F-Star Therapeutics Inc (FSTX) 2021 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the F-star Therapeutics Fourth Quarter 2021 Full Year Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Lindsey Trickett, Vice President, Investor Relations and Communications. Please go ahead.

Hi, good morning, everyone. Thank you for joining us. With me today is Eliot Forster, our CEO; and Darlene Deptula-Hicks, our CFO. We announced financial results pre-market today for the year ended December 31, 2021. You can access the press release on the Investor Relations page of our website at fstar.com.

Before we get started, let's quickly run through the forward-looking statements. Please note that as a part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them.

Investors are also cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. These risks include risks and uncertainties detailed in F-star's filings with the SEC. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call.

With that, I'll hand the call over to Eliot.

Thank you, Lindsey. Good morning, everyone. Welcome, and thanks for joining F-star's Fourth Quarter 2021 Earnings Call. It's great to speak with you today. I'm very pleased to review the past year of accomplishments and excited to provide an outlook on all we hope achieve in 2022.

2021 was our first full year as a NASDAQ-listed company. It was a stellar year for F-star. It was real progress across every aspect of our business. All 4 of our clinical programs progressed well, successfully navigating COVID. We were -- we added 2 new partners, continue to strengthen our patent portfolio and closed a significant financing. I'm pleased to say that we've carried this momentum into 2022 despite some of the obvious market headwinds.

This year, we're positioned to deliver meaningful data across all 4 of our clinical programs. Without question, these are the most important value drivers for F-star. Success in even just one of these, and of course, we expect more will be transformational for the company, for our shareholders and for patients with cancer. Additionally, our clinically validated platform technology will continue to add novel molecules to our own portfolio as well as to our partners' portfolios.

We continue to strengthen the senior team, and I'm delighted that James Sandy joined the company early this month as Chief Development Officer. Through his leadership of development operations, James is an expert in accelerating cancer treatment programs through early and late-stage development and has brought 8 drugs to market over the course of his career. His arrival adds yet more momentum to our ability to deliver timely high-quality clinical data.

'22 is the most important year so far for F-star as a clinical stage company. It's also a year in which bispecifics are coming of age. This is at least in part demonstrated by collaborations involving bispecific technologies, having reached over $18 billion in value over the past 2 years. It's also clear that the needs of patients with cancer extend well beyond that which can be delivered by first-generation in immuno-oncology therapies. Despite their successes, many patients do not respond to or progress after treatment.

The 4 approved bispecific drugs now being delivered to patients by others demonstrate the benefit of this format in these hard-to-treat cancers. It's in this context that we'll be providing data on all 4 of our programs during the course of this year.

It's also worth noting that several of our 20-plus partner programs also advance this year, providing a meaningful source of nondilutive income to F-star. At present, we have more than $2 billion in potential remaining future milestones from our ongoing partnerships. Along with the responsible management by cash, any partner income will extend our runway.

We believe that tetravalency is the best approach to bispecifics and the best approach for designing second-generation immuno-oncology therapeutics that will transform the lives of patients with cancer. F-star's technology in clinical pipeline are at the forefront of this transformation in cancer treatment, as we like to say, F-star bispecifics for life.

Our bispecific antibody technology allows us to create 2 new additional and distinct antigen binding sites in the Fc region of a natural human antibody, giving us 2+2 or tetravalent binding. These 2 new binding sites allow simultaneous targeting of 2 different antigens and importantly, enable a unique set of pharmacology that we call the 3 Cs, cross-linking, clustering and conditionality.

Cross-linking provides the bridge between 2 cells, and our platform has the architecture to perform this function with great effectiveness. Clustering is needed for our chosen receptor targets to elicit their pharmacology by balancing affinity, the binding to a single antigen with avidity, the cross-linking across multiple antigens. We believe our tetravalent bispecifics are amongst the best in class.

