Ziopharm Oncology Inc (ZIOP) Q1 2021 Earnings Call Transcript

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Ziopharm Oncology Inc (TCRT -13.04%)
Q1 2021 Earnings Call
May 6, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by. This is the conference operator. Welcome to the ZIOPHARM Oncology Inc's First Quarter 2021 Earnings Conference Call. As a reminder all participants are in a listen-only mode and the conference is being recorded. After the presentation there'll be an opportunity to ask questions [Operator Instructions].

I would now like to turn the conference over to Adam Levy, Executive Vice President, Investor Relations and Corporate Communications. Please go ahead.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thank you, operator. Good afternoon and welcome to the ZIOPHARM Oncology conference call and webcast to review results for the first quarter ended March 31st, 2021. This afternoon we filed our 10-Q and issued our financial news release both of which are available in the Investors section of our website, ziopharm.com. For informational purposes, we have also posted a set of PowerPoint slides to accompany today's commentary. These slides can also be found on our website in the Investor section.

During this call, the company will make a number of forward-looking statements, including statements regarding the potential therapeutic candidates in our development pipeline, regulatory status, financial information and business trends. Forward-looking statements are subject to numerous risks and uncertainties as described in our 10-K and 10-Q filings and within other filings that we may make with the SEC from time-to-time.

On our call today we have, Heidi Hagen, Interim Chief Executive Officer who'll present a brief corporate summary and financial overview and Dr. Raffaele Baffa, Chief Medical Officer who will present an update on our clinical programs. In addition, we're joined by Jill Buck, our EVP of Operations and Strategy and GM of Gene Therapy, Ellee de Groot, our EVP and GM of Cell Therapy and James Huang, our Executive Chairman. All of whom will be part of the Q&A which we'll open up after the formal remarks by Heidi and Raffaele and to get started, I'll turn the call over to Heidi Hagen.

Heidi, please go ahead.

Heidi Hagen -- Interim Chief Executive Officer

Thank you, Adam, and welcome everyone. I'm pleased to provide an update on our progress this quarter. The first quarter was one of focus and execution as we emphasized building shareholder value over the long-term. I would like to give an overview of several achievements and moves we've made reflecting this focus, as we prioritize our portfolio, strategically guided by capital allocation.

During the first quarter, the first patient was infused in the CD19-RPM CAR-T Phase I trial being conducted by our joint venture partner Eden BioCell. We look forward to providing updates on this important trial in the second half of the year. We made meaningful progress expanding our infrastructure during the quarter. We completed construction of our cell therapy GMP facility and will be qualifying and validating the facility over the summer. This will be followed by qualifying the process in the facility and adding the facility to the TCR-IND to supplement our CMO partner's capabilities with our own GMP manufacturing for the TCR Phase I trial at MD Anderson. This will allow the company to control our own destiny and expand patient capacity as we continue to progress our TCR-T work.

We have made the difficult decision announced today to accelerate and complete the wind down of our existing IL-12 clinical trials. We have not taken this decision lightly. But the management team and board agreed that capital and resources can be better deployed elsewhere. We remain open to partnerships and continue to believe in the potential benefits of this experimental therapy. In addition, as we explore next gen technologies, we have begun evaluating synergies between our IL-12 program and cell therapy program.

We anticipate a small number of layoffs through the end of 2021 associated with the closure of the existing IL-12 program. These reductions represent approximately 15% of our total headcount. We will be reallocating capital and human resources to support our growing TCR clinical program over the remainder of the year. Also, we anticipate the closure of the CD19-RPM CAR-T Allogeneic Phase I trial. Our focus and our investor focus should be on our CAR-T program in Taiwan being conducted by our joint venture partner Eden BioCell.

We ended quarter one with cash $100.1 million giving us a runway into late quarter two of 2022 and management believes this could be further extended. Management and board are working diligently and smartly to define the best approach for future capital needs. As we have discussed previously, we are committed to shareholder value as we consider and implement our capital raising approach. We'll have more to say on this in the near term. Other details on our financial performance during the first quarter can be found in our press release and 10-Q both of which were issued earlier today.

