Q3 2020 Xencor Inc Earnings Call
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Bassil I. Dahiyat: We're currently running six Phase I clinical studies evaluating such XMAT BISPECIFIC antibodies, and we continue to explore novel mechanisms of action for oncology treatments with our eczema bi-specific platform. And we're presenting three preclinical programs at the Society for Immunotherapy of Cancer meeting, or CITSI meeting, next week. Our B7H3-by-CD28 bispecific is a preclinical program that targets a T-cell co-stimulatory signal via CD28 to the pan-tumor target B7H3.
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Bassil I. Dahiyat: This creates an opportunity to enhance treatment in a wide range of tumor types with T-cell targeted therapies like checkpoint inhibitors and CD3 engagement. We're also presenting our PD-1-Targeted TGF-Beta Receptor Blocker for T-cell activation and our potency-engineered IL-12 program, both of which are engineered to enhance tolerability and duration of action while providing highly active immune stimulation. Now, before we move on to our clinical portfolio today, I'd like to provide an update on the impact of the COVID-19 pandemic on our operations. The pandemic did not significantly disrupt patient enrollment in our six ongoing clinical studies during the third quarter. Manufacturers that provide our drug supply have notified us that they're currently experiencing critical shortages of material used in their manufacturing process. Nevertheless, we have sufficient supplies of drug material to continue conducting our ongoing studies without interruption.
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Bassil I. Dahiyat: However, we expect a small delay in the development timelines for the preclinical XMAP 30819 program, our ENPP3 by CD3 biospecific for renal cell carcinoma. Timelines for advancing additional early stage programs into the clinic and for our ongoing clinical programs could be affected if the supply interruption goes longer than we currently estimate. The autoimmune IL-2 FC program, XMAP-27564, however, is not affected by this.
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Bassil I. Dahiyat: And the initiation of a phase one study is on track for early 2020. We'll continue to update you on manufacturing impacts from COVID if and when they emerge. Within the company, we're maintaining a requirement for non-laboratory employees to work remotely, and we're also continuing our on-site measures to protect the health and safety of our employees and of our community. In light of that, Allen Yang, our Chief Medical Officer, will review updates to the clinical portfolio. Allen
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Allen S. Yang: Thanks, Basil. Yesterday, the American Society of Hematology published an abstract containing updated data from our phase one study of Vibocodumab in patients with relapse and refractory acute myeloid leukemia, which we will present in December. Vibocodumab is a CD123 by CD3 T-cell engager, one in a class of tumor-targeted bispecific antibodies that contain both a tumor antigen binding domain, in this case CD123, and a cytotoxic T-cell binding domain, such as CD3. CD3 bispecifics activate T-cells at the site of the tumor in order to potentially kill malignant cells. Data emerging from the study suggests that patients with AML having low baseline disease burden and specific T cell signatures may be more likely to respond to treatment with Vibocodumab. The primary toxicity, cytokine release syndrome, is generally mild to moderate in severity when observed and is manageable.
Allen S. Yang: We continue to optimize the dosing regimen in this study. Additionally, along with our partner Novartis, we are exploring opportunities to develop Vibocodumab in patients with lower baseline leukemic disease burden, for whom an intermittently dosed CD123 targeting antibody could be a needed therapeutic option. Next, a Phase I study of Plamodimab, or CD20-CD3 bispecific antibody, continues to enroll patients with non-Hodgkin's lymphoma and chronic lymphocytic leukemia, with planned expansion cohorts expected to start in 2021. In addition, operational preparations are underway for a Phase II monotherapy trial in diffuse large B-cell lymphoma, and for a Phase II combination therapy study Last month, we presented initial dose escalation data from the ongoing phase 1 study in patients with neuroendocrine tumors, or NETs. Tidutimab was generally well tolerated at the recommended dose identified for the expansion portion of the study at 0.3 micrograms per kilogram priming dose and a subsequent 1.0 microgram per kilogram repeat dose. Peripheral blood biomarkers indicated tidumat-induced acute and sustained T-cell activation.
For particular therapeutic use we're currently running six phase one clinical studies evaluating such eczema by specific antibodies.
And we continue to explore novel mechanism of action for oncology treatments with or eczema bus by a specific platform and we're presenting three preclinical programs at the society for immunotherapy of cancer meeting or <unk> meeting next week.
R. B 783 by CD 28 by specific as a preclinical program that target to T cell co stimulatory signal Vse 28 to the Pan tumor target B 783, this creates an opportunity to enhance treatment and a wide range of tumor types with T cell targeted therapies like checkpoint inhibitors and <unk>.
