On December 13, 2022 Therabest USA. Inc, Therabest Korea (Therabest) and Glycotope GmbH (Glycotope) reported to have signed an agreement to assess the clinical development of Therabest’s EiNKTM (Enhanced iPSC-derived NK) cell therapy, TB-100, in combination with Glycotope’s immuno-cytokine, GT-00AxIL15 in triple-negative breast cancer (TNBC) patients (Press release, Glycotope, DEC 13, 2022, View Source [SID1234625209]).

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NK cell therapies from various cell sources have demonstrated exciting results in early clinical trials and are rapidly becoming powerful alternatives to conventional treatments. However, for solid tumors, NK cell therapies are still hampered by the low persistency and homing of NK cells. The combination of Therabest’s iPSC derived NK cell therapy TB-100 and Glycotope’s tumor-targeted immuno-cytokine GT-00AxIL15 challenges the current NK cell therapy paradigm by converging a two-component platform in which the dosage of an immuno-cytokine improves the activity of TB-100.

"We look forward to maximizing the strengths of TB-100 and GT-00AxIL15 to challenge solid tumors with enhanced cytotoxicity, specificity, persistency, and safety through this collaboration. We expect serial killing of MUC1 positive TNBC tumor cells by TB-100 redirected with GT-00AxIL15," said Sung Chang Lee, CEO, Therabest USA and adjunct CDO, Therabest.

"The collaboration underlines the attractivity of our tumor targeted immuno-cytokine GT-00AxIL15 and its suitability for combination therapies. We are excited by the potential of combining two highly innovative technologies to explore the treatment of TNBC here," added Henner Kollenberg, CEO, Glycotope.

Therabest’s EiNKTM platform is a next-generation allogeneic NK cell therapy manufacturing technology that covers all processes from iPSC gene editing to iPSC-derived NK cell differentiation and proliferation. TB-100, a highly active NK cell therapy development candidate from EiNKTM platform, can recognize and remove heterogeneous cancer cells very effectively. TB-100 is an off-the-shelf and uniform cell therapy without donor-dependent batch-to-batch variation with minimal risk of current cell therapies.

Glycotope’s antibodies target specific tumor-associated carbohydrate structures or protein/carbohydrate combined glyco-epitopes (GlycoTargets). Targeting these specific antigens enables broad indication range, long-term treatment potential and reduced on-target/off tumor toxicity, key elements of highly potent therapies. Based on this unrivalled tumor-specificity, Glycotope’s antibodies are highly suitable for a multi-function platform approach with independent modes of action to provide a tailored therapy format for as many patients as possible.

Contact Information:

Therabest, Therabest USA

Sung Chang Lee (CDO, Therabest Korea and CEO, Therabest USA)

Phone: +1 619-614-2966

Email: [email protected]

Glycotope GmbH

Henner Kollenberg (CEO)

Phone: +49 30 9489 2600

Email: [email protected]

Media Contact:

Chris Gardner, Chris Welsh

Consillium Strategic Communications

Phone: +44 20 3709 5700

Email: [email protected]

About TB-100

Therabest’s TB-100 is an allogeneic iPSC-derived NK cell therapy produced from Therabest’s EiNKTM (Enhanced iPSC-derived NK) platform. TB-100 is the next generation cell therapy consisting of highly specialized cytotoxic NK cells which can recognize and removes heterogeneous cancer cells very effectively because they have high expressions of various activation receptors, including IL-15R and NKG2D, and low expressions of inhibitory receptors. TB-100 is an off-the-shelf and uniform cell therapy without donor-dependent batch-to-batch variation with minimal risk of CRS (cytokine release syndrome) and neurotoxicity, which are known challenges in current CAR-T cell therapy.

About GT-00A x IL15

GT-00A x IL15 is a TA-MUC1 targeting IL-15 immuno-cytokine fusion antibody. Cytokines have long been used for cancer therapy to activate the immune system, but side effects and short half-life limit their therapeutic application. The concept of specific targeting to the tumor and tumor microenvironment to exploit the full potential of IL-15 biology is unique within the competitive field of IL-15 (super)agonists. The Immuno-cytokine attracts and activates immune cells (e.g., T and NK cells) directly at the tumor site thereby turning an "immune desert" into a "hot" tumor and inducing tumor cell lysis. A comprehensive non-clinical data package is available.