Finally, with respect to conditionality, the third C. For our potent bispecifics, we only want pharmacology to happen in the right place. Therefore, our conditionally active molecules deliver their effects only where both of the cancer targets can be engaged simultaneously, pointing their activity directly to the tumor. All of this means our plug-and-play platform enables rapid prospective design of natural full-length human bispecific antibodies for safe, potent immune activation at the site of the tumor. And with so few changes to this natural human antibody format, manufacturing becomes a straightforward process, giving us antibody light yields and stability.

It's important to note that over the last several months, our senior management has met with many existing shareholders as well as potential new investors. These meetings allows us to explain and ensure that the company and its plan for the year ahead is properly understood. F-star has multiple significant clinical readouts throughout this year in all 4 programs. As I mentioned earlier, this means 4 opportunities for success and with it enormous implications for patients, the company and, in my view, for our present valuation even against the backdrop of the current market conditions.

I'll now talk through our program, starting with FS118. As a reminder, FS118 targets 2 clinically validated inhibitory checkpoints, PD-L1 and LAG-3. FS118 is currently being tested in 2 different patient settings, checkpoint inhibitor naive patients with non-small cell lung cancer or diffused large B-cell lymphoma and also in head and neck cancer patients with PD-1 acquired resistance. We're anticipating a clinical safety and efficacy readout in the middle of this year for this latter trial. And despite some challenges with biopsy sample viability, we'll also report biomarker data for LAG-3 and PD-L1 co-expression in this patient group.

I'd like to say a few words about the tragic events in Ukraine. No one can have missed the human tragedy unfolding Ukraine, and we'd like to express our support and solidarity with the many millions who have been affected by the war. According to the FDA, over 250 drugs and devices are in clinical trials in Ukraine, which was selected as one of a number of countries for FS118 in checkpoint inhibitor naive patients. I should expect there will now be delays with this study in Ukraine. But contingency planning is well underway, and we'll continue to monitor the situation closely.

On a more positive note, recent economic forecasts of BMS' dual antibody program inhibiting LAG-3 and PD-1 is expected to add over $4 billion due immuno-oncology revenues by 2029, illustrating the tremendous potential value of targeting these 2 clinically validated checkpoint inhibitors in patients where there are a few other treatment options. We remain very excited about the prospects for FS118 and eagerly anticipate clinical data later this year.

FS222 is another important program in the F-star portfolio and continues to promise best-in-class data as we make ever more progress in the clinic. This program has the potential to be truly transformational for patients not getting the full benefit of first generation in immuno-oncology therapies.

FS222 is designed to target a wide range of patients, including those with PD-L1, low PD-L1 expressing tumors and benefits from all of the unique aspects of our platform technology. It's worth highlighting that in preclinical studies, we observed 100% survival and tumor clearance with FS222, and that's without having to combine with PD-1 inhibitors.

As we've previously described, FS222 is designed to have a unique balance of lividity and affinity profile against both the co-stimulatory CD137 and the inhibitory PD-L1 targets to provide dose-dependent PD-L1-driven CD137 T cell redirection. CD137 continues to gain momentum as a promising target in immuno-oncology in a wide range of settings. We're looking forward to providing a clinical update on FS222 later this year. This will include safety and tolerability, pharmacokinetics, pharmacodynamic biomarkers and early signs of efficacy, including objective responses. So far, I'm very excited to see the program translating beautifully from the preclinical setting into the clinical setting, more to follow.

In the second half of this year, we're also expecting to provide a clinical update on the Phase I trial of FS120. It aims to improve checkpoint inhibitor or chemotherapy treatment outcomes for patients, building on the potential of current standards of care whilst being tumor agnostic. As a reminder, FS120 co-stimulates OX40 and CD137, 2 key targets found on the surface of T cells. Later this year, ahead of schedule, we'll also plan to initiate a study of FS120 in combination with Merck's pembrolizumab. We look forward to sharing these data from the ongoing Phase I study.

