Cue Biopharma Inc (CUE) 2021 Q1 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Cue Biopharma First Quarter 2021 Earnings Call. (Operator Instructions)

And the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Dr. George Zavoico, Vice President, IR and Corp. Development. Please go ahead.

Thank you, Shana. Good afternoon, everyone. Thank you for joining us. On today's call are Dan Passeri, Cue Biopharma's CEO; and Dr. Anish Suri, President and Chief Scientific Officer; Dr. Ken Pienta, Acting Chief Medical Officer; Dr. Matteo Levisetti, Senior Vice President of Clinical Development; and Kerri-Ann Millar, Chief Financial Officer. Next slide, please.

Before we begin, I would like to remind you that various remarks that the company makes during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of the company's annual report on Form 10-K filed with the SEC on March 9, 2021, as well as other filings made by the company to the SEC from time to time, which can be accessed on the EDGAR database at www.sec.gov.

In addition, any forward-looking statement represents the company's views only as of today, May 17, 2021, and should not be relied upon as representing the company's views as of any subsequent date. While the company may elect to update these forward-looking statements at some future point, the company specifically disclaims any obligation to do so even if the company's views change.

Please be advised that today's call is being recorded. Live and archived versions of the event can be accessed via the company's website for the next 30 days.

I would now like to turn the call over to Dan Passeri, Cue Biopharma's CEO. Dan?

Yes. Thanks, George. Good afternoon, everyone, and thank you for joining us today for a review of our ongoing progress as well as our first quarter 2021 financial results, which are available in more detail in our Form 10-Q filed with the SEC on May 10.

Our agenda for today's call is shown on the next slide, which is Slide 3. I'll first provide a brief overview of ongoing progress since our last call, highlighting recent developments across our programs with an emphasis upon our lead clinical program, CUE-101. After the introductory update, I'll turn the call over to Dr. Anish Suri, who's our President and Chief Scientific Officer, who will provide a summary of progress and additional platform developments in both oncology as well as our autoimmune disease programs. After Anish provides an overview, Dr. Ken Pienta, our Acting Chief Medical Officer; and Dr. Matteo Levisetti, our Senior Vice President of Clinical Development, will each provide a clinical update and review associated data on our ongoing CUE-101 Phase I monotherapy dose escalation trial. Ken and Matteo will then turn the call over to Kerri Millar, our Chief Financial Officer, who'll provide a summary of our financial results for the last quarter. And then I'll come back on and provide a brief closing summary prior to opening the call for questions.

So to begin, I'd like to remind you of our foundational mission, which is stated on Slide #4, which is to design, develop and bring to patients in need rationally engineered biologics that restore immune balance by harnessing nature's own cues, hence our name, for selective and specific modulation of disease-relevant T cells directly in the patient's body. Through this approach, as shown here on Slide #5, we aim to restore balance to the patient's immune system by activating targeted T cells in the case of oncology and infectious disease or dampening or inactivating T cells associated with autoimmune disease. Again, Anish will provide further context and updates on these approaches momentarily.

I'd like to first begin with CUE-101, which is our lead drug candidate. It's currently in a Phase I monotherapy clinical trial for second line and beyond HPV-positive recurrent or metastatic head and neck squamous cell carcinoma and is representative of our Immuno-STAT platform engineered for targeting and activating cancer-relevant T cells.

Recently, we reported a confirmed partial response, or PR, from the Phase I dose escalation part of the CUE-101 trial for a refractory heavily pretreated patient. We view this RECIST confirmed partial response in the monotherapy dose escalation portion of the Phase I trial as an important derisking event, providing evidence of the potential ability of single-agent CUE-101 to selectively engage and modulate T cells in a challenging patient population.

While still early in development, we believe this promising data supports the potential of CUE-101, having a registrational path forward as a monotherapy in second line and beyond HPV-positive head and neck squamous cell carcinoma patients. As the drug's mechanism of action is based upon activating HPV E7-specific T cells, we also believe this recent data supports the premise that CUE-101 may also enhance patient reach and therapeutic benefit for frontline HPV-positive head and neck cancer patients in combination with pembrolizumab or KEYTRUDA, which is currently a standard of care for these patients who have a composite positive score or CPS greater than 1 for PDL expression. The combination trial referred to as the KEYNOTE-A78 trial is presently enrolling patients, and we look forward to providing an update on this combination study at the next quarterly call.

In summary, we believe that the emerging data from the ongoing monotherapy trial have the potential to be transformative for Cue Biopharma as it provides objective evidence of clinical activity as a monotherapy and a late-stage prior treatment refractory patient population. We also believe that this data differentiates our lead drug product candidate, CUE-101, as well as our drug candidate pipeline from competing IL-2 modalities and vaccine programs. Ken and Matteo will further -- will provide further details on the compilation of supporting clinical data to date.

So as we continue to generate data in our ongoing Phase I dose escalation trial, it's important to recognize that if favorable, these data provide risk reduction and validation for CUE-101 and also, by implication, the entire IL-2-based CUE-100 series. This principle is shown on the next slide, Slide #6.

