SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2019
NEON THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
40 Erie St., Suite 110
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, $0.001 par value per share
The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 2.05. Costs Associated with Exit or Disposal Activities.
On November 20, 2019, Neon Therapeutics, Inc. (the “Company”) issued a press release announcing that, as part of a new strategic focus, it was reducing its workforce by approximately 24% of its current headcount. This workforce reduction will take place primarily during the fourth quarter of 2019. At this time, the Company will cease undertaking new additional spending commitments related to its cancer vaccine programs, NEO-PV-01 and NEO-SV-01. The Company will continue to conduct follow-up from its NT-002 clinical trial of NEO-PV-01 in first-line patients with untreated advanced or metastatic non-small cell lung cancer, with plans to report clinical data from this trial in the third quarter of 2020. The Company also plans to cease future enrollment in its NT-003 trial in metastatic melanoma. The Company believes these actions will improve its potential to bring value to patients, employees and shareholders.
As a result of these actions, the Company expects to incur personnel-related restructuring charges of approximately $1.5 million in connection with one-time employee termination costs, including severance and other benefits, which are expected to be incurred in the fourth quarter of 2019. In addition, the Company has committed to pay one-time employee retention costs of up to $3.4 million, which are expected to be incurred through the third quarter of 2020. The Company expects that the restructuring and other cost-saving efforts will result in approximately $35.0 million in annualized cost savings. The Company may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the workforce reduction or retention efforts. These estimates of the costs that the Company expects to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ.
The Company also plans to explore strategic options to maximize shareholder value. There can be no assurance that the exploration of strategic alternatives will result in any transaction being entered into or consummated. The Company has not set a timetable for completion of this review process and the Company does not intend to comment further unless or until the Board of Directors has approved a definitive course of action, the review process is concluded, or it is determined that other disclosure is appropriate.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers
On November 18, 2019, the Board of Directors of the Company (the "Board") approved a retention plan designed to retain the employees required to support the refocused Company (the "Retention Plan"), which includes, among other arrangements, the following matters:
Letter Agreements with Executives
Pursuant to the Retention Plan, the Board approved entering into letter agreements (each, an “Executive Letter Agreement”) with each of Hugh O’Dowd, the Company’s Chief Executive Officer, Yasir Al-Wakeel, the Company’s Chief Financial Officer, and Richard Gaynor, the Company’s President of Research and Development (each, an “Executive”) that provide certain retention benefits and modify certain provisions of the employment agreements previously entered into by each of the Executives and the Company (each, an “Employment Agreement”).
Under the Executive Letter Agreements, if the Company terminates the Executive’s employment without Cause (as defined in the Executive’s applicable Employment Agreement, as amended) or the Executive terminates his employment with the Company for Good Reason (as defined in the applicable Employment Agreement, as amended), the Company will pay the entire Severance Amount (as defined the applicable Employment Agreement, as amended) in a one-time, lump sum payment. All other terms and conditions of the Employment Agreements, including those related to the Executive’s eligibility for the Severance Amount, shall remain in full force and effect.
The Board approved a retention bonus for each of the Executives, which is included in the Executive Letter Agreements and is payable if the Executive remains employed by the Company through and until the closing of a strategic transaction, in the amount of 25% of the Executive’s then current base salary, less all applicable withholdings and deductions required by law, payable in one lump sum cash payment. The Executive's eligibility for this retention bonus is dependent on the satisfaction of the following criteria: (a) the Executive’s performance has been satisfactory, as determined in the Company’s sole discretion, through the end of the retention period; (b) the Executive is employed by the Company on the last day of the retention period; (c) on or before the last day of the retention period, the Executive has not given notice of resignation of employment with the Company; and (d) on or before the last day of the retention period, the Company has not given the Executive notice of the intent to terminate his employment.
Restricted Unit Awards
The Board approved the grant to each of Yasir Al-Wakeel and Richard Gaynor of restricted stock units in the amounts of 75,000 per individual (“RSU Awards”), such RSU Awards to be deemed granted at the close of the Nasdaq Global Select Market on November 25, 2019, and to vest, subject to the Executive’s continued service to the Company, quarterly over one year from the
date of grant and otherwise be subject to the terms and conditions set forth in the Company’s 2018 Stock Option and Incentive Plan.
Item 7.01. Regulation FD Disclosure.
The Company from time to time presents and/or distributes to the investment community at various industry and other conferences slide presentations to provide updates and summaries of its business. A copy of its current corporate slide presentation is attached to this Current Report on Form 8-K as Exhibit 99.2. The Company undertakes no obligation to update, supplement or amend the materials attached hereto as Exhibit 99.2.
