Greetings, and welcome to the Bellicum Pharmaceuticals Fourth Quarter and Full Year 2019 Financial Results and Corporate Update Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.I would now like to turn the conference over to your host, Mr. Stephen Jasper from Westwicke ICR. Please go ahead, sir.

Thank you. Good afternoon, everyone, and thank you for joining the call. With me today on the call is Rick Fair, Bellicum's President and Chief Executive Officer; and Atabak Mokari, Chief Financial Officer. Later, during the Q&A session, Aaron Foster, Head of Research, will also be available.Earlier this afternoon, Bellicum released financial results for the fourth quarter and full year ended December 31, 2019. If you have not received this release or if you would like to be added to the distribution list, you can do so on the Investor Relations page of the company's website.As a reminder, today's conference call will include forward-looking statements made under the Private Securities Litigation Reform Act of 1995, including statements regarding our research and development plans, clinical trials, plans regarding regulatory filings, review and approval of our product candidates, commercialization expectations and our financial outlook.These forward-looking statements involve a number of risks and uncertainties and reflect our opinions only as of the date of this call. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.Actual results may differ from those indicated by these forward-looking statements due to numerous factors, including those discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.And now I will turn the call over to Rick Fair, Bellicum's President and CEO.

Thanks, Stephen. Good afternoon, everyone, and thanks for joining us today. On our call, I'll provide an update on our GoCAR platform and programs and two recently announced corporate transactions.As a reminder, our GoCAR platform is differentiated in two distinct ways. First, we've engineered GoCAR with the goal to deliver more potent and durable efficacy relative to current generation CAR-T. This is accomplished primarily through our coactivation domain, MyD88, CD40 or MC.MC signaling is believed to boost effector cell proliferation and survival to enhance functional persistence by resisting exhaustion and the suppressive tumor microenvironment and to stimulate the cancer patients' own immune system.Second, we've engineered GoCAR for higher performance, providing enhanced control with our switch technology. Other CAR therapies behave unpredictably due to their autonomous activity, but GoCAR antitumor effects are controlled by the scheduled administration of rimiducid.GoCAR activity can be modulated by adjusting the interval between rimiducid doses. In our dual-switch product candidates, we further improved controllability by incorporating our CaspaCIDe safety switch, which is designed to rapidly eliminate cells when triggered to manage acute toxicities if they occur.As the next-generation CAR platform, we believe GoCAR may address many of the shortcomings of current cell therapies. We've demonstrated some of these potential benefits in our preclinical work and are now observing supportive evidence of these effects in the clinic.We are currently pursuing two strategic paths for our GoCAR platform. Our first strategy is to target solid tumors where current generation CAR-T therapies have offered little benefit and while MC signaling may enhance activity. Our solid tumor GoCAR-T programs include BPX-601 targeting PSCA and BPX-603 targeting HER2.Our second strategy is to pursue an allogeneic off-the-shelf cell therapy. We believe that our GoCAR platform has the potential to drive proliferation and persistence and to stimulate a host immune response, both of which will be critical to delivering effective off-the-shelf cell therapies. We seek to demonstrate the best-in-class potential of our approach with our newest program, which is a GoCAR-NK targeting BCMA.Now let me provide an update on each of our programs. Our first GoCAR-T product candidate, BPX-601 targets PSCA and pancreatic cancer patients. At the ASCO Annual Meeting in June of last year, we presented clinical data from an ongoing Phase I/II clinical trial. The single dose schedule of rimiducid during dose escalation was intended to evaluate safety and was not optimized for efficacy.However, of the 13 patients evaluable for efficacy, 8 patients or 62%, achieved stable disease, including 3 with tumor shrinkage between 10% and 24%. These were late-line pancreatic cancer patients receiving a suboptimal schedule of treatment. So these results are quite encouraging.In January of this year, we presented new translational data from the highest dose Cohort 5B that further support the potential of BPX-601 and the GoCAR platform in solid tumors. We are encouraged by many of the reported findings, including tumor infiltration, GoCAR-t mediated immunomodulation, persistence of cells for up to 9 months and changes in gene expression in the tumor microenvironment, consistent