As demonstrated here on this slide, the underlying framework for the IL-2-based CUE-100 series remains essentially the same across programs with the primary difference being the 9 to 10 amino acid antigenic epitope in the MHC or HLA binding group. Our second drug product candidate from the CUE-100 series is CUE-102, which targets the Wilms' Tumor 1 protein, or WT1, which is an oncofetal protein expressed in a number of solid tumors as well as hematological cancers, which is being developed in collaboration with our Asia territory partner, LG Chem.

To expand patient reach and potentially address resistance mechanisms, we've also derivatized the CUE-100 series, providing us with Neo-STATs to address tumor heterogeneity and redirected Immuno-STATs or RDI-STATs to address resistance mechanisms of HLA loss and tumor immunogenicity. Importantly, we believe that positive clinical results for CUE-101 have the potential to provide mechanistic support for the entire CUE-100 series and derivative platforms.

First, Anish will provide an update on our drug candidate pipeline expansion and provide an overview of the platform's modularity and flexibility to potentially address both oncology and autoimmune disease. Following Anish's pipeline update, Ken and Matteo will provide a clinical update, including a discussion of the recent confirmed partial response.

Through focused execution of our corporate development strategy, we believe we are well positioned to potentially demonstrate the transformative nature of our protein engineering approach to provide breakthrough immunotherapies for patients in need of more effective therapeutics.

With that, I'm now going to turn the call over to Anish.

Thanks, Dan. I'd like to start with a broad perspective on our platform and evolving pipeline, which should also provide a helpful context to the important clinical metrics emerging from our current trial with CUE-101. To remind everyone, Slide 7 shows you the overall molecular structure of our IL-2-based CUE-100 series.

The CUE-100 series was designed with a key focus on the objective that the IL-2 activating signal was selectively delivered to tumor-specific CD8 T cells. The presence of bivalent tumor peptide HLA-loaded molecules, which is Signal 1, as shown here, allows for selective targeting of tumor-specific T cells. This molecular scaffold is designed to potentially minimize systemic activation of known tumor-related T cells, which constitute the vast majority of the T-cell repertoire in an individual.

The 4 IL-2 molecules are conserved within the CUE-100 series and have 2 key modifications. One aggregates binding to IL-2 receptor alpha, which avoids the bias towards regulatory T cells, or Tregs, and minimizes safety liabilities. And the second attenuates binding to IL-2 receptor beta, which favors activity towards TCR-engaged anti-tumor T cells. As shown previously and will be highlighted later in today's presentation of the clinical data, we have observed CUE-101 selectively activating tumor-specific T cells. We believe this exemplifies the power and potential of targeted versus systemic approaches for cytokines such as IL-2 for cancer immunotherapy.

In addition, a key strength of the Immuno-STAT platform is its versatility and modularity with respect to swapping different tumor-derived T cell epitopes to change the indication of interest. As an example, CUE-101 targets HPV E7-specific T cells, while CUE-102, our next clinical candidate for which we anticipate filing IND in the first half of 2022, targets Wilms' Tumor 1, as mentioned by Dan earlier. The majority of the molecular framework, including the IL-2 molecules, are identical between CUE-101 and CUE-102.

The next slide, Slide 8, provides a more holistic view on the clinical experience of CUE-101 and its impact on various pipeline and platform enhancements. We believe that the encouraging metrics with CUE-101 with respect to tolerability, favorable PK and exposure and PD data and now tumor response clinical data support multiple therapeutic opportunities, as shown here.

First, as mentioned before, it is our belief that the Immuno-STAT pipeline assets, including CUE-102 targeting Wilms' Tumor 1 and the KRAS G12 valine molecules, have a reduced risk profile due to clinical observations of CUE-101.

Second, we also believe that the Neo-STAT platform, which is a derivative of the IL-2-based CUE-100 series and is designed to address tumor heterogeneity, also directly benefits from the CUE-101 clinical data. To remind you, the Neo-STAT platform allows us to generate the core generic scaffold of the IL-2-based CUE-100 series without a tumor peptide. That is an empty stabilized HLA molecule to which the desirable tumor epitopes can be efficiently conjugated. This strategy allows us to target multiple tumor antigens, maximizing time and cost efficiencies. From a clinical application perspective, we believe the current clinical data sets with CUE-101 provides strong support for Neo-STAT since the core IL-2 molecules and HLA allele remain the same.

Third, we also believe that the development of the bispecific redirected Immuno-STATs or RDI-STATs designed to address tumor escape mechanisms of HLA loss or antigen presentation defects also derive benefit from CUE-101 since the core IL-2 framework is essentially the same.

We've evolved the RDI-STATs based on 2 key observations. One, a significant fraction of human cancers, up to 30% in some cases, will undergo loss of HLA molecules and antigen presentation defects, which makes them essentially invisible to tumor-specific T cells. And two, observations from cellular analysis of human cancer tissues have revealed a significant presence of virus-specific memory CD8 T cells in the tumor tissue.

To that end, the bispecific RDI-STATs contain the 2 key components, viral T cell epitopes, to engage antiviral T cells along with the tumor targeting arm that allows for binding to a tumor cell surface antigen such as a Trop2, mesothelin, HER2, et cetera. In this manner, the cancer cell bound to an RDI-STAT appears as a virally infected cell, which can be recognized and killed by the antiviral T cells in the patient.

