CytomX Therapeutics, Inc. Q2 FY2025 Earnings Call

Good afternoon, everyone. Thank you for standing by. Welcome to the CytomX Therapeutics Second Quarter 2025 Financial Results Call. Please be advised that today's call is being recorded. I would now like to hand the call over to your host for today, Chris Ogden, CytomX' Chief Financial Officer. Please go ahead.

Thank you. Good afternoon, and thank you for joining us. Before we begin, I would like to remind everyone that during this call, we will be making forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks 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. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments, or otherwise. Earlier this afternoon, we issued a press release that includes a summary of our second quarter 2025 financial results and highlights recent progress at CytomX. We encourage everyone to read today's press release and the associated materials, which have been filed with the SEC. Additionally, the press release, recording of this call, and our SEC filings can be found under the Investors and News section of our website. With me on the call today is Dr. Sean McCarthy, CytomX' Chief Executive Officer and Chairman. Sean will provide an update on our pipeline and company progress before I cover the financials for the quarter. We will then conclude with a Q&A session. With that, I'll now turn the call over to Sean.

Thanks, Chris, and good afternoon, everyone. We're thrilled to be here today to review our progress for the second quarter, highlighted by the exciting clinical data we announced in May for CX-2051, our PROBODY antibody drug conjugate targeting EpCAM, which we view as having significant potential in colorectal cancer and potentially many other tumor types. We're also making great progress with our second current clinical program, CX-801, that I'll come to a little later. I'll focus initially today on CX-2051 and our work in colorectal cancer, which I'll refer to from here on as CRC. CRC remains one of the biggest unmet needs in oncology with approximately 1.9 million patients diagnosed per year on a global basis. This disease burden is expected to increase considerably over the next couple of decades to more than 3 million, and is currently the second leading cause of death by cancer worldwide. Despite many advances across many other cancer types in recent years, CRC has seen little impact from innovation over this period of time, resulting in current 5-year survival rates in metastatic CRC of about 13%. New treatments like antibody drug conjugates are urgently needed to treat this cancer. In other solid tumor types, ADCs such as ENHERTU, TRODELVY, and ELAHERE have made a big difference for patients, but ADCs have yet to break through in CRC, representing a major scientific, clinical, and commercial opportunity. At CytomX, we have intentionally designed CX-2051 to address this opportunity, building on years of experience in how to optimally leverage our PROBODY technology for the maximum benefit of cancer patients. Let me recap the key design elements of CX-2051. EpCAM is a very highly expressed target in CRC, making it very attractive for an ADC. The payload on CX-2051 is a topoisomerase-1 inhibitor, which is ideally matched to CRC, where the Topo-1 inhibitor, irinotecan, has been a core component of the standard of care for many years. And thirdly, critically, CX-2051 uses CytomX PROBODY masking technology to limit binding in normal tissues, something that has thwarted previous attempts to drug EpCAM. Our initial experience with CX-2051 in the clinic announced in May is very encouraging. We have focused our Phase I clinical evaluation exclusively in CRC with the goal of delivering clear clinical proof of concept in this high area of unmet need. I'd like to briefly recap the CX-2051 initial Phase I data from May. For context, CX-2051 has initially been studied in a fifth-line CRC patient population where approved standard of care therapies are typically associated with 1% to 2% response rates and progression-free survival of only 2 to 3 months. In comparison to these benchmarks, CX-2051 has demonstrated robust clinical activity with a 28% confirmed overall response rate, 94% disease control, and 5.8 months of preliminary progression-free survival in the first 18 efficacy evaluable patients at relevant dose levels. We're also encouraged to have observed clinical activity, including confirmed objective responses across a relatively wide range of doses. Our initial data has also validated that EpCAM expression is abundant in late-line CRC with every evaluable patient having high target levels. This is important because it suggests that CX-2051 may broadly address CRC and may not require patient selection, potentially a significant commercial advantage. Furthermore, our CX-2051 masking strategy has succeeded in avoiding classic EpCAM toxicities such as pancreatitis that have impeded the successful development of drugs against this target previously. In terms of next steps, we have initiated dose expansions at doses of 7.2, 8.6, and 10 milligrams per kilogram administered every 3 weeks, and we are targeting enrollment of approximately 20 patients at each dose level. Enrollment is going well, and we remain on track for an updated data set from a total of about 70 patients in Q1 2026. Our goals for the dose expansions are to more fully characterize the dose response of CX-2051, both in terms of clinical activity and safety with the goal to inform dose selection for Phase II. In terms of safety, the most common adverse events in the interim Phase I data were diarrhea, nausea, vomiting, and anemia. In the expansion phase, we're paying particular attention to the management of diarrhea using prophylactic medications, and we'll continue to iterate and refine our AE management strategies to best position CX-2051 for Phase II and beyond. In parallel to enrolling the expansion cohorts, we are in the process of developing our Phase II strategy in late-line CRC and planning for potential initiation during the first half of 2026. While detailed next steps will, of course, be data dependent, our current view is that the next study would likely evaluate CX-2051 monotherapy in fourth-line CRC based on the high unmet need, the potential speed to market, and the multibillion-dollar market opportunity we see in this treatment setting. Looking out to the longer term, CX-2051 is also anticipated to have potential in earlier lines of CRC therapy and ultimately may be positioned, we believe, to replace irinotecan as a foundational component of CRC treatment. In support of this strategy, we anticipate starting combination studies in CRC in 2026. Now turning to CX-801, our masked interferon alpha-2b program that we're developing in combination with the PD-1 inhibitor, KEYTRUDA. Interferon alpha is a powerful immune system modulator with known anticancer activity across multiple tumor types, including renal cancer, bladder cancer, and melanoma. But it's fallen out of clinical use in oncology due to its poor tolerability. We designed CX-801 to really clamp down on the undesired broad systemic activity of interferon and localized activity to the tumor microenvironment. In May of 2025, during Q2, we dosed the first patient in the combination arm of our Phase I study with KEYTRUDA. This study is focused on metastatic melanoma, and we're targeting initial data for the combination in 2026. In the fourth quarter of this year, we anticipate providing a first look at translational data for monotherapy CX-801 impaired tumor biopsies and specifically how it's modulating the tumor microenvironment, including potential upregulation of interferon stimulated genes like PD-L1. Positive early results here would provide evidence that the mechanism of action is working as designed, underpinning our rationale for the KEYTRUDA combination and supporting our vision of turning cold tumors hot with this novel immunotherapy. We look forward to providing this initial CX-801 translational update in Q4 this year. With that, let me turn the call over to Chris for updates on our finances.

