CytomX Therapeutics Inc (CTMX) 2021 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the CytomX Therapeutics First Quarter 2021 Financial Results Call. Please be advised that today's call is being recorded. I would now like to hand the conference over to your host for today, Chau Cheng, CytomX's Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Suzanne. Good afternoon, and thank you for joining us. With me today are Dr. Sean McCarthy, CytomX's President, Chief Executive Officer and Chairman; and Carlos Campoy, Chief Financial Officer. Earlier today, we issued a press release that includes a summary of our first quarter 2021 financial results and highlights the important progress we made during the quarter.

We encourage everyone to read today's press release and the associated materials, which have been filed with the SEC. Additionally, the press release and a recording of this call can be found under the Investors and News section of our website at cytomx.com.

During today's call, we will be making forward-looking statements. Because forward-looking statements relates to the future, they are subject to inherent uncertainties and risks, including the uncertainties surrounding the COVID-19 pandemic that are difficult to predict and many of which are outside of our control.

Important risks and uncertainties are set forth in our most recent public filings with the SEC at SEC.gov, including our Form 10-Q filed today. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise.

With that, I'd like to turn the call now over to Sean.

Thank you, Chau, and good afternoon, everyone. Thanks for joining us today for brief remarks on our progress during the first quarter of 2021. Q1 was marked by focused execution by the CytomX team as we continue to drive towards initial data readouts from ongoing Phase II studies of our lead programs, the conditionally activated antibody drug conscious, praluzatamab ravtansine, formerly CX-2009 and CX-2029.

I hope all of you had the opportunity to attend last month's investor event that we hosted during which we took a deep dive into the science behind our Probody therapeutic platform. And also the Phase II clinical strategies for our 2 lead assets. We were delighted to be joined at the event by key opinion leaders, Dr. Sara Tolaney, Melissa Johnson & John Lambert.

An archived webcast is available on the Events and Presentations section of our website, and I encourage everyone to review the presentations to learn more about our lead programs and our leadership in the field of conditional activation of biologic therapeutics.

I'd like to start today with our program evaluating praluzatamab in patients with breast cancer. As a reminder, the Phase II study is enrolling patients with HER2 non-amplified breast cancer into 3 parallel arms. Arm A is evaluating monotherapy in patients with hormone receptor positive breast cancer.

Arm B is evaluating monotherapy in patients with CD166 positive triple-negative breast cancer. Arm C is evaluating praluzatamab in combination with pacmilimab, our proprietary PD-L1 Probody, and this is in patients with both CD166 positive and PD-L1 positive triple-negative breast cancer. Our first patients were treated in the study during Q1, and we continue to work towards initial data from arms A and B by the end of this year, and we anticipate initial data from arm C in 2022.

Now a notable development during Q1 relating to our praluzatamab breast cancer program, was the full approval by FDA of sacituzumab govitecan in the second and third-line metastatic TNBC settings. Based on data from the ASCENT Phase III trial, and this is obviously a terrific development for patients. I want to emphasize here that CD166, the target of praluzatamab is a novel target in breast cancer, and that our drug candidate utilizes a different payload to sacituzumab.

Furthermore, in our Phase I evaluation that we've reported previously, we saw meaningful clinical activity in the TNBC patient in the post sacituzumab setting where we expect high unmet medical need to remain. Indeed, the anticipated unmet need in the post sacituzumab setting is underscored by the 5% response rate in patients randomized to the control chemotherapy arm in the ASCENT study and their median progression-free survival of 1.7 months, a median overall survival barely exceeding 6 months.

Accordingly, our development strategy in TNBC will continue to assess pathways to accelerated and full approval for praluzatamab, a novel and potentially first-in-class treatment for this disease. I'd like to now move on to CX-2029, our conditionally activated ADC targeting CD71, the transferrin receptor.

