Gritstone bio, Inc. (NASDAQ:GRTS) Q4 2022 Earnings Call Transcript

Gritstone bio, Inc. (NASDAQ:GRTS) Q4 2022 Earnings Call Transcript March 9, 2023

Operator: Greetings. My name is Joe and I’ll be your conference operator today. Welcome to Gritstone bio’s, Fourth Quarter and Full Year 2022 Results Conference Call. Please note this event is being recorded. At this time I would like to introduce George MacDougall, Director of Investor Relations and Corporate Communications at Gritstone. Please go ahead sir.

George MacDougall: Thank you operator and thank you everyone for joining us from Gritstone bio’s conference call to discuss our financial results, clinical and business updates for the fourth quarter and full year 2022. With me on the call today from Gritstone bio are Andrew Allen, co-founder President and CEO and Vassiliki Economides, Executive Vice-President and Chief Financial Officer. Joining us for the Q&A portion will be Karin Jooss our head of R&D. Today after the market closed we issued a press release providing our fourth quarter 2022 and full year 2022 financial results as well as clinical and business updates. The press release is available on our website. I’d like to remind you that Today’s call is being webcast live via a link on Gritstone’s Investor Relations website, where replay will also be available after its completion.

After our prepared remarks, we’ll open up the call for Q&A. During the course of this call, we will make forward-looking statements that are based on current expectations. These forward looking statements are subject to a number of significant risks and uncertainties. And our actual results may differ materially from those described. We encourage you to review the risk factors in our most recent Form 10-K filed with the U.S. Securities and Exchange Commission and available on our website. All statements on this call are made as of today based on information currently available to us. Except as required by law, we disclaim any obligation to update such statements even if our views change. With that, let me turn the call over to Andrew. Andrew?

Andrew Allen: Thank you, George. And good afternoon, everybody. Let me begin by first thanking our entire team for the tremendous progress that we made in 2022. I’m proud of the work we’ve accomplished which started seven years ago with the ambition to take the next big step in cancer immunotherapy. We’re now just months away from seeing early data from the first randomized trial testing our hypothesis. This is an incredibly exciting time for Gritstone, and a big year for personalized cancer vaccines. The prospect of opening up most common solid tumors to the survival benefits of immunotherapy lies immediately ahead of us at Gritstone with preliminary proof-of-concept data from our randomized controlled GRANITE study in colorectal cancer expected in the fourth quarter of this year.

If positive, these data could be transformational to the field, and would encourage us to develop our platform in other common, cold solid tumors, such as ovarian, prostate and breast cancers, which remain largely refractory to simple immune checkpoint blockade, and still accounts for a huge number of deaths from cancer every year. The top line data shared by Moderna and Merck in December of 2022 are very encouraging for our product concept. And these data provide initial proof-of-concept from neoantigen based personalized cancer vaccine approach, albeit within the hot tumor context of melanoma. In total, randomized data from the three big players in the field, ourselves Moderna and BioNTech are expected in 2023. As I mentioned at the outset, this is an exciting year for personalized cancer vaccines.

So let’s dive into our work in oncology. First, I’ll address GRANITE, our fully individualized vaccine program. Let’s step back and remind ourselves of the therapeutic hypothesis that underpins this program and the clinical data we’ve generated in support of it. Most patients for solid tumors have immunologically cold tumors, wherein there is no evidence of immune system recognition that tumor neoantigens, no detectable new antigen specific cytotoxic T cell response and thus no T cell substrate for checkpoint inhibitors to work on, leading to their relative inactivity, as therapeutics in such patients. Our original idea was and our approach remains to identify tumor neoantigens and build vaccines containing these antigens, and then deliver them to patients alongside checkpoint inhibitors to induce strong new antigen specific PDA T cells, also known as cytotoxic T cells.

Once administered and generated, these T cells could then traffic to tumors, meet their antigen, proliferate and kill tumor cells leading to clinical benefit. This approach was described in our Nature Medicine paper, published in August of 2022. We’ve been diligently working on each step in this chain and have shown positive results in patients with advanced disease with a focus on colorectal cancer. Specifically, we have shown the following. First, we can predict human new antigens with high accuracy, a positive predictive value of over 75% at this point, and we continue to refine and improve our prediction model continuously. Secondly, in patients with no detectable neoantigen specific T cells at baseline, our simple vaccination schedule elicits strong responses promoting CD8 T cell, which can be readily detected in blood using traditional assays such as LS bought.

