Greetings. Welcome to the Ziopharm Oncology, Inc. Second Quarter 2021 Corporate Update. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Adam Levy, Executive Vice President of Corporate Development and Investor Relations. Thank you. You may begin..

Thank you, operator. Good afternoon, and welcome to the Ziopharm Oncology conference call and webcast to review our updates for the second quarter ended June 30, 2021. This afternoon, we issued our press release, which is available in the Investors section of our website, ziopharm.com.

Additionally, we posted a PowerPoint presentation to accompany today's commentary, which can also be found in the Investors section of our website.

Let me remind everyone that during the call, the company will make a number of forward-looking statements including statements regarding the potential therapeutic candidates in our development pipeline, regulatory status, financial information and business trends.

Forward-looking statements are subject to numerous risks and uncertainties, as described in our most recent 10-K and 10-Q filings and within other filings that we may make with the SEC from time to time. On our call today, we have Heidi Hagen, Interim Chief Executive Officer, who will present a brief corporate summary. She will be joined by Dr.

Raffaele Baffa, Chief Medical Officer, who will present an update on our clinical programs. In addition, we are joined by Ellee de Groot, our EVP and GM of Cell Therapy; and James Huang, our Executive Chairman, who will be available during the Q&A portion after our prepared remarks. And to get things started, I'll turn the call over to Heidi Hagen.

Heidi, please go ahead..

Thank you, Adam, and welcome, everyone. Let me start by saying that I'm excited by the progress we have made across multiple fronts since our last call in May. Indeed, since the beginning of the year, we have truly transformed the company, and you can see the progress reflected on Slide 4 of the deck we posted. This is a different company.

Turning now to the details of our progress, which are summarized on Slide 6 of the materials. Since our last quarterly update, we achieved several key milestones for our TCR-T program. We successfully completed the commissioning of the cGMP clinical production unit and completed aseptic process validation for the facility in Houston.

These critical steps enable the facility to be used for our Phase 1/2 TCR-T library trial. In addition, the team is completing process qualification with healthy donor cell, which will support the use of the facility to manufacture TCR-T cells for the clinical trial.

We remain on track to dose patients in our Phase 1/2 TCR-T library trial in the second half of 2021 and we are anticipating doing so in the fourth quarter. We have been emphasizing our strategy on our TCR program, and all of the company's efforts are being directed towards this program. We've never been more enthusiastic or optimistic.

Raffaele will share more on this in a few moments. Moving now to the balance sheet. We ended the first half of 2021 with approximately $76.7 million.

And today, we announced that we have successfully executed a venture debt facility with Silicon Valley Bank for $50 million, with an immediate drawdown of initial $25 million tranche, which is not included in our end of second quarter cash balance.

The $25 million initial tranche extends the company's cash runway into the fourth quarter of 2022, well beyond the time required to generate and assess the initial clinical data from our Phase 1/2 TCR-T library trial.

I want to make it clear that the company had and continues to have a multitude of options for financing and balance sheet fortification. The Board and management team were deliberative on the best path forward and took into account both where the science is and where our cash runway brought us. The guiding principle of course, was shareholder impact.

We've done this in a smart way with minimal dilution. As we said previously, we have no intention of selling shares at the current stock price, which we believe significantly undervalues the company. And regarding our current market valuation, we understand the concern shareholders have expressed.

We believe continuing to execute is the right way to demonstrate to the market that we are a leading oncology-focused TCR company. We firmly believe we are on the right track.

The company is now operating from a position of strength with meaningful progress in our groundbreaking TCR-T library trial enabling activity and in our efforts to strengthen the balance sheet. We are doing exactly what we said we would do earlier this year and we have growing momentum that is exciting to see.

We are now in a position where the company will succeed or fail based on the science and the clinical data rather than operational considerations and challenges. Before I turn the call over to Raffaele, let me say a word on the search for a permanent CEO.

As we mentioned in our press release, the Board is very close to a decision and we would expect an announcement in the very near future. A number of well-qualified candidates were considered and we are looking forward to making the announcement. Let me turn the call over.

Raffaele?.

the right cells, the right target and the right platform. With that, I will now turn the call over to the operator, who will help us begin the QA.

Operator?.

Thank you. [Operator Instructions] Apologies, we are having a slight technical difficulty. Okay, thank you for your patience. Our first question comes from Alethia Young of Cantor Fitzgerald. Please state your question..

Hi, this is Nina on for Alethia. Thanks for taking our questions. So for the Taiwan trial, can you please just discuss what the current manufacturing process was exactly and who runs it? And a second one, is there anything you can leverage from your own experience with manufacturing with TCR-T to help with the Eden BioCell program? Thanks..

Thanks, Nina. Let me maybe ask Ellee or Raffaele to comment on the manufacturing process in Taiwan..

Sure. I'll start. So the manufacturing process in Taiwan utilizes this rapid personalized manufacturing process or RPM process. So essentially, it's a very simple process where Sleeping Beauty is used to do the genetic transfer and the cells are released shortly thereafter and fused immediately, so within two days of the gene transfer.

This is quite different than the TCR process, which actually utilizes an ex vivo propagation, so a more kind of traditional type propagation process that allows the cells to grow to larger numbers. So you asked about who runs the manufacturing process. This is performed by the TriArm team.

So the TriArm team in Taiwan does the manufacturing at a cGMP facility on site at the National Taiwanese University. And certainly, there are – just in terms of the processes that are – have been developed and are continuing to, we continue to perform process research and process development to always improve the processes.

There are obviously things that one learns about improvements that can be made across the board. So I think just as the field, in general, progresses, there are learnings that can be made that will help us to improve the processes for the foreseeable future..

Yes. If I may add, there is also a structural difference between the CAR and the TCR. They are completely different. So the size, the sequence, without going into the details, there are two different constructs, right? While the Sleeping Beauty, the gene transfer works very well with both systems, keep that in mind, these are two different assets..

I would also add – this is Heidi. I would also add, you asked a question about the TCR process and its reflection on the CAR-T process. And yes, the TCR process is a more mature process that's had a couple of more years in our hands in the laboratory and in facilities.

And – so there are opportunities to further improve the process and their insights that we have gained. And we know what our colleagues at Eden have also gained some insights to along those lines.

So just to answer your second question is that there is experience and understanding that it does reflect on the opportunities with that particular process and product..

Okay. That makes sense. Thank you..

Nina, anything else we can help you with?.

No. Thank you..

Thank you..

[Operator Instructions] It appears there are no more questions at this time. I would like to now turn the call back to Heidi Hagen for closing remarks..

So our 10-Q will be filed in the next several days, and I would like to thank everyone for joining us today. Have a great rest of your day, and it's been a pleasure talking with you..

This concludes today's conference. You may disconnect your lines at time. Thank you for your participation, and have a wonderful day..