Patients enrollment continued during Q1 in the Phase II expansion study evaluating CX-2029 as a single agent in four cohorts: squamous non-small cell lung cancer, head and neck squamous cell carcinoma, esophageal and gastroesophageal junction cancers and diffuse large B-cell lymphoma. As with praluzatamab, we continue to work towards initial data for CX-2009 in the fourth quarter of this year, most likely from the squamous lung and head and neck cohorts with initial data from the additional cohorts anticipated in 2022.

Turning now to our research and preclinical pipeline. Another key development for CytomX in Q1 was the first presentation of our emerging work in the field of conditionally activated cytokines. One of the defining advantages of our Probody platform that we discussed during our recent investor event is its versatility and tunability.

And this has allowed us to continuously innovate across multiple biologic modalities. Our interest in cytokines stems from the fact that systemic toxicity and poor exposure have limited the clinical success of this important and highly potent class of immune modulators. Industry interest in this area is understandably high at the moment, given the landmark progress made in recent years on interleukin-2, a prototypical immune modulator currently the focus of many efforts to improve its therapeutic window.

Enormous room exists to optimize cytokine for cancer therapy and CytomX aims to be at the forefront. By leveraging the depth of our expertise in protein engineering, protease biology and our understanding of the tumor microenvironment, we have now demonstrated our ability to be a meaningful player in this field.

Leading our cytokine program is a protease activatable version of interferon Alfa-2b, to which we have directed our sophisticated protein engineering approaches to improve therapeutic window and unlock potential in this powerful immunotherapy. We'll have more to say in the future as we advance this exciting new frontier of cytokines at CytomX.

Another area of intense industry interest at present is bispecific T-cell engagers. We continue to work closely with our partner, Amgen, on IND-enabling studies for CX-904, our conditionally activated T cell bispecific antibody targeting EGFR and CD3. IND submission for CX-904 is planned for late 2021. Additionally, progress continued to be made in Q1 with drug discovery activities for this modality in our strategic collaboration with our newest partner, Astellas.

During Q1, we also continued to advance CX-2043, our conditionally activated antibody drug conjugate directed against the abundant tumor antigen EpCAM. IND-enabling studies continue to progress. Although here, we have experienced some delays as a result of recent supply chain interruptions. And based on a reassessment of the program timeline, we no longer expect to submit an IND in 2021, and we're currently reassessing the time line for this program.

Returning to the clinical pipeline. Our partner, Bristol-Myers Squibb, continued to make progress enrolling in the Part IIb evaluation of BMS-986249, a Probody version of ipilimumab in combination with nivolumab in a randomized study in patients with metastatic melanoma.

BMS also recently initiated 3 new cohorts testing this combination in patients with advanced hepatocellular carcinoma, metastatic castration-resistant prostate cancer and advanced TNBC. With these updates, I would like to turn the call over to Carlos to review our financials.

Thank you, Sean. CytomX continues to be in an excellent financial position to drive beyond the key value-creating data readouts in the fourth quarter of this year and well into 2023. As of March 31, 2021, we had $394 million in cash, cash equivalents and short-term investments.

This balance included the $108 million in net proceeds we raised in January from a well-received follow-on public equity offering. Revenue was $16 million for the first quarter of 2021 compared to $50 million for the corresponding quarter in 2020. The decrease was due to research and development partnership payments that were recognized in 2020.

R&D expenses were $22 million during the first 3 months of 2021 compared to $43 million in the first quarter of 2020. The decrease was largely attributable to onetime licensing expenses, decreased clinical trial spend and timing of manufacturing activities.

G&A expenses were essentially flat for the first quarters of 2021 and 2020, amounting to $9.2 million and $9.6 million, respectively. With that, I'll turn the call back to Sean.

Great. Thanks, Carlos. So at CytomX, we continue to dedicate ourselves to working towards making a meaningful difference for cancer patients by being different and thinking differently. We've pioneered an entirely new way to design therapeutic antibodies and other biologic modalities, and we've used our technology to purposefully go after high potential targets that were previously considered undruggable like CD166 and CD71.

