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Rubius Therapeutics, Inc (NASDAQ:RUBY)
Q4 2019 Earnings Call
Mar 12, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Rubius Therapeutics, Fourth Quarter and Full Year 2019 Financial Results and Strategic Update Teleconference and Webcast. [Operator Instructions]. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. I would now like to introduce the first speaker, Lori Melancon, Vice President of Corporate Communications and Investor Relations. You may begin.

Lori Melancon -- Vice President, Corporate Communications and Investor Relations

Thank you, operator. Good morning and thank you for joining us for our fourth quarter and full year 2019 financial results and strategic update. You may refer to the slides posted to this event within the Investor and Media section of our website. Here with me today are Chief Executive Officer, Dr. Pablo Cagnoni; Chief Medical Officer, Dr. Christina Coughlin; Chief Scientific Officer, Dr. Laurence Turka and; Chief Financial Officer, Andy Oh.

As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectation for the financial performance of the Company are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning risk factors is included in our Annual Report on the Form 10-K, the current report on Form 8-K, which we are filing today, and other filings that we make with the Securities and Exchange Commission.

Today's comments reflect management's current views which could change as a result of new information, future events or otherwise. The Company does not obligate or commit itself to update forward-looking statements except as required by law. Before I turn the call over to Pablo, I would like to note that we do not intend to begin hosting quarterly webcast or conference calls. We are doing so at this time, given the significance of these strategic updates, and we thank you for your time. Pablo?

Pablo J. Cagnoni -- Chief Executive Officer

Thank you, Lori. Good morning, and thank you for joining us for this important update. This morning we reported our fourth quarter and full-year financial results for 2019, and along with this update announced a reprioritization of our pipeline of Red Cell Therapeutics to focus on oncology and autoimmunity.

This decision allows us to focus on the areas in which our RED PLATFORM may offer the greatest potential benefit to patients. Over the past two years, we have generated and presented exciting preclinical oncology data demonstrating the ability of our Red Cell Therapeutics to both broadly activate the immune system and induce tumor specific responses by activating and expanding antigen-specific T cells with our artificial antigen-presenting cells or AAPCs.

The totality of the preclinical data show that our oncology product candidates are highly potent, interact rapidly with the immune system, shrink and in some cases nearly eliminate tumors and appear to be well tolerated. Not only do we observed striking results in vivo using mouse surrogate systems, but also in our in vitro studies using human healthy donor Peripheral Blood Mononuclear Cells or PBMCs. We believe this data support the ability of our RCTs to specifically activate, expand and induce cytokine production in antigen specific T-cells, giving us confidence that this data may be predictive of what we expect to see in the clinic.

Earlier this year, our Investigational New Drug or IND application for RTX-240 for the treatment of solid tumors was cleared by the US FDA and we plan to announce when the first patient has been dosed in the Phase 1 clinical trial. We are working with a superb group of oncologists with experience in the development of cellular therapies and are in the process of initiating clinical trial sites.

Additionally, we plan to file an IND for our first AAPC program, RTX-321, a Red Cell Therapeutic design to expand antigen specific T-cells for the treatment of Human papillomavirus or HPV-positive cancers by year-end. We recently announced that our state-of-the-art manufacturing facility in Smithfield, Rhode Island was operational nine months ahead of schedule. With this capability now in place, we are well positioned to provide consistent, reproducible, high quality GMP grade clinical supply for our soon to start oncology clinical trials. Our team in Smithfield has successfully executed ten consecutive manufacturing runs in preparation for the RTX-240 Phase 1 clinical trial.

Going forward, all of our clinical supply and eventual commercial supply will be manufactured at this facility. Furthermore, we have the potential to significantly expand manufacturing capabilities in our facility and plan to gate additional investments based on future supply needs. In addition to the exceptional team assembled in Smithfield, we have strengthened our leadership team by adding oncology and immunology expertise.

Dr. Christina Coughlin, Chief Medical Officer is an oncologist and immunologist with extensive experience leading clinical development and translational medicine teams with a particular focus in cellular therapy. Dr. Larry Turka is an internationally recognized distinguished physician-scientist with deep expertise in autoimmunity and translational immunology. Later in the call, they will each provide an update on our oncology and autoimmunity programs respectively.

With this increased focus in oncology and autoimmunity, we have decided to discontinue the RTX-134 Phase 1 clinical trial for the treatment of phenylketonuria and to de-prioritize our rare disease pipeline. Multiple factors contributed to this decision including, the unanticipated delays in the RTX-134 program, largely due to continued manufacturing challenges at our CMO. Since the administration of the first dose of RTX-134 in January, our CMO has not produced a single usable batch of RTX-134 despite having patients available for dosing.

