• Total Liquidity: Approximately $186 million at the end of Q3 2024.
• Debt Facility Drawdown: Further drawdown of $25 million following FDA approval of Tecelra.
• Total Operating Expenditure: $55.6 million in Q3 2024.
• Operating Expense Reduction: Expected reduction of approximately 25% in 2025 and over 30% in subsequent years.
• Revenue Projection: Combined U.S. peak revenue of $400 million for TCR T-cell and lete-cel.
• Authorized Treatment Centers (ATCs): 9 centers accepting patients, with 4 additional sites signed and 15 in active negotiations.
• Insurance Coverage: Over 67% of commercial lives covered for Tecelra.
• Patient Flow: Approximately 15 patients confirmed as double positive for Tecelra treatment.
• IGNYTE-ESO Trial Results: 42% response rate overall, with 6 complete responses.
• Median Duration of Response: Over a year for MRCLS and over 18 months for synovial sarcoma.

• Warning! GuruFocus has detected 4 Warning Signs with ADAP.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Adaptimmune Therapeutics PLC (NASDAQ:ADAP) has announced a new strategic business plan focusing on its commercial sarcoma franchise, aiming for operating breakeven by 2027.
• The company reported positive results from the pivotal IGNYTE-ESO trial with lete-cel, meeting its primary endpoint and showing better outcomes than interim results.
• Tecelra, the first FDA-approved engineered cell therapy for a solid tumor, has been successfully launched with 9 authorized treatment centers in the U.S., exceeding initial expectations.
• The company projects $400 million in combined U.S. peak revenue for its TCR T-cell and lete-cel products, with a clear path towards a successful sarcoma franchise.
• Adaptimmune has a robust pipeline with ongoing preclinical development of promising assets like PRAME and CD70, and is seeking strategic partners for these programs.

Negative Points

• Adaptimmune plans to reduce its workforce by about 33% and cut operating expenses by over 30% in subsequent years, indicating significant restructuring.
• The company will suspend clinical trial activities with user cell for ovarian cancer, impacting its pipeline diversification.
• Despite the successful launch of Tecelra, the company does not expect meaningful revenues in Q4 2024, with modest revenue anticipated in the first half of 2025.
• The restructuring involves difficult decisions, including reducing the UK production footprint and suspending investments in earlier-stage pipeline programs.
• There is uncertainty regarding the conversion rate of patients testing double positive for Tecelra, and the company is unlikely to continue providing detailed launch metrics.

Q & A Highlights

Q: Can you explain the timeline from a physician expressing interest in Tecelra for a patient to the patient receiving treatment? A: The process from initial interest to treatment can take approximately 3 to 4 months. This includes biomarker testing and insurance negotiations. We expect the majority of double-positive patients to be treated in the first two quarters of next year. Currently, we have 9 authorized treatment centers, which will expand to about 30 by the end of next year, facilitating patient access to Tecelra.

Q: What led to the decision to discontinue the SURPASS-3 study for ovarian cancer? A: The decision was based on capital allocation and portfolio prioritization. We have a strong sarcoma franchise nearing commercialization and early-stage programs with significant potential. The investment required for user cell in ovarian cancer did not align with our strategic priorities, despite the promising data and ongoing collaboration with Galapagos for other indications.

Q: How do you anticipate the uptake curve for lete-cel will compare to Tecelra once it's on the market? A: The uptake process will be similar, but lete-cel will benefit from an established network of approximately 30 treatment centers from day one, unlike Tecelra, which is still ramping up. This should result in a faster uptake for lete-cel.

Q: Can you provide more details on the cost savings plan and its impact on R&D and SG&A? A: We expect $50 million to $60 million in savings next year, with a 60-40 split between R&D and SG&A. Over the next four years, the savings will be more heavily weighted towards R&D as we continue to invest in our commercial team for Tecelra and lete-cel.

Q: What are the remaining steps before starting the rolling BLA for lete-cel? A: We need to finalize the clinical data from the pivotal trial, complete CMC validation, and develop a parallel NY-ESO diagnostic. These components will form the basis of our BLA submission.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.