CytomX Therapeutics, Inc. Q1 FY2022 Earnings Call

Good afternoon, everyone. Thank you for standing by. Welcome to the CytomX Therapeutics First Quarter 2022 Financial Results Call. Please be advised that today's call is being recorded. I would now like to head to call over to your host for today, Mr. Chau Cheng, CytomX Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Cindy. Good afternoon and thank you for joining us. With me today are Dr. Sean McCarthy, CytomX's Chief Executive Officer and Chairman; Amy Peterson, President and Chief Operating Officer; and Carlos Campoy, Chief Financial Officer. Earlier today, we issued a press release that includes a summary of our first quarter 2022 financial results and highlights the important progress we made during the quarter. We encourage everyone to read today's press release and the associated materials, which have been filed with the SEC. Additionally, the press release and a recording of this call can be found under the Investors and News section of our website. Please note that during today's call, we will be making forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks, including the uncertainties surrounding the COVID-19 pandemic that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov, including our Form 10-K that was filed today. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments, or otherwise. With that, I'll now turn the call over to Sean.

Thank you, Chau, and welcome back, Carlos. Good afternoon, everyone, and thanks for joining us for an update on CytomX's recent progress. I'd like to start today's call by reaffirming our commitment to making a significant impact for those affected by cancer. Our focus on unique cancer treatment approaches is reflected in our extensive therapeutic pipeline, which showcases the promise of conditionally activated biologics for developing new and distinct anti-cancer therapies. We believe in the potential of conditional activation and are dedicated to introducing innovative therapies backed by our exceptional research and development capabilities. Utilizing our Probody therapeutic platform, we currently have six experimental therapeutics in development. In the first quarter, we achieved substantial progress toward key data outcomes from our leading programs. I want to emphasize that we recognize the importance of careful financial management, particularly in today’s challenging market for small and mid-cap biotech companies. A core principle of our financial strategy at CytomX has been establishing foundational partnerships with leading biopharma companies like AbbVie, Amgen, Astellas, and Bristol-Myers Squibb. These collaborations have expanded the reach of our technology platform, enabling more Probody therapeutic candidates to advance to clinical trials, as well as providing significant non-dilutive financial resources to strengthen our balance sheet. As of the end of the last quarter, we had $263 million in cash and liquid assets, giving us adequate resources to progress our pipeline. We also remain active in our business development efforts related to our platform and product pipeline. Now, I'd like to share a few specific updates on our pipeline programs before handing over to Amy for further insights. Our most advanced wholly-owned drug candidate, praluzatamab ravtansine, is a conditionally activated ADC designed to provide therapeutic options for novel cancer targets that traditional methods have struggled to address due to their presence on healthy tissues. Praluzatamab is the first ADC to target CD166, a glycoprotein involved in multiple aspects of tumor biology, including blood vessel formation and invasiveness. Given its high expression on the surface of many cancer types, CD166 presents a valuable target for ADC development despite challenges posed by its presence in healthy tissues. Based on our published first-phase clinical data, we believe praluzatamab could play a key role in evolving treatments for hormone receptor positive and triple-negative breast cancers. Patient enrollment in our Phase 2 study of praluzatamab in breast cancer is progressing well, and we are on track to report initial results for both Arms A and B of this study in the latter half of the year. Additionally, we are exploring the combination of praluzatamab with our anti-PD-L1 Probody, pacmilimab, in treating triple-negative breast cancer. Our second leading conditionally activated ADC, CX-2029, is partnered with AbbVie and targets CD-71, the transferrin receptor. CD-71 has been recognized for years as a promising target due to its high levels in numerous cancers, but its presence in healthy tissues poses challenges for the development of anti-cancer therapies. We previously shared promising initial data regarding CX-2029's effectiveness in a Phase 2 expansion study involving patients with squamous non-small cell lung cancer, all of whom had received previous treatment with checkpoint inhibitors. Given the widespread use of checkpoint inhibitors in squamous lung cancer and the limited options available afterward, we see significant commercial potential for CX-2029 based on these early Phase 2 findings. Our ongoing Phase 2 expansion study continues to enroll, and we expect to update data in the latter half of 2022. Besides our ADC program, our multi-modal platform has also allowed us to venture into the emerging area of T-cell engaging bispecific antibodies. We are pleased to announce that we have initiated clinical study start-up activities for our first conditionally activated T-cell bispecific, CX-904, which is partnered with Amgen and targets EGFR, a well-validated cancer target found in many solid tumors, offering significant therapeutic potential. Additionally, we are exploring the full capabilities of our Probody platform by applying our conditional activation technology to cytokines, beginning with interferon alpha. While interferon therapy has the potential to stimulate the immune system to combat tumor cells, its clinical use has been limited due to toxicity concerns. We are excited to have developed a novel version of Interferon Alpha-2b designed to effectively target and kill cancer cells more safely. The encouraging preclinical data supporting this conditionally activated cytokine was recently presented at AACR, and we are eager to expedite its advancement toward clinical evaluation. We are excited about the progress we are making across our entire pipeline. Now, I'll hand the call over to Amy to provide a more detailed update on our clinical development activities.