Even with the measures we've put in place to correct the operational challenges we experienced last summer and early fall, including embedding a Rubius oversight team at the CMO site, the CMO continued to underperform. The second factor contributing to our decision to deprioritize our rare disease pipeline is the high cost associated with producing chronic high-dose therapy for enzyme deficiencies.

It became clear that the continued investments required to advance RTX-134 at this point in time would be at the expense of what we believe are more promising programs with encouraging preclinical data in oncology and autoimmunity. Finally, the third factor is a continued momentum of our oncology pipeline.

When we initially begun developing RTX-134, we expected to rapidly generate proof of concept data that would unlock the potential of the enzyme replacement pipeline and give us confidence that administering an engineered Red Cell to a patient was well tolerated, which potentially would have been extrapolated across the platform.

With the continued delays in the RTX-134 program, the likelihood of generating early proof-of-concept data in the near future is low and this together with the acceleration of our oncology pipeline does not support continued investment in the program. While this may not be the right time to continue the development of RTX-134, we believe that RTX-134 could provide patients with their well tolerated, convenient and effective treatment option to lower phenylalanine and allow patients with PKU to enjoy a normal diet.

Future capital investments and continued improvements in manufacturing efficiency, together with enhancements to the RED Platform may enable us to revisit chronic, high dose-dependent conditions in the future. Today, we also provided information on the first patient that was dosed in January as part of the Phase 1b clinical trial. RTX-134 administration was well tolerated, and there were no reported adverse events. Beyond safety, the results from the first patient were uninterruptible, possibly due in part to the low dose of cells administered and the sensitivity of the flow cytometry assay used to evaluate cell circulation in the patient.

Unfortunately we cannot draw any conclusions based on data generated from the single patient dosed in the trial. The resulting cost savings expected from the discontinuation of the RTX-134 clinical trial and the deprioritization of PKU and other rare disease programs and a reallocation of capital resources and personnel, enables us to extend our cash runway into 2022.

Andy will give an update on our financial results later in the call. But focusing on the development of our oncology and autoimmune pipeline, we believe we have the greatest opportunity to bring life-saving therapies to patients and to increase shareholder value. I would now like to turn the call over to Dr. Chris Coughlin to provide an update on our exciting oncology pipeline followed by Dr. Larry Turka who will provide an update on our autoimmunity programs.

Chris?

Christina Coughlin -- Chief Medical Officer

Thank you, Pablo. While checkpoint inhibitors and other immunotherapy modalities have revolutionized cancer treatment, their limitations of the class are becoming increasingly evident and new approaches are needed.

Responses to checkpoint inhibitors alone are confined to certain tumor types and only a small portion of patients are cured. The current challenges in immunotherapy are one, to induce responses in refractory or immunologically cold tumors, and two, to increase the rate and duration of anti-tumor activity in patients who respond to existing immunotherapy options.

To that end, we designed RTX-240, an allogeneic cellular therapy engineered to broadly stimulate the adaptive and innate arms of the immune system and generate an effective anti-tumor response. RTX-240 expresses hundreds of thousands of copies of 4-1BB ligand and IL-15 on the cell surface which mimics the presentation of these signals in the normal cell-cell communication in the immune system. These two key signals act synergistically on T-cells and natural killer cells or NK cells leading to both cell activation and proliferation resulting in tumor cells killing.

We believe that RTX-240 provides a potentially transformative and differentiated approach to treat immunotherapy naive patients, as well as in patients whose disease has become resistant or refractory to immunotherapies including checkpoint inhibitors. As Pablo mentioned, the IND for RTX-240 in solid tumors has been cleared by the FDA.

We are currently well into the process of initiating our clinical trial sites and we plan to announce when the first patient has been dosed in the Phase 1 clinical trial. Following monotherapy dose escalation, we plan to evaluate RTX-240 in combination with a PD-1 inhibitors and other immunotherapies. In addition to solid tumors, we plan to evaluate RTX-240 in patients with Acute Myeloid Leukemia or AML. AML cells are known to inhibit the differentiation and function of NK cells, thus decreasing their cytotoxic potential.

The resulting NK cell dysfunction is thought to contribute to disease progression in AML. Furthermore, it has also been observed that NK cell function both during and after treatment is linked to the response to therapy, underscoring the role of NK cells in this setting. In our preclinical studies, RTX-240 induces both activation and proliferation of NK cells supporting the clinical evaluation in the setting of relapsed or refractory AML.

Once initial safety data have been generated in the Phase 1 trial, RTX-240 could be evaluated in the post hematopoietic transplant setting where the NK population could contribute to the graft versus Leukemia effect of the transplant. We expect to provide an update on the timing of the AML program at a later date.

