All right, let's go ahead and get started. Welcome, everyone. Thanks for joining. This is the Fireside Chat with 2seventy bio. I have with me on the stage, Chip Baird, CEO, Vicki Zwicker, CFO. Chip, Vicki, thank you for joining us. Appreciate it. Thanks for having us. My name is Vikram Prasad. I'm one of the biotech analysts with the Morgan Stanley research team. I need to read a brief disclosure statement before we get started. For important disclosures, please see the Morgan Stanley Research, Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, let's dive right in. Chip, maybe for those that are not super familiar with 2seventy bio and some of the recent news events, do you want to just recap for us, kind of where the company is now, what some of the key inflection points have been, and then we can go into detail from there? Sure. And Vikram, just start by saying thanks for having us at the conference. Good to have you. Thanks to the broader team at Morgan Stanley. We're happy to be here. We also may make forward-looking statements throughout our conversation here, so encourage people to do their homework on the company. 2 seventy bio, just by way of background, was founded through the spin-out from bluebird bio in the fall of 2021. Focused on CAR T therapy in oncology. Over the past six months, we've made some pretty fundamental transformations to the company. In January, we announced an asset purchase agreement with our existing partner, Regeneron, whereby we sold most of the research pipeline and about 160 employees and a lot of our space to Regeneron to create Regeneron's cell medicines business, and that's off and running and a great thing. We sold in June our heme program to Novo Nordisk, also an existing collaborator, but they now have that program and the team that goes with it 100%. Today, 2seventy bio is a streamlined company focused exclusively on our commercial product Abecma. Abecma was the first approved CAR T therapy in multiple myeloma, targeting BCMA. We were the pioneers and innovators that discovered that product and really did the first clinical work against the BCMA target many years ago. Today, that product is approved in the third line. It was approved in the third line earlier this year, and that's a large commercial opportunity, and we're focused here in the U.S., bringing Abecma to as many patients as we can, together with our partners at BMS. That's a high-level overview of the company, and, you know, we're excited about what we've been able to achieve so far this year. Now focused on growing the Abecma franchise as effectively as we can. Great. That's a great, great intro, great place to kind of go into specifics on Abecma. Like you just alluded to, the return to growth for Abecma is one thing that you've been emphasizing as a priority for some time, as is BMS. You did mention that you did see some demand growth in 2Q. ... for Abecma. What do you think has been driving that? Yeah, I... You know, I think the biggest thing is, the, the relaunch of the product, on the heels of the third line approval. In April, the FDA gave us approval, for the, third line indication, on the heels of the KarMMa-3 data, and that opens up a much larger, market opportunity. We previously, we had been approved in the fifth line setting. That's about a 4,000 patient opportunity in the United States. When you add it to the larger, now third line opportunity, we have an addressable market that we estimate in the 16,000-18,000 US patient range. A much larger opportunity, and now we are out in the field, together with BMS, together with that sales force, detailing to the KarMMa-3 data sets. This is the first controlled study in myeloma, pivotal controlled study in myeloma, using a CAR T therapy. I think the efficacy messages that we've seen there, the consistent safety profile, and just candidly, a much broader data set than the original KarMMa data set, all have been factors that have contributed to the growth and demand that we've seen since April. Got it. Do you think there was any significant revenue impact from the third line label expansion in 2Q? In 2Q, not as we had previously guided, we did not expect to see a lot of impact on revenue in 2Q. We did turn a corner, and we kind of messaged that on earnings in the sense that we regrew revenue modestly. We achieved about $54 million of revenue in the second quarter. More importantly, we saw growth in apheresis. Apheresis is the moment that we collect the patient cells to bring back to our facility in Summit, New Jersey, to do the manufacturing of Abecma for that patient. The reality is, from the time we identify and enroll a patient to the time we deliver the cells back to the patient and infuse them and recognize revenue, that's about a two-month process, plus, minus. With an approval in April, that demand and that increase in the number of patients going through apheresis, that's really gonna pull through in terms of revenue growth in the third quarter. We expect to see more meaningful growth in the third quarter and beyond, and, you know, we look forward to sharing those results later in October. Great. Great. I guess qualitatively, what are some of the early signs you're seeing of broader use from the third line label expansion? And what are you seeing patients and prescribers think through as they make the decision on whether Abecma is the right choice for their, for their third line—for their disease in the third—in the third line setting? Yeah. You know, I think we refer to green shoots or, you know, sort of early indicators of renewal and return to growth. We've talked about one already, which is the increase in the number of apheresis, number of patients going through that process. You know, we've seen gradual, consistent month-on-month growth there, which is good. We get the question sometimes, "Is there a bolus here?" You know, I think that was true in