We believe this approach may provide several unique advantages from a mechanistic efficacy and safety perspective. The novel bispecific format of RDI-STAT is very distinct from other bispecific molecules that indiscriminately activate T cells, resulting in systemic cytokine release and toxicities.

Last week, at the New York Academy of Sciences Frontiers in Cancer Immunotherapy meeting, we presented early data indicating that RDI-STATs exhibited equivalent killing of target cells compared to CD3 bispecific molecules while avoiding systemic activation and cytokine secretion.

For autoimmune and inflammatory diseases, we have exploited the same IL-2 variant from CUE-101 to design a novel first-in-class molecule for induction and expansion of regulatory T cells. As shown here, this molecule, CUE-401, contains the 2 key signals, an IL-2 variant and a TGF-beta variant, for induced Treg or iTreg differentiation. Importantly, and in contrast to other approaches, focused on expansion of natural Tregs, the IL-2 variant is not biased towards IL-2 receptor alpha.

We have previously presented data indicating that in, in vitro assays, CUE-401 can induce and expand regulatory T cells derived from healthy human subjects and from patients suffering from rheumatoid arthritis and inflammatory bowel diseases. More importantly, these T cells exhibited suppression of effector T cells in, in vitro assays. More recently, we have generated additional data in, in vivo animal models that supports the mechanism of action of CUE-401 in inducing and expanding Tregs and the persistence in, in vivo activity. We will plan on sharing additional details of these exciting data sets in a future scientific forum.

In summary, the following slide, Slide 9, outlines our broad vision on the autoimmune front. Our core strategy here is centered on 2 key approaches: antigen specific and pathway specific. The antigen-specific approach deploys Immuno-STATs to modulate autoreactive T cells in diseases with well characterized or few auto antigens such as type 1 diabetes. In contrast, the pathway-specific approach, as exemplified by CUE-401 in the previous slide, is focused on induction and expansion of regulatory T cells and additional tolerogenic pathways for broad applications.

We've been collaborating with Merck on the antigen-specific approach focused on 2 autoimmune diseases and have made significant progress, which underscore the extension of our relationship last year to focus on optimizing potential lead clinical candidate molecules. Earlier this year, we presented a progress update on these efforts via a presentation at the Antigen-Specific Tolerance meeting. Those data slides are available on our website.

And as discussed in the previous slide, for the pathway-specific approach, we continue to make strong progress with our lead CUE-401 asset for generation and expansion of regulatory T cells directly in the patient's body. We believe CUE-401 provides a unique opportunity to reset immune balance for numerous autoimmune diseases, graft-versus-host disease and even transplant rejection.

With that summary, I'd like to pass the call to Ken and Matteo to provide a clinical update on CUE-101. Ken?

Thanks, Anish, and good afternoon, everyone. As always, I'd like to say thank you to all of the participating principal investigators. Their names are shown on the next slide, Slide 10.

As we have noted on previous earnings calls, we have continued to screen and enroll HPV-16 positive head and neck cancer patients to participate in our trial throughout the COVID-19 pandemic. We have fully enrolled through Cohort 7 at the 8 mg per kg dose without reaching an MTD, or a maximally tolerated dose, and have now completed enrollments of Cohorts 5 at 2 milligrams per kilogram and 6 at 4 milligrams per kilogram to 9 patients each in anticipation of selecting our expansion cohort dose in the near future.

The next slide, Slide 11, shows a high-level summary of the clinical design and dosing cohorts for this ongoing Phase I trial of CUE-101, enrolling second line and beyond patients that are HLA-0201 positive with recurrent or metastatic head and neck squamous cell carcinoma driven by HPV-16. We have now completed enrollment in the Part A dose escalation portion of this trial. As I have noted in previous earnings calls, this escalation phase of the trial protocol provided the opportunity to dose up to 9 patients in any given cohort to provide and bolster evidence of clinical activity or PD effect in order to enhance our ability to choose the most appropriate dose for the Part B expansion and presumed recommended Phase II dose.

The next slide, Slide 12, shows some of the details about our enrolled patients to date. The vast majority of our patients, more than 90%, have been treated with CUE-101 as third line or greater therapy after failing both platinum-based chemotherapy and a checkpoint inhibitor. Many patients also failed treatment with the epidermal growth factor inhibitor cetuximab.

Several observations give us confidence that our data is maturing to allow us to make an informed decision to choose our expansion dose. First, as shown in Slide 13, our data to date demonstrates the tolerability of CUE-101 in patients. We have treated through Cohort 7 at 8 mg per kg, as I mentioned, without reaching an MTD. All of the SAEs and AEs observed to date are consistent with those that are observed with IL-2 administration or are typical of those observed with immune modulators in the treatment of cancer patients. The most common AEs observed include fatigue, anemia and decreased lymphocyte counts.

Second, as reported in the previous earnings calls, our pharmacokinetics or PK data, as shown in the next slide, Slide 14, reveals dose-dependent exposure without any evidence or effect of antidrug antibodies on PK and exposure in patients that have received multiple doses of CUE-101.