Ultimately the goal in the RTX-240 clinical development program is to improve anti-tumor activity and overcome resistance to immunotherapy in patients with both solid tumors and hematologic malignancies. I'd like to now turn to our second approach in oncology, RTX-321, our first artificial antigen-presenting cell program.

In contrast to RTX-240's broad immune system stimulation, RTX-321 targets a specific antigen. In this case, the human papillomavirus 16 or HPV 16. While a number of different therapeutic modalities are under development to activate and expand endogenous T cells that targets a particular antigen in-vivo, to date, these approaches in general have had limited efficacy.

To address this clinical need in HPV-induced cancers, we developed RTX-321 which expresses an HPV peptide antigen bound to MHC class I, along with 4-1BB ligand and IL-12 on the cell surface. As we have shown in our preclinical studies with human PBMCs when these three signals are expressed and delivered simultaneously on the surface of a Red Cell Therapeutic, RTX-321 promotes antigen specific T cell expansion, cytokines production and cytolytic activity resulting in killing of tumor cells.

Importantly, using mRBC-321, our murine surrogate RCT, we have preliminary preclinical evidence of epitope spreading. Epitope spreading means that the murine RCT is able to not only generate an effective immune response to the selected target antigen, but to additional tumor antigens as well, creating a broader anti-tumor immune response.

Thus we are able to induce anti-tumor immunity in our surrogate murine models. We had planned to present these data in next month at the annual AACR meeting. We plan to share these data at the rescheduled meeting or via another conference. We are very excited about these preclinical data because they suggest RTX-321 may address two key limitations of other Antigen Specific immunotherapies including CAR T cell therapy.

First, RTX-321 significantly activates and expands a response against multiple tumor antigens through epitope spreading. Therefore tumor antigen loss would not be an anticipated resistance mechanism to RTX-321. This is in contrast to the CAR T therapies where antigen loss has been a major resistance mechanism. Efforts in our translational studies in this trial will seek to define the immune response and epitope spreading in both the tumor and periphery in the patients treated in our Phase 1 clinical trial.

Second, RTX-321 may more effectively control the expansion of tumor specific T cells and is thus expected to have better tolerability than that which has observed with effector cell therapies, including CAR-T. Current treatment options for relapsed and refractory HPV driven cancers are limited, and we expect to be able to offer patients a therapy that induces potent and highly specific immune stimulation with better tolerability.

We plan to file an IND for RTX-321 by the end of 2020. Taken together, our two distinct approaches in oncology to both broadly stimulate the immune system and induce a tumor specific immune response through antigen specific T cells may dramatically change the cancer treatment landscape and improve the long-term outlook for patients.

I would now like to turn the call over to Dr. Larry Turka, Chief Scientific Officer to provide an update on our autoimmune programs, Larry?

Laurence Turka -- Chief Scientific Officer

Thank you, Chris. Over the past two decades, considerable progress has been made in the treatment of autoimmune disorders. As a result, many patients enjoy an improved quality of life. However, despite treatment successes, available therapies for autoimmune diseases had significant limitations because typically these therapies need to be administered on a chronic lifelong basis. Just as importantly, many treatments failed to provide adequate benefit to patients and many patients diseases will eventually progress despite continued therapy.

Furthermore, these existing treatments are associated with side effects that include cardiovascular disease, opportunistic infections, cancer and in some cases even severe and fatal reactions to the therapy itself. While the triggers of most autoimmune diseases remain unknown, it is generally understood that autoimmunity is the result of a loss of tolerance to one's own antigens and cells. The accepted model of disease assumes a background genetic susceptibility which when triggered by an environmental event, leads to a loss of tolerance, with the resultant breakdown of immune regulatory mechanisms such as T-cell mediated immune suppression.

In principle restoration of peripheral tolerance should provide patients with a safer alternative to non-specific immune suppression and potentially a cure of their disease. We engineered Red Cell Therapeutics to express specific autoimmune disease associated antigens either within or on the cell surface to take advantage of how the body normally maintains self tolerance, thereby retraining the immune system to no longer see these self-antigens as foreign.

In addition, we have the ability to express immune modulating cytokines, enzymes or inhibitory signals which may have the potential to enhance the tolerogenic effects of RCTs. We believe RCTs can be designed to more specifically modulate complex counter-regulatory immune responses and enable greater efficacy with lower toxicity, potentially providing treatments for a number of diseases, and in some cases, potentially even cures.

Our preclinical data suggests that Red Cell Therapeutics expressing surface bound antigens are capable of blocking immune responses to those antigens potentially inducing tolerance, which is the ability to prevent ongoing responses without a need for continued immunotherapy. In preclinical studies using models of central nervous system inflammation and autoimmune diabetes, we achieved successful modulation of immune responses by expressing the relevant antigens on RCTs.