the fifth line, less true here. I think it's more, you know, we expect, and we are experiencing more steady growth in terms of the number of apheresis and that. Beyond, you know, the increase in patient demand, you know, I think we've been encouraged to see centers and physicians returning to Abecma. Physicians and centers that had gone dark and not used Abecma for a period of time, coming back and revisiting that decision and using Abecma again. This is a business where the top major academic and centers contribute to the majority of the commercial opportunities. When we get one of those back online, that has been a big deal for us. We have seen that and, you know, I think more to come, but, you know, certainly those are some of the indicators that have been positive for us. We can get into more. I think you had other questions, just in terms of how people think about that, that decision to use Abecma. Yeah. How are people thinking about whether Abecma is the right, the right option for them, for their third-line condition? What are you seeing kind of prescribers think through? What's driving decisions to go for it, versus at this point, decisions maybe to wait a little bit? Are you seeing any of... any considerations there might be? Yeah. We're, you know, I think the KarMMa-3 data set really sets up well. This is a set of patients that were triple class exposed to the major- ... treatment options in that line. And largely, we were refractory, largely, you know, had, a, an aggressive form of myeloma. And so, you know, we were able to show a, a pretty profound difference in terms of PFS, when, when they're treated with Abecma. And so those are patients who, you know, we've, we've focused on and we've, we've, pointed physicians to, as, as being eligible and, and good candidates, for Abecma. You know, I think when you compare other treatment options, certainly, the evidence is pretty clear that if you have a CAR, slot available, that that's gonna be preferable to do that before T-cell engager. Some T-cell engagers target, you know, BCMA as well, but we, we believe, and I think the evidence suggests that, you know, you, you lead with the, with the CAR there. I think the other thing that is a factor, and it's one that we've emphasized commercially, is the predictable safety profile of Abecma. And, you know, that's one that we saw in the original KarMMa study. We've seen again in KarMMa-3. You know, these therapies are powerful therapies that can drive deep and durable remissions, but they also have side effects. Some of the side effects, like CRS and ICANS, the field has learned how to manage. Other side effects, delayed neurotox, Parkinsonism, are harder to manage, are harder to attenuate, are, are hard to predict which patient might experience that. Again, in a third-line setting where absent CAR T therapy, the patient still has other options and years of therapy in front of them and years of life in front of them, that risk and the calculus around that risk is just different. Right. That's one that we've been making sure physicians understand. Got it. On that point around messaging, how significantly has the sales force been expanded to kind of help with the initial uptake curve for Abecma in the third-line setting? What are, I mean, holistically speaking, some of the key messaging points now around the value proposition of the product, and why, why it should be seriously considered for third-line Yeah ... fourth-line disease? Yes, we haven't given specifics in terms of the number of reps or MSLs, but we focus both on CTAMs, which are, you can think of as the sales reps, cell therapy asset or account managers, and then MSLs, who are more of a scientific, doctor-to-doctor interaction. Both are important in our efforts and in their interactions with physicians. In terms of... And one thing I would say, too, is that we have seen that the product is promotion sensitive, and the team has been doing a great job in terms of getting the reps, getting in front of docs. We've heard those docs repeating messages back to us that they've heard, you know, so it's those messages we think are landing. In terms of the specific messages, you know, one is that, you know, when you look at the KarMMa data set and you think about efficacy, bridging matters. One of the key findings, and we spent a lot of time with this, even at the ODAC panel with FDA, is that the effect of bridging is real. When you can give a patient a bridging therapy, debulk that patient prior to receiving the CAR T therapy, those are the patients that we've been able to drive the deepest and most durable responses in. The bridging matters, and when you give effective bridging, the efficacy gap relative to the other commercially approved CAR T narrows. That's a really important point and a really important data set for people to understand. We also touch on safety, and again, I think we've talked about that, but the consistent safety profile of Abecma, I think, is important, particularly in the earlier line. The last is, you know, the manufacturing process. You know, we have slots readily available, so there's no delay, which is important anytime you're talking about cancer. We—a shorter turnaround time, about 25 days on average, and we're able to manufacture in spec. This is a complicated process, as you can imagine, and when products are not in spec or not able to be released in spec, that creates all sorts of downstream impact for the patient and the treating physician. Those are, I think, some of the key messages, and, you know, we think they've been resonating, and I think that's been part of the story that's been able to bring some people back to the fold. Got it. And the twenty-five day timeline you just mentioned, just to clarify for everyone, is that what people conventionally call the vein- to- vein time, or is that the— Yeah, and we define it slightly differently. We, because