On August 8, 2023 Lyell Immunopharma, Inc. (Nasdaq: LYEL), a clinical‑stage T-cell reprogramming company advancing a diverse pipeline of cell therapies for patients with solid tumors, reported financial results and business highlights for the second quarter ended June 30, 2023 (Press release, Lyell Immunopharma, AUG 8, 2023, View Source [SID1234633982]).

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"Lyell continues to execute on our two Phase 1 clinical trials assessing resistance to T-cell exhaustion and enhanced durable stemness as key success factors to effective cell therapy for solid tumors and we look forward to presenting initial data from both our CAR T-cell and our TIL product candidates in 2024," said Lynn Seely, M.D., Lyell’s President and CEO. "Our research team continues to advance innovative technologies to generate more potent and long-lasting T cells, and we are on track to submit our next investigational new drug application for our third clinical program in the first half of 2024. We continue to diligently manage our expenses and maintain a cash runway through multiple milestones into 2026."

Second Quarter Updates and Recent Business Highlights

Lyell is advancing four wholly-owned product candidates with two product candidates in Phase 1 clinical development, LYL797 and LYL845. Two additional product candidates, LYL119 and a second-generation tumor infiltrating lymphocyte (TIL) product candidate, are in preclinical development.

LYL797 – A ROR1 Chimeric Antigen Receptor (CAR) T-cell product candidate genetically reprogrammed to overexpress c-Jun and epigenetically reprogrammed using Lyell’s proprietary Epi-RTM manufacturing protocol, designed for differentiated potency and durability

Enrollment in the Phase 1 clinical trial of LYL797 is ongoing. The study includes patients with relapsed or refractory triple-negative breast cancer or non-small cell lung cancer and is now open at 14 sites.
Initial clinical data from the Phase 1 trial of LYL797 are expected in the first half of 2024.
The Lyell START (Study of Tumor target Analysis for Referrals to Trials) ROR1-biomarker screening protocol was initiated in June 2023 to support the ongoing LYL797 Phase 1 trial, as well as potential future clinical trials with LYL797 and our next-generation ROR1-targeted product candidate, LYL119. START provides a decentralized mechanism for patients anywhere in the United States to have their collected tumor tissue screened for ROR1 expression and, for ROR1 positive patients, to be referred to clinical study sites.
LYL845 – A novel epigenetically reprogrammed TIL product candidate designed for differentiated potency and durability

Enrollment in the Phase 1 clinical trial for LYL845 is ongoing. The study includes patients with relapsed and/or refractory metastatic or locally advanced melanoma, non-small cell lung cancer and colorectal cancer and is now open at nine sites.
Initial clinical data from the Phase 1 trial of LYL845 are expected in 2024.
LYL119 – A ROR1 CAR T-cell product candidate incorporating Lyell’s four stackable reprogramming technologies for enhanced cytotoxicity

LYL119 is a ROR1-targeted CAR T-cell product enhanced with Lyell’s four novel, stackable genetic and epigenetic reprogramming technologies: c-Jun overexpression, NR4A3 knockout, Epi-R manufacturing protocol and Stim-RTM T-cell activation technology.
An investigational new drug (IND) application for LYL119 is expected to be submitted in the first half of 2024.
Rejuvenation – Novel partial reprogramming technology designed to maintain T-cell identity while reducing cells’ epigenetic age

Data demonstrating that T cells rejuvenated with Lyell’s technology have improved expansion capacity and increased expression of biomarkers associated with T-cell stemness, and also exhibit improved antitumor properties compared with non-rejuvenated T-cell controls in sequential cell-killing assays, were presented at the International Society for Stem Cell Research (ISSCR) 2023 Annual Meeting on June 14th in Boston, MA.
Corporate and Operational Updates

Matt Lang, J.D., was appointed Chief Business Officer in July. He also serves as Lyell’s Chief Legal Officer and Corporate Secretary. Mr. Lang is an experienced company builder who has successfully led growth in complex organizations. Mr. Lang is responsible for Lyell’s legal, compliance, human resources, alliance management and early commercialization teams.
Second Quarter Financial Results

Lyell reported a net loss of $63.9 million for the second quarter ended June 30, 2023, compared to a net loss of $36.3 million for the same period in 2022. Non‑GAAP net loss, which excludes non-cash stock-based compensation, non‑cash expenses related to the change in the estimated fair value of success payment liabilities and certain non-cash investment charges, was $45.6 million for the second quarter ended June 30, 2023, compared to $10.3 million for the same period in 2022.

Revenue

Revenue was approximately zero for the second quarter ended June 30, 2023, compared to $35.7 million for the same period in 2022. No research and development pursuant to our collaboration and license agreement with GlaxoSmithKline (GSK Agreement) was performed in the second quarter of 2023 due to the termination of the GSK Agreement in December 2022, which drove the $35.7 million decrease in revenue.
GAAP and Non-GAAP Operating Expenses

Research and development (R&D) expenses were $47.5 million for the second quarter ended June 30, 2023, compared to $43.7 million for the same period in 2022. The increase in second quarter 2023 R&D expenses was primarily driven by personnel-related expenses, principally related to an increase in headcount to expand our research, development and manufacturing capabilities to support increases in clinical trial enrollment, and an increase in research and laboratory costs primarily associated with clinical trials. Non‑GAAP R&D expenses, which exclude non-cash stock-based compensation and non-cash expenses related to the change in the estimated fair value of success payment liabilities, for the second quarter ended June 30, 2023, were $41.6 million, compared to $35.9 million for the same period in 2022. The increase in second quarter 2023 non-GAAP R&D expenses was driven by increased personnel-related expenses, primarily related to an increase in headcount to expand our clinical development and manufacturing capabilities in support of our ongoing clinical trials.
General and administrative (G&A) expenses were $19.0 million for the second quarter ended June 30, 2023, compared to $30.5 million for the same period in 2022. The decrease in second quarter 2023 G&A expenses was primarily driven by changes in non-cash stock-based compensation. Non‑GAAP G&A expenses, which exclude non-cash stock-based compensation, for the second quarter ended June 30, 2023, were $10.1 million, compared to $12.2 million for the same period in 2022. The decrease in second quarter 2023 non-GAAP G&A expenses was driven by a decrease in legal, consulting and other administrative expenses.
A discussion of non-GAAP financial measures, including reconciliations of the most comparable GAAP measures to non‑GAAP financial measures, is presented below under "Non-GAAP Financial Measures."

Cash, cash equivalents and marketable securities

Cash, cash equivalents and marketable securities as of June 30, 2023 were $632.7 million, compared to $710.3 million as of December 31, 2022. Lyell believes that its cash, cash equivalents and marketable securities balances will be sufficient to meet working capital and capital expenditure needs into 2026.