Q3 2019 Earnings Call

Good morning, and welcome to Mersana Therapeutics third quarter 2019 conference call. Currently all participants are in listen only mode.

Operator: Good morning, and welcome to Mersana Therapeutics' third quarter 2019 conference call. Currently, all participants are in a listen-only mode. There will be a question and answer session at the end of this call. I would now like to turn the call over to Sarah Carmody, Executive Director, Investor Relations, and Corporate Communications. Please proceed.

Maybe a question and answer session at the end of this call.

I would now like to turn the call over the Sarah Carmody Executive Director Investor Relations and corporate Communications. Please proceed.

Good morning, welcome to Mersana third quarter 2019 conference call, we issued a press release earlier. This morning, reviewing or third quarter 2019 result in business updates, which will be covered on this call.

Sarah Carmody: Good morning. Welcome to Mersana's third quarter 2019 conference call. We issued a press release earlier this morning reviewing our third quarter 2019 results and business updates, which will be covered on this call. A replay of today's call will be available on the Investor Media section of our website.

A replay of today's call will be available on the Investor and media section of our website.

Unnamed Speaker: After our prepared remarks, we will open the call for Q&A. Before we begin, I'd like to mention that our call will contain forward-looking statements within the meaning of federal securities laws. These are not statements of historical facts and are based on management's beliefs and assumptions and on information currently available. They are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially, including the risk that our early encouraging preclinical results for XMT 1536 are not necessarily predictive of the results of our ongoing or future discovery programs or clinical studies. That the development and identification of the company's product candidates and new platforms will take longer and or cost more than planned, and that our clinical trials will not be completed on schedule, if at all.

After our prepared remarks, we will open the call for acuity.

Where we begin I'd like to mention that are called will contain forward looking statements within the meaning of federal securities laws.

These are not statements of historical facts in are based on management's beliefs and assumptions.

Information currently available.

They are subject to risks and uncertainties that could cause actual results and the implementation of the company's plans to vary materially including the risk that our early encouraging preclinical results for X.M.T., 15, 36, or not necessarily predictive of the results of our ongoing or future discovery programs or clinical studies.

That the development and identification of the company's product candidates in new platforms will take longer indoor costs more than planned in that or clinical trials not be completed on schedule is at all.

Unnamed Speaker: These risks are discussed in the company's SEC filings, including, without limitation, the company's annual report on Form 10-K, filed on March 28, 2018, and subsequent filings. Except as required by law, the company assumes no obligation to update these forward-looking statements publicly, even if new information becomes available in the future. And with that, I'll turn the call over to Anna Protopapas, Mersana's Chief Executive Officer.

These risks are discussed in the company's FCC filings, including without limitation. The company's annual report on Form 10-K filed on March 28, 2018 in subsequent filings except as required by law. The company assumes no obligation to update these forward looking statements publicly even if new information becomes available.

In the future and with that I'll turn the call over to and prototype and some are sound as Chief Executive Officer.

Anna Protopapas: Good morning, everyone, and welcome to our Financial and Corporate Update call for the third quarter of 2019. Joining me today with prepared remarks are Dirk Hoepner, our Chief Medical Officer; Tim Loehringer, our Chief Scientific and Technology Officer; and Brian DeSchuytner, our Senior VP of Finance and Product Strategy. We're also joined by Eva Jack, our Chief Business Officer, and Michael Kaufman, our Senior VP of CMC, who will be available for questions.

Kim Sarah Good morning, everyone and welcome to our financial than corporate update pool for the third quarter of 2019, joining me today with prepared remarks are good.

Chief Medical Officer, Jim Lynch, Chief Scientific in Technology Officer, and Brian The Scheidler, a senior VP of finance and products start to cheap.

We're also joined by Youve, a jacket, Chief business Officer, and Michael Kauffman, I see newly PEO, CMC, who will be available for questions.

Anna Protopapas: As a reminder, we presented Phase 1 Interim Dose Escalation Data for XMT-1536, our first in-class and wholly-owned doloflexin ADC targeting NAPI 2B, at ASCO this year. This data showed encouraging clinical activity and durable responses and prolonged stable disease at well-tolerated doses in unselected and heavily pre-treated patients. We are now executing on a set of goals that positions Mersana for a data-rich 2020 and near-term proof of concept and are funded to deliver on these important data readouts. More specifically, in the third quarter, we initiated two expansion cohorts in patients with platinum-resistant ovarian and lung adenocarcinoma cancers at 36 milligrams per meter squared. The dose we have determined is efficacious and well-tolerated.

So we might do we presented phase one into a dose escalation data for X.M.T. 50, 36, our first in class and hold yield dollar flexi legacy toward getting that b to B and asked for this years. This data showed encouraging clinical activity and durable responses and prolonged stable.

These well tolerated doses in on selected and heavily pretreated patients. We are now executing on a set of goals that positions much signed up for a day go reached 2020 near to the concept and our funded to deliver on these important data read outs.

More specifically to lead this third quarter, we initiated two expansion cohorts in patients with platinum resistant ovarian and lung adenocarcinoma cancers, a 36 milligrams per meter square a dose we have determined this efficacious and well tolerated.