On December 13, 2022 GSK plc (LSE/NYSE: GSK) and Wave Life Sciences Ltd. (Nasdaq: WVE), a clinical-stage genetic medicines company committed to delivering life-changing treatments for people battling devastating diseases, reported a strategic collaboration to advance oligonucleotide therapeutics, including Wave’s preclinical RNA editing programme targeting alpha-1 antitrypsin deficiency (AATD), WVE-006 (Press release, GlaxoSmithKline, DEC 13, 2022, View Source [SID1234625208]). The discovery collaboration has an initial four-year research term. It combines GSK’s unique insights from human genetics, as well as its global development and commercial capabilities, with Wave’s proprietary discovery and drug development platform, PRISMTM.

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Oligonucleotides are short strands of DNA or RNA that can reduce, restore, or modulate RNA through several different mechanisms. The unique capability of oligonucleotides to address a wide range of genomic targets in multiple therapeutic areas is enabling new opportunities to treat a range of human diseases, including diseases where no medicines currently exist or that have historically been difficult to treat with small molecules or biologics.

Wave’s PRISM platform is the only oligonucleotide platform offering three RNA-targeting modalities (editing, splicing, and silencing, including siRNA and antisense). Importantly, these modalities incorporate novel chemistry, including PN backbone chemistry and control of stereochemistry, to optimise the pharmacological properties of therapeutic oligonucleotides.

The collaboration includes two main components. The first is a discovery collaboration which enables GSK to advance up to eight programmes and Wave to advance up to three programmes, leveraging Wave’s PRISM platform and GSK’s expertise in genetics and genomics. In addition to these programmes, GSK receives the exclusive global license for Wave’s preclinical programme for AATD called WVE-006, which uses Wave’s proprietary "AIMer" technology (A-to-I(G) RNA editing). AATD is an inherited genetic disease that affects both the lungs and liver with limited treatment options. Wave’s WVE-006 is a first-in-class RNA editing therapeutic that is designed to address both liver and lung manifestations of the disease.

Tony Wood, President and Chief Scientific Officer, GSK, said: "Oligonucleotide therapeutics are becoming a mainstream modality, and this collaboration will enable us to use our leading position in human genetics and genomics to advance novel oligonucleotide therapies. Pairing GSK’s genetic expertise with the best-in-class PRISMTM platform enables us to accelerate drug discovery for newly-identified targets, by matching target to modality. The addition of WVE-006 complements more advanced, clinical-phase oligonucleotides in our pipeline, including bepirovirsen for chronic hepatitis B and GSK4532990 for non-alcoholic steatohepatitis (NASH)."

Bepirovirsen, an investigational antisense oligonucleotide for the potential treatment of chronic hepatitis B infection, is now entering Phase III trials, and GSK4532990, a siRNA oligonucleotide, is progressing to Phase II for NASH. WVE-006 brings a third oligonucleotide into GSK’s portfolio that has the potential to be a first-in-class AATD treatment for both lung and liver disease and is a well-understood genetic target, contributing to GSK’s pipeline that is now more than 70% genetically validated.

Paul Bolno, MD, MBA, President and CEO of Wave Life Sciences, said: "For the past decade, Wave has been building a unique oligonucleotide platform that combines novel chemistry with the means to optimally address disease biology through multiple therapeutic modalities. In 2022, we started to deliver on the promise of our platform with the first data showing translation in the clinic for our next-generation stereopure PN-chemistry containing candidates. Now with our GSK collaboration, we are excited to leverage their expertise in genetics to continue building a differentiated oligonucleotide pipeline, with a focus on our best-in-class RNA editing and upregulation capability. Additionally, GSK is the ideal partner for our WVE-006 programme, due to their longstanding history and global reach in respiratory diseases. The collaboration meaningfully extends our cash runway into 2025 and offers the potential for significant future milestones, providing new resources to deliver life-changing medicines to patients."

