In late January the Cancer Immunotherapy ETF (Nasdaq: CNCR) team traveled to Miami for the Phacilitate Leaders World and World Stem Cell Summit. This four-day event attracted over 2,000 attendees from all around the world. Cell and gene therapies were a major focus of discussion. This is a great conference to attend given what a key role cell therapies are starting to play in the field of cancer immunotherapy. The recent approvals of Novartis’ Kymriah and Gilead’s Yescarta have energized the industry. While at the conference, we caught up with James Noble, CEO of CNCR holding Adaptimmune (Nasdaq: ADAP). View all holdings of the Cancer Immunotherapy ETF.
You might recall that Adaptimmune is a leader in developing a type of cell therapy called T-cell receptor (TCR) therapy. While many people are familiar with a different kind of cell therapy called chimeric antigen receptor T-cell therapy (CAR-T), less is known about the more developmental stage TCRs. To help our investors and other readers learn more, we recently published a TCR research report comparing the two approaches. We now also have this opportunity to present an interview with a true leader in the field. Mr. Noble discusses how long Adaptimmune has been working on TCRs, what they have learned over that time, and why 2019 is a pivotal year for the company. Below is a transcript of our wide-ranging interview, which has been minimally edited for clarity.
CNCR ETF: Let’s start in the beginning. Your company Adaptimmune has been focused on this TCR space for a very long time. Can you tell us how long you have been at this?
James Noble: We actually unbelievably hit our 20th anniversary at the end of March this year. We first started on a very modest basis with no employees, no premises, no buildings, and no labs. We simply found some interesting technology at the University of Oxford and decided to sponsor three academics within the university to see if they could bring the technology forward. So our first fundraising was an incredible £200,000, which is about $250,000. That was our first funding and then we managed to raise another $2,000,000 over the next year. With that, we started a real company in the year 2000, as Avidex, which became Adaptimmune in 2007. It has been a long time because it is a very complicated technology. Unfortunately for us, we had to be responsible for inventing most of the steps along the way. Each time we invented something we then hit the next step up and so forth. It has been a very long journey, but we are finally in human trials.
CNCR ETF: How long did it take to get to that clinical trial stage so that patients are being treated?
James Noble: The first time we treated patients took the first ten years actually. There were a lot of difficult hurdles to overcome. Not the least of which was actually making a T-cell receptor (TCR), which is our core technology, stable. An unstable protein will last a few seconds. A normal T-cell receptor until you stabilize it does that. So even trying to get to work with them proved very difficult. And then the next problem was that they were not potent enough. Therefore, you need to increase the potency, which is something called affinity in technical terms. Although we could get the T-cell receptor to be stable, it took about four years to get it to be more potent. Then it takes quite a time to develop a single product from that base technology to go into man. In fact, our first product was an HIV (human immunodeficiency virus) product – it had nothing to do with cancer. We put that into a couple of patients in the United States about ten years ago. Then, in 2009, we went into cancer subsequently.
CNCR ETF: This is cell therapy, which is a big theme in our industry right now. A lot of people have heard of CAR-T (chimeric antigen T-cell receptor) cell therapy but there is maybe less familiarity with what you are working on, TCR cell therapy. What is the difference between CAR-T and this?
James Noble: You are right to point out that CAR-T is at a more advanced stage. But they are very similar – the whole concept is that you find a patient, you draw their blood and separate out T-cells (called apheresis), and then you soup them up, genetically modify them, and then put them back into the same patient. This process goes by the name of autologous T-cell adoptive therapy. The main difference between CAR-T and TCR is that the targets are different. It just so happens that the immune system relies on two sides – the antibody side and the T-cell receptor side. The CAR-T cell can only target things that monoclonal antibodies can target. This means a whole protein sitting on the outside of a cell. However, there is a completely different way of targeting cancer cells through the T-cell receptor system. Many more proteins get broken down into tiny fragments called peptides and those get presented on the outside of the cell and that is what T-cell receptors target. So the targets are different – there are far more targets for T-cell receptors than there are for CAR-T. Now on the CAR-T side they have had spectacular data in hematological (blood) tumors like types of leukemia and lymphoma. For T-cell receptors, the big hope is that TCRs will act more definitively in solid tumors – things like sarcomas or adenocarcinomas, big diseases like lung, ovarian, liver cancer, and other such cancers like that which are not blood cancers. So the main differences are to do with the targets and the potential to deal with solid tumors. The reason people think there is solid tumor potential with TCRs is that we have had the first inklings of data in solid tumors using T-cell receptors in a rare disease called synovial sarcoma, another called myxoid/round cell liposarcoma, and also in a previous collaboration with the National Cancer Institute (NCI) in Washington D.C. in melanoma. We also had data in a myeloma study in the context of a stem cell transplant. Other companies have produced a couple of responses in one or two other diseases like cervical cancer. These are the first inklings that you can attack solid tumors using this type of technology.