Thirdly, these new antigen reactive T cells traffic into tumors and proliferate, changing the T cell composition of the tumors and critically, turning cold tumors into hot ones. Mostly, these T cell responses are associated with tumor cell destruction, as measured by reductions in traditional biomarkers, such as CEA and CA 19-9, often elevated in advanced colorectal cancer patients, as well as parallel reductions in circulating tumor DNA or ctDNA and emerging biomarker of value to immunotherapy drug developers. These molecular responses had been observed in approximately half of the third line colorectal cancer patients retreated. And finally, molecular response was then associated with extended overall survival. Such the molecular non responders experienced a median overall survival of 7.8 months, exactly as expected in this context, whereas molecular responders have not yet reached median overall survival, although it will exceed 22 months.

So having observed the success of its approach and a single arm study in advanced disease, we launched our randomized controlled Phase 2/3 study in newly diagnosed metastatic colorectal cancer patients, whereby patients are randomized to receive maintenance therapy with standard of care, 5-fluorouracil, or 5-FU plus Bevacizumab, or 5-FU plus Bevacizumab, plus our GRANITE immunotherapy. This is a registration or quality study discussed with FDA back in August 2021. And we are enrolling 80 subjects in the open label Phase 2 component with preliminary data expected in the fourth quarter of this year. We anticipate sharing both ctDNA and progression free survival data evaluated using both RECIST and iRECIST criteria on patients completing at least four months of treatment.

We then plan to discuss the results with FDA in the first half of 2024 to align on the appropriate primary efficacy endpoint and then move into the Phase 3 components of the trial. On a related note, I’d like to acknowledge our industry, the clinicians, the patient advocates and the regulators for the work currently being done to evaluate and corroborate the association between molecular responses and extended overall survival. The draft guidance for FDA issued in mid-2022 regarding ctDNA as a potential predictor of response among early stage cancer patients represented an important step forward. And the work being done across the industry to incorporate ctDNA into drug development, and patient and treatment selection is on-going. The burgeoning data and rapid adoption of ctDNA across healthcare sectors gives us conviction that we’re following the right path for Gritstone and for patients alike.

With GRANITE, note that this trial which again is in a common and cold tumor type, potentially opens the door to a transformation in cancer immunotherapy. Put otherwise, if GRANITE works in colorectal cancer, one of the hardest to treat cancers, it is reasonable to think it will work in many other solid tumor types. We believe that generation and or amplification of potent new antigen specific CD8 cytotoxic T cells is always a good thing for cancer immunotherapy and for cancer patients. And the potentially vaccines like GRANITE may become a foundational component of solid tumor immunotherapy. If we’re successful in this endeavor, biomanufacturing of personalized vaccines at scale will be a critical requirement. Importantly, recall that we manufacture our own vaccines at our GMP biomanufacturing facility in California.

Our decision to manufacture in house has offered us many strategic benefits since we built the facility several years back. Our manufacturing process continues to improve in efficiency and capacity as we plan to scale out the Phase 2 with an eye to commercial scale. Now to SLATE which is our product platform that leverages the same biology as GRANITE but seeks to do so in an off the shelf manner. Now off the shelf vaccines are attractive in that they can be administered rapidly upon patient selection. The key issue for the field has been to identify shared tumor specific antigens that can be included within an off the shelf product. The commonest shared new antigens derived from mutant KRAS proteins. And this is where we began our SLATE program a few years ago.

In September of last year, we shared initial results from the Phase 1/2 study of K RAS directed SLATE in late-line patients. Just as in the GRANITE Phase 1/2 study, we observed induction of new antigen specific CD8 cytotoxic T cells across all tumor types evaluated in the study, including metastatic microsatellite, stable colorectal cancer, and non-small cell lung cancer. Also, as in GRANITE, we saw molecular responses in roughly half of the valuable patients. The largest single group of patients had advanced non-small cell lung cancer, or refractory to checkpoint blockade. And in this group, molecular responses were associated with approximate doubling of overall survival, compared with subjects who didn’t experience molecular response. This is very consistent with what we observed in GRANITE.

The symmetry of these observations across products and across tumor types is suggestive of consistent biology and true efficacy signal. Following the same playbook as with GRANITE, our next step is to verify findings in a randomized control trial in newly diagnosed metastatic patients. And we’re launching such a study later this year. SLATE is a fascinating program that will diversify over time, as more shared tumor antigens are identified and included in our vaccines, enabling applications beyond just mutant care as patients. Underlining the notion that stimulation of tumor antigen specific T cells is likely always a good thing, we’ve recently begun a clinical collaboration with Dr. Steve Rosenberg at the National Cancer Institute, combining his mutant KRAS specific cell therapy with our mutant KRAS specific vaccine.