Anna Protopapas: We have strong investigatory interest and are rapidly bringing new sites for the expansion cohort enrollment. In parallel, we have continued to evaluate higher doses. Three patients have been dosed at 43 milligrams per meter squared without experiencing dose-limiting toxicity.

We have strong investigator interest and a rapidly bringing up new sites for the expansion cohort that won't but.

In parallel we have continued to evaluate higher doses sweep patients have been dosed up 43 milligrams per meter squared without experiencing dose limiting toxicities.

Anna Protopapas: So overall, we're encouraged with the continued safety and efficacy profile of XMT 1536. We are on track to achieve proof of concept and multiple data readouts in 2020. It should be a very exciting year for Mersana.

So overall, we were encouraged with the continued safety and efficacy profile Opex empty 15, 36, we're on track for achieving proof of concept and multiple data readout in 2020, it should be a very exciting here from were signed up Doug will provide more detail progress I think some T 15 30.

Anna Protopapas: Dirk will provide more detail on our progress on XMT 1536. In terms of our earlier pipeline, we have advanced our next ATCs to IND-enabling studies and are on track to announce results around year-end and file the IND in the first half of 2020. Our data to date continue to support the differentiated profile of this ADC and its potential to benefit patients. We're also continuing to strengthen our discovery pipeline, leveraging our dolaflexin, dolasynthin, and immunosynthin platforms. These innovative platforms provide a highly efficient product engine that allows us to build a robust discovery pipeline that will fuel our mid- to long-term growth. We recently presented data on our immunosynthin programs for the first time at World ADC in October, and we will be presenting additional data at the Society for Immunotherapy of Cancer this week. Tim will provide more details on our program. With that, I will now turn the call over to Dirk to provide an update on XMT 1536.

Six.

In terms of or worthy of pipeline, we have what thoughts on mixing Pcs wide be enabling studies and old truck to announce around year end and fall. The I. Indeed, the first half of 2020 or do you got to date continued to support the differentiated profile of the C.D.C. and its potential benefits paid.

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We also continued to strengthen our discovery paid pipelines leverage is Abdullah flexing Dulles synthon any munis instead platforms.

In a booking platform Kulbinder, hi, fission products and Gi that allows us to build a robust discovery pipeline that will fuel our mid to long term growth. We recently presented data on our immuno Simpson programs for the first time, but will be seen October and we will be presenting additional.

At the society for immunotherapy of cancer. This week, Tim will provide more details on doctoral forests with Dod I will now turn the call over to dork to provide an update on X M. P 50 36.

Dirk Hoepner: Thanks, Anna, and good morning, everyone. Today, I will provide an update on our ongoing clinical study of XMP1536 in patients with platinum-resistant ovarian cancer and NSCLC adenocarcinoma. I'll begin with the ongoing XMT 1536 expansion study. In August, we announced that we dosed our first patient in the expansion study. As a reminder, the ongoing expansion study is evaluating XMP1536 at 36 milligrams per square meter once every four weeks in patients with platinum-resistant ovarian cancer and NSCLC adenocarcinoma. We are currently enrolling platinum-resistant ovarian cancer patients who have had no more than three lines of therapy and NSCLC adenocarcinoma patients who have failed one prior line of platinum-based chemotherapy, either in combination or sequentially treated with an anti-PD-1 or anti-PD-L1 monoclonal antibody.

Thanks, and though.

Good morning, everyone.

Today, I will provide an update on our ongoing clinical study or X M. T 15, 36 in patients with platinum resistant ovarian cancer and if you don't see additional carcinoma.

I begin.

The ongoing excellent T 15, 36 expansion study.

In August we alone there were dosed our first patients in the expansion study as a reminder, your ongoing expansion study is evaluating exome T. 15, 36 at 36 milligram per square meter. Once every four weeks in patients with platinum resistant ovarian cancer.

And if you don't see I do know carcinoma. We are currently enrolling platinum resistant ovarian cancer patients. We have had no more than three lines of therapy and if you don't see are doing across you know my patients.

If I got one part a line of platinum based chemotherapy you go in combination was sequentially treated with an anti PD, one or anti PDL, one monoclonal antibody.

Dirk Hoepner: We are also enrolling patients with oncogenic driver mutations, such as EGFR or ALK mutations, who have had prior lines of targeted therapies and no more than one line of chemotherapy. We expect to enroll approximately 45 patients in each cohort. We are pleased with the investigator interest in the trial. To date, we have initiated 20 sites, and additional sites will be coming online in November and December.

We're also enrolling patients with oncogenic driver mutations such as Oh, I can tell machines, we have had prior lines of targeted therapies.

No more than one line of chemotherapy.

We expect to enroll approximately 45 patients in each cohort.

We're pleased with the investigator interest in the trial.

Today, we have initiated 20 sites and additional insights will be coming online in November and December .

We expect to be a booth.