Thank you, Sean. As mentioned, we continue to focus on execution of our Phase 2 study. And to that end, we have achieved important milestones. Beginning with praluzatamab ravtansine, I'm pleased to share that Arm A of our three-Arm Phase 2 study has completed enrollment towards our goal of 40 efficacy evaluable patients with hormone receptor positive HER2 non-amplified breast cancer. With this study milestone achieved, we are reaffirming our plans to report data from this monotherapy cohort in the second half of this year. As a reminder, the primary endpoint of the study is overall response rate. However, the focus to better assess for clinical benefit is on key secondary endpoints of clinical benefit rate at 24 weeks or CBR-24 and progression-free survival, the latter being a critical endpoint for a registrational study in the setting. Study conduct in Arm B designed to evaluate praluzatamab as monotherapy in patients with CD166 expressing triple-negative breast cancer and Arm C designed to examine the combination of praluzatamab plus pacmilimab, our anti-PD-1 Probody therapeutic in patients with PD-L1 positive and CD166 positive TNBC is ongoing. And we remain on track for initial data from Arm B in the second half of 2022. I would now like to move to CX-2029; our CD71 directed conditionally activated MMAE conjugated ADC, which is being developed in partnership with AbbVie. In December 2021, we reported an encouraging preliminary response rate of 18.8% and a disease control rate of 87.5% in 16 efficacy evaluable patients with platinum and checkpoint inhibitor refractory squamous lung cancer. I'm delighted to share that we have completed enrollment towards our goal of 25 efficacy evaluable patients and continue to track to a data update in the second half of 2022. Let's now turn our attention to the third treatment modality to which our Probody platform has been applied, namely solid tumor directed T-cell Bispecific. We continue advancing our first conditionally activated T-cell engaging Bispecific CX-904, which is partnered with Amgen. CX-904 is designed to bind to both the epidermal growth factor receptor or EGFR on cancer cells and to the CD3 receptor on T-cells. We believe that applying our Probody technology to solid tumor engaging TCBs will serve to localize T-cell activations against EGFR within the tumor microenvironment, minimizing the potential for systemic T-cell activation and the ensuing toxicities that have been associated with unmapped solid tumor directed TCBs. As we previously reported, our IND for CX-904 was cleared by the FDA and we had subsequently initiated clinical study start-up activities. The first-in-human Phase 1 study of CX-904 in patients with advanced solid tumors is on track to begin enrolling in the coming months. Finally, Bristol-Myers Squibb continues to develop BMS-986249 and BMS-986288, the Probody versions of the anti-CTLA4 for antibodies ipilimumab and the non-fucosylated ipilimumab respectively. BMS-986249 is in Phase 2 in combination with nivolumab in a randomized study versus ipilimumab plus nivolumab in patients with untreated advanced melanoma. The novel combination is also being evaluated in advanced hepatocellular carcinoma, castration-resistant prostate cancer, and triple-negative breast cancer. BMS-986288 continues in Phase 1 dose escalation, both as monotherapy and also in combination with nivolumab in patients with advanced solid tumors. To summarize, CytomX has developed six experimental treatments that are currently in clinical development. Over 500 patients have been enrolled in studies evaluating our Probody therapeutic candidates. Our platform has now been applied to four different therapeutic modalities: antibodies, antibody-drug conjugates, T-cell bispecifics, and cytokines. Phase 2 studies of our product candidates are being conducted in nine different cancer types. We're on track to provide data updates from our two lead programs, praluzatamab and CX-2029, in the second half of this year. And with that, I'm very happy to turn the call over to Carlos for a financial overview.