We’re excited by the science behind this approach, and believe that significant potential to extend the benefit of vaccine and cell therapy to potentially broad set of patients, combinations of our vaccine with small molecule mutant care as inhibitors may also make sense. And this is an area of interest at Gritstone. Now on the infectious disease side of our business, we continue making strides in putting clinical data onto the self-amplifying mRNA or samRNA platform via call our program evaluating vaccines against SARS-CoV-2. Through our three phase 1 CORAL studies, we continue to demonstrate the potential broad utility of samRNA to serve as a next generation platform vector. In August 2022 we reported six month neutralizing antibody data from the first two cohorts of our ongoing CORAL boost trial, which is evaluating our samRNA vaccines as a boost following Vaxzevria and or mRNA primary series.

Our numbers are small results showed in all observable patients the strong neutralizing antibody responses originally reported in January of 2022, persisted without decay up to six months. In the fourth quarter, we were notified that our NIAID sponsored CORAL NIH study had completed enrollment, and we also shared additional interim data updates from our CORAL Boost and CORAL-CEPI studies. These additional data demonstrated robust and potentially durable neutralizing antibodies, along with CD8 T cell responses. Enrollment in the CORAL-CEPI study is now complete. And we plan to share further data from the studies at the ECCMID Conference in Copenhagen in April. SamRNA is rapidly emerging as a well-tolerated, scalable and widely applicable platform technology, likely with distinct characteristics versus first generation mRNA.

We believe the data we’re generating against SARS-CoV-2 provide clinical proof-of-concept for the continued application of samRNA across a wide range of infectious diseases. Outside of SARS-CoV-2 our partnership with Gilead to develop a vaccine based curative HIV immunotherapy treatment remains active and ongoing in a phase 1 study. Results from a preclinical study in non-human primates within this program were presented at CROI just last month, demonstrating strong durable viral antigen specific CD8 T cell responses further augmented by immune checkpoint blockade. In addition to these clinical stage programs, we have exciting preclinical projects ongoing, including development of an optimal immunogen for therapeutic human papillomavirus vaccine that is supported by the Gates Foundation.

We were also researching an influenza vaccine, as well as a new combination vaccine against multiple respiratory viruses. We look forward to sharing additional updates on our infectious disease programs and research throughout the year. And finally, I’d like to address some recent developments related to our intellectual property position, which we believe to be a strong asset for Gritstone. In late 2022, we received two United States patents related to samRNA. One includes claims covering Gritstone’s individualized cancer vaccine candidates within the GRANITE program, and the second includes claims covering antigen encoding samRNA vectors in general and has broad applicability across Gritstone’s candidates in oncology and infectious disease.

Additionally, we received recently a third U.S. patent directly to Gritstone’s proprietary chimpanzee, adenovirus, or ChAd vector, which is modified to improve viral production. We use ChAd to prime within our oncology programs, and it is a key asset in our GRANITE strategy to turn cold tumors hot. We view these patterns as critical parts of a competitive moat around our therapeutic strategies. These recent patterns further strengthen our IP position, which also includes our Edge platform key for accurate Cancer New antigen prediction. I’ll now turn over to Celia who will provide more color on our financial results for the fourth quarter and for the full year 2022. Celia?

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Vassiliki Economides: Thank you, Andrew. Good afternoon, everyone. Gritstone ended 2022 with $185.2 million in cash, cash equivalents, marketable securities and restricted cash. We took several measures to extend our runway in 2022. And these include net proceeds of $42.4 million from a private placement secured on October 2022, and $19.6 million in net proceeds from utilizing our ATM offering program. We also secured an $80 million credit facility from Hercules Capital and Silicon Valley Bank in July 2022 and drew $20 million of that total at closing. Throughout the year we also implemented several capital conservation measures that helped to extend our runway while enabling us to pursue our corporate goals. We currently have cash runway into the second quarter of 2024, with multiple potential avenues to secure additional capital in 2023.

These include but are not limited to drawing down additional funds from our existing credit facility, establishing new or expanding existing collaborations and other non-diluted funding sources, such as a potential $40 million milestone payment from Gilead on our HIV tour partnership. Turning to our full year 2022 operating results. Our reported research and development expenses were $111.4 million for the year ended December 31, 2022 compared with $97.5 million for the year ended December 31 2021. The increase in R&D cost is primarily due to increases in personnel related costs, and clinical trial expenses. We reported that general and administrative expenses were $29 million for the year ended December 31, 2022 compared with $25.9 million for the prior year.