The companies expect to pursue targets across multiple disease areas, given preclinical data indicating Wave oligonucleotides can distribute to various tissues and cells without complex delivery vehicles.

Terms of the Collaboration

Under the terms of the agreement, Wave will receive an upfront payment of $170 million, which includes a cash payment of $120 million and a $50 million equity investment.

For the WVE-006 programme, Wave is eligible to receive up to $225 million in development and launch milestone payments and up to $300 million in sales-related milestone payments, as well as tiered sales royalties. Development and commercialisation responsibilities will transfer to GSK after Wave completes the first-in-patient study.

For each of GSK’s eight collaboration programmes, Wave will be eligible to receive up to $130-$175 million in development and launch milestones and $200 million in sales-related milestones, along with tiered sales royalties. Wave will lead all preclinical research for GSK and Wave programmes up to investigational new drug (IND) enabling studies. GSK collaboration programmes will transfer to GSK for IND-enabling studies, clinical development, and commercialisation. The collaboration includes an option to extend the research term for up to three additional years, expanding the number of programmes available to both parties.

The equity investment and collaboration agreement will complete at the same time and are conditional upon customary conditions including regulatory review by the appropriate regulatory agencies under the Hart-Scott-Rodino Act.

About Oligonucleotides

Oligonucleotide mechanisms that can reduce, increase or modify RNA include silencing (oligonucleotides that promote degradation of the target RNA, including antisense and siRNA); splicing (oligonucleotides that involve binding to the target RNA and modulating its function by promoting exon skipping); and ADAR-mediated RNA editing (oligonucleotides that edit adenosines in target RNAs to correct RNA or modulate protein function or production). GSK’s investments in genetics have revealed that a significant number of genetic associations point to proteins where modulation of RNA function and/or expression would likely be the most effective mechanism for therapeutic intervention versus more traditional small molecules and biologic-based therapeutics. Oligonucleotide therapeutics represent a modality that addresses this gap by regulating target expression rather than function.

About AIMers

Wave’s AIMers are designed to correct mutations in an RNA transcript, thereby avoiding permanent changes to the genome that occur with DNA-targeting approaches. Rather than using an exogenous editing enzyme, AIMers recruit normal proteins that exist in the body, called ADAR enzymes, which naturally edit certain adenine (A) bases to inosine (I). Because I is read as G (guanine) by the cellular translational machinery, sequence-directed editing with ADAR has the potential to revert transcripts with single G-to-A point mutations that cause genetic diseases. This approach redirects a natural system for therapeutic purposes, enables simplified delivery without viral particles or liposomes, and avoids the risk of irreversible off-target effects of DNA-targeting approaches. AIMers are short in length, fully chemically modified, and use novel chemistry, including proprietary PN backbone modifications and chiral control, that make them distinct from other ADAR-mediated editing approaches.

About Alpha-1 Antitrypsin Deficiency

Alpha-1 antitrypsin deficiency (AATD) is an inherited genetic disorder that is commonly caused by a G-to-A point mutation ("Z allele") in the> SERPINA1 gene. This mutation leads to lung disease due to lack of wild-type alpha-1 antitrypsin (M-AAT) function in lungs, and it leads to liver disease due to aggregation of misfolded Z-AAT protein in hepatocytes. There are approximately 200,000 patients in the United States and Europe who have Z mutations on both alleles, known as the PiZZ genotype. Augmentation therapy via delivery of AAT protein is the only treatment option for AATD lung disease and requires weekly intravenous infusions. There are no treatments for AATD liver disease, other than liver transplantation.

About WVE-006

WVE-006 is a PN-chemistry modified GalNAc-conjugated investigational development candidate for the treatment of alpha-1 antitrypsin deficiency (AATD), designed to correct the mutant SERPINA1 Z allele transcript to address both liver and lung manifestations of disease. WVE-006 is a potential first-in-class RNA editing candidate (AIMer) and the most advanced program currently in development using an oligonucleotide to harness an endogenous enzyme for editing. Wave expects to submit clinical trial applications for WVE-006 in 2023.