with a productive CAR-T cell immune response.We are now enrolling Cohort 5C to evaluate repeat rimiducid dosing. Our preclinical experience suggests that regular rimiducid dosing can reactivate and expand GoCAR-T cells over time without creating T cell exhaustion, maximizing the clinical efficacy potential. We are eager to complete this cohort as this is the first time the GoCAR system is being used in patients as intended.Enrollment of second-line pancreatic cancer patients in this cohort is now proceeding and is in line with our expectations. We are planning to present interim clinical results at a medical meeting by the end of the year. Based on the data we have seen so far, we remain optimistic about BPX-601 as a product candidate and as a proof-of-concept for our GoCAR platform.Now let me shift to BPX-603. This program is Bellicum's first dual-switch product candidate, which has been designed to target solid tumors that express HER2. We selected HER2 as a target for BPX-603 because it is a validated target for cancer therapy with clinical activity and reasonable safety observed in academic CAR-T trials.We believe that our dual-switch technology may be uniquely suited to improve upon these earlier efforts by driving greater efficacy through MC signaling and providing an extra layer of safety via our switch platform. After we submitted an IND application for BPX-603, the FDA requested additional non-clinical data to further characterize the product candidate. The additional non-clinical experiments to generate the data are underway. We expect to provide an update on our progress with BPX-603 in the third quarter of this year.Turning to our BCMA GoCAR-NK program. We're excited about the potential for our first off-the-shelf GoCAR-NK candidate. CAR-NK cells represent an exciting next wave in the evolution of cell therapy. In addition to CAR-mediated antigen recognition, NK cells also possess an 8 cytotoxic activity and play an important role in antitumor immune responses.Furthermore, allogeneic NK cells have a low propensity for causing graft versus host disease following adoptive transfer, and therefore, may be particularly useful for off-the-shelf cell therapy.While previous experiments with NK cell therapies have been safe, only modest efficacy has been observed, largely due to limited in vivo NK cell expansion and persistence.We presented preclinical data at the SITC meeting in November of last year. In preclinical studies, our GoCAR platform synergized with IL-15 to enhance NK cell proliferation, survival and cytotoxic function. Co-expression of our MC coactivation domain, IL-15, and a tumor-specific CAR, resulted in enhanced in vivo efficacy in multiple non-clinical tumor models.Based on these proof-of-concept studies, we believe that GoCAR-NK cells have the potential to serve as a best-in-class off-the-shelf cell therapy, and we selected BCMA as the target for our initial program.BCMA is already well-validated from our autologous CAR-T studies in multiple myeloma with high response rates observed. Given our preclinical experience, we believe that GoCAR-NK may improve the durability of response.Also as an off-the-shelf therapy, we anticipate the advantages that may bring, including faster and certain time to treatment, greater scalability and convenience and lower cost to manufacture.We are developing proprietary processes to prepare to deliver these benefits in large scale GoCAR-NK cell manufacturing. We recently initiated formal preclinical development activities for our BCMA GoCAR-NK program. We expect to present additional preclinical data from this program by the end of the year.That concludes the summary of our development programs, let me now turn to our corporate updates. First, regarding manufacturing operations, earlier this year, we announced an asset purchase agreement with MD Anderson to acquire our Houston manufacturing facility for $15 million.Given our current strategic focus on our early-stage GoCAR programs, the facility was substantially underutilized with a significant fixed cost base. As part of the transaction, we will also enter into a preferred supply agreement with MD Anderson to manufacture Bellicum's current and future product candidates. This transaction assures us access to cell therapy product supply, while reducing our operating costs. The transaction is expected to close by the end of the first quarter.In a separate and unrelated transaction, in late 2019, we announced that MD Anderson exercised its option to license Bellicum's CaspaCIDe safety switch technology for a $5 million upfront payment plus future milestone payments and royalties.The license agreement with Bellicum specifically covers the use of the CaspaCIDe safety switch in MD Anderson's CD19 CAR-NK cell program that was recently sublicensed to Takeda Pharmaceuticals. We believe that this agreement demonstrates interest in our molecular switch technology and further validates our platform.With that, I'd like to hand the call over to Atabak to review our financials.