CNCR ETF: You mentioned synovial sarcoma. I think this was the data that really put you on the map. Your TCR in that case targets something called NY-ESO. Why is NY-ESO a good target for synovial sarcoma?
James Noble: What you are really looking for is something that is expressed on the cancer cell but not expressed on normal tissue. A T-cell is a very powerful weapon. If it doesn’t like the look of a cell, it will kill it and it will also trigger an immune response to kill a lot of other cells that look like it. If the target is on normal tissue, you will damage normal tissue because the T-cells are activated. NY-ESO comes from a family of targets generally called cancer testis antigens, which, luckily, are on a variety of cancers but are not on normal tissue. NY-ESO had a very good safety profile. The key in cell therapy, to start with at least, is going to be to look at the safety profile of the T-cells. It did put us on the map. As far as we could tell, based on the safety studies we conducted, the T-cells targeted the cancer and nothing else. We never found anything else they targeted in terms of healthy tissue. So it worked exactly as we hoped it would work by attacking the cancer and not attacking the healthy tissue.
CNCR ETF: The U.S. FDA granted you something called Breakthrough Therapy Designation for synovial sarcoma and you have partnered on NY-ESO with GlaxoSmithKline (GSK). What exactly was the data that led to those things?
James Noble: When you get the conditions right – so that the patients do present the target and you give them enough cells and you give them enough preconditioning, which is an important part of all T-cell therapy – in this case about half of the patients responded. Response is a technical term, which means the lesions/tumors have shrunk by at least 30% for at least a month. You actually have an objective measure because you take scans of the tumors and measure them. In about half of the patients we got a response and, depending on exactly how you do the measure, it was about 50% to 60% in the first cohort. Just to give some background on that, there was a previous drug called Votrient approved in synovial sarcoma and that was approved on a 4% partial response rate. There were also no complete responses with Votrient and we had one complete response with the rest being partial responses. In other words, this is a very difficult to treat disease. It is a very sad disease because it is mainly in young people. The average age in our first cohort was about 29 to 30. So this data is where the excitement came from. We saw that you could remove tumors, actually very large tumors the size of your fist or a grapefruit could disappear completely, and other ones would shrink. So it was a very exciting time. We have now transferred that program to GlaxoSmithKline under the partnership deal you mentioned.
CNCR ETF: What is the status of that? They are planning to run what will be considered a pivotal trial in synovial sarcoma, correct? Has the trial started yet?
James Noble: I don’t think it has started. We talked to the U.S. FDA about the design of such a trial. We had extensive discussions with the FDA. That is actually the benefit of having Breakthrough Therapy Designation – you get access to advice from the FDA throughout the process. Especially since this is a new field, you do need to make sure you are in tune with the regulator because there is not a lot of history you can rely on. I assume that GSK will carry out a pivotal study although I don’t think it has started. They are also interested in the effect of that particular NY-ESO TCR therapy in lung cancer. I do know they are going to start a lung cancer study and a combination study with the checkpoint inhibitor Keytruda. So they are planning several studies. I don’t know exactly where they are with sarcoma because once we handed it over to them, it is their program and they run it as they see fit.