The information contained in Item 7.01 in this Current Report on Form 8-K (including Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
On November 20, 2019, the Company issued a press release titled “Neon Therapeutics Announces New Strategic Focus on Novel T Cell Programs." A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
Cautionary Note Regarding Forward-Looking Statements
The Company cautions you that statements included in this Current Report on Form 8-K that are not a description of historical facts are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “could,” “should,” “expects,” “intends,” “target,”, “contemplates,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern its expectations, strategy, plans, prospects or intentions. Such statements include, without limitation, statements regarding the Company’s business strategy, structure and operations, including the Company’s plans to explore strategic alternatives; the cause, size, timing and impact of the Company’s reduction in workforce and related activities; the expected size of the Company’s workforce following such reduction; the estimated charges and costs expected to be incurred in connection with such reduction; the financial plans and projections, including its restructuring and other cost-saving efforts and impact on cash runway; and the percent of such charges expected to result in cash expenditures. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company’s actual future results may differ materially from its current expectations due to the risks and uncertainties inherent in its business. These risks include, but are not limited to: those related to the difficulties in and effect of implementing the Company’s business strategy; the difficulties in and effect of implementing the Company’s reduction in workforce, such as claims arising out of the reduction; the risks related to the difficulty of predicting the financial impact or timing of the Company’s reduction in workforce, including the risk that the actual financial and other impacts of the reduction could vary materially from the outcomes anticipated; the risks related to our capital requirements, use of capital and unexpected expenditures, including our ability to manage operating expenses or obtain funding to support planned business activities or to explore and establish strategic alternative transactions; risks related to our ability to attract and retain personnel; and other risks set forth under the caption “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, as updated by the Company’s other subsequently filed SEC filings. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
* * *
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Neon Therapeutics, Inc.
Date: November 20, 2019
/s/ Yasir B. Al-Wakeel
Yasir B. Al-Wakeel, B.M., B.Ch.
Chief Financial Officer
Neon Therapeutics Reports Announces New Strategic Focus on Novel T Cell Programs
Lead program, NEO-PTC-01, is a personalized neoantigen adoptive T cell therapy candidate to address refractory solid tumors
Corporate restructuring effected to focus resources while exploring strategic options
Cambridge, Mass. - November 20, 2019 - Neon Therapeutics, Inc. (Nasdaq: NTGN) today announced its new strategic focus on the development of its novel neoantigen-based T cell programs, in conjunction with a corporate restructuring. Neon will focus its efforts on the advancement of both personal and precision neoantigen-targeted T cell therapy candidates. Neon’s most advanced program is NEO-PTC-01, its personal neoantigen-targeted T cell therapy candidate consisting of multiple T cell populations targeting the most therapeutically relevant neoantigens from each patient’s tumor. Neon expects to file a Clinical Trial Application (CTA) in Europe by the end of 2019 to evaluate NEO-PTC-01 in patients with metastatic melanoma who are refractory to checkpoint inhibitors.
“Prioritizing development of novel T cell therapies will leverage our years of expertise and learnings
in pioneering neoantigen science, while positioning Neon to best deliver new therapies that could potentially improve patient outcomes and bring value to shareholders. The strategic restructuring will enable us to focus resources to execute on this vision. We acknowledge this decision impacts many talented employees who helped build Neon into a leader in neoantigen-based-therapies and we are grateful for their many contributions,” said Hugh O’Dowd, Neon’s Chief Executive Officer.
NEO-PTC-01 leverages Neon’s neoantigen platforms, including RECON®, its machine-learning bioinformatics platform, and NEO-STIM™, its proprietary process to directly prime, activate and expand neoantigen-targeting T cells ex vivo. Neon believes that this approach will allow NEO-PTC-01, a non-engineered product that leverages peripheral blood mononuclear cells (PBMCs) as starting material, to specifically target each patient's individual tumor with T cells that can drive a robust and persistent anti-tumor response.
The initial clinical development of NEO-PTC-01 will be focused on demonstrating monotherapy activity targeting metastatic solid tumors that are refractory to checkpoint inhibitor therapy. Following the planned submission of a CTA by the end of 2019, the company plans to initiate a Phase 1 dose escalation clinical trial in second-line metastatic melanoma in collaboration with the Netherlands Cancer Institute. The second planned indication for NEO-PTC-01 is second-line metastatic ovarian cancer, with potential to expand to other solid tumor types and potential development in the United States.
“NEO-PTC-01 has the potential to unlock the potency of cell therapy in solid tumors with several key advantages that overcome the challenges of other cell therapy approaches. In pre-clinical development and in several patient samples, we have demonstrated the ability to produce multiple enriched neoantigen-specific CD8+ and CD4+ T cell populations, including both memory and de novo T cell responses, that killed patient-specific tumors by targeting their tumor neoantigens. We believe that neoantigen targets will provide the tumor specificity required to develop safe, effective and durable T cell therapies for the treatment of solid tumors,” said Richard Gaynor, M.D., Neon’s President of Research and Development.
Neon is also advancing a precision T cell therapy program targeting shared neoantigens in genetically defined patient populations. This process utilizes off-the-shelf targets with a patient’s own PBMCs to develop a novel cell-based immunotherapy enabling rapid deployment for each patient. The lead program from this approach, NEO-STC-01, is a T cell therapy candidate targeting shared RAS neoantigens initially in pancreatic cancer and is currently in preclinical development.