Thank you, Rick. Bellicum reported revenue of $5.1 million for the fourth quarter of 2019 and $7.1 million for the full year ended December 31, 2019. The Q4 2019 results included a $5 million license fee from MD Anderson for the use of the CaspaCIDe safety switch.R&D expenses were $13.3 million and $64.5 million for the fourth quarter and full year 2019, respectively, compared to $19.9 million and $71.6 million during the comparable periods in 2018.The reduction in expenses in the fourth quarter and full year 2019 compared to respective periods in 2018 were primarily due to the reduced expenses related to rivo-cel, general R&D and employee salary-related charges from the reduction in force that was implemented during the second half of 2019.These reduced expenses were partially offset by the impairment of the intangible asset previously recorded from the Miltenyi Supply Agreement, increased expenses related to our GoCAR-T program and employee severance costs arising from the reduction in force.General and administrative expenses were $5.7 million and $30.0 million for the fourth quarter and full year 2019, respectively, compared to $7.0 million and $25.0 million during the comparable periods in 2018.The reduction in expenses in the fourth quarter of 2019 relative to the comparable period in 2018 was primarily due to a decrease in personnel costs and share-based compensation from the reduction in force that was implemented during the second half of 2019.The increase in G&A expenses for full year 2019 compared to the prior year was primarily due to an increase in personnel costs and commercialization activities during the first half of 2019, partially offset by a reduction in rivo-cel-related commercialization activities as well as the effects of the reduction in force that reduced employee salary-related charges.Bellicum reported a net loss of $29.0 million for the fourth quarter of 2019 and $112.5 million for the full year 2019 compared to a net loss of $27.2 million and $98.0 million for the comparable period in 2018.The results included non-cash expense of $14.3 million and $19.2 million related to the change in fair value of warrant liability in the fourth quarter and full year 2019, respectively.Turning to the balance sheet. As of December 31, 2019, cash and cash equivalents and restricted cash totaled $93.8 million. In the fourth quarter, we had a cash loss from operations of approximately $12.7 million, which included the MD Anderson license fee and was a decrease from prior quarters, given the steps we have taken to streamline the organization.Based on current operating plans and assuming the MD Anderson facility sale transaction closes as scheduled, Bellicum expects cash utilization of $55 million to $65 million in 2020 and that current cash resources will be sufficient to meet operating requirements into the second half of 2021.And now I'll hand the call back over to Rick.

Thanks, Atabak. Looking back at 2019, which was a year of transition and strategic refocus for us, I'm pleased by our accomplishments.We made clinical progress and presented data on BPX-601, prepared and submitted an IND application for BPX-603 and initiated our first GoCAR-NK program.From a corporate perspective, we extended our runway through a significant financing, sale of our manufacturing facility, reduction in our operating cost base and license of our CaspaCIDe safety switch, which enables us to fund our strategic priorities into the second half of 2021.This year, I anticipate additional progress in our programs. In the third quarter, we plan to update you on the status of the IND application for BPX-603. And by the end of 2020, we're planning to present clinical update on BPX-601 with focus on repeat rimiducid dosing and preclinical data for our BCMA GoCAR-NK program.I'm excited about our future, the potential of our GoCAR pipeline, and I look forward to updating you on our efforts.I'll now open the call to questions. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Biren Amin with Jefferies. Please proceed with your question.

Hey, guys. Thanks for taking my questions. Rick, on 601, when you give us the data from the 5C cohort, how many patients should we expect in the second half of the year?

