Earnings Call Transcript - BCAB Q1 2022

Operator, Operator

Good day, and thank you for standing by. Welcome to the BioAtla First Quarter 2022 Financial Results and Business Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Bruce Mackle, LifeSci Advisors. Please go ahead.

Bruce Mackle, LifeSci Advisors

Thank you, operator, and good afternoon, everyone. With me today on the phone are Dr. Jay Short, Chairman, CEO and Co-Founder; Scott Smith, President; Philippe Martin, Chief of Clinical Development and Operations; Sheri Lydick, Senior Vice President, Commercial Strategy; and Richard Waldron, Chief Financial Officer. Earlier today, BioAtla released financial results and a business update for the quarter ended March 31, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that statements made during this conference call that are not historical facts are forward-looking statements within the meaning of the federal securities laws, including, but not limited to statements regarding our business plans and prospects, financial and operating performance and expectations, operating costs and expenses, products pipeline, clinical trial and regulatory timing and associated resource requirements, our programs and potential partnerships, and the advancement of our CAB technology and product candidates. These forward-looking statements are based upon BioAtla's current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties as described in BioAtla's annual report on Form 10-K filed February 28, 2022, and subsequent filings with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on these statements. All forward-looking statements made during this conference call are based on management's assumptions and estimates as of today, May 4, 2022. BioAtla undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after today, except as required by law. With that, I'd like to turn the call over to Jay Short, Chairman, CEO and Co-Founder of BioAtla. Jay?

Jay Short, Chairman, CEO and Co-Founder

Thank you, Bruce. Thanks to everyone for joining us for our first quarter 2022 and first ever BioAtla earnings call. BioAtla is a clinical-stage biotechnology company focused on transforming cancer therapy with the development of our novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancer. Our Conditionally Active Biologics or CABs target known and widely validated tumor antigens that have previously been difficult or impossible to target by exploiting characteristic pH differences between cancer cells and normal healthy cells. Since our IPO in December of 2020, the broad applicability of our CAB technology has allowed us to continue advancing the development of our innovative clinical and preclinical programs. We have five potentially registration-enabling ongoing Phase 2 trials for our two latest stage CAB-ADC product candidates, mecbotamab vedotin or BA3011 and ozuriftamab vedotin or BA3021 across multiple solid tumor types for these first-in-class therapeutic candidates. BioAtla is also supporting a multi-center investigator-initiated trial for both our lead assets in platinum-resistant ovarian cancer. Additionally, a Phase 1 basket trial for our CAB-CTLA-4 antibody BA3071 has been initiated and is currently ongoing. Finally, BioAtla has several candidates in our IND-enabling preclinical pipeline that include CAB bispecific and next-generation ADC antibodies targeting unmet medical needs in multiple types of solid tumors. We are pleased with our continued progress during the first quarter across our many clinical programs and believe we are well poised for another strong year of execution in 2022. Most importantly, we are excited to share the updates on our ongoing clinical programs with you today. In particular, interim clinical data from our Phase 2 sarcoma study with our lead asset BA3011. With that, I would now like to turn the call over to Philippe Martin, Chief of Clinical Development and Operations, to provide a top line interim clinical data update from our Phase 2 sarcoma study.