Third, again, as reported in previous earning calls, the sustained increase in exposure with increasing doses of CUE-101 has led to observed pharmacodynamic effects, including early evidence of proliferation of tumor-specific CD8-positive T cells versus the broader CD8-positive T cell component and an increase in natural killer cells, or NK cells. We have previously shared early data on the increase of E7-specific CD8-positive T cells and NK cells in patient blood samples at various time points after dosing of CUE-101.

Fourth, as noted in a previous earnings call, as shown in Slide 15, histopathology from biopsies of treated patients has revealed evidence of antitumor activity, including necrosis and T cell infiltration, as shown on the left-hand panel; as well as in the right-hand panel, evidence of PD-L1 expression on the tumor cells, as shown by the brown staining; and a marked infiltration of cytotoxic CD8-positive T cells, as shown by the pink staining cells.

Fifth, in the dose escalation phase of the trial, we have had 5 heavily pretreated patients: patients that received CUE-101 as third-, fourth- and fifth-line therapy with confirmed stable disease after receiving CUE-101. In addition to these 5 patients with stable disease, as announced last week, a patient in Cohort 6 at the 4 milligram per kilogram dose had a confirmed partial response. We believe that the partial responses observed in this patient demonstrate single-agent activity of CUE-101, something rarely seen in mono immunotherapy treatments.

We believe that this clinical observation provides supporting evidence that CUE-101 is an active agent with promising potential for HPV-positive head and neck squamous cell carcinoma patients, which is further bolstered by the supporting pharmacodynamic data in which we have observed activation of disease-specific T cells and NK cells in the blood of our treated patients.

I will hand the call over to Matteo to describe some of these data in greater detail. Matteo?

Thanks, Ken. The next slide, Slide 16 shows some of the data associated with the confirmed partial response in this patient. This patient had previously failed cetuximab and pembrolizumab systemic therapy for their recurrent disease and was treated with CUE-101 as third line for their metastatic cancer.

At the first scan after 2 cycles of therapy, the patient had an approximate 50% decrease in the size of their target lesions, and this was confirmed on their second scan after 4 cycles of therapy. The associated pharmacodynamic data for this patient correlates with this clinical response. The middle panel demonstrates the slight increase in Tregs at cycle 1 day 8 that returns to baseline by day 15 that we have observed in other patients. Similarly, as we have seen in other patients, we see a marked increase in NK cells on cycle 1 day 8 that persists through day 15.

The right panel demonstrates the ninefold increase in E7-positive specific T cells in the cycle 1 day 8 peripheral blood sample from this patient. These data support the mechanism of action of the Immuno-STAT platform and supports the further development not only of CUE-101 but the entire CUE-100 series and beyond.

On the next slide, Slide 17. I also wanted to share with you new histology data, which also supports the mechanism of action of CUE-101. Granzyme B is a serine protease most commonly found in the granules of natural killer cells and cytotoxic CD8-positive T cells. It's a weapon utilized by these cells to kill cancer cells. Slide 17 demonstrates biopsies from a patient in Cohort 5 before and after administration of 2 doses of CUE-101. In the post-treatment histo micrograph on the right and quantified on the graph on the far right, you can see a marked increase in cytotoxic T cells that are secreting granzyme B, again, providing valuable validating data supporting the mechanism of action of CUE-101.

These results are also supported by the preclinical data published late last year in Nature Methods, where an immunoPET imaging demonstrated that the core scaffold of an Immuno-STAT consisting of the peptide MHC components could penetrate solid tumor tissue and directly engage tumor-infiltrating lymphocytes. Hence, mechanistically, the Immuno-STATs have the potential to directly engage TILs and NK cells, which may also alter the local tumor microenvironment to favor antitumor immunity.

As noted in previous earnings calls, we also continue to monitor progression-free survival and overall survival closely and continue to observe what appears to be an enhancement of survival of patients in the CUE-101 dose escalation trial. Our clinical trial protocol amendment for the expansion phase will, once cleared by FDA, one, allow patients to remain on study at investigator discretion if they demonstrate radiologic progression but are clinically stable; two, add assessment of response by iRECIST criteria to the exploratory end points; and third, allow for collection of data regarding subsequent anticancer treatments patients may receive to gain further insights into our preliminary survival observations.

I will now hand the call over to Kerri to discuss first quarter financial results.

Thank you, Matteo. Turning now to Slide 18. I'd like to provide a brief update on our financial results for the 3 months ended March 31, 2021. The company reported collaboration revenue of approximately $1.6 million and $0.9 million for the 3 months ended March 31, 2021 and 2020, respectively. The increase in revenue was due primarily to revenue generated from the extension of the Merck research program in November 2020, from which we are receiving additional financial support to further research and develop promising preclinical biologics with the objective of identifying clinical candidates for the treatment of type 1 diabetes and an additional undisclosed autoimmune disease.

Research and development expenses were $9.8 million and $9.9 million for the 3 months ended March 31, 2021 and 2020, respectively. The decrease was primarily due to a decrease in laboratory costs and travel-related expenses. General and administrative expenses were $4.3 million and $4 million for the 3 months ended March 31, 2021 and 2020, respectively. The increase was due primarily to stock-based compensation and legal fees incurred during the first quarter of 2021 as compared to the same period in 2020.