Thank you, Amy. CytomX continues to have a strong balance sheet. As of March 31, 2022, we had $263 million in cash, cash equivalents, and investments, which we project will be sufficient to support operations well into 2023. For the first quarter of 2022, revenue was $17 million, compared to $16 million for the corresponding period in 2021. The increase was largely related to the CD-71 collaboration with AbbVie. R&D expenses increased $8 million to $31 million during the three months ended March 31, 2022, compared to Q1 2021. The increase was driven by contract and service expenses in manufacturing and development in support of our preclinical and clinical portfolio. G&A expenses were $10.5 million during the first quarter of 2022, an increase of $1.3 million compared to the same period in 2021. The increase is mainly in personnel and professional expenses. As Sean previously mentioned, we exercised judicious financial stewardship with our capital and will continue to manage our cash resources strategically. I may now turn the call over to Sean.

Thanks, Carlos and Amy. In closing, I would like to again emphasize the terrific execution by CytomX so far this year. We remain on track for important data readouts in the second half from our Phase 2 ADCs. And we have also continued to advance several earlier-stage programs to maintain a broad and deep pipeline. Our versatile and multimodality platform supported by our ever-growing understanding of the tumor microenvironment continues to provide us with optionality both within our own programs and in our ongoing work with our biopharma partners. We remain as passionate as ever in our quest to destroy cancer differently. Before we open the call up for Q&A, let me express my sincere gratitude to our retiring board members, Fred Gluck and Dr. John Scarlett. Both gentlemen have been with CytomX for many years, and their contributions have been instrumental and invaluable to our growth. And I wish them all the very best for the future. So with that operator, please open up the call for Q&A.

Thank you. And your first question from Kaveri Pohlman. Your line is now open.

Hi. Good afternoon. Thanks for the update. My first question is regarding 2009, how different is the safety profile of this ADC from ImmunoGen's ADC, especially in terms of ocular events because this is a higher dose that you're evaluating?

Yes, hi Kaveri. Thanks for the question. Let me start by addressing that. The payload for 2009 praluzatamab is DM4, the same maytansine payload that ImmunoGen is using in mirvetuximab. As we've shared before, during our Phase 1 experience, the main toxicity we observed was ocular toxicity, which we expected. We are implementing measures to manage this with mandatory prophylaxis in the Phase 2 setting. We've outlined various aspects of that prophylactic regimen before. Overall, our Phase 1 experience with 2009 aligns with what ImmunoGen has observed in their programs, and we will be reporting initial Phase 2 data on both effectiveness and safety in the second half of this year.

Got it. And for HER positive, HER2 negative breast cancer how feasible is it to get an ORR? Is it that a lot of these patients have bone disease, which makes the durability more reliable readout like the RBC? Just wanted to get some insight there.

