GENOCEA BIOSCIENCES, INC. Management's discussion and analysis of our financial condition and results of operations should be read together with our 2021 10-K and our unaudited condensed consolidated financial statements and accompanying notes and other disclosures included in this Quarterly Report on Form 10-Q.
Overview
We are a biopharmaceutical company dedicated to discovering and developing novel cancer immunotherapies using our proprietary ATLAS™ platform. The ATLAS platform can profile each patient's CD4+ and CD8+ T cell immune responses to every potential target or "antigen" identified by next-generation sequencing of that patient's tumor. ATLAS zeroes in on both antigens that activate anti-tumor T cell responses and inhibitory antigens, or Inhibigens™, that drive pro-tumor immune responses. We believe this approach ensures that cancer immunotherapies, such as cellular therapies and vaccines, focus T cell responses on the tumor antigens most vulnerable to T cell targeting. Consequently, we believe that ATLAS may enable more immunogenic and efficacious cancer immunotherapies.
On
Since then, in an effort to further reduce costs while assessing strategic alternatives to maximize shareholder value, we have also decided to voluntarily terminate the TiTAN™ clinical study of GEN-011 and continue to review our other research programs and collaborations to determine an appropriate course of action.
GEN-011 is an investigational next-generation solid tumor cell therapy candidate comprised of CD4+ and CD8+ neoantigen-targeted peripheral T cells ("NPTs") which are specific for up to 30 antigens, designed to limit tumor escape. GEN-011 is comprised of T cells extracted from the patient's peripheral blood and specific for ATLAS-prioritized neoantigens. NPTs have minimal bystander, non-tumor-specific cells, and are designed to be devoid of Inhibigen-specific cells which may be detrimental to clinical response. GEN-011 has the potential to be differentiated from other cell therapies because of the breadth of surface-presented neoantigens it targets and the ease of manufacturing tumor-relevant T cells extracted from readily accessible peripheral blood. TiTAN is an open-label, multi-center Phase 1/2a trial evaluating the safety, tolerability, T cell persistence and proliferation, and clinical efficacy of GEN-011. The TiTAN clinical trial was testing two dosing regimens.
GEN-009 is an investigational neoantigen vaccine delivering adjuvanted synthetic
long peptides from ATLAS-identified neoantigens. We reported long-term
immunogenicity and clinical response data from our GEN-009 neoantigen vaccine
Phase 1 clinical trial in
ATLAS platform
Harnessing and directing T cells to kill tumor cells is increasingly viewed as having potential to treat many cancers. Cellular therapies or vaccines employing this approach may be most effective when targeting specific differences from normal tissue present in the patient, such as antigens arising from genetic mutations or cancer-causing viruses. However, the discovery of optimal antigens for such immunotherapies has been particularly challenging for two reasons. First, the number of candidate antigens can be very large, with up to thousands of candidates per patient in some cancers. Second, the genetic diversity of human T cell responses means that effective antigens may vary from person to person. An effective antigen selection system must therefore account both for each patient's tumor and for their T cell repertoire.
ATLAS selects antigens through an ex vivo assay that unveils CD4+ and CD8+ T cell immune responses each patient has made to nearly any possible tumor-specific antigen, including candidate neoantigens, tumor-associated antigens and tumor-associated viral antigens. In doing so, we believe that ATLAS provides the most comprehensive and accurate system for identifying the right and wrong antigens for cancer immunotherapies. Previously, all candidate antigens were thought either to be targets of effective anti-tumor responses (stimulatory) or irrelevant. However, using ATLAS, we have identified Inhibigens and demonstrated, in preclinical studies, that such antigens can promote rapid tumor growth, reduce or eliminate the protection of an otherwise effective vaccine, and dampen or reverse the effects of checkpoint inhibitors ("CPI"). We therefore believe that both by identifying the optimal antigens and by excluding Inhibigens, ATLAS enables differentiated immune responses and clinical efficacy.
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We believe ATLAS has the potential to be a key tool in optimizing antigen selection for therapies across a number of diseases beyond cancer. We have previously demonstrated its effectiveness in identifying novel protective antigens for infectious disease therapies. In addition, while we believe Inhibigens should be avoided in cancer immunotherapies, they could prove to be beneficial in other therapies such as treatment of autoimmune disease.
