Earnings Call Transcript - BOLT Q1 2024

Operator, Operator

Good afternoon, and welcome to the Bolt Biotherapeutics Strategic Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would now like to hand the call over to Willie Quinn, incoming Chief Executive Officer of Bolt Biotherapeutics. Please go ahead, sir.

Willie Quinn, CEO

Thank you, and good afternoon, everyone. This afternoon, we issued our first quarter 2024 financial results and business update, which outlines the topics we plan to discuss today. You can access the press release by going to the Investors and Media section of our website at www.boltbio.com. I am joined today by Randy Schatzman, outgoing Chief Executive Officer and Edith Perez, outgoing Chief Medical Officer. I am also joined by some newly promoted members of Bolt's senior leadership team, including Michael Alonso, Co-Founder of Bolt and newly promoted Senior Vice President of Research and Dawn Colburn, newly promoted Senior Vice President of Clinical Development. Before we begin, I'd like to remind everyone that during this call, we will be making forward-looking statements that are subject to a number of risks and uncertainties. These may cause our actual results to differ materially, and I encourage you to read our SEC filings for more details on these risks and uncertainties. You are cautioned not to place any undue reliance on these forward-looking statements, and Bolt disclaims any obligation to update such statements. To start, I'd like to thank everyone for joining us today. As you all know, we don't normally have earnings calls, but we decided it would be a good idea to have a call today to clearly communicate our new vision for Bolt. On today's call, we will provide details regarding strategic pipeline and leadership changes as well as review our progress during the first quarter. We believe these strategic changes will enable us to optimize the company's operations, maximize shareholder value, and, most importantly, deliver meaningful benefits to the many patients with cancer who could benefit from more effective treatment options. I'd like to start the call by addressing our decision to discontinue development of BDC-1001. And for that, I'd like to call on my colleague, Dr. Edith Perez.

Edith Perez, Outgoing Chief Medical Officer

Thank you, Willie. I am proud of the work that we've done to establish that our Boltbody immune-stimulating antibody conjugates (ISACs) can be safely delivered and can produce antitumor activity in patients with metastatic solid malignancies. I am grateful for the collaboration with world-leading investigators who understood and appreciate the promise of the ISAC approach, and I want to thank them for all they have done to help advance the scientific understanding of how this brand new platform of biotech may ultimately improve cancer care. We continue to build upon that foundation with our next-generation ISAC programs. We have decided to discontinue all development of BDC-1001 and will work with our investigators to achieve an orderly shutdown of our trials. Deciding to discontinue a program is never easy, especially when one sees signs of activity and evidence supporting our proposed mechanism of action. However, we have limited resources and must focus those resources on our product candidates with the highest potential. We set out to reproduce a 30% overall response rate that we saw in BDC-1001's dose escalation trial, and we did not see that in the Phase 2 portion of the program. However, the clinical activity of BDC-1001 along with the significant advances in our next-generation ISAC technology have encouraged us to shift resources to our Claudin 18.2 targeting next-generation ISAC program and our ongoing Phase 1 study of our Dectin-2 agonist antibody. With these changes, I have decided to transition to an advisory role and hand over the reins to Dawn Colburn, who is being promoted to Senior Vice President of Clinical Development. Dawn Colburn joined Bolt in 2023, bringing over two decades of experience in oncology clinical development. Prior to joining Bolt, she was Vice President of Clinical Science at Agenus and Arcus Biosciences, where she built and led the clinical science organization and the non-small cell lung cancer development strategy at both organizations. I am happy that both clinical programs are in good hands, and I look forward to continuing to work with Dawn and the team in this advisory role. And with that, I'll now hand over the call to Randy.