Regarding our search for a permanent Chief Executive Officer, the board seeks an individual who can continue to drive execution and deliver success for all our stakeholders. I'm pleased to report that the board has made good progress on identifying a strong initial set of candidates. We will continue to update you on this as it progresses. Before I turn the call over to Raffaele, I want to remind investors that we will hold our Annual Shareholder Meeting on May 19. This will be a virtual meeting and we look forward to shareholder participation as we continue to execute on our strategy.

With that, I will now turn the call over to our Chief Medical Officer, Dr. Raffaele Baffa. Raffaele?

Raffaele Baffa -- Chief Medical Officer

Let me begin by saying how pleased we were to have had the chance to share detailed overview of our cell therapy programs during our R&D Day held in March. Materials from that event are posted on our website. Given the deep dive of that event as today I will provide a very brief update. At AACR on our meeting last quarter, we presented a poster highlighting work of evaluating the ability of the non-viral Sleeping Beauty transposes gene transfer system to redirect the specificity of T cells to our QC3 [Phonetic] and KRAS neoantigens and to characterize the resultant engineered TCR-T cell populations for specificity and function. These data give us increased confidence in our TCR neoantigen work and the poster in abstract are available on our website.

Heidi mentioned the difficult decision the company has made to accelerate the wind down of the existing IL-12 clinical program. We'll continue to monitor and report back at the appropriate time on the patients already enrolled. Now on, our CD-19 Rapid Personalized Manufacturing of CAR-T trial in Taiwan. We were pleased Eden BioCell announced first patient dose using our RPM technology. This trial is progressing and we anticipate sharing data in the second half of this year. It is important to note the advantages of our system that we believe have the potential to differentiate us in this space. For example, patients are refused two days after transfer of CAR genetic material into the patient T cells.

Turning to our, TCR Library Trial. Our internal team is making good progress and we are pleased to have the IND clearance in the first quarter. We're now focused on streams of activity on both of the manufacturing side and on the clinical enrolment side. We continue to anticipate treating patients in the second half of this year. As we've previously guided, we would expect the first data on this trial to readout in 2022.

In our preclinical research area, we continue to explore a variety of next generation enhancements to our TCR technology notably the inclusion of membrane-bound IL-15 and to pursue in-licensing of additional TCR to our Library to expand the treatable patient population. We have provided an updated pipeline slide that reflects our ongoing progress in the materials posted to-date as a reference.

With that, I'll now open the call for questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] the first question is from Alethia Young from Cantor Fitzgerald. Please go ahead.

Nina -- Cantor Fitzgerald -- Analyst

This is Nina on for Alethia. So as you prepare to start the company Library TCR-T trial in solid tumors. What are the remaining steps to get that steady up and running and at MD Anderson are clinical trials running relatively normally in light of COVID? Thanks.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thanks Nina. Let me maybe ask Raffaele and Ellee to comment on that one.

Raffaele Baffa -- Chief Medical Officer

Thank you for the question. So I can tell you that, we're moving forward with we'll open after the prior fairly sooner at MD Anderson and the worse of the COVID has passed. It's beyond us, that's what we hope and MD Anderson is starting enrolling patients at the speed. Let's say pre-COVID. So we're confident we're going to start enrolling as we have announced earlier in the Q3 of this year. Ellee, do you want to add something?

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

Sure, thank you. The two remaining stuffs then to really-which is focus of our team are A; to complete these final manufacturing qualification batches at our contract manufacturer and preparation for in the trial and being able to do that clinical production. And then, as Raffaele said, identifying patients. So those are two major focal points of the team and those activities are moving along nicely and give us confidence that we'll able to enroll patients by the end of the year as we projected.

Raffaele Baffa -- Chief Medical Officer

I'd like to add, that we started pre-screening process already for the patient for this trial.

Nina -- Cantor Fitzgerald -- Analyst

Okay, thank you.

Operator

The next question is from Chris Howerton from Jefferies. Please go ahead.

