Analyst Conference Summary

biotechnology

conference date: August 14, 2023
for quarter ending: June 30, 2023 (second quarter, Q2)

Forward-looking statements

Overview: Good y/y revenue ramp, still in the red.

Basic data (GAAP):

Revenue was $36.0 million, down 13% sequentially from $41.6 million, and up 167% from from $13.5 million year-earlier.

Net income was negative $42.1 million, up sequentially from negative $47.0 million, and up from negative $ 77.4 million year-earlier.

Earning per share (EPS), diluted were negative $0.83, up sequentially from negative $1.08, and up from negative $2.02 year-earlier.

Guidance:

Abecma sales by Bristol Myers for 2023 now expected near $470 million. Cash runway expected into 2026.

Conference Highlights:

Nick Leschly said "We launched 2seventy in late 2021 with the stated mission of delivering more time for people living with cancer through the transformative power of cell therapy. Since the creation of 2seventy, our mission has always been dual-pronged: to deliver on the commercial potential of Abecma and to leverage our translational engine to develop an innovative cell therapy pipeline. Over the course of this year, we continue to make progress against this goal. We have successfully delivered Abecma to an extensive and growing number of patients in need of new treatment options. While the competitive intensity has increased and will have an impact on revenue in the 2nd half of 2023, we believe in the long-term commercial potential of this important therapy, particularly as we move toward earlier lines. On the development side, in June, we paused our PLAT-08 study in AML due to a Grade 5 safety event and this has since been followed by a clinical hold by FDA. We’ve collaborated with Seattle Children's to conduct a root-cause analysis and developed amendments to the protocol. Seattle Children's will review these amendments with FDA with the goal of resuming the study as soon as possible."

Revenue by type: service $5 million; collaboration $29 million; royalty and other $2 million.

2seventy bio and Bristol Myers (BMY) share equally in all profits and losses related to development, manufacturing, and commercialization of Abecma in the U.S. 2seventy reported collaborative arrangement revenue of $24.5 million for Q2, and share of collaboration loss of $0 million. That is based on Bristol Myers Q2 Abecma revenue of $115 million. 2seventy expects the collaboration to be cash flow positive throughout 2023 and to generate between $200 and $300 million of operating income for 2seventy bio during the 2024-2025 period. In addition to increasing manufacturing capacity, commercial efforts are underway to expand the U.S. treatment center footprint.

The multiple myeloma market is rapidly evolving. BMS expects a slowdown in Q3, followed by return to growth in Q4. Followed by the larger opportunity if label expansion is approved in December.

In Q1 The FDA accepted the sBLA for Abecma in adult patients with triple-class exposed relapsed or refractory multiple myeloma. The FDA assigned a PDUFA date of December 16, 2023.

The joint 2seventy bio and Novo Nordisk collaborative program focused on an in vivo gene editing treatment for hemophilia A achieved positive proof of concept data, triggering a $15 million milestone payment to 2seventy bio.

2seventy bio made 4 presentations at the ASCO 2023 annual meeting and six at EHA. Also 5 presentations at ASGCT in Q2 2023

By the end of 2023 2seventy bio expects: a data update from Phase I CRC-403 study of bbT369 in patients with relapsed and/or refractory B cell non-Hodgkin lymphoma (B-NHL). Submission of an IND for the MUC-16 program in ovarian cancer, in partnership with Regeneron. Led by JW Therapeutics, initiation of an investigator-initiated study in China of 2seventy bio's potency enhanced MAGE-A4 T cell receptor (TCR) program in solid tumors.

In the Phase I PLAT-08 study of SC-DARIC33 in patients with acute myeloid leukemia (AML), there was a fatal adverse event in June 2023. The study is paused. Working on understanding the cause of the event. 2seventy is working with Seattle Children's and the FDA to amend the study and restart.

At the end of the quarter the balance of cash and equivalents (including marketable securities) was $307 million, down sequentially from $341 million.

Operating expenses of $84 million consisted of: R&D $60 million; cost of manufacturing $4 million; SG&A $19 million, cost of royalties $1 million. Loss from operations $42 million. Interest income $3 million. Other income $3 million.

Analyst Q&A, selective:

Revenue guidance details? The manufacturing maintenance was planned. Market dynamics are evolving. CAR T capacity overall, including competition, has grown, number of patients has grown. Ours and other regulatory approvals are coming. Multiple Myeloma is a huge market.

KOLs skeptical of demand for CAR T in earlier lines of MM therapy? Our research with BMS indicates a strong role earlier in the disease. We will have the data to show this to doctors. Convenience is a factor, so people will take whatever is available if they can't get the best therapy.

In market now, who is getting treated? The June shutdown meant those slots become July revenue. Growth drivers going forward include expansion of number of sites and of sales reps, including in the community hospital setting. We and BMS are investing across capacity for future growth. We are only in the early ramp-up phase.

Centers with multiple MM therapies available? That is one thing that gives us confidence, we are not releasing details.

Suspension vector work? We are moving towards commercial approval early next year. Is more cost effective, has greater capacity, and should produce better margins.

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