Lyell Immunopharma, Inc. (Nasdaq: LYEL), a clinical‑stage T‑cell
reprogramming company advancing a diverse pipeline of cell
therapies for patients with solid tumors, today reported financial
results and business highlights for the third quarter ended
September 30, 2023.
“We remain on track to present initial data from each of our two
lead Phase 1 programs next year and remain confident in our
science, our product candidates and our ability to deliver
meaningful advances in cell therapy to patients with solid tumors,”
said Lynn Seely, M.D., Lyell’s President and CEO. “As we continue
to generate clinical data from our two lead programs, we have also
taken important steps toward reducing costs and manufacturing time
for cell therapies through our proof-of-concept CAR T-cell
manufacturing collaboration with Cellares and advances in our Epi-R
P2 manufacturing process. We are focused on strengthening our
ability to fully elucidate the potential of the currently disclosed
product candidates in our pipeline through multiple clinical
milestones and have extended our ability to fund operations into
2027. We have restructured our company to prioritize investment in
our clinical stage programs and core research platforms and have
streamlined operations. In doing so we are parting ways with
talented and valued Lyellites. Tina Albertson, M.D., Ph.D., our
Chief Medical Officer is also leaving the company. We thank our
departing colleagues for their many contributions that have helped
advance our mission.”
With key infrastructure now in place and a maturing company
focus, the company is prioritizing investment in its most value
enhancing clinical stage product candidates and core research
platforms and has scaled down investment in certain early-stage
research programs and stage gated certain other expenses. An
approximately 25% reduction in workforce associated with this
prioritization is expected to be completed in the fourth quarter of
2023.
Third Quarter Updates and Recent
Business Highlights
Lyell is advancing four wholly-owned product candidates with two
product candidates in Phase 1 clinical development, LYL797 and
LYL845. Two additional product candidates, LYL119 and a
second-generation tumor infiltrating lymphocyte (TIL) product
candidate, are in preclinical development.
LYL797 – A ROR1-targeted Chimeric Antigen Receptor (CAR)
T-cell product candidate genetically reprogrammed to overexpress
c-Jun and epigenetically reprogrammed using Lyell’s proprietary
Epi-R™ manufacturing protocol, designed for
differentiated potency and durability
- Enrollment in the Phase 1 clinical
trial of LYL797 is ongoing. The study includes patients with
relapsed or refractory triple-negative breast cancer (TNBC) or
non-small cell lung cancer (NSCLC).
- Initial clinical and translational data
from at least 20 patients in the Phase 1 trial of LYL797 are
expected in the first half of 2024.
- Initiated a CAR T-cell manufacturing
proof-of-concept collaboration with Cellares as part of an overall
manufacturing strategy to build scale and reduce cost. Under the
collaboration, the companies have agreed on a proof-of-concept
technology transfer process for the manufacture of Lyell’s LYL797
CAR T-cell therapy, using Cellares’ Cell Shuttle™.
- Announced initial results from Lyell’s
ROR1 screening program indicating that expression of ROR1 in TNBC
and NSCLC, 53% (N=77) and 33% (N=18), respectively, is consistent
with what has been reported in the literature. The screening
program is designed to support Lyell’s current and future clinical
trials.
- LYL797 Trial in Progress poster was
presented at the 38th Annual Meeting of the Society for
Immunotherapy of Cancer (SITC) in San Diego on November 1-5,
2023.
LYL845 – A novel epigenetically reprogrammed TIL product
candidate designed for differentiated potency and
durability
- Enrollment in the Phase 1 clinical
trial for LYL845 is ongoing. The study includes patients with
relapsed and/or refractory metastatic or locally advanced melanoma,
NSCLC and colorectal cancer.
- Initial clinical data from the Phase 1
trial of LYL845 are expected in 2024.
- Preclinical data on the Epi-R P2
manufacturing process designed to shorten TIL manufacturing time
without impacting cell number and phenotype were presented at SITC.
Epi-R P2 is expected to be incorporated into the Phase 1 trial in
2024.
- LYL845 Trial in Progress poster was
presented at SITC.
LYL119 – A ROR1-targeted CAR T-cell product candidate
incorporating Lyell’s four stackable reprogramming technologies for
enhanced cytotoxicity
- LYL119 is a ROR1-targeted CAR T-cell
product enhanced with Lyell’s four novel, stackable genetic and
epigenetic reprogramming technologies: c-Jun overexpression, NR4A3
knockout, Epi-R manufacturing protocol and Stim-R™ T-cell
activation technology.
- An investigational new drug (IND)
application for LYL119 is expected to be submitted in the first
half of 2024.
- An abstract highlighting preclinical
development of LYL119 was presented at SITC.
Rejuvenation – Novel partial reprogramming technology
designed to maintain T-cell identity while reducing cells’
epigenetic age
- An abstract highlighting rejuvenation
of TIL through partial reprogramming was presented at SITC.