CNCR ETF: Let’s go back to last year – 2018. The most recent data I saw from you was at a big cancer research conference called the European Society for Medical Oncology (ESMO). I think there were TCRs with a couple of targets – MAGE-A4 and MAGE-A10. Why are those compelling targets and what kind of cancers did you test them against?
James Noble: They are compelling targets because they come from the same family as NY-ESO so we hope we will get similar data and see some responses in solid tumors. We wholly own those programs. They are in a variety of diseases. We are looking at ADP-A2M10, which targets MAGE-A10, in four different diseases. ADP-A2M4, targeting MAGE-A4, is much more prevalent and we are looking at it in nine different diseases in total. We spent most of 2018 going up the safety cohorts. As I mentioned earlier, T-cells are very potent and the most important thing you must do with a T-cell therapy is to make sure it is safe before you expand the study. That is what we did. Safety is a tricky thing in cell therapy – it is not really about the dose. In a traditional drug you keep increasing the dose until you see toxicity, because as you go up the doses you might have more efficacy but you also get more side effects. When you get to a point when the side effects are more important than the efficacy you stop and then that is the dose you use in the future. Conversely, cell therapy is a tricky thing because it is not exactly about the dose. The reason why it is not exactly about the dose is because the cells actually keep growing once you put them back into the patient. So they expand in-vivo, as it is called. You put a certain dose into the patient, but that is not the ultimate number the patient will see because they will expand just like any other cell will expand if they get into the body in a proper way. What you are really looking for in terms of safety is whether there is a possibility that your cells recognize something that you do not want them to recognize. Of course we do masses of safety testing before we go into the patient, but you are never quite sure with biologics that they will not recognize something that you do not want them to recognize. Obviously you want them to recognize the cancer but you do not want them to recognize something on a normal cell. We do all the testing we can, but until you go into patients you do not know the definitive answer to that. We spent 2018 going up the dose levels and giving more and more cells. We now know that they expand in the patients and we also know that if we were going to see any safety concern, we would have likely seen it by now. So we were pleased with the data both in ADP-A2M10 and ADP-A2M4 because we didn’t see any of that so-called “off-target” toxicity. Now we are able to expand the cohorts – to expand the number of patients getting cells. That is the job of 2019 – to see if we get any responses.
CNCR ETF: You also announced some news in early January around the time of the J.P. Morgan Healthcare Conference about another program that you have in liver cancer. It sounds like the same story – you are still working up your dose and checking for safety. Is that correct?
James Noble: Yes, correct. However, this program is not from the same family I have mentioned called the cancer testis antigens. In this case, the target is called ADP-A2AFP, targeting AFP, which stands for alpha fetoprotein. It is only expressed in liver cancer. However, it is also expressed in some healthy liver progenitor cells – some cells within the liver that you don’t want to kill. We are much more cautious on that from a safety point of view since it is expressed on some healthy tissue so maybe there will be an effect on that. We haven’t seen this at all so far. The safety review committee has allowed us to go up to the second dose cohort. So we are excited. We are also very excited because a Chinese company has a cell therapy program focused on the same target and they have seen responses. We are really hoping that once we get the dose up to where we need it to get to that we might also see some responses. But, again, that is a job for 2019.
CNCR ETF: What are some of the catalysts we should watch for from Adaptimmune in 2019?
James Noble: I think the main catalysts are going to be whether we see any responses in any cancer in any of our three programs. That will determine the future of the company. Obviously we are excited to get the data – we don’t have the data yet. It will be a small number of patients and it will be based on scans showing whether or not they have had responses. I think those are very important catalysts and if we see anything in sarcoma, if we see any responses, then we plan to go into a pivotal study. With cell therapy you tend to move straight from phase 1 data into pivotal studies without doing a lot of the phase 2 studies that other companies have to do. So you can actually make tremendous progress. If we see responses in sarcoma, we should be in pivotal studies in 2019. We would suddenly go from almost no response data to being in a pivotal study. We also have second-generation versions of these programs coming forward and we also plan combination studies with checkpoint inhibitors.
CNCR ETF: Speaking of second-generation technologies, what are some of the improvements you are working on? What is second-generation in this case?