Thank you, Sean. Echoing Sean's earlier comments, the second quarter was important as we presented initial CX-2051 Phase I data that informed clear next steps for the program. From a capital formation standpoint, we are pleased to have completed a $100 million follow-on offering with a top-tier group of shareholders, further underscoring CX-2051's potential. Following the execution of the financing, CytomX is in a strong financial position with projected cash runway to the second quarter of 2027. Of note, our cash guidance does not assume any additional milestones from existing collaborations or any new business development. Outside of CX-2051, we will continue to employ a focused capital allocation approach, including for CX-801, where we are aiming to deliver initial proof of concept in combination with KEYTRUDA in melanoma. In terms of our research collaborations, we continue to view partnering as a capital-efficient way to extend the reach of our technology and drive increased long-term value. A key current focus in our collaborations is T-cell engagers, where, for example, we have momentum with partners, Regeneron and Astellas and have the potential to earn milestones over the next 1 to 2 years. With that, I'll walk through our second quarter financial results. As of June 30, 2025, we ended the quarter with $158.1 million in cash, cash equivalents, and investments versus $79.9 million in cash at the end of the first quarter of 2025. Total revenue was $18.7 million compared to $25.1 million in the second quarter of 2024. The lower revenue was driven by the completion of our performance obligations in the BMS and Amgen collaborations as well as decreased activity with Moderna. Operating expenses for the second quarter were $19.9 million compared to $33.6 million in the second quarter of 2024. R&D expenses were $13.3 million during the second quarter, representing a decrease of $11.9 million versus the second quarter of 2024. General and administrative expenses also decreased by $1.8 million during the 3 months ending June 30, 2025, to $6.6 million compared to $8.4 million for the corresponding period in 2024, driven by lower personnel costs and lower legal and patent expenses. Overall, we will continue to maintain a disciplined data-driven capital allocation approach in order to advance the most promising opportunities in our pipeline. With that, I'll turn the call back to Sean for closing remarks.