Randy Schatzman, Outgoing Chief Executive Officer

Thank you, Edith. Bolt will now be shifting away from BDC-1001 and prioritizing BDC-3042 and BDC-4182, our next-gen ISAC targeting Claudin 18.2, which incorporates five years of advancement in ISAC design parameters. In conjunction with the strategic refocusing, the company will be reducing its workforce by approximately 50%. As a result of these actions, we expect to extend our cash runway into the second half of 2026, which enables us to achieve clinical data on our next-generation ISAC and our Dectin-2 program with our existing resources. As part of this refocusing, we've also made leadership changes that will best serve the company's path moving forward. My colleague Willie Quinn, both longstanding Chief Financial Officer will be stepping in as Chief Executive Officer. Willie has been a strong leader at Bolt since joining the company four years ago with expertise in executing operational and financial strategies, driving corporate growth, and raising capital. He's been an invaluable partner to myself and to both the Board of Directors and overseeing all aspects of the company. We anticipate a seamless transition and I look forward to transitioning into a strategic advisory role and continuing to be involved in that capacity. Along with these changes, we're also reducing the size of both the Board by two directors. Bolt Founder Ed Engleman is stepping down from the Board of Directors and into a position on our Scientific Advisory Committee. Dr. Engleman founded the company in 2015 to expand on his pioneering work in cancer immunotherapeutics and myeloid biology conducted at Stanford University. We're glad that he will be able to continue to be a resource for us here at Bolt. Dr. Richard Miller has also decided not to stand for reelection when his term expires in June. Dr. Miller has served on our board since 2017, and we are grateful for his drug development perspective over the years. Finally, I want to thank all the dedicated and talented employees who will be leaving as part of this realignment. It's been a true pleasure to work with you for these past five years. With that, I would like to pass the call back to Bolt's incoming Chief Executive Officer, Willie Quinn, to provide an overview of the company's strategy and platform.

Willie Quinn, CEO

Thank you, Randy. Before I start, I want to thank all Bolt's employees and particularly Randy, Edith, Ed, and Richard for their leadership in advancing the company to where we are today. While our priorities are shifting, our mission remains the same: to leverage the power of the immune system to find better ways to treat cancer. This is not an easy path, and drug development is inherently risky, but we are making progress. Our understanding of the relationship between the immune system and tumor microenvironment continues to improve, and our ISAC platform is dramatically better than it was only a few years ago. As a reminder, at Bolt, we are developing product candidates with the goal of training a patient's own immune system to recognize and eliminate their cancer. We do this by focusing on the tumor microenvironment, which almost always contains some myeloid cells. Myeloid cells, such as Macrophages and Dendritic Cells, are part of what is called the innate immune system. Their function is to recognize molecular patterns unique to pathogens such as bacteria, fungi, and viruses. Our product candidates find ways to use this system to train the body to mount an immune response targeted at the cancer. We have three clear priorities going forward: BDC-3042, BDC-4182, and our collaborations. We believe BDC-3042, a first-in-class agonist antibody that reawakens myeloid cells so they can attack tumor cells, has broad applications across many tumor types, and we are encouraged that BDC-3042 seems safe and well tolerated in the Phase 1 dose escalation thus far. In today's call, you will also hear more about BDC-4182, the first next-generation Boltbody ISAC to advance into IND enabling studies. BDC-4182 targets Claudin 18.2 and has very promising preclinical data. Finally, we are committed to supporting our collaboration partners, Genmab and Toray, and look forward to providing details on some of those exciting programs later this year. With that, I would like to turn the call over to Dawn Colburn, our Senior Vice President of Clinical Development, to discuss BDC-3042 in greater detail.

Dawn Colburn, Senior Vice President of Clinical Development

Thank you, Willie. Turning now to BDC-3042. BDC-3042 is the first-in-class Dectin-2 agonist monoclonal antibody that reprograms tumor-associated macrophages to attack tumor cells. Dectin-2 gene expression is elevated in tumor-associated macrophages across a broad range of solid tumor types. The ongoing first-in-human clinical study is currently evaluating BDC-3042 in patients with six types of metastatic or unresectable cancer, including triple-negative breast cancer, colorectal cancer, clear cell renal cell carcinoma, head and neck cancer, non-small cell lung cancer, and ovarian cancer. The study starts with dose escalation of BDC-3042 as a single agent to evaluate the safety and determine the recommended Phase 2 dose. BDC-3042 has advanced through the first three dose escalation cohorts without any dose-limiting toxicities, and the fourth dose level cohort is fully enrolled. BDC-3042 has been well tolerated to date. We anticipate providing an update on enrollment and safety in the latter half of this year. I'd like to now hand it off to Michael Alonso, our Senior Vice President of Research, to provide an overview of BDC-4182.