On December 13, 2022 Galapagos NV (Euronext & NASDAQ: GLPG) and CellPoint (a Galapagos company) reported encouraging initial data from the ongoing ATALANTA-1 Phase 1/2 study with GLPG5101 at the 64th Annual American Society of Hematology (ASH) (Free ASH Whitepaper) Congress taking place in New Orleans, Louisiana, from 10-13 December (Press release, Galapagos, DEC 13, 2022, View Source [SID1234625207]).

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ATALANTA-1 is a Phase 1/2 study in heavily pre-treated rrNHL patients to evaluate the safety, efficacy, and feasibility of GLPG5101, a fresh CD19 CAR-T product candidate manufactured at point-of-care. The dose levels that are evaluated in the Phase 1 part of the study are 50×106 (DL1), 110×106 (DL2) and 250×106 (DL3). As of 8 November 2022, 9 patients were enrolled; baseline and safety data for 8 patients were available (n=4 at DL1; n=4 at DL2). 7 patients reached the follow-up period of 28-days and were eligible for efficacy evaluation.

The initial results from 7 patients that were eligible for efficacy evaluation (cut-off date: 8 November 2022) indicated that a 7-day vein-to-vein time is feasible and demonstrated strong and consistent in vivo CAR-T expansion levels. Moreover, the initial efficacy results are encouraging with an objective response rate (ORR) of 86% observed and all responding patients achieving a complete response (CR). A duration of response of up to 7 months has been reported and follow-up is ongoing. Two patients who received DL1 that progressed after initial stable disease or CR respectively, had a CD19-negative escape. No CD19-positive relapses have been observed.

In the safety analysis of these 7 patients, adverse events were consistent with the known toxicities of CD19 CAR-T treatment. No grade 3 or higher cytokine release syndrome (CRS) or immune effector cell-associated neurotoxicity syndrome (ICANS) was observed in any of the patients. At DL2, CRS grade 1 or 2 was reported in 4 patients and ICANS grade 1 was reported in 3 patients. Patients at DL1 did not experience any grade of CRS or ICANS. Dose-limiting toxicity (neutropenia grade 4 for >21 days) was observed in 1 patient (DL2) and the majority of grade ≥3 adverse events were hematological toxicities.

"We are committed to accelerating transformational innovation to address unmet needs of patients with advanced cancers," said Dr. Paul Stoffels1, CEO and Chairman of the Board of Directors of Galapagos. "Despite significant medical advancements in recent years, many cancer patients relapse, become resistant to treatment or are diagnosed too late. We believe that differentiation and broader access to therapy can come from a disruptive CAR-T manufacturing model at the point-of-care, closer to patients. We are excited to present initial encouraging safety, efficacy and feasibility data from the ATALANTA-1 study with GLPG5101 manufactured at point-of-care, which support that potential. We are on track to report topline data from the completed study in the first half of 2023."

The poster presentation was given by Marie José Kersten, MD, PhD, Professor of Hematology and Head of the Department of Hematology at the Academic Center in Amsterdam:

Abstract Title Authors Presentation date/time
Initial Clinical Results of ATALANTA-1, a Phase 1/2 Trial of Point-of-Care Manufactured GLPG5101 (19CP02) in rrNHL Sébastien Anguille, Ilse Kuipers, Kirsten Saevels, Yves Beguin, Anna Van Muyden, Christian Jacques, and Marie José Kersten Poster Number: 4637
Date: 12 December 2022, 6:00–8:00 PM ET
Session: 704. Cellular Immunotherapies: Early Phase and Investigational Therapies: Poster III
CellPoint has developed, in a strategic collaboration with Lonza, a novel point-of-care supply model, which is designed to enable clinicians to administer fresh CAR T cells within 7 days of leukapheresis, without complex logistics or cryopreservation, thereby aiming to address important limitations of current CAR-T treatments. The proprietary platform consists of CellPoint’s end-to-end xCellit workflow management and monitoring software and Lonza’s Cocoon Platform, a functionally closed, automated manufacturing platform for cell therapies.