We believe that induction of tolerance is possible for many other antigens when similarly expressed on RCTs. We've continued to learn more about our platform, we are now focusing on T-cell mediated autoimmune diseases and are pursuing Type 1 diabetes, along with a number of other undisclosed programs. We are earlier in the development of our autoimmune pipeline than oncology and expect to provide an update on our progress in the future.

I would now like to turn the call over to Andy Oh, Chief Financial Officer to provide an overview of our fourth quarter and full year results. Andy?

Andrew Oh -- Chief Financial Officer

Thank you, Larry. Our net loss for the fourth quarter of 2019 was $44.5 million or $0.56 per share, compared to $27.2 million or $0.35 per share in the fourth quarter of 2018. In the fourth quarter of 2019, Rubius invested $30.5 million in R&D specifically toward enhancing our novel RED PLATFORM and toward expanding and advancing our product pipeline, as compared to $16.5 million in the fourth quarter of 2018.

This year-over-year increase was driven primarily by $3.9 million in incremental R&D program spend related to our Phase 1b clinical trial for RTX-134 and toward preclinical and IND-enabling activities for our lead oncology programs, including RTX-240. In addition, $6.0 million in incremental R&D spending was driven by increased R&D headcount, a move into larger facilities, and purchasing lab supplies to support expanded research activities.

Contract research and development costs increased by $3.3 million and R&D stock-based compensation increased by $0.8 million. G&A expenses were $14.9 million during the fourth quarter of 2019, as compared to $12.6 million for the fourth quarter of 2018. The higher costs were primarily driven by a $1.0 million increase in personnel and facility costs due to increased headcount as well as increases in professional fees and infrastructure costs to support the Company's growth.

Now turning to our full year financial results. Net loss for the full year 2019 was $163.5 million or $2.08 per share, compared to $89.2 million or $2.27 per share for the full year 2018. In 2019, we invested $112.4 million in R&D toward developing our RED PLATFORM and toward expanding and advancing our product pipeline, compared to $51.8 million for the full year of 2018. This year-over-year increase was largely due to an additional $31.8 million in R&D personnel, contract research and development, facilities and lab supplies and $23.7 million in R&D program spending, including costs related to the RTX-134 Phase 1b clinical trial as well as preclinical and IND-enabling activities for our lead oncology programs, including RTX-240. R&D stock-based compensation increased by $5.2 million in 2019.

During the 12-months of 2019, G&A expenses were $57.2 million as compared to $39.9 million for the same period in 2018. The higher costs were primarily driven by an $8.5 million increase in stock-based compensation and $8.8 million increase in personnel costs, professional and facility fees to support the our growth and to operate as a public Company.

Now moving to our cash position. As of December 31st, 2019, our cash, cash equivalents and investments totaled $283.3 million as compared to $404.1 million as of December 31st, 2018, providing Rubius with a cash runway into 2022. This represents a shift from our prior cash runway guidance of mid-2021 due to cost saving measures and reallocation of resources resulting from our decision to focus on oncology and autoimmunity.

During the year, we used $110.4 million of cash to fund operations and $40.7 million to fund capex, including work related to the build-out of our Smithfield, Rhode Island manufacturing facility. In addition, the Company drew down a second tranche of $25.0 million in June 2019 from our $75.0 million loan agreement which leaves a third tranche of $25.0 million that can be drawn by June 2020, subject to the satisfaction of certain financial covenants.

I would now like to turn the call back over to Pablo.

Pablo J. Cagnoni -- Chief Executive Officer

Thank you, Andy. As you have heard, we have a number of exciting activities planned for this year, across our oncology and autoimmune programs, where we believe our RED PLATFORM could have the greatest opportunity for patients as well as our shareholders.

Looking ahead of this year, our focus will be on the following. Initiating clinical development for our first oncology product candidate RTX-240 for the potential treatment of solid tumors, delivering GMP product from our own manufacturing facility to support near-term oncology trials, filing an IND for our second oncology product candidates and first AAPC RTX-321 for the treatment of patients with HPV-positive tumors by year-end, and advancing the discovery efforts for RCTs focused on the treatment of autoimmune disorders including type 1 diabetes.

With a streamlined, strategic-focused, experienced team, our fully owned and operational manufacturing facility and cash runway that takes us into 2022, we are well positioned to execute against these priorities and bring this potentially lifesaving therapies to patients. Thank you for joining us today. We will now open the line for questions. Operator?

Questions and Answers:

Operator

Thank you, ladies and gentlemen. [Operator Instructions]. Our first question comes from Michael Yee with Jefferies. Your line is open.

