Adicet Bio, Inc. (ACET) is a clinical-stage biotechnology company at the forefront of discovering and developing innovative allogeneic gamma delta T cell therapies for autoimmune diseases and cancer. With a deep-rooted commitment to advancing the field of immunotherapy, Adicet has established itself as a trailblazer in the realm of off-the-shelf cell therapies.
Company Background and History
Adicet Bio, Inc. was founded in November 2014 as a clinical stage biotechnology company focused on discovering and developing allogeneic gamma delta T cell therapies. The company's journey has been marked by significant milestones and strategic decisions. In September 2020, Adicet underwent a transformative merger with resTORbio, Inc., a Delaware corporation. As a result of this merger, the former Adicet became a wholly owned subsidiary of resTORbio and was renamed Adicet Therapeutics, Inc. Simultaneously, resTORbio changed its name to Adicet Bio, Inc., solidifying the company's identity and focus.
Throughout its history, Adicet Bio has faced numerous challenges typical of early-stage biotechnology companies. The company has consistently reported net losses since its inception, relying on various funding sources to sustain its operations. These have included a collaboration and licensing arrangement, public and private placements of equity securities and debt, as well as cash received from the merger with resTORbio. Despite these financial hurdles, Adicet has remained committed to advancing its innovative platform and pipeline.
Strategic Partnerships
A pivotal moment in Adicet's history came in July 2016 when the company entered into a license and collaboration agreement with Regeneron Pharmaceuticals, Inc. This agreement, which was later amended in April 2019, provided Adicet with crucial financial support and validation of its technology. Regeneron made a non-refundable upfront payment of $25 million and has since provided an additional $20 million in research funding as of September 30, 2024. The partnership reached a new level in January 2022 when Regeneron exercised its option to license the exclusive, worldwide rights to ADI-2, an allogeneic gamma delta CAR T cell therapy, accompanied by a $20 million option exercise fee.
Clinical Development and Strategy
Adicet's clinical development journey has been marked by both progress and strategic adjustments. In December 2023, the company achieved a significant milestone with the FDA granting IND clearance for its lead product candidate, ADI-1, to treat patients with lupus nephritis. However, the company has also made difficult decisions to optimize its resources and focus. In January 2024, Adicet announced the deprioritization of enrollment for large B cell lymphoma patients in its Phase 1 clinical trial of ADI-1 in non-Hodgkin's lymphoma. Further refining its strategy, in September 2024, the company decided to concentrate ADI-1 development resources on autoimmune indications, leading to the closure of patient enrollment in the Phase 1 clinical study of ADI-1 in mantle cell lymphoma.
Product Pipeline
Adicet's flagship product candidate, ADI-001, is a first-in-class allogeneic gamma delta T cell therapy expressing a chimeric antigen receptor (CAR) targeting CD20. The company is currently evaluating ADI-001 in a Phase 1 clinical trial for the treatment of autoimmune diseases, with a focus on lupus nephritis (LN), systemic lupus erythematosus (SLE), systemic sclerosis (SSc), anti-neutrophil cytoplasmic autoantibody (ANCA) associated vasculitis (AAV), idiopathic inflammatory myopathy (IIM), and stiff person syndrome (SPS). The results from this trial are eagerly anticipated, as they could potentially unlock new frontiers in the management of these debilitating autoimmune conditions.
Adicet's pipeline also includes ADI-270, an armored gamma delta CAR T cell therapy targeting CD70. The company recently received Investigational New Drug (IND) clearance from the U.S. Food and Drug Administration (FDA) to evaluate ADI-270 in a Phase 1 clinical trial for the treatment of relapsed/refractory renal cell carcinoma (RCC). This advancement marks a significant milestone for Adicet, as it expands the company's focus beyond autoimmune diseases into the realm of solid tumor oncology.
Financials and Liquidity
Adicet's financial position remains strong, with $202.1 million in cash, cash equivalents, and short-term investments as of September 30, 2024. This robust balance sheet provides the company with the necessary resources to drive its clinical trials and research and development efforts forward. The company's recent successful capital raises, including a $91.7 million underwritten public offering in January 2024, have further bolstered its financial flexibility.
