GMDA - Gamida Cell Ltd. (GMDA) Q1 2023 Earnings Call Transcript
2023-05-15 20:39:08 ET
Gamida Cell Ltd. (GMDA)
Q1 2023 Results Conference Call
May 15, 2023 04:30 PM ET
Company Participants
Mike Kuczkowski - Corporate Communications
Abbey Jenkins - President and CEO
Michele Korfin - COO and Chief Commercial Officer
Ronit Simantov - Chief Medical Officer and Scientific Officer
Shai Lankry - CFO
Conference Call Participants
Edward Tenthoff - Piper Sandler
Gil Blum - Needham & Company
Vernon Bernardino - H.C. Wainwright
Mark Breidenbach - Oppenheimer
Presentation
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the Gamida Cell’s Conference Call for the First Quarter 2023 Financial Results. My name is Catherine and I’ll be your operator for today’s call. Please be advised that this call is being recorded at Gamida Cell’s request.
I would like to introduce your host for today’s conference, Mike Kuczkowski of Gamida Cell Corporate Communications. Mike, please go ahead.
Mike Kuczkowski
Thank you, Catherine, and good evening, everyone. Welcome to today’s call during which we will provide an update on the Company and review our financial results for the first quarter of 2023. Earlier today, we issued a press release summarizing our financial results and providing a business update which is available on our website at www.gamida-cell.com.
Here with me on our call today are Abbey Jenkins, President and Chief Executive Officer; Michele Korfin, Chief Operating Officer and Chief Commercial Officer; Ronit Simantov, Chief Medical Officer and Scientific Officer; and Shai Lankry, Chief Financial Officer.
Today’s call will follow a slightly different format than we have recently as we just had our Omisirge approval call on April 17th. Abbey and Shai will share brief updates. Michele and Ronit will be available for the Q&A.
Before I begin, I want to remind everyone that during the call, we may make forward-looking statements about our future expectations and plans, including with respect to the timing of and initiation and progress of and data reported from preclinical and clinical trials of our products and product candidates, regulatory filings, commercialization planning efforts to potentially life-saving or curative therapeutic and commercial potential of Gamida Cell’s product, Omisirge and product candidate, GDA-201 and our expectations regarding our projected cash, cash equivalents and investments to be used for operating activities.
Our actual results may differ materially from what we project today due to a number of important factors, the scope progress and expansion of our clinical trials, and impacts to the cost thereof, clinical scientific, regulatory and technical developments, those inherent in the process of developing and commercializing product candidates that are safe and effective for use as human therapeutics and in the endeavor of building a business around such product candidates, as well as those considerations described in the Risk Factors section of our most recent annual report on Form 10-K and other filings that we may make with the SEC from time to time. These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future, whether as a result of new information or future events, except as required by applicable law.
Now, let me turn the call over to our President and CEO, Abbey Jenkins.
Abbey Jenkins
Thank you, Mike, and welcome to our call, everyone.
Today, we’re providing a brief corporate update. I know many are interested in hearing more details on how the launch is going. We will be hosting an Investor Day at the end of June to share more details and offer external perspectives on what Omisirge means to the transplant community. Look for an announcement on the date and time of that event in the next week or two.
In terms of our update, I want to pull through the thread of the last seven weeks because there has been a lot of changes, and we want to make sure that the picture we’re conveying is crystal clear. At the end of March, we took several actions to strategically restructure the Company’s operations to focus on the approval and launch of Omisirge. These actions, as you will recall, have the net effect of reducing our expenses, slowing the anticipated ramp of our launch and extending our cash runway through the third quarter. We further communicated that we would be executing a two-pronged corporate strategy going forward with these two objectives. One, to successfully execute our commercial plan for a targeted Omisirge launch in the U.S., aiming to onboard 10 to 15 transplant centers by year-end 2023; and two, to pursue strategic partnerships with biopharmaceutical companies to expand transplant center on-boarding to accelerate patient access to Omisirge. I’m pleased to share that we are making positive progress on both fronts.
In terms of the launch, our team was launch ready on April 15th. So, when the FDA approved Omisirge on April 17th, two weeks before its PDUFA date, we were able to move swiftly to initiate on-boarding of transplant centers and secure payer coverage in order to make Omisirge available to appropriate patients in need of a stem cell transplant. As of today, we are on track to complete the goal of on-boarding 10 to 15 of the top 70 transplant centers in 2023.
