TCR² Therapeutics Reports Fourth Quarter 2021 Financial Results and Provides Corporate Update

Mar 22, 2022

CAMBRIDGE, Mass., March 22, 2022 (GLOBE NEWSWIRE) -- TCR2 Therapeutics Inc. (Nasdaq: TCRR), a clinical-stage cell therapy company with a pipeline of novel T cell therapies for cancer patients suffering from solid tumors, today announced financial results for the fourth quarter ended December 31, 2021 and provided a corporate update.

"Consistent execution throughout the last year has positioned TCR2 for a series of important readouts as we accelerate our clinical progress in 2022," said Garry Menzel, Ph.D., President and Chief Executive Officer of TCR2 Therapeutics. "We were able to successfully conclude the dose escalation portion of our ongoing gavo-cel Phase 1/2 clinical trial with the identification of a RP2D and submit a protocol amendment with the FDA for the upcoming Phase 2 clinical trial. We also submitted an IND with the FDA for our first enhanced TRuC-T cell that incorporates a PD-1:CD28 switch. In the meantime, we have been identifying new clinical trial sites and expanding manufacturing capacity for the reproducible process used by Miltenyi and ElevateBio to support our clinical trials. In addition to the clinical readouts from gavo-cel and TC-510, we will continue to provide updates on the innovations in our rapidly growing pipeline, most immediately with a preclinical data presentation on our allogeneic TRuC targeting mesothelin at the AACR Annual Meeting in April."

Recent Developments

Gavo-cel:

  • TCR2 announced the submission of a protocol amendment to the US Food and Drug Administration (FDA) in the first quarter of 2022 for the gavo-cel Phase 2 expansion cohort, including the amendment to treat patients with gavo-cel in combination with Opdivo and/or Yervoy which forms the basis of the Company’s clinical trial collaboration with Bristol Myers Squibb.

TC-510:

  • TCR2 announced the submission of an Investigational New Drug (IND) to the FDA in the first quarter of 2022 for TC-510, the Company’s first enhanced TRuC-T cell targeting mesothelin with a PD-1:CD28 chimeric switch receptor.

Pipeline:

  • TCR2 announced it will present a poster at the American Association of Cancer Research (AACR) Annual Meeting 2022 featuring new preclinical data on an allogeneic (off-the-shelf) TRuC-T cell, taking place on April 8-13, 2022 in New Orleans, Louisiana. In preclinical studies, this allogeneic product candidate without an enhancement demonstrated improved anti-tumor efficacy associated with enhanced persistence and increased antigen sensitivity in vivo compared to donor-matched autologous TRuC-T cells targeting mesothelin. Furthermore, allogeneic TRuC-T cells generated with an additional knockout of Beta-2-microglobulin (B2M) maintained their potency.

  • TCR2 announced a strategic research collaboration agreement with Arbor Biotechnologies focused on the further development of a defined set of allogeneic TRuC-T cell therapies. The collaboration leverages Arbor's proprietary CRISPR gene-editing technology, which is tailored to address the underlying pathology of genetic diseases and TCR2's first-in-class TRuC platform, which has demonstrated clinical activity in multiple treatment-refractory mesothelin-expressing solid tumor indications with gavo-cel.

Corporate:

  • TCR2 announced the appointment of experienced biotech executive Rosemary Harrison, Ph.D., as Chief Business and Strategy Officer where she will be responsible for supporting a range of activities including commercial strategy, operational planning, corporate partnerships and long-term growth opportunities.

Anticipated Milestones

  • Gavo-cel:

    • Present the expanded and complete Phase 1 dataset for gavo-cel in the second quarter of 2022.

    • Initiate the Phase 2 expansion cohort of the ongoing gavo-cel Phase 1/2 clinical trial in the first half of 2022.

    • Provide an initial update from at least one of the Phase 2 expansion cohorts of the ongoing gavo-cel Phase 1/2 clinical trial in the second half of 2022.

  • TC-510:

    • Report initial safety, efficacy and translational data from at least one of the Phase 1 dose escalation cohorts of the TC-510 Phase 1/2 clinical trial in the second half of 2022.

  • Pipeline:

    • Initiate IND-enabling studies for TC-520, an enhanced CD70 targeting TRuC-T cell program, in 2022.