As part of this new strategic focus, Neon is reducing its workforce by approximately 24% of its current headcount. At this time, Neon will cease undertaking new additional spending commitments related to its cancer vaccine programs, NEO-PV-01 and NEO-SV-01. The company will continue to conduct follow-up from its NT-002 clinical trial of NEO-PV-01 in first-line patients with untreated advanced or metastatic non-small cell lung cancer, with plans to report clinical data from this trial in the third quarter of 2020. Neon also plans to cease future enrollment in its NT-003 trial in metastatic melanoma. Neon believes these actions will improve its potential to bring value to patients, employees and shareholders. As part of these cost reduction efforts, Neon intends to explore strategic options.
Neon expects that the restructuring and other cost-saving efforts will result in approximately $35 million in annualized cost savings. Neon estimates that it will incur approximately $1.5 million of pre-tax charges for severance and other costs related to the restructuring in 2019. With this restructuring, Neon now expects that its cash, cash equivalents and marketable securities will enable it to fund its operating expenses and capital expenditure requirements into the third quarter of 2020.
There can be no assurance that Neon’s restructuring and other cost-saving efforts will be sufficient to continue the development of NEO-PTC-01 or its other programs through completion of the planned or ongoing clinical trials, nor that Neon’s exploration of strategic alternatives will result in any transaction being entered into or consummated. Neon has not set a timetable for completion of this strategic review process and Neon does not intend to comment further unless or until its board of directors has approved a definitive course of action, the review process is concluded, or it determines that disclosure is required or appropriate.
About Neon Therapeutics
Neon Therapeutics is a biotechnology company developing novel neoantigen-targeted T cell therapies, dedicated to transforming the treatment of cancer by directing the immune system towards neoantigens. Neon is using its neoantigen platform to develop both personal and precision neoantigen-targeted T cell therapy candidates. Neon’s most advanced program is NEO-PTC-01, its personal neoantigen-targeted T cell therapy candidate consisting of multiple T cell populations targeting the most therapeutically relevant neoantigens from each patient’s tumor. Neon expects to file a Clinical Trial Application (CTA) in Europe by the end of 2019 to evaluate NEO-PTC-01 in patients with metastatic melanoma who are refractory to checkpoint inhibitors.
For more information, please visit neontherapeutics.com.
This press release contains “forward-looking statements” of Neon Therapeutics, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, but may not be limited to, express or implied statements regarding our ability to obtain and maintain regulatory approval of our product candidates; the potential timing and advancement of our clinical trials; the potential timing and manner of data readouts from our ongoing and planned clinical trials; the design and potential efficacy of our therapeutic approaches; our plans to explore strategic alternatives; financial plans and projections, including its restructuring and other cost-saving efforts and impact on cash runway; and our ability to replicate results achieved in our preclinical studies or clinical trials in any future studies or trials. Any forward-looking statements in this press release are based on management’s current expectations and beliefs of future events, and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: uncertainties related to the initiation, timing and conduct of studies and other development requirements for our product candidates; the risk that any one or more of our product candidates will not be successfully developed and commercialized; the risk that the results of preclinical studies and clinical trials may not be predictive of future results in connection with future studies or trials; the risk that Neon’s collaborations will not continue or will not be successful; risks related to our ability to protect and maintain our intellectual property position; risks related to our capital requirements, use of capital and unexpected expenditures, including our ability to manage operating expenses or obtain funding to support planned business activities or to explore and establish strategic alternative transactions; risks related to our ability to attract and retain personnel; and risks related to the ability of our licensors to protect and maintain their intellectual property position. For a discussion of these and other risks and uncertainties, and other important factors, any of which could cause Neon’s actual results to differ from those contained in the forward-
looking statements, see the section entitled “Risk Factors” in Neon’s most recent Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission, as well as discussions of potential risks, uncertainties, and other important factors in Neon’s other filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Neon undertakes no duty to update this information unless required by law.