Additionally, I’m excited to report that we have confirmed coverage with payers that cover more than 65% of commercial lives, and discussions are ongoing with other commercial payers and CMS. We are absolutely thrilled at the progress we’ve made with payers. We believe coverage would come quickly based on our market access team’s engagement with payers over the last 18 months, but these results exceeded our expectations of what could be possible within just the first month post approval. This level of access reinforces the important role that Omisirge can play in allo-HSCT. It is also a credit to our experienced and exceptional cell therapy market access and medical affairs team who’ve built relationships and prowess introducing other novel cell therapies to the market in recent years.
In terms of the on-boarding of transplant centers, this, as you know, is the single most important rate-limiting step for getting Omisirge to appropriate patients. Our targeted plan of transplant center engagement and on-boarding is going well. The team has reported interest from both, centers that participated in our clinical studies as well as those that did not. This again suggests the important role Omisirge can play in allo-HSCT. No other enhanced and expanded cell therapy has been approved for use in allo-HSCT and nothing similar is on the horizon in other companies’ pipelines. We have said that we believe Omisirge has the potential to both, increase access and improve outcomes. It is gratifying to see this belief translated into interest from the transplant community.
I also want to acknowledge, though, that this momentum signals a significant opportunity and is the area where if we have more resources or it could secure additional investment or a strategic partnership, we could be doing more. We could drive more education, we could onboard more transplant centers and do so much more quickly. We know from pre- and post-approval market research that this is an educationally sensitive market. The more resources we can apply to capturing the interest in the market, the more successful the launch of Omisirge will ultimately be.
I also want to note some additional progress stabilizing the Company’s financial position. In our press release, we noted that we recently received $22.8 million in gross proceeds from a public offering of securities. This funding enables us to jump start the launch of Omisirge while extending our cash runway into early 2024. We also reduced our debt obligation through a combination of share redemptions by Highbridge Capital Management and our installment payments on Highbridge’s December 2022 senior secured convertible term loan. Through these actions, the outstanding principal balance of this loan has been cut in half from $25 million to $12.5 million as of May 12th.
In terms of the second element of our two-pronged corporate strategy, we are also actively pursuing discussions with strategic partners, including potential U.S. and global partnerships with biotech and pharmaceutical companies that can help resource our commercial efforts more robustly. We’re making progress here as well with the help of banking partner, Moelis & Company LLC, who are supporting the process. We’ve had active and ongoing conversations, and there has been significant interest post approval.
So to summarize, we believe we’ve made the right moves, tightening our belt on expenses, raising equity, reducing debt and extending our cash runway into 2024. We promised that we would be a more streamlined and focused company, and we are. We are launching Omisirge and seeing support from payers through their coverage and great interest from transplant centers. And we’re confident that with the strategic partnership, we can capitalize on the interest we’re seeing more quickly to maximize access for patients and value for shareholders.
I will now turn the call over to Shai to review our Q1 ‘23 financial results. Shai, over to you.
Shai Lankry
Thank you, Abbey, and good afternoon, everyone. Today, I will summarize our financial results for the first quarter of 2023.
As of March 31, 2023, our total cash position was $46.8 million. This amount does not include approximately $25 million in net proceeds from our April public offering and sales we have made through the ATM facility.
Research and development expenses were $8.8 million in the first quarter of ‘23 compared to $11.3 million in the same quarter in ‘22. The decrease was mainly due to a $2.4 million decrease in payments to Lonza for manufacturing services as well as a $1.3 million decrease in clinical activity related to the conclusion of our Phase 3 clinical trial, offset by an increase of $1.2 million in the GDA-201 clinical program. Going forward, we anticipate that our research development expenses will decrease due to the development discontinuation of our engineered pre-clinical NK cell therapy pipeline.
Commercial expenses for the first quarter of ‘23 were $5.6 million compared to $3.9 million in the first quarter of ‘22. The increase was mainly due to an increase in launch readiness activities. We anticipate that our commercial expenses will increase over time, driven by launch activities following the recent FDA approval of Omisirge.
General and administrative expenses for the quarter were $5.2 million compared to $4.1 million in the same period in ‘22. The increase was primarily due to professional services expenses to support the launch readiness activities.
Finance expenses net were $1.4 million in the first quarter of ‘23 compared to $0.9 million in the same period in ‘22. The increase was mainly due to interest expenses from the convertible notes we have issued in December ‘22, offset by interest income from cash management.