About the ATALANTA-1 study (EudraCT 2021-003272-13)
ATALANTA-1 is an ongoing Phase 1/2, open-label, multicenter study to evaluate the feasibility, safety, and efficacy of point-of-care manufactured GLPG5101, a CD19 CAR-T product candidate, in patients with relapsed/refractory Non-Hodgkin Lymphoma (rrNHL). GLPG5101 is a second generation anti-CD19/4-1BB CAR-T product candidate, administered as an intravenous infusion of a fresh product candidate in a single fixed dose. Each enrolled patient will be followed for 24 months. The primary objective of the Phase 1 part of the study is to evaluate safety and to determine the recommended dose for the Phase 2 part of the study. Secondary objectives include assessment of efficacy and feasibility of point-of-care manufacturing of GLPG5101. The planned dose levels that are evaluated in the Phase 1 are 50×106, 110×106 and 250×106 CAR T cells. The primary objective of the Phase 2 part of the study is to evaluate the objective response rate (ORR) while the secondary objectives include complete response rate (CRR), duration of response, progression free survival, overall survival, safety, pharmacokinetic profile, and feasibility of point-of-care manufacturing. The study is currently enrolling rrNHL patients in Europe and the first expansion cohort for Mantle Cell Lymphoma, a form of NHL, is currently open for recruitment. The company aims to broaden the study to include US patients in 2023 and to provide topline results in the first half of 2023.

About Non-Hodgkin’s Lymphoma
Non-Hodgkin’s lymphoma is a cancer originating from lymphocytes, a type of white blood cell which is part of the body’s immune system. Non-Hodgkin’s lymphoma can occur at any age although it is more common in adults over 50 years old. Initial symptoms usually are enlarged lymph nodes, fever, and weight loss. There are many different types of Non-Hodgkin’s lymphoma. These types can be divided into aggressive (fast-growing) and indolent (slow-growing) types, and they can be formed from either B lymphocytes (B cells) or in lesser extent from T lymphocytes (T cells) or Natural Killer cells (NK cells). B-cell lymphoma makes up about 85 percent of Non-Hodgkin’s lymphomas diagnosed in the US. Prognosis and treatment of Non-Hodgkin’s lymphomas depend on the stage and type of disease.

On December 13, 2022 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for patients with cancer, reported preclinical data of several novel strategies designed to enable administration of off-the-shelf cell-based cancer immunotherapies without conditioning chemotherapy at the 64th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition. Conditioning chemotherapy, commonly used throughout the field of cell therapy, often results in hematologic toxicities, can limit the potential for administration of multiple doses, and can prohibit adoption as part of early-line treatment (Press release, Fate Therapeutics, DEC 13, 2022, View Source [SID1234625206]). Novel strategies to reduce or eliminate the need for conditioning chemotherapy presented by the Company at ASH (Free ASH Whitepaper) include arming iPSC-derived effector cells with an alloimmune defense receptor, which selectively targets and eliminates 41BB-expressing alloreactive host immune cells to promote expansion, persistence, and anti-tumor activity; the genetic ablation of CD38 in combination with CD38-targeted monoclonal antibody therapy, which uniquely targets and depletes CD38-expressing activated host immune cells; and the combined genetic ablation of the adhesion molecules CD54 and CD58, which reduces immune synapse formation resulting in host immune cell evasion.

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"Eliminating the need for conditioning chemotherapy has the potential to significantly improve the safety and clinical benefit of cell therapies, and enable their use in a significantly broader population of patients with hematologic malignancies and solid tumors. Our next-generation iPSC product platform seeks to create the ideal off-the-shelf cell therapy, which would enhance functional persistence and anti-tumor activity while reducing or eliminating the need for conditioning chemotherapy to deplete host lymphocytes," said Bob Valamehr, Ph.D., Chief Research and Development Officer of Fate Therapeutics. "We are developing multiple promising strategies that can only be realized through precise multiplexed-engineering of cells, and we believe our leading iPSC product platform is uniquely positioned to generate clonal NK and T-cell product candidates that can thrive and resist rejection."

