Engineered TACs Prevented Hyperglycemia in Type 1 Diabetes Models by Deletion of Target T Cells and Increase of Regulatory T Cells that Exerted Potent Bystander Suppression

Data Presented at Federation of Clinical Immunology Societies

SQZ Biotechnologies Company (NYSE: SQZ), focused on unlocking the full potential of cell therapies for multiple therapeutic areas, is presenting preclinical results from the company’s Tolerizing Antigen Carrier (TAC) program demonstrating that its engineered TACs can drive antigen-specific immune tolerance through key mechanisms relevant to many complex autoimmune diseases. In models of Type 1 diabetes (T1D), SQZ™ TACs were able to delete antigen-specific T cells, without causing non-specific immune suppression, ultimately preventing hyperglycemia. Importantly, SQZ TACs increased antigen-specific regulatory T cells (Tregs) that exerted potent bystander suppression, showing the ability to suppress pathogenic T cells with different autoantigen specificities. Together, these results suggest that SQZ TACs are a versatile platform for inducing antigen-specific immune tolerance. The data will be presented on Thursday at the 2021 Federation of Clinical Immunology Sciences (FOCIS) annual meeting.

“The holy grail for effectively treating autoimmune diseases is the ability to precisely target autoreactive T cells without inducing broad immunosuppression,” said Howard Bernstein, M.D., Ph.D., chief scientific officer at SQZ Biotechnologies. “We are very excited to see our TACs induce multiple mechanisms of antigen-specific tolerance with long lasting effects. We believe the ability of our TACs to increase regulatory T cells capable of bystander suppression may enable the development of differentiated therapies for complex autoimmune diseases.”

Critical to the development of tolerogenic therapies for many autoimmune diseases is the ability to regulate both autoreactive CD4 (helper) T cells and CD8 (killer) T cells, which are often involved in the attack seen on healthy cells in autoimmune diseases. These preclinical studies tested SQZ TACs in multiple models of T1D.

Major Findings from Autoimmune Disease Models:

• Disease Suppression: Engineered TACs significantly delayed onset of disease to a median of 65 days compared to 8 days in controls of a T1D model driven by pathogenic CD4 T cells. All doses were administered within the first 4 days of disease induction. In another T1D model where disease was driven by pathogenic CD8 T cells, the TACs prevented onset of T1D for all animals. All doses were administered within the first 2 days of disease induction.

• Reduction of Disease Driving T Cells: TACs reduced frequency of disease driving CD4 T cells in the pancreas 5-fold and decreased the secretion of proinflammatory cytokine interferon gamma – a major driver of disease in this model – by 126-fold. The engineered TACs also reduced disease driving CD8 T cells in the pancreas by 60-fold and decreased secretion of proinflammatory cytokine interferon gamma by 375-fold. In addition, there was a nearly 4-fold increase in antigen-specific apoptotic CD8 T cells in the pancreas.

• Increase in Regulatory T Cells: In the T1D model driven by pathogenic CD4 T cells, antigen-specific Tregs in the pancreas increased by approximately 5-fold and the suppressor cytokine IL-10 by about 6-fold.

• Bystander Suppression: In a model where both pathogenic CD4 and CD8 T cells were present, treatment with TACs encapsulating CD4 antigen alone increased frequency of antigen-specific Tregs by 3.5-fold, reduced the number of CD8 T cells of a different autoantigen specificity by 10-fold, and decreased interferon gamma secretion by 9-fold – displaying strong bystander suppression.

These robust preclinical data demonstrate that SQZ TACs can restore T cell tolerance to self-antigens through multiple mechanisms and highlight the broad potential of the SQZ platform to enable antigen-specific immunotherapies for complex autoimmune disease.

Poster Presentation Details

Title: SQZ™ TAC Cell Therapy Platform Induces Antigen-Specific Tregs and Prevents Onset of Diabetes in Adoptive Transfer Model

Abstract Number: Th128

Poster Session: Thursday, June 10, 2021 - 4:45 PM - 5:30 PM PDT

About Type 1 Diabetes

Nearly 1.6 million Americans are living with Type 1 Diabetes (T1D), including about 1.4 million adults and 200,000 children and adolescents (<20 years). Five million people in the U.S. are expected to have T1D by 2050. A separatee CDC study of T1D cases in youth showed that 60 percent of diagnoses occur between the ages of 5 and 14. Worldwide incidence is 15 patients diagnosed per every 100,000 people. There is no cure for T1D, and it requires chronic disease management through exogenous insulin therapy, insulin analogs and adjunctive treatments for glycemic control. The life expectancy for T1D patients is 10–15 years less than the healthy population due to hypoglycemia events and long-term risks of cardiovascular complications, neuropathy, kidney damage, and retinopathy. There remains significant unmet need for disease-modifying therapeutics that address the autoimmune-mediated attack of beta cells as a driving factor of disease pathogenesis.

About SQZ TACs

SQZ TACs are a red blood cell-derived cell therapy candidate being developed as an antigen-specific immune tolerance platform. The platform is designed to leverage the natural process of RBC clearance by professional antigen presenting cells (APCs) in the lymphoid organs, where they engulf aged RBCs and present their components to CD4 and CD8 T cells. This physiological mechanism is tolerogenic by default, instructing the immune system to not mount an attack. SQZ TACs are generated by squeezing RBCs with disease-specific antigen and are made to appear aged. SQZ TACs are designed to be rapidly engulfed in vivo by patient’s professional APCs and to act as a “Trojan horse” to drive high quantities of antigen through the tolerogenic RBC clearance process, inducing tolerization of the patient’s T cell and antibody responses against the specific target.

About SQZ Biotechnologies

SQZ Biotechnologies is a clinical-stage biotechnology company focused on unlocking the full potential of cell therapies to benefit patients with cancer, autoimmune and infectious diseases. The company’s proprietary Cell Squeeze® technology offers the unique ability to deliver multiple biological materials into many patient cell types to engineer what we believe can be a broad range of potential therapeutics. Our goal is to create well-tolerated cell therapies that can provide therapeutic benefit for patients and improve the patient experience over existing cell therapy approaches. With accelerated production timelines under 24 hours and the opportunity to eliminate preconditioning and lengthy hospital stays, our approach could change the way people think about cell therapies. The company’s first therapeutic applications seek to generate target-specific immune responses, both in activation for the treatment of solid tumors and in immune tolerance for the treatment of unwanted immune reactions and autoimmune diseases. For more information, please visit www.sqzbiotech.com.

Forward Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements relating to events and presentations, our product candidates, preclinical and clinical activities, development plans, clinical safety and efficacy, applicability across disease states, regulatory compliance, and therapeutic impact. These forward-looking statements are based on management's current expectations. Actual results could differ from those projected in any forward-looking statements due to several risk factors. Such factors include, among others, risks and uncertainties related to our limited operating history; our significant losses incurred since inception and expectation to incur significant additional losses for the foreseeable future; the development of our initial product candidates, upon which our business is highly dependent; the impact of the COVID-19 pandemic on our operations and clinical activities; our need for additional funding and our cash runway; the lengthy, expensive, and uncertain process of clinical drug development, including uncertain outcomes of clinical trials and potential delays in regulatory approval; our ability to maintain our relationships with our third party vendors; and protection of our proprietary technology, intellectual property portfolio and the confidentiality of our trade secrets. These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K and other filings with the U.S. Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements. Any forward-looking statements represent management's estimates as of this date and SQZ undertakes no duty to update these forward-looking statements, whether as a result of new information, the occurrence of current events, or otherwise, unless required by law.

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