Adicet Bio Inc

Previous wording

Our lead product candidate, ADI-001, a first-in-class allogeneic gamma delta T cell therapy expressing a CAR targeting CD20, is being developed for the potential treatment of autoimmune diseases and relapsed or refractory aggressive B cell non-Hodgkin's lymphoma (NHL). Our pipeline also includes our lead preclinical candidate, ADI-270, an armored gamma delta CAR T cell product candidate designed to address multiple CD70+ solid tumor and hematological malignancies indications, with renal cell carcinoma (RCC) as the initial indication. Our pipeline has several additional internal gamma delta T cell therapy programs in discovery and preclinical development for both hematological malignancies and solid tumors. We expect to continue to develop product candidates in autoimmune diseases and cancer based on our gamma delta T cell platform using either previously validated antigens or those that we identify and target using CAR and other technology. We plan to file one new Investigational New Drug (IND) application every 12-18 months, including an IND for ADI-270 for the treatment of RCC in the second quarter of 2024.

Current wording

Our lead product candidate, ADI-001, a first-in-class allogeneic gamma delta T cell therapy expressing a CAR targeting CD20, is being developed for the potential treatment of autoimmune diseases and relapsed or refractory aggressive B cell non-Hodgkin's lymphoma (NHL). We are also pursuing ADI-270, an armored gamma delta CAR T cell product candidate designed to address multiple CD70+ solid tumor and hematological malignancies indications, with renal cell carcinoma (RCC) as the initial indication. Our pipeline has several additional internal gamma delta T cell therapy programs in discovery and preclinical development for both hematological malignancies and solid tumors. We expect to continue to develop product candidates in autoimmune diseases and cancer based on our gamma delta T cell platform using either previously validated antigens or those that we identify and target using CAR and other technology. We plan to file one new Investigational New Drug (IND) application every 12-18 months.

Previous wording

In December 2023, the U.S. Food and Drug Administration (FDA) cleared our IND application for ADI-001 in lupus nephritis. Lupus nephritis is a serious complication of systemic lupus erythematosus (SLE) which affects approximately 40% of the estimated 322,000 patients with SLE in the U.S. We expect to initiate a Phase 1 clinical trial of ADI-001 for the treatment of lupus nephritis in the second quarter of 2024 and expand development efforts into one to two additional autoimmune indications in the second and third quarters of 2024, subject to clearance of INDs in those indications. We believe the potential market opportunity for ADI-001 in B cell mediated autoimmune diseases is substantial based on the prevalence in the U.S., EU5, China and Japan of greater than 1.7 million patients with autoimmune diseases where CAR-T cell therapy has demonstrated clinical proof-of-concept, including SLE (which includes lupus nephritis), systemic sclerosis and idiopathic inflammatory myopathies.

Current wording

In December 2023, the U.S. Food and Drug Administration (FDA) cleared our IND applications for ADI-001 in lupus nephritis (LN) and we recently expanded clinical development beyond LN to include systemic lupus erythematosus (SLE), systemic sclerosis (SSc) and anti-neutrophil cytoplasmic autoantibody associated vasculitis (AAV). We have initiated startup activities at multiple clinical sites and plan to commence enrollment in our Phase 1 clinical trial of ADI-001 in LN in the third quarter of 2024, and in SLE, SSc and AAV patients in the second half of 2024. We believe the potential market opportunity for ADI-001 in B cell mediated autoimmune diseases is substantial based on the prevalence in the U.S., EU5, China and Japan of greater than 1.7 million patients with autoimmune diseases where CAR-T cell therapy has demonstrated clinical proof-of-concept, including SLE (which includes LN), SSc and idiopathic inflammatory myopathies. In June 2024, the FDA granted us Fast Track Designation to ADI-001 for the potential treatment of relapsed/refractory class III or class IV LN. We anticipate providing preliminary clinical data from our Phase 1 clinical trial of ADI-001 in LN as well as in SLE, SSc and AAV in the first half of 2025, subject to study site initiation and patient enrollment.