Sure. So the design is a 3 plus 3 design. In this cohort, it's designed to treat 3 patients, a clear DLT window and then treat 3 additional patients with the second DLT window. So 6 total patients. I think the number of patients that we report on will depend on enrollment and follow-up time and will certainly also depend on whether or not any patients experience DLT. So that's the neighborhood of the number of patients.

And when I compare - when you present the data and when we compare it to the 5B data that you presented, I think you saw 3 patients with stable disease in that cohort. And you saw a pretty decent, I think, cell expansion and persistence. So I guess, from a biology standpoint, what do you think we need to get to from an expansion and persistence standpoint where you can start to see PRs in this patient population?

Yes, it's a tough question to answer, Biren. We don't have a lot of experience in the cell therapy space, unfortunately, of CAR-T cells driving responses in solid tumors. So it's a little hard to know how to correlate that with expansion, which we're typically measuring in the periphery.I think what I'd say is that we believe that reactivation of these cells with our system is important, both to drive proliferation and persistence of those cells and to drive cytokine production that will engage the host immune system in a response.And we're optimistic based on our preclinical experience that, that will lead to greater tumor control. Whether that will achieve partial responses in pancreatic cancer patients or not, we'll just have to see.

Okay. And then what was the rationale for going into pursuing this BCMA NK opportunity?

So the NK cell - as I discussed on the call, I think the NK cell is, for us, an exciting platform for an off-the-shelf therapy. It doesn't cause GvHD. It has its own ability to kill tumor. The limitations with NK cells, historically, have been driven a lot by an inability to proliferate and persist.So it's an off-the-shelf therapeutic, that's challenging. We have a system that's designed to do just that. So that's really the rationale for the NK cell portion of that. We selected BCMA because we think we have an ability to differentiate in an area where there will be clearly an important role for cell therapy, based on the autologous CAR-T experience. And based on our preclinical findings with the GoCAR-NK platform, we think we have the ability to be best-in-class, off-the-shelf solution targeting BCMA.I would also say that it's useful when you're evaluating new technology like ours to have some level of target confidence, and clearly, BCMA is a validated target for cell therapy.

Thanks for taking my questions.

Thanks, Biren.

Your next question comes from the line of Nicholas Abbott with Wells Fargo. Please proceed with your question.

It's Nick on for James. Thanks for taking our question. So Rick, maybe just starting off on 603. So can you elaborate on what non-clinical studies are being undertaken? What level of confidence you have that these will address FDA's concerns?

Yes. So based on our follow-up interactions with FDA to understand the nature of the information being requested, we're conducting in vitro experiments to evaluate the level of interaction of BPX-603 cells with healthy tissues that express lower levels of HER2, which we believe will answer their questions specifically.I'd say our confidence level is relatively high. Obviously, we need to complete those experiments and submit them and get their response. But I would say our confidence level is high based on the question being asked and what we've seen to date. We'll provide an update, as we indicated in Q3.

And I mean, roughly, how long do these experiments take? I guess, we were assuming that you complete the experiment, you submit to the agency, they review. So by the time we get to Q3, you've been through that kind of review process?

Well, I think it depends on the outcomes of the experiments. But if all goes well, certainly, that's right. If we -- if our initial experiments don't yield the results that we were looking for and we have to design and conduct additional ones, that could vary. So I don't think I can really speculate too much on that other than to say that we think we're doing the right things to answer their questions. I think we have optimism that they will answer their questions, and we can update you in a few months' time.

Okay. And then for the GoCAR-NK, can you talk about the binder that you're going to use? I mean, there's some data out there for a biparatopic binder that's fully human binders. What's your strategy is try and get, what you hope is a best-in-class binder?

We probably won't speculate too much on that. Binder selection is certainly part of our finalization of the construct design that we're currently working on.Our anticipation is that we'll work through that and have what we need for final candidate selection for that program in about a year's time or maybe a little less. So I don't think I speculate on that currently, and we'll update you as we get a little closure and do more experimentation on that.

