Adaptimmune Reports Q2 2024 Financial and Business Updates

Rhea-AI Summary

Adaptimmune Therapeutics plc (Nasdaq: ADAP) reported Q2 2024 financial results and business updates. Key highlights include:

1. U.S. FDA approval of Tecelra® (afami-cel), the first engineered cell therapy for solid tumors.

2. Total Liquidity of $214.8 million at the end of Q2.

3. Revenue increased to $128.2 million for Q2 2024, compared to $5.1 million in Q2 2023.

4. Net profit of $69.5 million for Q2 2024, compared to a loss of $21.3 million in Q2 2023.

5. Plans to initiate rolling BLA submission for lete-cel in 2025 and commercial launch in 2026.

6. Projected peak U.S. sales of $400 million for the sarcoma franchise.

Positive

• FDA approval of Tecelra® for advanced MAGE-A4+ synovial sarcoma
• Revenue increased to $128.2 million in Q2 2024 from $5.1 million in Q2 2023
• Net profit of $69.5 million in Q2 2024 compared to a loss of $21.3 million in Q2 2023
• Total Liquidity of $214.8 million at the end of Q2
• Projected peak U.S. sales of $400 million for sarcoma franchise
• $100 million initial payments from Galapagos collaboration agreement

Negative

• R&D expenses increased to $40.4 million in Q2 2024 from $30.0 million in Q2 2023

Insights

Financial Analyst

Adaptimmune's Q2 2024 results show significant progress, particularly with the FDA approval of Tecelra®. The revenue surge to $128.2 million for Q2 is impressive, primarily due to the Genentech collaboration termination. However, this is a one-time event and not indicative of sustainable revenue growth.

The company's liquidity position of $214.8 million provides a solid runway for commercialization efforts. The net profit of $69.5 million for Q2 is a positive turnaround from previous losses. R&D expenses increased, reflecting investment in pipeline development. The projected peak US sales of $400 million for the sarcoma franchise indicates substantial market potential, but achieving this will depend on successful commercialization and market penetration.

Oncology Expert

The FDA approval of Tecelra® marks a significant milestone as the first engineered cell therapy for solid tumors. This breakthrough in synovial sarcoma treatment, a rare and aggressive cancer, addresses a critical unmet need. The 43% overall response rate and 4.5% complete response rate are promising for this difficult-to-treat cancer.

The expansion of the sarcoma franchise with lete-cel for myxoid/round cell liposarcoma further strengthens Adaptimmune's position in rare cancers. The 40% overall response rate across both indications is encouraging. The company's focus on decentralized manufacturing for uza-cel in head & neck cancer could potentially improve accessibility and reduce costs, which is important for cell therapies.

Market Research Analyst

Adaptimmune's strategic positioning in the solid tumor space with Tecelra® and its expanding sarcoma franchise presents a unique market opportunity. The absence of a REMS program for Tecelra® could facilitate faster market penetration and adoption by healthcare providers. The company's focus on rare cancers like synovial sarcoma and myxoid/round cell liposarcoma allows for potentially higher pricing and less competition.

The collaboration with Galapagos, including $100 million in initial payments and potential milestone payments up to $465 million, provides additional financial support and validates Adaptimmune's technology. The company's progress in allogeneic therapies could open up broader market opportunities in the future, potentially addressing manufacturing scalability challenges inherent to autologous cell therapies.

Adaptimmune received U.S. FDA accelerated approval of Tecelra® (afami-cel), the first approved engineered cell therapy for a solid tumor

Patients can begin treatment journey; biomarker testing available; Adaptimmune systems ready to receive orders

At the end of Q2, Adaptimmune had Total Liquidity^[1] of $214.8 million

Philadelphia, Pennsylvania and Oxford, United Kingdom--(Newsfile Corp. - August 12, 2024) - Adaptimmune Therapeutics plc (Nasdaq: ADAP), a company redefining the treatment of solid tumor cancers with cell therapy, today reports financial results and business updates for the second quarter ended June 30, 2024. The Company will host a live webcast at 8:00 a.m. EDT (1:00 p.m. BST) today.

Adrian Rawcliffe, Adaptimmune's Chief Executive Officer: "On 1 August, we received US FDA approval for Tecelra, the first ever engineered cell therapy for a solid tumor and the first new treatment option for people with synovial sarcoma in more than a decade. We have hit the ground running to make Tecelra available to eligible patients. Patients can start their treatment journey now with healthcare providers able to begin testing and our ordering platform is up and running. Tecelra will be available in 6-10 US authorized treatment centers in the coming weeks. Tecelra is the first product in our sarcoma franchise, and we are planning to commence our rolling BLA submission for lete-cel in 2025 and commercial launch in 2026. We expect our sarcoma franchise to redefine the treatment landscape in advanced soft tissue sarcoma with projected peak US sales of $400 million."

