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Press Release

Adaptimmune Reports First Quarter 2018 Financial Results and Business Update

- Dosing patients in MAGE-A10 lung cancer study at one billion target cell dose -

- Updated MRCLS response data will be presented in an oral presentation at ASCO

- Guidance confirmed, funded through to early 2020 -

- Conference call to be held today at 8:00 a.m. EDT (1:00 p.m. BST) -

PHILADELPHIA and OXFORD, United Kingdom, May 09, 2018 (GLOBE NEWSWIRE) -- Adaptimmune Therapeutics plc (Nasdaq:ADAP), a leader in T-cell therapy to treat cancer, today reported financial results for the first quarter ended March 31, 2018, as well as provided a business update.

“2018 is off to an outstanding start, and the remainder of the year promises to be even more exciting for Adaptimmune as we look forward to response data from our wholly owned assets in a variety of solid tumors,” commented James Noble, Adaptimmune’s Chief Executive Officer. “The transition of the NY-ESO program to GSK is progressing, our manufacturing capabilities are strengthening, and we have a robust pipeline delivering novel therapeutic approaches to cancer patients. We look forward to presenting further progress in the coming months as we move towards our ambition to be the first to market with an approved TCR T-cell therapy.”

Clinical momentum
Adaptimmune continues to make good progress across all trial cohorts. Clinical data highlights include:

  • Initial safety data (https://bit.ly/2HAuhTS) with Adaptimmune’s wholly owned SPEAR T-cell therapy targeting MAGE-A10 reported in January. These data will be presented and updated in a poster at the upcoming American Society of Clinical Oncology (ASCO) annual meeting in June.
  • Dosing at the target dose of one billion transduced SPEAR T-cells in the MAGE-A10 triple tumor study reported in January (https://bit.ly/2HAuhTS).
  • Dosing at the target dose of one billion transduced SPEAR T-cells after recent recommendation from the scientific review committee (SRC) to dose escalate in the MAGE-A10 non-small cell lung cancer (NSCLC) study.
  • Responses in a second solid tumor, myxoid round/cell liposarcoma (MRCLS), with NY-ESO reported in March (https://bit.ly/2HAluxz). These data will be presented and updated at an oral presentation during ASCO.

Initial safety data from the MAGE-A4 “basket study” (required to support dose escalation to one billion cells) is on track for the second quarter of 2018. MAGE-A4 response data and initial AFP safety data are anticipated throughout the second half of this year.

Manufacturing progress
In another important step towards its ambition to become a fully integrated cell therapy company, Adaptimmune has now received regulatory approval to produce SPEAR T-cells for all of its wholly owned programs (MAGE‑A10, MAGE-A4, and AFP) at its Philadelphia Navy Yard facility. The Company is routinely manufacturing SPEAR T-cells at the Navy Yard, and achieving cell volumes in the range of the therapeutic doses seen with NY‑ESO in synovial sarcoma.

In addition, Adaptimmune announced in January 2018 (https://bit.ly/2D8A52t ) that it had executed an agreement with Cell and Gene Therapy (CGT) Catapult for its own dedicated manufacturing space to secure vector supply for the medium term for ongoing studies with all three wholly owned SPEAR T-cell therapies. The Catapult space is now officially open.

Highlights

Wholly owned programs

Continued momentum towards safety and response readouts from SPEAR T-cells targeting MAGE-A10 and MAGE-A4 in multiple solid tumors throughout the second half of 2018, and initial safety data from AFP in hepatocellular carcinoma anticipated in late 2018

  • MAGE-A10 
        -  Dosing at one billion target cell dose in both pilot studies (NSCLC and “triple tumor”)
        -  To date, no evidence of off-target toxicity in MAGE-A10 pilot studies in patients who received 100 million cells
        -  Response data anticipated in the second half of 2018
        -  Preclinical data presented at the American Association for Cancer Research (AACR) annual meeting in April 2018 support the potential specificity and potency of Adaptimmune’s MAGE‑A10 SPEAR T-cells (https://bit.ly/2HulQJG)
  • MAGE-A4
        -  Basket study: Dosing continues and on schedule to report initial safety data in Q2 2018
        -  Response data are anticipated throughout the second half of this year
        -  Preclinical safety data presented at AACR identified no major safety concerns for MAGE-A4 SPEAR T‑cell, and analyses of NSCLC tumor samples support the validity of MAGE‑A4 as a target in this indication (https://bit.ly/2HulQJG)
  • AFP
        -  Hepatocellular carcinoma: Study open and enrolling with initial safety data anticipated in late 2018
     