Philippe Martin, Chief of Clinical Development and Operations

Thank you, Jay. And good afternoon, everyone. Before providing a top line interim update on our Phase 2 sarcoma study, I would point out that we have put this slide of top line interim clinical data on the Investors section of our company website under Events & Presentations. Our ongoing potentially registration-enabling open-label Phase 2 trial of BA3011 was designed to evaluate the efficacy and safety of BA3011 in adults and adolescent patients with refractory soft tissue and bone sarcoma. There are two parts to the Phase 2 portion of the trial. In Part 1, we enrolled approximately seven patients across seven different sarcoma subtypes to receive BA3011 monotherapy and across all sarcoma subtype to receive BA3011 in combination with nivolumab, split equally between CD20 positive and CD20 negative tumor expression. Patients were selected based on AXL expression in each sarcoma subtype. These subtypes in soft tissue sarcoma include leiomyosarcoma, synovial sarcoma, liposarcoma, other soft tissue sarcomas, including undifferentiated pleomorphic sarcoma or UPS, while bone sarcoma subtypes included osteosarcoma, Ewing sarcoma, and other bone sarcomas, such as chordoma, and/or chondrosarcoma. The purpose of Part 1 of the Phase 2 study was to identify sarcoma subtypes that do not respond to BA3011 treatment and eliminate these subtypes for moving forward into Part 2 of the study. Predefined go/no-go criteria for the interim analysis determines which subtype may advance to Part 2 of the study. This threshold for a go decision is either at least one partial response or complete response per subtype or progression-free survival rate of at least 40% at three months. Our preliminary interim analysis of Part 1 of the Phase 2 study that we will share today is based on an efficacy data cut-off date of April 28, 2022. We achieved and even exceeded predefined criteria in multiple sarcoma cohorts, including UPS and osteosarcoma. Specifically in UPS in the monotherapy cohort, we observed one partial response out of five patients, which satisfied our predefined go criteria in Part 2 of Phase 2. We observed an additional PR in our UPS patient in the combination cohort, resulting in a total of two partial responses out of six UPS patients treated, with an objective response rate of 33%. This is consistent with what was observed in Phase 1. When combining Phase 1 and Phase 2 data at the recommended dose of 1.8 milligrams per kilogram, partial responses were observed in four of eight UPS patients with an objective response rate of 50% and a progression-free survival at three months of 50%. Importantly, we are observing durable responses, and partial responders are able to remain on treatment for extended periods of time. Some of them are on study for over two years. In the Phase 2 osteosarcoma cohort, we enrolled a total of six patients and observed a progression-free survival rate of 67%, which exceeded our predefined go criteria to Part 2 of Phase 2. When combining Phase 1 and Phase 2 data at the recommended dose of 1.8 milligrams per kilogram, we enrolled a total of seven patients with a progression-free survival rate at three months of 57%. For context, recent studies have shown that the placebo PFS rate for first and second line metastatic osteosarcoma patients at eight weeks is at or around 0%. When combining all Phase 1 and 2 bone sarcoma patients, we enrolled a total of 17 patients and observed a PFS rate at three months of 56%. We're encouraged by these interim results in UPS and osteosarcoma. In view of the significant unmet need, we believe we have an opportunity for potential accelerated regulatory approval for BA3011 in these sarcomas. We intend to advance these two sarcomas as two separate cohorts and are working toward a meeting with the FDA by July of this year and anticipate enrollment into Part 2 to begin shortly thereafter. Consistent with the purpose of Phase 1, we also identified a cohort that will not advance into Part 2, that cohort is leiomyosarcoma. The PFS rates observed in the leiomyosarcoma cohort was 27%, thus, below the threshold established by the predefined criteria. This rate is pending confirmation as some patients are still on treatment, they have not yet reached three months. Based on the data so far, we are hopeful that other cohorts will be moving forward into Part 2 of Phase 2 soon as more patients get through the three-month mark. We are continuing to enroll patients across four additional cohorts: synovial sarcoma, liposarcoma, Ewing sarcoma, and other bone sarcomas. An update will be provided as soon as the go/no-go decision is reached for each of these cohorts. With regards to the safety, BA3011 is generally well tolerated, with a Phase 2 safety profile consistent with the profile observed in Phase 1. As of the safety data curve as of March 31, 2022, there were no treatment-related deaths, and we observed few treatment-related serious adverse events and adverse events leading to discontinuation. Treatment-related adverse events were generally consistent with MMAE toxicity. Related AEs generally did not lead to treatment discontinuation. Only two patients out of the 68 discontinued treatment due to treatment-related adverse events. Both were Grade 2 peripheral neuropathy. With that, I'd like to thank you for your attention and would now like to turn the floor over to Sheri Lydick, Senior Vice President Commercial Strategy, who will highlight the significant unmet need and commercial opportunity in sarcoma.