For the three months ended September 30, 2024, Adicet recorded a net loss of $30.5 million, with no revenue reported for the quarter. The company's operating cash flow (OCF) for the quarter was negative $22.0 million, while free cash flow (FCF) stood at negative $22.4 million. The decrease in net income, OCF, and FCF compared to the prior year quarter was primarily due to increased research and development expenses as the company progressed its clinical trials.
Adicet's liquidity position remains solid with a debt-to-equity ratio of 0 and current and quick ratios of 10.64. The company also has access to a $5.5 million non-formula ancillary services credit line under its Loan Agreement with Banc of California. Management believes the current cash position will be sufficient to fund forecasted operating expenses, capital expenditure requirements, and debt service payments for at least the next twelve months from the issuance of the Q3 2024 financial statements.
Operational Resilience
Despite the inherent challenges of developing novel cell therapies, Adicet has demonstrated its resilience and adaptability. The company has navigated the complexities of the COVID-19 pandemic, maintaining its operational continuity and advancing its clinical programs. Moreover, Adicet has proactively addressed potential supply chain disruptions, ensuring the uninterrupted supply of critical materials and components.
Strategic Expansion
Adicet's commitment to innovation is further exemplified by its strategic expansion into China. In May 2024, the company initiated research and development activities in the country through a series of contractual agreements, leveraging the unique opportunities presented by the evolving regulatory landscape.
Product Segments
Adicet Bio operates in two main product segments: autoimmune diseases and cancer.
In the autoimmune disease segment, the lead product candidate is ADI-1.00, targeting CD20. The FDA cleared Adicet's IND application for ADI-1.00 in lupus nephritis (LN) in December 2023. In the second quarter of 2024, the company received clearance to expand the ADI-1.00 autoimmune clinical development program to include systemic lupus erythematosus (SLE), systemic sclerosis (SSc), and anti-neutrophil cytoplasmic antibody associated vasculitis (AAV). Further expansion occurred in October 2024 with clearance to evaluate ADI-1.00 in idiopathic inflammatory myopathy (IIM) and stiff person syndrome (SPS) as part of the ongoing Phase 1 clinical trial in autoimmune diseases.
Adicet believes the potential market opportunity for ADI-1.00 in B cell mediated autoimmune diseases is substantial, with over 1.7 million patients in the U.S., EU5, China and Japan where CAR-T cell therapy has demonstrated clinical proof-of-concept. In June 2024, the FDA granted Fast Track Designation to ADI-1.00 for the potential treatment of relapsed/refractory class III or class IV LN. The company plans to report preliminary clinical data from the Phase 1 study of ADI-1.00 in LN in the first half of 2025, and for other autoimmune diseases in the second half of 2025, subject to study site initiation and patient enrollment.
In the cancer segment, Adicet's lead product candidate is ADI-270.00, an investigational allogeneic gamma delta CAR T cell therapy targeting CD70 for the treatment of renal cell carcinoma (RCC) and other solid tumor indications. The FDA cleared the IND application for ADI-270.00 in RCC in June 2024 and granted Fast Track Designation for the potential treatment of patients with metastatic/advanced clear cell RCC in July 2024. Adicet plans to initiate a Phase 1 multicenter, open-label clinical trial to assess the safety and anti-tumor activity of ADI-270.00 in RCC patients in the fourth quarter of 2024 and share preliminary clinical data in the first half of 2025, subject to site initiation and patient enrollment.
Industry Trends
The gamma delta T cell therapy market is expected to experience significant growth in the coming years, driven by the potential of these therapies to address unmet needs in autoimmune diseases and cancer. This growing market presents substantial opportunities for Adicet to establish itself as a leader in the field.
Future Outlook
The future for Adicet remains promising, as the company continues to execute on its ambitious clinical and operational milestones. With a robust pipeline, a strong balance sheet, and a talented team, Adicet is well-positioned to capitalize on the growing demand for innovative cell-based therapies. As the company advances its lead candidates and explores new frontiers in the treatment of autoimmune diseases and cancer, investors and patients alike eagerly await the unfolding of Adicet's transformative story.