Will O’Connor, Stern Investor Relations
Stephanie Simon, Ten Bridge Communications
NASDAQ: NTGN Neoantigen-based Cell Therapies Corporate Presentation » November 2019
Forward-Looking Statements and Intellectual Property Forward-Looking Statements This presentation may contain forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, our development plans, our clinical results and other future conditions. All statements other than statements of historical facts contained in this presentation are forward-looking statements, our future financial or business performance, conditions, plans, prospects, trends or strategies and other financial and business matters; our current and prospective product candidates; the timing and advancement of current and planned clinical trials; our ability to replicate results achieved in our preclinical studies or clinical trials in any future studies or trials; research and development costs; the estimated size of the market for our product candidates; the timing and success of our development
and commercialization of our anticipated product candidates; and the availability of alternative therapies for our target market. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. Although we believe the expectations reflected in such forward- looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements. These statements are also subject to a number of material risks and uncertainties that are discussed in the section titled “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2018 and our subsequent quarterly reports on Form 10-Q, as well as discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was made. Neither we, nor our affiliates, advisors, or representatives, undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Intellectual Property Neon Therapeutics, Inc. is the owner of the NEON THERAPEUTICS, RECON, NEO-STIM, Precision NEO-STIM and MAPTAC trademarks, as well as certain other trademarks, including design versions of some or all of these trademarks. The symbols ™ and ® are not used in connection with the presentation of these trademarks in this presentation and their absence does not indicate a lack of trademark rights. Certain other trademarks used in this presentation are the property of third-party trademark owners and may be presented with or without trademark references. © 2019 Neon Therapeutics. 2
A Neoantigen-Based Cell Therapy Company Leveraging Validated Neoantigen Science through Novel Cell Therapy Approaches for Advanced Cancers Leading Neoantigen Personal and Precision Focused on Single-Agent Platform T cell Programs Activity in Refractory Tumors Machine learning bioinformatics Personal and precision adoptive Targeting metastatic disease platform and T cell induction T cell product candidates offer that is relapsed or refractory to process to prime, activate multiple therapeutic opportunities standard of care therapy and expand © 2019 Neon Therapeutics. 3
Significant Unmet Need Persists Despite Advancements in Treatment of Solid Tumors Overcome resistance in refractory Goal solid tumors through optimized T cell therapies Outcomes Nivolumab (αPD-1) lpilimumab (αCTLA-4) Chemotherapy Time Adapted from Dammeijer et al (Cytokine & Growth Factor Reviews, 2017). © 2019 Neon Therapeutics. 4
Neon Continues to Pioneer Neoantigen Science Personal neoantigen vaccine clinical trials – Founder Ton Schumacher initiated at Dana Farber publishes neoantigen-specific – NEO-STIM T cell induction T cell induction protocol protocol presented at AACR Founders Bob Schreiber and SITC and Ton Schumacher – T cell collaboration publish seminal neoantigen established with Netherlands – Founder James Allison, PhD research in Nature Cancer Institute (NKI) wins Nobel prize 2015 2017 2019 2014 2016 2018 Launch of Neon – NEO-PV-01 trial demonstrates and foundational IP Neon publishes a strong evidence of the mechanism estate licensed from Class I predictor in for targeting neoantigens Broad/Dana Farber/MGH Immunity that forms the basis for – Neon publishes in Founders Schumacher/ RECON Immunity a Class II Schreiber work featured predictor that in Science achieves >61-fold improvement over publicly available predictors © 2019 Neon Therapeutics. 5
Key Neoantigen Learnings Continue to Guide Future Development of New Modalities Neoantigens are fundamental to anti-tumor immune activity Pre-existing responses to neoantigens are rare and therefore an intervention to target neoantigens is required to mount an immune response in most patients Identifying and selecting the best neoantigens to target is critical for successful neoantigen therapy © 2019 Neon Therapeutics. 6