    • Select a lead candidate for its allogeneic program in 2022.

  • Manufacturing:

    • Production of clinical trial material to commence at ElevateBio BaseCamp as capacity is increased in anticipation of demand from the Phase 2 expansion trial of gavo-cel in 2022.

Financial Highlights

  • Cash Position: TCR2 ended the fourth quarter of 2021 with $265.6 million in cash, cash equivalents, and investments compared to $228.0 million as of December 31, 2020. Net cash used in operations was $23.3 million for the fourth quarter of 2021 compared to $13.5 million for the fourth quarter of 2020. TCR2 projects net cash use of $115-125 million for 2022. We expect cash on hand to support operations into 2024.
     
  • R&D Expenses: Research and development expenses were $22.4 million for the fourth quarter of 2021 compared to $14.3 million for the fourth quarter of 2020. The research and development expenses for the fourth quarter of 2021 include restructuring costs of $3.7 million and are partially offset by a $2 million settlement from a vendor due to a commercial dispute. The remaining increase in R&D expenses was primarily due to an increase in headcount and manufacturing facilities.
     
  • G&A Expenses: General and administrative expenses were $5.2 million for the fourth quarter of 2021 compared to $4.3 million for the fourth quarter of 2020. The increase in general and administrative expenses was primarily due to an increase in personnel costs.
     
  • Net Loss: Net loss was $27.7 million for the fourth quarter of 2021 compared to $18.5 million for the fourth quarter of 2020.

About TCR2 Therapeutics

TCR2 Therapeutics Inc. is a clinical-stage cell therapy company developing a pipeline of novel T cell therapies for cancer patients suffering from solid tumors. The company is focused on the discovery and development of product candidates against novel and complex targets utilizing its proprietary T cell receptor (TCR) Fusion Construct T cells (TRuC®-T cells). The TRuC platform is designed to specifically recognize and kill cancer cells by harnessing signaling from the entire TCR, independent of human leukocyte antigens (HLA). For more information about TCR2, please visit www.tcr2.com.

Forward-looking Statements

This press release contains forward-looking statements and information within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. The use of words such as "may," "will," "could," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "seeks," "endeavor," "potential," "continue" or the negative of such words or other similar expressions can be used to identify forward-looking statements. These forward-looking statements include, but are not limited to, express or implied statements regarding the therapeutic potential of gavo-cel, TC-510 and the Company’s other product candidates, expected progress and timing of updates for the gavo-cel and TC-510 clinical trials, expectations with respect to the FDA’s review of our gavo-cel protocol amendments, expectations with respect to timing of our IND submission for TC-510, expectations regarding clinical data for gavo-cel and TC-510 and preclinical data for our emerging pipeline and enhancements, increased manufacturing capacity and technical capabilities, including through our manufacturing partnership with ElevateBio, LLC, expectations with respect to increased clinical trial demand and identification of additional clinical trial sites, future IND filings and clinical development plans, expected cash use in 2022 and cash runway into 2024, the development of the Company’s TRuC-T cells, their potential characteristics, applications and clinical utility, and the potential therapeutic applications of the Company’s TRuC-T cell platform.

The expressed or implied forward-looking statements included in this press release are only predictions and are subject to a number of risks, uncertainties and assumptions, including, without limitation: uncertainties inherent in clinical studies and in the availability and timing of data from ongoing clinical studies; whether interim results from a clinical trial will be predictive of the final results of the trial; whether results from preclinical studies or earlier clinical studies will be predictive of the results of future trials; the expected timing of submissions for regulatory approval or review by governmental authorities, including review under accelerated approval processes; orphan drug designation eligibility; regulatory approvals to conduct trials or to market products; TCR2’s ability to maintain sufficient manufacturing capabilities to support its research, development and commercialization efforts, including TCR2’s ability to secure additional manufacturing facilities; whether TCR2's cash resources will be sufficient to fund TCR2's foreseeable and unforeseeable operating expenses and capital expenditure requirements, the impact of the COVID-19 pandemic on TCR2’s ongoing operations; and other risks set forth under the caption "Risk Factors" in TCR2’s most recent Annual Report on Form 10-K, most recent Quarterly Report on Form 10-Q and its other filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although TCR2 believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur.