And finally, SB 11285, our next-generation intravenous-administered novel STING agonist. Last year, we provided an interim update on the safety tolerability of pharmacokinetics of SB 11285. At that time, alone and in combination with atezolizumab, SB 11285 was well tolerated across 5 monotherapy and 3 combination dose levels. Based on these data, we are continuing to dose escalate and provide a clinical update on these further dose levels later this year.

Under the terms of the contingent value rights for SB 11285, we're exploring partnering options for the program. Of course, this adds a potential further source of nondilutive funding for the company.

In addition to the data readouts on our 4 programs that I've just described, we plan to actively participate in scientific conferences such as AACR, ESMO and Citi.

Now turning to our partnerships. The most recent partner announcements highlight the ongoing potential of our bispecific platform to generate new partnerships and also reaffirms the consistent delivery to our existing partners. In the fourth quarter of 2021, we were delighted to welcome Janssen, a member of the J&J family of companies as a new partner. The deal included a $17.5 million upfront payment and up to $1.35 billion in potential milestones.

Also, our long-term partner, Merck KGaA, Darmstadt, Germany exercised a fourth licensing option for a bispecific molecule under the ongoing immuno-oncology collaboration. We're also pleased to add AstraZeneca as a new partner in the middle of last year. We're excited to progress with all of our partners in 2022, and we'll continue to consider new partnering opportunities in noncore areas.

Also in 2021, 2 composition of matter patents were granted to F-star for FS118 in the EU and for SB 11285 in the U.S., adding to our growing intellectual property estate which now includes over 500 granted and pending patents.

Since our founders performed the first experiments on the pathway to tetravalency, we've been committed to developing novel therapies with potential to transform the lives of patients with cancer. As I've highlighted, we're embarking on a very important year as a clinical stage company, and we look forward to 4 programs delivering meaningful data in 2022. With the right experience and resource in place, we're very much looking forward to sharing these data with you.

As well as the 4 programs, we'll also bring forward exciting new molecules into the pipeline to find different ways to serve patients' needs and more on this towards the end of the year. 2021 was a year full of achievements. We've delivered on our promises and are poised to reap the benefits of those efforts this year. Our platform is generating novel differentiated pharmacology in the clinic in a way that is potentially huge implications for our understanding of immunology in the tumor microenvironment.

Bispecifics are clearly not monoclonal antibodies or even the combination of monoclonal antibodies. They behave differently and have the potential to deliver different better outcomes for patients. Bispecifics have come of age. And with the recent approval of tebentafusp from my former company, we see the difference that bispecifics can make.

We are committed to continuous outreach to the investment community and are grateful for the investor support that we've received to date. It's been a pleasure to share this corporate update with you, providing insight in how we both plan to transform the lives patients with cancer and unlock longer-term shareholder value.

And with that, I'll hand over to our CFO, Darlene, to give you an update on our financials. Darlene?

Thank you, Eliot, and good morning, again, everyone. As Eliot has highlighted, it's been an incredibly busy and exciting 2021 for the company. We've advanced all 4 of our clinical programs, added 2 new collaboration partners, closed a significant financing and continue to strengthen our patent portfolio. It all delivered while addressing the challenges of COVID-19 and obvious market headwinds.

Taking this momentum with us into 2022, we're set up for another strong year with significant upcoming milestones. I'll now go through the financials for the full year ending December 31, 2021, which demonstrates excellent progress against our strategy, including executing on our clinical programs, securing important new partnerships and robust financial management. We'll be happy to take questions at the end.

Cash and cash equivalents at December 31, '21, were $78.5 million as compared to $18.5 million at December 31, 2020. This $60 million increase in cash was primarily -- was driven primarily by net proceeds from our $78 million ATM in equity financing, $10 million debt financing and the $17.5 million upfront payment received from our new partner, Janssen, offset by the company's operational cash needs during 2021.

Revenue for the full 2021 year was $21.2 million as compared with $11.3 million for the prior full year, an increase of $9.9 million. The '21 revenue consists of $18.3 million of upfront fees from new licensing agreements, including Janssen and AstraZeneca and $2.9 million primarily from the Merck KGaA upon exercise of their option to license a third molecule.

