Gamida Cell Ltd. (NASDAQ:GMDA) Q1 2023 Earnings Call Transcript May 15, 2023

Gamida Cell Ltd. reports earnings inline with expectations. Reported EPS is $-0.27 EPS, expectations were $-0.27.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Gamida Cell’s Conference Call for the First Quarter 2023 Financial Results. My name is Catherine and I’ll be your operator for today’s call. Please be advised that this call is being recorded at Gamida Cell’s request. I would like to introduce your host for today’s conference, Mike Kuczkowski of Gamida Cell Corporate Communications. Mike, please go ahead.

Mike Kuczkowski: Thank you, Catherine, and good evening, everyone. Welcome to today’s call during which we will provide an update on the Company and review our financial results for the first quarter of 2023. Earlier today, we issued a press release summarizing our financial results and providing a business update which is available on our website at www.gamida-cell.com. Here with me on our call today are Abbey Jenkins, President and Chief Executive Officer; Michele Korfin, Chief Operating Officer and Chief Commercial Officer; Ronit Simantov, Chief Medical Officer and Scientific Officer; and Shai Lankry, Chief Financial Officer. Today’s call will follow a slightly different format than we have recently as we just had our Omisirge approval call on April 17th.

Abbey and Shai will share brief updates. Michele and Ronit will be available for the Q&A. Before I begin, I want to remind everyone that during the call, we may make forward-looking statements about our future expectations and plans, including with respect to the timing of and initiation and progress of and data reported from preclinical and clinical trials of our products and product candidates, regulatory filings, commercialization planning efforts to potentially life-saving or curative therapeutic and commercial potential of Gamida Cell’s product, Omisirge and product candidate, GDA-201 and our expectations regarding our projected cash, cash equivalents and investments to be used for operating activities. Our actual results may differ materially from what we project today due to a number of important factors, the scope progress and expansion of our clinical trials, and impacts to the cost thereof, clinical scientific, regulatory and technical developments, those inherent in the process of developing and commercializing product candidates that are safe and effective for use as human therapeutics and in the endeavor of building a business around such product candidates, as well as those considerations described in the Risk Factors section of our most recent annual report on Form 10-K and other filings that we may make with the SEC from time to time.

These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future, whether as a result of new information or future events, except as required by applicable law. Now, let me turn the call over to our President and CEO, Abbey Jenkins.

Abbey Jenkins: Thank you, Mike, and welcome to our call, everyone. Today, we’re providing a brief corporate update. I know many are interested in hearing more details on how the launch is going. We will be hosting an Investor Day at the end of June to share more details and offer external perspectives on what Omisirge means to the transplant community. Look for an announcement on the date and time of that event in the next week or two. In terms of our update, I want to pull through the thread of the last seven weeks because there has been a lot of changes, and we want to make sure that the picture we’re conveying is crystal clear. At the end of March, we took several actions to strategically restructure the Company’s operations to focus on the approval and launch of Omisirge.

These actions, as you will recall, have the net effect of reducing our expenses, slowing the anticipated ramp of our launch and extending our cash runway through the third quarter. We further communicated that we would be executing a two-pronged corporate strategy going forward with these two objectives. One, to successfully execute our commercial plan for a targeted Omisirge launch in the U.S., aiming to onboard 10 to 15 transplant centers by year-end 2023; and two, to pursue strategic partnerships with biopharmaceutical companies to expand transplant center on-boarding to accelerate patient access to Omisirge. I’m pleased to share that we are making positive progress on both fronts. In terms of the launch, our team was launch ready on April 15th.

So, when the FDA approved Omisirge on April 17th, two weeks before its PDUFA date, we were able to move swiftly to initiate on-boarding of transplant centers and secure payer coverage in order to make Omisirge available to appropriate patients in need of a stem cell transplant. As of today, we are on track to complete the goal of on-boarding 10 to 15 of the top 70 transplant centers in 2023. Additionally, I’m excited to report that we have confirmed coverage with payers that cover more than 65% of commercial lives, and discussions are ongoing with other commercial payers and CMS. We are absolutely thrilled at the progress we’ve made with payers. We believe coverage would come quickly based on our market access team’s engagement with payers over the last 18 months, but these results exceeded our expectations of what could be possible within just the first month post approval.

This level of access reinforces the important role that Omisirge can play in allo-HSCT. It is also a credit to our experienced and exceptional cell therapy market access and medical affairs team who’ve built relationships and prowess introducing other novel cell therapies to the market in recent years. In terms of the on-boarding of transplant centers, this, as you know, is the single most important rate-limiting step for getting Omisirge to appropriate patients. Our targeted plan of transplant center engagement and on-boarding is going well. The team has reported interest from both, centers that participated in our clinical studies as well as those that did not. This again suggests the important role Omisirge can play in allo-HSCT. No other enhanced and expanded cell therapy has been approved for use in allo-HSCT and nothing similar is on the horizon in other companies’ pipelines.

We have said that we believe Omisirge has the potential to both, increase access and improve outcomes. It is gratifying to see this belief translated into interest from the transplant community. I also want to acknowledge, though, that this momentum signals a significant opportunity and is the area where if we have more resources or it could secure additional investment or a strategic partnership, we could be doing more. We could drive more education, we could onboard more transplant centers and do so much more quickly. We know from pre- and post-approval market research that this is an educationally sensitive market. The more resources we can apply to capturing the interest in the market, the more successful the launch of Omisirge will ultimately be.