  • Next generation SPEAR T-cells
        -  
    Adaptimmune’s US patent US15/713464 covering a “next generation” approach to making our T‑cells resistant to the immunosuppressive environment of solid tumors, has been granted. This approach is likely to be used in some of the Company’s future clinical trials.

NY-ESO program (partnered with GSK)
Compelling clinical data supports the potential of Adaptimmune’s TCR T-cell therapies to treat solid tumors

  • MRCLS: Update will be presented in an oral presentation at ASCO.
  • GSK option exercise and transition: The transition of the NY-ESO program to GSK is ongoing.

Manufacturing
Adaptimmune is building a fully integrated cell therapy company

  • Received regulatory approval to produce SPEAR T-cells for all of its wholly owned programs (MAGE-A10, MAGE-A4, and AFP) at its Philadelphia Navy Yard facility.
  • Routinely manufacturing SPEAR T-cells at the Navy Yard, and achieving cell volumes in the range of the therapeutic doses seen with NY ESO in synovial sarcoma.
  • Announced in January 2018 (https://bit.ly/2D8A52t ) that it had executed an agreement with CGT Catapult for its own dedicated manufacturing space to secure vector supply for the medium term for ongoing studies with all three wholly owned SPEAR T-cell therapies.
  • The Catapult space is now officially open.
  • Had a US patent granted (US9932597), covering a “WPRE-free" vector system, that will further optimize the vector system used for manufacture of its SPEAR T-cells.

Other corporate news
Adaptimmune is in a strong financial position to deliver success with SPEAR T-cell therapies

  • Funded through to early 2020 with cash and cash equivalents of $53.4 million and total liquidity1 of $161.8 million
  • Announced in April 2018 (https://bit.ly/2v7v3D3 ) that John Furey, Chief Operating Officer at Spark Therapeutics, was appointed as an independent Non‑Executive Director to Adaptimmune’s Board of Directors (effective July 5, 2018)

Financial Results for the three-month period ended March 31, 2018

  • Cash / liquidity position: As of March 31, 2018, Adaptimmune had cash and cash equivalents of $53.4 million and Total Liquidity1 of $161.8 million that will fund the Company through early 2020 based on management’s estimates.
  • Revenue: With effect from January 1, 2018, the Company has adopted a new accounting standard2. Under this new accounting standard, revenue represents the upfront payment and milestones under the GSK Collaboration and License Agreement, which are recognized based on the percentage completion of the NY-ESO and PRAME development programs. Revenue for the three months ended March 31, 2018 was $8.2 million. Revenue for the three months ended March 31, 2018 under the previous guidance would have been $9.0 million, compared to $2.9 million for the same period of 2017. This increase in revenue, compared to the same period in 2017, is primarily due to a reduction in the period over which the Company is recognizing revenue following GSK’s exercise of its option over the NY-ESO program in September 2017 and additional development milestones achieved.
  • Research and development (“R&D”) expenses: R&D expenses for the three months ended March 31, 2018 were $25.7 million, compared to $18.6 million for the same period of 2017. The increase was primarily due to increased costs associated with clinical trials, manufacturing for clinical trials, and increased personnel costs.
  • General and administrative (“G&A”) expenses: G&A expenses for the three months ended March 31, 2018 were $11.2 million, compared to $6.5 million for the same period of 2017. The increase was primarily due to increased personnel costs consistent with the Company’s planned growth, an increase in costs associated with developing its IT infrastructure and an increase in other corporate costs.
  • Other income, net: Other income for the three months ended March 31, 2018 was $7.1 million, compared to $0.4 million for the same period of 2017. Other income primarily comprises unrealized foreign exchange gains, which fluctuate depending on exchange rate movements and the amount of foreign currency assets and liabilities.
  • Net loss: Net loss attributable to holders of the Company’s ordinary shares for the three months ended March 31, 2018 was $21.1 million ($(0.04) per ordinary share) compared to $21.8 million ($(0.05) per ordinary share) in the same period of 2017.