Sarcoma Franchise with Tecelra® and lete-cel

• U.S. Food and Drug Administration (FDA) approves Tecelra® for the treatment of advanced MAGE-A4+ synovial sarcoma in adults with certain HLA types who have received prior chemotherapy.
• Tecelra® is the first engineered cell therapy for solid tumors.
• Tecelra® is the first new treatment option for synovial sarcoma in more than a decade.
• Tecelra® is a single infusion treatment.
• No Risk Evaluation and Mitigation Strategies (REMS) program was required for BLA approval.
• Patients can start their treatment journey now, with testing approved and available in the United States.
• Sarcoma centers of excellence across the Unites States are being onboarded as Authorized Treatment Centers (ATCs) for Tecelra®.
• The approval of Tecelra® was based on results of the SPEARHEAD-1 (Cohort 1) trial. The major efficacy outcome was overall response rate (ORR) by independent review and supported by duration of response. Tecelra® treatment resulted in an ORR of 43% with a complete response rate of 4.5%. The median duration of response was 6 months (95% CI: 4.6, not reached). Among patients who were responsive to the treatment, 39.0% had a duration of response of 12 months or longer. Data from the pivotal SPEARHEAD-1 trial were previously published in The Lancet earlier this year.
• Data presentations:
  • Data from the pivotal IGNYTE-ESO trial of lete-cel (letetresgene autoleucel), an engineered cell therapy targeting NY-ESO-1, in synovial sarcoma (SyS) and myxoid/round cell liposarcoma (MRCLS) was presented at the American Society of Clinical Oncology's (ASCO) annual meeting. The overall response rate (ORR) of 40% was consistent across both SyS and MRCLS, meeting the primary endpoint success criterion for efficacy. Given the trial's success, Adaptimmune plans to initiate a rolling Biologics License Application (BLA) submission for lete-cel for the treatment of advanced or metastatic MRCLS and synovial sarcoma during 2025. Lete-cel will bolster Adaptimmune's sarcoma franchise by expanding the addressable patient population to NY-ESO-1 positive MRCLS and SyS solid tumors.

Clinical pipeline

• Adaptimmune recently announced the company had entered into a clinical collaboration agreement with Galapagos to conduct a clinical proof-of-concept trial to evaluate the safety and efficacy of uza-cel (next-generation engineered TCR T-cell therapy, formerly ADP-A2M4CD8) using Galapagos' decentralized manufacturing platform in patients with head & neck cancer and potential future solid tumor cancer indications.
• Adaptimmune retains the right to develop, manufacture, commercialize, and otherwise exploit uza-cel for platinum-resistant ovarian cancer.
• Uza-cel is being investigated in the SURPASS-3 Phase 2 clinical trial (NCT05601752) for the treatment of platinum-resistant ovarian cancer. Uza-cel received FDA RMAT designation in 2022 for the treatment of patients with platinum resistant ovarian cancer. The SURPASS-3 trial is currently enrolling patients.
• Screening in the SURPASS Phase 1 trial has stopped and enrolment will cease shortly.

Preclinical pipeline

• Wholly owned allogeneic pipeline progressing; process optimization continues at Adaptimmune's facility in Milton Park, UK.
• IND-enabling activities continue for ADP-600 (PRAME) and ADP-520 (CD70) programs.

Business and corporate updates

• Under the terms of Adaptimmune and Galapagos' collaboration agreement, Adaptimmune will receive initial payments of $100 million, comprising $70 million upfront and $30 million of R&D funding of which $15m was received on signing, option exercise fees of up to $100 million, additional development and sales milestone payments of up to a maximum of $465 million, plus tiered royalties on net sales.
• Adaptimmune announced in May entry into a Loan and Security Agreement with Hercules Capital, Inc., for a term loan facility of up to $125.0 million. Following the receipt of FDA approval for Tecelra, the Company is eligible to draw down the Tranche 2 Advance of $25.0 million and is in the process of requesting this Tranche 2 Advance.