Dirk Hoepner: We expect to be able to provide multiple data readouts during 2020. These disclosures could include data from both the platinum-resistant ovarian cancer and NSELC adenocarcinoma patient cohorts. I now turn to the status of the XMT-1536 dose escalation study. As Anna mentioned, we initiated a 43 milligram per square meter once every four weeks cohort in August. The Safety Review Committee evaluated three patients at the 43 mg per sq. m dose level and concluded that no patients experienced dose-limiting toxicities and that the dose has been well-tolerated today. So far, we have seen an encouraging safety profile at this dose level without the severe treatment-related AEs typically associated with other ADC platforms, such as neutropenia, neuropathy, and ocular toxicity. We are pleased with the continued positive profile of XMP1536 and plan to enroll more patients at this dose level to gain additional experience.

To provide multiple data read outs during 2000 and trends. This disclosure of put include data from both the platinum resistant ovarian cancer and NSCLC or do you know crossing remote patient cohorts.

I know Turing to the status of the Exome T 15, 36 dose escalation study.

And then I mentioned, we initiated a 43 milligram per square meter once every four week cohort in August .

Safety Review Committee has evaluated three patients on the 43 milligram per square meter dose level and concluded that locations experience dose limiting toxicities and that's the Ddos has been well tolerated to date.

So far we have seen an encouraging safety profile at this dose level without the severe treatment related is typically associated with although I do see platforms, such as neutropenia neuropathy and awful lot toxicity.

We are pleased little bit continued positive profile of exome to 15, 36 and plan to enroll more patients at this dose level to gain additional experience.

Dirk Hoepner: As we have said in the past, our objective is to optimize efficacy while maintaining a good tolerability profile. It is also important to point out that we have patients treated at 20, 30, 36, and 43 mg per square meter in the dose escalation phase that are still on treatment, allowing us to continue to evaluate the overall long-term profile of XMT1536. We expect to report data from this study in 2020 at the completion of the dose escalation study. In closing, we continue to make great progress in the clinical development of 1536 and look forward to sharing further data from the expansion and the dose escalation portions of this study in 2020. I will now turn the call over to Tim Lohringer, our chief science and technology officer, to discuss the preclinical and next-generation ADC platform work. Thanks, Jerk!

As we have set in the past our drugs or objective is to optimize if you could see while maintaining a good tolerability profile.

There is also important to point out that we have patients treated at 2030, 36, and 43 milligram per square meter in the dose escalation that are still on treatment, allowing us to continue to evaluate the overall long term profile of X M. T 15 30.

Six we expect to report today or in 2020 at the completion multi dose escalation study.

In closing we continue to made great progress in the clinical development or 15 36.

And look forward to Sharon for the data from the expansion and the dose escalation portions of the study in 2000 Trent.

I really no true on the call over two to closure or she science and technology officer to discuss the preclinical and next generation Hdc platform work.

Thanks Dirk.

Tim Loehringer: I'd like to start by highlighting a co-authored poster on NAPI-2b expression in non-small cell lung cancer that was presented a few weeks ago at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics, or the so-called Triple meeting, in Boston. We worked with an academic collaborator to analyze a large sample of well-annotated lung tissues to investigate NAPI2b expression in NSCLC, emphasizing correlations to histology, and determined that NAPI2b is broadly expressed in lung adenocarcinoma. The study demonstrated that in this large early-stage surgical non-small-cell lung cancer cohort, a high level of NAPI 2B expression was seen with adenocarcinoma histology and across the range of adenocarcinoma subtypes. In addition, patients with EGFR or KRAS mutations were also found to have high expression of NAPI 2B. For adenocarcinoma cases, 80% of patients with EGFR mutations and 75% of patients with KRAS mutations were also found to have high expression of NAPI 2B. We believe these findings further support our decision to evaluate XMT-1536 in non-small cell lung cancer adenocarcinoma patients in our ongoing expansion study. You can find a copy of the poster on our website.

I'd like to start by highlighting a co authored poster on nappy to be expression in non small cell lung cancer was presented a few weeks back at the Hey, CR and see you RTC International conference on molecular targets and cancer Therapeutics for the so called Triple meeting in Boston.

We worked with an academic collaborator to analyze a large sample of well annotated lung tissues to investigate and happy to be expression in NSCLC, emphasizing correlations to histology and determined that nappy to be is broadly expressed in lung adenocarcinoma.

The study demonstrated that in this large early stage surgical non small cell lung cancer cohort a high level of not be to be expression was seen with admiral carcinoma, histology and across the range of annual carcinoma sub types. In addition patients with easier far or K BRAF mutations also were found.

To have high expression of that B to B for Admiral carcinoma cases, 80% of patients with easier far mutations and 75% of patients with key BRAF mutations. We're also found to have high expression of not b to b.

We believe these findings further support our decision to evaluate exome T 15, 36 in non small cell lung cancer and no carcinoma patients in our ongoing expansion study.

You can find a copy of the poster on our website.

Tim Loehringer: Turning to our next ADC, we remain on track to disclose the details around the end of the year and file an IND in the first half of 2020. We're excited about the differentiated profile of this ADC and its potential to benefit patients. In addition, we've made important progress in advancing our proprietary immunostimulatory platform and pipeline. We presented preclinical immunosymptom data at the World ADC Conference in October. As a reminder, Immunosympton is designed to deliver a novel sting agonist safely and efficiently to the tumor and stimulate an antitumor innate immune response. At World ADC in October, we showed that our Sting Agonist ADC results in more than a hundred-fold increase in in vitro and in vivo potency compared to free payload, that it causes complete regression of tumors in vivo after a single, well-tolerated dose, and that it increases immune cell infiltration and cytokine expression profile within the tumor after dosing.