Neoantigens + T cell Therapy: A Powerful Combination Neoantigens T cell Therapies – Intimately tumor specific and not found on – Approved CAR-T therapies validate clinical benefit normal tissue of T cell modality – Can be highly immunogenic and not recognized – TCRs are exquisitely capable of selectively targeting by self neoantigens on cancer cells – Broad applicability across tumor types – TIL therapy has shown clinical effect in solid tumors – Multiple targets reduce risk of escape and may improve durable clinical benefit Neon’s Optimized Cell Therapy Approach © 2019 Neon Therapeutics. 7
Proprietary Platform Drives Novel T Cell Programs Neon’s Core Platforms NEO-PTC-01: Fully Personal T cell Therapy Custom manufactured, targeting neoantigens specific to each patient Precision T cell Therapies Bioinformatics T cell induction engine protocol Targeting shared neoantigens in genetically defined patient populations © 2019 Neon Therapeutics. 8
Neon has Continually Advanced its Machine Learning Platform to Identify Neoantigen Targets nd 1st Generation: 2 Generation: Class II prediction Class I prediction; Mono-allelic mass spectrometry Multi-allelic mass spectrometry In vitro netMHC binding assay Continual advances in RECON’s capabilities to identify, predict and select © 2019 Neon Therapeutics 9
A Leading Bioinformatics Platform to Predict Both MHC Class I and II Neoantigens September 2019 February 2017 © 2019 Neon Therapeutics. 10
NEO-STIM: A Platform to Prime, Activate and Expand Antigen-Specific T cells Inputs Induction Outputs Antigen Presenting Cells & T cells (Peripheral Blood Mononuclear Cells) APC T cell T cell RECON-predicted APC epitopes – Specific cell subsets from a – Multiple antigen-specific patient’s apheresis CD8+ & CD4+ T cell populations Proprietary – Stimulated with immunogens in – Expansion of memory responses culture process proprietary culture conditions – De novo induction from naïve compartment © 2019 Neon Therapeutics. 11
A Neoantigen-based Cell Therapy Company Preclinical Development Phase 1 Later Stage nd NEO-PTC-01 2 line metastatic melanoma Personal neoantigen nd T cell therapy 2 line metastatic ovarian cancer Preclinical Target Discovery Target Validation Development Phase 1 Later Stage NEO-STC-01 RAS pancreatic cancer Shared neoantigens T cell therapy Undisclosed solid tumors © 2019 Neon Therapeutics. 12
NEO-PTC-01: Personal neoantigen T cell therapy candidate © 2019 Neon Therapeutics. 13
NEO-PTC-01 Addresses Challenges of Current Personal Cell Therapy Approaches TIL Therapy TCR-T cell Therapy NEO-PTC-01 (Iovance, Achilles) (PACT, Adaptive) – Multiple – Currently 1 TCR per patient – Multiple, selected by RECON # of Targets – Pre-existing only – Pre-existing and potential for – Pre-existing and de novo – Non-selective expansion de novo – Selective expansion – Resectable lesion, IL-2 – No restriction and IL-2 not Process – Extended time needed to required in vitro and required limitations engineer TCRs systemically – PBMC starting material T cell – Exhausted, non-engineered – Engineered – Optimized, non-engineered phenotype © 2019 Neon Therapeutics. 14
NEO-PTC-01 Target Product Profile: An Adoptive Personal T cell Therapy for Refractory Solid Tumors Generation 1 Next Generation First-in-Human Trial Product Profile # neoepitopes* >20, CD8+ and CD4+ Optimized # of CD8+ and CD4+ Immunogen format Peptides Peptides or RNA Product Neoantigen responses Memory + de novo Memory + de novo Characteristics Central memory (CM) + T cell phenotype CM + EM, further optimized effector memory (EM) Cell dose 109-1010 cells To be determined in FIH study Turnaround time** 13 weeks Target ≤6 weeks Manufacturing Process Drug product format Frozen Frozen * Typical mix of ~30 longmers and ~30 shortmers **Includes sequencing, epitope manufacturing, T cell induction and release © 2019 Neon Therapeutics. 15
NEO-PTC-01 Pilot Run Results Pilot run generates drug product adhering to early development product profile Pilot Run Results Development Product Profile – At scale run using healthy (Healthy donor PBMCs) donor material Immunogen format Peptides Peptides ✓ Neoantigen responses Memory + de novo De novo – Manufactured in GMP facility at ✓ NKI following draft batch # CD8 neoantigen hit rate Ideally 3-5 responses 4 ✓ records # CD4 neoantigen hit rate 3-5 responses 5 ✓ – Release testing performed Polyfunctional and demonstrate REL (polyfunctionality) & MART-1 Functionality of responses Endogenous antigen recognition for >X following draft procedures and (polyfunctionality & cytotoxcity) ✓ specifications epitope Bulk product: – In-depth characterization Magnitude of responses 50 to 500 million neoantigen-specific 715.2 x 106 ✓ analysis conducted T cells T cell phenotype CM + EM CM + EM ✓ Cell dose 109-1010 cells 6.07 x 109 ✓ © 2019 Neon Therapeutics. 16