Thanks, Chris, and thanks, everyone, for joining us today. CytomX made tremendous progress during Q2, and we look forward to the second half as we set our sights on 2026 and in particular, next steps for the CX-2051 program. With EpCAM, we believe we have unlocked a new approach to the treatment of late-stage CRC, leveraging our proprietary platform technology and prior experience with masked ADCs. We view CX-2051 as a first-in-class and highly differentiated asset with broad scope for value creation. Based on the interim Phase I dose escalation results disclosed to date, we see a clear path forward to develop CX-2051 in late-line CRC, and we plan to execute against this opportunity as our top near-term priority. We're excited to see Phase I results in Q1 of 2026, together with our next steps for the program. Regarding CX-801, we're executing a similarly focused strategy to CX-2051 in melanoma in order to generate proof of concept for the KEYTRUDA combination. Positive data here would reestablish interferon as a potential new centerpiece of combination immunotherapy with broad potential across many immunologically cold tumors or for patients who become refractory to checkpoint inhibition. We look forward to advancing CX-801 towards this vision. Before I wrap up today's call, I want to sincerely thank and honor the patients who joined our studies, their families, our clinical investigators, and our dedicated team here at CytomX. Your collective contributions are responsible for our advancements, and we're grateful for your help in getting us to where we are today. With that, operator, please go ahead and open up the call for Q&A.

Our first question comes from Edward Tenthoff with Piper Sandler.

Congrats on all the progress here. So my question has to do with the potential to move into earlier lines of colorectal therapy. What's going into those decisions? And how do you envision sort of announcing those trials?

Thank you for your question, Ted. To start, we are highly focused on pursuing opportunities in the late-line treatments. We see significant potential to advance quickly in that area during the fourth line. As we look to move into earlier lines, this will become a key focus for us, allowing us to expand our opportunities. Achieving this will require combination studies to determine the doses we will choose for the Phase II trials, particularly for monotherapy in certain combination contexts. Our goal is to advance into the third line and ultimately into the second line, where we aim to replace irinotecan. One clear opportunity for combinations, given its widespread use in treating colorectal cancer, is to assess the combination with bevacizumab. We are examining this closely, and we will need to complete the Phase I study before selecting our doses.

Our next question comes from the line of Nabeel Nissar with Jefferies.

This is Nabeel on for Roger. Thanks for the updates. Quick question regarding the rationale for value creation of EpCAM beyond CRC. Are we approaching this with partnerships? And what is the strategy? Are we looking for a particular TAM? Or is there a particular tumor indication that would fit better with your technology?

Thank you for your question. It's a great opportunity to expand the 2051 development program beyond CRC. Currently, we are focused on the substantial scope and scale of the opportunity in colorectal cancer. However, to reiterate, EpCAM is found in most solid tumors, often at high levels in lung, pancreatic, gastric, endometrial, and breast cancers. There is a significant opportunity here now that we have initial proof of concept in colorectal cancer. This type of drug could potentially benefit from a partnership over time. We will consider that when the timing is appropriate. As I have mentioned repeatedly on these calls, we will pursue the right deals at the right moment. This could be advantageous for value creation in the future, but for now, it is crucial for us to focus on building value through the CRC opportunity over the coming months.

Our next question comes from the line of Matt Biegler with Opco.

What do you think is the bar for accelerated approval in CRC right now, assuming you do go forward with like a monotherapy fourth line? I think obviously, like the rule of thumb that the buy side loves to point to is a 30% ORR, but we've recently seen an ESMO working group come out advocating as low as 20%, I think, like given how poor salvage therapies work in this setting. So I'm just kind of curious if you had any thoughts on that or whether you think ORR is even the most relevant outcome versus PFS or OS or something like that?