The increase was primarily attributable to an increase in personnel related costs and an increase in outside services to support our ongoing operations. We also reported that collaboration license and grant revenues were $19.9 million for the year ended December 31 2022, compared to $48.2 million for the prior year. Our 2022 revenues include $1.6 million in collaboration revenue related to the Gilead cooperation agreement, and $7.7 million in collaboration revenue related to the $2.75 agreement. $9.5 million in grant revenue related to the CEPI agreement, and $1.2 million in grant revenue related to the Gates agreement. The net loss was $31.3 million for the fourth quarter of 2022 compared with $29.8 million for the same period last year. The net loss was $119.7 million for the full year 2022 compared with $75.1 million for the same period last year.

Finally, as of December 31 2022, Gritstone had 86,894,901 shares of common stock outstanding and pre funded warrants outstanding to purchase 13,573,704 shares of common stock at a nominal exercise price of $0.01 per share and 13,274,923 shares of common stock at an exercise price of 100th of a cent per share. This brings the total pre funded warrants outstanding as of December 31 2022 to 26,848,627 . I’ll now turn the call back over to Andrew for some closing remarks, Andrew?

Andrew Allen: Thank you, Celia. Gritstone was formed to pursue a big idea and take a bold approach to driving a potentially transformative novel product class. Over the seven years since our founding, we’ve carefully curated and advanced our set of capabilities and technologies, with the aim of driving more potent and durable tumor specific immune responses, and then infectious disease immune responses. We now sit at the threshold of proving out our new antigen approach in metastatic colorectal cancer and the accomplishment that could open up cold solid tumors. Additionally, we’re pioneering a novel technology that could represent the next RNA platform approach against infectious disease. We look forward to what will be an exciting year ahead for Gritstone and to continuing to share our findings with you throughout that time. And with that, I’d like to thank you all for joining us today. I’ll now turn the call over to the operator for questions. Operator?

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Q&A Session

Operator: Thank you. Our first question comes from the line of Marc Frahm with TD Cowen. Please proceed.

Marc Frahm: Hi, thanks for taking my questions. Maybe just to start off with Andrew. Just as we look towards that data in Q4, you’re given the size of the data set. What type of difference in a ctDNA responses do you think is the kind of minimum that’s likely to predict ultimately at some data fully matures? A PFS significant PFS?

Andrew Allen: I would change the question slightly because what we care about is not a PFS difference, what we care about is an OS difference. So that obviously is the goal here really, of course, that is the efficacy endpoint that matters is the only one that matters aside from quality of life type endpoints. So living longer, functioning better, and feeling better are the sort of classic trio. So really is about overall survival. And ctDNA appears to be a better surrogate with novel immunotherapies to that endpoint. It’s not been well characterized in this context, as you know, it’s been well characterized, in the adjuvant setting identifying patients at high risk of disease recurrence. And it seems to track without come extremely well in that setting.

It’s increasingly being validated in, in lung cancer immunotherapy. And friends of cancer research have published some data showing again, that ctDNA response correlates with overall survival. And their data suggested that the nuances were not that important. They looked at different thresholds of percentage reduction. They looked at different techniques for determining whether it’s a mean or median example. And the evidence from their manuscript was that actually didn’t matter that much, which is good, because strong signals should obviously shine through and make small tweaks to assessment, frankly, rather irrelevant. So we’re doing this for the first time in the setting of metastatic colorectal cancer. And so we didn’t really know the answer to your question.

We’ve powered the study to detect at least a 20% difference in ctDNA response rate between the two arms. So it doesn’t anchor on an absolute value, it anchors on the delta between the two arms, which I think obviously is reasonable. I don’t know that that 20% is the right number. I don’t know obviously, what we’re going to see, we could see a much bigger number. And how that mathematically correlates with overall survival is hard to know at this point. It’s impossible to know at this point, what we’ve learned from others is that as you might expect, and as is true with most tumor markers, if you start a new therapy and the markers go up, that’s bad. If they stay flat, that’s good. And if they go down, that’s best. I think that’s likely to be true here, as we’ve discussed.

So 20% is what we’re statistically looking for. But I think it’s an open question as to how changes will actually correlate with overall survival.

Marc Frahm: I think that’s very helpful. And then maybe for CELIA, just given what’s going on in the wider market with one of your lenders, can you can you remind us if there are any clauses associated with that that might allow them to accelerate payback on that on the loan?

Vassiliki Economides: Yes, thanks Mark. So we do for the loan is actually with both Hercules and SVB with the majority of it actually being with Hercules capital, there is a financial covenants that kicks in which you can renew your 10K. But that does kick in in April of this year, we have to have 55% of the outstanding loan on our balance sheet, we’ve only drawn down $20 million at this time.

Marc Frahm: Okay, fair enough. Thank you.