Moreover, except as required by law, neither TCR2 nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements included in this press release. Any forward-looking statement included in this press release speaks only as of the date on which it was made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Investor and Media Contact:

Carl Mauch
Senior Director, Investor Relations and Corporate Communications
(617) 949-5667
carl.mauch@tcr2.com


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)

  December 31,
2021
    December 31,
2020
 
Assets          
Current assets          
Cash and cash equivalents $ 222,564     $ 94,155  
Investments   43,029       133,831  
Prepaid expenses and other current assets   10,534       7,552  
Total current assets   276,127       235,538  
           
Property and equipment, net   17,075       10,013  
Right-of-use assets, operating leases   28,283       -  
Restricted cash   1,156       583  
Other assets, non-current   730       61  
Total assets $ 323,371     $ 246,195  
           
Liabilities and stockholders’ equity          
Accounts payable $ 2,144     $ 2,448  
Accrued expenses and other current liabilities   13,094       6,392  
Operating lease liabilities   3,367       -  
Total current liabilities   18,605       8,840  
           
Operating lease liabilities, non-current   22,996       -  
Other liabilities   293       807  
Total liabilities   41,894       9,647  
           
Stockholders’ equity          
Common stock, $0.0001 par value; 150,000,000 shares authorized; 38,496,484 and 33,516,795 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively.   4       3  
Additional paid-in capital   631,008       486,197  
Accumulated other comprehensive income (loss)   (13 )     63  
Accumulated deficit   (349,522 )     (249,715 )
Total stockholders’ equity   281,477       236,548  
Total liabilities and stockholders’ equity $ 323,371     $ 246,195  


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except share and per share data)

    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
    2021     2020     2021     2020  
Operating expenses                        
Research and development   $ 22,411     $ 14,298     $ 77,239     $ 51,980  
General and administrative     5,206       4,269       22,503       16,720  
Total operating expenses     27,617       18,567       99,742       68,700  
Loss from operations     (27,617 )     (18,567 )     (99,742 )     (68,700 )
                         
Interest income, net     38       191       224       1,737  
Loss before income tax expense     (27,579 )     (18,376 )     (99,518 )     (66,963 )
                         
Income tax expense     160       75       289       161  
Net loss   $ (27,739 )   $ (18,451 )   $ (99,807 )   $ (67,124 )
                         
Per share information                        
Net loss per share of common stock, basic and diluted   $ (0.72 )   $ (0.55 )   $ (2.63 )   $ (2.40 )
                         
Weighted average shares outstanding, basic and diluted     38,289,295       33,448,315       37,935,554       27,990,564  


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

  Twelve Months Ended December 31,  
  2021     2020  
Operating activities          
Net loss $ (99,807 )   $ (67,124 )
Adjustments to reconcile net loss to cash used in operating activities:          
Depreciation and amortization   2,827       1,592  
Asset impairment due to restructuring   559       -  
Stock-based compensation expense   12,265       8,492  
Amortization (accretion) on investments   837       (702 )
Deferred tax liabilities   99       131  
Changes in operating assets and liabilities:          
Prepaid expenses and other current assets   (2,496 )     (1,101 )
Operating leases, net   (2,416 )     -  
Accounts payable   (771 )     451  
Accrued expenses and other liabilities   7,300       1,522  
Cash used in operating activities   (81,603 )     (56,739 )
           
Investing activities          
Purchases of equipment   (11,098 )     (7,164 )
Software development costs   (351 )     -  
Purchases of investments   (50,726 )     (152,812 )
Proceeds from sale or maturity of investments   140,622       111,041  
Cash provided by (used in) investing activities   78,447       (48,935 )
           
Financing activities          
Proceeds from public offering of common stock, net of issuance costs   131,330       133,571  
Proceeds from the exercise of stock options   1,217       1,189  
Payment of deferred offering costs   (409 )     (61 )
Cash provided by financing activities   132,138       134,699  
           
Net change in cash, cash equivalents, and restricted cash   128,982       29,025  
Cash, cash equivalents, and restricted cash at beginning of year   94,738       65,713  
Cash, cash equivalents, and restricted cash at end of period $ 223,720     $ 94,738  

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Source: TCR2 Therapeutics

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