Allen S. Yang: Dose-dependent increases in proliferation and activation markers of CD8-positive T cells were observed, which is consistent with titudinamide's mechanism of action. In 14 patients where we described clinical activity, the best overall response was stable disease, and the median duration of treatment was approximately 7 months. We believe completion of enrollment and longer follow-up are required to evaluate progression-free survival and the clinical utility of Titumab for patients with neuroendocrine tumors. Early next year, we plan to initiate an additional clinical study in patients with Merkel cell carcinoma and small cell lung cancer, which are somatostatin-2 receptor-expressing tumor types known to be responsive to immunotherapy. In addition to these CD3 bispecifics, we have developed another suite of bispecific antibodies where the binding affinities are tuned for selective engagement of T-cells, and we call these our tumor microenvironment activators. Selecting for dual checkpoint expression, for example, distinguishes these from combination therapy and most checkpoint inhibitors. T-cells that have multiple checkpoint expressions are typically found more in the tumor microenvironment than in the periphery.
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We're also presenting our PD one targeted TGF beta receptor blocker for T cell activation and our potency engineered I'll 12 program, both of which are engineered to enhance tolerability and duration of action, while providing highly active immune stimulation and tumors.
So before we move onto our clinical portfolio today I would like to provide an update on the impact of Covid. The COVID-19 pandemic on our operations. The pandemic did not significantly disrupt patient enrollment in our six ongoing clinical studies during the third quarter.
Manufacturers that provide our drug supply however, notified us that they are currently experiencing critical shortages of material used in their manufacturing processes.
We have sufficient supplies of drug material to continue conducting our ongoing studies without interruption. However, we expect a small delay in the development timelines for the preclinical X map 30819 program are E&P three by three by specific for renal cell carcinoma.
Timeline for advancing additional early stage programs into the clinic and for our ongoing clinical programs could be affected if the supply interruption goes longer than we currently estimate.
The auto immune I'll to F. C program X men have 270, 564, however is not affected by this and the initiation of a phase one study is on track for early 2021.
Allen S. Yang: Our design of this class seeks to more effectively reactivate these tumor-reactive T-cells than existing therapies and is meant to potentially drive improved efficacy and tolerability compared to the dosing of separate anti-CTLA-4 and anti-PD-1 antibodies in combination. In mid-October, after abstracts from the CITSE annual meeting were temporarily available to the public, we issued an 8K with an abstract containing data from our ongoing Phase 1 study evaluating XMAP2717, a dual PD-1 CTLA-4 checkpoint-inhibiting bispecific antibody in patients with advanced solid tumors. The CITSE meeting is next week, so we won't review the abstract in its entirety now. In summary, though, XMAB 27.1.7 continued to be well-tolerated in heavily pre-treated patients, and we are encouraged by the anti-tumor activity observed in patients with various types of advanced solid tumors at the 10 mg per kg dose level.
We will continue to update you on manufacturing impacts from Covid, if and when they emerge.
Within the company, we're maintaining requirement for non laboratory employees to work remotely, but we're also continuing our onsite measures to protect the health and safety of our employees and of our community.
With that <unk>, our Chief Medical Officer will review updates to the clinical portfolio Allen.
Thanks, Basil yes.
Yesterday, the American Society of Hematology published an abstract containing updated data from our phase one study of by boat Vibe Dakota Mountain and patience with relapse, new factories acute myeloid leukemia, which we will present in December by Dakota, Mab as a C. D. One twenty-three buy C. D. Three T cell engage or one in a class of tumor targeted by specific antibodies.
Contain both the tumor antigen binding domain in this case C. D 123, and a cytotoxic T cell binding domain such as C. D. Three CD three by specifics fix activate T cells at the side of the tumor in order to potentially kill malignant cells.
Allen S. Yang: The study is currently enrolling patients with renal cell carcinoma in an expansion cohort and continues to enroll patients with additional dose escalation cohorts starting at 15 mg per kg, as we did not reach the maximum tolerated dose. Expansion cohorts with melanoma, advanced non-small cell lung cancer, prostate cancer, and other cancers without approved checkpoint therapies are fully enrolled. The first studies evaluating two other clinical stage tumor microenvironment activators, XMAP22841 and XMAP23104, continue to enroll and dose patients with advanced solid tumors.
Data emerging from the study suggested the patience with AML, having low baseline disease burden and specific T cell signatures may be more likely to respond to treatment with fiber COTA map. The primary toxicity cytokine release syndrome is generally mild to moderate and severity when observed and is manageable we continue to optimize the dosing Reds.
Women in this study along with our partners Novartis, we are exploring opportunities to developed by the coda map in patients with lower baseline leukemic disease burden for whom and intermittently dose C. D. One twenty-three targeting antibody could be unneeded therapeutic option.
Allen S. Yang: Finally, we're developing a suite of cytokines, which are immune signaling proteins we have engineered with the XMAB bispecific SC domain. We also tune the potency of these cytokines to improve their properties and make them more drug-like, for example, by slowing their receptor-immediate clearance and extending their circulating half-life.