And should we expect an IND in '21 then for this program?

I think our - it obviously will depend on our progress, but I think our current estimate is roughly 2 years to IND from where we sit today. So that gets you into potentially early '22. But I would say late '21 is potentially possible, but that could also change a lot in 2 years' time based on our work.

And then just final one for me in terms of - and I'll jump back in the queue, on use of cash. You've got one clinical program. You're competing with perhaps a handful of patients being enrolled. So what is driving the cash utilization of $55 million to $65 million this year? And is there an assumption that you move 601 into the clinic or…

Yes, I'll let Atabak address that question.

Sure. So as you -- we talked about in the past, Nick, we've taken a number of measures to reduce our costs. And ultimately, cell therapy has a fair amount of expense associated with it and a fair amount of fixed cost expense associated with it. So we've tried to reduce that as much as possible.So - and so I think from what we've assumed for this year is primarily around in terms of what's in the clinic is around BPX-601 driving that expense.

Okay. Thank you.

Your next question comes from the line of Steve Seedhouse with Raymond James. Please proceed with your question.

Good afternoon. This is Daniel on for Steve. Thanks for taking the question. The question is with respect to BPX-601. So in your ASCO GI poster, you suggested that with BPX-601 vector copy number drop following rimiducid infusion was possibly due to redistribution of activated T cells from the blood stream, potentially by vascular adhesion. Do you expect this effect to be exacerbated in Cohort 5C with repeat rimiducid dose? Or do you expect that we see a rebound to be just as quick as in 5B cohort?

Maybe I'll turn that question over to Aaron Foster, Head of Research, who is on the call.

Yes, thanks for the question. As you've noted, we have consistently seen a decrease in vector copy number immediately following rimiducid and as you suggested is, our hypothesis as well as this is due to margination of the T cell through iMC-related activation. Probably, our expectation for Cohort 5C is that we would see similar types of activity with respect to vector copy number in the peripheral blood.This is primarily due to the fact that in our preclinical studies that we've observed consistent activation over a number of periods of rimiducid exposure and what that effect will be ultimately on CAR expansion, persistence or antitumor activities yet to be determined.

All right, great. And another question. With the coronavirus pandemic going on, do you -- or have you seen any impacts on your clinical trial? As you mentioned, some patients may be reluctant to come in for repeat rimiducid dosing once a week? And do you have any contingency plans in case patients will be skipping those more dosing appointments?

Yes. So great question. Obviously, we're in early days of the pandemic here in the U.S. where our clinical trials are being conducted. I would say, as of now, our sites continue to see their patients and continue to screen new ones. And so we have experienced really no effect of the pandemic currently.That said, I would characterize this as a very highly fluid and rapidly evolving case. We are in regular contact with our sites, and we'll take whatever actions are necessary to continue to try and treat the patients that are on study and to acquire new ones.I think their message to us has been we're dealing with relapsed and refractory pancreatic cancer patients who have an acute need for treatment. And so I think it's likely that would be the type of patient that would continue to seek care and get care even in a more profoundly affected health care system.

Thank you very much for taking my question.

Your next question comes from the line of Wangzhi Li with Ladenburg. Please proceed with your question.

Hi. Thanks for taking my question. Most of questions already asked. So can you [Technical Difficulty] patient right now. You said a 3 to 6 patients, but as they -- include -- enrolled in parallel across multi presenters? Or is the one by one?

Your cell phone cut out there at the beginning of that question. But if I understand the question correctly, it's more clarity on the enrollment of the current Cohort 5C in the schema there?

So how many centers are you enrolling patients? Do they enroll patients in parallel? Or either 1 by 1 sequentially?

Yes, got it. So we have sequential enrollment of the 2 different 3 cohort sets. So we can enroll 3 in parallel. But then we have to wait for DLT window, and then we can enroll other 3 in parallel and wait for DLT window. We're currently open in 4 sites.