We do not currently have any ongoing research and development service arrangements with partners as those programs have either come to the end of the research phase and hence, transitioned to the milestone phases expected or did not include R&D services, all of which is consistent with our collaboration strategy.

It's worth noting that there are currently 20-plus clinical and preclinical programs in development by our partners, which both validates our technology and potentially provides meaningful source of nondilutive income and extended cash runway over the coming months and years.

Turning to research and development. Total R&D expenses were $28.8 million for the full year '21 as compared to $14.1 million for the prior full year. This $14.6 million increase was due primarily to the expansion of our FS118 clinical trial into acquired resistant head and neck patients as well as our CPI naive trial in non-small cell lung cancer and DLBCL, a full year spend on the mono and combo SB 11285 clinical trial, which was acquired in the Spring Bank transaction in November of '20 and continued progression of our FS120 and 222 clinical programs.

More specifically, this increase includes the following: increases of $7.3 million in clinical trial costs, $3.2 million in manufacturing costs, $1.2 million in staff-related costs, $1 million in share-based compensation, $0.7 million in lab consumables, $0.2 million of other expenses and a $1 million reduction in the U.K. R&D tax refund, which is recorded as a credit to R&D expense. R&D expenses also included $1.7 million and $0.7 million of noncash stock-based compensation expense for 2021 and 2020, respectively.

Total G&A expenses were $23.1 million for the full year '21 compared to $19.5 million for the prior full year. This $3.6 million increase is primarily due to $2.5 million -- sorry, $2.4 million increase in stock-based compensation expense and $1.6 million increase in public company D&O officers insurance, for a full year versus approximately 2 months in the prior year.

$0.6 million in facilities costs, which primarily results from the 2 building leases we assumed in the Spring Bank transaction, $0.4 million in IT-related costs, primarily for the implementation of a new quality management software, offset by reductions of $8.8 million in legal and professional fees and $0.6 million in G&A staff costs.

The offsetting Spring Bank sublease income of $0.6 million, which basically netted to 0 is recorded in other income. Of note, 1 of the 2 Spring Bank building leases we assumed expired in Q2 last year.

G&A expense also includes $5.2 million and $2.8 million of noncash stock-based compensation expense for 2021 and 2020, respectively. Net loss for '21 was $31.3 million or $1.88 per basic and diluted share compared with a net loss of $25.6 million or $9.69 per basic and diluted share for the full year of 2020.

In closing, 2021 was a year full of achievements. We delivered on our promises and are poised to reap the benefits of those efforts with all 4 programs expected to deliver meaningful data this year and beyond. We're grateful for the engagement we received from the investment and analyst community, particularly given the current market conditions. However, we clearly continue to be undervalued, especially considering that we're trading below cash and have 4 programs that are progressing well in the clinic.

We're well placed to deliver on our strategy for the coming months and years, even while facing the same current market headwinds as many other biotech companies. It's an exciting time for bispecifics generally as well as for F-star and our investors as we work towards transforming the lives of patients with cancer.

With that, operator, we will open the call up for questions.

(Operator Instructions) Our first question comes from the line of Hartaj Singh from Oppenheimer & Company.

Great. I just got one question on FS118 and one quick follow-up. Eliot, you had mentioned that you're still hoping to, I guess, give an update in 2022 in the head and neck trial. Can you just give any updates on the non-small cell lung cancer trials also the CPI naive and I guess maybe there was a DLBCL-1 also that might have been planned to be initiated this year? And then I just got a quick follow-up.

Yes, sure. So thanks, Hartaj. Nice to speak with you. Yes, so the checkpoint naive non-small cell lung cancer and diffuse large B-cell low lymphoma trials are active right now, and we've been guiding towards the first half of next year for clinical data from those 2 patient groups in the checkpoint naive study.

Great. Great. And then just the other question on -- I guess you've seen more data now on the BMS approach with LAG-3 and PD-1, and there are some other companies that are trying the 2 antibody approaches. From what you've been able to see utilizing 2 antibodies versus 1 bispecific, has there been additional insights that you gained that could help you with your clinical trial strategy and also whether it's more something, for example, like enriching patients or anything else like that?

