GSK - Lyell Immunopharma: Potential Solid Tumor Targeting With CAR-T And TIL

2023-11-10 14:23:48 ET

Summary

• Lyell Immunopharma results from a phase 1 study using LYL797 for the treatment of relapsed/refractory NSCLC and TNBC patients with ROR1 expression expected in the 1st half of 2024.
• Results from phase 1 study using LYL845 for the treatment of patients with relapsed/refractory metastatic or advanced melanoma, NSCLC, and colorectal cancer are expected in 2024.
• Lyell Immunopharma is advancing a 2nd generation CAR-T known as LYL119 and an IND submission for it is expected in 1st half of 2024. It is also advancing a second-generation TIL.
• Workforce reduction of 25% occurred, along with reprioritizing its pipeline to only advance core research programs. Cash of $598.2 million as of September 30th, 2023 will be enough to fund operations into 2027.

Lyell Immunopharma, Inc. ( LYEL ) has been making great progress in being able to advance its pipeline, that's because it is advancing two clinical candidates for the treatment of patients with solid tumors. One candidate is using CAR-T technology to go after ROR1 solid tumor types and then the other one is a tumor infiltrating lymphocyte ((TIL)), which is being deployed to target patients with various solid tumor types. These candidates are known as LYL797 and LYL845, respectively.

Why I believe that there is value here for investors is because there is going to be the release of results for both of these clinical candidates in 2024. This means there are two shots on goal using two different types of drugs targeting patients with solid tumors. In the meantime, it is also advancing another candidate in the pipeline in preclinical testing known as LYL119, which is another CAR-T candidate being developed to target ROR1 solid tumor types. It has even been able to reprioritize its pipeline and has now been able to extend its cash runway into 2027.

LYL797 for Targeting of Relapsed/Refractory Non-Small Cell Lung Cancer and Triple-Negative Breast Cancer

As I stated above, Lyell Immunopharma has two clinical candidates, both of which are expected to have data readouts in 2024. The first candidate deals with LYL797 which is a CAR-T being advanced to treat patients with relapsed/refractory triple-negative breast cancer (TNBC) or non-small cell lung cancer (NSCLC) along with other ROR1 solid tumor types. The use of this drug is being explored in an ongoing phase 1 study. Such a phase 1 study has recruited a total of 20 patients who are to be given treatment with LYL797. This study is looking at safety measures, of course, such as dose limiting toxicities (DLTs), treatment emergent adverse events (TAEs), and recommended phase 2 dose (RP2D).

However, the goal is to also explore this drug in terms of efficacy, and as such, some measures are anti-tumor activity based on overall response rate ((ORR)), duration of response ((DOR)), progression-free survival ((PFS)) and overall survival ((OS)) as well. The solid tumor market is a large one, especially when it comes to these two indications noted above. The global non-small cell lung cancer market is projected to reach $36.9 billion by 2031 . This is a very large market opportunity for sure, as is the other one also. It is expected that the global triple-negative breast cancer market could reach $1.46 billion by 2030 .

However, it's important to consider that this biotech is using LYL797 to only target NSCLC and TNBC tumors that have the ROR1 mutation. To help in this regard, Lyell has incorporated a screening program in its phase 1 study. Such a screening program was put in place to make sure that such solid tumor patients had ROR1 expression. The split of the population based on ROR1 expression was as follows:

• Non-small cell lung cancer - 53% (About 77 patients) had ROR 1 expression
• Triple-negative breast cancer - 33% (About 18 patients) had ROR 1 expression

This is just based off of its phase 1 study, but as you can see even if this biotech only targets these solid tumor types, it is still a sizeable market size it can go after. Also, this is just based on the targeting of only NSCLC and TNBC. If this program ends up working out, then it could expand to target other solid tumor types that express ROR1.

A catalyst for this program is that initial data from this phase 1 study, treating 20 relapsed/refractory NSCLC and TNBC patients, is expected to be released in the 1st half of 2024. Hopefully, this CAR-T candidate will work out in the clinic, but if it doesn't, then it does have another one that is being advanced in the pipeline in preclinical testing.

The other CAR-T being advanced in the pipeline is LYL119, which is also being advanced for ROR1 solid tumor types. This provides the ability for this biotech to use another CAR-T to try and target these solid tumor patients who harbor such a mutation. It is expected that an IND application of LY119 to begin a phase 1 study using this drug toward patients with ROR1 solid tumors, is going to be submitted in the 1st half of 2024.