Sheri Lydick, Senior Vice President Commercial Strategy

Thank you, Philippe, and good afternoon, everyone. As you all know, sarcoma is a relatively rare type of cancer with a high unmet medical need. There are limited therapeutic options and the five-year survival rate for advanced refractory metastatic sarcoma is only approximately 20%. In part as a consequence of the high unmet medical need, the regulatory threshold for investigational therapies is quite low. Essentially, all approved therapies fall at or well below 15% objective response rate suggesting that a drug with an ORR at or above this threshold would be a welcome addition to limited treatment options for these refractory sarcoma patients. UPS is one of the largest sarcomas subtypes representing nearly 15% of all soft tissue sarcomas. UPS is also one of the most aggressive subtypes with one of the highest recurrence rates. Patients with refractory UPS often progress very rapidly. The standard treatment is surgical removal, and there are no FDA treatments specifically approved to treat UPS. Ewing sarcoma is a malignant tumor of the bone that is often diagnosed in children and young adults. Osteosarcoma is the most common malignant primary bone tumor excluding multiple myeloma, accounting for 30% of all such malignancies. They are frequently aggressive tumors, often occurring in childhood. Nearly 20% of osteosarcoma patients have metastasis at diagnosis, and of the remainder, 50% will eventually progress to clinical metastasis. Surgical excision remains the mainstay of curative treatment with chemotherapy and radiotherapy often used in conjunction with suboptimal success. In addition to the high unmet medical need, UPS and bone sarcoma represent a significant commercial opportunity. Combined, there are approximately 5,000 to 7,000 addressable UPS and osteosarcoma patients per year in the U.S. with the potential to generate upwards of $1 billion in worldwide revenue. The FDA has granted Orphan Drug Designation to BA3011 for treatment of soft tissue sarcoma. The U.S. sarcoma patient population and the medical professionals who treat them can be served by a highly trained, yet relatively small group of marketing professionals and a commercial infrastructure that can target high-volume sarcoma centers at launch. Based on the encouraging interim data just shared from our Phase 2 BA3011 sarcoma study, we are excited that our lead CAB-ADC asset BA3011 moves us closer toward our transition to a commercial stage company while filling a significant unmet medical need for sarcoma patients. Now, I would like to turn the call over to Scott Smith, President of BioAtla, to provide an overview and updates to our other ongoing clinical programs.

Scott Smith, President

Thank you, Sheri, and good afternoon, everyone. I'm going to take a few minutes to run through some key operational updates and upcoming milestones. Before I do, I wanted to reiterate my excitement about the interim Phase 2 sarcoma data from Part 1 of the study. Given the significant unmet medical need and commercial opportunity in sarcoma, we are thrilled to move one step closer toward potential first-in-class accelerated regulatory approval path of BA3011 in multiple sarcoma subtypes. Looking beyond sarcoma, we have a Phase 2 trial ongoing with BA3011 in refractory non-small cell lung cancer. Over 40 sites are active in this trial, and we're actively enrolling and dosing patients. We anticipate the preliminary cohort of 20 patients to be fully enrolled by the end of this quarter, with an interim update anticipated on or around our second quarter earnings call. Now turning to our second lead CAB-ADC product candidate, BA3021, a CAB-ROR2-ADC. As a reminder, there are no other therapies targeted virtually in the clinic. So we have the potential to have a first-in-class treatment for solid tumors. In Phase 1, we saw impressive responses in ROR2-positive patients, refractory to PD-1 therapy, including two confirmed partial responses in non-small cell lung, one PR in head and neck cancer, and a complete response in a melanoma patient who remains in complete remission off treatment for over two years. We have initiated three Phase 2 trials with BA3021, and I'm happy to provide an update as to where we are with each, beginning with non-small cell lung cancer. The non-small cell lung trial in refractory patients is currently dosing, and we anticipate the preliminary cohort of up to 20 patients to be enrolled in the second half of 2022, with an interim update planned after these patients have received at least three months of therapy, likely in the second half of this year. Turning to the melanoma trial, which is being conducted in patients refractory to PD-1 therapy, we have run into challenges with trial recruitment and have enrolled only one patient to date. The ROR2 positivity rate has been lower than anticipated at around 10%. So it's been a challenge obtaining invasive tissue biopsies in these patients, which we believe has significantly impacted our ability to recruit to trial. We are working diligently on liquid biopsy with our partner. We are currently in the validation phase and anticipate this non-invasive assay will be available to us in the melanoma trial set. We believe there will be a significant acceleration in enrollment with the availability of this liquid biopsy. While we only had one melanoma patient enrolled in Phase 2, I'm very happy to report that this patient has also achieved a complete response. When you take into account the complete response we observed from Phase 1, we now have two out of two ROR2 positive PD-1 refractory patients with a complete response, which is quite remarkable. While we're unsure of timing at this point, we remain very excited about the potential of BA3021 in melanoma patients who are working toward providing an interim update in the second half of this year. The third Phase 2 study that we've initiated with BA3021 is in refractory patients with head and neck cancer. We anticipate the first patient to be dosed in the second quarter of this year. To round out our CAB-ADC programs, we are supporting a multi-center investigator-initiated Phase 2 clinical trial of BA3011 or BA3021 in patients with platinum-resistant ovarian cancer. This trial was initiated and is currently screening patients in Canada and the United States. I’d now like to talk briefly about updates for a CAB-CTLA-4 antibody BA3071. The Phase 1/2 trial is ongoing and will examine safety and tolerability of BA3071 in doses ranging from 7 milligrams every three weeks to 700 milligrams every three weeks as monotherapy and in combination with nivolumab. We are very excited to have this asset back in BioAtla’s portfolio and believe there's a tremendous unmet need and commercial opportunity for a safer and better-tolerated CTLA-4. We anticipate the first patient dosed in the second quarter of this year. Turning to our preclinical pipeline, BioAtla has several candidates in IND-enabling phase that include CAB bispecific and second generation ADC antibodies. We remain on track for an IND submission for a CAB EpCAM x CAB-CD3 bispecific antibody this year, as well as for additional IND filings for multiple preclinical CAB bispecific and next-generation CAB-ADC candidates in 2023. On the business development front, we announced early in Q1 that we entered into a clinical collaboration with BMS to investigate our two lead CAB-ADCs in combination with BMS's nivolumab. With that, I'd like to hand over to Rick to review the first quarter 2022 financials.