we, we focus on what we can control. It's the time from the apheresis- Yeah ... that we collect the cells to the time the product is ready to ship, is released for shipment to the site. It's more like holistically, your manufacturing time? Yes. Yeah. Because sites have all sorts of different motivations and considerations in terms of when they receive those cells and deliver them to the patient. Got it. Sometimes it's a very short, you know, it's 25 days plus one. Sometimes it's longer. Right ... because of schedules, or patient considerations, or physician considerations. Got it. Got it. That's helpful. So taking a step back and then looking at the return to growth, for Abecma again, do you think that is fully tethered to third-line uptake, or do you think the stronger commercial efforts could also spur uptake in the fourth-line, fifth-line setting, and that should also be a part of the return to growth for the second half of the year? Yeah, it's a great question. We think it's a little bit of both. We do think there's been a, a increase in, in the later line. Again, part of that is the renewed energy around the product and the detailing of the product and the larger data set we're now able to describe and talk about compliantly with physicians. Of course, the third line, there's a huge opportunity and one that I think will grow into over time. Again, I... We see it more as linear in terms of what that growth path is likely gonna look like. Yeah. But that can be a great thing, and, you know, it doesn't, as we've said, you know, stepping back from Abecma and the commercial dynamics for our business, for our valuation, for our path to profitability, and I think we'll get into it later, but it doesn't take a lot- Yeah ... where we sit today. Yeah. Yeah. That is actually, I think, a great, great next topic to go to. I mean, generally speaking, I mean, now that you've kind of enacted some pretty significant cost reduction efforts, you have the aspiration of Abecma returning to growth pretty significantly in the second half of the year. What is the goal for break-even profitability? What's the timeline to get there? Yeah. Vicki, you wanna take that? Yeah, sure. In terms of our goals, obviously, the path to break even is really contingent upon two things. First and foremost, the return to growth, as Chip has been nicely describing. That's obviously paramount. Second is the control that we have over the 2seventy bio cost structure. We have taken significant actions, as Chip highlighted earlier, to really curtail our spend. At the beginning of the year, we had guided that we would save $150 million this year over last year, and we're well on track, making good progress towards that goal. I think the convergence of those two things will sort of pave the way for us to become break even, and then hopefully thereafter, profitable. Yeah. Got it. Got it. You, some time ago, you used to provide US sales guidance for Abecma, that was held back for some time. At what point would you feel comfortable reinstating sales guidance? It's a good question. I think for those that are following the BCMA-targeted multiple myeloma space, you know that it's an extremely competitive, dynamic market. One of the things that we can say is that one constant is change. From our perspective, the thing that's most important for us to do today is to post the results and to show the growth. We obviously need a few sequential quarters of that before we feel comfortable giving additional guidance. It continues to be a show me story, and that's what we plan to do. Got it. Got it. And to play devil's advocate, in the third line setting, what do you foresee as the biggest challenges when you and BMS kind of plan out the commercial strategy? What are the biggest hurdles for uptake? Whether that's inertia, maybe it's from some prescribers and patients, or a lack of awareness, or competition from... You know, obviously there's another player with a second-line, third-line- Yeah ... label, and there's also the availability of bispecific antibodies. Which of those factors do you think presents kind of the biggest hurdle for, for commercial uptake in the third-line setting? Yeah, I mean, I would-- all of them. All, all the above. Is that a choice? Sure. Yeah, no, we think about all of those factors, and, you know, I would comment that the history of myeloma is one that it's never been winner take all. I think these decisions ultimately, in terms of which product to use, are physician-specific, are patient-specific. You know, I, we have a meaningful share today. We expect that the market's gonna grow. We are doing our part to grow that market in terms of investment in engaging with physicians, investment in moving to more sites, increasing the geographic footprint of where we can deliver. Because, again, our manufacturing capacity is only one of the capacity constraints, and if you solve a capacity constraint there, you might create a capacity constraint somewhere else. We are doing what we can as part of the broader ecosystem to contribute to that as well and expand the use of CAR T therapy into these earlier lines and to get to more patients. It is all above, but I would say for each of those, whether it's T-cell engagers, or whether it's, you know, comparisons to Carvykti, you know, we-- I think the team is ready and, you know, has thought that through and has, you know, appropriate messaging to address. Got it. Got it. I guess going back to the topic of break-even profitability, assuming you get there on the timeframe that you mentioned, and you kind of hit those hurdles, what would be the next step for the business holistically? What would you envision the company looking like? Would it still just, in your base case, continue to be the Abecma profit split kind of flowing into the P&L? Or do you think that creates optionality for bringing new assets into