Alloimmune Defense Receptor Targeting 4-1BB

The cell surface receptor 4-1BB (CD137), a member of the tumor necrosis factor receptor superfamily, is upregulated on activated CD4+, CD8+, and regulatory T cells as well as activated NK cells of the host immune system. Scientists from the Company and the laboratory of Maksim Mamonkin, Ph.D., Assistant Professor, Cell and Gene Therapy, Baylor College of Medicine, integrated a novel alloimmune defense receptor (ADR) that selectively targets 4-1BB into a master induced pluripotent stem cell (iPSC) line incorporating a CD19-targeted chimeric antigen receptor (CAR), that was subsequently differentiated into NK cells (ADR-armed, CD19-targeted CAR iNK cells). In the ASH (Free ASH Whitepaper) presentation (Abstract #1986), the scientists showed that in an in vitro co-culture assay with allogeneic peripheral blood mononuclear cells (allo PBMCs), ADR-armed, CD19-targeted CAR iNK cells expanded, persisted, and selectively eliminated 4-1BB+ allo PBMCs in contrast to ADR-null CD19-targeted CAR iNK cells, which were depleted. Further, a disseminated Nalm6 leukemia model comprised of allo-reactive T cells and tumor cells resistant to T-cell killing (MHC class 1-null), demonstrated that ADR-armed, CD19-targeted CAR iNK cells exhibited uncompromised effector function in vivo compared to ADR-null CD19-targeted CAR iNK cells, suggesting that ADR-armed NK cells functionally persist, proliferate, and durably kill tumor cells while resisting rejection by allo-reactive T cells.

CD38 Genetic Ablation in Combination with CD38-targeted Monoclonal Antibody Therapy

CD38-targeted monoclonal antibody therapies, such as daratumumab, are approved by the U.S. Food and Drug Administration for the treatment of multiple myeloma. CD38 has also been shown to be highly expressed on activated immune cells, including CD8+ T cells, CD4+ T cells, and NK cells. The Company has incorporated the knock-out of CD38 into its proprietary iPSC product platform, which uniquely allows for CD38-null, iPSC-derived NK cells (CD38-null iNK cells) to be combined with CD38-targeted monoclonal antibody therapies and avoid fratricide. In the ASH (Free ASH Whitepaper) presentation (Abstract #3288), scientists from the Company showed that, in a humanized mouse model containing allogeneic CD38+ activated NK and T cells, administration of daratumumab selectively depleted allogeneic CD38+ NK and T cells and uniquely enabled CD38-null iNK cells to functionally persist through Day 28 compared to wild-type iNK cells. These preclinical data were supported by translational findings from the Company’s Phase 1 study of FT576 (NCT05182073), its multiplexed-engineered, BCMA-targeted CAR NK cell product candidate that incorporates the knock-out of CD38, where combination with daratumumab rapidly and selectively eliminated CD38+ patient immune cells through the first month of therapy. The translational findings suggest that following administration of daratumumab, CD38-null iNK cells may avoid rejection by activated host immune cells without requiring conditioning chemotherapy.

Combined CD54 and CD58 Genetic Ablation

Avoiding NK cell-mediated rejection has been an area of significant research in the field of allogeneic cell therapy. While it has been shown that the knock-out of MHC class-I and MHC class-II molecules can avoid T cell-mediated rejection, engineered cells integrating MHC class-I knock-out are aggressively targeted and eliminated by NK cells. In the ASH (Free ASH Whitepaper) presentation (Abstract #481), scientists from the Company, the laboratory of Karl-Johan Malmberg, M.D., Ph.D., Professor of Immunology, University of Oslo, Norway, and the laboratory of Michel S. Sadelain, M.D., Ph.D., Stephen and Barbara Friedman Chair; Director, Center for Cell Engineering, Memorial Sloan Kettering Cancer Center presented a novel engineering strategy comprised of the knock-out of four genes: MHC class-I and MHC class-II as well as the adhesion molecules, CD54 and CD58. The scientists showed that the knock-out of CD54 and CD58 confers resistance to NK cell-mediated rejection across the spectrum of NK cell subpopulations compared to other engineering approaches such as HLA-E over-expression, which avoids recognition by NKG2A+ NK cells but induces killing by the most potent sub-set, NKG2C+ NK cells. Using multiplexed-engineered, iPSC-derived NK cells incorporating MHC class-I and MHC class-II knockouts, the scientists showed that the addition of CD54 and CD58 knockouts extended persistence in vivo in a humanized mouse model comprised of allogeneic NK cells.