Previous wording

In March 2021, we initiated the first-in-human Phase 1 (GLEAN) trial to assess safety and efficacy of ADI-001 in patients with relapsed or refractory aggressive B cell NHL. The study includes a dose escalation portion followed by dose expansion cohorts to explore the activity of ADI-001 in multiple subtypes of NHL. In April 2022, the FDA granted fast track designation for ADI-001 for NHL. As of the May 4, 2023 cutoff date, of the 24 evaluable subjects in the GLEAN trial, 18 had large B cell lymphoma (LBCL), five had mantle cell lymphoma (MCL), and one patient had follicular lymphoma. Most patients were heavily pre-treated, with a median four lines of prior therapy, and twelve patients (50%) had previously progressed following CAR T cell therapy. Despite the advanced nature of patients at baseline, we observed a high complete response (CR) rate and favorable durability in MCL patients. Across all doses of MCL patients, we observed an 80% (4/5 patients) overall response rate (ORR), an 80% CR rate (4/5 patients) and a 60% CR rate (3/5 patients) at six months. As of May 4, 2023, the safety profile of ADI-001 was generally favorable, with no significant risk of cytokine release syndrome (CRS), immune effector cell-associated neurotoxicity syndrome (ICANS), or T cell malignancy observed. In November 2023, we initiated an expansion cohort, EXPAND, in post-CAR T LBCL. In January 2024, we announced our decision to deprioritize enrolling LBCL patients in the GLEAN trial in order to focus on advancing MCL enrollment.

Current wording

In March 2021, we initiated the first-in-human Phase 1 (GLEAN) trial to assess safety and efficacy of ADI-001 in patients with relapsed or refractory aggressive B cell NHL. The study includes a dose escalation portion followed by dose expansion cohorts to explore the activity of ADI-001 in multiple subtypes of NHL. In April 2022, the FDA granted fast track designation for ADI-001 for NHL. As of the May 4, 2023 cutoff date, of the 24 evaluable subjects in the GLEAN trial, 18 had large B cell lymphoma (LBCL), five had mantle cell lymphoma (MCL), and one patient had follicular lymphoma. Most patients were heavily pre-treated, with a median four lines of prior therapy, and twelve patients (50%) had previously progressed following CAR T cell therapy. Despite the advanced nature of patients at baseline, we observed a high complete response (CR) rate and favorable durability in MCL patients. Across all doses of MCL patients, we observed an 80% (4/5 patients) overall response rate (ORR), an 80% CR rate (4/5 patients) and a 60% CR rate (3/5 patients) at six months. As of May 4, 2023, the safety profile of ADI-001 was generally favorable, with no significant risk of cytokine release syndrome (CRS), immune effector cell-associated neurotoxicity syndrome (ICANS), or T cell malignancy observed. In November 2023, we initiated an expansion cohort, EXPAND, in post-CAR T LBCL. In January 2024, we announced our decision to deprioritize enrolling LBCL patients in the GLEAN trial in order to focus on advancing MCL enrollment. We expect to provide a clinical update from the Phase 1 study in MCL patients in the fourth quarter of 2024.

Previous wording

ADI-270 is an investigational allogeneic gamma delta CAR T cell therapy targeting CD70 via the CD27-ligand for the treatment of RCC and with potential in other solid tumor indications. ADI-270 is designed to home to solid tumors, with a highly specific targeting moiety for CD70 and an armoring technology of transforming growth factor beta dominant-negative receptor to address immunosuppressive factors in the tumor microenvironment. Building on gamma delta 1 tissue tropism to solid tumors and three mechanisms of anti-tumor activity (CAR, innate and adaptive), CAR gamma delta 1 T cells may be well positioned to address solid tumors. We plan to file an IND application for ADI-270 in RCC in the second quarter of 2024 and provide clinical data in the first half of 2025, subject to regulatory clearance and study initiation activities. We are also considering potential expansion into additional CD70+ tumor indications in the first half of 2025, with potential clinical data from such studies in the second half of 2025, subject to regulatory clearance and study initiation activities.

Current wording

ADI-270 is an investigational allogeneic gamma delta CAR T cell therapy targeting CD70 via the CD27-ligand for the treatment of RCC and with potential in other solid tumor indications. ADI-270 is designed to home to solid tumors, with a highly specific targeting moiety for CD70 and an armoring technology of transforming growth factor beta dominant-negative receptor to address immunosuppressive factors in the tumor microenvironment. Building on gamma delta 1 tissue tropism to solid tumors and three mechanisms of anti-tumor activity (CAR, innate and adaptive), CAR gamma delta 1 T cells may be well positioned to address solid tumors.

