On May 4, 2023 Selecta Biosciences, Inc. (NASDAQ: SELB), a biotechnology company leveraging its clinically validated ImmTOR platform to develop tolerogenic therapies for autoimmune diseases and gene therapies, reported financial results for the first quarter ended March 31, 2023 and provided a business update (Press release, Selecta Biosciences, MAY 4, 2023, View Source [SID1234631053]).

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The Company also announced a program prioritization and capital allocation strategy that is expected to extend its cash runway into the second half of 2025.

"As the only immune tolerance platform with positive Phase 3 data, we firmly believe in the potential of our pipeline of candidates powered by our ImmTOR technology," said Carsten Brunn, Ph.D., President and Chief Executive Officer of Selecta. "As we continue to navigate the current market environment, we have undertaken the strategic decision to focus our resources in the areas where we believe we have the highest potential to succeed in delivering meaningful therapies to the patients we aim to serve. In the near term, we look forward to continuing to work with our partner, Sobi, to advance SEL-212 (ImmTOR in combination with pegadricase) toward a Biologics License Application (BLA), which we continue to expect in the first half of 2024, while also advancing our ImmTOR-IL combination for diseases of the liver."

Strategic Initiative Overview

Following a comprehensive review of its portfolio and capital resources, Selecta, in consultation with the Company’s Board of Directors, plans to streamline operations and prioritize investments in select programs. As part of this initiative, the Company plans to:

Advance SEL-212 in Patients with Chronic Refractory Gout in Partnership with Sobi. In March 2023, Selecta and its SEL-212 development partner, Sobi, reported positive Phase 3 data from the Phase 3 DISSOLVE I & II placebo controlled randomized clinical trials. Both trials met their primary endpoint, and SEL-212 was observed to be safe and well-tolerated. A BLA submission remains on track for the first half of 2024. In June 2020, Sobi licensed SEL-212 from Selecta and is responsible for development, regulatory, and commercial activities in all markets outside of China.
Prioritize Development of the Combination of ImmTOR and Company’s Proprietary Treg-Selective IL-2 (ImmTOR-IL). The combination of ImmTOR and IL-2 (ImmTOR-IL) represents an evolution of Selecta’s precision immune tolerance platform. The Company remains on track to initiate Investigational New Drug (IND)-enabling studies in 2023, while also exploring multiple autoimmune indications that may be suitable for study with ImmTOR-IL, with an initial focus on diseases of the liver.
Develop SEL-018 IgG Protease (Xork) for LOPD in Partnership with Astellas Gene Therapies. In January 2023, the Company announced an exclusive licensing and development agreement for IdeXork (Xork), a next-generation immunoglobulin G (IgG) protease, to be developed for use with AT845, Astellas Gene Therapies’ investigational adeno-associated virus (AAV)-based treatment for Late-Onset Pompe disease (LOPD) in adults. Xork is designed to be differentiated by its low-cross reactivity to pre-existing antibodies in human serum, which the Company believes has the potential to expand access to life-changing gene therapies for more patients.
Advance Gene Therapy Programs through Potential Partnerships. Selecta will pause further development of its wholly-owned gene therapy programs, including the ongoing Phase 1/2 clinical trial of SEL-302, an AAV gene therapy combined with ImmTOR for the treatment of methylmalonic acidemia (MMA). The Company is currently assessing ways to support further development of these programs through potential partnerships.
Reduction in Force. The Company reduced its headcount by approximately 25% in order to align its workforce with its updated priorities. As a result of the reduction in force, the Company expects to incur a cash charge of approximately $1.0 million related to severance and benefit-related expenses.
Dr. Brunn added, "The decision to enact these measures was extremely difficult, as we are losing many valued colleagues who helped advance Selecta to where it is today. I would like to express my sincere gratitude to all of these individuals."

First Quarter 2023 Financial Results:

Cash Position: Selecta had $127.5 million in cash, cash equivalents, restricted cash, and marketable securities as of March 31, 2023, as compared to cash, cash equivalents, restricted cash, and marketable securities of $136.2 million as of December 31, 2022. Selecta believes that following the capital efficiencies expected to be realized through its strategic reprioritization, its available cash, cash equivalents, restricted cash, and marketable securities, as well as the next anticipated milestone payment related to SEL-212 development activities, will be sufficient to meet its operating requirements into the second half of 2025.

Collaboration and License Revenue: Revenue for the first quarter of 2023 was $5.9 million, as compared to $34.0 million for the same period in 2022. Revenue was primarily driven by the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program under the license agreement with Sobi.

Research and Development Expenses: Research and development expenses for the first quarter of 2023 were $18.6 million, as compared to $17.7 million for the same period in 2022. The increase was primarily the result of expenses incurred for contract license and milestone payments and personnel expenses partially offset by a decrease in expenses incurred for the SEL-212 clinical program.

General and Administrative Expenses: General and administrative expenses for the first quarter of 2023 were $5.7 million, as compared to $5.5 million for the same period in 2022. The increase was primarily the result of increased personnel expenses.

Net (Loss) Income: For the first quarter of 2023, Selecta reported net loss of $21.7 million, or basic net loss per share of $(0.14). For the first quarter of 2022, Selecta reported net income of $28.8 million, or $0.23 per share.

Conference Call and Webcast Reminder
Selecta’s management will host a conference call at 8:30 AM ET today to provide a corporate update and review the Company’s first quarter 2023 financial results and strategic initiatives. Individuals may participate in the live call via telephone by dialing (844) 845-4170 (domestic) or (412) 717-9621 (international) and may access a teleconference replay for one week by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and using confirmation code 6836582. Investors and the public can access the live and archived webcast of this call and a copy of the presentation via the Investors & Media section of the Company’s website, www.selectabio.com.