2seventy bio (TSVT) has reported its fourth-quarter and full-year financial results for 2023, highlighting progress in its asset purchase agreement with Regeneron (NASDAQ:REGN) and anticipating the closure of the deal in the first half of the year.
The company is preparing for an ODAC meeting to discuss the third-line use of their therapy, ABECMA, and expects the therapy to return to growth post-approval in this setting. The fourth-quarter saw ABECMA US revenues of $56 million, with an additional $2 million from collaborative arrangements.
2seventy bio ended the year with a substantial cash reserve and anticipates significant savings from restructuring measures in the coming years. They are poised for ABECMA to return to growth in 2023 and potentially reach breakeven by 2025.
Key Takeaways
- 2seventy bio reports Q4 ABECMA US revenues of $56 million and collaborative arrangement revenue of $2 million.
- The company expects to close the asset purchase agreement with Regeneron in the first half of the year.
- Anticipated annual savings of about $150 million in 2024 and $200 million in 2025 due to restructuring.
- ABECMA is expected to grow after approval for third-line-plus use, with the company aiming for breakeven by 2025.
- Expansion of the number of sites to increase ABECMA's accessibility to patients.
Company Outlook
- 2seventy bio aims for ABECMA to return to growth in the current year.
- The company holds a positive view on ABECMA's market opportunity, especially in the third-line plus setting.
- They expect to provide more updates following the ODAC meeting.
Bearish Highlights
- There were no specific bearish highlights mentioned in the call.
Bullish Highlights
- The company is confident in ABECMA's benefit-risk profile, safety, and efficacy.
- Real-world evidence data supports ABECMA's reproducible efficacy and favorable safety profile.
- ABECMA is not limited to a specific patient type, indicating a broad market potential.
Misses
- The company did not report any misses in the call.
Q&A highlights
- During the Q&A, the company emphasized the significant demand for ABECMA and the challenge for any manufacturer to meet it.
- They plan to educate on ABECMA's safety and efficacy throughout the year.
- The company expressed excitement for future updates and the upcoming ODAC meeting.
2seventy bio's earnings call was marked by a strong sense of optimism regarding the potential growth of ABECMA. The company is not only preparing for the regulatory discussions but also actively working on expanding the treatment's accessibility and educating the medical community about its benefits. With substantial financial resources and expected cost savings, 2seventy bio is positioning itself for a pivotal year in 2023. Investors and stakeholders are likely to watch closely as the company navigates the upcoming ODAC meeting and executes its strategic plans for ABECMA.
InvestingPro Insights
As 2seventy bio (TSVT) gears up for a pivotal year with its focus on ABECMA's growth trajectory, it's crucial to consider the financial health and market performance of the company. According to InvestingPro data, the company has a market capitalization of $293.12 million, reflecting its size in the biotech landscape.
One of the key InvestingPro Tips for TSVT is the company's rapid cash burn, which is a critical factor to monitor given the high costs associated with biotech research and development. This is particularly relevant as the company prepares for an ODAC meeting and the closure of its agreement with Regeneron, which could have significant financial implications.
Another InvestingPro Tip highlights TSVT's weak gross profit margins, which stand at a concerning -146.72% for the last twelve months as of Q1 2023. This could affect the company's ability to reach breakeven by 2025, as projected in their optimistic outlook.
Despite the challenges, TSVT has shown a strong return over the last three months, with a 146.38% increase in price total return, signaling investor confidence in the company's potential. This is coupled with a 35.6% year-to-date price total return, which may interest investors looking for growth opportunities.
For those interested in further insights and tips, InvestingPro offers additional guidance on TSVT, which can be accessed at https://www.investing.com/pro/TSVT. Utilize the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the full range of InvestingPro Tips, which currently lists 8 additional tips for TSVT.
Full transcript - 2Seventy Bio Inc (TSVT) Q4 2023:
Operator: Good day, and thank you for standing by. Welcome to the 2seventy bio fourth-quarter 2023 earnings conference call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Elizabeth Hickin, Head of Investor Relations. Please go ahead.
Elizabeth Hickin: Thank you, operator, and good morning, everyone. Thank you for joining us. This morning, we issued a press release on our fourth-quarter and full-year 2023 financial results. The press release can be found in the Investors and Media section of the company's website at 2seventy bio.com. As a reminder, today's discussion will include forward-looking statements related to 2seventy bio's current plans and expectations, which are subject to certain risks and uncertainties. These forward-looking statements include statements regarding our strategic plans, timelines, and expectations with respect to sales, efficacy, and perceived therapeutic benefits of ABECMA, the timing and review of additional studies and regulatory applications for ABECMA, and statements regarding our financial condition. expectations. and future financial results among others. Actual results may differ materially due to various risks, uncertainties, and other factors including those described in the risk factors section of our most recent Form 10-K, quarterly reports, and other SEC filings. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. You are cautioned not to place any undue reliance on these forward-looking statements and except as required by law, we undertake no obligation to update or revise any forward-looking statements. On today's call, we are joined by Chip Baird, Incoming Chief Executive Officer; and Vicki Eatwell, Incoming Chief Financial Officer. Anna Truppel-Hartmann, Head of Clinical Development, is also on the line for Q&A. And now I will turn it over to Chip. Chip?
Chip Baird: Thank you, Liz, and thank you all for joining us. This morning, we disclosed our fourth-quarter and full-year 2023 financial results and recent business and operational updates. I'd like to walk through some of the business updates and then Vicki Eatwell, our Incoming Chief Financial Officer, will go into detail on the financials. First, as we announced in January, we have embarked on a new strategic path forward as an organization that will be wholly focused on ABECMA. As part of this new path forward, we entered into an asset purchase agreement with Regeneron to acquire our research and development pipeline. I'm pleased to share that we've made good progress on the agreement and continue to believe we are on track to close within the first half of the year. Turning to ABECMA, we're looking forward to discussing our sBLA in the third-line at the upcoming ODAC meeting next week. As we've shared, FDA has said they are focused on the overall survival data from the KarMMA-3 study, which was presented at ASH and importantly showed benefit in the ABECMA arm when adjusted for crossover. We believe these data support the case to prove ABECMA in this triple-class exposed patient population. We're pleased to see regulators across other geographies respond positively with third-line plus approvals in Japan, Switzerland as well as a positive CHMP opinion in the EU, which gives us confidence in a potential approval here in the US. Our clinical and regulatory teams at 2seventy and at BMS have been diligent and thorough in our preparation for the ODAC and we look forward to the meeting next week. From commercial perspective, the approval in the third-line-plus setting is a key catalyst for ABECMA returning to return to growth. To that end, we and BMS are prepared to meet the anticipated demand in and importantly, to continue to deliver ABECMA on time and inspect for patients in need. These efforts are in addition to other ongoing efforts to expand site footprint and competitively differentiate ABECMA's safety and efficacy profile with real world data. We look forward to educating the communities together with BMS on these data, and we remain excited about the potential for ABECMA to transform the lives of patients living with myeloma. With these efforts and our extended cash runway, we believe 2seventy is strongly positioned to see ABECMA return to growth this year and deliver for patients in need. Before I close, I'd like to turn the call to Vicki to walk through some of our financials. Vicki, over to you?
Vicki Eatwell: Thanks, Chip. As mentioned, fourth quarter ABECMA US revenues as reported by Bristol-Myers Squibb (NYSE:BMY) were $56 million. The decline in fourth-quarter sales was due to ongoing competition from other BCMA targeted therapies. We anticipate the commercial performance for the first part of 2024 will continue to be impacted by competitive dynamics until the potential expansion of the label to the third-line plus setting, which will increase the addressable patient population. In the fourth quarter, 2seventy bio reported collaborative arrangement revenue of $2 million related to its collaboration with BMS for the three months ended December 31, 2023, and collaborative arrangement revenue of $50 million related to its collaboration with BMS for the 12 months ended December 31, 2023. We anticipate collaborative arrangement revenue to grow meaningfully as we see ABECMA return to commercial growth. We ended the year with $221.8 million of cash, cash equivalents, and marketable securities. With the changes to the cost structure resulting from restructuring measures and following the close of the asset purchase agreement with Regeneron, we expect annual savings of approximately $150 million in 2024 and approximately $200 million in 2025, inclusive of the one-time cash restructuring costs of approximately $8 million to $10 million. We now expect our cash runway to go beyond 2027 and see a path to potential breakeven by 2025, obviating the need to seek funding from the capital market in the foreseeable future. With that, I'll turn it back to Chip.
Chip Baird: Thanks, Vicki. Before we close, I'd like to thank the team at 2seventy for continuing to navigate these challenging waters and not losing sight of the mission and the clear task at hand. With key milestones coming in the near term, close of the APA with Regeneron, ODAC, and soon thereafter, we feel we are well positioned to emerge from the first quarter in a much stronger position. We look forward to continuing to support our partners at BMS as they bring ABECMA to myeloma patients in need. With that, we're happy to take your questions. Operator, over to you.
Operator: [Operator Instructions]. Our first question comes from the line of Daina Graybosch with Leerink Partners.
Daina Graybosch: Yeah, I'd like to ask a question of the [Technical Difficulty] toxicity profile. And it keeps often spoken in the past that the lack of delayed neurotoxicity, whether the more severe or the less severe forms of that are potential advantage [indiscernible] not necessarily seeing that in the revenue numbers. And I can wonder -- I wonder how your conversations with doctors in the field are going, and whether you expect toxicity to be a major planned discussion at the ODAC.
Chip Baird: Okay. Thanks, Daina. It's a good question and that's one that's been known and on the label for some time. I would comment broadly at a commercial perspective that the tox profile becomes increasingly important as we move towards earlier-line settings when there are other treatment options available and when the benefit risk profile just is inherently different. So I think that will be an important factor as we move into this third-line plus setting. But we will turn it to Anna to comment from a clinical perspective and MD perspective. Anna?
Anna Truppel-Hartmann: Thank you, Chip, and thank you, Daina. It is also important to note that experience is growing as well in the field, which also has an impact onto you. So with all the revered evidence that has been published in the last month or so, at last ASH, there was a wealth of data. We can see that there is lots of delayed neurotoxicity such as Parkinsonism for some other products, not for -- not as much for ABECMA. And I think these data will also influence how to see the toxicity profile for the product.
Operator: Our next question comes from the line of Salveen Richter with Goldman Sachs.
Tommie Reerink: Hi. This is Tommie Reerink on for Salveen. Thanks so much for taking our question. Just on the upcoming ODAC meeting, what key piece of data do you think best supports the overall survival data? Thanks so much.
Chip Baird: Yeah, Anna, do you want to comment on that one?
Anna Truppel-Hartmann: Yes, thank you very much for the question. So the overall survival data has a key confounding factor, which is the crossover. We have used a very patient-centric study design and therefore, we haven't seen a difference between the center of care of an ABECMA in the overall survival. But when adjusting for crossover, as mentioned by Chip before, then it really seems to favor ABECMA. So this is an important point when looking at overall survival data. In addition to that, we have had discussions around bridging therapies as well for the ITP population and due to the impact of bridging therapies and the importance of bridging therapies; we've seen some imbalance in the early part of the Kaplan-Meier curve. But overall survival seems to be favoring ide-cel when adjusting for the crossover.
Chip Baird: Yeah, and the other thing I'd add there is overall survival was a focus of, as we said before, the regulatory discussions in Japan and in Europe and the Swiss regulatory authority. So this is a topic that we've had experience talking to regulators about the team has been diligent [indiscernible] for the meeting, and so we look forward to discussions next Friday.
Operator: Our next question comes from the line of Yaron Werber with TD Cowen.
Unidentified Analyst: Hi, this is Jana on for Yaron. Thanks for taking our question. You're always facing a lot of competition from [indiscernible] and bispecifics. But looking further ahead, do you think that ABECMA's lead to market is going to be sufficient to be competitive even with newer CAR Ts and development like, [indiscernible] or do you think demand is going to be increasing in other CAR T and upstream to make room for several CAR Ts to coexist?