Financial guidance
The Company believes that its existing cash, cash equivalents, marketable securities and income from GSK upon transition of the NY-ESO program will fund the Company’s current operating plan through to early 2020.

_________________________________________
1
Total liquidity is a non-GAAP financial measure, which is explained and reconciled to the most directly comparable financial measures prepared in accordance with GAAP below.  
2 ASC 606, Revenue from Contracts with Customers.

  

Conference call information
The Company will host a live teleconference and webcast to provide additional details at 8:00 a.m. EDT (1:00 p.m. BST) today, May 9, 2018. The live webcast of the conference call will be available via the events page of Adaptimmune’s corporate website at www.adaptimmune.com. An archive will be available after the call at the same address. To participate in the live conference call, if preferred, please dial 1-833-652-5917 (U.S.) or 1-430-775-1624 (International). After placing the call, please ask to be joined into the Adaptimmune conference call and provide the confirmation code (2967789).

About Adaptimmune
Adaptimmune is a clinical-stage biopharmaceutical company focused on the development of novel cancer immunotherapy products. The Company’s unique SPEAR (Specific Peptide Enhanced Affinity Receptor) T‑cell platform enables the engineering of T-cells to target and destroy cancer, including solid tumors. Adaptimmune is currently conducting clinical trials with SPEAR T-cells targeting MAGE-A4, -A10, and AFP across several solid tumor indications. GlaxoSmithKline plc (LSE:GSK) (NYSE:GSK) exercised its option to exclusively license the right to research, develop, and commercialize Adaptimmune’s NY-ESO SPEAR T-cell therapy program in September 2017. Transition of this program to GSK is ongoing. The Company is located in Philadelphia, USA and Oxfordshire, U.K. For more information, please visit http://www.adaptimmune.com

Forward-looking statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These forward-looking statements involve certain risks and uncertainties. Such risks and uncertainties could cause our actual results to differ materially from those indicated by such forward-looking statements, and include, without limitation: the success, cost and timing of our product development activities and clinical trials and our ability to successfully advance our TCR therapeutic candidates through the regulatory and commercialization processes. For a further description of the risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, as well as risks relating to our business in general, we refer you to our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 15, 2018, and our other SEC filings. The forward-looking statements contained in this press release speak only as of the date the statements were made and we do not undertake any obligation to update such forward‑looking statements to reflect subsequent events or circumstances. 

Total liquidity (a non-GAAP financial measure)
Total Liquidity is the total of cash and cash equivalents, and marketable securities. Each of these components appears in the Consolidated Balance Sheet. The U.S. GAAP financial measure most directly comparable to Total Liquidity is cash and cash equivalents as reported in the Consolidated Financial Statements, which reconciles to Total Liquidity as follows:

(in thousands)
(unaudited) 
                    March 31,
2018
    December 31,
2017
Cash and cash equivalents   $ 53,375   $ 84,043
Marketable securities       108,459       124,218
Total Liquidity   $   161,834   $   208,261
 

The Company believes that the presentation of Total Liquidity provides useful information to investors because management reviews Total Liquidity as part of its management of overall liquidity, financial flexibility, capital structure and leverage.