Third Quarter Financial
Results
Lyell reported a net loss of $50.9 million for the third quarter
ended September 30, 2023, compared to a net loss of
$70.3 million for the same period in 2022. Non‑GAAP net loss,
which excludes non-cash stock-based compensation, changes in the
estimated fair value of success payment liabilities and certain
non-cash investment charges, was $43.0 million for the third
quarter ended September 30, 2023, compared to $43.7 million
for the same period in 2022.
Revenue
- Revenue was approximately zero for both
the third quarter ended September 30, 2023 and 2022. No
research and development pursuant to our collaboration and license
agreement with GlaxoSmithKline (GSK Agreement) was performed in the
third quarter of 2023 due to the termination of the GSK Agreement
in December 2022.
GAAP and Non-GAAP Operating Expenses
- Research and development (R&D)
expenses were $43.8 million for the third quarter ended
September 30, 2023, compared to $41.6 million for the same
period in 2022. The increase in third quarter 2023 R&D expenses
was primarily driven by personnel-related expenses, mainly due to
an increase in headcount to expand our research, development and
manufacturing capabilities to support increases in clinical trial
enrollment, and an increase in research and laboratory costs
primarily associated with clinical trials. Non‑GAAP R&D
expenses, which exclude non-cash stock-based compensation and
changes in the estimated fair value of success payment liabilities,
for the third quarter ended September 30, 2023, were
$40.5 million, compared to $34.7 million for the same
period in 2022. The increase in third quarter 2023 non-GAAP R&D
expenses was driven by increased personnel-related expenses,
primarily related to an increase in headcount to expand our
clinical development and manufacturing capabilities in support of
our ongoing clinical trials.
- General and administrative (G&A)
expenses were $15.5 million for the third quarter ended
September 30, 2023, compared to $26.1 million for the
same period in 2022. The decrease in third quarter 2023 G&A
expenses was primarily driven by changes in non-cash stock-based
compensation. Non‑GAAP G&A expenses, which exclude non-cash
stock-based compensation, for the third quarter ended
September 30, 2023, were $9.5 million, compared to
$11.4 million for the same period in 2022. The decrease in
third quarter 2023 non-GAAP G&A expenses was driven by a
decrease in legal, consulting and other administrative
expenses.
A discussion of non-GAAP financial measures, including
reconciliations of the most comparable GAAP measures to non‑GAAP
financial measures, is presented below under “Non-GAAP Financial
Measures.”
Cash, cash equivalents and marketable securities
Cash, cash equivalents and marketable securities as of
September 30, 2023 were $598.2 million, compared to $710.3
million as of December 31, 2022. Lyell believes that its cash,
cash equivalents and marketable securities balances will now be
sufficient to meet working capital and capital expenditure needs
into 2027 while continuing to advance its clinical programs.
About Lyell Immunopharma, Inc.
Lyell is a clinical-stage T-cell reprogramming company advancing
a diverse pipeline of cell therapies for patients with solid
tumors. Lyell is currently enrolling a Phase 1 clinical trial
evaluating a ROR1-targeted CAR T-cell therapy in patients with
relapsed refractory triple-negative breast cancer and non-small
cell lung cancer (NSCLC) and a second Phase 1 clinical trial
evaluating reprogrammed tumor infiltrating lymphocytes (TIL) in
patients with advanced melanoma, NSCLC and colorectal cancer. The
technologies powering its product candidates are designed to
address barriers that limit consistent and long-lasting responses
to cell therapy for solid tumors: T-cell exhaustion and lack of
durable stemness, which includes the ability to persist and
self-renew to drive durable tumor cytotoxicity. Lyell is applying
its proprietary ex vivo genetic and epigenetic reprogramming
technologies to address these barriers in order to develop new
medicines with improved durable clinical outcomes. Lyell is based
in South San Francisco, California with facilities in Seattle and
Bothell, Washington. To learn more, please visit www.lyell.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements expressed or implied in this press
release include, but are not limited to, statements regarding:
Lyell’s anticipated progress, business plans, business strategy and
clinical trials; Lyell’s advancement of its pipeline and its
research, development and clinical capabilities; the potential
clinical benefits and therapeutic potential of Lyell’s product
candidates; the advancement of Lyell’s technology platform; Lyell’s
expectation that its financial position and cash runway will
support advancement of its pipeline through multiple clinical
milestones into 2027; Lyell’s expectations related to its planned
workforce restructuring in the fourth quarter of 2023; Lyell’s
plans to submit an IND for LYL119 and the timing thereof;
expectations around enrollment and timing of initial clinical data
from Lyell’s Phase 1 trials for LYL797 and LYL845; the potential of
Lyell’s partnership with Cellares to reduce cost and manufacturing
time for CAR T-cell and the effect of the steps Lyell has taken to
reduce cost and manufacturing time for Epi-R P2; and other
statements that are not historical fact. These statements are based
on Lyell’s current plans, objectives, estimates, expectations and
intentions, are not guarantees of future performance and inherently