Okay. And the safety window is 28 days?

I'm sorry, Wangzhi, can you repeat that?

Sorry. The safety window is 28 days?

Yes, the safety window is from the second or third -- I'm -- the second or third dose of rimiducid post cells, we then have to wait a month.So in practice, you're talking about roughly a 45-day period post the last patient treated in the 3 patient cohort.

Got it. Okay. And then for 603, when do you expect to provide an update in the third quarter? Do you expect to already have communicate with FDA to kind of their feedback on the new data before you provide an update? Or you will provide an update ahead of the FDA feedback?

I think we're committing to provide an update regardless, if our initial set of experiments go well and answer the question, and we submit them and get positive feedback from the FDA. That will be the communication. I think, in a sort of downside scenario, our initial round of in vitro experiments, don't answer the question, and we needed to conduct some additional experiments in which case, we'll be describing that.So I think there's a range of outcomes. I think what we're committing to here today is we're not going to have an indefinite period to the next update, but we'll be clear that on our midyear call in the third quarter, we'll update you.

Got it. Okay. The last question is a financial question for Atabak. So if we look at the shares number outstanding for fourth quarter is closer to 5 million shares. I think that is because the reverse split. As far as reverse split is done in February this year.So how - help me understand why the shares number for the fourth quarter is -- looks like already had the reverse split effect?

For the accounting guidance, you -- if you complete the reverse split before you file your 10-K, you presented retroactively.

Okay, got it. Thanks for taking my question.

Your next question is a follow-up from Nicholas Abbott with Wells Fargo. Please proceed with your question.

Hi. Thanks for taking my call. So just going back to the 601 poster that was presented earlier in the year. And when I'm looking at -- I think it's the tumor PSCA expression in figure 601 before and after treatment, this patient 5B5 is the one who had the highest number of infiltrating CAR cells. And your untreatment PSCA signal appears highly diminished compared to baseline.So I guess that either means that, A, [indiscernible] sampling, B, that the target level is going down, you'll see that you're killing of tumor. So was there other staining you were able to do on these samples to look at tumor and trying to address this issue, whether it's down regulation or clearance of actual tumor cells?

I'll turn that question over to Aaron. Aaron, do you want to comment?

Yes, sure. So in the figure that you're talking about, we used in situ hybridization for an RNA probe for PSCA. And while we think that, that's a good way to measure PSCA expression, of course, looking at the protein level is probably more appropriate, we're currently developing assays to assess protein levels through immunohistochemistry and that work is ongoing.So I would agree with your comments about -- the question about protein expression heterogeneity more levels and it's certainly something that we're very interested in exploring to understand whether we've hit the target or not.

And then just a follow-on going back to cash utilization. In terms of rivo-cel, obviously, there's no comment in your prepared statements. But -- so is this a lack of interest in the asset, lack of agreement on the financial structure? And does your cash use contemplate any funds coming in from an asset sale on rivo-cel?

Yes, I think we have identified the universe of people that have interest in rivo-cel. We haven't come to terms that are acceptable for the asset, and we may not. Our current cash guidelines assumes that we retain the rights to the asset and some amount of ongoing costs related to monitoring the clinical trials that have concluded. But if we have an update on rivo-cel in the future, we'll certainly provide it.

And to be clear, we're not assuming any -- a transaction -- a strategic transaction occurs with that. So that would be incremental benefit to our cash utilization.

Okay, great. Thank you very much.

Okay. Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Mr. Rick Fair for closing remarks.

Thanks, everyone, for participating today in a busy and intense day. As always, I'd like to thank our passionate team of Bellicians, our collaborators and investigators, and most importantly, the patients and families who participate in our clinical trials. They're the ones who inspire our effort every day, if you have additional questions, please feel free to contact us, and thanks for joining us this afternoon.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.