About Fate Therapeutics’ iPSC Product Platform

The Company’s proprietary induced pluripotent stem cell (iPSC) product platform enables mass production of off-the-shelf, engineered, homogeneous cell products that are designed to be administered with multiple doses to deliver more effective pharmacologic activity, including in combination with other cancer treatments. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. The Company’s first-of-kind approach involves engineering human iPSCs in a one-time genetic modification event and selecting a single engineered iPSC for maintenance as a clonal master iPSC line. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, clonal master iPSC lines are a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf for patient treatment. As a result, the Company’s platform is uniquely designed to overcome numerous limitations associated with the production of cell therapies using patient- or donor-sourced cells, which is logistically complex and expensive and is subject to batch-to-batch and cell-to-cell variability that can affect clinical safety and efficacy. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 350 issued patents and 150 pending patent applications.

On December 13, 2022 Eli Lilly and Company (NYSE: LLY) reported its 2023 financial guidance, highlighted by expected volume-based revenue growth and increased investments to maximize future value (Press release, Eli Lilly, DEC 13, 2022, View Source [SID1234625198]). The company will review potential key events for the upcoming year, including important data readouts for several investigational medicines in its clinical pipeline and the possibility of multiple regulatory submissions and approvals, in a call with investors today.

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"Lilly is exiting 2022 with momentum. Our approved and available medicines are early in their life cycles and showed accelerated growth during the year, led by a strong Mounjaro launch. In addition, several of our late-stage medicines for serious diseases were submitted for approval this year, and will hopefully launch in 2023," said David A. Ricks, Lilly’s chair and CEO. "We continue to innovate and are beginning new pivotal studies for the next group of potential breakthrough treatments. In the decade ahead, we are well-positioned to create significant value for patients with challenging conditions, health systems struggling to manage chronic disease, and of course, our shareholders."

Anat Ashkenazi, Lilly’s executive vice president and chief financial officer, outlined the company’s expectations for its growth prospects: "We believe we have the potential to deliver top-tier, volume-driven revenue growth through at least 2030 with groundbreaking medicines. In addition to the tremendous on-going launch of Mounjaro in type 2 diabetes and expected future opportunities to treat obesity and obesity-related metabolic outcomes with tirzepatide, we plan to invest in our four significant potential new launches next year. With limited patent expirations this decade, we believe these potential new medicines and the continued scaling of our key growth products will fuel our next wave of growth. Lilly is committed to maximizing long-term value for stakeholders and we look forward to delivering further in 2023."

2022 Financial Guidance

The company reaffirmed its 2022 financial guidance on both a reported and non-GAAP basis. The company’s 2022 financial guidance reflects adjustments shown in the reconciliation table below.

2022

Expectations

% Change vs
2021

Earnings per share (reported)

$6.50 to $6.65

6% to 9%

Net losses on investments in equity securities(1)

.52

Amortization of intangible assets

.51

Asset impairment, restructuring, and other special charges

.17

Earnings per share (non-GAAP)

$7.70 to $7.85

4% to 6%

Numbers may not add due to rounding

Acquired IPR&D and development milestone charges(2)

$.67

(1) The company’s guidance does not reflect the impact of net gains or losses on
investments in equity securities during Q4 2022.

(2) The company’s guidance does not include any acquired IPR&D or development
milestone charges incurred during Q4 2022.

The company reaffirmed its 2022 financial guidance, as set forth in the following table:

2022 Guidance

Revenue

$28.5 to $29.0 billion

Gross Margin % of Revenue (reported)

Approx. 76%

Gross Margin % of Revenue (non-GAAP)

Approx. 78%

Marketing, Selling & Administrative

$6.4 to $6.6 billion

Research & Development

$7.1 to $7.3 billion

Acquired IPR&D & Development Milestones

Approx. $670 million

Other Income/(Expense) (reported)

$(700) to $(600) million

Other Income/(Expense) (non-GAAP)

$(100) million to $0

Tax Rate

Approx. 13% to 14%

Earnings per Share (reported)

$6.50 to $6.65

Earnings per Share (non-GAAP)

$7.70 to $7.85

Operating Margin % (reported)

Approx. 26%

Operating Margin % (non-GAAP)

Approx. 29%

Non-GAAP guidance reflects adjustments presented in the earnings per share table above.