Michael Yee -- Jefferies -- Analyst

Hey guys, good morning and thanks for the question. I mean, I guess there are two positive takeaways and I have two questions, the two positive takeaways are your ability to make your own drug now and you don't rely on the CMO, so that doesn't hold things up. And I guess the cancer timelines will almost come around the same time as PKU. So that's not much of a delay go forward. But if that's the case, I guess my two questions are, number one, on PKU, can you at least make a comment as to what timelines you looked at, or what time points you looked at the cells and whether they are around for weeks at least for weeks. Maybe just make some comment on any information gathered in PKU.

And then the second question is on 240 for oncology, maybe shed some light on at least some estimated timelines for dosing, getting some patients in and presumably at least confirm you do believe you'll have data this year, maybe talk to some of that. Thank you.

Pablo J. Cagnoni -- Chief Executive Officer

Thanks, Mike. Good morning. So let me take the first question, which was about the RTX-134 program. As I mentioned in my prepared remarks, due to the low dose of cells and the fact that our flow cytometry tests underperformed, under real life conditions, I don't believe the results are interpretable in any way other than a positive which is, this is the first time that an engineered Red Cell manufacturing bioreactor has been given to a patient and the administration was well tolerated and no adverse events were reported.

I think that's a really important read through for the rest of the platform. That was one of the questions we had which was, is this going to be safe when administered? And we can say that it was well tolerated. Beyond that, and you might recall that we had this conversation before that I've always had been very remiss to promise that we would have an interpretation of the data based on a single patient treated.

So because of that, together with the lower dose in this -- in this patient together with the poor performance of the flow, I don't think we're going to go any further in terms of interpreting that data. Let me now -- a couple of comments about the RTX-240 and then I'll hand it over to Chris Coughlin, our CMO for additional color. First of all, we're delighted that this was our second IND and for the second time the IND was cleared in 30 days by the FDA which we take as a very positive sign from the perspective of the quality of the package that we submitted and the confidence that the FDA has in the quality of that package.

Regarding the timing, as you can imagine, we're not ready to provide a clear guidance yet. But let me hand it over to Chris for some additional color on this program.

Christina Coughlin -- Chief Medical Officer

Thanks, Pablo. Yeah, we are well on our way to opening our sites for the RTX-240 trial. We're working with a fantastic group of oncologist, all with cell therapy experience and many of whom I know personally and have worked with in cell therapy trials very recently in my previous role. These centers have been handpicked, there is an established clinical trial infrastructure here for cell therapies and we expect to successfully deliver on this trial. It will start with a monotherapy dose escalation. We are planning to develop in AML as well, followed by combination development and as Pablo mentioned, we'll give updates later on the timing.

Michael Yee -- Jefferies -- Analyst

Okay, thank you guys.

Operator

Thank you. Our next question comes from Michael Schmidt with Guggenheim. Your line is open.

Michael Schmidt -- Guggenheim -- Analyst

Hey guys, thanks for taking my questions. I had a question on the RTX-240 Phase 1 study. Maybe first, can you help us understand how the -- how the dose is, or the planned dose range is in this Phase 1 study maybe compares to what you've planned for the RTX-134 program and then also, I guess, your confidence level in those dose is producing the side effects may be based on pre-clinical data.

Pablo J. Cagnoni -- Chief Executive Officer

Good morning, Michael, and thank you for the question. Let me make a couple of comments and then I'll hand it over to our Chief Scientific Officer to comment on some of the measures, some of the biomarkers that we're going to implement in the 240 program. The doses in the RTX-240 are as we discussed before, the doses in oncology in general we predict are going to be lower than in phenylketonuria. And that's an important point, because one of the reasons for the decision that we took today is the high cost of manufacturing large quantities of cells potentially for treatment of phenylketonuria.

So that's a really important point that I want to, I want to highlight. The second part is, we suggested to the FDA a certain starting dose and after a discussion with the agency we settled on a starting dose that is -- as you can imagine for an agonist it is a little bit on the lower side, but still we're very positive about where we ended up with the starting dose for this study and about our ability to escalate the dose reasonably quickly.

The most important thing in oncology though and you and I had this conversation before, is the fact that RTX-240 is intended to be administered and rapidly interact with the immune system, with different components of the immune systems such as T-cells and NK cells and those cells will then traffic to the tumor and deliver the therapeutic effect.

And in fact that's exactly what we've seen in animals. We've seen how those rapid and dramatic expansion of affected T cells in the lymph node, in the spleen, and then those cells migrate to the tumor and they deliver a very strong therapeutic effect in in-vivo models. So let me hand it over now to Larry to comment a little bit further on some of the pharmacodynamic studies that we're going to do as part of the RTX-240 clinical program. Larry?