Richard Waldron, Chief Financial Officer

Thank you, Scott. BioAtla’s financing strategy is an integral part of our overall corporate strategy. Our primary objective is to be cost-effective across current product candidates through the commercialization stage or other major development inflection points, while expanding our product candidate pipeline. This is intended to optimize our opportunities for future financing and enhance value for the stockholders. As of March 31, 2022, we had $219.4 million in cash and cash equivalents compared to $245 million as of December 31, 2021. We expect current cash and cash equivalents will be sufficient to fund planned operations, including all ongoing CAB product development programs into the second half of 2024. We control all CAB product market rights in the U.S., Europe, and Japan. Selective licensing of product rights in certain territories or collaborations with other biopharmaceutical companies could generate for us upfront cash, development milestones, and royalties upon regulatory approval and commercialization that could extend our cash runway and create additional value for stockholders. For the first quarter of 2022, we reported a net loss of $24.3 million compared to a net loss of $18.7 million in the first quarter of 2021. All of the $5.6 million increase is attributable to the increase in research and development expenses from $10.4 million in 2021 to $16.9 million in the first quarter of 2022, primarily driven by expansion of our product development efforts, including clinical development for CAB-CTLA-4 BA3071, and preclinical development of additional CAB candidates. We expect our R&D expenses to increase as we continue to invest in R&D activities to advance our product candidates and clinical programs and to expand our product candidate pipeline. General and administrative expenses were $7.4 million for the first quarter of 2022, compared to $8.4 million for the first quarter of 2021. The $1 million decrease was attributable to a decrease in stock-based compensation for the 2022 period. We expect our G&A expenses to increase to support development of our product candidates, expand our intellectual property portfolio, support pre-commercialization activities for our lead product candidate BA3011, and meet all requirements as a public company. Net cash used in operating activities for the three months ended March 31, 2022, was $25.1 million compared to net cash used in operating activities of $15 million for the same period in 2021. The increase in net cash used in operating activities for the first quarter of 2022 is primarily derived from the $5.6 million increase in net loss, the $1 million decrease in stock-based compensation, and a $3.5 million greater change in certain working capital accounts compared to the 2021 first quarter results. And now, back to Scott.