2023 Financial Guidance

Earnings per share (EPS) for 2023 is expected to be in the range of $7.65 to $7.85 on a reported basis and $8.10 to $8.30 on a non-GAAP basis. The company’s 2023 financial guidance reflects the adjustment shown in the reconciliation table below.

2023

Expectations

Earnings per share (reported)

$7.65 to $7.85

Amortization of intangible assets

.45

Earnings per share (non-GAAP)

$8.10 to $8.30

Numbers may not add due to rounding.

The company’s 2023 financial guidance does not include any impact from potential
or pending business development transactions or potential development milestone
charges.

The company anticipates 2023 revenue between $30.3 billion and $30.8 billion, driven by volume increases from key growth products. This growth is expected to be partially offset by lower revenue for Alimta due to its loss of patent exclusivity, no anticipated COVID-19 antibody revenue, and the continued negative impact of foreign exchange rates.

Gross margin as a percent of revenue for 2023 is expected to be approximately 77% on a reported basis and approximately 79% on a non-GAAP basis.

Marketing, selling and administrative expenses for 2023 are expected to be in the range of $6.9 billion to $7.1 billion. Research and development expenses are expected to be in the range of $8.2 billion to $8.4 billion.

Consistent with 2022, the company is not including any potential or pending acquired in-process research and development (IPR&D) and development milestone charges in its initial 2023 guidance and expects to update EPS guidance each quarter as acquired IPR&D and development milestone charges are incurred.

Other income (expense) is expected to be expense in the range of $100 million to $200 million on both a reported and non-GAAP basis.

The 2023 effective tax rate is expected to be approximately 16% on both a reported basis and non-GAAP basis. This assumes the provision in the 2017 Tax Act that requires capitalization and amortization of research and development expenses for tax purposes is deferred or repealed by U.S. Congress this year, effective for the full year 2022 as well as 2023. The tax rate increase also includes the impact from recently enacted Puerto Rico legislation that will become effective starting in 2023, as well as the impact from an expected increase in the proportion of earnings in higher tax jurisdictions.

The following table summarizes the company’s 2023 financial guidance:

2023 Guidance

Revenue

$30.3 to $30.8 billion

Gross Margin % of Revenue (reported)

Approx. 77%

Gross Margin % of Revenue (non-GAAP)

Approx. 79%

Marketing, Selling & Administrative

$6.9 to $7.1 billion

Research & Development

$8.2 to $8.4 billion

Other Income/(Expense)

$(200) million to $(100) million

Tax Rate

Approx. 16%

Earnings per Share (reported)

$7.65 to $7.85

Earnings per Share (non-GAAP)

$8.10 to $8.30

Non-GAAP guidance reflects adjustments presented in the earnings per share table above.

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the 2023 financial guidance conference call through a link on Lilly’s website at investor.lilly.com/webcasts-and-presentations. The conference call will begin at 9 a.m. Eastern time today and will be available for replay via the website.

Non-GAAP Financial Measures

The company uses non-GAAP financial measures that differ from financial statements reported in conformity with U.S. generally accepted accounting principles ("GAAP"), and this press release and related materials includes a description of certain non-GAAP items that may affect the company’s financial expectations for 2022 and 2023. The company’s non-GAAP financial measures adjust reported results to exclude amortization of intangibles and items that are typically highly variable, difficult to predict, and/or of a size that could have a substantial impact on the company’s reported operations for a period. The company believes that these non-GAAP financial measures provide useful information to investors in evaluating the company’s performance. They can assist in making meaningful period-over-period comparisons and in identifying operating trends that would otherwise be masked or distorted by the items subject to the adjustments. Management uses these non-GAAP financial measures internally to evaluate the performance of the company’s business, including to allocate resources and to evaluate results relative to incentive compensation targets. Investors should consider these non-GAAP financial measures in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP.