When Precision BioSciences completed its initial public offering (IPO) on Nasdaq in March of this year, it chose “DTIL” as its trading symbol. The significance: Dedicated to Improving Life (DTIL). In April, the company dosed its first cancer patient with its first off-the-shelf, or allogeneic, CAR-T therapy candidate in its first ever clinical trial — this followed after many years spent developing its proprietary genome editing technology. The Cancer Immunotherapy ETF (Nasdaq: CNCR) shares this type of dedication to improving patients’ lives and was happy to add DTIL to the fund during its semi-annual rebalance in June. View all holdings of the CNCR ETF.
Precision BioSciences has a platform genome editing technology called ARCUS which it is currently using to develop solutions for cancer, rare diseases and food and agriculture. Unlike other gene editing tools like CRISPR, ARCUS is entirely proprietary to Precision and might bring with it certain advantages. We caught up with Precision’s CEO Matt Kane at our office in New York in early October. In a wide-ranging interview, he explains the ARCUS technology, talks about the company’s first ever human trials with an off-the-shelf CAR-T therapy in cancer, and describes potential future genome editing applications that might have an impact on genetically driven diseases. Below is a transcript of our interview, which has been edited for clarity.
Precision BioSciences CEO Matthew Kane discusses ARCUS and CAR-T therapy with Loncar Funds.
CNCR ETF: Can you please introduce yourself and tell us about your background.
Matt Kane: First of all, thanks for having us out this morning. It is a pleasure to meet you, and share our story with you and the CNCR ETF audience.
My name is Matt Kane. I’m part of the team at Precision BioSciences. I am one of the co-founders of the company and my background is in bioengineering. For the last 14 years I have been leading Precision BioSciences, one of the world’s leading patient and solution focused genome editing companies.
CNCR ETF: Your company is based on a technology platform. As you said, Precision BioSciences works with genome editing. I think many people have heard of some genome editing tools like CRISPR and TALEN. What is your tool and what sets it apart from others?
Matt Kane: Great question because our genome editing platform really is the foundation of Precision. It is why we started the company and it is the focus that my technical co-founders have had throughout their careers going back to the earliest days of genome editing — we are fortunate to have some of the true pioneers of genome editing on our founding scientific team. The platform we utilize today is something we call ARCUS. It is a very unique genome editing technology. Outside of Precision and our collaborators, no one else in the world has access to it or is utilizing it today. Making an ARCUS nuclease requires a tremendous amount of skill, know-how and materials that we have developed over many years inside Precision BioSciences.
It is unique in a number of ways. One I just alluded to is the proprietary nature of the technology. We invented it, we developed it, and we patented it at Precision. Also very unique is that rather than combining multiple components from different biological systems as we have seen done with other genome editing technologies, ARCUS is derived from a naturally-occurring enzyme called I-CreI. This is part of a class of enzymes that have evolved to edit genes. So rather than trying to use biological engineering to create a genome editing platform, we relied more on evolution and thousands of years of nature solving this problem for us. We have taken what nature has offered in the I-CreI enzyme, and over many years of work have introduced very subtle changes to the enzyme so we can target it very specifically to locations of our choosing. We think this is an incredibly powerful genome editing platform, this thing that we call ARCUS.
Also, importantly, because we went to nature, nature had already figured out a way to make it highly specific. The technology, unlike all of the others that I am aware of, is only switched on and can only perform the gene editing function when it is bound to the intended DNA target site. What that potentially helps us avoid is the most challenging problem today in the field of genome editing which is random, off-target changes. This is the problem of making a planned edit to an organism’s DNA but also inadvertently making other random DNA changes that you didn’t intend to make. That might be fine for some academic or discovery-type applications, but when we started thinking about making therapeutic products and actually introducing a genome editing tool into a person and potentially permanently changing their genome, detectable levels of off-target mutations are not acceptable. Safety has to be paramount when you think of these technologies, and that is the approach we have taken in developing the ARCUS technology. It is technology that utilizes learnings from nature to provide what we think is an optimal gene editing tool for overcoming serious problems of human health and wellness.
“We think this is an incredibly powerful genome-editing platform, this thing that we call ARCUS.”
—Matthew Kane, Chief Executive Officer, Precision BioSciences
CNCR ETF: It sounds clearly that one of the advantages you believe ARCUS delivers is from a safety standpoint. How about from a standpoint of how precise it is compared to the other genome editing tools?
Matt Kane: Yes, the two run hand-in-hand. All the editing technologies today are good at finding the genetic location that they are intended to get to. However, as you would expect with a name like Precision BioSciences, it is that precision that the ARCUS technology really brings. By precision, we mean targeting the right genetic site and, more importantly, not targeting other sites and making unintended changes. That is really the crux of what led us to develop ARCUS in the first place.
As we developed it further, we found a number of other distinct advantages that the technology has. This is especially the case as we moved into product development. One of the biggest ones is delivery. What we found across the field is that simply being able to edit cells in a dish is great, but it doesn’t necessarily translate to being able to precisely get these editing enzymes to the right tissue type in the organisms that we are attempting to make our genetic edits in. A lot of the constraint has to do with size — physical size matters. This is because many of the delivery vectors limit the amount of cargo that can ride along. I think it is a major advantage for us that ARCUS is about one fifth the size of several of the other gene editing technologies that are widely used today. It is also a single protein, meaning that, unlike many of the others, multiple components do not have to come together within a cell before the edit can be performed.
In our case a single protein goes in, it is very small, we can get a therapeutically relevant amount of it into a particular tissue type and we can potentially use a broad array of different delivery approaches. So that is the other side of our key advantage. There is specificity on the one hand and the benefits of optimized delivery on the other that really differentiate our approach.
CNCR ETF: Precision invented ARCUS and you own it, would you consider licensing it out to other researchers and companies?
Matt Kane: Yes, and no. Absolutely we partner with other companies. For example, we collaborate very closely with Gilead Sciences on a program to develop a potential cure for chronic hepatitis B. Gilead, as I am sure you are aware, is one of the leaders in antivirals and so we decided to partner with them last year to use an ARCUS nuclease with the goal of destroying both the CCC DNA that makes up the viral pool in patients who have suffered from chronic hepatitis B, along with integrated copies of the viral genome. This is a great example of where we are bringing together the expertise of both companies to optimize a product profile that we think would be most impactful for patients.
That being said, we do not expect to broadly license the ARCUS technology to multiple players for applications like drug discovery, diagnostics, and things like that. This is because while ARCUS is great in terms of its specificity and ability to deliver to different tissue types, it is also very difficult to make. Unlike some of the other editing technologies where simply a patent license is enough and you can go off and do what needs to be done, ARCUS isn’t like that. It requires a tremendous amount of effort and design expertise to actually make one of these nucleases. That expertise and know-how is really only found within the team at Precision.
CNCR ETF: The first therapeutic area that you have applied ARCUS to in clinical trials is cancer, which is the focus of our ETF. Why did you choose cancer as the first human application?
Matt Kane: We moved into a specific field within cancer called CAR-T cell therapy, which has generated a tremendous amount of excitement over the last few years. Response rates for the first generation of CAR-T products have in some cases been exceptional. However, the field of CAR-T, which is essentially about taking immune cells from patients and making them into a drug by training them to go after and target a cancer, is far from perfect today. The problem with the current approach, which is called autologous CAR-T, is that a lot of patients just can’t get treated in time, and it is also very expensive. Every time you want to treat a patient you need to make a new CAR-T drug product from scratch by extracting some of the patient’s own cells, sending them away to be engineered, and then shipping them back and reinfusing them — this can take several weeks and ends up being a very expensive and highly variable process. You do not have a lot of control over the quality of the cells that you start with because you are dealing with someone who likely has a compromised immune system. These might not be the best types of cells to start working with.
We looked at this and saw that there is a tremendous amount of potential to help patients. We thought what if we could flip it over and instead of having this highly variable, slow, expensive and difficult to make product, what if we could use genome editing to create a widely available and very consistent product. We want to make something that can be used a lot more like a traditional biologic therapy, like the monoclonal antibodies that are very commonly used in treating all sorts of diseases today. We decided to leverage our unique ARCUS platform to make allogeneic, or off-the-shelf, CAR-T product candidates. These are product candidates that we develop from T-cells that come from healthy donors. These donors are not just healthy people, they have a very specific profile that we think provides us with the optimal types of T-cells as starting material for our CAR-T product candidates, and which we think will ultimately generate a drug product that will be effective at killing cancer cells.