I also want to note some additional progress stabilizing the Company’s financial position. In our press release, we noted that we recently received $22.8 million in gross proceeds from a public offering of securities. This funding enables us to jump start the launch of Omisirge while extending our cash runway into early 2024. We also reduced our debt obligation through a combination of share redemptions by Highbridge Capital Management and our installment payments on Highbridge’s December 2022 senior secured convertible term loan. Through these actions, the outstanding principal balance of this loan has been cut in half from $25 million to $12.5 million as of May 12th. In terms of the second element of our two-pronged corporate strategy, we are also actively pursuing discussions with strategic partners, including potential U.S. and global partnerships with biotech and pharmaceutical companies that can help resource our commercial efforts more robustly.

We’re making progress here as well with the help of banking partner, Moelis & Company LLC, who are supporting the process. We’ve had active and ongoing conversations, and there has been significant interest post approval. So to summarize, we believe we’ve made the right moves, tightening our belt on expenses, raising equity, reducing debt and extending our cash runway into 2024. We promised that we would be a more streamlined and focused company, and we are. We are launching Omisirge and seeing support from payers through their coverage and great interest from transplant centers. And we’re confident that with the strategic partnership, we can capitalize on the interest we’re seeing more quickly to maximize access for patients and value for shareholders.

I will now turn the call over to Shai to review our Q1 ‘23 financial results. Shai, over to you.

Shai Lankry: Thank you, Abbey, and good afternoon, everyone. Today, I will summarize our financial results for the first quarter of 2023. As of March 31, 2023, our total cash position was $46.8 million. This amount does not include approximately $25 million in net proceeds from our April public offering and sales we have made through the ATM facility. Research and development expenses were $8.8 million in the first quarter of ‘23 compared to $11.3 million in the same quarter in ‘22. The decrease was mainly due to a $2.4 million decrease in payments to Lonza for manufacturing services as well as a $1.3 million decrease in clinical activity related to the conclusion of our Phase 3 clinical trial, offset by an increase of $1.2 million in the GDA-201 clinical program.

Going forward, we anticipate that our research development expenses will decrease due to the development discontinuation of our engineered pre-clinical NK cell therapy pipeline. Commercial expenses for the first quarter of ‘23 were $5.6 million compared to $3.9 million in the first quarter of ‘22. The increase was mainly due to an increase in launch readiness activities. We anticipate that our commercial expenses will increase over time, driven by launch activities following the recent FDA approval of Omisirge. General and administrative expenses for the quarter were $5.2 million compared to $4.1 million in the same period in ‘22. The increase was primarily due to professional services expenses to support the launch readiness activities.

Finance expenses net were $1.4 million in the first quarter of ‘23 compared to $0.9 million in the same period in ‘22. The increase was mainly due to interest expenses from the convertible notes we have issued in December ‘22, offset by interest income from cash management. Net loss in the first quarter of ‘23 was $21 million compared to a net loss of $20.2 million in the first quarter of last year. We expect that our current total cash position will support our ongoing operating activities into ‘24. This cash guidance is based on our current operational plans and exclude any additional funding that may be received for business development activities that may be undertaken. With that, I will turn the call back over to Abbey.

Abbey Jenkins: Thank you, Shai. So to reiterate, we have a two-pronged corporate strategy. One, execute our commercial plan around omidubicel, onboard transplant centers, secure payer coverage; number two, pursue potential strategic partnerships that can accelerate the Omisirge commercial strategy. Both activities are underway, and we’re making progress. It’s early, but we’re excited at the interest we’re seeing from transplant centers. We believe we’re well positioned and if we’re able to secure a strategic partnership, we can capitalize on the interest we’re seeing in Omisirge. The equity we’ve raised and the debt we’ve reduced extend our cash runway into early 2024. Now, let’s open the call for questions and invite Michele Korfin, CCO and COO; and Ronit Simantov, CMO and CFO, to join us. Operator?

Q&A Session

Operator: [Operator Instructions] Our first question comes from Edward Tenthoff with Piper Sandler.

Operator: Thank you. One moment for our next question. Our next question comes from Gil Blum with Needham & Company. Your line is open.

Operator: One moment for our next question. Our next question comes from Vernon Bernardino from H.C. Wainwright. Your line is open.

Operator: And our next question comes from Mark Breidenbach from Oppenheimer. Your line is open.

Operator: Thank you. And I’m showing no other questions in the queue. I’d like to turn the call back to Abbey Jenkins for closing remarks.

Abbey Jenkins: Great. Thank you. Thank you again for joining us this evening. To recap our recent launch, with our recent launch, Gamida Cell is positioned like never before to bring our mission to life and provide this potentially life-saving cell therapy to patients with hematologic malignancies in need of a stem cell transplant. Our two-pronged strategic approach includes successfully executing our commercial strategy with Omisirge, now FDA approved and launching, while pursuing strategic partnerships that will accelerate our ability to provide this important cell therapy to patients in need of a new option. Thank you, everyone, for joining us on today’s call, and we look forward to seeing many of you at our Investor Day coming in June. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.