involve significant risks and uncertainties. Actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and
uncertainties, which include, but are not limited to, risks and
uncertainties related to: the effects of geopolitical instability;
macroeconomic conditions and the lingering effects of the COVID-19
pandemic; Lyell’s ability to submit planned INDs or initiate or
progress clinical trials on the anticipated timelines, if at all;
Lyell’s limited experience as a company in enrolling and conducting
clinical trials, and lack of experience in completing clinical
trials; Lyell’s ability to manufacture and supply its product
candidates for its clinical trials; the nonclinical profiles of
Lyell’s product candidates not translating in clinical trials; the
potential for results from clinical trials to differ from
nonclinical, early clinical, preliminary or expected results;
significant adverse events, toxicities or other undesirable side
effects associated with Lyell’s product candidates; the significant
uncertainty associated with Lyell’s product candidates ever
receiving any regulatory approvals; Lyell’s ability to obtain,
maintain or protect intellectual property rights related to its
product candidates; implementation of Lyell’s strategic plans for
its business and product candidates; the sufficiency of Lyell’s
capital resources and need for additional capital to achieve its
goals; Lyell’s ability to successfully implement the workforce
restructuring; and other risks, including those described under the
heading “Risk Factors” in its Annual Report on Form 10-K for
the year ended December 31, 2022, filed with the Securities
and Exchange Commission (SEC) on February 28, 2023, and the
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2023, being filed with the SEC today.
Forward-looking statements contained in this press release are made
as of this date, and Lyell undertakes no duty to update such
information except as required under applicable law.
|
Lyell Immunopharma, Inc.Unaudited Selected
Consolidated Financial Data(in thousands) |
|
Statement
of Operations Data: |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
25 |
|
|
$ |
3 |
|
|
$ |
117 |
|
|
$ |
36,297 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(1) |
|
43,849 |
|
|
|
41,607 |
|
|
|
135,950 |
|
|
|
121,156 |
|
General and administrative |
|
15,507 |
|
|
|
26,084 |
|
|
|
53,816 |
|
|
|
90,959 |
|
Other operating income, net |
|
(292 |
) |
|
|
(1,251 |
) |
|
|
(2,149 |
) |
|
|
(3,544 |
) |
Total operating expenses |
|
59,064 |
|
|
|
66,440 |
|
|
|
187,617 |
|
|
|
208,571 |
|
Loss from operations |
|
(59,039 |
) |
|
|
(66,437 |
) |
|
|
(187,500 |
) |
|
|
(172,274 |
) |
Interest income, net |
|
6,608 |
|
|
|
2,251 |
|
|
|
16,369 |
|
|
|
3,600 |
|
Other income (expense), net(1) |
|
1,578 |
|
|
|
(1,068 |
) |
|
|
2,352 |
|
|
|
(1,047 |
) |
Impairment of other investments |
|
— |
|
|
|
(5,000 |
) |
|
|
(12,923 |
) |
|
|
(5,000 |
) |
Total other income (loss), net |
|
8,186 |
|
|
|
(3,817 |
) |
|
|
5,798 |
|
|
|
(2,447 |
) |
Net loss |
$ |
(50,853 |
) |
|
$ |
(70,254 |
) |
|
$ |
(181,702 |
) |
|
$ |
(174,721 |
) |
|
(1) As of
December 31, 2022, the Company’s success payment liability was
recognized at fair value as Fred Hutchinson Cancer Center
(Fred Hutch) had provided the requisite service obligation to
earn the potential success payment consideration under the
continued collaboration. The change in the estimated fair value of
Fred Hutch success payment liabilities beginning in Q1 2023 was
recognized within other income (expense), net in the unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Loss. The change in the estimated fair value of Fred Hutch success
payment liabilities in 2022 was recognized within research and
development expenses in the unaudited Condensed Consolidated
Statements of Operations and Comprehensive Loss. |
|
Balance Sheet Data:
|
As of September 30, 2023 |
|
As of December 31, 2022 |
|
|
|
|
Cash, cash equivalents and marketable securities |
$ |
598,160 |
|
$ |
710,269 |
Property and equipment,
net |
$ |
108,096 |
|
$ |
123,023 |
Total assets |
$ |
794,989 |
|
$ |
937,561 |
Total stockholders’
equity |
$ |
697,573 |
|
$ |
833,252 |
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement our financial results and guidance presented in
accordance with U.S. generally accepted accounting principles
(GAAP), we present non-GAAP net loss, non-GAAP R&D expenses and
non-GAAP G&A expenses. Non‑GAAP net loss and non-GAAP R&D
expenses exclude non-cash stock-based compensation expense and
non-cash expenses related to the change in the estimated fair value
of success payment liabilities from GAAP net loss and GAAP R&D
expenses. Non-GAAP net loss further adjusts non‑cash investment
gains and charges, as applicable. Non‑GAAP G&A expenses exclude
non-cash stock-based compensation expense from GAAP G&A
expenses. We believe that these non-GAAP financial measures, when
considered together with our financial information prepared in
accordance with GAAP, can enhance investors’ and analysts’ ability
to meaningfully compare our results from period to period, and to
identify operating trends in our business. We have excluded
stock-based compensation expense, changes in the estimated fair
value of success payment liabilities and non-cash investment gains
and charges from our non‑GAAP financial measures because they are
non-cash gains and charges that may vary significantly from period
to period as a result of changes not directly or immediately
related to the operational performance for the periods presented.