Previous wording

costs incurred under agreements with consultants, CDMOs and contract research organizations (CROs);

Current wording

costs incurred under agreements with consultants, contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs);

Previous wording

General and administrative expenses increased by $0.4 million, or 6%, during the three months ended March 31, 2024 as compared to the same period in 2023. The increase in general and administrative expenses was primarily due to an increase in stock-based compensation of $0.6 million and salaries of $0.2 million. The increase was partially offset by a $0.2 million decrease in contractor fees as well as a $0.1 million decrease in professional fees.

Current wording

General and administrative expenses increased by $0.4 million, or 6%, during the three months ended June 30, 2024 as compared to the same period in 2023. The increase in general and administrative expenses was primarily due to an increase in stock-based compensation of $0.7 million. The increase was partially offset by a $0.2 million decrease in recruiting fees and a $0.1 million decrease in consultant fees.

Previous wording

Interest income increased by $0.3 million, or 9%, during the three months ended March 31, 2024 as compared to the same period in 2023, which was primarily due to higher interest rates as well as our investments in treasury securities.

Current wording

Interest income increased by $0.4 million, or 15%, during the three months ended June 30, 2024 as compared to the same period in 2023, which was primarily due to higher interest rates as well as our investments in treasury securities.

Previous wording

Other expense, net decreased by $0.1 million, or 70%, during the three months ended March 31, 2024 as compared to the same period in 2023. This was due to a decrease in franchise taxes and realized losses related to foreign exchange rates.

Current wording

Other expense, net decreased by less than $0.1 million, or 59%, during the three months ended June 30, 2024 as compared to the same period in 2023. This was due to a decrease in franchise taxes and realized losses related to foreign exchange rates.

Previous wording

Research and development expenses decreased by $2.9 million, or 11%, during the three months ended March 31, 2024 as compared to the same period in 2023. The decrease in research and development expenses was primarily due to a net $3.1 million decrease in expenses related to CDMOs and other externally conducted research and development. The overall decrease was partially offset by a less than $0.1 million increase in payroll and personnel expenses resulting from an increase in overall headcount. There was also a less than $0.1 million increase in professional fees for the period.

Current wording

Research and development expenses decreased by $5.3 million, or 10%, during the six months ended June 30, 2024 as compared to the same period in 2023. The decrease in research and development expenses was primarily due to a $5.1 million decrease in expenses related to CDMOs and other externally conducted research and development and a $0.6 million decrease in payroll and personnel expenses resulting from an decrease in overall headcount. This decrease was partially offset by a $0.3 million increase in professional fees.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $247.6 million. We expect that the cash and cash equivalents will be sufficient to fund our forecasted operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months from the issuance of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $224.1 million. We expect that the cash and cash equivalents will be sufficient to fund our forecasted operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months from the issuance of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

In April 2024, the Term Loans under our Loan Agreement expired. The Non-Formula Ancillary Services, which shall not exceed $5.5 million in the aggregate, remain available. As of the date of this Quarterly Report on Form 10-Q, we were in compliance with such covenants and had no indebtedness outstanding under the Loan Agreement.

Current wording

In April 2024, the Term Loan availability under our Loan Agreement expired. The Non-Formula Ancillary Services, which shall not exceed $5.5 million in the aggregate, remain available. As of the date of this Quarterly Report on Form 10-Q, we were in compliance with such covenants and had no indebtedness outstanding under the Loan Agreement.

Previous wording

We recorded net loss of $28.0 million for the three months ended March 31, 2024. Prior to this period, we have recorded net losses since inception. As of March 31, 2024, we had an accumulated deficit of $408.8 million.

Current wording

We recorded net loss of $29.9 million for the three months ended June 30, 2024. Prior to this period, we have recorded net losses since inception. As of June 30, 2024, we had an accumulated deficit of $438.7 million.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $247.6 million. We believe that our cash and cash equivalents will be sufficient for us to continue as a going concern for at least twelve months from the issuance date of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $224.1 million. We believe that our cash and cash equivalents will be sufficient for us to continue as a going concern for at least twelve months from the issuance date of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

Previous wording

Net cash used in operating activities was $22.8 million for the three months ended March 31, 2024. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $8.1 million, and a net decrease in assets and liabilities of $3.0 million. Non-cash items primarily included depreciation and amortization of $1.7 million, stock-based compensation expense of $5.7 million and non-cash lease expense of $0.8 million. The net change in assets and liabilities was primarily due to a net decrease in accrued and other current non-current liabilities of $1.8 million, a decrease in operating lease liability of $0.9 million, a decrease in accounts payable of $0.2 million and a decrease in prepaid expenses and other current assets of $0.2 million. The decrease was partially offset by an increase in other non-current assets of $0.1 million.