Intellectual property
Our ATLAS and immuno-oncology intellectual property portfolio comprises nine
patent families and two additional potential patent families, all but one of
which are wholly owned by us. The first patent family, in-licensed from the
President and Fellows of
GEN-011
We believe that GEN-011 represents a new category of adoptive T cell therapy for solid tumors, neoantigen-targeted peripheral T cells ("NPTs"). The first neoantigen-targeted T cell therapy to demonstrate clinical efficacy in patients with solid tumors is tumor-infiltrating lymphocyte ("TIL") therapy. TILs consist of a subset of lymphocytes that have invaded a tumor but, importantly, are not all necessarily specific for tumor antigens. TIL therapy requires a fresh, uncontaminated, viable tumor resection from each patient, from which TILs will be obtained. These TILs are then non-specifically expanded ex vivo in the presence of high dose interleukin-2 ("IL-2") and infused into that same patient, who has undergone lymphodepletion preconditioning, followed by high dose IL-2 treatment. In certain patients with solid tumors resistant to CPI therapy, TIL therapy has resulted in durable clinical responses.
We believe that GEN-011, if approved, may offer efficacy, patient accessibility and cost advantages over other neoantigen-targeting solid tumor adoptive T cell therapies.
The potential efficacy advantages derive from the following product features:
•Targeting up to 30 tumor-specific antigens simultaneously to limit tumor escape, with minimal bystander, non-tumor-specific T cells;
•Avoiding T cells specific for Inhibigens that may be detrimental to clinical response;
•Including both CD4+ and CD8+ tumor antigen-specific T cells; and
•Using peripheral blood-derived T cells, which are believed to have potential for superior activity and persistence.
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The potential patient accessibility and cost advantages derive from the fact that:
•No extra surgery or viable tumor is required as starter material;
•GEN-011 can treat any patient, while some adoptive T cell therapies engineer T cells for applicability to certain human leukocyte antigen types and specific tumor-associated antigens, often limiting their clinical utility to certain subsets of western Caucasians with tumors that express specific targets; and
•The GEN-011 cell expansion process does not require T cell receptor ("TCR") vector design or transduction.
We believe our PLANET process also has some key advantages as it:
•Uses peripheral blood, potentially expanding accessible patient population;
•Has a robust process designed for reliable production; and
•Is a single-use technology for modularity and rapid scalability.
The following is a summary of our PLANET process:
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The Phase 1/2a TiTAN trial investigates the safety, tolerability, T cell persistence and proliferation, and clinical activity of GEN-011 in patients with refractory solid tumors. Our target indications include melanoma, non-small cell lung cancer, small cell lung cancer (NSCLC), squamous cell carcinoma of the head and neck (SCCHN), urothelial carcinoma (UC), renal cell carcinoma (RCC), cutaneous squamous cell carcinoma (CSCC), and anal squamous cell carcinoma (ASCC). The trial includes 2 dosing cohorts. Cohort A patients received a lower intensity regimen without lymphodepletion with fractional GEN-011 doses monthly, and with post-infusion intermediate dose IL-2 (125K IU/kg daily s.c.). In Cohort B, patients received GEN-011 as a single infusion after lymphodepletion, followed by IL-2. This Cohort includes one of three escalating lymphodepletion and IL-2 dose regimens.
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The early results presented at the
Since we presented data at AACR from five patients, one additional patient with an initial Day 57 scan showed progressive disease (PD). Another dosed patient experienced a Suspected Unexpected Serious Adverse Reaction ("SUSAR") that resulted in a fatality, which was timely reported to the FDA.
In an effort to further reduce costs while assessing strategic alternatives to
maximize shareholder value, following the restructuring announced on
GEN-009
GEN-009 is a neoantigen vaccine candidate delivering adjuvanted synthetic long peptides spanning ATLAS-identified anti-tumor neoantigens. The phase 1/2a clinical trial evaluating GEN-009 is currently collecting long-term data across a range of solid tumor types. Part A of the trial is assessing the monotherapy GEN-009 for safety, immunogenicity and ability to prevent disease relapse in certain cancer patients with no detectable tumor at the time of vaccination but with a risk of relapse. Part B of the trial is assessing the safety, immunogenicity and preliminary anti-tumor activity of GEN-009 in combination with CPI therapy in patients with advanced or metastatic tumors.
We have observed the following from our data, most recently presented at the
In Part A of the trial, we have observed the following in the eight dosed patients:
•100% of patients had measurable CD4+ and/or CD8+ T cell responses to their GEN-009 vaccine;
•Responses were detected against 99% of the administered vaccine neoantigens (N=88 administered antigens), a response rate in excess of that which has been reported previously by others in response to candidate neoantigen vaccines;
•GEN-009 was well tolerated, with no dose-limiting toxicities observed; and
•Only two of the eight vaccinated patients have developed a recurrence of their targeted tumor, with up to 36 months of follow-up.