Current NEO-PTC-01 Manufacturing Process Bioinformatics Custom Epitope Production QC & release Tumor Sample & Sequencing NEO-PTC-01 Personal Neoantigen Apheresis T Cell Therapy Current time: 8 weeks 4 weeks 1 week Will be performed upfront in targeted patient cohorts © 2019 Neon Therapeutics. 17
Significant Potential for Compressed Manufacturing Turnaround Compressing turnaround time from 13 weeks to ≤6 weeks Goal may significantly broaden clinical opportunity – Streamline tumor sample processing – Adopt dedicated sequencing lab/equipment – Move from peptides to RNA – Optimize induction protocol – Implement rapid release assays © 2019 Neon Therapeutics. 18
Turnaround Time Improvements Expected to Broaden Clinical Applicability Across Treatment Settings 13 weeks Early Clinical Development Strategy Standard-of-Care 1L or bridging therapy – Initial focus on indications post- progression on checkpoint inhibitor or Tumor NEO-PTC-01 NEO-PTC-01 other frontline therapy Sample & Production Infusion Sequencing Later-stage Clinical/Commercial Strategy – Shorter turnaround timelines will enable ≤6 weeks broader clinical utility © 2019 Neon Therapeutics. 19
NEO-STIM Induces and Expands Multiple Neoantigen T cell Populations in a Melanoma Sample Expansion of Memory Response Induction of de novo Response Starting PBMCs Post NEO-STIM Starting PBMCs Post NEO-STIM Memory de novo + 72.1% of CD8+ + 6.5% of CD8+ Response 4.5% of CD8 Response 1 0% of CD8 pMHC pMHC Multimer Multimer A de novo 0% of CD8+ 13.4% of CD8+ pMHC Response 2 Multimer B 16-fold increase post NEO-STIM – Three neoantigen-specific CD8+ responses were induced using NEO-STIM – Specificity of mutant over wild-type epitope observed Data from a single melanoma patient sample © 2019 Neon Therapeutics. 20
NEO-STIM Induced and Expanded Three CD4+ Populations from a Melanoma Patient Sample Unloaded Neoantigen- Unloaded Neoantigen- DCs loaded DCs DCs loaded DCs S>L 1 4 . 7 % 3 1 . 3 % MKRN1 – Three neoantigen-specific CD4+ responses S>L were induced using NEO-STIM 1 3 . 1 % 3 4 . 5 % – The induced CD4+ T cell responses CREBBP exhibited multiple functions (production of cytokines and upregulation of CD107a) K>E 1 8 . 5 % 4 1 . 9 % TPCN1 C D 1 0 7 a + I F N + T N F + C D 1 0 7 a + C D 1 0 7 a + I F N + I F N + + + + IFN-γ (% of CD3 /CD4 ) C D 1 0 7 a + T N F + T N F + I F N + T N F + N e g a t i v e Data from a single melanoma patient sample © 2019 Neon Therapeutics. 21
NEO-STIM Effectively and Reproducibly Induces CD8+ T cell Responses from Melanoma Patients LTS#P4 Pt NV10 LTS#P5 Pt NV6 SRSF1E>K ARAP1Y>H PKDREJG>R ACTN4K>N CSNK1A1S>L DHX40neoORF 72.1% of CD8+ 6.5% of CD8+ 13.4% of CD8+ 0.2% of CD8+ 49.9% of CD8+ 0.7% of CD8+ – NEO-STIM reproducibly induces neoantigen-specific CD8+ T cell responses – + LTS#P8 Pt 23 Neoantigen-specific CD8 T GLI3P>L QARSR>W FAM178BP>L RPS26P>L cell responses have been DNM2 LRBA GTF2H3 I>V S>L V>A 52.0% of CD8+ 4.2% of CD8+ 7.8% of CD8+ 34.2% of CD8+ induced towards single 0.26% of CD8+ 35.7% of CD8+ 1.0% of CD8+ nucleotide variants and neoORFs © 2019 Neon Therapeutics. 22
NEO-STIM-induced CD8+ T cells Can Kill Tumor Cells Cytotoxic Marker CD107a on Upregulation of Active Induced Neoantigen-Specific T Cells Caspase-3 on Target Tumor Cells p<0.0001 40 15 **** 35 p<0.0001 + + 3 a 30 s 7 + a 0 10 25 – NEO-STIM-induced CD8 T 1 C + D 20 (memory) e C cells upregulate active v 15 + E>K LTS#P4 i 8 5 L 10 Caspase-3 on antigen D % C 5 SRSF1 expressing tumor targets, % 0 0 25 p<0.0001**** which is an early apoptotic 30 p<0.0001**** + + 20 marker a ) 25 3 7 s 0 + a 1 20 15 – NEO-STIM-induced CD8 T C D e C de de novo 15 ( v 10 + cells upregulate CD107a i 8 LTS#P5 L P>L P>L 10 D when challenged with antigen % 5 C GLI3 5 expressing tumor targets % 0 0 Target tumor cell line Target tumor cell line (expressing patient HLA) (expressing patient HLA) © 2019 Neon Therapeutics. 23
NEO-STIM-induced T Cells are Highly Specific for Mutant Peptides Representative data from LTS#P4 Melanoma NEO-STIM-induced NEO-STIM-induced CD8+ memory response CD8+ naïve response 72.1% of CD8+ T cells 6.5% of CD8+ T cells + 3 0 Mutant + 3 0 peptide or CD107a or CD107a or + 2 0 + 2 0 α α * * * * * * * * Mutant or TNF or or TNF or * * * + + * peptide 1 0 1 0 IFNγ IFNγ + + + + Wildtype Wildtype peptide peptide % of CD8 of % CD8 of % 0 0 0 0 . 0 5 0 . 2 0 . 8 3 . 2 0 0 . 0 5 0 . 2 0 . 8 3 . 2 Assay peptide concentration (uM) Assay peptide concentration (uM) (neoantigen loaded DCs) (neoantigen loaded DCs) 88% of NEO-STIM generated responses are mutant specific AACR 2019, Abstract 580, Lenkala, et al © 2019 Neon Therapeutics. 24
