On March 18, 2021 Precision BioSciences, Inc. (Nasdaq: DTIL) a clinical stage biotechnology company dedicated to improving life with its proprietary ARCUS genome editing platform, reported financial results for the fourth quarter and fiscal year ended December 31, 2020 and provided a business update (Press release, Precision Biosciences, MAR 18, 2021, View Source [SID1234576851]).

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"2020 was a pivotal year for Precision with significant advances across our ARCUS-based in vivo gene editing and allogeneic CAR T pipelines. We entered into a research collaboration and exclusive license agreement with Eli Lilly for the research and development of multiple in vivo gene correction therapies aimed at potentially curing genetic disorders, including Duchenne muscular dystrophy. In addition to advancing two new CAR T programs into the clinic, we reported interim study results for our lead CD19 program, which showed continued acceptable safety alongside high objective response rates," commented Matt Kane, CEO and co-founder of Precision BioSciences. "In 2021, we look forward to starting our Phase 1/2a study of PBCAR19B to assess whether our next-generation, stealth, donor CAR T cells can persist longer in the body, a key goal that we believe could lead to deep and durable responses with off-the-shelf CAR T products. We also expect to report in 2021 interim data updates for our three clinical CAR T programs, PBCAR0191, PBCAR20A, and PBCAR269A, and provide an update on our PH1 in vivo gene editing program."

Recent Developments and Upcoming Milestones:

Allogeneic CAR T Portfolio:

PBCAR0191: In December 2020, Precision reported encouraging interim clinical results for its Phase 1/2a study of patients with relapsed/refractory (R/R) non-Hodgkin lymphoma (NHL) and R/R B-cell Acute Lymphoblastic leukemia (B-ALL). For this study, 27 patients across multiple dose levels received PBCAR0191 with either standard lymphodepletion (sLD) (fludarabine 30 mg/m2/day x 3 days + cyclophosphamide 500 mg/m2/day x 3 days) or enhanced lymphodepletion (eLD) (fludarabine 30 mg/m2/day x 4 days + cyclophosphamide 1000 mg/m2/day x 3 days). Response rates were as follows:

83% objective response rate at day 28 or later for patients across NHL (n=4) and B-ALL (n=2) who received PBCAR0191 when coupled with eLD.
At day 28 or later, 75% (3/4) of NHL patients who received PBCAR0191 with eLD achieved a complete response compared to 33% of NHL patients (n=9) using sLD.
The longest demonstrated response was > 11 months in a B-ALL patient.
PBCAR0191 demonstrated a clear dose-dependent increase in peak cell expansion. Compared to sLD, eLD with PBCAR0191 resulted in approximately 95-fold increase in peak cell expansion, and approximately 45-fold increase in area under the curve. PBCAR0191 demonstrated an acceptable safety profile, with no graft versus host disease (GvHD), no grade ≥ 3 cytokine release syndrome, and no grade ≥ 3 neurotoxicity (ICANS).

Precision expects to provide updated interim data for PBCAR0191 by mid-2021.

PBCAR19B: In January 2021, Precision announced that the U.S. Food and Drug Administration (FDA) accepted its investigational new drug application for PBCAR19B, the Company’s next generation, stealth cell, allogeneic CAR T candidate for patients with CD19-positive malignancies such as those with R/R NHL. PBCAR19B is designed to improve the persistence of allogeneic CAR T cells following infusion by reducing rejection by T cells and natural killer (NK) cells. In addition to the CAR gene, the PBCAR19B vector includes a short hairpin RNA that suppresses expression of beta-2 microglobulin (B2M), a component of Class 1 major histocompatibility complex (MHC) molecules found on the cell surface. Reducing or knocking down Class 1 MHC expression on allogeneic CAR T cells has been shown to reduce CAR T cell killing by cytotoxic T cells. The PBCAR19B vector also carries an HLA-E gene intended to reduce rejection of CAR T cells by NK cells that can be stimulated as a result of reduced MHC molecule expression on the cell surface.

The Phase 1 study is expected to begin by mid-year 2021 and will be a non-randomized, open-label, single-dose, dose-escalation and dose-expansion study to evaluate the safety and clinical activity of PBCAR19B in patients with R/R NHL. The primary objective of the study is to identify the maximum tolerated dose and any dose-limiting toxicities.

PBCAR20A: Precision also continues to enroll patients in its Phase 1/2a clinical trial of PBCAR20A, a wholly-owned investigational allogeneic anti-CD20 CAR T therapy for patients with R/R NHL including patients with R/R chronic lymphocytic leukemia or R/R small lymphocytic lymphoma. In February 2021, the study began enrolling patients into dose level 3, a fixed dose of 480 x 106 cells with a max dose of 6.0 × 106 cells/kg. The Company expects to report interim data for the PBCAR20A study in 2021.

PBCAR269A: Precision continues to enroll patients in its Phase 1/2a study of PBCAR269A, its wholly-owned investigational allogeneic CAR T candidate targeting B-cell maturation antigen for the treatment of R/R multiple myeloma, for which Precision has received Fast Track Designation and Orphan Drug Designation from the FDA. In February 2021, the study began enrolling patients into its highest dose cohort, dose level 3 (6.0 × 106 cells/kg) and Precision expects to report interim data in 2021.