Operator: Our next question comes from the line of Ted Tenthoff with Piper Sandler. Please proceed.

Ted Tenthoff: Great. Thank you very much. And thank you for the update everybody. So my question is on SLATE. And again, kind of digging in a little bit deeper in terms of how you intend to advance and what that product could look like. I’m sorry, what that next study could look like with a KRAS product. Thanks.

Andrew Allen: Yes, thanks, Ted. We haven’t disclosed the details of that study. But it will follow the same playbook, as we’ve followed with GRANITE as you might expect. Clearly, vaccinating subjects as a last line therapy, and end of life therapy essentially is never the optimal place for a vaccine based immunotherapy. Everyone I think will acknowledge that. But of course, that’s where you need to begin in order to demonstrate safety and earn your way to move upstream. I think we’ve done that with GRANITE, I think we’ve now done that with SLATE. So we are intending to move upstream to a much earlier line of therapy likely newly diagnosed metastatic subjects. And one of the key questions for an off the shelf product is how to deliver as many antigens as possible that are relevant to each patient.

Because of course, the beautiful thing about the personalized vaccine is you’re delivering, in our case, your 20 candidate new antigens, of which we’ve got data to suggest that typically between 12 to 15 of them are real neoantigens. And that is a strength of a product because the same as with small molecule drug therapy for viruses, you want multiple lines of attack on a highly mutable target to reduce the probability of acquired resistance. So that’s the same for viruses as it is for tumors. We just think about multiple lines of attack to reduce acquired resistance. So with SLATE how can we deliver multiple antigens to try and achieve the same goal? And KRAS obviously, is a very good shared target, but it is one target and therefore, what can we add in that will enable us to have attack T cell attack on stone KRAS neoantigens plus perhaps some other specific targets.

So that’s the work that obviously we do pretty extensively at Gritstone. We have a large team in Cambridge, Mass. This is our Tumor Epitope Discovery Group. They have continued to iterate on our prediction model over the last several years since we’ve asked published from the platform, and one of the key areas they’re looking at is additional shared tumor antigens. So it’s an important question and it is one we’re paying a lot of attention to. Today is not the day for us to reveal more, but we will do so later this year as we disclose details around that SLATE randomized trial. Okay, thanks operator. I think we’re ready for the next question. Thank you Ted.

Operator: Our next question comes from the line of Mayank Mamtani with B. Riley Securities. Please proceed.

Mayank Mamtani: Good afternoon, and thanks for taking your questions and congrats on the progress. So just a couple of quick follow ups. So in the Phase 2/3 regimen if you compare against the Phase 1 data set. Could you just talk about that? And then secondly, did you say what the standard of compare — standard of care, molecular response you’re expecting? And then I just have one final question.

Andrew Allen: So I didn’t specify, we think it will be low. But as I said, the study’s power to detect a difference, rather than being focused on an absolute value, so over 20% difference between the two arms, I think is likely to be meaningful. In terms of the rationale for administering a second dose of the adenovirus, let me hand that question over to our adenovirus guru, Karin, our head of R&D. Karin, would you like to take that one?

Karin Jooss: Yes, we have. Thank you, Andrew, great question. So we have assessed in non-human primates, whether we could we vaccinate non-human primates, after several months with the chimpanzee adenovirus vector. The reason was we knew that adenovirus is highly biased to driving high CD8 T cell responses. And this is what we after in with our primate vaccine, and I had done in the past — in the past studies assessing the interval needed to be able to come back with the adenovirus vector because once you vaccinate this, this vaccine platform, there is neutralizing antibodies being generated against the code proteins. And so we introduced in non-human primates after six or seven months and also up to four months, the adenovirus vector and we saw a very, very strong boost effect.

Specifically CD8 T cells boost effect. And this is what we introduced in our initial primate study. And this is what we added to the protocol of Go-10. So, yes, after kicking the CD8 T cells up to be high titers with the second administration of the chat.

Mayank Mamtani: Understood. Thank you. And then on the regulatory scenarios that could exist after achieving this data in 4Q, could you could you maybe comment on, is there anything that you’re specifically looking to learn from the Moderna Merck situation? Given that you will have the control data, you will have a number of these translation markers, correlating with survival metrics, could you just kind of higher level sort of commentary on how you’re thinking about engaging with the FDA after fourth quarter?

Andrew Allen: Mayank, the donor, obviously, is potentially useful. We, they haven’t published anything on their personalized cancer vaccine program. There have been a few poster presentations at various meetings. So we don’t really know anything about the key attributes, how do they do new action selection, that quantifying the strength of the T cell response for diversity, the phenotype of those cells, the numbers of new antigens being recognized pre and post vaccination. So any of that information would obviously be helpful, and we’ll see whether that’s disclosed. So simple answer is we don’t know much about the data. And we want, we are kind of just waiting like everybody else to see what’s published and presented, hopefully, in short, in short order.