Next a phase one study of promote promote them app or CD 20th city three by specific antibody continues to enroll patients with non hodgkins lymphoma, and chronic lymphocytic leukemia with planned expansion cohorts expected to start in 2021. In addition, operational preparations are underway for a phase two monotherapy trial.
Allen S. Yang: Our first cytokine program and lead in our collaboration with Genentech is IL-15 fused to its alpha receptor and our bispecific FC domain, which is XMAB24306 or RG6323. It targets the expansion and activation of T cells and natural killer cells and is not biased towards regulatory T cells like its cousin, the cytokine IL-2. Genentech is currently enrolling patients in a Phase I study evaluating XMAB24306, initially as monotherapy and then in combination with tesolizumab, their anti-PD-L1 antibody. We are planning to explore a number of our own combination studies after safety and dose in the ongoing Phase I studies have been established. Our second cytokine candidate, XMAP27564, is an IL-2FC fusion protein that we are planning to develop for patients with autoimmune disease. Similar to the IL-15 program, we reduced its potency and incorporated our Xtend technology in order for it to have more drug-like properties.
<unk> and diffuse large b cell lymphoma, and for a phase to combination therapy study as well.
Our third clinical stage C. D. Three by specific antibody is tai due to map, which targets somatostatin receptor to last month, we presented initial dose escalation data from the ongoing phase one study in patients with neuroendocrine tumors or nets.
I did a map was generally well tolerated at the recommended dose identified for the expansion portion of the study at 0.3 micrograms per kilogram priming dose and a subsequent 1.0 microgram per kilogram repeat dose.
Peripheral blood Biomarkers indicated tight intimate induced acute and sustained T cell activation dose dependent increases and proliferation and activation markers of CD positive T cell C. D. Eight positive T cells were observed which is consistent with titled amounts mechanism of action.
And 14 patients, where we describe clinical activity. The best overall response was stable disease and the median duration of treatment was approximately seven months, we believe completion of enrollment and longer follow up are required to evaluate progression free survival and the clinical utility of Titan amount for patients with neuroendocrine tumors.
Allen S. Yang: As Basil mentioned, we are on track to start dosing healthy volunteers in early 2021. We look forward to keeping you informed about all our clinical programs as they progress. That's all.
Bassil I. Dahiyat: Thanks, Allen. So now on to partnerships. A core part of our business is to complement our internal development portfolio with partnering. These partnerships generate payments from the licensing of XMAB technologies, the clinical advancement of XMAB candidates, as well as royalties from sales of approved products. There were no COVID-19 impacts on partnering revenue during the third quarter, but we will continue to monitor potential impacts, of course. Now, our many partnerships really highlight the plug-and-play nature of the suite of XMAB FC domains that we've created.
Early next year, we plan to initiate an additional clinical study in patients with Merkel cell carcinoma, and small cell lung cancer, which are somatostatin two receptor expressing tumor types known to be responsive to immunotherapy.
In addition to these C D. Three by specifics we have developed another sweet or by specific antibodies, where the binding affinities are tuned for selective engagement of T cells and we call. These are tumor microenvironment activators selecting for dual checkpoint expression. For example, distinguishes these from combination therapy and most check.
Bassil I. Dahiyat: With small changes to the FC structure that we've engineered, we can, for nearly any antibody, improve its activity, half-life, or readily create stable multivalent structures. We have 12 ongoing partnerships for XMAB technology, which have resulted in two marketed products. Alexion's Altamiris for rare blood disorders, and now Morphosis' Mongivy or Tafacitamab as the first second-line treatment for patients with an aggressive form of lymphoma, diffuse large B-cell lymphoma. Unlike Altamiris, where we just licensed the XtendFC technology to Alexion, we created Tafacitamab, which Morphosis licensed from us in 2010, CD19 Antibody Engineered with our XMAB Cytotoxic Estrogen. Morphosis has guided the decision on Taficinimab's European marketing authorization application, which should be in the second half of 2020.
Point inhibitors T cells that have multiple checkpoint expression are typically found more than the tumor microenvironment than in the periphery.
Our design of this class seeks to more effectively reactivate these tumor reactive T cells than existing therapies and is meant to potentially drive improved efficacy and tolerability compared to the dosing of separate Anticity law for an anti P. D. One antibodies in combination.
In mid October after abstracts from the sits the annual meeting where temporarily available to the public we issued an 8-K with an abstract containing data from our ongoing phase one study evaluating X mab twenty-seven one seven a dual P. D. One C TLA for checkpoint inhibiting by specific antibody in patients with advanced solid tumors.
The city meeting is next week, so we won't review the abstract in its entirety now.