Precision BioSciences’ Proprietary Single Step CAR-T Process
Next, we use ARCUS to modify the genome of the donor T-cells to knock out a receptor that would otherwise make the cells recognize the patient’s body as foreign and attack healthy tissue. That is a very important genome editing step that we have to complete as part of our process and we do it in a unique way — ARCUS allows us to insert a gene that tells the cell to make what we call a CAR, the protein that actually targets the tumor, directly into the gene that we need to knock out. So we can do this “knock in / knock out” process as a single step. It means that in a single engineering step we are able to do what is needed to take the foreign donor T-cell that cannot recognize the tumor target and turn it into a CAR-T cell that does not recognize the patient’s healthy tissue but does recognize the tumor cell. And because we have chosen donor T-cells with the special optimal profile that I mentioned earlier, and have developed a process that preserves this profile into the final CAR-T drug product candidate, we believe the CAR-T cells we produce will be particularly good at rapidly expanding in the patient’s body and, hopefully, will be really good at targeting and killing cancer cells.
CNCR ETF: Our readers might be familiar with allogeneic approaches to CAR-T because the fund currently has positions in some other companies working on it. You mentioned the advantage of how you can edit cells in one step. Are there any other differences in the process, or in your opinion in the quality of the cells, using your ARCUS technology compared to companies that are using other approaches to allogeneic CAR-T?
Matt Kane: Yes, there are several that we think are very important. From studying the autologous, or first generation, CAR-T products, we have become convinced that the optimal profile for an effective product is one that has a high percentage of young T-cells. This means cells that haven’t differentiated and already exhausted themselves. We look to find donors who have a high percentage of those cells and then, as I mentioned, we have designed a very gentle manufacturing process to make the CAR-T cells — and I think we are quite unique in both of these things. We want to take the healthy donor cells that we identify and do as little to them as we possibly can; in contrast, other companies have to use several editing and engineering steps along the way. We have distilled that down to a single editing step and have made the whole manufacturing process very short. T-cells really don’t like being engineered, that starts sending them down the wrong pathway towards being exhausted and ineffective, and they don’t like being pushed hard through a long manufacturing process. Our process is only 10 days long to go from a donor T-cell to a final CAR-T cell product, which is approximately half the time that has been reported by others working in the field. We have found that taking even a couple of days longer than 10 days to produce a CAR-T product can result in cells that are in an exhausted state — we don’t think those exhausted cells will expand in the body and ultimately won’t be able to effectively kill cancer cells.
We have also invented a unique signaling domain that is built into the CAR that we insert into the donor T-cells — we call this signaling domain N6. This is a component within our CAR that we have designed to help preserve that young, highly expanding cell type that I just talked about. We think this also might play a role in helping to further optimize our product.
One consequence of us being able to optimize the quality of our CAR-T cells in a way that we think others are not doing right now, is that we believe we are able to use a milder conditioning regime in our clinical trials. When you administer a CAR-T product to a patient you have to make space for the CAR-T cells to survive and expand — this process is called lymphodepletion. We are using a mild lymphodepletion regime in our trials because we believe our cells don’t need a lot of help to expand well in the body. This has the major advantage of not exposing the patient to high levels of potentially toxic lymphodepletion drugs that can themselves cause severe side effects. Precision is quite unique in this regard as some of our peers in the allogeneic space have chosen to use much harsher lymphodepletion approaches to try to help their cells survive and expand in the body. We think we potentially have a better approach here that can benefit patients and support a truly off-the-shelf CAR-T product candidate.
The final thing I would highlight is that because of the power and specificity of ARCUS, the CAR that we insert into the genome of the donor T-cells is always placed into the same location, as I have mentioned. This is important. Prior attempts in clinical studies have had less control over where the CAR has been inserted in the T-cell genome, and that works, but what you end up with is a pool of cells that express sometimes a high level of the CAR, sometimes a low level and sometimes none at all. This makes it very challenging to know what you are dosing the patient with. In our case, we always place the CAR in the same location and therefore the cells in our product candidate are expected to be highly consistent. It gives us a higher confidence that we have a consistent product and one that is made of very high quality cells that have the potential to expand well in the body and kill cancer cells.