Across our pipeline, we now have 4 assets in Phase II studies in 9 different tumor types. Our move into the cytokine space where many opportunities exist to take high potential immune modulators and widen or open therapeutic window is also consistent with our broad guiding philosophy. We believe that by taking on big challenges like these, we increased our chances of really moving the needle for cancer patients and realizing our vision as an organization.

So thanks for your time and listening to that brief update. With that, let's open the call up for Q&A. Carlos and I will take your questions. Amy Peterson, who usually joins us on these calls, is currently performing her specific duty on jury service. So we will be happy to take your calls. Operator?

(Operator Instructions)

Our first question comes from the line of Terence Flynn from Goldman Sachs.

Maybe 2 for me. I was just wondering, broadly, Sean, if you can comment on enrollment trends you're seeing in your trials, given the pace of vaccinations and the U.S. has obviously been picking up and infections have been going down.

But maybe just what are you seeing at the enrollment level at your sites? And then maybe one for Carlos, just on pacing on spend for the rest of the year. Is the first quarter a good baseline to think about? Or is there going to be upward pressure on that over the course of the year here as you continue to enroll these key Phase II studies?

Great. Terence, thanks for the questions. First of all, with regards to enrollment, of course, we're seeing across the country, a lot of great trends with vaccination and improving numbers across the board, and that's great. We're all looking to open up a bit more. I would say that with regards to clinical execution, still predominantly remote monitoring and remote activities.

But we are seeing things steadily continue to improve, and we remain on track with our guidance for initial data for these studies by the end of this year.

Congrats on the spend, Q1, it's a pretty good proxy, even though there will be fluctuations from quarter-to-quarter, and we haven't really guided for full year spend, but there shouldn't be anything super out of the ordinary.

Our next question comes from the line of Peter Lawson from Barclays.

This is Mitchell on for Peter. The first question on 2009. Could you comment on the size and scope of the data we might see for the Phase II data sets in 4Q?

Yes. Thanks for the question. So the study design across the 3 arms, arms A, B and C is to enroll 40 patients in each of those arms. And we are working hard towards that. As I mentioned, the goal is for initial data from arms A and B towards the end of this year, arm C in 2022, and that remains our objective at this point is to drive enrollment as expeditiously as we can across those 3 arms.

Great. And then could you just talk about what would be the bar to be kind of like the -- on efficacy for TNBC and HR-positive, HER2 negative breast cancer? Just kind of how far above the bar would you need to show to be considered positive data?

Yes. I think this was covered in some level of detail by Dr. Tolaney at our investor event on April 7. And I would say, just high level to recap her remarks, you've obviously got 2 quite different diseases here with hormone receptor positive and triple negative.

In the hormone receptor positive setting, ORR tends to be less of a driver and less of an objective given the natural history of these patients over extended periods of time, is really more about the duration of response, as evidenced in our Phase I data, actually, where we showed a promising clinical benefit rate of both 16 and 24 weeks.

So Dr. Tolaney said in this setting and or you're looking for greater than 10%, and you're looking for something in the range of 3 to 4 months of PFS. Obviously, we'll be looking to do even better than that, but that would be in her words and those of us at the steering committee members clinically significant in the hormone receptor positive setting.

Triple negative, different, much more aggressive disease. Of course, these patients that progress much more rapidly. So here ORR is going to be more important. And of course, likely in the post sacituzumab setting, we saw in the ASCENT study for sacituzumab govitecan and/or 35%, PFS 5 to 6 months overall survival of 12 months.

So really a terrific outcome for patients, and that's what underpinned the approval in the second and third-line settings. In the post-sacituzumab setting, I think, what we heard from Dr. Tolaney, was an ORR of 20% or above will be clinically meaningful with a relatively short duration of PFS 2 to 3 months would be meaningful for these patients.

I would underscore my comments earlier on that if you look in the ASCENT study, the chemo arm, these patients an overall response rate of 5%. So there's going to be significant unmet need remaining in this patient population where the disease can progress very, very rapidly. So those are some of the benchmarks that we're thinking about.