Net loss in the first quarter of ‘23 was $21 million compared to a net loss of $20.2 million in the first quarter of last year. We expect that our current total cash position will support our ongoing operating activities into ‘24. This cash guidance is based on our current operational plans and exclude any additional funding that may be received for business development activities that may be undertaken.
With that, I will turn the call back over to Abbey.
Abbey Jenkins
Thank you, Shai.
So to reiterate, we have a two-pronged corporate strategy. One, execute our commercial plan around omidubicel, onboard transplant centers, secure payer coverage; number two, pursue potential strategic partnerships that can accelerate the Omisirge commercial strategy. Both activities are underway, and we’re making progress.
It’s early, but we’re excited at the interest we’re seeing from transplant centers. We believe we’re well positioned and if we’re able to secure a strategic partnership, we can capitalize on the interest we’re seeing in Omisirge. The equity we’ve raised and the debt we’ve reduced extend our cash runway into early 2024.
Now, let’s open the call for questions and invite Michele Korfin, CCO and COO; and Ronit Simantov, CMO and CFO, to join us. Operator?
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from Edward Tenthoff with Piper Sandler.
Edward Tenthoff
Great. Thanks for taking the time. I was hoping to hear about the updates, especially on the reimbursement side. So, maybe you guys can paint a picture for us for what it’s like now for patients and/or physicians, transplanters, as they consider using Omisirge. And what is the process from here to start onboarding patients? And obviously, to get them treated, we have to have the manufacturing process. So maybe walk us through those steps in the short term.
Abbey Jenkins
Michele, do you want to take that? And Ronit can chime in.
Michele Korfin
Yes, absolutely. Good afternoon, Ted. Thank you for joining us for the questions. So first, let’s talk about considerations for Omisirge and then the next, which ties into onboarding. So, what we have heard since we have received FDA approval for Omisirge is very consistent with our pre-approval market insight studies. There’s really two key opportunities for Omisirge. One is to improve outcomes for patients as compared to transplanters experiences with other donor sources and the other is to increase access. And that’s especially for those patients right now who are eligible for transplant who before on the Omisirge approval, unfortunately, just couldn’t find an appropriate match. And as we know with the latter, the increased access, unfortunately, there is a health disparity in the U.S., which our clinical trial demonstrated we were able to appropriately match and treat a range of patients from ethnic and racial disparities with over 40% of the patients in our study coming from patients who are non-Caucasian.
So, those are the considerations that would come into a transplanter’s decision-making process to choose Omisirge, the ability to improve outcomes as compared to other donor sources or to increase access for a patient who otherwise would be eligible, but couldn’t find a donor source. So, that feedback has been very consistent with our market insights.
The key, as Abbey indicated, to getting Omisirge to patients is onboarding transplant centers. We’ve been very encouraged in only the few weeks since we’ve been FDA approved by the feedback for centers wanting to be onboarded. We do recognize onboarding is a comprehensive process, but we are confident that we are on track to reach our goal of onboarding 10 to 15 centers this year. And these will be both, sites that were part of our clinical trial, but also sites that were not part of our clinical trials.
So, Ted, let me stop there and see if I’ve answered your question, if you have any other questions or if not, we’ll move on to Ronit.
Edward Tenthoff
Really clear and super helpful. I appreciate it.
Michele Korfin
Excellent. Thank you.
Abbey Jenkins
Ronit, anything you want to add to that before we move to the next question?
Ronit Simantov
Not much to add. Just in terms of the experience for the transplanter, once the transplant center is prepared to deliver or order Omisirge and a transplanter would work with the Be the Match filter on MatchSource, which is the way that they choose their graft source online. And Omisirge will be available to them as a choice at the site of the transplant center that they can choose for treating their patients, and they will work through our Gamida Cell assist portal to order and have the tracking and delivery of Omisirge for their patients.
Operator
Thank you. One moment for our next question. Our next question comes from Gil Blum with Needham & Company. Your line is open.
Gil Blum
Congratulations on progress, especially the increased coverage. I have a specific question about the way that payers are viewing the label language regarding cord blood. I mean -- so, when payers see coverage, is this for specific patients who are going to go on cord blood, or is it broader than that?
Abbey Jenkins
Michele, over to you.
Michele Korfin
Excellent. Thank you. And Gil, good afternoon. Thank you for joining us. So Gil, we actually had the opportunity to conduct blinded market insights studies with the final label right immediately before we launched and then we’ve had, obviously, extensive discussions with payers, which we’re very encouraged by.