Scott Smith, President

Thank you, Rick. Since our IPO in December of 2020, we have continued to advance the development of our innovative clinical and preclinical programs and have achieved a number of value creating clinical milestones with our CAB assets. As BioAtla continues to build our medical affairs and commercial capability, and given the strength of our balance sheet, we will continue to make efficient use of our capital resources to continue to focus on solid tumors with the greatest therapeutic and market potential. In addition, we will strategically prioritize our resources to execute our efficient and strategic clinical trial designs, thereby achieving key value inflection points for our company and for our shareholders. We're very excited about the potential range of opportunities for CAB antibodies to create long-term sustainable value, transforming cancer therapy, and have a meaningful impact on patients' lives across multiple solid tumor types. Thank you for your attention. And with that, we will turn it back to the operator to take your questions.

Operator, Operator

Our first question comes from the line of Anupam Rama with JP Morgan.

Anupam Rama, Analyst

My first question is, can you give us a sense of the status of the data for the liposarcoma, synovial, and Ewing sarcoma when you meet with regulators in July? And then, regarding safety, for the two patients with peripheral neuropathy, are there any noteworthy baseline characteristics for them?

Scott Smith, President

Thank you for your question, Anupam. I'm going to ask Philippe Martin to directly answer the two questions that you put forward there. So Philippe?

Philippe Martin, Chief of Clinical Development and Operations

Yes. So by July, we anticipate we will have all the data from the remaining cohorts that we're still recruiting at the time we'll be meeting with the agency. Again, I'd like to point out that we are working with the agency right now to schedule the meeting. July is a tentative date that should work based on general timelines, but it's based on the agency availability. So I just want to make that clear to you. And then for the peripheral neuropathy, baseline for those two patients, I believe one of the two patients had a prior history of peripheral neuropathy before joining the trial. We've seen a few of those patients coming in with Grade 1 peripheral neuropathy. We are allowing that, and the patients progress to Grade 2. But I mean two patients out of 68 is a rate that is definitely acceptable going forward.

Scott Smith, President

Particularly in this multi-refractory patient population that we're studying, many of whom are coming in with a history of peripheral neuropathy. So again, I think it shows a little bit of the CAB technology playing out in the clinic, because the rates are quite low relative to other ADCs studied in this multi-refractory patient population.

Anupam Rama, Analyst

Would you disclose some of the data from the other cohorts like Ewing and synovial and liposarcoma when you have them or how should we be thinking about the disclosure around those cohorts?

Scott Smith, President

We are currently not disclosing details about the cohorts we are still enrolling, as we haven't made any determinations and lack sufficient information. In Phase 1, we observed responses in UPS, bone, and one response in leiomyosarcoma. We have confirmed our findings in Phase 4 for bone and UPS, reflecting our Phase 1 results. However, we chose to hold off on advancing the leiomyosarcoma cohort, since we did not see a response in Phase 1 and the progression-free survival data was not adequate to proceed to Phase 2. Once we gather the necessary information, we will provide updates on these cohorts, likely in the next conference call. We anticipate having enough data to present to the agency and make informed decisions moving forward. I am particularly pleased with our progress in UPS and osteosarcoma, two significant sarcoma subtypes, as the data we are seeing is very compelling and supports our Phase 1 observations.

Operator, Operator

Our next question comes from Tiago Fauth with Credit Suisse.

Tiago Fauth, Analyst

So just one quick check the box here. So a few different charts had different values for the tumor membrane percentage score for the sarcoma. So just to confirm, the Phase 2 data that you presented today, those are all in patients 70% plus, correct?

Philippe Martin, Chief of Clinical Development and Operations

That's correct. We allowed 50% or more, but the patients you're seeing for UPS were all 70% or more.

Tiago Fauth, Analyst

Given the responses so far, is there a specific biological reason why the drug is effective only on those subtypes? In Phase 1, the response seemed mostly linked to AXL expression. Additionally, there was a leiomyosarcoma response not seen in Phase 2, with only one response observed among 45 patients in the monotherapy arm. How confident are you that there is a strong signal here and that it isn't simply due to positive selection moving forward? I'm interested in understanding the rationale for such differing results.