Yes, that's great, Hartaj. Yes. So the underlying hypothesis for us, as you know, is related to LAG-3 expression and -- that's true across the 3 different patient groups head and neck, non-small cell lung cancer and diffuse large B-cell lymphoma. But really, the thing that we drive towards, and this will become really important and we look forward to the discussion around AACR, is the removal of LAG-3 from the TILs . And we believe that our 2+2 bispecific has the opportunity to drive that removal in a way which is more efficient and effective than other approaches. So either combinations or even PD-1 like 3 bispecifics.

Our next question comes from the line of Daina Graybosch from SVB Leerink.

A couple clarifying on FS118 first. I think you said in the prepared remarks that you had some challenges of biopsies, but you'll still report biomarker data for LAG-3 and PD-L1. Our understanding was that positive LAG-3 and PD-L1 was an inclusion criteria for enrollment in the study. Is that still the case? And then as you look forward to the data readout later this year, can you give us any more guidance on when in the year to expect and about how many patients given the challenges of biopsy and the challenge of your site in Ukraine?

Yes. Daina, nice to speak with you. Yes. So 2 questions but actually 3 answers. So the first is, just to clarify, we take anyone who's got the acquired resistance, head and neck cancer into the study. We observe that's something like 7 or 8 out of 10 of those patients in the prior study and through literature and others' research are LAG-3/PD-L1 co-expressing in the way in which would be appropriate. But we retrospectively analyze the samples, which frankly, for the first few patients were tricky, and we do that in a batch-wise manner to understand whether they are or are not expressing.

So assuming our estimates are correct, the Stage 1, we're looking between 8 and 12 evaluable patients. So we would expect to recruit 15 or so -- and that's the sort of numbers that are playing out for us to get that data. We continue to guide to the middle of this year. So for that study with respect to the clinical data that I mentioned in the prepared remarks, and I shall repeat that.

Just one clarification. The Ukrainian center was for the checkpoint naive FS118 study in non-small cell lung cancer only. It's very unfortunate circumstances, I guess, for us, of course, we don't just open an international study in 1 country. We opened across several countries and we have several other countries also participating. We're just looking right now to see how we make [contingency] -- that won't have an impact on the FS118 head and neck study and we're obviously making sure that the checkpoint naive is impacted as little as possible.

I'm glad I asked for the clarification. I got it all wrong. So then one other question on FS120. Can you remind us why this one, it makes sense to combine with pembro, where you don't believe you'll need to combine with pembro for FS118 and FS222?

Yes, sure. So 118 -- so I'll answer it in reverse order. So 118 and 222 contain a checkpoint inhibitor, we put PD-L1, as you know, in both of those. So LAG-3 and PD-L1 for FS118 and CD137 and PD-L1 in FS222. FS120, just a reminder, is a dual agonist, so both OX40 and CD137 which, at least in a preclinical setting, are really synergistic with respect to immune stimulation. But -- and we've described and we'll continue to describe this year that kind of triple response around CD4, CD8 and the destabilization of Tregs and some really interesting data emerging there, both non-clinically and in the clinic.

But of course, as you'd imagine, as you stimulate that immune system, you get cell killing, then you get an uptick in checkpoint pathways, not least of which being the PD-1, PD-L1. And so we found in the preclinical setting that either combination with checkpoint or interestingly, 3 different types of chemo and that's something we're really going to start to explore in the not-too-distant future, really give a better survival in the syngeneic models than just FS120 on its own.

Although, frankly, FS120 on its own gave an improvement of survival as well compared to controls. But that's why we're going with that. And we're delighted we're a bit ahead of the game on that. The preclinical data we're translating really well into the clinic. As you know, FS120 is kind of cancer-type agnostic. And we're excited to do the pembro combination, and we'll give an update on the Phase I when we do that combo a little bit later this year.