the company or doing something a little bit different with the P&L to kind of provide some flexibility? Yeah, it... That's a great question. I mean, our answer has been, you know, "Ask us when we get there. Yeah. I think two things. One is, we're not gonna be distracted from getting there, so we have a very explicit focus, and we're not gonna deviate from that. As you heard from Vicki, that could be as soon as next year, that we get to a moment of cash flow break-even, which would be amazing, and creates a number of things for us. It creates capital markets independence, it creates strategic optionality, and it creates a company that, from a valuation perspective, is just, it's just different because you're not, well, you know, if this happens and if that happens. Right ... and then I can build a model that says it's worth X, you actually have those inputs, and you can see it. Again, all of the things you mentioned from, you know, potentially other assets or, you know, appropriately returning capital, I mean, there's lots of different things we could do. Our focus is, right now, is a hundred percent on just getting to that moment in the, the quickest, most efficient ways that we can. Got it. Got it. Okay. I guess when you think about just the path forward again for Abecma, how are you and BMS thinking about what the entry of a potential new competitor could be? Obviously, Gilead and Arcellx- ... are progressing anito-cel, as another BCMA CAR T agent. There has been a good amount of focus on that asset recently in the space. Yeah. How does that factor into your, your views on return to growth and what you and BMS need to do to be prepared for another agent- Yeah ... to compete against? Yeah. Look, we, you know, we, we track that asset and along with all the other competitors, and it's, you know, it never ceases to amaze just how busy and competitive the field is. You know, again, we'll have to see more data, and again, the early data set, small sample, like, very interesting, how that plays out in a more registration-directed study, what regulators make of that, what kind of label comes out of that. You know, all of that is TBD. Ultimately, that's to the benefit of patients, and, you know, we, we believe in that very much. Again, ultimately, we're all gonna be at different points in our journey with these products. You know, if there is a third entrant, you know, at that time, we will be in the third line-plus setting for a couple of years. We are developing the product in the frontline setting as well and making investments there. You know, I think it will all play out over the goodness of time, but we will have to, you know, understand the datasets better before we kind of understand where we play. I think all of them, you know, it is easy to simplify prior to larger datasets coming out and say, "Well, if you could have efficacy looks like this without any of these safety concerns," and it is not often that you see absolutes come out of— Right I think all that will exist on a spectrum, whether it's efficacy or safety or any of those factors. Got it. Got it. Okay. You brought up your earlier line work, so... I did wanna touch on that KarMMa-9. Just would love to get an update on how that study is progressing and kind of what you see as the opportunity for Abecma if KarMMa-9 were to be successful. Yeah. So KarMMa-9 is a study that is underway, phase 3 study, looking at patients with a suboptimal response to transplant. You know, ostensibly a frontline study, and this is a subset of frontline patients. It's about 5,000 additional patients on top of the third line set of patients that we have today. It's a meaningful patient population, and it's one with a high unmet need. These are patients who were eligible for transplant but don't achieve a complete response. We have seen evidence in KarMMa-2 Cohort C that in that set of patients, that patient profile, we're able to drive very deep, very durable responses. I think our belief in the odds of success of that study is strong. We're out there opening sites right now, enrolling patients, and as we move through, we can get more specific about timing and what that could look like. You know, certainly, and we, both with KarMMa-9 and other forms of data generation, investigator-sponsored studies, we continue to support the product and explore, you know, ways to further optimize the utilization of Abecma for myeloma patients. Got it. Got it. From a design perspective, does the design and, and do the trial's endpoints give you the flexibility to talk with the FDA about, seeking approval, potentially based on MRD negativity? Obviously, that's been a, a discussion- Yeah. Recently. The FDA's talked about it recently and have telegraphed that there's the potential to have that discussion. Absolutely. What are your thoughts on, on the use of that endpoint and what that could mean for KarMMa-9? Yeah, that was so... You know, earlier this year, we, we, MRD as an, as a, a potentially acceptable endpoint, you know, was something that came out, and that was years in the making, and that's, you know, that's great, for patients, that's great for drug development, that could shave a lot of time. And so MRD negativity is an endpoint that we're already measuring as part of KarMMa-9. You know, how that impacts and, and where we are with that with FDA, you know, I would say, generally, oops, all of our regulatory conversations appropriately happen behind a pretty heavy curtain. You know, and that's, I think, the right way. If, if... You know, certainly if we're able to elevate that, you guys would be the first to hear. Got it. Got it. Okay. Are there-- When you think about the potential, and I know this is sometime in the future, but, you know, past, past potential break even, past potential profitability, when you think about kind of preferentially allocating, you know, I guess, investment dollars- How