Payers consistently in both the blinded insights and in our live discussions have said that they work very closely with the FACT accredited transplant centers, and those centers are responsible and able to choose the appropriate donor source. So that has been very consistent with both, the blinded market insight studies and then our live discussions with payers after FDA approval. So, the feedback from payers has been very encouraging with the overall proposition of Omisirge, as Abbey indicated. I mean, we’ve invested in our market access team. They were very strong in their interactions with payers through the end of the year ‘22 and to be able to be just a few weeks into launch and to have confirmed Omisirge coverage with commercial payers who cover approximately 65% of lives is just incredibly encouraging. And it does tie in to the payers seeing that value proposition for Omisirge.
Abbey Jenkins
And maybe just to add to what Michele said, I think just to say it out loud, we don’t feel that the label limits us. But obviously, Omisirge is derived from cord blood, you need to be appropriate for cord blood for Omisirge to be appropriate for a patient. So, we don’t feel that this limits in any way, Gil. And I think the payer coverage is showing that.
Gil Blum
I think you also kind of answered my other question, which was have you received any negative feedback on the pricing. Well, if you’re getting 65% of coverage, it suggests that payers are pretty amenable.
Michele Korfin
I think that is a very fair characterization. We spent a lot of time prior to the FDA approval, making sure we evaluated the value proposition of Omisirge in the context of pricing. And the feedback and the very quick and successful coverage that we’re seeing come through, I do say supports the value proposition.
Gil Blum
Okay. Last couple of things that are mostly technical, so are you going to say where do you think you’re going to start recognizing sales at what time?
Abbey Jenkins
Shai?
Shai Lankry
Yes. I can take this question. So, as we just received the approval last month, we are focusing right now on onboarding site and make sure they will be ready for -- ready for Omisirge. We’ll be able to provide updates in the future, but not today in this call.
Gil Blum
Okay. And then, one last one for you, Shai. Because there was a convert on some of the debt, I’m having a little trouble with the share count. Is this going to be shown? Should -- has this already been shown in this quarter? Is it going to show up next quarter? I’m just trying to understand.
Shai Lankry
Yes. So, the quarter numbers include the debt as of March 31st. Since then, there was a significant improvement, as Abbey mentioned in the prepared remarks. Almost $6.5 million of debt were actually removed. I will be able to send you the exact numbers. It would be helpful.
Operator
One moment for our next question. Our next question comes from Vernon Bernardino from H.C. Wainwright. Your line is open.
Vernon Bernardino
Hi guys. Thanks for taking my question. And congratulations on the coverage process with the commercial payers. So, you mentioned that you’re on target to complete the goal of onboarding 10 to 15 of the top 70 transplant centers. I think you sort of alluded to it before, but not necessarily mentioned a goal. When you say you’re on target to complete the goal of onboarding 10 to 15 is -- what exactly is the goal? And as far as the number is concerned of those top 70, along what kind of time line? Just trying to get an idea of, of course, whether you’re making progress ahead of schedule or at some point, or what is the goal, let’s say, by, I don’t know, let’s say, end of second quarter, end of third quarter, if that’s something that you could convey to us?
Abbey Jenkins
Sure. Thanks, Vernon, for your question. Michele, over to you.
Michele Korfin
So, maybe I’ll just -- I’ll start with the definition of onboarding, talk about what the goal is and talk about our future updates. So, when we talk about onboarding a center, it’s -- everything is completed within the center to allow them to prescribe Omisirge for their patients. Ronit touched on a very, very important point earlier in the Q&A.
We have a very important partnership with Be the Match. We partnered with them for our Phase 3 study, and we partner with them now that we are FDA-approved for Omisirge. When a physician is onboarded, they see Omisirge in their database for donor sources, which is excellent. So, it’s the same database they would be -- used to be using for unrelated donors.
So, onboarding means the center is able -- everything is in place, they could prescribe Omisirge for an appropriate patient. Our goal was by end of 2023 to have onboarded 10 to 15 centers. And we do anticipate, as you alluded to, those would be among the top 70 centers that make up -- those 70 centers make up 80% of the transplants. So today, we’re not guiding on goal by quarter. We will provide more updates at the investor meeting that Abbey discussed during her prepared remarks. But what I’m very encouraged by is the enthusiasm by sites to come forward to be onboarded, both those sites that are -- have been clinical trial sites, but also those that are not clinical trial sites.