Precision also expects to initiate, in the first half of 2021, the combination arm of its ongoing Phase 1/2a clinical study with PBCAR269A and nirogacestat, SpringWorks Therapeutics’ investigational gamma secretase inhibitor. Precision announced its clinical collaboration with SpringWorks in 2020.

In Vivo Gene Correction Portfolio:

Established Genome Editing Research Collaboration with Eli Lilly: In November 2020, Precision and Eli Lilly and Company announced a research collaboration and exclusive license agreement to use Precision’s proprietary ARCUS genome editing platform for the research and development of potential in vivo therapies for genetic disorders. The agreement includes up to six programs, with an initial focus on Duchenne muscular dystrophy and two other undisclosed gene targets.

In connection with the closing of the agreement in January 2021, Precision received an upfront cash payment of $100 million and Eli Lilly made an equity investment of $35 million in Precision’s common stock. Precision is also eligible to receive up to an aggregate of $420 million in potential development and commercialization milestone payments per licensed product, nominating fees for additional targets, and tiered royalties ranging from the mid-single digits to low-teens on product sales should Lilly successfully commercialize a therapy from the collaboration.

PH1: Pre-clinical research continues to progress with Precision’s wholly-owned in vivo gene correction program using its ARCUS genome editing technology to knock out the HAO1 gene as a potential one-time treatment for primary hyperoxaluria type 1 (PH1), a rare genetic disease. The Company expects to provide an update on this program in the first half of 2021.

PCSK9: In February 2021, Molecular Therapy published a paper describing three-year follow-up data showing long-term stable reduction of low-density lipoprotein (LDL) cholesterol levels in nonhuman primates (NHPs) following in vivo gene editing of the PCSK9 gene with ARCUS genome editing. The study was led by James M. Wilson, M.D., Ph.D. and Lili Wang, Ph.D. from the Gene Therapy Program in the Perelman School of Medicine at the University of Pennsylvania. After a one-time vector administration in 2017, NHPs treated with ARCUS have experienced stable reductions of up to 85% in PCSK9 protein levels and a 56% reduction of LDL cholesterol levels.

Corporate:

Intellectual Property Protection: In January 2021, Precision received a Notice of Allowance from the U.S. Patent and Trademark Office for a patent application covering PBCAR19B. The allowed composition claims of this patent application encompass genetically-modified human T cells comprising the Company’s PBCAR19B construct, which is inserted within the T cell receptor alpha constant locus. Once issued, patents arising from this patent family will have standard expiration dates in April 2040.

Leadership: In December 2020, Precision announced that Alex Kelly, the Company’s Chief Corporate Affairs Officer, would serve as the Company’s Interim Chief Financial Officer and Shane Barton, the Company’s Vice President and Corporate Controller, would serve as interim principal accounting officer. These leadership changes followed the departure of Abid Ansari, Precision’s prior Chief Financial Officer, after nearly five years with the organization to pursue a new career opportunity.

Elo Life Systems:

Corporate Structure: In January 2021, Precision disclosed its intention to spin out its wholly-owned subsidiary, Elo Life Systems. Precision is continuing to explore its strategic options, and the timing of any such sale, spinout or other treatment of Elo remains uncertain.

Published Vanilla Genome Paper in Nature Food: In December 2020, researchers at Elo Life Systems in collaboration with Alan Chambers, Ph.D., and the Tropical Research and Education Center at the University of Florida published a paper in Nature Food, reporting on a chromosome-scale, phased Vanilla planifolia genome, which revealed sequence variants for genes that may impact the vanillin pathway, and therefore influence bean quality, including its productivity, flower anatomy, and disease resistance.

Fiscal Year 2020 Financial Results

Cash and Cash Equivalents: As of December 31, 2020, Precision had approximately $89.8 million in cash and cash equivalents, which did not include the $100 million upfront cash payment and $35 million equity investment received from Eli Lilly in connection with the closing of the collaboration and license agreement in January 2021. The Company expects that cash and cash equivalents as of December 31, 2020, cash payments received from Lilly in January 2021, expected operational receipts and available credit will allow the Company to continue its operations into 2023.

Revenues: Total revenues for the year ended December 31, 2020 were $24.3 million, compared to $22.2 million for the year ended December 31, 2019. The increase of $2.1 million in revenue was primarily the result of an increase in collaboration revenue with Servier, offset by a decrease in collaboration revenue from Gilead due to the termination our agreement with them.

Research and Development Expenses: Research and development expenses were $98.1 million for the year ended December 31, 2020, as compared to $82.4 million for the same period in 2019. The increase of $15.7 million was primarily due to increases in direct research and development expenses related to our ongoing CD19 clinical program, increases in employee-related costs associated with increased headcount to support our technology platform development and manufacturing capabilities, and increased costs associated with contract manufacturing organizations and research organizations.

General and Administrative Expenses: General and administrative expenses were $36.1 million for the year ended December 31, 2020, as compared to $27.0 million for the same period in 2019. The increase of $9.1 million was primarily due to increases in employee-related costs associated with increased headcount as well as costs associated with the Company’s growing infrastructure needs.

Net Loss: Net loss was $109.0 million, or $(2.09) per share, for the year ended December 31, 2020, compared to a net loss of $92.9 million, or $(2.21) per share, for the same period in 2019.