do you think about additional investment in, I guess, maybe additional slivers of multiple myeloma patient populations, where Abecma could further be evaluated versus completely new assets and completely new therapies to bring under the umbrella? Yeah, I think there's lots of-- I mean, there's, even in a company like ours, and together with BMS, we're, I think, capital constrained, not opportunity constrained. There's always other studies. I was just having a call with an investigator this week who had an idea for a different way of doing lymphodepletion and how that could potentially impact Abecma and kind of the efficacy that we see with Abecma. There's no shortage of those ideas out there, and I think we'll continue to follow the science and appropriately allocate capital if it makes sense and can further the utilization of the asset and benefit patients. You know, I think beyond that, other assets, I think it would have to be, you know, clear a high hurdle from an investment case and allocation of investor capital. You know, I think it would be... Not to say it wouldn't happen, but it would need to be narrowly fit within the things that we do today. You know, we've streamlined the company down to about 60 people, most of whom are focused on QC and some of the work having to do with the vector that is used to make Abecma. Yeah. You know, it would need to be more than, I think, a financial investment. I... You know, you'd want it to leverage a capability or knowledge set that we're using today. Got it. That leads you back to the most likely, you know, would be on additional studies and exploration of, of things you can do with Abecma. Got it. Got it. Okay, that makes sense. You did mention earlier that coming back to, I guess, the commercial efforts behind Abecma. your view, that it's a promotionally sensitive market. I mean, given that, do you think there's an ambition to do kind of another round of investment in the sales force? You know, assuming you see a return to growth- later this year, and you can kind of tie that back, at least partially, to the investment dollars and putting more people in- into the field. Yeah. Do you think that's worth doing again in 2025? Yeah, I mean- I feel like you're- That's... We're, we're in that cycle right now. It's, you know, it's budget season, and- Yeah ... and, you know, I think we, you know, together with BMS, you know, calculate the return on investment for, for those, for the field force and, and for the people out, interacting with physicians. I think if, if we're seeing a return there, you know, the question will be like: How much more could we drive- ... and what's your belief set there? It's definitely something on the table. You know, if we make decisions that kind of rise to the level of materiality, we'll talk about it. Again, I, together with our partner at BMS, have been a little circumspect in terms of laying too many breadcrumbs there, just from a competitive perspective. Sure, sure. Understood. Final question I'll ask you on the path to break even. I know you're not providing guidance or a specific number on kind of what level of sales you need to kind of get there, but- ... just generally speaking, what's the best way to think about the, I guess, the bookends of sales that could help you kind of work towards that level? Yeah, we actually have provided guidance on that, so I'll just reiterate that we've been saying that we don't need that much, as Chip mentioned earlier, and that number happens to be a number slightly lower than $400 million of total US sales in order for 2seventy bio as a whole company to break even. Obviously, that hinges on things like gross margins and how much above, you know, the margins are continuing to improve, just given some of the lumpiness that we have seen in the past. Obviously, with a return to growth and more demand comes better margins. We're pretty confident that we've paved the way with all of the cost-cutting actions that we've taken to be able to achieve that. Got it. Got it. Okay, helpful. We do not have too much time left. Final question to close things out, I guess maybe a question for both of you, 'cause what do you think is right now kind of the most misunderstood aspect of the story, and the most, from your perspective, the most misunderstood aspect of the market, of Abecma, commercial dynamics, and, you know, what would you guide people to, to think about over the kind of the next six to twelve months? Kind of get, from your perspective, a more- Yeah ... comprehensive picture of the story. Yeah, no, I, I'd... I mean, I think the thing we run into a lot is just a group of folks who it's sort of, it's game, set, match, and, you know, the market and the opportunity is all gonna, you know, flow to a single competitor. I think the history of myeloma therapy going back a long ways would cut against that. I think in, particularly with earlier line patients, the benefit- risk profile is just, is different, the safety considerations are different, and the data that we saw from KarMMa-3 and the importance of bridging put us in a position where we have a product that we think is differentiated from a safety perspective, but also is competitive and relevant from an efficacy perspective. Getting people to, whether it's physicians or, candidly, investors, to think about that and to revisit that, I think is the work that's in front of us. We've cleared the decks. ... from the things we can control in terms of cost structure of the company and the setup, and we're happy with where we are there. It's doing that work, and it really is center by center or investor by investor, for this audience, in terms of educating on that story. Got it. Got it. With that, we're at time. We'll go ahead and close out. Chip and Vicki, thanks so much for joining us. Appreciate it. Thanks everyone for listening in. Thanks for coming. Thanks. Thank you.