Turning to our next DTC, we remain on track to disclose the details around the ended the year and file in R&D in the first half of 2020, we're excited about the differentiated profile of this 80 C and its potential to benefit patients.

In addition, we've made important progress in advancing our proprietary immunostimulatory platform and pipeline.

He presented preclinical immuno Simpson data at the World AIDC Conference in October .

As a reminder, immuno synthon is designed to deliver a novel Sting agonist safely and efficiently to the tumor and stimulate an anti tumor innate immune response.

And we'll really see in October we showed that our sting agonist AIDC results in more than 100 fold increase in vitro and in vivo potency compared to free payload.

But it causes complete regression of tumors invivo after a single well tolerated dose.

And that it increases immune cell infiltration and cytokine expression profile within the tumor after dosing.

In addition to this data we plan to so further in vitro and in vivo preclinical data at the 2019 Society for immunotherapy of cancer Conference on November eight.

Tim Loehringer: In addition to this data, we plan to show further in vitro and in vivo preclinical data at the 2019 Society for Immunotherapy of Cancer Conference on November 8. The poster abstract went live yesterday on the CITSE website, and the poster will be available on our website following the CITSE poster session. In closing, with DolaFlexion, DolaSimpson, and our ImmunoSymptom platform, we have built a powerful set of ADC platforms to allow us to efficiently generate a robust pipeline of ADCs for multiple targets and indications and address a broad set of patient needs.

The poster abstract went live yesterday on the 50 web site and the poster will be available on our website. Following the 50 poster session.

In closing with those Loxam dollar Simpson and our immuno Simpson platform. We've built a powerful set of AIDC platforms to allow us to officially generate a robust pipeline of ADCC for multiple targets in indications and address a broad set of patient needs.

Brian C. DeSchuytner: And with that, I will turn the call over to Brian DeSchuytner, Mersana's Senior Vice President, Finance and Product Strategy. Thank you, Tim. Before I discuss our third-quarter financial results, I'd like to take a moment to highlight a few key takeaways from ESMA.

And with that I will turn the call over to Brian The Shatner for solar Senior Vice President Finance and product strategy.

Thank you Sam good morning, everyone and thank you for joining us today before I discuss our third quarter financial results I'd like to take a moment to highlight a few key takeaways from ESMO and the potential impact for ex Ante 15, 36, and platinum resistant ovarian cancer.

Brian C. DeSchuytner: and the potential impact of XMT-1536 and platinum-resistant ovarian cancer. The data presented at ESMO this year on ovarian cancer signaled the potential for a real paradigm shift in the standard of care for first-line ovarian cancer. We learned that targeted therapies, specifically betacizumab and PARP inhibitors approved in platinum-resistant ovarian cancer, are likely to be used in earlier lines of therapy. In addition, HAARP inhibitors, previously primarily used in BRCA-positive genes, may be used more broadly against tumors that have homologous recombination deficiency or HRD positivity.

The data presented at ESMO. This on ovarian cancer signaled the potential for a real paradigm shift in the standard of care for first line ovarian cancer, we learned that targeted therapies. Specifically does this isn't a map PARP inhibitors approved and platinum resistant ovarian cancer are likely to be used in earlier lines of therapy.

In addition, PARP inhibitors previously primarily use in BRAF positive tumors, maybe use more broadly against tumors that have homologous recombination deficiency or HRG positive.

Brian C. DeSchuytner: All of this taken together means targeted therapies will be exhausted earlier for more patients and increases the need for new mechanisms of action in later stages and in platinum-resistant patients. Based on our discussions with investigators and the emerging profile of XMT-1536, there is substantial interest in pursuing accelerated registration strategies. With regard to lung cancer, data released at ESMO and also at the World Lung Cancer Conference reinforced that despite advances in the frontline standard of care, there remain substantial unmet needs for patients with relapsed disease who have already been treated with PD-1 or PD-L1 in chemotherapy.

All of this taken together means targeted therapies will be exhausted earlier for more patients and increases the need for new mechanisms of action in later line and in platinum resistant patients.

Based on our discussions with investigators in the emerging profile of SMTC 15, 36, very substantial interest pursuing celebrated registration strategies.

With regard to lung cancer data released at ESMO and also in the World lung cancer conference reinforce that despite advances in the frontline standard of care there remains substantial unmet needs for patients with relapsed disease, who have already been treated with PD, one PDL one chemotherapy.

Brian C. DeSchuytner: We continue to work with investigators to assess XMT-1536 in this setting. Now, let me turn to our third-quarter financial results, then I'll start with our cash position. We entered the third quarter of 2019 with $112 million in cash, cash equivalents, and marketable securities. We used net cash of $16.3 million in operations in the third quarter of 2019. And we expect our cash position will fund our operating plans through several key clinical milestones, with cash into at least mid-2021. In addition, we have the option to draw additional advances of up to $15 million through the Debt Financing Agreement for Silicon Valley Banks, which we completed in May of 2019. And now, some of the key highlights from our third quarter 2019 financial results.