Philippe Martin, Chief of Clinical Development and Operations

I believe the results are consistent with what we observed in Phase 1. We identified a signal in UPS and were able to replicate that in Phase 2. In the case of leiomyosarcoma, the patients we observed in Phase 2 were very advanced, having failed three or more prior lines of therapy. We noted several patients progressing very quickly, which likely prevented us from seeing a response. The reported progression-free survival (PFS) of 27% may change as some leiomyosarcoma patients are still undergoing treatment and haven't reached the three-month mark yet. However, that figure is still too low for us to consider being competitive in that leiomyosarcoma space. Regarding osteosarcoma, it is well established that PFS is a more relevant measure of anti-tumor activity in advanced cases than objective response, since tumor shrinkage in calcified lesions may not accurately reflect the true anti-tumor effect of the treatment. The osteosarcoma expert community supports using PFS as a more effective and reliable endpoint in Phase 2 studies. The PFS we observed in osteosarcoma, which was 67% at three months, is very encouraging for progressing into a Phase 2 study, especially since these were advanced patients with an average of three prior lines of therapy. Studies have shown that metastatic patients with one to two prior treatments generally progress within eight weeks, and we see a 100% progression rate when these patients are untreated. In contrast, other chemotherapies show low PFS rates of around 14% at 12 months. This significant difference reinforces our belief in the strong rationale for advancing in osteosarcoma.

Scott Smith, President

I want to add one other thing to what Philippe was saying, and that is for UPS where we saw a very strong signal in Phase 1, we saw two responses one in mono as you say, one in combination, but we saw two responses in a very small number of patients. We could have enrolled 10 patients fully in UPS and another 5 or 10 in combination UPS, but we saw signal both in mono and in combination very quickly. So we decided not to fill that up and move quickly to Phase 2. Given the fact between Phase 1 and 2 in UPS, we've got a 50% response rate, it's likely we would have seen other responses had we continued to fill up that cohort, but we had enough security to move forward into the registrational Part 2 of Phase 2 and the registration part of this cohort. So we were very pleased with what we saw there and very validated with what we saw in Phase 1.

Operator, Operator

Our next question comes from Kelly Shi with Jefferies.

Kelly Shi, Analyst

First, could you share what is the enrollment status and median follow-up time for the full cohorts, which you are yet to report the clinical results?

Scott Smith, President

So the question, just let me repeat, Kelly. Thank you for the question. But let us make sure I have it right. You want to know the timing for filling up the cohorts, which we did not report on because they weren't full at this point in time where we couldn't make a decision?

Kelly Shi, Analyst

Yes. And specifically I think I'm just curious about median follow-up for the enrolled patients in that full cohorts if you could disclose?

Scott Smith, President

I'm sorry, I didn't understand that part two of the question, Kelly.

Kelly Shi, Analyst

So the median follow-up time for the full cohorts you have not presented clinical outcome.

Scott Smith, President

No, we haven't disclosed that now. We will update these other cohorts as we get to the Q2 call and let you know where we are with them. I will say, just from where we are, even though we can't be definitive, certainly we see a couple of cohorts here that we're very encouraged by, that we're sort of preparing to move forward as well. But we want to get some more enrollment there because they're not a sarcoma types that we saw in Phase 1. So we want to get a few more patients in there to make a fulsome decision. But I do believe that based on what we see today, that it's highly likely that there will be other cohorts moving forward into Part 2 of Phase 2.

Kelly Shi, Analyst

Okay, great. Thanks. Also I have follow-up. So in the UPS, have you observed the correlation between AXL expression level and the depth of response?

Philippe Martin, Chief of Clinical Development and Operations

We enrolled all UPS patients in Part 1 of Phase 1 and Phase 2 who had a Tumor membrane percentage score of 70% or higher. We have observed that at least 50% of these patients responded to treatment and achieved a partial response. This indicates that patients with a TmPS of 70% are responding. More generally in sarcoma, we've noted that the response tends to occur around a 70% TmPS. In Phase 1, we did not enroll patients with TmPS between 50% and 70%. Therefore, in Phase 2 Part 1, we aimed to explore those patients but were only able to enroll two, while the majority of the others had a TmPS of 70% or more.