In Part B of the trial, we continue to evaluate immune responses and efficacy in two cohorts of patients, those who are checkpoint-sensitive and those who are checkpoint-resistant.
•In the checkpoint-sensitive cohort, we believe we have shown compelling signals of response.
•Of the nine checkpoint-sensitive patients, four have independent RECIST criteria responses after administration of GEN-009 that appear to be attributable to GEN-009.
•Of those four patients, one patient achieved a complete response and three patients achieved a partial response after vaccination.
•In the checkpoint-resistant cohort, we believe that GEN-009 has shown early evidence of stabilization of disease.
•This group of seven patients initially started their CPI therapy but quickly progressed and transitioned to standard-of-care therapy which generally consists of radiation and/or chemotherapy. After completing the standard-of-care therapy, these patients received GEN-009 vaccination.
•Of the seven patients, one patient achieved a partial response and two achieved prolonged disease stabilization lasting up to 12 months, longer than their prior duration of disease control.
We believe the GEN-009 data confirm the potential antigen selection advantages of ATLAS, the potential efficacy advantage of a personalized vaccine, and suggest a differentiating advantage for GEN-011.
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Other research activities
In addition to our two clinical programs, we are exploring the immunogenicity of
neoantigens and the role and impact of Inhibigens, in collaboration with
Business update regarding COVID-19
The current COVID-19 pandemic has presented a substantial public health and
economic challenge around the world and is affecting our employees, patients,
communities and business operations, as well as the
To date, we have been able to continue our operations and do not anticipate any material interruptions attributable to COVID-19 for the foreseeable future. However, we are continuing to assess the potential impact of the COVID-19 pandemic on our business and operations, including our supply chain, research activities and clinical trials.
Our third-party contract manufacturing partners continue to operate their manufacturing facilities at or near normal levels. While we currently do not anticipate any interruptions in our supply chain, it is possible that the COVID-19 pandemic and response efforts may have an impact in the future on us and/or our third-party suppliers and contract manufacturing partners' ability to manufacture our products or the products of our partners.
Financing and business operations
We commenced business operations in
On
We have a sublease agreement for one floor of lab and office space through
We have a loan and security agreement with
We have an agreement with
We had a purchase agreement with
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As of
These factors, combined with our forecast of cash required to fund operations
for a period of at least one year from the date of issuance of these
consolidated financial statements, raise substantial doubt about our ability to
continue as a going concern. Our future viability beyond one year from the date
of issuance of the consolidated financial statements is dependent on our ability
to raise additional capital to finance our operations. As announced on
Costs related to clinical trials can be unpredictable, and there can be no guarantee that our current balances of cash and cash equivalents, combined with proceeds received from other sources, will be sufficient to fund our trials or operations. These funds will not be sufficient to enable us to conduct pivotal clinical trials for, seek marketing approval for, or commercially launch GEN-011, GEN-009 or any other product candidate. Accordingly, we will be required to obtain further funding through public or private equity offerings, collaboration and licensing arrangements, or other sources. Adequate additional financing may not be available to us on acceptable terms, or at all, which could result in a decision to pause or delay development or advancement of clinical trials for one or more of our product candidates. Similarly, we may decide to pause or delay development or advancement of clinical trials for one or more of our product candidates if we believe that such development or advancement is imprudent or impractical.
Financial Overview Revenues
We have not generated any revenues from product sales to date, and we do not
expect to generate revenues from product sales for the foreseeable future. Our
license revenue in the three months ended
Research and development expenses
Research and development expenses consist primarily of costs incurred to advance our clinical and preclinical product candidates, which include:
•payroll and other headcount-related expenses;
•expenses incurred under agreements with contract research organizations, contract manufacturing organizations, consultants, and other vendors that conduct our clinical trials and preclinical activities;
•costs of acquiring, developing, and manufacturing clinical trial materials and lab supplies; and
•facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.
The following table summarizes research and development expenses for our product
candidates for the three months ended
Three Months Ended March 31
2022 2021
Phase 1/2a programs $ 10,067 $ 5,776
Discovery and pre-IND 879 1,786
Other research and development 1,498 1,189
Total research and development $ 12,444 $ 8,751 Phase 1/2a programs are Phase 1 or Phase 2 development activities. Discovery and pre-IND includes costs incurred to support our discovery research and translational science efforts up to the initiation of Phase 1 development. Other research and development include costs that are not specifically allocated to active programs, including facility costs, depreciation expense, and other costs.