Chip Baird: Yeah, thanks for the question. I think the history of myeloma has always been never a winner-take-all scenario. This is a huge market. It's a complex market. Patients progress through different lines of therapies in myriad of different ways. And again, as we expand from the current label to this expanded third-line plus setting, the market opportunity is significant. It will be difficult for anyone manufacturer to meet that demand. And as Anna alluded to you before, as we look at the real-world evidence and as we understand more and more about this therapy, is not outside the strict confines and controlled setting of a clinical study, but actually in their use and application in the real world. Differences emerge and our understanding of what's the best product to offer for this patient population has evolved. And we think that's going to play out over a very long time. I think at the outside world has taken somewhat of a winner-take-all mindset and that's convenient. And that's a -- we think it's a simple -- it's an oversimplification of the nuance between these different products. And as we said, we like the benefit risk profile of ABECMA, we like the safety and efficacy profile. We think it's competitive and we look forward to educating on that in the third-line plus setting throughout the balance of this year.
Operator: Our next question comes from the line of Kelsey Goodwin with Guggenheim Securities.
Kelsey Goodwin: Hey, good morning. Thank you for taking my question. I guess on the real-world evidence that's being generated, could you just remind us what are the major key areas of differentiation for ABECMA that's arising with the real-world data. And then maybe quickly a follow-up on increasing the site footprint. Could you maybe just expand a bit there, I guess, are these sites that already have existing CAR T infrastructure? And how will that build outlook? Thank you so much.
Chip Baird: Sure. Thanks, Kelsey. Maybe I'll take the site footprint question first, and then we can talk about the points of differentiation that are emerging in the real-world evidence and real-world setting. From a site footprint perspective, as we've described before, we continue to increase the number of sites where documents available for patients and a large market like the US, that's really important for patients, particularly later-line patients for whom extended travel is difficult. So again, we started it in larger cities and larger academic centers where the was just larger and that made a lot of sense. But as we've increased the footprint that's going to make ABECMA available for more and more patients and we have plans to continue to expand that footprint over time, so that's an important commercial driver. But I think the main one is going to be our ability to describe and articulate both the safety profile and the efficacy -- competitive efficacy profile of ABECMA in the third-line plus setting. In terms of the what we're seeing and some of those competitive differentiators in the real-world evidence, again, it's both safety and I think a closing of the gap from the efficacy perspective, but Anna, I think it would be best to comment on that.
Anna Truppel-Hartmann: Yeah, thank you, Chip. [Indiscernible] evidence data is wonderful to see that the wealth of data is increasing with ABECMA being available now for a while commercially. And what we really can see is that we -- whatever dataset that is looked at in the data are reproducible from the KarMMA pivotal study. So any data set has shown either same efficacy or even better efficacy. And of note, many of those patients that are treated in real-world wouldn't have been eligible for the pivotal study. So this is very, very encouraging to see the real-world evidence data seem to be very beneficial for ABECMA with regards to efficacy, but also with regards to safety. I do think there was also a lot of data around the safety profile of the new agents approved in myeloma. And also there, ABECMA looks very, very good compared to the other profiles with regards to non-relapse mortality or infections or delayed neurotoxicities, et cetera. So I do think we are very pleased to see how the body of evidence -- real world is showing positive results.
Operator: Our next question comes from the line of Samantha Semenkow with Citi.
Samantha Semenkow: Hi, good morning. Thanks for taking our question. I'm wondering if you're able to share any insight on ABECMA's utilization trends over the last several months or quarters? What types of patients are receiving, continuing to receive ABECMA -- physicians making the decision to utilize ABECMA [Technical Difficulty] competitive BCMA options where -- types of centers are you seeing ABECMA use? Any insight you're able to provide would be helpful?
Chip Baird: Hi, Sam. Yeah. Thanks for the question. I would say it's really site-specific in terms of how it's being used. So again, we don't tend to think of ABECMA being niched for a given type of patient. So really, I think it depends on the site in terms of whether it's ABECMA-only side versus ABECMA and T cell engager side or whether they have multiple CAR Ts. Those are all different factors that I think impact how ABECMA is being deployed. But certainly, as we think about both the first-line and looking forward to the third-line plus setting, we don't see ABECMA as niched to a given subset of patients. But Anna, anything from a clinical perspective to add?
Anna Truppel-Hartmann: No, thanks.
Chip Baird: Thank you.
Operator: Thank you. I'm showing no further questions at this time. I'd like to hand the call back over to Chip Baird for closing remarks.
Chip Baird: Thank you, everyone, for making time for the call today, and we look forward to sharing more updates, and I'm sure we'll be talking again on the other side of the ODAC meeting this week. And with that, I wish everyone a great day. Thank you.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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