Scott Smith, President

I want to add to Philippe’s comments. One of the very positive aspects for us about UPS is that not only are the patients who are AXL positive typically showing a high level of AXL positivity or expression, but also a significant majority, between 70% to 80%, of UPS patients are AXL high. This makes it a very promising population for further study.

Operator, Operator

Our next question comes from Kaveri Pohlman with BTIG.

Kaveri Pohlman, Analyst

My first question is regarding the PD-1 combinations. Can you provide any color on your development strategy there? Because I believe these combinations, or PD-1 therapy, monotherapy itself is not really approved for sarcoma?

Scott Smith, President

Yes. In general, I'll pass this over to Philippe for a more detailed response. However, I want to note that we observed minimal, if any, benefit from the PD-1 in the sarcoma population. Therefore, unless circumstances change, our development strategy will be to proceed with monotherapy, particularly in the two cohorts we are advancing.

Philippe Martin, Chief of Clinical Development and Operations

I don't have much more to add. We did not see a benefit in adding the PD-1 to BA3011 for sarcoma, which we were generally expecting and wanted to confirm. Going forward, we will focus on the monotherapy in sarcoma, and I want to emphasize that because we anticipate it may differ in non-small cell lung cancer and melanoma.

Kaveri Pohlman, Analyst

And regarding the TmPS score for AXL and ROR2, I believe one of your previous slide decks suggested lower TmPS score for ROR2 compared to AXL. Why is it that ROR2 with the same payload allows you to build in much lower toxicity?

Philippe Martin, Chief of Clinical Development and Operations

Yes. So it's not just about the payload; it's also about the level of expression of AXL and ROR2 on the membrane of the tumors where we are testing. And right now, what we are doing for ROR2, because we have less information than we have for AXL, we're going with a broad TmPS score of 1% or more. For a couple of reasons: one is the fact that we've seen a PR in head and neck patient in Phase 1 that was at 18% TmPS score. Therefore, we could have chosen 10% of the threshold, but we might as well go up 1% and see if we can derive benefit for those patients. I think it's important for the Part 1 of the studies to really define what the cut-off is going to be for ROR2 and AXL going forward into registration studies.

Scott Smith, President

I believe it's essential to characterize the response in relation to AXL or ROR2 expression with regulatory agencies. This aspect is very important. We had clearer results with AXL, where high AXL expression indicated a response while low AXL expression did not. As mentioned, patients with head and neck cancer showing 18% ROR2 positivity and a TmPS of 18% responded very well. Thus, we are working on defining the connection between ROR2 expression and response.

Philippe Martin, Chief of Clinical Development and Operations

Yes, I would like to add something that hasn't been disclosed yet. The patient with melanoma ROR2 who achieved a complete response to TmPS had a response rate of 30%. This is below the 50% threshold we observed for AXL in sarcoma. Therefore, it continues to make sense for us to start broadly and then narrow our focus if necessary.

Operator, Operator

And our next question comes from Tony Butler with ROTH Capital.

Tony Butler, Analyst

I have actually a few questions. Perhaps I could just ask them all up front may help a little bit. So one of the questions is, is there any evidence that other markers, for example, MDM2 amplification or CDK4 amplification correlated with response rate? That's question one. Number two is, the spider plots you show are really quite impressive. But I wanted to make sure, did all of the patients who are observed on those spider plots, did they receive at least two scans or were there patients which only had one scan with a second follow-up? That's question two. Question three, and my apologies, you stated it, I just didn't capture it. Again, what were the number of patients in Phase 1 on UPS that did respond? Was that just one patient or was it two? And I thank you for taking those questions.

Scott Smith, President

Thank you, Tony. And I'll answer your last question first, and then kick it over to Philippe to get into more detail on the first two questions. And in Phase 1, we saw two AXL positive UPS patients, both of whom responded, two of two.

Philippe Martin, Chief of Clinical Development and Operations

The RP2D of 1.8 milligrams per kilogram. So what was your first question, I'm sorry?

Tony Butler, Analyst

Yes, sorry. I'm looking into other markers, such as MDM2 amplification and CDK4 amplification, to determine if there is any correlation with other genetic abnormalities. Thanks.

