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 first quarter ended
March 31, 2023.
“We remain focused on accumulating data in the two Phase 1
clinical trials of our wholly owned CAR T cell and TIL product
candidates,” said Lynn Seely, M.D., Lyell’s President and CEO.
“With more than a dozen sites now open and actively screening and
enrolling patients across these two trials, I am pleased with the
progress we are making. We are paving the way for two initial
clinical data readouts in 2024 that we expect will provide
important insights on the potential of our T cell reprogramming
technologies to benefit patients with solid tumors. Our strong
financial position with cash runway into 2026 positions us to focus
on execution, while also advancing new technologies being deployed
in our pipeline of novel product candidates.”
First Quarter Updates and Recent
Business Highlights
Lyell is advancing four wholly-owned product candidates: two
product candidates, LYL797 and LYL845, are in Phase 1 clinical
development and two additional product candidates, LYL119 and a TIL
product candidate incorporating novel genetic and epigenetic
reprogramming technologies, are in preclinical development.
LYL797 – A ROR1 CAR T-cell product candidate genetically
reprogrammed using c-Jun and epigenetically reprogrammed using
Lyell’s proprietary Epi-RTM
manufacturing protocol, designed for differentiated potency
and durability
- Enrollment in the Phase 1 clinical
trial of LYL797 is ongoing at nine sites in the US. The study is
enrolling patients with relapsed or refractory triple-negative
breast cancer or non-small cell lung cancer. Initial clinical data
from the Phase 1 trial of LYL797 are expected in the first half of
2024.
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 at five sites in the US. The study is
enrolling patients with relapsed and/or refractory metastatic or
locally advanced melanoma, non-small cell lung cancer and
colorectal cancer. Initial clinical data from the Phase 1 trial of
LYL845 are expected in 2024.
LYL119 – An innovative ROR1 CAR T-cell product designed
for enhanced cytotoxicity
- An IND for LYL119 is expected to be
submitted in the first half of 2024.
- An abstract highlighting preclinical
development of LYL119 has been selected for presentation at the
American Society for Gene and Cell Therapy (ASGCT) 26th Annual
Meeting taking place in Los Angeles, CA May 16-20, 2023.
First Quarter Financial
Results
Lyell reported a net loss of $67.0 million for the first quarter
ended March 31, 2023, compared to a net loss of $68.1 million
for the same period in 2022. Non‑GAAP net loss, which excludes
non-cash stock-based compensation, non‑cash expenses related to the
change in the estimated fair value of success payment liabilities
and certain non-cash investment gains and charges, was
$44.8 million for the first quarter ended March 31, 2023,
compared to $50.0 million for the same period in 2022.
Revenue
- Revenue was $0.1 million for the first
quarter ended March 31, 2023 compared to $0.6 million for the
same period in 2022. No research and development pursuant to our
collaboration and license agreement with GlaxoSmithKline (GSK
Agreement) was performed in the first quarter of 2023 due to the
termination of the GSK Agreement in December 2022, which drove the
$0.5 million decrease in revenue.
GAAP and Non-GAAP Operating Expenses
- Research and development (R&D)
expenses were $44.6 million for the first quarter ended
March 31, 2023, compared to $35.8 million for the same period
in 2022. The increase in first quarter 2023 R&D expenses was
primarily driven by non-cash expenses related to the change in the
estimated fair value of success payment liabilities and an increase
in personnel-related expenses, primarily related to an increase in
headcount to expand our R&D and manufacturing capabilities.
Non‑GAAP R&D expenses, which exclude non-cash stock-based
compensation and non-cash expenses related to the change in the
estimated fair value of success payment liabilities for the first
quarter ended March 31, 2023, were $40.6 million compared
to $35.9 million for the same period in 2022. The increase in
first 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 $19.3 million for the first quarter ended
March 31, 2023, compared to $34.4 million for the same period
in 2022. The decrease in first 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 first quarter ended March 31, 2023, were
$10.0 million, compared to $16.2 million for the same
period in 2022. The decrease in first quarter 2023 non-GAAP G&A
expenses was driven by a decrease in legal 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
March 31, 2023 were $668.0 million, compared to $710.3 million
as of December 31, 2022. Lyell believes that its cash, cash
equivalents and marketable securities balances will be sufficient
to meet working capital and capital expenditure needs into
2026.