Current wording

Net cash used in operating activities was $46.3 million for the six months ended June 30, 2024. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $16.5 million, and a net decrease in operating assets and liabilities of $4.9 million. Non-cash items primarily included depreciation and amortization of $3.3 million, stock-based compensation expense of $11.7 million, and non-cash lease expense of $1.6 million. The net change in assets and liabilities was primarily due to a net decrease in accrued and other current and non-current liabilities of $0.8 million and a decrease in operating lease liability of $1.8 million. There was also a $1.7 million decrease in prepaid expenses and other current assets and a $0.8 million decrease in accounts payable.

Previous wording

Net cash used in operating activities was $24.1 million for the three months ended March 31, 2023. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $6.6 million, and a net increase in assets and liabilities of $0.2 million. Non-cash items primarily included depreciation and amortization of $1.3 million, stock-based compensation expense of $4.8 million, and non-cash lease expense of $0.6 million. The net change in assets and liabilities was primarily due to a net increase in operating lease liability of $2.5 million related to the additional tenant improvement allowance as part of the Third Amendment to the lease for our office and laboratory facility at 1000 Bridge Parkway, Redwood City, California (1000 Bridge Parkway), offset by a decrease in accounts payable of $2.3 million and a decreased in accrued and other current liabilities of $0.2 million.

Current wording

Net cash used in operating activities was $49.0 million for the six months ended June 30, 2023. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $13.9 million, and a net increase in operating assets and liabilities of $0.4 million. Non-cash items primarily included depreciation and amortization of $2.8 million, stock-based compensation expense of $9.8 million, and non-cash lease expense of $1.3 million. The net change in assets and liabilities was primarily due to a net increase in operating lease liability of $1.6 million related to the additional tenant improvement allowance as part of the Third Amendment to the lease at 1000 Bridge Parkway as well as an increase of $0.2 million in prepaid expenses and other current assets and an increase of $0.2 million in other non-current assets. This increase was offset by a decrease in accounts payable of $1.6 million.

Previous wording

Net cash used in investing activities was $1.9 million for the three months ended March 31, 2023, which consisted of purchases of property and equipment of $1.9 million, primarily related to the construction of our GMP cell processing suite at 1000 Bridge Parkway.

Current wording

Net cash used in investing activities was $0.5 million for the six months ended June 30, 2024, which consisted of purchases of lab equipment for our GMP cell processing suite at 1000 Bridge Parkway.

Previous wording

Net cash used in investing activities was $0.2 million for the three months ended March 31, 2024, which consisted of purchases of property and equipment of $0.2 million, primarily related to activities at our GMP cell processing suite at 1000 Bridge Parkway.

Current wording

Net cash used in investing activities was $3.4 million for the six months ended June 30, 2023, which consisted of purchases of lab equipment of $3.4 million, primarily related to our GMP cell processing suite at 1000 Bridge Parkway.

Previous wording

Net cash provided by financing activities was $111.0 million for the three months ended March 31, 2024, which included approximately $91.7 million in net proceeds from the issuance of our common stock and pre-funded warrants in the Offering and approximately $19.3 million in net proceeds from the issuance of our common stock under the JonesTrading ATM Program.

Current wording

Net cash provided by financing activities was $111.2 million for the six months ended June 30, 2024, which included approximately $91.7 million in net proceeds from the issuance of our common stock and pre-funded warrants in the Offering and approximately $19.3 million in net proceeds from the issuance of our common stock under the JonesTrading ATM Program.

Previous wording

Net cash used in financing activities was less than $0.1 million for the three months ended March 31, 2023, which was related to cash paid for taxes withheld on the net share settlement of equity awards, offset by net proceeds from the issuance of common stock in connection with the exercise of stock options under our equity plans

Current wording

Net cash provided by financing activities was $0.2 million for the six months ended June 30, 2023, which was primarily related to net proceeds from the issuance of common stock in connection with our employee stock purchase plan. This was partially offset by cash paid for taxes withheld on the net share settlement of equity awards.