Our next question comes from the line of Matt Phipps from William Blair.

I guess a bit of a follow-up on Daina's, but encouraging words from you on FS222 with regards to recapitulating what you've seen preclinically. So I guess just wanted to confirm at this point, you all do not plan to combine with a PD-1 drug like a lot of your, I guess, colleagues and other companies are doing with their kind of monovalent PD-L1, CD137 bispecifics?

Matt, nice to speaking to you. So look, we certainly don't see the need to combine with PD-1 in the clinic. It certainly wasn't required in the preclinical data. As you may recall, we've got 100% survival in total tumor clearance as a monotherapy of FS222. The other thing is that in immuno-oncology, and we see this more and more and some of the AACR abstracts are really interesting along these lines, is you will have to do combinations, right? I mean, it's how it's going to go.

We don't think it needs -- we think we've got the PD-1, PD-L1 axis completely covered with FS222, but there will be other interesting combinations we look at as part of development. There's no doubt about that. But right now, and certainly, we're very excited about what we're seeing in the clinic as a monotherapy, and I'm excited to share those data later this year with everyone.

Okay. Great. And I was wondering if you all are looking at or have seen CD137 shedding similar to what you all have reported with LAG-3 shedding with 118?

Sorry, just to repeat that back to CD137 shedding as a kin to the LAG-3 shedding? Matt, was that the question you spoke or...

Just wondering if with 222, you're seeing any CD137 shedding? Others have also talked about soluble 137 with the [same therapy for this.]

Got it. Got it. Yes. Just wanted to make sure. Yes, so we have a raft of biomarkers. We look at shedding of PD-L1, CD137 and the 222 is part of that mix. We will publish on that later this year. But I guess if I -- without giving you the answer, let me just point you to mechanistically how well are drugs, which, as you know, the 2+2 tetravalency are ideally suited for that clustering and shedding. And so we would anticipate that the benefit of removing, for example, LAG-3 from TILs would also play out with respect to shedding of CD137 and PD-L1 with FS222 and more on that to come this year.

Our next question comes from the line of Justin Walsh from B. Riley Securities.

To start, last month, a competitor announced that it's no longer advancing its partners, tetravalent PD-1 and LAG-3 in a number of indications due to the clinical data that they saw. Wondering if you can comment on any potential read through to FS118 and what gives you confidence that your PD-L1 LAG-3 asset will do better?

Yes. Look, thanks, Justin. I mean one of the central characteristics of our 2+2 is the ability to cleave LAG-3 from the TILs. And we've shown some of that data in Phase I and we're obviously following that in Phase II, not just in the head and neck setting, but of course, in non-small cell lung cancer and diffuse large B-cell lymphoma.

One of the things kind of our foundational hypotheses is around the expression and co-expression, expression of LAG-3 and co-expression alongside PD-L1. And we're confident that, that mechanism will play out in these tumor settings. With a PD-1 bispecific or even with the combination, that ability to remove LAG-3 from TILs just simply doesn't exist. And -- or as a minimum is reduced compared to what we see. So I think [material] data with -- carefully, but I don't think that will play through mechanistically to what we're seeing with FS118.

And I would suggest actually, if you forgive a kind of in-question advert, we've got a poster at AACR on the exploration of tetravalency, PD-1 versus PD-L1 and the removal of LAG-3 from TILs and we're really excited to share those data.

Great. Looking forward to seeing that. One more quick one from me. I was wondering if you could provide some color on how F-star is managing and prioritizing its busy development efforts. And specifically, I know that your partners are funding those efforts, but wondering how time and effort is allocated in terms of supporting partner efforts versus advancing your own wholly owned pipeline?

Yes. So thanks, Justin. That's a great question. Our key focus is on delivering the 4 programs and the data from those 4 programs. It's actually 7 ongoing trials, but 4 programs with data this year. Our partners are continuing to report and then I think as Darlene mentioned, we've got more than 20 programs with our partners now. But the way in which we've structured the deals is that the kind of heavy lifting is undertaken by our partners. And so if you look across Merck or Denali and the newer partners, all of the research, clinical development and then ultimately, commercialization is done externally.