I think it’s really important for your audience to understand that one of the reasons Precision is unique in the allogeneic field is that we are true pioneers in gene editing and we fully own our editing technology ARCUS — our scientific founders developed ARCUS from first principles, and it is very different from most of the other editing techniques in use. That is very unusual in our space, with some of the other editing technologies being used for allogeneic CAR-T being more or less open source these days. We are also fortunate to have in our team several true scientific leaders in the field — people who aren’t just experts at producing cell therapies but who are global leaders in the science of editing the genetics of a T-cell. Why does this matter? Well, I’ve talked a bit already about how the basic process of creating a CAR-T cell is of critical importance in determining its ultimate utility and safety — unlike many other companies in the CAR-T space, we fully control a gene editing technology, ARCUS, that allows for the production of CAR-T cells with a potentially ideal profile to attack cancer cells. And our team not only understands this fundamental T-cell biology but also intimately understands how the process of genetically editing a T-cell might impact this ideal product profile.
“There is specificity on the one hand and the benefits of optimized delivery on the other that really differentiate our approach.”
—Matthew Kane, Chief Executive Officer, Precision BioSciences
CNCR ETF: You started your first cancer trial early this year. What kind of cancer is this being tested in and what is the status of the trial currently?
Matt Kane: That’s right, we did start the trial earlier this year. We are testing our first allogeneic CAR-T product candidate which we call PBCAR0191 — it is a CAR-T product candidate that targets a well-known protein called CD19 which is found on the surface of several types of cancer cells. We dosed the first patient in this trial in April and we are testing PBCAR0191 both in non-Hodgkin lymphoma (NHL) and acute lymphoblastic leukemia (ALL).
CNCR ETF: Are these both for adult patients?
Matt Kane: Yes, both adults. All are CD19 positive, so this is a CD19 targeting allogeneic CAR-T product candidate. It is a 3 x 3 dose expansion study looking at 3 different dose levels of PBCAR0191. Again, the trial started in April and it is progressing as expected. We are running the trial at four leading cancer centers in the US and we will be sharing interim data on the phase 1 portion of the trial no later than the first quarter of 2020.
CNCR ETF: There is a big blood cancer conference in early December called ASH that we always follow closely. Do you think you will have data ready for that?
Matt Kane: We can’t comment on the ASH conference. I believe abstracts are released on November 6th. Certainly we plan to provide data at a technical conference sometime between now and the end of the first quarter.
CNCR ETF: Do you have plans to push this forward into other cancers or are you focused on this first study for now?
Matt Kane: Yes we believe our allogeneic CAR-T platform is highly flexible and we are developing a pipeline of CAR-T therapies against different cancer targets. We actually just received clearance from the FDA to start a trial for our second allogeneic product candidate which is called PBCAR20A. This one targets another protein that is found on blood cancers called CD20 and we are going to test it initially in NHL, chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL). We expect to begin dosing our first patients before the end of the year with this CD20 CAR-T product candidate and then we are following that with a program next year targeting BCMA for multiple myeloma. We plan to move forward with additional programs very rapidly. Part of the reason for this is because we built a very modular manufacturing system. The only difference between the products is the target. Otherwise, it is the same manufacturing process, same editing tool, and the same focus on young healthy donor cells that we talked about earlier.
CNCR ETF: Right now, the field is in a place where everyone is mostly engineering in one target into the cells. Where is this headed? Will the cells be able to recognize multiple targets one day? Are you thinking about doing that sometime in the future?
Matt Kane: Certainly that is a potential avenue for us to explore in the future. Initially though, we need to establish safety and show activity before we get too far ahead of ourselves. The whole allogeneic field is still in its early days with lots of questions to answer. That being said, we mentioned CD19 and CD20, and one could imagine a mixed product or a combination product one day — that’s the power of our approach, you could have a CAR-T product that could be administered to patients rather like monoclonal antibodies are today, including in combination. This is something that is currently not feasible with the first generation autologous products. That would enable us to go after NHL and other diseases from both angles. One of the drawbacks that we have seen with the first generation CAR-T products targeting CD19 is that there have been a number of patients who have relapsed from CD19 antigen escape. This means that the target is no longer showing up on tumor cells. If we are able to go after two targets at once, that might allow us to more effectively eliminate the tumor cells.