In terms of the agency, obviously, we will have the collective goal of trying to improve outcomes for patients with metastatic colorectal cancer, which remain dismal, the median survival of no more than two years for a typical newly diagnosed patient. And as we all know, no, no real benefit from immunotherapy. And so we’ve had a constructive dialogue with the agency through the development of this program. We started talking to them way back, before we were in the clinic around things like sequencing approaches and how that would be regulated, we solicited their input to the design of our bio manufacturing facility. So we’ve had a good good relay political relationship with the agency. And when we spoke to them last on this topic, which was in the summer of 2021, we aligned on the design of this phase 2/3 program.

And it’s sort of traditional programming that there is a phase 2, randomized phase 2, and we will learn a lot and we will use the insights from those from the phase 2, to inform the design at the phase 3. And the key issue on the table will be what’s the primary efficacy endpoint for phase 3. And that conversation we anticipate will happen in the first half of 2024. And the obvious endpoint is overall survival. It’s unambiguous, it’s internationally accepted and of course, it’s the one that counts. And in terms of timing, unfortunately, this is a disease where you don’t have to wait that long to obtain survival data. As I say median survival is around two years. Whereas a PFS study would be around one year median, PFS 11 months or 12 months, something like that.

So it’s not a big difference between a surrogate endpoint like PFS and the hard clinical endpoint of overall survival. The OS is I think the default. Now it’s possible that a form of PFS might be a good surrogate. But we don’t really know that today and with our kind of immunotherapy, as I’ve mentioned previously, their major concern is pseudo progression, that we drive T cells into lesions which get bigger for a good reason, which is the T cells are proliferating. The assumption of the recessed rules is that lesions getting bigger is bad because it’s T — it’s tumor cell proliferation. And that, obviously, is an assumption that was developed when research was developed for cytotoxic chemotherapy, and it worked for targeted therapeutics, but obviously has just theoretical challenges.

And then practical observed challenges if you apply that principle, to a therapy designed to expand lesion size. So RECIST is a problem. I think the agency kind of knows this. And the question is whether the modification to RECIST, could iRECIST that use that permits essentially one cycle of so called pseudoprogression, whether that adequately addresses the nature of efficacy that we observed with our vaccine based immunotherapy. And we simply don’t know the answer. And that’s why we’re collecting the data in the phase 2 study. So that will be part of the discussion. And then obviously, there’s much interest in ctDNA it is clearly something that a lot of people are working on. Our view is that it will become an accepted surrogate in metastatic disease.

But the question is, when will that come and obviously, the agency needs to see a body a significant body of validating data that so far has not been generated and presented. And so there is uncertainty as to when that window crossed the line and start to accept ctDNA change as a surrogate endpoint. I think they’re holding the bar appropriately high. Obviously, we don’t want to approve drugs, with endpoints that actually lead to approval of drugs that ultimately don’t extend survival. Parenthetically, we’ve seen quite a bit of that with checkpoints and the use of RECIST, as a basis for accelerated approvals. Hence the advisory committee last year on that notion of dangling approvals, some of which led to sponsors withdrawing, approvals. So it’s a complicated topic.

It’s one that can only really be answered with data. We’re generating the data, and we’ll be discussing those data with the agency first half of 2024. And as I say, there’s always going to be an endpoint for phase 3 that we will be very happy with which will be able to survival. The question on table is whether there’s a proximal endpoint that might enable an earlier perhaps accelerated approval. So more to come on that topic. Thanks for the question.

Mayank Mamtani: Thank you. Looking forward to it.

Operator: The next question comes from the line of Arthur He with H. C. Wainwright. Please proceed.

Arthur He: Hey, good afternoon, Andrew and team. This is Arthur on for Sean. Thanks for taking my question. I apologize because I get on the call late. And I apologize if this topic has been discussed. So regarding your COVID vaccine program, I noticed there’s a data update expecting the second quarter of this year. Could you tell us what kind of data result can expect here?

Andrew Allen: Sure, yes. Thanks for the question. I’ll turn it that question has not been asked before. So happy to take it. The key issue with self-amplifying mRNA is whether it is better than mRNA. Because if it isn’t, then obviously I think we have some pretty good mRNA vaccine players out there. But they are not perfect. And one of the key challenges has proven to be the durability of mRNA vaccine elicited neutralizing antibodies. And if you had a vaccine platform that generated antibodies that were more persistent, that I think would be a materials advanced because it would reduce the need for repeated boosting, which obviously has bedeviled the field of mRNA vaccines as we all know. And we have early data in the boost setting from our U.K. study suggesting that some RNA elicits neutralizing antibodies that have high stability in the blood, meaning that the cause concentrations of antibody doesn’t materially change over six months.