LYL845 as a Tumor Infiltrating Lymphocyte Provides Another Shot on Goal for Solid Tumors

While the one clinical data readout above provides a good opportunity, there is another one that investors could also look forward to. This is a bit different than the two candidates I described above, both of which were CAR-Ts. This is with respect to the advancement of LYL845, which is a tumor infiltrating lymphocyte ((TIL)) being developed to treat patients with relapsed/refractory metastatic or locally advanced melanoma, non-small cell lung cancer ((NSCLCL)) and colorectal cancer, in a phase 1 study .

One important thing to note is that this time around with LYL845, the solid tumor types being targeted are not ones that express a mutation. Thus, this candidate provides an opportunity to go after a larger pool of patients. The global melanoma market is expected to reach $7.5 billion by 2029 . Speaking of Melanoma, this biotech has a very good positive development recently relating to this specific program. Lyell Pharmaceuticals was able to obtain Orphan Drug Designation (ODD) for LYL845 for the treatment of patients with stage IIB-IV melanoma.

I already spoke about the market opportunity above as it relates to the NSCLC market, but I haven't yet mentioned the possible market opportunity as it relates to colorectal cancer. It is expected that the global colorectal cancer market could reach $18.34 billion by 2028 . Investors won't have to wait long to see data here either with respect to this program. That's because initial clinical data from this phase 1 study, using LYL845 for the treatment of patients with relapsed/refractory metastatic or locally advanced melanoma, NSCLC, and colorectal cancer, is expected to be released in 2024.

Financials

According to the 10-Q SEC Filing , Lyell Immunopharma had cash , cash equivalents, and marketable securities of $598.2 million as of September 30, 2023. As I stated above, this biotech was able to reprioritize its pipeline. It stated that it would reduce its workforce by 25% by Q4 of 2023 for starters. In addition, it has decided to scale down its investment in other early-stage programs. Thus, it has decided to put its focus towards advancing core research programs instead.

A major reason for this was because of a terminated partnership that was established with GSK plc ( GSK ) back in 2019. However, such a partnership advanced a T cell receptor ((TCR)) drug that targeted NY-ESO-1. Such clinical candidates being advanced were LYL132 and LYL331 that were going after this specific target. Despite losing out on advancing these candidates, plus the potential for $1 billion or more in milestone payments, Lyell Immunopharma was able to extend its cash runway.

Thus, it believes that the $598.2 million in cash will be enough to fund its operations into 2027. This gives it plenty of time to go through its clinical data readouts in 2024 and possibly enhance shareholder value.

Risks to Business

There are several risks that investors should be aware of before investing in Lyell Immunopharma. The first risk to consider would be with respect to the advancement of LYL797, which is being advanced in a phase 1 study for the treatment of patients with relapsed/refractory non-small cell lung cancer ((NSCLC)) and Triple-negative breast cancer ((TNBC)) patients with ROR1 expression. That's because there is no guarantee that the initial data to be released from these patients will turn out to be positive.

A second risk to then consider would be with respect to the development of the TIL candidate being advanced in a phase 1 study, which is being used to treat patients with relapsed/refractory metastatic or locally advanced melanoma, NSCLC, and colorectal cancer. There is no assurance that the initial data to be released from this specific study will turn out to be successful either.

The third and final risk to consider would be with respect to the backup candidates, which I highlighted above. Even though this company is putting its efforts into LYL797 and LYL845, these are its first-generation candidates. It is advancing another CAR-T targeting ROR1 known as LYL119 and a 2nd generation TIL drug as well. There is no guarantee that such clinical products will make it past preclinical testing, nor that they will end up being successful through all the other stages of clinical testing.

Conclusion

Lyell Immunopharma has made great progress in being able to advance its pipeline, especially with the two core drugs in its pipeline, which are LYL797 and LYL845. Again, there are going to be initial data readouts from both programs expected in the 1st half of 2024 and in 2024 respectively. Hopefully, these candidates end up creating shareholder value upon data release.

However, at least this biotech has 2nd generation candidates it could deploy just in case things don't work out with the 1st generation CAR-T and TIL candidates. I do want to reiterate, though, that there is no guarantee that LYL119 and the 2nd generation TIL will be able to make it past phase 1 testing either, nor that Lyell will ultimately decide to move these other programs forward. A good thing for shareholders here is that it has enough cash to fund its operations into 2027, and thus, there is no risk of dilution at all in the near term. This gives it plenty of time to reach several clinical milestones in the coming years.

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