For the combination, just to round out and talk a little bit about arm C, which is the combination with our PD-L1 Probody pacmilimab. The case 2 study here, which has been reported previously by Roche, atezo plus T-DM1 was able to show a significant shift in the ORR of monotherapy from about 30% into the 50s with PFS of greater than 8 months.

And so of course, we would be looking for the combination here to do more than the monotherapy. And we've shown previously, we've reported a pretty robust monotherapy activity for pacmilimab in triple-negative as well. So we know both of these agents, CX-2009 praluzatamab and pacmilimab both have single-agent activity.

And obviously, we're excited to see what this combination can do in this patient setting as well. So I hope that helps.

Our next question comes from the line of Joe Catanzaro from Piper Sandler.

Maybe one quick one for me. So Sean, you had mentioned IL 2, and I think many of us are familiar with the historical data that native recombinant IL-2 has generated and why there's so much interest for that target. But maybe you could just speak to the historical single agent profile of interferon Alfa.

Are there specific tumor types that have shown some interesting activity? And why you see it as a great opportunity for a conditionally activated version?

Yes, John, great question. So it's a cytokine, cytokine's for quite a long time, right, interferon, not really being pursued by -- let me just say that we're kind of blazing a trail here. We think this is a terrific opportunity for our technology. The clinical activity, I'd point to 2 indications, in particular, where interferon Alfa has shown particularly impressive clinical activity.

One is in the non-invasive -- non-muscle invasive bladder cancer area where interferon Alfa-2b gene therapy approach, given by installation into the bladder has shown robust clinical activity. And actually, that product candidate is in registration at the moment.

So it's pretty clear that in the right setting, locally delivered interferon can have potent anticancer effects. And then there's a study from BMS showing combination with PD-1 in melanoma, which showed a very significant ORR of about 60%. But Grade 3, 4 adverse events of 49%.

So a wide-ranging toxicities of an immune nature from the administration of interferon in a systemic manner. So I think it's -- and there are several other indications besides that where interferon has potential. So it's still early days for our program. Some of this has been about just the basic protein engineering to take on a growth factor cytokine, where we know there's significant room for improvement, but we think there are a lot of places we could potentially go with this.

But at the moment, the program is serving initially as a proof-of-concept for some pretty sophisticated masking approaches that we've been doing, including dual masking that we reported at the Cytokine Summit, which we think is a particularly innovative approach that may be extendable to other cytokines as well.

Our next question comes from the line of Roger Song from Jefferies.

Great. Sean, maybe a quick one still on your early pipeline. So given the versatility of the Probody platform, and you obviously is thinking about the cytokine modality. Any other particular modality, you seem -- may seem appropriate for the Probody, like the (inaudible) antibody conjugate? And any kind of modality you're thinking?

Yes. Roger, thanks for the question. As I commented during my remarks here, I do think one of the defining features of our company is really the breadth and depth of the science that we've been able to prosecute over the last several years, both ourselves and with our partners, we've really built a significant research capability. We are working across multiple modalities already checkpoint inhibitor for antibodies.

ADCS, bispecifics, now moving into the cytokine space. We've also got a growing interest early, though it may be in applying the -- directing the weapons, if you like, to cell therapies, such as CAR-Ts, even CAR-NKs, where we did some work some years ago with MD Anderson.

So really anything that looks like an antibody, we can apply our technology to, we think, and it's really in no small part, the depth of the protease biology expertise that we have developed over the years and the tunability of the systems, which is a little different in each case, right?

Because the devil is really in the details here across each of these different modalities. The tunability and the control, if you like, of the systems that will allow us to move into these different modalities. And I would refer you to, again, the work -- the initial work that we've shown on interferon Alfa.

You can see from that first preclinical data that we've shared that we have very nice control over the system in terms of being able to activate both a single and dual masked version of interferon in a protease dependent manner.

So this type of tight control that we've been able to develop over this particular cytokine. And I'm very confident others will be very important for the future. So we're super excited about the science and continuing to explore all of these modalities, both ourselves and with our partners.