And we obviously maintain the IP. We remain good partners with respect to giving guidance -- help, if it's needed. But we're also pretty careful about the nature of partners that we would take on. And if you just read through the list, I mean, they're outstanding quality partners. And you know what we learn things from them every day as part of those partnerships as well.

But operational focus is kind of 99% our in-house pipeline, the 4 programs, plus the other things that are coming into the pipeline from the platform through the discovery team, and we'll talk more about that at the end of this year, which we're really excited about. And then the, I guess, what, if I can do the math right, but the remaining 1% with partnerships.

Our next question comes from the line of Yale Jen from Laidlaw & Company.

Basically, I have 2. The first one is for 118 in terms of the checkpoint naive, the 2 indications. Do you sense any sort of difficult patient recruitment given a checkpoint has been a standard of care nowadays of those 2 indications? And then I have a follow-up.

Sure. Yale, nice to speak with you. Yes, so in part, and this is part of the misfortune with the Ukrainian war, is we need to go to territories where use of checkpoints in first to second line is less frequent. And so we are doing that in Europe predominantly. And I think we're reasonably comfortable that we'll get there. And I guess the other thing that's worth noting is there aren't any checkpoints approved in diffuse large B-cell lymphoma. So that's an easier group to tackle -- and in particular, if you think about the utility of CAR therapies in that setting as well, then there are things we can do around that. And certainly, LAG-3 looks like a very important immune suppression pathway there.

For non-small cell lung cancer, we've not talked publicly about what we're doing with respect to the kind of major subgroup that's available, but there are certainly significant subgroups in terms of percentage of patients with non-small cell lung cancer who don't typically get checkpoints in the first instance. And so again, we think there's an opportunity there as well. But we are monitoring that closely and that's why we do a substantial amount of our work in Europe.

Okay. Great. That's something very helpful. Maybe a follow-up question here is in terms of 222. Given there's a number of programs, both targeting both PD-L1 and the CD137. Before we have all the data, what do you think the -- sort of the potential benefit or leg up you guys may have? Or just any comment on your competitor, a very direct competitor at this moment?

Yale, thanks. That's a spot-on question. So look, again, I come back to my response to others is the tetravalent structure we have, the 2+2 is really well positioned to give us that cross-linking and clustering. And what we showed in the nonclinical setting, and we'll see how this translates later this year into the clinic is a normal dose response. So we don't get a hook effect. And in particular, that's because of the way in which we've tuned the molecule, as I said in my talk, is a balance between affinity and avidity. And where from a differentiation perspective, we think that's going to be important.

We also think there is -- it looks like there's no need and this to the question earlier to combine with the PD-1. And ultimately, we can go after patients who are low PD-L1 expressing who get less response as a monotherapy from the first generation and indeed need often to combine with chemo. And one of the things we've been looking to do is spare chemo. And we think that tetravalency underpins all 3 of those elements. So a no hook effect going after PD-L1 low and ultimately, potentially chemo sparing in that patient group.

Our next question comes from the line of Patrick Trucchio from H.C. Wainwright.

Team, this is Jason Shieh on for Patrick. And my first question is just around FS222 and the CD137 targets. How does the FS222 compare with other programs in the space, including the new collaboration between Adagene and Sanofi for ADG106? And what are some of the [read through] from the other programs for the near term that investors can place more confidence into the 4-1BB as a potential target? And I have a follow-up question after that.

Sure. Well, nice to speak with you, Jason. I mean, I think one of our central contentions would be that the simplicity of the way in which we produce the Fcabs. So this is modified Fc against PD-L1, where we -- sorry, not PD-L1, CD137, where we tune for avidity rather than for high affinity, gives us a differentiation compared to many of the other CD137s. So that's -- so for us, that's different.