We ended the quarter with approximately $73.3 million in cash, cash equivalents and marketable securities and working capital of approximately $60.8 million. In April, we extended our cash runway with approximately $10.4 million from the sale of approximately 907,000 shares of our common stock under our at-the-market equity offering through Stifel, Nicolaus & Company, who acted as our sales agents. We believe our cash, cash equivalents and marketable securities as of March 31, 2021, along with the funds received in April through the ATM, will allow us to support the development of our Immuno-STAT platform, including the clinical development of CUE-101 into the fourth quarter of 2022.

I'll now turn the call back over to Dan for closing remarks. Dan?

Thanks, Kerri. In conclusion, the confirmation of clinical activity of CUE-101 as a monotherapy in this challenging and heavily pretreated patient population is an important step forward and supports the potential of not only our CUE-101 drug product candidate for oncology but for our follow-on drug candidates as well such as CUE-102 from the IL-2-based CUE-100 series and provides valuable proof-of-concept of the Immuno-STAT platform to activate and expand disease-relevant T cells and NK cells directly in the patient's body as a method to treat other cancers.

We anticipate a number of important milestones throughout this year with the potential of further data to support the possibility of a registration path for CUE-101 as a monotherapy. These milestones include the planned selection of a recommended Phase II dose of CUE-101 by mid-2021 for further development as a single-agent treatment for HPV-positive second line and beyond head and neck squamous cell carcinoma; our plans to support initial Phase I results from the combination study of CUE-101 with pembrolizumab in the second half of 2021; and our plans to initiate a neoadjuvant study to evaluate the effects of CUE-101 on the tumor microenvironment, which is also expected to launch in the second half of the year.

We continue to execute our corporate strategy in a focused and deliberate manner, with the aim of demonstrating clear competitive advantage and market positioning of the Immuno-STAT platform and associated programs. We believe that CUE-101 monotherapy trial provides a potential registration path forward as a single-agent therapeutic, and the combination trial with pembrolizumab, also known as KEYTRUDA, provides the prospects to enhance patient reach and market size by moving upstream to first-line patients, where we anticipate the potential for significant mechanistic synergies as demonstrated in our preclinical studies. We look forward to providing the trial status update at our next earnings call.

Finally, we'd like to thank our employees whose dedication to our mission through their commitment and professionalism allows us to continue executing our corporate development strategy. I'd like to thank our Board of Directors for their support and guidance. And I want to thank our shareholders who provide us with the essential resources to continue our important work developing promising therapeutic candidates for patients in need. But importantly, we want to thank those patients and their families involved in the clinical trials. Their courage and willingness to be part of a clinical study allows us the opportunity to assess potential drug activity and assess the potential therapeutic benefit of our promising drug candidates.

With that, I want to thank you very much for your attention and interest. I'd now like to turn the call back over to the operator for questions. Operator?

(Operator Instructions) Our first question comes from Tom Shrader from BTIG.

Let me be the first but hopefully not the only to congratulate you on the response. It's been quite a push. So congratulations. I have kind of a general question probably for Anish. How many patients do you have blood levels of tissue-specific T cells and tumor-specific levels? And are you getting to a point where you can start to define the curve as to what levels in the blood might mean in the tumor, at least for the specific example? And then I have a Treg question, if I can.

Yes, sure. Thanks, Tom. So in the data points that we have evaluated so far, Tom, we've been able to detect E7 in about -- clearly in about 1/3 of patients. And I caveat that by the sampling times because our major bleed is at day 21 after injection of the drug at day 0. So there's a fair bit of things that happen in the middle of T cells once they get activated, expansion and extravasation from blood. So we view that as a significant positive just by doing this first pass analysis. Remember, this is just direct detection from the blood with no ex vivo expansions, et cetera, or looking at additional protocols.

Having said that, as you saw here when Matteo presented, this was about a ninefold increase. We'd also reported, I think, about a sevenfold increase in a patient with stable prior -- stable disease in a prior presentation. We just need to do enough and have additional data to be able to make any sort of hard conclusions, Tom, whether these numbers at the end of the day are correlating with an objective response.

And I say that simply is the fact that it's a wonderful read in the blood for mechanism of action and PD activity. But ultimately, we think having deeper insights into the target tissue will reveal more meaningful sort of outcomes. And that's been the general narrative in the field as you well have followed that out. This is actually one of the reasons why we pushed for the neoadjuvant study, where we have guaranteed access to the blood and the tumor tissue postsurgical resection pre and post CUE-101 administration.

So I think the blood data is fascinating. It's very positive from a PD perspective. But I think as we go through the rest of the year and start gathering the metrics on the neoadjuvant study, we'll hopefully be able to strengthen and make those correlations. The biopsies in the current trial are not mandatory. As you're well aware, these are optional. So we're very grateful and thankful to patients that have provided us those, although they have been fewer events there. But nonetheless, the data that Ken presented and material discussed is just fascinating to see the immune effector mechanism sort of start to kick in after the drug is administered.

Okay. And then quickly on the Treg program, your RNA data is presumably a model where you know exactly the antigen. Do you think in a disease like RA, you will need exactly the Treg antigen? Or can it be one of several and you just get enough Tregs in the joint that you would have some sort of anti-inflammatory effect? Any data there yet?