Yes. It's another great question. And the etiology of the disease, you are quite right to point out that these patients, particularly in the late line setting as they come onto our study, are quite challenging to achieve objective responses in. That said, the primary endpoint for our study is ORR. But the more meaningful endpoint we believe, and our investigators and advisors would agree with us, is CBR-24, of course, as a clinical benefit rate for 24 weeks, which of course, is a surrogate ultimately for PFS, which would be the most important registrational endpoint as this program moves forward. So it is a significant consideration within the context of hormone receptor positive disease as you quite rightly point out.

That makes sense. And maybe a last one on the cytokine program. What's your rationale for selecting IFN-alpha as the lead asset? And how different is it from IL-2L which is also kind of drives IFN-alpha in the lead?

We have an extensive cytokine program with multiple initiatives underway. While we haven't revealed any additional cytokines beyond interferon, we recognize a significant opportunity for our conditional activation marketing technology to make a broad impact in this area due to its vast potential. Interferon is our initial focus, valued for its proven track record as it was the first immunotherapy approved many years ago. There is considerable clinical knowledge about interferon, both regarding its effectiveness as a standalone treatment and in combination therapies. Most importantly, we are aware of its safety limitations, which presents opportunities for enhancement with our technology. Interferon alpha-2b is a well-established mechanism in immuno-oncology that we believe we can significantly improve upon. This initiative represents the forefront of our broader company program.

Got it. Thanks for taking my question.

My pleasure.

Your next question from Gavin Scott. Your line is now open.

Thanks for taking my question. Just on praluzatamab and patient selection criteria for cohort C, I don't think you've disclosed the respective PD-L1-CD166 cutoff, but what does the epidemiology data suggest on the prevalence of this population? And can you maybe provide some color on the accrual rate for cohort C? Thank you.

Thank you, Gavin, for your question. Let me clarify it because we didn’t fully understand your inquiry, and then I’ll have Amy provide some insights. I believe you are asking about the size of the population in Arm C of the praluzatamab Phase 2 study, which is examining the combination of praluzatamab with our PD-L1 Probody pacmilimab. Is that correct?

Yes. That was the second part. The first part was just, on the patient selection criteria and cutoffs. I don't think you've disclosed that in the past, but just any color there as well.

That's right. I'll take the first part. So you're correct, we haven't disclosed that. But regarding the patient epidemiology, if you like, a PD-L1 plus CD-166, I may ask Amy to comment on that briefly.

Sure. So PD-L1 expression, the prevalence is pretty well known. There are a couple of different diagnostic tests that can be used to establish PD-L1 expression. And so, we allow patients who are PD-L1 positive by any one of those tests. With regard to overlap between CD-166 and PD-L1 expression, there really is no reason to believe that they would either be convergent or divergent. The amount of overlap is a function of the expression of CD-166 and the expression of PD-L1 in triple-negative breast cancer. So we are continuing to look at CD-166 expression levels and PD-L1 is a requirement. And I think what we've said before is that PD-L1 population, the PD-L1 positivity rate is about 35% of triple-negative breast cancer.

Okay. Thanks. And just a follow-up. When you present data, will you stratify it by any varying expression levels?

Yes. Let me briefly comment on that. In triple-negative breast cancer, our experience in Phase 1, which we presented and published, was consistent with the variability of the disease in that CD-166 expression is quite different among the patients we enrolled in Phase 1; it was a fairly small number of patients, around ten or eleven. We observed that about half of the patients had high CD-166, which means an IHC score of two or above. Therefore, we are very interested in understanding the relationship between CD-166 expression and clinical activity, particularly in triple-negative breast cancer since the targeted expression is variable; this may lead to patient selection strategies in the future. We'll have much more information to share about this with the Phase 2 data that we will present in the second half of the year.

And your next question from Peter Lawson. Your line is now open.

Great. Thanks for taking the questions, and congratulations on the enrollment of Arm A. Do you think we will observe a timing difference between the data from Arm A and Arm B? Also, could you share your expectations regarding the number of patients we should expect and the data for Arm A? Thank you.