Vernon Bernardino
Thanks for that insight and detail. And just to confirm, the top 70 cover about 80% of transplants?
Michele Korfin
That is correct. Yes.
Vernon Bernardino
Okay. Thank you very much. And congrats on the progress. Looking forward to the first sales numbers.
Abbey Jenkins
Thanks, Vernon.
Operator
And our next question comes from Mark Breidenbach from Oppenheimer. Your line is open.
Mark Breidenbach
Just a couple for me. Maybe, Michele, you could give us an estimate of approximate time line it takes to onboard each transplant center. If you had unlimited resources, how quickly could you onboard all 70 or 80 target centers. What -- is this a month-long process, is it a two-month process? Some idea would be helpful.
And then, I guess the second question is sort of what metrics of launch performance you intend to be providing over the next few quarters besides simply transplant centers onboarded and maybe insurance or payer coverage, anything else specifically that can help us refine our models going forward? Thanks for taking the questions.
Michele Korfin
Excellent. Abbey, do you want me to start?
Abbey Jenkins
Yes.
Michele Korfin
Great. Mark, actually, I’m going to take your second one first, and thank you, by the way, and thank you for joining the call. The metrics for launch, and this will tie into what we’re focused on at this point in time. The key metrics for launch, especially in the early stage as we are with Omisirge are getting transplant centers onboarded and also the payer coverage, which, as Abbey indicated, we’ve made great progress in the payer coverage, and we’re on track for those 10 to 15 centers that were our goal to be onboarded this year.
Some of the other metrics that we’ll talk about. One is it’s fairly straightforward, but important to recognize. We are a publicly traded company. So, as Shai indicated, as time goes on, as we recognize revenue, we will be certainly discussing the revenue that we are recognizing for Omisirge. Some of the other key metrics that we want to talk about is around our manufacturing facility. We historically have been able to manufacture Omisirge and return it to the transplant center within 30 days from the start of manufacturing. And that’s something that will be critical for us to continue to monitor and discuss. We were very consistent with that in the Phase 3 trial and also very consistent in the EAP and aplastic anemia study. And as a reminder, we’ve been successfully manufacturing out of our Gamida Cell facility for approximately one year for the EAP and for the aplastic anemia study. So those are some examples of key metrics that we will be tracking and discussing.
The time line to onboard, it does vary by center. One of the benefits for Omisirge, although we are seeing centers coming forward who would like to be onboarded who were not part of the clinical trial sites. The clinical trial sites did have the advantage of seeing what was required for the Phase 3 study and having the appropriate procedures in place. So, just to give you a sense, there is going to be a variation in terms of how long it takes the center to onboard for the following reasons. Some centers do want to develop specific standard operating procedures for new cell therapies that come out and then some are able to edit their current SOPs. So, we’re not guiding on centers by quarter at this point in time, but keeping the overall 2023 goal of having 10 to 15 centers onboarded by year-end.
You did ask about, what would it be like if we had unlimited resources. If you go back to some of our early -- our discussions back in 2022, we originally had guided that we would have about half of the 70 centers onboarded by first quarter of ‘24. So, it gives you a sense of additional resources do come in that we would be able to accelerate beyond the 10% to 15% that we’re seeing now is our goal.
Mark Breidenbach
Okay. That’s helpful. And we’re looking forward to your Investor Day at the end of June. Thanks for the update.
Michele Korfin
Excellent. Thank you.
Operator
Thank you. And I’m showing no other questions in the queue. I’d like to turn the call back to Abbey Jenkins for closing remarks.
Abbey Jenkins
Great. Thank you. Thank you again for joining us this evening. To recap our recent launch, with our recent launch, Gamida Cell is positioned like never before to bring our mission to life and provide this potentially life-saving cell therapy to patients with hematologic malignancies in need of a stem cell transplant. Our two-pronged strategic approach includes successfully executing our commercial strategy with Omisirge, now FDA approved and launching, while pursuing strategic partnerships that will accelerate our ability to provide this important cell therapy to patients in need of a new option.
Thank you, everyone, for joining us on today’s call, and we look forward to seeing many of you at our Investor Day coming in June. Thank you.
Operator
This concludes today’s conference call. Thank you for participating. You may now disconnect.
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Gamida Cell Ltd. (GMDA) Q1 2023 Earnings Call Transcript