Laurence Turka -- Chief Scientific Officer

Great. Thanks, Pablo. As Pablo mentioned the key in the study is not necessarily going to be a clinical effect. It's going to be the pharmacodynamic effects of the drug. And as such, and again as Pablo has mentioned, we're going to be looking at effects on the target cell populations, T cells and NK cells, we'll be looking for expansion of T cells and NK cells in the blood. We'll be looking for Activation by itself surface markers and potentially in vitro assays of Cytotoxicity and really importantly, we're also going to be looking at tumor biopsies because obviously that's where the action is. We expect to have T cells and NK cells recruited into the tumors and activated in the tumors. We'll be able to compare tumor biopsies pre-therapy with tumor biopsies post therapy, a critical comparison and through a variety of means, including looking at T-Cell Receptor repertoires, we'll be able to understand whether we've increased the commonality and diversity of the response to tumors, and as I mentioned, assessing T and NK cell activation.

Pablo J. Cagnoni -- Chief Executive Officer

Thank you, Larry.

Michael Schmidt -- Guggenheim -- Analyst

Great, thanks. And then maybe just one follow-up, so with the RTX-240, is this something where one would expect single agent activity or is it really a position as a combination in our partner for something like a PD 1 inhibitor?

Pablo J. Cagnoni -- Chief Executive Officer

Chris wanted to comment on that.

Christina Coughlin -- Chief Medical Officer

Yes. So we're taking a look at both of these in the Phase 1 trial. We do anticipate a monotherapy activity potentially in some of the solid tumors. And then, yes, we do plan to take a look at this as well in combination with the PD-1 inhibitor.

Michael Schmidt -- Guggenheim -- Analyst

Okay, great. Thank you.

Operator

Thank you. Our next question comes from Jonathan Chang with SVB Leerink. Your line is open.

Jonathan Chang -- SVB Leerink -- Analyst

Good morning, thanks for taking my questions. First question, you know, continued manufacturing challenges at the CMO is one of the reasons for deprioritizing PKU. Can you provide any additional color on what these challenges were and what the lessons are for your own manufacturing process and the oncology applications?

Pablo J. Cagnoni -- Chief Executive Officer

Yes, Jonathan. So as I mentioned in my prepared remarks, since we dosed that patient, and we announced that our CMO has been enabled to successfully manufacture a batch of RTX-134 to administer to a patient. That's despite of a number of actions that we -- that we put in place in the late summer, early fall when we had the initial challenges from that facility, that led to us embedding a team having a number of meetings with the CMO management team and try to implement some solutions, which we did. That led to some successful runs, which allowed us to initiate the clinical trial and then was followed by additional failures.

The more recent failures had to do with a number of factors. For example, poor materials management that require last minute procurement activities to keep runs in progress and sometimes to the detriment of a specific run. The process duration changes as a result of stock-out issues, for example, some operational inefficiencies that impacted process flow. And so there's been a litany of problems at our CMO.

So the second part of your question is what gives me confidence. Well, first of all, you asked about lessons learned, I can tell you that the main lesson that we've learned is when you are trying to manufacture a complex biologic that nobody has ever done before, you have to control your own manufacturing. I think we made that decision very early in the journey of this Company. We made that decision a month after going public. And I think it might have been the best decision we ever made as an organization.

Importantly, from that point on, we did everything we could to accelerate having our own manufacturing facility fully operational. And so we delivered that almost a year ahead of schedule. The reason why I have confidence is that's a team that I know personally. We recruited all their key individuals, and that team has now conducted ten consecutive successful runs and is GMP-ready and ready to go.

So I'm confident they can deliver cells for our RTX-240 and I'm confident we will not have the same manufacturing challenges that we had with 134.

Jonathan Chang -- SVB Leerink -- Analyst

Got it. Thank you. And just second question, why not wait until there are data available at the next dose level before deprioritizing PKU?

Pablo J. Cagnoni -- Chief Executive Officer

The challenge there and this is a really difficult decision, Jonathan. As you can imagine, I mean a lot of effort and investment went into this and with the arrival of Chris Coughlin, a few months ago, we really revitalized the RTX-134 clinical program to the point that we had patients ready to go and we couldn't manufacture cells to continue the trial.

I think continue to wait to make that decision would have been at the expense of investments in oncology and autoimmunity. And while it is a really difficult decision to make, at some point in situations like this, you have to decide that enough is enough, and you have to stop certain activity, be able to invest on something that we are convinced has much higher potential a, to deliver important clinical results to patients and potentially to create value to shareholders.

As you and I discussed in the past, we believe -- I believe that the biggest opportunity for this platform is in Oncology and not immunity. As a result of that, difficult as it was, I'm convinced this was the right time to make this decision. And I'm convinced, this is the right decision for the Company.