Recognition of Autologous Tumor by NEO-STIM Induced T cells 12 * NEO-STIM cells alone + + a 9% of CD8 7 10 NEO-STIM + autologous tumor digest 0 pMHC+ 1 D 8 C r E:T ratio: 1:1 o 6 / + d pMHC E:T ratio: 0.006 : 1 + B n a 4 + ns pMHC N 2 F I 0 pMHC+ A gated on gated on pMHCneg CD8+ pMHCpos CD8+ Tcells Tcells – Induced CD8+ T cells recognize autologous tumors as reflected by induction of IFNy and/or CD107a+ © 2019 Neon Therapeutics. 25
Planned Phase 1 Trial in Second Line Metastatic Melanoma Cohort A: Dose Escalation (Monotherapy) NEO-PTC-01 Dose: 109 Progressed on N=3 patients αPD-1 and received Trial Objectives αCTLA-4 NEO-PTC-01 Dose:1010 – Safety N=3 patients – Clinical activity – ORR – Response durability Cohort B: Dose Expansion – Immune monitoring – Cell viability NEO-PTC-01 Dose: Selected Stable or progressor from Cohort A at 3 months on αPD-1 N=Up to 20 patients © 2019 Neon Therapeutics. 26
Planned Phase 1 Clinical Trial in Second Line Metastatic Ovarian Cancer Stable or progressor Trial Objectives at 3 months on – Safety αPD-1 + chemo – NEO-PTC-01 treatment Clinical activity post-manufacturing – ORR Exclude rapid – Response durability progressors and – Immune monitoring deep responses – Cell viability – Large unmet need for effective immunotherapies in ovarian cancer – Ovarian cancer is characterized by an intermediate mutational burden with evidence from tumor biopsies suggesting the presence of high quality neoantigens (Bobisse S. et al, Nat Communications 2018) – Evidence for ovarian cancer being amenable to a personalized neoantigen T cell approach comes from recent TIL data (Westergaard MCW et al, BJC 2019) © 2019 Neon Therapeutics. 27
NEO-PTC-01: Pathway to Clinical Proof-of-Concept 2H 2019 1H 2020 2H 2020 1H 2021 2H 2021 1H 2022 Clinical Trial Melanoma Application Phase 1 Dose in Europe Escalation Trial Phase 1b Trial Ovarian Phase 1b Trial Cancer Process Development RNA Process Development Note: Dashed lines represent gated programs. © 2019 Neon Therapeutics. 28
Precision T cell Therapies © 2019 Neon Therapeutics. 29
Precision T cell Therapy Candidates Generate potent T cell therapies with high specificity Goal for validated, shared neoantigen targets in genetically defined patient populations – Well validated tumor-specific targets provide confidence in T cell immunogenicity – Optimal T cell phenotype to drive persistence and tumor cell killing – Precision approach provides clear patient selection strategies – Non-engineered products with potential for less toxicity © 2019 Neon Therapeutics. 30
Precision T cell Programs Leverage Neon’s Proprietary and Reproducible Neoantigen Platform Pre-manufactured peptides targeting validated neoantigens Manufactured prior to cell process and pulled off-the-shelf from inventory • Multiple CD8+ and CD4+ neoantigen-specific T cells • Expanded memory plus de novo induced T cells • Polyfunctional profile with Patient Selection Leukapheresis Precision T cell central memory/effector via Gene Panel or Therapy Candidates memory phenotypes ctDNA Assay Culture process © 2019 Neon Therapeutics. 31
Potential for Precision T cell Platform to Target Shared Tumor Neoantigens Across Patient Populations Focus Areas Target Mutation(s) Target Indication(s) RAS G12X Multiple Breast Breast mutation ER+/HER2- Breast BTK mutation r/r Leukemia Resistance Mutations EGFR mutation r/r EGFRmut NSCLC MSI+ Cancers Multiple neoORFs Colorectal + others Prostate genes Prostate Non-mutated Targets Viral oncogenes Multiple Hematologic drivers Multiple AML + others Melanoma Drivers Multiple Melanoma + others © 2019 Neon Therapeutics. 32
NEO-STIM-induced T cells are Cytotoxic Against RAS Epitopes NEO-STIM-induced T cells are highly Target cell: HLA-transduced A375-GFP specific and cytotoxic cells + peptide E :T = 0.05:1 Target cell (48hr) ) Specific T Cells % ( 80 r h 8 No peptide 4 t 60 a h t a e 40 d l l RAS mutant peptide e c 20 c i f i c e p 0 RAS wildtype peptide S RASmut RASwt peptide peptide © 2019 Neon Therapeutics. 33
Precision Approach: Initial Focus on RAS Neoantigens in Pancreatic Cancer Patient Population NEO-STC-01 Targeting shared RAS neoantigens in pancreatic cancer Other Precision Genomic Panel or Mutation-positive T cell Therapies Circulating Tumor Patient Targeting shared DNA Assay neoantigens in genetically defined patient populations © 2019 Neon Therapeutics. 34
NEO-STC-01: Planned Path to the Clinic 2H 2019 1H 2020 2H 2020 1H 2021 2H 2021 1H 2022 NEO-STIM Protocol Optimization in Healthy Donor and Patient Samples RAS Pancreatic NEO-STIM Large-scale Tech Transfer Cancer Process Development to CMO U.S. IND Filing Note: Dashed lines represent gated programs. © 2019 Neon Therapeutics. 35
