Analyst Conference Summary

biotechnology

conference date: November 14, 2023
for quarter ending: September 30, 2023 (third quarter, Q3)

Forward-looking statements

Overview: In a bit of trouble from competition.

Basic data (GAAP):

Revenue was $12.0 million, down 67% sequentially from $36.0 million, and down 10% from from $13.4 million year-earlier.

Net income was negative $72 million, down sequentially from negative $42 million, and down from negative $68 million year-earlier.

Earning per share (EPS), diluted were negative $1.40, down sequentially from negative $0.83, and up from negative $1.76 year-earlier.

Guidance:

Lowered guidance for BMS Abecma sales below the prior $470 to $570 range for 2023. No longer providing specific cash runway guidance.

Conference Highlights:

Nick Leschly said "This quarter, 2seventy completed a significant reshaping of our organization, enabling us to advance our pipeline in an efficient and more cost-effective manner. We are also supporting BMS’ efforts to return Abecma to growth through a variety of commercial and medical affairs initiatives, including adding more treatment sites and boots on the ground. Collectively, we believe these measures will give us the ability to continue our mission of delivering time to patients, operate within a more disciplined cost structure and deliver value for our shareholders."

Revenue by type: service $5 million; collaboration $6 million; royalty and other $1 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 $0.5 million in Q3, down sequentially from $24.5 million for Q2. That is based on Bristol Myers Q2 Abecma revenue of $69 million, down sequentially from $115 million. Some of the negative impact was from the June manufacturing mainenance, but mostly it is competition in the BCMA space. In addition to increasing manufacturing capacity, commercial efforts are underway to expand the U.S. treatment center footprint. More Abecma data will be presented at ASH.

In response to the loss of income, in September 2seventy announced a restructuring program.

The multiple myeloma market is rapidly evolving. BMS expects a slowdown in Q4, followed by return to growth in 2024. 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 (third line) 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.

In Q4 2023 MUC16 CAR T therapy preclinical data for ovavian cancer was presente at SITC, in partnership with Regeneron. IND submission planned before end of 2023.

In Q3 2023 expanded strategic alliance with JW Therapeutics in China.

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 $284 million, down sequentially from $307 million.

Operating expenses of $90 million consisted of: R&D $51 million; cost of manufacturing $4 million; SG&A $13 million, restructuring $9 million, goodwill impairment 12 million, cost of royalties $0.6 million. Loss from operations $78 million. Interest income $4 million. Other income $3 million.

Analyst Q&A, selective:

Return to growth trajectory? BMS efforts take time to take hold. Evolves with data, expansion of delivery centers.

Abecma joint venture in Q4? Would be driven by patient volumes, progress on cost of goods sold. Over the coming years Abecma should contribute to our business.

Abecma Karma9? That study has started enrollment, could give us a frontline label.

JW program has not yet chosen a solid cancer target, first will establish safety.

Confidence about earlier line settings vs. bispecifics? The myeloma market is huge. No one has been able to cure it. We are confident in our data. Lots of questions on optimal sequencing v TCEs (T Cell engagers), but it seems BCMA CARs are best when first in sequence, and that should be true in earlier lines of therapy.

Competing CAR T? CAR dynamic has been practicality driven, rather than data driven. Our rival is in initial ramp, so not surprising they are going up. We saw TCE competition and CAR competition more when we were more capacity constrained. This is not a saturated market, at this point in time about 50% of patients are not receiving any advanced treatment.

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