But what we're, frankly, pleased to see are more and more CD137 approaches. And I think the industry physicians and the rest of the community are really beginning to see the potential power of CD137. Although I come from a previous setting which CD3s were used widely. And I think they are important, it's sometimes more difficult to control the immune response, the immune stimulation from that and CD137 looks like a controlled way of going right across the immune stimulation, not just the CD4s and 8s, but also NK cells and some interesting inverse effect in the Treg population as well.

So I would say that we're different because of the very simple 12 amino acid substitution to produce CD137 binder. And at the same time, we have an explosion of interest in CD137 where we collectively where -- sorry, collectively understand more and more. And I guess, ultimately, the kind of CD137 story tripped up, I think, in its first generation because of safety. And we've all -- and not just F-star, but collectively understood in part what that was about and it was certainly to do with nonspecific Fc gamma interactions. And of course, we've tuned our molecules to be conditional. So you only get the effect when both receptors are [bound] and we think that will be important for us as well.

So I summarized once, I'm going to summarize again. So we're really excited about CD137. I think it's really important. Obviously, we're wedded to it through FS222 and through FS120 and I think the industry is heading in the same direction. The next wave of CD137 approaches will also be interesting. There's clearly the checkpoint pathways, but I think we'll see a greater role in taking CD137 through a TAA approach to the tumor microenvironment, we shouldn't ignore other cell types as well while we're in there.

That's really helpful. Yes. And I guess as a follow-up, what are some of the key data points that we should focus on for the expected data readouts in the Part A study of the FS222 trial this year? And when can we be expecting initiation for the Phase Ib like tumor-specific expansion cohort?

Yes. So we'll give a report later this year on the progress of FS222 in the clinic. And I think as I said in my presentation, we'll be focusing in kind of 3 major areas. So one is, obviously, safety and tolerability, which is going to be really important, and we're expanding the level of dosing and the number of doses at each group very well now. We're also, of course, really interested to see the kind of PK and PD relationship and PD related to those biomarkers. And as I've already discussed, CD137 and PD-L1 maybe shedding is something we're taking a look at.

And then finally, clearly evidence of efficacy. And we measure the same efficacy outcomes as everyone else does. We do regular scans. And clearly, we'll report on those data that we're seeing there from a response perspective. And I think it's more likely that the full expansion into that kind of Part B, Part C and we're -- and all of our programs are built so that they can be modified live as it were on the kind of (inaudible) analysis will be into the early part of next year.

Okay. Great. And if I could just squeeze in one last one is for your versatile like plug-and-play platform, are there any new programs that we should be expecting in the near term?

Yes, indeed, we're -- our CSO, Neil and his team, have been working like Trojans behind the scenes. And we're very excited to be able to talk about at least 1 new program before the end of this year. That's coming through into the clinic. And thinking about, as I said, new ways of thinking about helping patients through different sorts of approaches, but based around our platform.

At this time, I'm showing no further questions. I would like to turn the call back over to Eliot Forster for closing remarks.

Great. Well, look, thanks, everyone, for joining this morning and really appreciate. Thanks very much for those insightful questions. It's worth a reminder that in 2021, we had a first great year as a public company. And obviously, 2022 is an important one for F-star for patients, employees and of course, our shareholders. We delivered on our corporate promises and clinical strategies in 2021, and we'll do the same this year in 2022.

New partnerships with Janssen and AstraZeneca have highlighted our strategy for capitalizing on noncore assets. I'm excited about the emerging data from patients in FS222, FS120 and SB 11285 trials. I also eagerly anticipate the FS118 clinical data. With the current cash flow, we are excited to be on track to deliver these important clinical milestones.

And finally, I'd really like to thank the F-star team, our partners and our shareholders for your ongoing support. I'd also like to thank the patients participating in our trials and our expert clinical investigators. As you work through the COVID pandemic and pass into a further period of political uncertainty, I know that we are all united behind our mission to develop next-generation immunotherapies to transform the lives of patients with cancer. And I look forward to sharing our successes with you every step of the way. Thank you, and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.