Yes. Hi, Peter. We are currently working on providing an update for both Arms A and B simultaneously in the second half of the year. That's our objective. As Amy noted, Arm A, which targets hormone receptor positive patients, has completed enrollment. Our aim is to reach 40 patients who are evaluable for efficacy, and we will share that data set later this year. Enrollment for the triple-negative Arm B is progressing well. We expect to have a significant number of patients in Arm B at the same time; that is our target. Enrollment for the triple-negative group has been a bit slower due to the different patient demographics. Now, I'll hand it over to Amy to provide some brief comments regarding Arm A and what we are specifically looking for there.

Sure. I'm pleased to share that in collaboration with our steering committee and conversations with individuals like Dr. Sarah Solano, we hope for a CBR-24 rate around 30% or higher, along with a progression-free survival rate of about three to four months.

Got you. Thank you. Then, Sean, just kind of, I guess, on more strategic and forward-level question. Just with retiring Board members, any changes you anticipate? Just what kind of ads you will make there? Or who would be added there? And then, just thoughts about partnerships and in addition to partnerships, we've heard a lot from pharma about increased likelihood of partnerships happening. Just your thoughts would be great.

Thank you, Peter, for your questions. I want to express my gratitude to Fred and Chip for their years of service. At this time, I don’t have anything to add regarding any changes to the Board. I'm very satisfied with our governance. We wish Fred and Chip all the best. On the topic of partnerships, as I noted earlier, business development has been a vital part of our strategy since we started the company. We recognize that our technology's breadth benefits from partnerships in applying it across various modalities and programs. Additionally, these partnerships have significantly contributed to our financing, enabling us to achieve a lot over the past few years. As Amy mentioned, we've treated 500 patients, and we have gained substantial experience with conditional activation thanks to the funds we've raised, both equity and non-dilutive. Our partnerships are strong, and we are excited about the progress with all four of our partners. We are also in discussions for potential new alliances, and I believe we will pursue the right deals at the right time.

Your next question from Roger Song. Your line is now open.

Great. Thank you for taking our question. So a couple of from us. The first one is just curious about the next step for the 2009, and particularly for the TNBC part given you have monotherapy and the combo, would you weigh the combo data before you would make a decision for the monotherapy moving forward?

Yes, hi Roger. I think it's too early to comment at this stage. We are very focused, as you can hopefully tell from the comments on the call, on executing these important datasets. Specifically regarding triple-negative breast cancer, we expect to have the monotherapy data before the combination data, partly because we need to screen patients in Arm C for both PD-L1 and CD-166. We previously indicated, and continue to indicate, that Arm C will be available in 2023. Therefore, it's really too early to comment on any potential next steps.

Okay. That's understood. Maybe just a quick one. Last one from us. Can you provide any comments on the enrollment and timeline for the data readout for the other cohort related to 2029?

We don't have any comments on the timing at this moment. Enrollment is ongoing across the multi-cohort study. Today, we've shared significant progress the team has made in lung. We're eager to see the complete data from the 25 patient cohort, especially given the encouraging 18.8% response rate we reported last December, and enrollment in the other cohorts is still active. No updates on the timing are available right now.

Your next question from Boris Peaker. Your line is now open.

Great. Thank you. So my first question is on your ipilimumab Probody though, one partner with BMS. Could you comment on any timing updates on what should we be expecting some data there?

Yes. Hi, Boris. So the ipi-Probody, otherwise known as the BMS-986249, continues to make progress in the randomized Phase 2 frontline melanoma study. It also is being studied by BMS in three other tumor types as well, and also not to lose sight of the Probody version of the non-fucosylated version of ipi that is also in the clinic in Phase 1. We do not have any updates at this point on timing as to when that data will be available or shared.

Great. And maybe on 2029, can you comment on the CD71 receptor? What is the biological function of this receptor? Is that known?