CNCR ETF: I know that you have a robust pipeline gearing up outside of cancer. You already mentioned your collaboration with Gilead Sciences in hepatitis B. What are some other things you are working on?
Matt Kane: Yes that’s right — we are very excited about the potential of our in vivo gene correction pipeline which uses ARCUS to directly correct gene defects in the body. We have a broad range of programs that we are exploring right now in large animal studies, which we think is very important to give us the confidence to move into man. This is important from both a safety and efficacy standpoint. Those studies revolve around everything from diseases that affect sight and cause blindness like autosomal dominant retinitis pigmentosa, to a number of liver mediated diseases that we might be able to halt by altering something in the genome of cells in the liver.
I’ll highlight one study where we have publicly shared some exciting data, which is focused on the PCSK9 gene. In this case, we know well from literature and from other drug products that by inhibiting the PCSK9 gene we can reduce LDL, or bad cholesterol, levels in the body. We initiated a program targeting PCSK9 several years ago in collaboration with Dr. Jim Wilson at the University of Pennsylvania and we were able to show that with a single administration of an ARCUS nuclease we were able to knock out the PCSK9 gene in a non-human primate’s liver cells. What’s more, this resulted in a sustained 50% reduction in LDL levels. After around 2 years of follow-up those animals still had a 50% reduction in their LDL levels. We think this is very exciting data and we have seen no obvious adverse events associated with the use of the ARCUS editing platform. It appears to be both a well-tolerated and permanent way to edit the genome. We think this opens up the broad potential for genome editing directly in the body, and for true gene corrections for genetic diseases. We are very excited to continue exploring these possibilities with our in vivo gene correction portfolio.
Of course, the primary focus of Precision today is on our allogeneic CAR-T cancer immunotherapy programs. We think we can have an outsized impact very rapidly here, and we believe our differentiated approach may give us a leadership position in this area. We are being careful as we begin to advance our in vivo gene correction programs but we think they can have a big impact on certain genetic diseases as well.
CNCR ETF: I think it is important to highlight what you said. With the cancer programs you are doing all of the genome editing to the cells outside of the body. If I heard you correctly, what you are saying with this PCSK9 cholesterol program is that you actually did the editing in the body of the animals and now those genes are changed inside the animal, and the cholesterol is being lowered. This might be a suggestion that the delivery component, which is technically challenging, seems to be working, at least in animals?
Matt Kane: Yes, and this is in large animals, which is important. You are exactly right. One of the biggest challenges that the field has faced is the lack of translation from mouse studies to large animals that are much more representative of the patients that we would be seeking to treat. The fact that we’ve been able to successfully move into non-human primates again speaks to the unique features of our ARCUS genome editing platform which we designed in part to potentially be compatible with various different delivery approaches. We are very excited about this and we think we have a distinct advantage. The gene editing space, and in particular the in vivo gene correction field, brings with it a lot of potential to do good and deliver what could be life-altering or life-saving treatments for patients that are in need.
CNCR ETF: We saw that you cut the ribbon on a manufacturing facility in North Carolina recently. We know that with these types of therapies the manufacturing process in many respects is the most important thing. Why was this facility an important investment for the company and what will it allow you to do?
Matt Kane: Thank you for asking because I agree. Manufacturing in an advanced therapeutic area like this is critically important. There is not a robust 20-year history behind developing an allogeneic CAR-T product or an in vivo gene correction product. We have to lead this and own it. So in July we were delighted to open what we call MCAT, or the Manufacturing Center for Advanced Therapeutics, in North Carolina just a few miles from our headquarters in Durham. We believe MCAT is the first cGMP (current good manufacturing practice) certified facility dedicated to genome edited allogeneic CAR-T cells in the United States. What MCAT provides us is not only the cell engineering capabilities for our CAR-T programs, but also it gives us in-house production capabilities for two of the hardest to source and most expensive inputs to the process. That is a viral vector called AAV that we utilize to get our CAR into the donor T-cells, and mRNA which we use to express the ARCUS nuclease to actually make the single editing cut during the manufacturing process. By having full control over that extensive ecosystem we believe it will bring down our costs and make the product more accessible to patients if we are able to show that it is both safe and effective.
CNCR ETF: Thank you for your time today and thank you for the work you are doing for patients. Best of luck.
Matt Kane: Thank you.
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