Corporate Summary © 2019 Neon Therapeutics. 36
Financial Summary Cash balance at 9/30/19 $44.3M Debt $0.0M Expected cash balance at 12/31/19 $25.0M to $30.0M (including restructuring charges, excluding financing) Current cash runway Into Q3 2020 © 2019 Neon Therapeutics. 37
Expected Milestone Timing 2H 2019 1H 2020 2H 2020 1H 2021 2H 2021 1H 2022 NEO-PTC-01 Clinical Trial Initiate Phase 1 Identify Dose & Phase 1/1b Application Dose Escalation Initiate Phase 1b Interim Melanoma in Europe Trial Trial Data Initiate Phase 1b Ovarian Cancer Trial NEO-STC-01 RAS U.S. IND Pancreatic Filing Cancer NEO-PV-01 NT-001 Data NT-002 Presentation at NSCLC Melanoma, SITC Meeting Data * NSCLC, Bladder Cancer * Trial fully enrolled as of April 2019 Note: Dashed lines represent gated programs. © 2019 Neon Therapeutics. 38
Appendix © 2019 Neon Therapeutics. 39
The Current NEO Culture reagents RECON RECON peptides Leukapheresis Input Input Materials cell responses EXPAND aimsto stimulationof round Each PRIME, ACTIVATE PRIME, neoantigen - 0 cliniMACS STIM Induction Process for NEO Peptide X - specific T specific loading & Maturation 1 st and stimulation PRIME Days cliniMACS X Peptide X loading & X Maturation X 1x Induced cultures PRIME & & PRIME EXPAND 2 nd stimulation Days X (cryopreserved) NEO - PTC - PTC - 01 - 01
Optimizing NEO-STIM Variables Different maturation mixes do not Choosing the right starting cell density is critical improve NEO-STIM hit rate for optimal NEO-STIM expansion Naïve CD8 T cell induction using different maturation mixes Donor A Donor B day 14 day 14 6 12 10 n n o o i 4 i 8 s s n n a a p p 6 x x E E d 2 d 4 l l o o F F 2 0 0 Seeding density Seeding density © 2019 Neon Therapeutics. 41
Optimizing NEO-STIM Variables Depleting the leukapheresis of certain cell types improves outgrowth of specific cells Evaluation of starting Fraction of antigen-specific material pre- and post- cells from depleted or non- depletion depleted material Cell Type-1 Cell Type-2 antigen specific fraction PBMC (n = 3 replicates) 25 + 20 C H M 15 p + 8 D 10 C % 5 Depleted 0 input t C t C u M u M p p B n B in i P d P d te te le le p p e e SSC d d donor A donor B © 2019 Neon Therapeutics. 42 Marker-1 Marker-2
Using mRNA in NEO-STIM Produces Neoantigen-specific CD8+ T cells Similarly to Peptide NEO-STIM Cultures Peptide Neoantigen- specific CD8 cells: 1.47% De novo Neoantigen Absolute Cell Numbers in NEO-STIM 2 0 0 0 0 0 ) r s e l l b 1 5 0 0 0 0 e m C u n N e g e 1 0 0 0 0 0 i t t u n l a o o s e 5 0 0 0 0 RNA b N A ( Multimer A Multimer NeoAg 0 specific CD8 e A d cells: 1.67% ti N p R e P Cognate pools of epitopes were encoded in peptide or mRNA form and introduced into NEO-STIM cultures • Frequency of multimer specific T cells were similar in both cultures • Increased neoantigen-specific cells in RNA cultures due to better fold expansion Multimer B pMHC multimer staining of NEO-STIM cultures
NEO-PTC-01: Regulatory Overview Filing CTA/IMPD in Netherlands for first in human (FIH) trial – Engaged with the Netherlands Heath Authority through a customized advice meeting with Medicines Evaluation Board – Consider other countries (e.g., Denmark) after approval from Netherlands Health Authority Medicines Evaluation Board (MEB) in Utrecht meeting on July 11, 2017 – Customized Advice – Attendees from MEB and CCMO – Committee well informed about cell-based products
NEO-PTC-01: Dutch Health Authority Feedback: CMC – Confirmed Neon’s position on Drug Substance and Drug Product – Agreed on classification of input materials: Input Confirmed Classification RECON bioinformatics Critical equipment Patient-specific peptides Critical raw material Patient apheresis Starting material product – Agreed that in-process and release testing and specification setting strategies are appropriate at this stage of development – Agreed Drug Product characterization tests are suitable to support initiation of the planned clinical trial – Agreed to design of the stability study and approach to assignation of expiration date for Drug Product
NEO-PTC-01: Dutch Health Authority Feedback: Pre-clinical and Clinical – Agreed that pre-clinical study plan will likely result in sufficiently studied proof of concept – Agreed that animal studies are not required to support the proposed clinical trial – Agreed to flat-fixed dose levels; advised to start at a lower dose – Agreed that proposed safety monitoring is sufficient to evaluate the safety during the clinical trial – Agreed that duration of the clinical trial is relevant and sufficient to evaluate short-term and long-term preliminary safety – Agreed to proposed lymphodepleting chemotherapy regimen