Chris Howerton -- Jefferies -- Analyst

As you think about the wind down of the activities of the IL-12 program, what can we expect in terms of some of the changes, if any to the R&D line there? And I guess overtime basically, what should we look like over for the rest of this year. The second question I have is, just maybe just a clarification. What exactly is the CRO now that is manufacturing the cells for TCR-T program and doing the qualifying and how is that different than the facility in Houston? So thanks.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thanks Chris. Maybe Heidi, you want to take the first one and then Raffaele the second. The first question Heidi was on the outlook for R&D spend given the IL-12 shutdown.

Heidi Hagen -- Interim Chief Executive Officer

Yes, thank you for the question. So as we've discussed before we're really pivoting and focusing on our cell therapy programs and very much our TCR programs. So we are focused on getting our manufacturing of ingoing and appropriately ready to dose the first patient as Raffaele stated some of the steps to getting toward that from a clinical perspective. And so we're really looking toward moving our capital allocation in that direction and expanding it at a speed that we feel like will enable us really attest that platform and move forward quickly. So you can expect that's where R&D focus will be going forward, which is inconsistent with what we've talked about in the past just an opportunity now to take some of that other capital allocation we've had in the past and focus and put it toward that program at this point.

I guess Raffaele and Ellee; do you want to comment on our CMO and our GMP manufacturing for the question?

Raffaele Baffa -- Chief Medical Officer

Yes. So first we're not disclosing at this time the name of the CMO. What can I say is that our internal manufacturing CPU [Phonetic] is going to be supplementing the CMO, so we're double doing this way?

Heidi Hagen -- Interim Chief Executive Officer

And that will enable us to really think about how we want to expand and do future work in TCRs as we go forward in 2022. So it gives us a lot of optionality having two streams of manufacturing.

Chris Howerton -- Jefferies -- Analyst

Okay and maybe if I could just add clarification. So obviously there'll be OpEx put toward the program as you described. But is there any significant capital expenditures that we should expect or is that basically done at this point for your facility?

Heidi Hagen -- Interim Chief Executive Officer

Thank you, Ellee.

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

So that is now complete. So we have completed the construction and the installation of equipments and as Heidi outlined in her summary earlier. We are marching through the qualification of the facility and the batches that it will be required for demonstrating that we can perform the process for the clinical trial.

Chris Howerton -- Jefferies -- Analyst

So just to maybe ask the question very plainly. There is no more capital expenditures expected for the facility or meaningful ones at this point?

Heidi Hagen -- Interim Chief Executive Officer

I would say for the capacity that we're talking about now, which would be for Phase I trial. We will look toward if we move-hopefully moving the TCR program forward in the future years. We would obviously be expanding into Phase II and Phase III and so we may have opportunity at that point, where we'll expect to expand our capacity further. But at this point, we're very comfortable with the capacity you have between our CMO partner and our facility that we have built thus far amid the qualifying.

Chris Howerton -- Jefferies -- Analyst

Got it. Okay. All right, that's very clear. Thank you very much.

Operator

Your next question is from David Novak of Raymond James. Please go ahead.

David Novak -- Raymond James -- Analyst

Just one from me. On the auto CAR-T program. Could you guys help us frame up expectation for the preliminary look we're expecting in the back half of this year? I mean based on current enrollment rates since March. Could you speak probably to something like patient numbers or maybe timing of disclosure, like ASH a reasonable forum for this data? Anything you can help in terms of just framing that expectation will be helpful. Thanks and I'll leave at there.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thanks David. Raffaele, do you want to comment on that? And then Ellee, you can add additional color.

Raffaele Baffa -- Chief Medical Officer

Sure, as I said actually the R&D Day, the expectation is we have five to six patients by the end of the year. Now, is ASH the right place? Might be. It depends on how many patients we have. I believe they will the submission deadline. Definitely will be a good feat. I'm not sure we're going to make it for ASH, that's all I can. But it's going to be right after ASH that we're going to submit for a conference [Phonetic]. Ellee, you want to add something?

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

I don't really have anything further to add. I think you covered it.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thanks David. Anything else?

David Novak -- Raymond James -- Analyst

That's it from me. Thanks so much.

Operator

Your next question is from Yale Jen from Laidlaw & Co. Please go ahead.

Yale Jen -- Laidlaw & Co -- Analyst

In terms of allogeneic CAR-T, that you're going to close down. What's the next potential possibility would that be our license or other alternatives?