Our next question comes from the line of Anupam Rama from JPMorgan.

I just had a really quick one on CX-2043. In terms of what are the ongoing preclinical activities here and the gating factors to an IND filing and getting that program into the clinic.

Yes. Thanks for the question. So we're at that point where we're doing all the things you do is get something into the clinic in ID (inaudible) stage, including getting GLP tox -- getting through GLP tox. It's a little bit of an unfortunate hiccup that I mentioned earlier on in terms of a delay in the supply chain.

These things are happening all over the place at the moment with Biologics manufacturing, as you know, given the pressure on the system, understandably brought by vaccine and other biologic capacity being utilized for COVID. So -- and other COVID related delays that are kind of out of our control.

So we're just -- we're doing the usual things. And as I said, the -- this manufacturing timeline change is just -- we're just at the place right now where we're taking another look at the overall program timeline. So does that help?

Our next question comes from the line of Mara Goldstein from Mizuho.

I apologize to say the proverbial, I missed the beginning of the call, but it's a busy earnings day. So I'm just wondering, maybe if you could just give us a little bit of sort of high-level understanding of the differences in the sort of engineering production aspect of creating Probodies for cytokine biology as opposed to for specific antigen targeted biology, that would be awesome.

Yes. Mara, it's a really good question. And when we talk about the field of cytokines, it's easy to think of it as one bucket. It's obviously a bucket with a lot of very complicated things in it. There are so many different families, different -- 3-dimensional structures, different multimeric structures.

There are often multiple receptors, receptor complexes, receptor families that different cytokines interact with. So I really think here, it's going to be cytokine by cytokine that the field really breaks down the challenges. And that's why -- why are we seeing so much effort in IL-2 because it's a complex system.

So I would say that when we think about our technology, again, I would reiterate that the experience that we've been able to gain over the years with the generation of wave upon wave of protease cleavable linkers, a lot of which we haven't talked about yet and are not available in the literature.

Still sort of know-how to CytomX, give us a very unique opportunity to tune conditional cytokines in ways that we think could allow us to really control their activity. And the marketing strategies, similarly, we typically -- when it comes to antibody-based masking, our approach has been and continues to be to use peptide masks, which we screen for on an antibody by antibody basis.

But as you saw in the work that we presented on interferon-2 alfa, we've combined that with a steric masking strategy as well, and it offers up some really interesting opportunities for that and potentially other cytokine classes as well. At the end of the day, success in the cytokine field is going to depend upon, as I've already mentioned, very sophisticated protein engineering, and I'm very proud of our team at CytomX, and they continue to do some really interesting things.

Our next question comes from the line of Etzer Darout from Guggenheim.

Great. Just one quick one for me. Just last (inaudible) been made about sort of the efficacy profile, right, and sort of the CDK4/6 post CDK4/6 setting for hormone receptor positive. But wondering if you could talk a little bit about sort of tolerability, safety for potential for 2009 and the ability to kind of move up sort of the treatment paradigm?

Yes. That's a great question. Again, a fair amount of time spent on that during our investor event. Dr. Tolaney talking about the principal adverse events that we are watching in the Phase II study, which is of course, ocular toxicity that is a function of the DM4 payload.

As she mentioned, and we agree, I mean, we feel pretty good about our ability to manage that at the 7mg per kg Q3 schedule, and we are requiring ocular prophylaxis mandating it in this study, a combination of steroidal and constraining eye drops, cold compresses. And if we look at the experience of others, including immunogen with mirvetuximab, which Dr. Tolaney also referred to, we feel reasonably good about being able to manage that toxicity.

How that will help us move forward. Obviously, we're optimistic, one step at a time. But we don't see the ocular toxicity being a really substantial barrier for 2009 in the long run.

At this time, I would now like to hand the conference back over to Chau Cheng for his closing remarks.

On behalf of the executive team, I'd like to thank you all very much for joining us this afternoon. We look forward to updating you in the future on our ongoing progress.

Great. Thank you, everybody. Thank you for your time.

Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect, and have a great day.