We continue to work with investigators to assess SMC 15 36 in this setting.

Now, let me turn to our third quarter financial results and I'll start with our cash position. We ended the third quarter 2019, with $112 million and cash cash equivalents and marketable securities. We use that cash of 16.3 million in operations in the third quarter 2019, and we expect our cash position.

Well fund our operating plan through several key clinical milestones with cash into at least 2021.

In addition, we have the option to draw additional advances of up to 15 million through the debt financing agreement for Silicon Valley Bank, which we completed in May of 2019.

And now some of the key highlights from our third quarter 2019 financial results collaboration revenue for the third quarter 2019 was approximately 0.8 million compared to 2.2 million for the same period and 28 decrease in collaboration revenue was primarily a result, a decrease in services performed in support of our partner.

Brian C. DeSchuytner: Collaboration revenue for the third quarter of 2019 was approximately $0.8 million, compared to $2.2 million for the same period in 2018. The decrease in collaboration revenue was primarily a result of fewer services performed in support of our partners' programs. Research and development expenses for the third quarter of 2019 were approximately $13.7 million, compared to $15.2 million for the same period in 2018, driven primarily by a decrease in manufacturing costs for XMT-1536 and XMT-1522. However, this was offset by, one, an increase in manufacturing costs associated with the company's next ADC clinical candidate, two, the advancement of companion diagnostic development efforts for XMT-1536, and three, the payment of General and administrative expenses for the third quarter of 2019 were flat compared to the same period in 2018, at $4.4 million. The net loss for the third quarter of 2019 was $16.8 million, or $0.35 per share, compared to a net loss of $17.1 million, or $0.74 per share, for the same period in 2018. The weighted average common shares outstanding for the quarters ended September 30, 2019 and September 30, 2018 were approximately $48 million and $23 million, respectively.

As programs.

Research and development expenses for the third quarter 2019 were approximately 13.7 million compared to 15.2 million for the same period in 2018.

Driven primarily by a decrease in manufacturing cost correct empty 15, 36 annex empty 15 22.

This was offset by one an increase in manufacturing costs associated with the Companys next 80 see clinical candidate to the advancement of companion diagnostic development efforts correct empty 15, 36, and three the payment of a milestone related to the expansion cohort initiation.

General and administrative expenses for the third quarter of 2019 were flat compared to the same period in 2018 at 4.4 million.

Net loss for the third quarter, 2019 was 16.8 million or 35 cents per share compared to a net loss of 17.1 billion or 74 cents per share for the same period in 2018.

The weighted average common shares outstanding for the quarters ended September Thirtyth 2019 at September Thirtyth 2018.

Approximately 48 million and 23 million respectively.

I'll now turn call back there.

Thank you, Brian we have made tremendous progress in the clinical development of excepting 50, 36, the advancement of our mix clinical candidate and the strengthening of our discovery pipeline.

This work well positions most signed up for a data, which 2020 with multiple potential inflection points throughout the year.

Anna Protopapas: I'll now turn the call back to Anna.

For example in 2020, we're targeting to report first the data from the full dose escalation portion.

Anna Protopapas: Thank you, Brian. We have made tremendous progress in the clinical development of XMT-1536, the advancement of our next clinical candidate, and the strengthening of our discovery pipeline. This work well positions Mersana for a data-rich 2020 with multiple potential inflection points throughout the year. For example, in 2020, we're targeting to report first the data from the full-dose escalation portion of the 1536 study. Secondly, early data from the ovarian and lung cohorts in the XMT 1536 dose expansion study. And thirdly, a more mature set of data from both of those expansion cohorts.

15, 36 study secondly, the early data from the ovarian and lung cohorts in the X.M.T. 15, 36 dose expansion study and thirdly, a more mature set of data. So both of those expansion cohorts. In addition, we plan to fall and I D and enter the clinic.

With our next CVC candidate in the first half of 2020 as well as disclosed additional information on our next molecules to add to preclinical studies.

We're planning to provide more specific guidance in terms of timing of all these goals early next year.

Lastly, as Brian mentioned with a cash balance of 112 million. We believe we're well capitalized to execute a driver programs towards meaningful data readout snakes tier and into at least mid 2021.

Anna Protopapas: In addition, we plan to file an IND and enter the clinic with our next ADC candidate in the first half of 2020, as well as disclose additional information on our next molecules to enter preclinical studies. We're planning to provide more specific guidance in terms of timing of all these goals early next year. Lastly, as Brian mentioned, with a cash balance of 112 million, we believe we're well-capitalized to execute and drive our programs towards meaningful data readouts next year and into at least mid-2021. It's a really exciting time at Mersana as we get closer to our goal of bringing XMT1536 to patients. I look forward to continuing to update you on our progress, and I will now open the call to Q&A.

It's a really exciting time mersana as we get closer to a gold upbringing exome T 15 36 to patients.

I look forward to continuing to update you on our progress.