Philippe Martin, Chief of Clinical Development and Operations

Yes, this is data we'll be able to report once we have the full cohorts enrolled. We're gathering the information, and we haven't analyzed it just yet. We'll be waiting for the full cohorts to do that. If we see any correlation, we'll make sure to highlight them for you.

Scott Smith, President

And the second question was relative to scans in the spider plots?

Philippe Martin, Chief of Clinical Development and Operations

Yes, the scans in the spider plots show that for osteosarcoma, there are seven patients for the progression-free survival in Phase 1 and 2, but only six patients are displayed. The seventh patient has not completed 12 weeks of treatment and has not had the first scan yet, which is why they are not included in the spider plot. However, this patient is accounted for in the progression-free survival data while being censored, as we still don’t have the first scan results.

Tony Butler, Analyst

Yes, thank you for that, Philippe. That's great. But were all patients, other than the one you mentioned, assessed with one scan, or do some of them have two scans?

Philippe Martin, Chief of Clinical Development and Operations

Yes, most patients have two scans, but in the case of osteosarcoma, there's one line that overlaps between two patients, and one of those patients currently has only one scan. That patient is still ongoing and waiting for the second scan.

Scott Smith, President

And the other patient has four scans that you're talking about, right? So all the way from one scan to four scans in this patient population. Did I answer your question?

Tony Butler, Analyst

Yes, it absolutely did.

Scott Smith, President

We will provide updates as these patients continue their treatment, and we'll share details on their progress and additional information during the Q2 call. What we are observing is very encouraging, especially given the challenging nature of this patient population.

Operator, Operator

And our next question comes from Arthur He with H.C. Wainwright.

Arthur He, Analyst

This is Arthur from H.C. Wainwright. Most of my question have been answered. I just want to follow-up on the LMS cohorts. For those 17 patients, does any patient get the dose reduction or all seven patients received the Phase 2 reduced dose levels?

Philippe Martin, Chief of Clinical Development and Operations

So all patients started with a Phase 2 dose of 1.8 milligrams per kilogram, and some patients had to have dose reduction. I don't have the exact number in front of me, but I can follow-up and let you know what that number is. But some patients had to have dose reduction because of some adverse events that sometimes were related or not related to treatment. But we have a few patients that require a dose reduction, yes.

Arthur He, Analyst

And switch gear to the 3021 in myeloma. Could you give us more color on the ROR2 score for the patient enrolling the Phase 2 study? How that compared to the score for the patient who has a complete response in the Phase 1?

Philippe Martin, Chief of Clinical Development and Operations

So if you recall that, so the patient here I just mentioned, the TmPS score for the melanoma patient and the complete response in Phase 2 is 30%. In Phase 1, we were not able to determine what the score of that patient was because there were some malignant staining that precluded us from seeing the entire surface of the cell. We saw ROR2 staining, but we couldn't give it a score. And so right now, what we know is that one of the two CRs had a TmPS of 30%. The other one, we don't have the score.

Scott Smith, President

I just would like to add, as we talked about when we were in our prepared remarks, we're very excited about this program. This is really highly unusual to see two ROR2 positive patients both having complete responses. There have been some operational difficulties. And around the idea that it requires an invasive biopsy to get in and at a positivity rate of 10%, physicians in the states are seeing many more negative biopsies to positive which then deters them. So moving to a liquid biopsy, I think will help us operationalize this in a very, very good way. And we're really excited about the potential.

Operator, Operator

And I'm currently showing no further questions at this time. I'd like to hand the conference back over to management for any closing remarks.

Jay Short, Chairman, CEO and Co-Founder

Thank you, and thanks, everyone for your questions and attention today. We're very excited about the year ahead and we're...

Scott Smith, President

Thank you for your attention. We are looking forward to keeping everyone updated as we progress through the quarters. Our clinical programs are at an exciting stage, with many important developments on the horizon. We are very enthusiastic about the future and will continue to share our progress. Thank you.

Jay Short, Chairman, CEO and Co-Founder

Thanks, Scott. I did cut off for a second. Thanks, everyone.

Operator, Operator

Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect. Everyone, have a wonderful day.