Michael Alonso, Senior Vice President of Research

Thank you, Dawn. I'm happy to join the call today to explain why we are so excited about our next-generation Boltbody ISAC platform and about our Claudin 18.2 Boltbody ISAC in particular. As a reminder, an ISAC is comprised of a tumor targeting antibody and an immune-stimulating payload. Over the last several years, we have continued to advance our Boltbody ISAC technology and have come to appreciate the importance of the antibody, the linker, the payload, and the combination of the three. We have developed a next-generation ISAC with enhanced potency and activity that has the potential to deliver superior efficacy with acceptable safety. We have generated preclinical data showing that our next-generation Boltbody ISAC can provide better efficacy than naked antibodies and even better than cytotoxic antibody drug conjugates (ADCs). We have also generated antitumor activity in preclinical models with lower antigen density tumor models where our first-generation ISAC underperformed. I'll now turn to our exciting new program that we are unveiling today, BDC-4182, which targets Claudin 18.2. Claudin 18.2 is a protein that is expressed in the stomach epithelium, and in healthy cells, it is somewhat hidden in the transmembrane type junction. In cancers, such as gastric and pancreatic cancer, expression of Claudin 18.2 is significantly elevated. Claudin 18.2 in these tumors is also localized to surfaces that are more readily accessible to biologics and effector cells, thereby providing an expression pattern that makes for an excellent target for ISAC. We have incorporated the learnings from BDC-1001 into our next-generation ISAC and designed BDC-4182 with enhanced potency and activity. We are excited by the preclinical data generated to date, indicating that the next-generation Claudin 18.2 ISAC has superior antitumor activity relative to MMAE-based ADCs and can deliver antitumor activity in models with low Claudin 18.2 antigen density. BDC-4182 has advanced to IND enabling activities supported by preclinical results demonstrating potent antitumor activity, induction of immunological memory with epitope spreading, and importantly, an acceptable safety profile. With that, I'll turn the call back over to Willie for closing remarks.

Willie Quinn, CEO

While it was a difficult decision to pivot away from our first-generation ISAC BDC-1001, we are guided by the strong principle of doing what will ultimately be best for patients. And in this case, that means learning from the data and turning our resources towards our clinical candidate BDC-3042 and our next-generation ISAC platform. I'd like to reiterate the excitement we have for our pipeline going forward. We are steadfast in our mission of generating breakthrough immunotherapies for patients with cancer, teaching the innate immune system to recognize and kill multiple tumor types. We have a focused pipeline centered on both proven platform technology as well as improvements that have been further validated by our external collaborations with Genmab and Toray. For our clinical stage program, BDC-3042, we will plan to share a safety and enrollment update on the Phase 1 dose escalation trial in the second half of this year, and we are advancing BDC-4182 towards initiating a clinical trial in 2025. We have a refreshed and prioritized corporate strategy and are adequately capitalized to achieve our upcoming program milestones into the second half of 2026. Bolt, at its core, is committed to innovative, groundbreaking science, and I am proud of the progress we have made in advancing such differentiated technology in order to bring positive change to the oncology treatment landscape in the future. We will now open the call up for Q&A, for which we will have available our SVP Clinical Development, Dawn Colburn, our SVP Research, Michael Alonso, and myself.

Operator, Operator

And our first question comes from Jeffrey La Rosa with Leerink Partners.

Jeffrey La Rosa, Analyst

I'd like to talk more about the Claudin 18.2 ISAC and can you elaborate more on why and how it is more potent than the first-gen platform? Is it just a matter of it being a more potent TLR7/8 agonist? Why are you still confident in TLR7/8 agonist and there are other innate stimulants? And I guess, part of the HER2 experience with 101 was really a fierce competitive landscape with high bars with some of the other HER2 mechanisms there. It's pretty similar with Claudin 18.2 with ADCs and T-cell engagers there. How do you think this will play out differently competitively versus the HER2 experience and sort of just kind of talk more about target selection in general, how that plays into how you select your new ISAC programs and relative to what else is out there?

Willie Quinn, CEO

Jeff, those are great questions. This is Willie. And I would like to turn it over to Michael to address those. I think we have some good answers.

Michael Alonso, Senior Vice President of Research

Perfect. Thanks. I think first and foremost, BDC-1001 certainly demonstrated that ISAC can be safely delivered to patients, elicit immune activation in the patient tumors, and produce meaningful clinical benefit. We've taken these learnings and made several design improvements with the next-generation ISACs that lead to enhanced activation of the immune system that we expect will increase the antitumor activity in patients, including those with tumors expressing lower levels of target antigen as we have seen in our preclinical model. Now more specifically, as it relates to the ISAC and the design improvement, we've certainly made improvements to the potency of the TLR7/8 agonist. We've also made improvements to the antibodies such that we are seeing enhanced phagocytosis and activation of the myeloid cells, and we have some optimization of the conjugation chemistry. I think by optimizing these features with our common design principles, we've certainly produced ISACs that are much more potent than what we observed with BDC-1001 preclinically and have seen some compelling antitumor activity in our preclinical models. As it relates to why TLR7/8 versus some of the other immune agonists that are out there, I think from the big picture standpoint, we still prefer TLR7/8 as they are endosomally located and can deliver robust activation of the innate immune system. Their expression profiles in humans nicely cover plasmacytoid dendritic cells as well as monocytes, macrophages, and dendritic cells, which are all cells that when activated can lead to a robust innate immune response that will translate to the adaptive immune response and get some compelling T-cell immunity.