Yes. Thanks, Matt. Great question. And of course, an exceedingly difficult one to answer at the moment. But given the activity that we've seen so far and the performance of 2051 in this area of such enormous unmet medical need, we, of course, have to be thinking about strategies that could lead to an accelerated approval. We want to get this drug to patients as quickly as we possibly can. That said, there are two major considerations as we develop that strategy. One, there's no precedent for accelerated approval in the CRC setting based on ORR, as you know, that would be breaking new ground. More typically, we're looking at a patient population in a clinical setting where we're relying on PFS and of course, ultimately OS endpoints. That said, the scope of the unmet need, the nature of the unmet need here is so high and our activity is so encouraging that we are considering it, and we will, at the right time, have discussions with the FDA. The second thing, of course, is just the overall regulatory uncertainty at the moment, which none of us can ignore. But just to reiterate, of course, we're all aligned here and wanting to get this drug to patients by the fastest possible means.

Our next question comes from the line of Anupam Rama with JPMorgan.

So on the preliminary 801 monotherapy data here in the fourth quarter, what are you looking for that might give you confidence in sort of the combination potential of this product with KEYTRUDA and melanoma? And I guess, any thoughts on any risks of overlapping toxicity that you're going to be monitoring for?

Anupam, that’s a great question. I'm glad to elaborate on 801 a bit more. There's a strong precedent for the combination of PD-1, particularly KEYTRUDA, and interferon alpha-2b showing significant effectiveness in melanoma. Merck has demonstrated this in an earlier patient setting than we are currently focusing on, revealing robust efficacy, though it was accompanied by a notable incidence of Grade 3 adverse events, especially immune-related ones. This indicates that the combination can be quite effective in melanoma. Regarding our development plan for 801, we are proceeding cautiously. We have moved through several cohorts of monotherapy with a small number of patients to gather initial experience. In our previous reports, we noted that we have already surpassed the clinically approved and utilized dose of interferon alpha, which shows our progress consistent with improved tolerability. Notably, this initial experience has allowed us to begin the combination study, which we initiated in Q2, as previously mentioned. We envision the drug being used in combination with KEYTRUDA, and we will actively recruit patients for this part of the study, with data expected next year. The safety and efficacy results from this combination are slated for 2026. In the meantime, with the small number of monotherapy patients treated, we are and will continue to investigate a series of paired tumor biopsies to analyze the immune tumor microenvironment, focusing on how the interferon is affecting immune cells and inducing interferon-regulated genes like PD-L1, which supports our rationale for combining it with a checkpoint inhibitor like KEYTRUDA. The data we plan to share in Q4 will come from a select group of patients and will be initial biopsy data. We do not anticipate having any overall response rate assessment from this small group at this stage; rather, we will focus on translational data, which we believe will be crucial and informative, illustrating that the drug is functioning according to our design at the molecular level.

Our next question comes from the line of Peter Lawson with Barclays.

I apologize if this has been asked, I joined late. On the EpCAM ADC, so we got the Phase I update in Q1. Kind of just if you could talk through the size of the data set we see and the scope of it, and kind of if we should expect to see durability and also biomarker data.

Yes. Thanks, Peter. Thanks for giving me the opportunity to recap some of our earlier comments on the call. It's very important. So as we said, we're super focused on generating this next data set for 2051. We anticipate that in Q1 2026, we'll have 70 and maybe a few more patients having experience with the drug compared to the update, the initial disclosure in May, which was 25 safety evaluable patients and 18 efficacy evaluable. So by the time we get to Q1, that data set should be quite a bit larger and predominantly across three dose levels, 7.2, 8.6, and 10 mg per kg. Each of which were doses that we saw clinical activity for in that initial disclosure, right? So by then, yes, we would expect to have reasonable follow-up on the majority of those patients. And the other element of that update will be integration of that data into our go-forward plan for Phase II. So that's our current plan - that the Q1 update will be a rounded out Phase I data set plus our strategy for moving forward into Phase II. That's the current plan.