We'll now open the call two key Wednesday.

Thank you.

Ladies and gentlemen, if you have a question at this time. Please press the star followed by the number one key on your Touchtone telephone. If your question has been answered or you wish our move yourself from the Q. Please press the pound key once again to ask a question. Please press star and then one now.

And our first question comes from Jonathan Chang from SVB Leerink. Your line is open.

Good morning, and thanks for taking my questions.

First question on the 43, Nick per meter squared dose.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press the star followed by the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Once again, to ask a question, please press the star and then one now. And our first question comes from Jonathan Chang from SVB Lering. The line is open. Good morning, and thanks for taking my... First question on 43 meg per meter squared. What would you need to see to consider either dose escalating beyond that or using that as the go-forward dose for the experiment?

What would you need to see to consider either dose escalating beyond that or using that as the go forward dose for the expansion cohorts.

Yeah. This is Dirk so I can take this question.

So first of all receiving a very nice safety and Tolerability profile at reported three milligram per square meter.

In the first three patients.

I want to point out here a bit.

We haven't seen.

The LTV, we have only seen a grade wanted right to toxicities.

So far and.

More importantly, we haven't seen the severe treating the related a he said I typically associated with other platforms, such as neutropenia and.

Dirk Hoepner: Yeah, this is Dirk. So I can take this question. So first of all, we're seeing a very nice safety and tolerability profile at 43 milligrams per square meter in the first three patients. I want to point out here that we haven't seen a DLT. We have only seen grade 1, grade 2 toxicities so far. And even more importantly, we haven't seen the severe treatment-related AEs that are typically associated with other ADC platforms, such as neutropenia, neuropathy, and ocular toxicity. So, keeping our objectives in mind, which are to optimize efficacy and maintain a good tolerability profile that is also suitable for long-term dosing, there are basically two questions that we need to address. The first question would be, how much further can we dose escalate?

You are up of the an awful lot Fox is a true.

So keeping.

Oh objectives, and mine, which is through optimized frequency and maintaining a good tolerability profile that is also suitable for long term dosing.

So that they are basically two questions that we would need to address the first would be.

How much further can be dose escalate on the second would be a rich Korean are going to switch.

The dose.

So at this stage.

We are going to.

Enrolled pro the patients and this will help us to answer those questions.

Dirk Hoepner: And the second question would be, at which point are we going to switch the dose? So at this stage, we're going to enroll further patients, and this will help us to answer those questions. We have identified those already, and we're planning to do another three. And we believe this is going to go relatively quickly. And again, whatever we're going to find then, this is going to drive our decision. But at the moment, we feel very comfortable with what we're seeing at 43 milligrams.

We have identified those already.

Planning to do another three and we believe this is going to grow relatively quickly and again.

We're going to find then this is going to drive or decision, but at the moment, we feel very comfortable with what we're seeing at 43 milligram.

Got it.

Just operationally speaking what are the considerations for changing the expansion cohort dosing.

Unnamed Speaker: Got it. And just operationally speaking, what are the considerations for changing the expansion cohort dosing?

Yeah.

Listen I think.

The next week is fairly simple it would require an amendment to the protocol, which would be quite simple.

Unnamed Speaker: Jonathan, I think the switch is fairly simple. It would require an amendment to the protocol, which would be quite simple, and that's the benefit of having these sites up and running and continuing to add additional sites.

That's the benefit of having these sites up and running and continuing to add additional sites.

Got it.

Unnamed Speaker: Got it. Just one last one from me.

Just one last one from me.

Unnamed Speaker: Are you willing to provide any more color today on when we might see the next data update from the 1536 study? And in that next update, should we expect data from both the escalation and expansion portions at the same event? Or is this more likely to be staggered, where we'll first see, I guess, the escalation data?

Are you willing provide any more color today on when we might see the next day to update from the 15 36 study and in that next update should we expect data from both see escalation in expansion portions of the same event.

Or is this more likely to be staggered forsee.

Escalation data.

I think.

Anna Protopapas: I think I'll, you know, as we've said, we're really gearing up for a very data-rich 2020. That will include disclosure of the full escalation data. It will include disclosures on both expansion cohorts, early data, and more mature data. The exact timing of it and the forum will be disclosed. I think we need some more time before we are ready to give that specific guidance, Jonathan, but we know it will be coming in the near term as we move these programs and these studies forward.

<unk>.

As we've said.

We are really gearing up for a very data reached 2020. It will include disclosure of the full escalation date will include disclosures on both expansion cohorts early data and more mature data. The exact timing operated a forum we will disclose this I think we need some more.

Time before we are ready to give specific guidance John Thats. It.

We know it should it will become make it but yet base as we move these programs. These studies forward.

Operator: Got it. Thanks for taking my question. Thank you. Our next question comes from Devjit Chattopadhyay from HC Wainwright.

Got it thanks for taking my question.

Thank you.

Next question comes from Debjit Chattopadhyay from H.C. Wainwright Your line is open.

Operator: Your line is open. Hi, good morning everybody. This is Earl D. Souza from Infodebit. So, just a few questions on our end. What was the general experience at the 30 and 36 Mixed Omega-Q cohorts, and were there additional responses beyond what has been disclosed?