Willie Quinn, CEO

Not to interrupt, but I think the other component that is interesting from a competitive landscape perspective, which is something that we didn't have in the HER2 landscape is a look at cytotoxic ADCs, and maybe you could talk a little bit about that too?

Michael Alonso, Senior Vice President of Research

Yes. So moving into the competitive landscape, we certainly are paying attention to the landscape, notably with what's out there or what's about to be out there with trastuzumab, the naked antibody and its activity in patients with high Claudin 18.2 expression, but also what's coming next in some of the early phase clinical trials. A lot of what we've been seeing is the antibody drug conjugates with the MMAE payloads. We've taken, we've made the cytotoxic ADCs in-house and have compared them to the ISAC in syngeneic tumor models with high expression or with medium expression of Claudin 18.2. We certainly see that the ISAC perform superior to them, at least in our early models that we've assessed to date. So, we're certainly positioning ourselves to face the competition and we expect that our differentiated mechanism will provide clinicians with some interesting options as it relates to immune stimulation and the potential for durable immune responses. And I think your last question was on target selection for the next-generation ISAC and I'll spend a little bit of time just for Claudin, right? So why are we interested in Claudin 18.2? I think I touched on that a bit. It's certainly been validated with the experience with trastuzumab. The expression profile of Claudin 18.2 is also quite compelling in healthy tissues, as it's restricted to the tight junctions in the gastroesophageal. As the cancer progresses, you see it losing some of the cell polarity and then being more readily accessible to biologics. We are thinking about the next-generation ISAC that are significantly more potent than the first-generation ISAC, while still having safety in mind. Very specific expression of the tumor targeting antigen can certainly lead to a compelling hypothesis to test in the clinic, and that's what we're excited to do.

Willie Quinn, CEO

And Jeff, I'll just end by pointing out that we also just uploaded a new corporate presentation, which is available on our website. It does include a few slides on the preclinical data that we've generated for BDC-4182. So encourage you to take a look at that and obviously we're happy to have follow-up conversations.

Operator, Operator

Our next question comes from Stephen Willey with Stifel.

Stephen Willey, Analyst

I guess maybe just a follow-up on the prior question and maybe a little bit more specifically. Can you talk about the differentiation of the payload on 4182 relative to 1001, I guess specifically as it pertains to the skew of TLR7 versus 8 agonism? If I remember correctly, I think 1001 was skewed more towards TLR7. Should we assume that in this being more potent you've driven that skew more towards 8?

Willie Quinn, CEO

So again, I'll let Michael jump in on that. I do think we have some good slides that also speak to that, but I'll let him answer the question.

Michael Alonso, Senior Vice President of Research

Yes. I think aside from getting into how far it’s skewed one way or another, I would say that the payload that we're utilizing for BDC-4182 is significantly more potent on both TLR7 and TLR8 relative to what we utilized for BDC-1001. I think it's important and you can reference the corporate deck on Slide 20 when you go through these data. Our goal is to still activate the innate immune system, which includes the myeloid cells and the plasmacytoid dendritic cells. What we've learned is that as you climb down the antigen ladder, i.e., if you target tumors with lower antigen density, you see significantly enhanced antitumor activity with the next-generation ISACs, not just on quadrant but also on HER2, TROP2, and CEA, relative to the first generation. We are delivering significantly more activity, both in vitro in our preclinical models and in vivo in our tumor models.

Stephen Willey, Analyst

And then just with respect to 3042, can you just, I guess, maybe speak to your level of confidence that you'll be able to see monotherapy activity with this agent in dose escalation or even dose expansion? And can you give us any inclination as to what your preclinical data tells you about at what dose level you would expect to maybe see some potential efficacy just based upon the exposures that you're starting to achieve at any given dose level?