Jonathan Chang -- SVB Leerink -- Analyst

Got it. Thank you.

Operator

Thank you. Our next question comes from Matthew Harrison with Morgan Stanley. Your line is open.

Matthew Harrison -- Morgan Stanley -- Analyst

Thanks. Good morning. Two from me, I guess maybe first, you know, given the operational delays in it, you saw the CMO and given the progress you've made internally, why not just switch to manufacturing for 134 internally, and then I have a follow-up.

Pablo J. Cagnoni -- Chief Executive Officer

Yeah. That's an excellent question, Matthew. The reason why we decided not to do that, a, it would have been an additional delay. You can't just transfer manufacturing immediately from one place to the other. And included in that would have required an IND amendment, because it's a different manufacturing facility, the original IND for RTX-134 was filed with a certain manufacturing facility.

So I think that would have created an additional delay and still in the relatively near-term, it would have required significant capital investments to continue to increase the capacity to manufacture 134 for which the dose is much higher than for 240. And you said you had a follow-up?

Matthew Harrison -- Morgan Stanley -- Analyst

Yeah. So I guess the second thing is on -- as we think about oncology, can you just talk to us what you view as proof of concept from those initial studies? What that data may look like, etc, just so we have some idea of what you are looking forward to establish proof of concept.

Pablo J. Cagnoni -- Chief Executive Officer

Certainly. Let me have Chris Coughlin comment on that. Chris?

Christina Coughlin -- Chief Medical Officer

So probably the most critical parameter that we're going to look at initially are the mechanistic effect of the drugs, as Larry mentioned earlier understanding, if the drug is doing what we expected to do, the T-cells and the NK cells have been activated and are proliferating in the patient.

We expect this to occur rapidly, but we also expect the pharmacodynamic effect to last for some prolonged period of time and ultimately as we see in our animal models, we see tumor shrinkage. And we expect to see that initially in the patients with solid tumors. Again when we move into the hematologic malignancies, we'll be dosing the drug right there where the AML cells are. We expect to see blast counts decrease. And similarly when we move into combination with PD 1, we expect these two agents to act synergistically.

Laurence Turka -- Chief Scientific Officer

Let me just emphasize one point. As you know RTX-240 is an Agonist, right? Two different signals on the same cell 4-1BB ligand and IL-15TP, both very powerful agonist with an effect on T-cells and NK cells.

As a result of that, I think we have a reasonable expectation that there will be a single agent activity. I think the early data we're going to see, is as Larry and Chris have highlighted, a fair amount of biomarker that we're going to put in place in terms of T cell expansion activation, NK cell expansion activation, both in the periphery and through tumor biopsies.

But I think there is a reasonably high probability that we'll see single agent activity when it comes to clinical efficacy in certain tumor types, Matthew.

Matthew Harrison -- Morgan Stanley -- Analyst

Okay. Thanks very much.

Pablo J. Cagnoni -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Jessica Fye with J.P. Morgan. Your line is open.

Jessica Fye -- J.P. Morgan -- Analyst

Hey guys, good morning. Thanks for taking my questions. Following upon one of the earlier questions, do you have GMP supply of RTX-240 ready to start dosing in the Phase 1 and if not, when will you have that?

Pablo J. Cagnoni -- Chief Executive Officer

Good morning, Jess. No. As you know, the shelf life for RTX-240 is approximately 45 days. So we can't store it. We have an effort, as we discussed before on cryopreserving Red Cell Therapeutics. That effort is moving very rapidly, but we're not ready to provide guidance on one that's going to be ready.

We have conducted as I mentioned earlier now, ten consecutive successful runs, our facility is ramping up and ready to go to initiate the clinical trial for RTX-240. So I'm confident we're going to have supply.

Jessica Fye -- J.P. Morgan -- Analyst

Okay. When will you have that?

Pablo J. Cagnoni -- Chief Executive Officer

The manufacturing is going to be initiated. We're basically conducting a series of runs almost continuously to be ready to start clinical trial as soon as sites are open.

Jessica Fye -- J.P. Morgan -- Analyst

I see, OK. And for the 240 trial, will that be single dose escalation or will patients get multiple doses from the start and also curious at what time point post-treatment, you're going to be taking the biopsy?

Pablo J. Cagnoni -- Chief Executive Officer

Let me comment on the first part and then I'll ask Chris to comment on the second. No, it's not a single dose study. It's a standard, and not only oncology dose escalation study, but it's continued dosing until as in any other oncology trial, either progression or an adverse event requires you to stop dosing.

So it's not as continued dosing. Chris, you want to comment on timing for the biopsies?