Yes. It's actually very well characterized. CD71 is the transferrin receptor. Its biological function is to bind to transferrin in the blood and allow transferrin complex with iron to enter cells where the iron is delivered to the cellular metabolic machinery. The thing that's most interesting about the target is that it's actually one of the first proteins that was used to describe the biochemical process of receptor-mediated endocytosis. It cycles off of the cell surface very, very quickly. And for that reason, it has been thought of for a long time as a potentially ideal target for an antibody-drug conjugate to deliver a payload into cells. The problem is the target is present on all normal tissues because of course, all normal tissues require iron for their metabolism. So it's been a very difficult target to drug until we deployed the Probody technology, and that's the basis of our program CX-2029.

And can you look at iron as a biomarker for some kind of engagement or activity then in this case?

We haven't really looked at that in depth. I don't know that that would ultimately be fruitful in the clinic. What we've observed and we've had a lot of work in the clinic as you know, we haven't seen any obvious correlations or issues with iron metabolism or even the metabolic state of iron metabolism in patients coming on to study. So, it's something that we continue to think about, but not really a significant workstream for us at the moment.

And your last question from Mitchell Kapoor. Your line is open.

Hey there. Thanks for taking the questions. The first one just for the second half data for Arms A and B for praluzatamab. Thinking about the holistic profile. Could you kind of describe what would be meaningful and then what would be considered beyond meaningful kind of a great profile out of the datasets?

Thanks, Mitch, for the question. I think we'll focus on the meaningful aspects if that works for you. I'll ask Amy to comment.

Sure. Sure. Meaningful. So again, going back to hormone receptor positive HER2 non-amplified. That's the patient cohort that we enrolled in Arm A. That enrollment is complete and the goal was to get 40 efficacy data from 40 efficacy evaluable patients. And here, we're focusing on the endpoints that are really more extrapolatable and important to registrational studies, those being progression-free survival and clinical benefit rate at 24 weeks. Here, we're looking for something that would be CBR consistent with 30% and PFS that is three months or better. I think anything north of that is going to be in your best case scenario. So that's what we're looking for in Arm A. In Arm B, this is monotherapy in patients with CD-166 expressing triple-negative breast cancer. There, the bar is a little bit different. Response rates can be meaningful, and certainly, durability of response can be meaningful and response rates can form the basis of accelerated approval studies. Sacituzumab being the most recent example of this in triple-negative breast cancer. Here, we're looking for response rates that are really upwards of 20%. And according to our KOLs and our steering committee, we're looking for PFS that exceeds one scan. So that is greater than two months. And why are we seeing that? Well, the ASCENT trial that was the Phase 3 study of Sacituzumab versus chemotherapy had response rates of 5% in the chemotherapy arm and median progression-free survival of 1.7 months. And Sacituzumab got full approval on the basis of that study and went from accelerated to full. And so, we are in very likely the post-Sacituzumab setting where there really isn't a whole lot of treatment options. So really 20% to 30% response rate and a PFS that is greater than two months would be something that we would be happy with.

Yes, absolutely. The work presented at AACR extended from the in vitro characterization of the masking strategy for interferon alpha to the evaluation of the anticancer activity of the molecule in both masked and unmasked forms. We have also started some preliminary assessments of tolerability in cynomolgus monkeys. The data clearly demonstrate that we have significantly broadened the therapeutic window for interferon alpha-2b by concentrating its activity in tumor tissue and focusing the immunobiological response stimulated by interferon alpha-2b in the tumor microenvironment. We believe this presents a substantial opportunity to enhance the therapeutic window for interferon in cancer patients both as a standalone treatment and, more importantly, in combination with other therapies. Ultimately, our goal is to make a difference for patients who are unresponsive or have become resistant to immunotherapies. There is considerable potential for this program, and we, along with our advisors, are excited about advancing it. This is just one part of our broader initiative at the company aimed at leveraging our innovative technology to improve the therapeutic window for various cytokines.

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

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

And this does conclude today's conference call. Thank you all for participating. You may now disconnect, and have a great day.