James Noble: The main things we are looking for is to increase the ability of the T-cells to get to the cancer and then to kill the cancer once it gets there. In order to get to the cancer, you have to fight the defenses the cancer puts up. There is something called the hostile tumor microenvironment. There are a lot of things the cancer does to prevent the T-cells from getting to it. The first type of second-generation program is to fight back against the cancer’s determination to stop the T-cells from getting there. That is the first thing. The second thing is about how not all cells in the cancer will present your target. With a targeted therapy, you will kill what presents the target but if cells don’t present the target, what happens then? Actually, there are things you can do. You can put things into the cell that drag in other cells and that drag in other parts of the immune system that essentially create a sort of fire inside the tumor. This gives a much more general immune reaction. Some people call that epitope spreading, which is a technical term for dragging things that don’t recognize your target but that recognize other targets into the cancer. Our ideas are mainly centered on those two concepts. One is about making sure you can get through the tumor microenvironment and actually get to the cancer and the other is making sure you eradicate the cancer rather than just killing the cells that express a particular target.
CNCR ETF: The Cancer Immunotherapy ETF has been an Adaptimmune investor for a little over three years. How would you describe the progress you have made as a company over that time?
James Noble: I would say we are light years further on. For example, consider the manufacturing, which is a very key point. You know, Scott Gottlieb, who heads the FDA, has said that for a normal drug 80% of the data you look at is clinical and 20% is about production, and he says it is the other way around for cell therapy. You have to make sure the product is the product because you are dealing with something that comes out of a patient and you then modify it and put it back into the same patient. How do you standardize that? There is no batching and you do not have inventory because each patient is unique. I think Adaptimmune has made huge progress there. We have made progress both in how to get the product into the cells and also how to make the cells in very large volumes – because billions of cells is what you need for solid tumors. I think in terms of the targets, we have learned a tremendous amount about which targets might be effective. I think we have also completely revolutionized generation two. Three years ago we hadn’t developed solid generation two products and we are now at the point where we expect to file our Investigational New Drug (IND) application for the first products this year and go into man this year. I would say right across from looking at targets to identifying patients to signing up centers, we are now in more than 20 centers across the USA and we have dosed our first patient in Europe, the business has become a machine to develop T-cells and I think that is a very impressive difference over the last three years.
CNCR ETF: You mentioned manufacturing. We are here at a cell therapy conference and a lot of the discussions are about the complexities of manufacturing. Can you expand on that a little more?
James Noble: Cell therapy is completely different from any other type of drug because you can’t make it in advance. You can’t make inventory. Also, it is a living product. So you have a cell, you have taken cells out of the patient, you have genetically engineered and modified them, and then you put them back into the same patient. We came to the conclusion about four years ago that it was impossible to monitor the improvements and make the product consistent and understand exactly what is going on unless you have your own manufacturing facility. We have built our own manufacturing facility in the Navy Yard in Philadelphia. From December of 2017, before which we had never produced a dose, we can now produce ten patients a month. These are an enormous number of cells because you need 5 billion to 10 billion cells. We have managed to go from nothing in a year to be able to produce more than 100 doses on an annual basis. We have learned so much in that year. I think it is an essential component for any company that really wants to go forward at this stage in cell therapy to invest in their own manufacturing and what is called process development, which is the technology behind the manufacturing, to make improvements. We have made so many improvements in the last year. I don’t think we could have ever done that with a third party. It might become easier to use a third party in ten years time when all the questions have been sorted out but I think that while the process itself is being developed, I think it is absolutely essential to do it yourself. We have invested a great deal of money and we now have a large number of people involved in very high tech clean rooms in the Navy Yard and it is the best investment we could have made.
CNCR ETF: It sounds like 2019 is a pivotal year for you. I think the message is that 2018 was the year Adaptimmune learned about safety and 2019 is the year the company will learn about how efficacy stands. We wish you the best of luck.
James Noble: Thank you very much.
Opinions expressed are those of the author, interviewee, or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. GlaxoSmithKline and Novartis are not a holding of the Fund or affiliated with the Fund.