That’s what we observed in a small number of subjects. And therefore, we need to confirm that finding in a much larger end, ideally of subjects who have not been previously primed and vaccinated but are vaccine naive. And that’s the dataset that we’ve been generating in South Africa in our CEPI funded study of several different SARS-CoV-2 constraints in a vaccine naive population in South Africa. So six months antibody data is what we anticipate sharing at the ECCMID Conference in Copenhagen in April. And that will be from over 100 subjects, that we’re looking at some different dose levels, slightly different types of subjects, some are virus naive, or we’re trying to determine virus nature, which can be a little bit challenging, but let’s label them virus naive versus clearly virus convalescent folks.

But they’re all vaccine naive. So that’s a very important data set. And that is key I think, to the new data coming in April of this year. Now, the second question around differentiation, perhaps will relate to, to the dose. And here there’s a growing interest in the notion of multi pathogen vaccines. And the one that’s much talked about is the idea of a single vaccine that protects people over 60 against three different viruses, RSV, influenza and SARS-CoV-2, so can I put all three together? And obviously the question is, what will the benefit, in other words immunogenicity look like? And then what will the reactogenicity look like, how well tolerated or such a vaccine be. And the challenge with some of the products is that, at the full dose, there’s a clearly acceptable amount of reactogenicity.

But if I drop the dose, perhaps by a third, to allow three equivalent, or three different pathogens in the same product, dropping the dose actually leads to meaningfully reduced immunogenicity, which obviously, is not what you want, that’s definitely moving in the wrong direction. And so dosing and immuno reactor ratio becomes very important for the platform. And this is where self-amplifying mRNA may have an advantage because it does make copies of itself, which permits relatively low doses to be used, as we’ve shown. And so the interesting question becomes, do we see good immunogenicity at low doses, as low as three or five micrograms, such that one could think about putting three of those doses together into a 50 microgram product with acceptable reactogenicity.

And I think the immunoreactive profile of samRNA looks a bit different from what we’ve seen so far from mRNA, that just the numbers are different. And of course, again, be looking out for those data in this data set coming in ECCMID. So those are two potential points of key differentiation for self-amplifying mRNA versus mRNA. And I think that’s what you should be looking for.

Arthur He: That’s awesome. Thanks for the color Andrew. And my second question actually alluded to the, the multi agent vaccine. So in your plan, are you guys still pursuing COVID through RSV, vaccine by yourself? Or — you were only consumed with a partner?

Andrew Allen: We’re interested in that product concept for sure. And there are obviously quite a few things, we can do it at research level. We’re well equipped to do those. And obviously, if we have good data, then that might be something apart, potentially would be interested in. So certainly we are we are pursuing that product class internally, initially at the research level as you as you might anticipate.

Arthur He: Got you. Thanks for taking my question and congrats on the progress.

Andrew Allen: Thank you.

Operator: Our next question comes from the line of Corinne Jenkins with Goldman Sachs. Please proceed.

Corinne Jenkins: Yes. Good afternoon, everyone. Maybe just a couple from me with this fourth quarter update for GRANITE. Just how many patients should we be looking for? And can you talk I know we don’t have a great sense of the magnitude of ctDNA benefit. But as you think about clinical thresholds to move forward with the program, what would be your best case expectation? What would make you really excited? And what would be kind of the last exciting outcome?

Andrew Allen: Yes, thanks, Corrine. So the sample size for the phase 2 component is 80. And obviously, the study is enrolling well, and we anticipate a data from a meaningful fraction of those subjects at year end. And the key here is that you need four months data. So that’s the constraint on this total quantity of data this year, which is the requirement for four months data, and the reason we need four month data is that we have observed even in third line, and we’ve shown these, these data, we observe pseudoprogression, not infrequently, which means that markers can be going up at the six, eight week time point. And scans can show lesion expansion at that time point, which actually is pseudoprogression. Because it then subsequently everything comes down.