Hi, Good morning, everybody. This is all diesel and forget it so just a few questions on.

First.

What has been the general experience that the 30 and 36 mix I mean acute cohorts and has there been additional responses beyond what has been disclosed.

So the experience so far has been very positive and promising on the 30 and 36 many run for as we disclose publicly within our poster at Astro we have for treated its a number of patients on both of those.

Dirk Hoepner: So the experience so far has been very positive and promising in the 30 and 36 milligram cohort. As we disclosed publicly with our poster at ASCO, we have treated a number of patients on both of those dose levels, sorry, the 36 and about the 30. And what we see there is that patients stay on study for extended periods of time, and we have seen efficacy in doses between 20 and up, so the 30 milligram. And if you look at the poster, we saw two responders in the 30 milligram per square meter dose cohort. So we are definitely in an efficacious range here, and so far, 30, 36 milligrams has been well tolerated. We feel very comfortable moving this forward in the current expansion study.

Dose levels.

Sorry, the 36, though about the 30 and what we see there's that patients.

Stay on study for extended periods of time, and we have seen the sickest see in doses between 20 and upsell. The 30 milligram and if you look at the poster we saw two responder us after 30 milligram per square meter dose cohorts. So.

So we are definitely in an efficacious range here.

And so far 30, 36 milligram has been well tolerated we feel very comfortable moving this forward in the current expansion study.

Thank you and the responses to date had they been durable above four month.

Dirk Hoepner: And the responses to date, have they been durable above four months? You know, I think we are, I will point you to the ASCO poster as the last data disclosure we have made, and obviously, as I mentioned earlier, we will be disclosing the full-dose escalation data set as well as the expansion data set in 2020.

You know I think we are well point you to the ask a poster as the last data disclosure, we have made and obviously as I mentioned earlier, we will be disclosing the full dose escalation dataset as well as the expansion dataset into.

2020.

Okay. Thank you and the final one Orion.

Unnamed Speaker: Okay, thank you. And the final one, Orion, what are your thoughts on the diagnosis and utilization in an ongoing expansion cohort? Thank you.

What I thought on the diagnostic and utilization in an ongoing expansion cohort. Thank you.

We have developed a diagnostic that we think is a very robust diagnostic we validated that in a GLP lab, it's being used in the expansion cohorts, where we're collecting builds archival tissue and where medically feasible fresh tissue.

Unnamed Speaker: The Allen Institute, LLC.

Unnamed Speaker: We have developed a diagnostic that we think is a very robust diagnostic. We validated that in a GLP lab. It's being used in the expansion cohorts where we are collecting both archival tissue and, where medically feasible, fresh tissue. And in fact, we've already engaged with a commercial vendor, so we will be able to have what could be a commercially available diagnostic to develop in association with a registration-enabling study.

So we are in the we are collecting this stage that we have a and I see that weve demonstrated has a broad dynamic range to really be able to distinguish low expressions expressed as we do expresses in high Expressers and in fact, we've already engaged with a commercial vendor. So we will be.

Able to have.

It could be a commercially available our diagnostic to develop in association with a registration enabling studies.

Thank you.

Thank you.

Operator: Our next question comes from Boris Peaker from Cowan. Your line is open. Good morning. Another one on 1536. I'm just curious, as you're exploring several doses, do you have any data to show how the actual payload delivery correlates with dosing? Is it linear or perhaps follows a more complex pharmacodynamic relationship?

Next question comes from Boris Peaker from Cowen Your line is open.

Good morning, another one on 15 36, I'm just curious as you're exploring several doses do you have any debt data to show how the actual payload delivery correlates with dosing is it linear or perhaps follows a more complex pharmacodynamic relationship.

Yes, so the pharmacokinetic profile its dose proportional we also presented that as the poster at ASCO.

Unnamed Speaker: Yes, so the pharmacokinetic profile is dose proportional. We also presented that at the poster at ESCO across a range of doses from 3 mg all the way up to 30 mg. And so the exposure is dose proportional. We don't see accumulation in the current setting over 3 weeks or 4 weeks. So the drug behaves like a very promising profile in terms of pharmacokinetics and reliability of exposure.

Across a range of doses from three milligram, all the way up to 30 milligram and and.

Well the exposure as dose proportional we don't see cumulation.

In the in the current setting or over three weeks or four weeks.

So there is.

The drug behaves like you're right like you're very promising profile in terms of pharmacokinetic and reliability off exposure.

Gotcha, and just don't want to clarify on notice on the part questions. So do you have any plans at this point to go above the 43 make dose orange to plan just to enroll more patients and 43, and then decide of higher doses or even need it.

Anna Protopapas: Gotcha. And I just want to clarify on maybe some of the prior questions. So do you have any plans at this point to go above the 43 MIG dose, or is the plan just to enroll more patients in 43 and then decide if higher doses are even needed?

Yeah.

Anna Protopapas: Data is really going to drive where we go. I think both, I think the option to go higher is there, and we're just going to let data drive the decision. And, I think, as Dirk indicated, we're encouraged by the continuous profile of the drug.