We also regularly use these non-GAAP financial measures internally
to understand, manage and evaluate our business and to make
operating decisions. These non-GAAP financial measures are in
addition to, and not a substitute for or superior to, measures of
financial performance prepared in accordance with GAAP. In
addition, these non-GAAP financial measures have no standardized
meaning prescribed by GAAP and are not prepared under any
comprehensive set of accounting rules or principles and, therefore,
have limits in their usefulness to investors. We encourage
investors to carefully consider our results under GAAP, as well as
our supplemental non-GAAP financial information, to more fully
understand our business.
Lyell Immunopharma, Inc.Unaudited
Reconciliation of GAAP to Non-GAAP Net Loss(in
thousands) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss - GAAP |
$ |
(50,853 |
) |
|
$ |
(70,254 |
) |
|
$ |
(181,702 |
) |
|
$ |
(174,721 |
) |
Adjustments: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
10,516 |
|
|
|
19,123 |
|
|
|
38,621 |
|
|
|
63,561 |
|
Change in the estimated fair value of success payment
liabilities |
|
(2,706 |
) |
|
|
2,441 |
|
|
|
(3,309 |
) |
|
|
2,177 |
|
Impairment of other investments |
|
— |
|
|
|
5,000 |
|
|
|
12,923 |
|
|
|
5,000 |
|
Net loss - Non-GAAP(1) |
$ |
(43,043 |
) |
|
$ |
(43,690 |
) |
|
$ |
(133,467 |
) |
|
$ |
(103,983 |
) |
|
(1) There was no
income tax effect related to the adjustments made to calculate
non-GAAP net loss because of the full valuation allowance on our
net U.S. deferred tax assets for all periods presented. |
|
Lyell Immunopharma, Inc.Unaudited
Reconciliation of GAAP to Non-GAAP Research and Development
Expenses(in thousands) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Research and development
expense - GAAP |
$ |
43,849 |
|
|
$ |
41,607 |
|
|
$ |
135,950 |
|
|
$ |
121,156 |
|
Adjustments: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
(4,548 |
) |
|
|
(4,442 |
) |
|
|
(14,439 |
) |
|
|
(12,401 |
) |
Change in the estimated fair value of success payment
liabilities(1) |
|
1,246 |
|
|
|
(2,441 |
) |
|
|
1,249 |
|
|
|
(2,177 |
) |
Research and development
expense - Non‑GAAP |
$ |
40,547 |
|
|
$ |
34,724 |
|
|
$ |
122,760 |
|
|
$ |
106,578 |
|
|
(1) As of
December 31, 2022, the Company’s success payment liability was
recognized at fair value as Fred Hutch had provided the requisite
service obligation to earn the potential success payment
consideration under the continued collaboration. The change in the
estimated fair value of Fred Hutch success payment liabilities
beginning in Q1 2023 was recognized within other income (expense),
net in the unaudited Condensed Consolidated Statements of
Operations and Comprehensive Loss. The change in the estimated fair
value of Fred Hutch success payment liabilities in 2022 was
recognized within research and development expenses in the
unaudited Condensed Consolidated Statements of Operations and
Comprehensive Loss. |
|
Lyell Immunopharma, Inc.Unaudited
Reconciliation of GAAP to Non-GAAP General and Administrative
Expenses(in thousands) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
General and administrative
expense - GAAP |
$ |
15,507 |
|
|
$ |
26,084 |
|
|
$ |
53,816 |
|
|
$ |
90,959 |
|
Adjustments: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
(5,968 |
) |
|
|
(14,681 |
) |
|
|
(24,182 |
) |
|
|
(51,160 |
) |
General and administrative
expense - Non‑GAAP |
$ |
9,539 |
|
|
$ |
11,403 |
|
|
$ |
29,634 |
|
|
$ |
39,799 |
|
|
|
Contact:Ellen RoseSenior Vice
President, Communications and Investor Relationserose@lyell.com
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