Christina Coughlin -- Chief Medical Officer

Sure. Thanks, Pablo. Following the animal data, kind of where we've seen a couple of doses of RTX-240 induced tumor changes will be taking the post-treatment biopsies after either the second or the third dose in the trial. And again, these will be compared to the pre-dose biopsy to take a look at some of those effects in the tumor.

Jessica Fye -- J.P. Morgan -- Analyst

So how far -- how long after the initiation of treatment?

Christina Coughlin -- Chief Medical Officer

So the dose -- yeah, each of the doses will be given every six weeks. And so the biopsies will be taken after that first dose and after the second.

Jessica Fye -- J.P. Morgan -- Analyst

After the first dose and after the second. Okay. And then just bigger picture, it seems like over the past year or so you weren't talking too much about the autoimmune platform. Is that just coming back into focus because you're moving away from rare disease or is there a reason that you kind of feel more excited about that vertical again?

Pablo J. Cagnoni -- Chief Executive Officer

Great question. I'm going to ask Larry to make a couple of comments here. But first let me -- let me answer your question about the past year. I personally have been very interested and excited in autoimmunity from the beginning, and it was one of the key reasons why I came to Rubius. I think that over the past 12 months, 18 months, as you can imagine, there's been a lot of competing priorities [Phonetic] in the Company. We were trying to get the first ever clinical trials for this modality off the ground. We were building a manufacturing facility. And because of the impact, potential impact in oncology, we were generating a lot of preclinical data in oncology and I wanted to accelerate that part of the pipeline, as much as possible.

I think with the recruitment of Larry, which was a deliberate decision, he's a world expert in Tolerance Induction, I thought it was important to have somebody like him in the organization to really refine our autoimmune or tolerance induction strategy. So with his arrival, and he has now had a little bit of time to dig in, we are really reprioritizing as part of this effort autoimmunity, because honestly, I think these are the two areas where this platform has the biggest potential. Larry, I don't know if you have any comment on that.

Laurence Turka -- Chief Scientific Officer

Yes. No. Thanks, Pablo, you know, Jessica, one of the reasons that it so attracted me and excited me about joining Rubius was because of the incredible potential not only in oncology, but also in autoimmunity. And there has been -- as Pablo mentioned a lot of the efforts and recently have been devoted to getting the oncology program into the clinic. And now we have the opportunity to do the same thing in autoimmunity.

There is a wealth of preclinical data from our own work and other work by other investigators showing the potential of modulating autoimmune responses by putting antigens on red blood cells. And I'm really excited that we're going to be -- going to be making significant efforts to do that in a variety of T-cell mediated diseases and hopefully being in the clinic very soon.

Pablo J. Cagnoni -- Chief Executive Officer

Thank you, Larry.

Jessica Fye -- J.P. Morgan -- Analyst

Great. Can I ask one last financial question for Andy? Just when we think about that cash runway you provided, how much of the burn between now and then into 2022 timeframe will be opex versus capex and does that runway assume you take down the third $25 million tranche?

Andrew Oh -- Chief Financial Officer

So I'll answer your last question first. Whether we take down that tranche or not, we will have a cash runway into 2022. Regarding capex, now that our Rhode Island facility is operational, you're going to see a significant drop in capex and but those funds, you'll see go toward R&D programs including -- as well as the 240 trial ramps up, and as we file 321, you'll see not only R&D program spending ramp up, but R&D in total, I think you'll see be slightly higher than last year.

Jessica Fye -- J.P. Morgan -- Analyst

Thank you.

Operator

Thank you. And I am showing no further questions at this time, I'd like to turn the call back over to Pablo Cagnoni, for closing remarks.

Pablo J. Cagnoni -- Chief Executive Officer

Thank you, operator and thank you everybody for joining us today. We have, I think a very exciting year in front of us. We are looking forward to announcing when we treat the first patient in the RTX-240 clinical trial and we will file our second Oncology IND and third IND overall for RTX-321 later this year.

We have now fully operational GMP grade manufacturing facility that will provide clinical trial material for all our oncology programs going forward. And we look forward to updating you on the advancements in the Tolerance Induction autoimmunity pipeline. So with that I will conclude our call. Thank you very much everybody for joining us today.

Operator

[Operator Closing Remarks]

Duration: 50 minutes

Call participants:

Lori Melancon -- Vice President, Corporate Communications and Investor Relations

Pablo J. Cagnoni -- Chief Executive Officer

Christina Coughlin -- Chief Medical Officer

Laurence Turka -- Chief Scientific Officer

Andrew Oh -- Chief Financial Officer

Michael Yee -- Jefferies -- Analyst

Michael Schmidt -- Guggenheim -- Analyst

Jonathan Chang -- SVB Leerink -- Analyst

Matthew Harrison -- Morgan Stanley -- Analyst

Jessica Fye -- J.P. Morgan -- Analyst

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