Yes. No, it's a fantastic question, Tom. So especially in the cases of chronic autoimmune diseases like RA, like lupus, like IBD, where the diversity of antigen is vast and it's not well characterized in many cases, I think having this CUE-401 asset is extremely beneficial because it expands Tregs globally, and the hope is that they would then turn around and modulate and control autoreactivity. In fact, that's what has been seen and that's what we've seen in our own in vitro assessments of activity of these cells.

That is in contrast to the Immuno-STATs we're deploying with Merck in our collaboration, for example, for diseases like T1D with focused antigens like proinsulin in that case. But those diseases are a handful where some of those antigens are really dominant or well characterized. But you're absolutely right. That's exactly the reason why we had this dual strategy of an antigen specific that deploys Immuno-STAT and pathway specific that's actually agnostic of the antigen identity and goes after the vast regulation of the potential of Tregs.

Our next question comes from Mark Breidenbach from Oppenheimer.

Let me add my congrats on the progress and especially on the partial response. It's great news. I was wondering if you could tell us a little bit more about the responding patient, whether or not they were primary refractory to pembro or if this was a case of acquired resistance, and also how long the patient had been off pembro before receiving CUE-101.

Yes. Ken, do you want to take that question?

Yes. So these patients -- all the patients virtually have been on some kind of a checkpoint inhibitor. And this patient failed pembro. And it's controversial how long pembro sort of hangs in the system. But what I think we can say for sure is with a confirmed PR 12 weeks into treatment that there wouldn't be any pembro in the system. So the patient is still on study. And so I'm hesitant to report too much more about the patient, but we'll be happy to share that in later calls.

Okay. Fair enough. And one quick follow-up, just on the really nice biopsies you showed us. I'm glad you were able to collect paired biopsies from the responding patient. I'm wondering if we can expect to see an analysis of pre- and post-treatment TCR sequences from inside the tumor infiltrating lymphocytes.

Yes. Anish will take that.

Yes, Mark. So that has been an area of very high interest for us. As you well know, in previous sort of studies, we have done a fair bit of single-cell TCR analysis and expression. That's exactly the intention here, is to get to a point where we can, using the single-cell platforms, identify, pair TCRs, express them and then not only show functionality for the E7 epitope but also show clonality for oligoclonal expansion.

Those are data that we've previously reported with Immuno-STATs in preclinical models and ex vivo expansion. That is the very intention we intend to do with our clinical samples. And in fact, again, coming back to the neoadjuvant study, Mark, that's one of the major goals there, is to be able to characterize the TILs with response to both clonality and specificity.

Our next question comes from Ren Benjamin from JMP Securities.

Congratulations as well on the terrific clinical news. A couple of questions. Maybe just starting off with the patient for Ken. Can you talk a little bit about prior to entry into the study, was the patient progressing quite rapidly? Was he relatively stable or just slowly progressing? You mentioned that he's still on the study as he -- overall, I don't know if you can make any comments, but is he doing fine? And I guess related to that, is this the highest CD8 T cell count that you've seen to date, peripherally? Or are there are other instances where we saw higher levels?

Well, I'll let Anish comment on the CD8 levels, but the patient does remain on study, and it is feeling clinically well. And what I'll say is patients progress. And rate of progression is, I guess, a relative term. Patient's cancer is growing, and that's not good. And so the patient went on study. I think because the patient is still being -- is still active, I really would like to hesitate to go into a lot more detail about the patient.

And Ren, just to add on the T cell increase. We have seen T cell increases. Remember, this is fold increase, Ren, so it's driven by the denominator of what you find initially. But I do want to caveat that again by sampling. In fact, one of the major amendments that we're trying to accomplish and that [candidate] material have driven is to get more blood samples at time points so we can understand the kinetics to be able to get deeper insights into this.

But this is an area where we have noticed this sort of fold expansion in this range, even in prior samples. And again, knowing well that as opposed to what we've done in preclinical models where you can sample on a more regular basis and understand the kinetics of engagement, expansion and contraction, that obviously has limited what you can do with patients in the situation. And hopefully, we'll gather more insights as the data continues to mature. But nonetheless, it's extremely positive to see these rare frequencies just emerge in a primary snapshot that we've been able to detect them.

Fair enough. As we think about the recommended Phase II dose, can you just kind of talk us through maybe the matrix here or what you're considering? What are the metrics that are going to drive that decision? You have the 9 patients that have enrolled. Whether you see additional responses, I think then that decision becomes easier. If you don't, what other factors and what else do you need to see to declare a recommended Phase II dose?

Yes. Ken, do you want to take that?

Yes. Thanks. Well, it certainly becomes the totality of the PK data, the PD data, the clinical responses as well as the safety data, all of which is maturing literally as we speak for the later cohorts. And I do believe that we will have the data we need to choose that dose within the next month or so.

Got it. Okay. And then I guess just one final one from me, probably for Anish. Just could you give us a sense as to how the 2 programs, the IL-2 TGF beta and the Merck programs, are progressing in the autoimmune front?

Yes. Sure, Ren. So on the Merck side, with the antigen-specific approach, the team's focused with the proinsulin-specific Immuno-STAT for type 1 diabetes. We've made tremendous progress there, evolving that molecule towards a potential lead clinical candidate. And we are aiming to have those studies completed by the end of the year.

