A Perspective on Strategy, Patience and Belief

Six months ago I made the transition from CEO to Executive Chairman of Poseida Therapeutics to focus more on strategy and strategic corporate development. Despite the ongoing headwinds and volatility in the industry, the company’s steady progress and growing opportunity set has continued to support our long-held belief that Poseida has the technology and the strategy that will succeed in the long run.?

As we look into the second half of 2024 and beyond, we continue to be excited by our science and technology, our progress across multiple fronts and the multitude of opportunities that lay before us. We believe a longer-term perspective is required to look beyond the current volatility and disruption in the industry and remain focused on delivering on the promise of allogeneic CAR-T and non-viral genetic medicines for patients. The biotech industry has been in a volatile period and the macroeconomic and geopolitical turmoil is not helping – but all these things will resolve in time.?

Strategy combined with strategic execution

The Poseida team continues to execute against our long-term strategy. Those who are watching can observe the benefits emerging of that strategy and strategic execution. A few examples and observations:?

• Since we established our collaboration with Roche in 2022, we have suggested that the terms of that collaboration have strong strategic and financial benefits to Poseida that seem underappreciated by the markets. Some of those benefits are starting to publicly declare themselves as Poseida is earning an increasing number of milestones and payments that help strengthen our financial position and provide strategic flexibility. We expect that to continue through the rest of 2024 and beyond. As a reminder, the Roche collaboration is a broad and deep collaboration centered on hematologic malignancies that could include up to ten programs and a potential of over six billion dollars in milestones and payments plus royalties. The collaboration has been very fruitful thus far and we are just getting started.?
• In addition to the Roche collaboration, we recently announced a collaboration with Astellas in allogeneic cell therapy for solid tumors that builds on a strategic investment that Astellas made in Poseida last year, which means we entered into two separate transactions with Astellas in less than a year. The collaboration with Astellas uniquely combines Poseida’s technology and platform with technology of Astellas to explore another novel approach to allogeneic cell therapy for solid tumors beyond our core area of pipeline focus. ?Astellas’ strategic investment plus this collaboration is further strong validation of our differentiated technology and approach to allogeneic cell therapy and supports our strategy and plans.?
• Poseida also continues to make progress on our internal efforts in allogeneic cell therapy for solid tumors, non-viral in vivo gene editing and gene therapy programs, as well as ongoing genetic engineering technology development. In allogeneic cell therapy our focus on high-Tscm allogeneic cells is starting to demonstrate its benefits in the clinic and we expect that to continue and are seeing broader recognition of that approach which we have pioneered. In addition, our focus on non-viral approaches to gene editing and gene insertion are also emerging with positive pre-clinical data and plans for INDs moving forward. ?We recently highlighted our genetic medicines efforts at an R&D Day in April and will host an R&D Day for cell therapy in Q4.?

The combination of our platform technology, partnering capabilities and disciplined approach to investment have allowed Poseida to continue to make progress while many others have experienced challenges. In the last two years an unprecedented number of companies in biotech have undertaken large layoffs, terminated programs, and even closed their doors. Because of our differentiated technology and strategy, we have been afforded the opportunity to continue moving forward with our science and programs without the need for more significant action. Said another way, we are excited and optimistic about what’s ahead.?

Addressing hard problems takes patience paired with sound strategy

It is worth noting, we also believe that a combination of strategy and patience is needed to address hard scientific and clinical problems. Allogeneic cell therapy for solid tumors as well as non-viral in vivo gene editing and non-viral in vivo gene insertion are tough scientific and clinical challenges that we are committed to addressing. That takes patience, perseverance and perspective. As we all know, R&D in novel drug development approaches is not a straight line and not predictable. We are unafraid of difficult tasks.?

In the last year or so, we have seen many in the industry struggle, especially in allogeneic cell therapy and viral-based gene therapy. Those industry-wide challenges have caused investors to pull back and seen many companies pivot away from allogeneic cell therapy for oncology and in vivo gene therapy.? To a degree that is a sad and unfortunate trend for patients and for scientific advancement although we acknowledge that, in many cases, they did not have the right approach to prevail.?

One case in point from the headlines is using cell therapy for autoimmune diseases, which has created quite a frenzy. Since the publication of some academic data out of Germany last year, dozens of companies have rushed into the space and started to pursue this idea. To us, it does not appear that many of these companies have the right technology nor a well thought out strategy but rather were rushing for first mover advantage – seldom a recipe for long-term success. ?More than a few have pivoted to autoimmune not out of a position of strength, but because their oncology plans ran aground. ?

We absolutely believe that cell therapy can, and should, play an important and even transformative role in autoimmune disease.? However, we also believe that a strategic and thoughtful approach of how and where to begin is prudent – cell therapy is unique and autoimmune is not oncology.?

In oncology, cell therapy approaches are varied and have different approaches and outcomes in different applications – the variables are many.? Liquid tumor vs. solid tumor, cell type choices, cell subtypes, targeting moieties, potential combination therapies, patient selection approaches, dosing regimens, lymphodepletion regimens, and the list goes on. Unlike biologics and small molecules, we are also talking about developing and manufacturing a living product, which brings a host of challenges and opportunities.? Together, it is a complex endeavor.??

Exploring cell therapy in autoimmune is no different. There are many different autoimmune indications and varying levels of severity within indications and every reason to expect each will be somewhat different. A host of scientific and clinical development questions that need to be examined with different attributes and considerations than oncology. In addition, manufacturing remains equally complex – especially for those not familiar with cell therapies.? We also believe that to explore larger patient populations such as autoimmune, an allogeneic cell therapy approach will be essential to success.?

Autoimmune represents an intriguing and potentially significant opportunity and we believe that we have the right technology and approach to stand out from the crowd. ?

Cell therapy and gene therapy represent the future and Poseida is well positioned to succeed?

After six months in the Executive Chairman role, the management team and I remain excited about the future for Poseida and that excitement is rooted in a few core beliefs:?

• We believe that genetic medicines will represent the biggest potential growth area of drug development for years to come.?
• We believe that high-Tscm allogeneic cell therapy is the key to unlocking the potential of cell therapies in oncology (both liquid and solid tumors) and also in disease areas like autoimmune. ?

• We believe that non-viral delivery of gene editing and gene insertion therapies is the future for genetic medicines for many rare diseases and beyond.?

• We believe that Poseida has a highly differentiated genetic engineering toolset and approach that will enable us to deliver on the promise of those therapies.?

• We believe that we cannot do it all alone and that our strategic partners share these beliefs and that we continue to need strong strategic partners to unlock the potential of our technology.?

While it is disappointing that the market has not yet recognized what we believe is a very compelling value proposition, we are confident that recognition will follow. In time, the financial markets and geopolitical turmoil will settle down. If we practice patience and continue to execute on our strategy, the value will become more broadly recognized by the industry, investors, and others.?

If you are a believer, follow us, join us or support us as we strive to unlock the value of genetic medicines for patients.