Willie Quinn, CEO

We are very excited about 3042, and I'll hand it over to Dawn to just talk a little bit about the status of where we are in the clinic there. And then either she can talk a little bit about mechanism or Michael can jump in as needed. Dawn?

Dawn Colburn, Senior Vice President of Clinical Development

So for a program like 3042, we don't yet know what we will see in the clinic during our dose escalation experience. We are hopeful that we will start seeing some activity at some of the dose levels coming up. But it's still very early days and pretty low doses that we're administering to these patients. The preclinical models lead us to believe that we should see monotherapy activity here, and I think it will just need to be borne out in the clinic as to whether or not we will actually see monotherapy activity with this agent. And I'll hand it over to Michael to speak to sort of dose expectations.

Michael Alonso, Senior Vice President of Research

I think Dawn said it perfectly. I think we are in the range where we are starting to get very interested in the clinical doses and we'll know more as we get to those patients.

Operator, Operator

Our next question comes from Michael Schmidt with Guggenheim.

Michael Schmidt, Analyst

I have two questions. The first one is on BDC-1001. Yes, I'm just curious what sort of the trigger was to drop the program? I thought you just had recently initiated the use of expansion cohorts. Was it data from one or more specific cohorts that did not meet the bar? How do we and what are learnings from the BDC-1001 experience?

Willie Quinn, CEO

We definitely tried to make this decision as early as we could in light of the other interesting programs we have, because we wanted to make sure that our precious resources were going in the very best place possible. But it's always a difficult decision, especially when you're seeing signs of clinical activity and you think you might have a program, but you're weighing that against the competitive landscape and what else you could do. And maybe I'll just hand it over to Dawn a little bit, who is a lot closer to the BDC-1001 program and kind of the nitty-gritty. And we're not necessarily going to give patient-by-patient details, but I think she can give you a better sense of where we were and how we came to that decision.

Dawn Colburn, Senior Vice President of Clinical Development

Certainly. Just to remind folks, when we set out to do the expansion cohorts, what we were trying to do is reproduce the data that we saw in our dose escalation portion of the first BDC-1001 clinical trial. That produced a 29% or 30% overall response rate in a mixed group of heavily pretreated patients. So we opened expansion cohorts with a bar of 30%. And quite frankly, we didn't see that in some of the initial cohorts. That's why we took the tough decision to go ahead and discontinue the program at this time to give us the runway to look at these other assets that we have. We still continue to believe very strongly in our ISAC technology. Just to remind folks, we have seen interesting biomarker data and clinical activity from the dose escalation. It was very safe and well tolerated, and we will be publishing the totality of our dose escalation data in combination with a lot of biomarker data in an upcoming manuscript.

Michael Schmidt, Analyst

And on 3042 targeting TAMs, I guess, what is the most compelling argument for targeting Dectin-2? And are there any other examples out there of therapies targeting TAMs that could help to derisk this mechanism clinically?

Willie Quinn, CEO

We love talking about BDC-3042 because we do think we have a unique first-in-class mechanism. I'm going to hand it over to Michael to talk a little bit more about that target and our decision to go there.

Michael Alonso, Senior Vice President of Research

I think for targeting Dectin-2, it's got a couple of things going for it. One is a pattern recognition receptor that when agonized can repolarize some of the tumor-supportive macrophages and convert them into tumor-destructive macrophages. From an expression standpoint, Dectin-2 is actually quite interesting because it is elevated in tumor-associated myeloid cells, which include macrophages and other cell types. Its expression is relatively modest in the rest of the body, such that you can get some nice tumor targeting with the BDC-3042. That's why we're excited about this program. Certainly, from other TAM targeting agents that are out there, we're aware of the previous strategies geared mostly towards depleting some of these tumor-associated macrophages, and we believe very much in redeeming these cells and reprogramming them such that they can really fight for us rather than against us in the tumor. Some of the interesting ones, there are certainly CD40 agonists that have had some early compelling clinical activity that were really hampered or hindered by some of the potential toxicity of targeting CD40, such that it has pretty broad expression in the periphery and across the body. That's why we think the targeting of Dectin-2, which is more specific to the tumor, is compelling.

Operator, Operator

Thank you. There are no further questions. I could turn the call back over to Willie Quinn for any further remarks.

Willie Quinn, CEO

Thank you. So this has been an emotional day for us as you can imagine. We thank you all for joining us today. We look forward to keeping you updated on our programs and hope to talk to you again soon. Thank you.

Operator, Operator

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, good day.