Heidi Hagen -- Interim Chief Executive Officer

I think as we've discussed and-I'm sorry go ahead, Adam. As we discussed I think in some of the releases and what we put out today is really we're asking folks to on our auto CAR-T trial where we're really putting a lot of effort to look at the Phase I there and so the closing of that trial. We feel like it's just one step in terms of us focusing toward that and that leaves us options and considerations for the future. But we really are putting most of our effort in that direction.

Yale Jen -- Laidlaw & Co -- Analyst

Okay, maybe just one more question here. Could you update us in terms of the status of the Library at this point? Is there anymore targets been added to the Library since last time, R&D Day and what those might be?

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Ellee, do you want to talk about the Library?

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

Sure. As we outlined in R&D Day, we started our IND with six TCRs, six of them with promising TCRs and submitted that to the FDA and for the trial will be initiated with those TCRs. But we also as we outlined have in licensed a number of TCRs from the NCI. So I think it' well over 40 TCRs against 18 different targets and so we're working through these evaluations of those TCRs and selecting which ones we want to add to the IND next and are actively working toward that goal and we anticipate doing that through the year.

Yale Jen -- Laidlaw & Co -- Analyst

Okay, great. Thanks appreciate it.

Operator

The next question is from Thomas Flaten of Lake Street Capital Markets. Please go ahead.

Thomas Flaten -- Analyst

Just a follow-up on the auto CAR. There was some preliminary data presented on six patients from the compassionate use and investigator-initiated activity going on in Asia. Do you have any updates on that? Any outcomes of those patients? Or the most patients added? Is there anything you'll be sharing in the near term with respect to how those patients are faring?

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Thanks Thomas. James, do you want to provide some comments on that?

James Huang -- Executive Chairman

Sure, Thomas. We continue to monitor patients. We don't have any update at the moment. We're working through some of the-last year's some of the changes in the law related to data information under genetic law there is. So we're in the process of setting up a domestic legal structure in order to adjust that. So sure of we don't have any new data or information on the patient to share with you.

Thomas Flaten -- Analyst

Great and then with respect to clinical trial enrollment. It sounds like things are up and running at MD Anderson. Any update on what's going over NCI and how things are looking for TCR study over there?

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Heidi, do you want to comment on NCI and then Raffaele or Ellee, can add?

Heidi Hagen -- Interim Chief Executive Officer

Sure. As we think we stated before, we don't control that facility or the patient enrollment there. We're a great supporter of Dr. Rosenberg. But they're still I think working on their technical issues to bring, their facility back in and do the work there. So we continue to talk with them and advise. But it's really outside the bounds of our process and our protocol and our technical side of it. So it really resides within them. We expect them and hope that they'll be coming up soon with patients and manufacturing soon in the future. But it is outside of our concerns.

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Ellee, anything you want to add on that, on NCI?

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

The only thing I would add is just, that we have said before that the issues that are going on at the NCI with regard to kind of trials being suspended are really unrelated to our own technology and so we're in close coloration and speaking with them regularly. But we're really not at liberty to discuss the details of those and we're hopeful to move that forward.

Thomas Flaten -- Analyst

Great thanks for taking the questions. Much appreciated.

Operator

This concludes the question-and-answer session. I would like to turn the conference back over to Heidi Hagen for any closing remarks.

Heidi Hagen -- Interim Chief Executive Officer

We really want to thank everyone for joining us today and we look forward to speaking with you again at our next quarterly call. Have a great day and wish everybody well.

Operator

[Operator Closing Remarks].

Duration: 24 minutes

Call participants:

Adam Levy -- Executive Vice President, Investor Relations and Corporate Communications

Heidi Hagen -- Interim Chief Executive Officer

Raffaele Baffa -- Chief Medical Officer

Ellee de Groot -- Executive Vice President and General Manager of Cell Therapy

Thomas Flaten -- Analyst

James Huang -- Executive Chairman

Nina -- Cantor Fitzgerald -- Analyst

Chris Howerton -- Jefferies -- Analyst

David Novak -- Raymond James -- Analyst

Yale Jen -- Laidlaw & Co -- Analyst

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