On the fascinating CUE-401, this is a fantastic asset, and this is really exciting for us because of the breadth of application. So we've generated foundational data. We actually have been invited to [Focus]. So we'll be presenting a talk on this in June as well. The intentions are to continue to validate in preclinical models, have that solidified by the end of the year to be in a position to start initiating IND-enabling studies, et cetera, and position ourselves to start thinking about what a clinical development strategy would look like for chronic autoimmune, sort of the big indications. We're talking about RA and IBD and lupus, et cetera, which stand out to us.

Our next question comes from Stephen Willey from Stifel.

So I know in your prepared remarks, Dan, I think you kind of reemphasized your confidence in monotherapy having a potential registrational path forward. How are you guys thinking about pursuing that as of right now? And I guess should we anticipate because of this, I guess, extended event times that you're seeing in patients that a trial in this setting would most likely be something like CUE-101 versus best supportive care and salvage? Or do you think if you see another response or 2 just given, I think, the low single-digit response rate that's associated with current standard of care, do you try to push forward in a single-arm study?

Yes. I'm going to just answer that broadly, but I'll hand it over to Ken as well. So I think you actually just summarized the answer to it in that that's how we're looking at it. These patients, as you know, are refractory. There is no standard of care. Many of them are basically going on palliative therapy. So I think, one, it's looking at the response rate, just another couple of PRs, I think, that would really bolster confidence.

So we're confident by what we're seeing already to date in that we're seeing the molecules actively modifying the relevant immune components. We're seeing, again, in a dose escalation, we have 5 confirmed stable disease, a confirmed partial response as a monotherapy. And we're seeing what appears to be emergence of data suggesting there's a survival advantage. So all of this is basically giving us confidence going forward. And it will be continuing that type of data that will give us confidence going forward with the registration path.

But with that, I'll turn it over to Ken if he wants to elaborate.

Well, I think that the -- you said it well. The bottom line is if we think that we have a registration path as a single-arm study, that's certainly what we're going to pursue. And I'll leave it at that. I mean that's what we're hoping, and that's what the data looks like is emerging.

So in terms of the monotherapy expansion cohorts at the recommended Phase II dose, do you then, I guess, have a conversation with FDA and potentially design that such that those Phase I expansion patients could be rolled into a registrational data set?

Short answer, yes.

Understood. And then maybe just a bigger question here. You've got proof-of-concept established with the CUE-101 series, and I know you've got a lot of other interesting constructs that you're working on with Neo-STAT and the RDI-STATs. But how do you just think about prioritizing each of the opportunities now within the pipeline? And because of the derisking, I guess, on 101, do you try to accelerate the WT1? Do you accelerate KRAS? Can you accelerate both of those things in the context of making progress on these constructs on the novel formats? How do you guys think about that?

It's a complex question, Steve, as you know, because it has to do with resource -- access, resource allocation. Priority right now is focus on establishing a foothold or a beachhead with 101, which by implication applies in terms of derisking and validation to the 100 series. So we have 102 -- 101, 102 and 103 partnered with LG Chem. That's a strategy that incorporates the potential of looking at patients here in the U.S. as well as Asia. That's something we consider.

So I don't know if there's one priority. I think all of it is actually really important. So we have to continue pushing forward with 101 as establishing the foothold but then expanding out into 102 to make sure we're doing that in a timely manner. Right now, we are expecting the IND to be filed in Q1 of 2022. And KRAS is obviously a high-profile program. So we're putting our resources on that as well. Going forward beyond that, it's really going to be based on resource access and allocation. But right now, it's really focused on establishing the foundational principle with 101 and expanding out as efficiently as we can with the other programs.

Our next question comes from Brian Skorney from Baird.

I'll offer my congrats, too, on the single-agent activity. It seems like it really supports a lot of the Immuno-STAT platform and probably in particular the 100 series. So to that point, I guess, how do we kind of think about using the 101 monotherapy in thinking through the design of Phase Is in KRAS and Wilms'? Does this give you any opportunity to sort of accelerate through dose escalation here, maybe starting at a dose that would be closer to what you think would be relevant exposures for driving a response in T cell activity?

Ken, do you want to take that?

Yes. Great question. The -- we certainly believe that what we've learned from 101 has -- will allow us to propose to the FDA that we'd be able to start at, for example, higher doses than we were with CUE-101. And we have that as part of the -- our pre-IND meeting question -- set of questions is will the FDA accept the learnings from CUE-101 as part of what we do going forward.

So I would also mention that we really like this trial design that we've used for 101, which is based on the 3x3 design but also lets us backfill cohorts as needed. So I think we'll use that strategy again, but we'll be able to get to clinically relevant doses much quicker based on the PK/PD and safety data that we've observed with 101.

Great. And then maybe digging a little bit on the 101 PD data. Are you -- is there anything on the PD side that shows kind of a clear dose relationship, maybe the increase in NK cells and/or E7-specific CD8 T cells? I'm just trying to get to dose level test where you really don't see this activation like Cohort 3. And is there a dose level where you sort of see it peak out and higher doses, maybe Cohort 7, just aren't showing any additional activity?