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. 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 advancement of its pipeline or its
capabilities; the potential clinical benefits and therapeutic
potential of Lyell’s product candidates; Lyell’s expectation that
its strong financial position with cash runway into 2026 will
support advancement of its pipeline; Lyell’s plans to submit an IND
for LYL119 and the timing thereof; expectations around patient
profiles, enrollment and timing of initial clinical data from
Lyell’s Phase 1 trials for LYL797 and LYL845; 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 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; 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 March 31, 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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
65 |
|
|
$ |
553 |
|
Operating expenses: |
|
|
|
Research and development(1) |
|
44,630 |
|
|
|
35,830 |
|
General and administrative |
|
19,279 |
|
|
|
34,421 |
|
Other operating income, net |
|
(1,288 |
) |
|
|
(1,122 |
) |
Total operating expenses |
|
62,621 |
|
|
|
69,129 |
|
Loss from operations |
|
(62,556 |
) |
|
|
(68,576 |
) |
Interest income, net |
|
4,497 |
|
|
|
397 |
|
Other income, net(1) |
|
1,100 |
|
|
|
35 |
|
Impairment of other investments |
|
(10,000 |
) |
|
|
— |
|
Total other (loss) income, net |
|
(4,403 |
) |
|
|
432 |
|
Net loss |
$ |
(66,959 |
) |
|
$ |
(68,144 |
) |
(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, 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 for Q1 2022 was
recognized within research and development expenses in the
unaudited Condensed Consolidated Statements of Operations and
Comprehensive Loss.
Balance Sheet Data:
|
As of March 31, 2023 |
|
As of December 31, 2022 |
|
|
|
|
Cash, cash equivalents and marketable securities |
$ |
668,024 |
|
$ |
710,269 |
Property and equipment,
net |
$ |
118,600 |
|
$ |
123,023 |
Total assets |
$ |
880,450 |
|
$ |
937,561 |
Total stockholders’
equity |
$ |
783,826 |
|
$ |
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. As of December 31, 2022, our Fred Hutch 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.
For the three months ended March 31, 2023 and future periods,
the change in the Fred Hutch success payment liability fair value
is recognized in other income, net, as the requisite service
obligation had been met, whereas it was previously recognized
within research and development expenses. Non-GAAP net loss further
adjusts non-cash investment gains and charges, as applicable, and
for the income tax effect, if any, of the non-GAAP adjustments.
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,
non-cash expenses related to the change 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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss - GAAP |
$ |
(66,959 |
) |
|
$ |
(68,144 |
) |
Adjustments: |
|
|
|
Stock-based compensation expense |
|
13,882 |
|
|
|
22,028 |
|
Change in the estimated fair value of success payment
liabilities |
|
(1,708 |
) |
|
|
(3,851 |
) |
Impairment of other investments |
|
10,000 |
|
|
|
— |
|
Net loss - Non-GAAP(1) |
$ |
(44,785 |
) |
|
$ |
(49,967 |
) |
(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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
Research and development
expense - GAAP |
$ |
44,630 |
|
|
$ |
35,830 |
|
Adjustments: |
|
|
|
Stock-based compensation expense |
|
(4,612 |
) |
|
|
(3,764 |
) |
Change in the estimated fair value of success payment
liabilities(1) |
|
608 |
|
|
|
3,851 |
|
Research and development
expense - Non-GAAP |
$ |
40,626 |
|
|
$ |
35,917 |
|
(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, 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 for Q1 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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
General and administrative
expense - GAAP |
$ |
19,279 |
|
|
$ |
34,421 |
|
Adjustments: |
|
|
|
Stock-based compensation expense |
|
(9,270 |
) |
|
|
(18,264 |
) |
General and administrative
expense - Non-GAAP |
$ |
10,009 |
|
|
$ |
16,157 |
|
Contact:
Ellen Rose
Senior Vice President, Communications and
Investor Relations
erose@lyell.com
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