And that Phase II, would that have a randomized component to it?

I think that's most likely. Yes, we're still obviously collecting data from the Phase I. So no decisions made yet, but we are of the general view that the next study would be randomized to a component or components of current standard of care in the fourth line where, unfortunately, for patients today, the bar is very low. So we think that 2051 is very well positioned against those comparators. And we'll also be thinking through in the context of Project Optimus and also, of course, based on the full Phase I data set that we analyze later this year and into Q1, whether that's a one dose of 2051 or maybe two, that remains to be decided.

Our next question comes from the line of Mitchell Kapoor with H.C. Wainwright.

You mentioned that there's quite a low bar for 2051. That makes a lot of sense. But thinking about what triggers a go/no-go move into the Phase II and fourth line as a monotherapy, can you just speak to what we should be looking for that would be indicative of a positive outcome that would immediately trigger looking to move into Phase II?

Yes. Mitch, thanks for the question. Well, again, just to recap our experience with the first 18 efficacy evaluable patients where across the three dose levels of 7.2, 8.6, and 10, we saw a confirmed ORR of 28%. So I think we all agree that that's very exciting and would set up a very clear go-forward decision into the fourth-line study. Number doesn't, of course, need to be as high as that to go forward. I don't think we're going to put a number on it today, but we've got a lot of room to maneuver, we think, with the data that we've already presented with CX-2051 as our data continues to mature.

Okay, great. And just one more on the CRC combos in earlier lines, would you potentially advance multiple combinations? And have any plans been discussed with the FDA on the combination strategy so far?

Multiple combinations are certainly on the table. We need to be mindful of our resources at this point in time. And as I mentioned, the place to start most likely would be the combination with bevacizumab. We have yet to have significant conversations with FDA relating to our go-forward study design. That will come, of course, as our Phase I data continues to mature.

Our next question comes from the line of Mayank Mamtani with B. Riley.

This is Jeff from B. Riley for Mayank. My first question is given that CX-2051's Grade 3 diarrhea rates exceeded those of other Topo-1 inhibitor ADCs. Will you explore alternative mitigation strategies such as specific protease inhibitors or microbial modulation rather than relying solely on loperamide? My second question is how much median follow-up are you expecting to have at the 1Q update? And are you planning to present data at ASCO GI in January 2026?

Thanks for the questions. Regarding the concern about diarrhea, it is indeed one of the adverse events we are prioritizing in this Phase I study. We have gained significant insights from the data we shared earlier. To summarize our approach, at the outset of this study, we focused on understanding the overall adverse event profile of this drug without implementing any preventive measures for diarrhea management. However, around March and April of this year, as we began preparing for some expansion studies, we started to consider the use of loperamide as a preventive strategy. We anticipate learning more about its effectiveness as we proceed with the expansions. In terms of Grade 3 diarrhea incidence, which is approximately 20%, I would like to remind everyone that during the early development of irinotecan, the incidence was around 30% to 40%. We also recognize that Topo-1 inhibitors in ADCs can lead to significant instances of Grade 3 diarrhea and higher, which necessitates further understanding and management on our part. We are currently exploring the use of loperamide as a starting point. Regarding your question about protease inhibitors, it's an interesting topic, but at this stage, our exploration is very preliminary, and we currently lack evidence that protease biology is influencing the adverse event profile. This may be worth investigating in the future. As for your additional questions about median follow-up, I can say that enrollment for the expansions is progressing well, and by the first quarter of next year, we expect to have substantial follow-up data on most of these patients, though I can't provide a specific number since the study is ongoing. Furthermore, I cannot comment on the ASCO GI 2026 presentation plans yet, but we will remain open to all options regarding when and where to present our data as is customary. Thank you for your questions.

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Dr. Sean McCarthy, Chairman and CEO, for closing remarks.

Thanks, everyone, for joining us today. It's been a pleasure to recap our tremendous progress during Q2 of 2025. We look forward to providing additional updates as we move through the second half of the year. So enjoy the rest of your day.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.