Condensed Consolidated Statement of Operations
(unaudited, in thousands, except per share data)

      Three months ended
March 31,
    2018   2017
Revenue   $   8,196     $   2,857  
Operating expenses            
Research and development       (25,732 )       (18,615 )
General and administrative       (11,204 )       (6,463 )
Total operating expenses       (36,936 )       (25,078 )
Operating loss       (28,740 )       (22,221 )
Interest income       659         240  
Other income, net       7,130         430  
Loss before income taxes       (20,951 )       (21,551 )
Income taxes       (127 )       (231 )
Net loss attributable to ordinary shareholders   $   (21,078 )   $   (21,782 )
             
Net loss per ordinary share - Basic and diluted   $   (0.04 )   $   (0.05 )
             
Weighted average shares outstanding - Basic and diluted       562,381,995         428,961,818  
                 


Condensed Consolidated Balance Sheets

(unaudited, in thousands)

  March 31,
2018
  December 31,
2017
Assets          
Current assets          
Cash and cash equivalents $ 53,375     $ 84,043  
Marketable securities - available-for-sale debt securities   108,459       124,218  
Accounts receivable, net of allowance for doubtful accounts of $- and $-   5,052       206  
Other current assets and prepaid expenses (including current portion of clinical materials)   28,777       21,716  
Total current assets   195,663       230,183  
           
Restricted cash   4,360       4,253  
Clinical materials   4,572       4,695  
Property, plant and equipment, net   41,235       40,679  
Intangibles, net   1,238       1,337  
           
Total assets   247,068       281,147  
           
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable   5,051       8,378  
Accrued expenses and other accrued liabilities   19,650       27,201  
Deferred revenue   27,221       38,735  
Total current liabilities   51,922       74,314  
           
Other liabilities, non-current   3,884       3,849  
           
           
Total liabilities   55,806       78,163  
           
Stockholders’ equity          
Common stock - Ordinary shares par value £0.001, 701,103,126 authorized and 564,859,960 issued and outstanding (2017: 701,103,126 authorized and 562,119,334 issued and outstanding)     858         854  
Additional paid in capital   461,603       455,401  
Accumulated other comprehensive loss    (27,136 )      (21,641 )
Accumulated deficit    (244,063 )      (231,630 )
Total stockholders’ equity   191,262       202,984  
           
Total liabilities and stockholders’ equity $ 247,068     $ 281,147  
 

Condensed Consolidated Cash Flow Statement
(unaudited, in thousands)

   Three months ended
March 31,
  2018   2017
Cash flows from operating activities          
Net loss  $   (21,078 )    $   (21,782 )
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation     1,740         986  
Amortization     143         60  
Share-based compensation expense     4,672         2,686  
Realized loss on available-for-sale debt securities     1,163         -   
Unrealized foreign exchange gains     (7,862 )       (52 )
Other     124         -   
Changes in operating assets and liabilities:          
Increase in receivables and other operating assets     (10,179 )       (1,813 )
Increase in non-current operating assets     (123 )       (17 )
Decrease in payables and deferred revenue     (15,879 )       (8,507 )
Net cash used in operating activities     (47,279 )       (28,439 )
           
Cash flows from investing activities          
Acquisition of property, plant and equipment     (1,904 )       (12,249 )
Acquisition of intangibles     (10 )       (242 )
Maturity of short-term deposits     -          7,854  
Investment in short-term deposits     -          (18,000 )
Maturity or redemption of marketable securities     28,043         -   
Investment in marketable securities     (12,490 )       -   
Net cash provided by (used in) investing activities     13,639         (22,637 )
           
Cash flows from financing activities          
Proceeds from issuance of common stock, net of issuance costs $4,774     -          61,397  
Proceeds from exercise of stock options     1,534         -   
Net cash provided by financing activities     1,534         61,397  
           
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash     1,545         1,491  
Net (decrease) increase in cash, cash equivalents and restricted cash     (30,561 )       11,812  
Cash, cash equivalents and restricted cash at start of period     88,296         162,796  
Cash, cash equivalents and restricted cash at end of period  $   57,735      $   174,608  
 

Adaptimmune Contacts:

Media Relations:
Sébastien Desprez – VP, Communications and Investor Relations
T: +44 1235 430 583
M: +44 7718 453 176
Sebastien.Desprez@adaptimmune.com

Investor Relations:
Juli P. Miller, Ph.D. – Director, Investor Relations
T: +1 215 825 9310
M: +1 215 460 8920
Juli.Miller@adaptimmune.com

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