Financial Results for the three and six months ended June 30, 2024

• Cash / liquidity position: As of June 30, 2024, Adaptimmune had cash and cash equivalents of $211.8 million and Total Liquidity^[2] of $214.8 million, compared to $144.0 million and $146.9 million respectively, as of December 31, 2023.
• Revenue: Revenue for the three and six months ended June 30, 2024, was $128.2 million and $133.9 million, respectively, compared to $5.1 million and $52.7 million for the same periods in 2023. Revenue has increased in 2024, compared to the same periods in 2023 primarily due to the termination of the Genentech collaboration in the second quarter of 2023, resulting in the majority of the remaining deferred income for the collaboration being recognized as revenue including a cumulative catch-up adjustment of $101.3 million. This was significantly higher than the impact from the termination of the Astellas collaboration in 2023, which resulted in $42.4 million of revenue being recognized in March 2023.
• Research and development (R&D) expenses: R&D expenses for the three and six months ended June 30, 2024, were $40.4 million and $75.7 million, respectively, compared to $30.0 million and $55.5 million for the same periods in 2023. R&D expenses increase due to an increase in the average number of employees engaged in research and development, increases in subcontracted expenditures, an increase in in-process research and development costs and a decrease in offsetting reimbursements receivable for research and development tax and expenditure credits.
• General and administrative (G&A) expenses: G&A expenses for the three and six months ended June 30, 2024, were $19.1 million and $38.8 million, respectively, compared to $20.1 million and $40.5 million for the same periods in 2023. G&A expenses decreased due to restructuring and charges recognised in the first quarter of 2023 that were not repeated in 2024 and an increase in offsetting reimbursements, offset by an increase in other corporate costs due to an increase in accounting, legal and professional fees in the second quarter of 2024 due to fees relating to business development work and preparation for commercialization.
• Net profit/(loss): Net profit attributable to holders of the Company's ordinary shares for the three and six months ended June 30, 2024, was $69.5 million and $21.0 million, respectively ($0.05 and $0.01 per ordinary share), compared to losses of $21.3 million and $20.4 million ($(0.02) and $(0.02) per ordinary share), for the same periods in 2023.

Today's Webcast Details

A live webcast and replay can be accessed HERE. Call in information is as follows: +1-844-763-8274 (US or Canada) or +1-647-484-8814 (International). Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the Adaptimmune call.

About Adaptimmune
Adaptimmune is a fully integrated cell therapy company working to redefine how cancer is treated. With its unique engineered T cell receptor (TCR) platform, the Company is developing personalized medicines designed to target and destroy difficult-to-treat solid tumor cancers and to radically improve the patient's cancer treatment experience.

Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements address our expected future business, financial performance, financial condition, as well as the results of operations and often contain words such as "anticipate" "believe," "expect," "may," "plan," "potential," "will," and similar expressions. Such statements are based only upon current expectations of Adaptimmune. Reliance should not be placed on these forward-looking statements because they 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 for the year ended December 31, 2023, our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission. 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 (a non-GAAP financial measure) is the total of cash and cash equivalents and marketable securities (available-for-sale debt securities). Each of these components appears separately in the condensed consolidated balance sheet. The U.S. GAAP financial measure most directly comparable to Total Liquidity is cash and cash equivalents as reported in the condensed consolidated financial statements, which reconciles to Total Liquidity as follows (in thousands):

		June 30,			December 31,
		2024			2023
Cash and cash equivalents		$	211,810		$	143,991
Marketable securities - available-for-sale debt securities			2,979			2,947
Total Liquidity		$	214,789		$	146,938

 

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

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

		Three months ended						Six months ended
		June 30,						June 30,
		2024			2023			2024			2023
Revenue		$	128,231		$	5,130		$	133,909		$	52,731
Operating expenses
Research and development			(40,448	)		(29,965	)		(75,655	)		(55,513	)
General and administrative			(19,083	)		(20,073	)		(38,815	)		(40,470	)
Total operating expenses			(59,531	)		(50,038	)		(114,470	)		(95,983	)
Operating profit/(loss)			68,700			(44,908	)		19,439			(43,252	)
Interest income			1,376			1,543			2,721			2,219
Interest expense			(526	)		-			(526	)		-
Gain on bargain purchase			-			22,155			-			22,155
Other income (expense), net			497			501			436			(170	)
Profit/(loss) before income tax expense			70,047			(20,709	)		22,070			(19,048	)
Income tax expense			(526	)		(680	)		(1,052	)		(1,305	)
Net profit/(loss) attributable to ordinary shareholders		$	69,521		$	(21,389	)	$	21,018		$	(20,353	)
Net profit/(loss) per ordinary share
Basic		$	0.05		$	(0.02	)	$	0.01		$	(0.02	)
Diluted		$	0.04		$	(0.02	)	$	0.01		$	(0.02	)
Weighted average shares outstanding:
Basic			1,533,531,837			1,108,166,960			1,492,386,749			1,050,071,434
Diluted			1,559,183,774			1,108,166,960			1,519,004,675			1,050,071,434

 

Condensed Consolidated Balance Sheets
(unaudited, in thousands, except share data)