Previous wording

On October 28, 2018, Adicet Therapeutics executed a non-cancelable lease agreement for an office and laboratory facility at 1000 Bridge Parkway (the Redwood City Lease), with an expiration date of February 28, 2030. The initial annual base rent for the Redwood City Lease is an aggregate of $1.3 million, and such amount will increase 3% annually. On June 16, 2022, Adicet Therapeutics entered into a second amendment to the Redwood City Lease (the Second Amendment), which expands the space lease by 12,204 square feet (the Expansion Space). Adicet Therapeutics will pay a monthly fee for the Expansion Space increasing annually from approximately $73,000 to $78,000 over the thirty-six (36) month term of the Second Amendment. The Second Amendment also provides Adicet Therapeutics with an allowance to construct improvements to the Expansion Space. On January 9, 2023, Adicet Therapeutics entered into a third amendment of the Redwood City Lease (the Third Amendment). The Third Amendment increases the tenant improvement allowance as of January 1, 2023 by an additional $3.0 million. The additional allowance will be repaid through equal monthly payments of principal amortization and interest on a monthly basis over the term of the lease at an interest rate of eight percent (8%) per annum. On August 7, 2023, Adicet Therapeutics entered into the Fourth Amendment, which amends the period over which the tenant improvement allowance received in the Third Amendment will be amortized and identifies the monthly amortization payable by us.

Current wording

On October 28, 2018, Adicet Therapeutics executed a non-cancelable lease agreement for an office and laboratory facility at 1000 Bridge Parkway (the Redwood City Lease), with an expiration date of February 28, 2030. The initial annual base rent for the Redwood City Lease is an aggregate of $1.3 million, and such amount will increase 3% annually. On June 16, 2022, Adicet Therapeutics entered into a second amendment to the Redwood City Lease (the Second Amendment), which expands the space lease by 12,204 square feet (the Expansion Space). Adicet Therapeutics will pay a monthly fee for the Expansion Space increasing annually from approximately $73,000 to $78,000 over the thirty-six (36) month term of the Second Amendment. The Second Amendment also provides Adicet Therapeutics with an allowance to construct improvements to the Expansion Space. On January 9, 2023, Adicet Therapeutics entered into a third amendment of the Redwood City Lease (the Third Amendment). The Third Amendment increases the tenant improvement allowance as of

Previous wording

On January 19, 2024, we entered into a membership agreement with Industrious Bos 131 Dartmouth Street LLC for office space at 131 Dartmouth Street, Boston, Massachusetts (the Dartmouth Street Agreement). The Dartmouth Street Agreement commenced on February 1, 2024 and expires on January 31, 2025.

Current wording

On January 19, 2024, we entered into a membership agreement with Industrious Bos 131 Dartmouth Street LLC for office space at 131 Dartmouth Street, Boston, Massachusetts (the Dartmouth Street Agreement). The Dartmouth Street Agreement commenced on February 1, 2024 and expires on January 31, 2025. On March 12, 2024, we amended the Dartmouth Street Agreement to include additional office space which commenced on May 1, 2024 and expires April 30, 2025. On March 12, 2024, we further amended the Dartmouth Street Agreement to include additional office space which commenced on June 1, 2024 and expires May 31, 2025.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements prepared in accordance with GAAP. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reported periods and related disclosures. These estimates and assumptions, including those related to accruals for CDMO, CRO and research and development expenses, and equity-based compensation are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. These critical estimates and assumptions are based on our historical experience, our observance of trends in the industry, and various other factors that are believed to be reasonable under the circumstances and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates under different assumptions or conditions. A summary of our significant accounting policies is contained in Note 2 of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 19, 2024.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reported periods and related disclosures. These estimates and assumptions, including those related to accruals for CDMO, CRO and research and development expenses, and equity-based compensation are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. These critical estimates and assumptions are based on our historical experience, our observance of trends in the industry, and various other factors that are believed to be reasonable under the circumstances and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates under different assumptions or conditions. A summary of our significant accounting policies is contained in Note 2 of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 19, 2024.