Data, it's really going to drive where we go I think both I think the option to go higher is there and we're just going to let Dave that drive the decision making.

And I think as Stuart indicated we are encouraged with liquidity profile of the drug or so.

Anna Protopapas: Gotcha. And lastly, do you see anybody else besides you guys working on this target?

Gotcha, and lastly, do you see anybody else. Besides you guys working on this target.

We're not aware of anyone else working on this target.

Anna Protopapas: We're not aware of anyone else working on this project.

Operator: Great, thank you for taking my call. Thank you. And again, ladies and gentlemen, to ask a question, please press star and then one now. And our next question comes from Jessica Fye from J.P. Morgan. Your line is open. Hi, this is Daniel from Jessica Five. Thanks for taking our question. For the 43 milligram dose level, I realize you did not hit DLT, but did you see any transient liver enzyme elevations

Great. Thanks for taking my questions.

Thank you and again, ladies and gentlemen to ask a question. Please press star and then one now.

And our next question comes from Jessica Fye from JP Morgan Your line is open.

Daniel for Jessica Fye, Thanks for taking your question.

With a 43 milligram dose level I realize you did not have deal t., but did you see any trends liver enzyme elevation.

We have seen the profile that is very consistent with what we presented at ASCO are great won a great to toxicities, they're primarily fatigue.

Unnamed Speaker: We have seen a profile that is very consistent with what we presented at ASCO. Grade one and grade two toxicities are primarily fatigue, nausea, and transient AST elevations that are not associated with changes to other liver enzymes. So a very consistent profile, very well tolerated, really looks very much like what we presented at ASCO.

Nausea.

And transit A.S.T. elevations that are not associated with changes just the other.

Liver enzymes, so a very consistent profile very well tolerated.

Really looks very much like what we presented at ASCO.

And then to add on those toxicities are only grade one and two we didnt have any great three talks as it to you on those first three patients.

Unnamed Speaker: And to add to that, those toxicities were only grade 1 and grade 2. We didn't have any grade 3 toxicity in those first three patients.

Got it and then for the dose escalation study how long have the patients being dosed at 42 milligram.

Unnamed Speaker: And then for the dose escalation study, how long have the patients been dosed at 43 mg?

Unnamed Speaker: Well, I think we said on the script that we dosed the first patient at 43 in August.

Well I think we said on the script that we dose the first patient at 43 in August .

And then last besides safety can you speak qualitatively to the activity you're seeing at this higher doses in the dose escalation.

Unnamed Speaker: And then last, besides safety, can you speak qualitatively to the activity you're seeing at higher doses in the dose escalation data?

Obviously, it's early but I can tell you that we continued to be encouraged with the profile of the drug I will see activity.

Unnamed Speaker: Obviously, it's early, but I can tell you that we continue to be encouraged with the profile of the drug. We're seeing activity at a well-tolerated dose.

Well tolerated doses.

Thank you very much for taking your questions.

Unnamed Speaker: Thank you very much for tuning in. Thank you. Our next question comes from Mike Olves from Baird. Your line is open. Great, thanks. Hi, guys, and thanks for taking the question. So just with respect to the expansion study, can you maybe talk about the pace of enrollment here and maybe what you're seeing in both the ovarian and lung cancer cohorts and maybe how those are tracking versus your expectations?

Thank you. Our next question comes from Mike Oh from Baird. Your line is open.

Great, Thanks, and Oh.

Hi, guys and thanks for taking the questions. So just with respect to the expansion study can you maybe talk about you know the pace of enrollment here and maybe what you're seeing in both the ovarian and lung cancer cohorts and maybe how those are tracking versus your expectations. Thanks.

Yeah, Yeah. So first of all that we are very pleased with the number of sites that we were able to initiate a were ahead of schedule ahead of plan and that's mostly due to investigator enthusiasm.

Dirk Hoepner: Yeah, so first of all, we are very pleased with the number of sites that we were able to initiate. We are ahead of schedule, ahead of plan, and that's mostly due to investigator enthusiasm for the study. And the number of sites and also enrollment is increasing, basically on a daily basis, and we're going to provide more updates as we get closer to completion of the cohort. But at the moment, I can tell you it's going very well.

On the study and the number of sites and also enrollment is increasing basically on a daily basis, and we're going to provide more update.

As we get close so drew completion of the cohort, but at the moment I can tell you it's going very well.

Great. Thank you.

Operator: Great, thank you. Thank you, and I am showing no further questions from our phone lines, and I'd like to turn the conference back over to Anna Protopapas for any closing remarks.

Thank you and I am showing no further questions from our phone lines and I'd like to turn the conference back over to an approach of office for any closing remarks.

Well. Thank you for really listening any good continued interest in most sauna.

Anna Protopapas: Well, thank you for listening in and for your continued interest in Mersana. We have a lot going on, and we are looking forward to a very data-rich 2020. And we look forward to giving you an update on our progress. Thank you.

We have a lot going on and we're looking forward to a very data rich 2020, and we look forward to giving you an update on our progress. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program you may all disconnect everyone have a wonderful day.

Operator: Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a wonderful day.

Operator: BF-WATCH TV 2021