Anish, do you want to take that?

Yes. Brian, so if you look at some of the emerging PD metrics, including some of the NK data, we think that Cohorts 5 and 6 -- you start to see the uptick at about Cohort 3 and 4. But at 5 and 6, they're very comparable. So we think these -- as you're looking around activity, appear to be very relevant cohorts. It's also what Ken and Matteo stressed, as you heard about the dose expansion. We just have to mature on the T cell side with some of these emerging metrics, and I think sampling more would help and obviously make -- continue to make this strong.

But already what we're seeing, with the sustained increase in NK, the notable sort of increase in the E7 specific and only a transient uptake on Treg that comes back to the baseline, I think provides a very strong case that these are these appropriate cohorts that seem to exhibit what we would indicate as very relevant PD metrics for us to be able to move forward on.

(Operator Instructions) Our next question comes from Zhiqiang Shu from Berenberg.

I want to add my congratulations to the team as well. So first, I want to ask about the safety. I know it looks like the safety is quite favorable. Just curious, for the lymphocyte decrease, do you have an idea of why we've seen some grade 3 of lymphocyte decrease? Wouldn't be the IL-2 is supposed to be designed to activate T cells and NK cells in this manner?

So Ken, do you want to comment on that? And I can follow up after Ken.

Go ahead, Anish.

So the -- again, the activity of IL-2 in peripheral lymphocytic populations, including T cells and NKs, post activation, as you're well aware, there is -- it has been noted for extravasation. And you see these transient dips. I think that likely explains that these active doses is the most likely aspect and consistent with what's been sort of seen in prior pharmacological measurements.

Yes. It's a known IL-2 effect. Essentially, what it represents is the IL-2 moving out of -- the lymphocytes moving out of the blood into tissue in a nonspecific manner at those early time points.

Got it. Okay. Understood. And then I also want to ask about the combination trial, PD-1 and CUE-101. Based on your preclinical modeling, have you seen any synergies between them? Have you observed PD-L1 being up-regulated upon CUE-101 treatment?

I can take that, at least answer from the preclinical side, Zhi, which is a very important component that not only supports but provides a lot of good evidence for the synergistic. So first of all, as everyone appreciates, checkpoint blockade like PD-1 in absence of the right repertoire is likely not very meaningful. So the fact that CUE-101 elicits and activates the repertoire is actually very meaningful from that.

And in our preclinical studies that we published last year in Clinical Cancer Research, in an E7-driven aggressive TC-1 tumor model, we saw monotherapy, the murine CUE-101 surrogate its activity, whereas PD-1 alone in that setting was no better than the vehicle. However, when that monotherapy was then further combined with anti-PD-1 blockade in that model, there was a substantial increase in the observed efficacy and response in the animals. Upon closer examination of the tumor tissue from those animals, we could again very nicely locate tumor-specific T cells in both mono and combo, except that in combination therapy, those numbers were present in higher numbers within the tumor tissue.

And as Ken showed you from the histopath from one of the patients in his section, we have observed, and this is from a mono trial, where the tumors are expressing PD ligand and are infiltrated by CD8 T cells. So putting it all together, I think as we continue to build on our combination trial, that data, combined with what we've noticed in preclinical observations, should really bode well and further sort of build favorable parameters for these patients.

Okay. Great. And one final question is also a biology probably also for you, Anish. For Neo-STAT, I understand it is empty HLA construct with IL-2. So I guess is it designed to bind to any PCR regardless of what tumor antigen is -- the tumor has?

Yes. So the whole concept of the Neo-STAT, Zhi, is to have the scaffold to which we can then conjugate any tumor peptide, which we do using chemical conjugation, using established chemistry. So it's a covalent linkage. So when the drug product actually gets made, it's not an empty HLA, but rather it's conjugated with a desirable epitopes in cases of multiple antigens. And that's quite significant when you compare it to an immuno-STAT where each one of the epitope like the HPV-E7 or the WT1 is a fused peptide. So in other words, each one of those antibody molecules is a separate drug molecule with a separate cell line for production and time there.

With Neo-STAT, you have one cell line that can generate this scaffold that can then serve many different areas of interest and indications based upon the tumor epitopes that one wants to conjugate. So it's still very much antigen specific, except that the versatility and modularity there, since it's empty, allows us to go after many different tumor T cell epitopes. And the fact that it's a single cell line obviously has significant implications for the time and cost to the clinic. It's essentially an off-the-shelf scaffold that one can deploy in real time to drug patients. That was our vision when we started on this about 3 years back.

Okay. So essentially, it's a cancer vaccine turbo-charged with IL-2?

Well, it's a vaccine in terms of specificity. Every single vaccine is dependent upon the APC actually doing his job in antigen processing presentation, the right kind of membrane interactions, (inaudible), et cetera. We've just bypassed all that, and that's a big leap in the space of immunotherapy.

(Operator Instructions) This concludes the question-and-answer session. I would like to turn the conference back over to Dan Passeri for any closing remarks.

Yes. We want to thank everyone for your attention and interest, and we look forward to providing periodic updates as we continue to make progress on these important observations and findings. So thank you, and we look forward to catching up sometime soon in the near future.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.