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General and administrative expenses
General and administrative expenses consist primarily of payroll and other headcount-related expenses for executive and other administrative functions. Other general and administrative expenses include facility costs, professional fees associated with consulting, corporate and intellectual property legal expenses, and accounting services.
Other income (expense)
Other income (expense) consists of the change in the fair value of the warrant liability, transaction expenses, interest expense, net of interest income, gains and losses on the sale and disposal of assets, and gains and losses on foreign currency.
Critical Accounting Policies and Significant Judgments and Estimates
Our critical accounting policies have not changed from those described in the 2021 10-K.
Results of Operations
Comparison of the three months ended
License revenue
Three Months Ended March 31
2022 2021
(in thousands)
License revenue $ 270 $ -
During the three months ended
Research and development expenses
Three Months Ended March 31
2022 2021
(in thousands)
Research and development $ 12,444 $ 8,751 Research and development expenses increased
General and administrative expenses
Three Months Ended March 31
2022 2021
(in thousands)
General and administrative $ 3,599 $ 3,671 General and administrative expenses were relatively consistent for the three
months ended
Other income (expense)
Three Months Ended March 31
2022 2021
(in thousands)
Other income (expense) $ (205) $ 439 The change in other income (expense) for the three months ended
Liquidity and Capital Resources
Overview
As of
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On
We have a loan and security agreement ("the SVB Loan Agreement") with SVB for
the
The SVB Loan Agreement contains customary covenants and representations,
including a financial reporting covenant and limitations on dividends,
indebtedness, collateral, investments, distributions, transfers, mergers or
acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries.
There are no financial covenants. As of
The SVB Loan Agreement also includes customary events of default, including
payment defaults, breaches of covenants, change of control and occurrence of a
material adverse effect. Amounts outstanding during an event of default shall be
payable on demand and shall accrue interest at an additional rate of 4.0% per
annum of the past due amount outstanding. As of
We have an agreement with Cowen to establish an ATM equity offering program
pursuant to which Cowen is able to offer and sell up to
We had a purchase agreement with LPC pursuant to which, for a period of 30
months beginning in
Cash flows from operating activities
Cash flows from operating activities consist of our net loss adjusted for
various non-cash items and changes in operating assets and liabilities. Cash
used in operating activities for the three months ended
Cash flows from investing activities
Investing activities used
Cash flows from financing activities
Financing activities used
Operating capital requirements
Our primary uses of capital are for payroll and other headcount-related costs, manufacturing costs for clinical materials, third-party clinical trial services, research, laboratory and related supplies, legal and other regulatory expenses, facility and general overhead costs. We expect these costs will continue to be the primary operating capital requirements for the near future.
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We had available cash and cash equivalents of
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products coupled with the global economic uncertainty that has arisen with the outbreak of COVID-19, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
•the timing and costs of our ongoing and planned clinical trials for GEN-011;
•the progress, timing, and costs of manufacturing GEN-011;
•the timing of GEN-011 patient enrollment and dosing;
•the availability of GEN-011 third-party manufacturing capacity;
•the availability and timing of additional financing;
•the initiation, progress, timing, costs, and results of preclinical studies and clinical trials for our potential product candidates;
•the terms and timing of any future collaborations, grants, licensing, consulting, or other arrangements that we may establish;
•the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights, including milestone payments, royalty payments and patent prosecution fees that we are obligated to pay pursuant to our license agreements;
•the costs of preparing, filing, and prosecuting patent applications, maintaining and protecting our intellectual property rights, and defending against intellectual property-related claims;
•the extent to which we in-license or acquire other products and technologies;
•the costs to manufacture material for clinical trials;
•the costs to seek regulatory approvals for any product candidates that successfully complete clinical trials;
•the costs to attract and retain skilled personnel; and
•the costs to create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.
On
We will need to obtain substantial additional funding in order to complete clinical trials and receive regulatory approval for GEN-011, GEN-009 and our other product candidates. To the extent that we raise additional capital through the sale of our common stock, convertible securities, or other equity securities, the ownership interests of our existing stockholders may be materially diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect the rights of our existing stockholders. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back, or discontinue the development of GEN-011, GEN-009 or our other product candidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, and relinquish or license, potentially on unfavorable terms, our rights to GEN-011, GEN-009 or our other product candidates that we otherwise would seek to develop or commercialize ourselves.
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