		June 30,			December 31,
		2024			2023
Assets
Current assets
Cash and cash equivalents		$	211,810		$	143,991
Marketable securities - available-for-sale debt securities (amortized cost of $2,979 and $2,940) net of allowance for expected credit losses of $0 and $0			2,979			2,947
Accounts receivable, net of allowance for expected credit losses of $0 and $0			2,335			821
Other current assets and prepaid expenses			36,646			59,793
Total current assets			253,770			207,552
Restricted cash			2,866			3,026
Operating lease right-of-use assets, net of accumulated amortization of $15,645 and $13,220			18,203			20,762
Property, plant and equipment, net of accumulated depreciation of $51,182 and $46,020			45,867			50,946
Intangible assets, net of accumulated amortization of $5,257 and $5,155			996			330
Total assets		$	321,702		$	282,616
Liabilities and stockholders' equity
Current liabilities
Accounts payable		$	7,513		$	8,128
Operating lease liabilities, current			5,293			5,384
Accrued expenses and other current liabilities			30,850			30,303
Deferred revenue, current			38,417			28,973
Total current liabilities			82,073			72,788
Operating lease liabilities, non-current			17,101			19,851
Deferred revenue, non-current			99,860			149,060
Borrowings, non-current			24,954			-
Other liabilities, non-current			1,440			1,404
Total liabilities			225,428			243,103
Stockholders' equity
Common stock - Ordinary shares par value £0.001, 2,039,252,874 authorized and 1,534,220,604 issued and outstanding (2023: 1,702,760,280 authorized and 1,363,008,102 issued and outstanding)			2,083			1,865
Additional paid in capital			1,099,758			1,064,569
Accumulated other comprehensive loss			(3,412	)		(3,748	)
Accumulated deficit			(1,002,155	)		(1,023,173	)
Total stockholders' equity			96,274			39,513
Total liabilities and stockholders' equity		$	321,702		$	282,616

 

Condensed Consolidated Cash Flow Statement
(unaudited, in thousands)

		Six months ended
		June 30,
		2024			2023
Cash flows from operating activities
Net profit/(loss)		$	21,018		$	(20,353	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			5,457			3,824
Amortization			115			253
Gain on bargain purchase			-			(22,155	)
Share-based compensation expense			6,160			5,513
Unrealized foreign exchange (gains)/losses			(266	)		377
Accretion on available-for-sale debt securities			(42	)		(633	)
Other			2			663
Changes in operating assets and liabilities:
Decrease in receivables and other operating assets			20,788			1,971
Increase/(decrease) in payables and other current liabilities			1,012			(8,801	)
Increase in borrowings			454			-
Decrease in deferred revenue			(39,249	)		(41,704	)
Net cash provided by/(used in) operating activities			15,449			(81,045	)
Cash flows from investing activities
Acquisition of property, plant and equipment			(524	)		(3,565	)
Acquisition of intangible assets			(588	)		(199	)
Cash from acquisition of TCR2 Therapeutics Inc.			-			45,264
Maturity or redemption of marketable securities			-			76,119
Investment in marketable securities			-			(67,121	)
Other			11			537
Net cash (used in)/provided by investing activities			(1,101	)		51,035
Cash flows from financing activities
Proceeds from issuance of borrowings, net of discount			24,500			-
Proceeds from issuance of common stock from offerings, net of commissions and issuance costs			29,171			188
Proceeds from exercise of stock options			76			22
Net cash provided by financing activities			53,747			210
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash			(436	)		398
Net increase/(decrease) in cash, cash equivalents and restricted cash			67,659			(29,402	)
Cash, cash equivalents and restricted cash at start of period			147,017			109,602
Cash, cash equivalents and restricted cash at end of period		$	214,676		$	80,200

 

Adaptimmune Contact

Investor Relations
Juli P. Miller, Ph.D. - VP, Corporate Affairs and Investor Relations
T : +1 215 825 9310
M : +1 215 460 8920
Juli.Miller@adaptimmune.com

Media Relations
Dana Lynch, Senior Director of Corporate Communications
M: +1 267 990 1217
Dana.Lynch@adaptimmune.com

 

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^[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] 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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219435

FAQ

What was Adaptimmune's revenue for Q2 2024?

Adaptimmune reported revenue of $128.2 million for Q2 2024, a significant increase from $5.1 million in Q2 2023.

What is Tecelra® and when was it approved by the FDA?

Tecelra® (afami-cel) is the first approved engineered cell therapy for solid tumors. It received U.S. FDA accelerated approval on August 1, 2024, for the treatment of advanced MAGE-A4+ synovial sarcoma in adults with certain HLA types who have received prior chemotherapy.

What are Adaptimmune's plans for lete-cel (ADAP stock)?

Adaptimmune (ADAP) plans to initiate a rolling Biologics License Application (BLA) submission for lete-cel in 2025 for the treatment of advanced or metastatic MRCLS and synovial sarcoma, with a commercial launch expected in 2026.

What is the projected peak U.S. sales for Adaptimmune's sarcoma franchise?

Adaptimmune projects peak U.S. sales of $400 million for its sarcoma franchise, which includes Tecelra® and lete-cel.