And so obviously, showing two months data is potentially uninformative. Four months data, usually all of those events have occurred in the past, and it has become clearer by four months, the trajectory for that patient. So four months data on a meaningful fraction of VAT in Q4 of this year. In terms of magnitude of ctDNA response, as I mentioned earlier, we’re powered to find the 20% delta, obviously, the higher the Delta, the more excited we will be. Because again, I think it’s truism that going down is good, and the more people you have going down, and the further down they go, and the more durable that decline in their ctDNA, the better. So it is a sliding scale. Greater frequency, depth and durability are all good. And we don’t yet have enough insight into how that correlates with overall survival to sort of think about boundaries, that just simply a quantitative qualitative statement, I think that more of that is a good thing.

Corinne Jenkins: That’s helpful. Thanks. And then. So with the SLATE candidate that you’re moving forward with it, I — It sounds to me like it’s slightly different versus when we thought as now, as you thought about updating that for next trial, just what were you trying to optimize for? And how do you think you’ve delivered that with this new, newer candidate?

Andrew Allen: Yes, it’s, we have tried to optimize, because obviously, one of the beautiful things about immunotherapy and the fact that we make our own products is that we can practice real translational development, whereby we observed in humans that in patients the outcomes, the effects of a particular vaccine, and we can then quickly iterate on it, and then hopefully improve it, make it and put it back in the clinic. It’s true. Bent bed to bench back to bed, biology and drug development, which is pretty exciting. And you’ve seen this with SLATE. If you remember, we have a version one of SLATE that contains KRAS mutations, but also some additional dead antigens. And what we observed there was that the magnitude of the immune response to the KRAS mutations was not as strong as we anticipated, based on preclinical testing under our GRANITE data.

And we dissected that out and realize that we actually had included an immune dominant antigen in the vaccine, which was a great antigen, but actually rare. And therefore, it didn’t, it wasn’t relevant to most patients. But it was presented by a common HLA alleles. And so many patients were making really strong immune responses to this dominant antigen. But those immune responses were useless because the tumor didn’t have the actual mutation. But the net effect was to actually then reduce the strength of the KRAS specific response, which is the one the patient needed. And so this was obviously a novel observation, no one had really understood the notion of a hierarchy of antigenic dominance within human cancer, new antigens. So this was a new observation, but an important one, and it was actionable.

So we modified the vaccine to remove that, that rare but dominant antigen, and we made a KRAS dedicated product. And that’s what we showed more data on that ESMO, last September in Paris. And we did indeed see a strong immune response to the modified vaccine exactly as we had intended. The key issues I mentioned earlier, is that we’re still delivering a single new antigen, and you just have to worry about acquired resistance. And the best way that we can deal with that is to deliver additional antigens relevant to the patient. And that’s the key term. It’s not enough, obviously, just to put in any old antigen, it has to be relevant to that patient’s tumor. And that’s the interesting question, what are those other antigens that that will be relevant to a patient with a KRAS mutation?

And how do I do I capture those in a vaccine in a form that enables the patient to mount now a strong immune response to multiple antigens, which is likely to reduce the frequency and tempo of acquired resistance, all things being equal. So that’s the biological problem as we framed it, and we think we’ve got a good solution to that. And we’ll be talking about that more in due course, as I say, as we start to prepare for launch of that study.

Corinne Jenkins: Maybe just a quick follow up on that because as you said, you had the pieces D3 there and that didn’t work great. How confident are you that you’ve been able to find the right additional antigens to go forward with this next generation product?

Andrew Allen: We’re confident, because obviously we we’ve been learning a lot about how to encode antigens within our vaccines. And we’ve been learning a lot about antigens, obviously, as we continue to study human tumors in great depth. And as I mentioned earlier, we have a large team in Cambridge that does work using sequencing, but also this sophisticated mass spec technique where you literally observe peptides presented on the surface of tumor cells. And you can actually quantify them. You can do quantitative mass spec. So you can kind of count the number of HLA peptide complexes on the surface of human tumors. And you can do that for different antigens and different HLA alleles. And that probably relates to this dominance phenomenon.

So we think we’ve got a way of assessing that outside of a clinical trial, just from tumor samples. And then of course, we design accordingly, and then tested again, back in humans. So again, this iterative loop, and I think, long-term, if you want to deliver good new antigen on cancer, tumor antigen vaccines to large numbers of patients cheaply, the off the shelf product, obviously, is where we need to end up. We’ve got a lot to learn still, but I think this is a game that really is worth playing hard. And the winners I think, will be those who figure it out and deliver these multi targeted products in an off the shelf format, to huge numbers of solid tumor patients. And these products are obviously a lot cheaper to make them personalized products.

That’s obviously the one of the key attractions here.

Corinne Jenkins: Yes, thank you.

Andrew Allen: Thanks Corrine.

Operator: Thank you, ladies and gentlemen. There are no further questions at this time. And this will conclude today’s conference. You may disconnect your lines and thank you for your participation.