Bassil I. Dahiyat: The plug-and-play nature of our XMAB technologies enables partners to advance their programs with very few resources from us, and we selectively license access to our XMAB technology. We recently entered into an agreement with Omaros Corporation, providing them a non-exclusive license to our Xtend FC technology. As is typical for these types of agreements, Omaros is responsible for all development and commercialization activities for all candidates.
In summary, though X mab twenty-seven one seven continue to be well tolerated and heavily pre treated patients and we are encouraged by the antitumor activity observed in patients with various types of advanced solid tumors at the 10 milligram per kilogram dose level. The study is currently enrolling patients with renal cell carcinoma, two expansion court and continue.
To roll patients with additional dose escalation cohorts starting at 15 milligrams per kilogram as we do not reached the maximum tolerated dose expansion cohorts with melanoma advanced non small cell lung cancer prostate cancer and other cancers without approved checkpoint therapies are fully enrolled.
Bassil I. Dahiyat: We received an upfront payment of $5 million and are eligible to receive milestone payments in Royal. Finally, I just wanted to touch on progress our partners are making in advancing antibody therapies that incorporate Xtend FC domains for the treatment of patients with COVID-19. Alexian is conducting a randomized controlled phase 3 study of ultramarous and hospitalized patients with advanced COVID.
The first studies evaluating two other clinical stage tumor microenvironment Activators X map 22, 841, and X map twenty-three one O four continued to enroll in dos patients with advanced solid tumors.
Bassil I. Dahiyat: VeeR has non-exclusive access to our Xtend FC technology to extend the half-lives of VeeR7831 and VeeR7832, both novel antibodies that they're investigating as potential treatments for COVID-19. Vera has commenced a phase three clinical study for VER7831 for the early treatment of COVID-19 patients who are at high risk of hospitalization. And they plan to initiate a clinical study of VER7832 in the near future. Our partnership with VIRA additionally demonstrates the broad applicability of Xtend across viral infectious diseases. As there are other antibody programs, VIRA-3434 in hepatitis B virus infection and VIRA-2482 in influenza A are both advancing through early stage clinical development. Now I'll hand the call over to John Kuch, our CFO, who will review the third quarter and first nine-month financial results. John?
Finally, we're developing sweet aside a kinds, which are immune signaling proteins. We have engineered with the X men by specific F. C. Domains. We also tuned the potency of these cytokines to improve their properties and make them more drug like for example by slowing their receptor immediate clearance and extending their circulating half life.
Our first cytokine program and lead in our collaboration with Genentech does the I owe 15 fused too it's alpha receptor and are by specific F. C domain, which is X mab 24, three O six or Argy sixty-three twenty-three it targets the expansion in activation of T cells in natural killer cells, and does not biased towards regulatory T cells.
Like it's cousin decided kind of IL to Jeanette Tech is currently enrolling patients in a phase one study evaluating xpath 24, three O. Six initially as a monotherapy and then in combination with that Tesla lose them out there or antique PDL. One antibody. We are planning to explore a number of our own combination studies after safety and dose and the <unk>.
John J. Kuch: During the third quarter, Xencor's portfolio of partnerships, collaborations, and licensing arrangements continued to generate strong cash flow, which helped offset the growing investment in our pipeline of clinical and early-stage drug development. This afternoon's press release re-reported cash, cash equivalents, and market world securities totaling $582.9 million as of September 30, 2020, compared to $601.3 million at December 31, 2019. The decrease reflects cash used to fund operating activities in the first 9 months of 2020, offset by total proceeds of $89.1 million received in up-front payments, milestone payments, and royalties from licensing agreements. Total revenue for the third quarter ended September 30, 2020 was $35.4 million compared to $21.8 million for the same period in 2019.
Ongoing phase one has been established.
Our second cytokine, Canada X map twenty-seven 564 is an IL two F. C fusion protein that we are planning to develop for patients with auto immune diseases. It is engineered to selectively activate regulatory T cells and similar to the I owe 15 program, we reduced its potency and incorporate or or extend technology in order for it to have more drug.
Like properties as Basil mentioned, we are on track to start dosing healthy volunteers and early 20th 21.
We look forward to keeping you informed about all our clinical programs as they progress.
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Thanks, Alan so now onto partnerships.
John J. Kuch: Revenues in the third quarter included milestone revenue from Morphosis related to the approval of Manjubi, licensing revenue from Omaris, and royalty revenue from Alexion. Compared to revenues from the same period of 2019, which primarily reflected milestone revenue from the Alexion, Amgen, and Novartis collaboration, total revenue for the nine months ended September 30, 2020 was $80.8 million, compared to $153.2 million for the same period in 2019.
John J. Kuch: Revenues for the nine-month period in 2020 include royalty revenue from Alexion, milestone revenue from Morphosis, and licensing revenue from Gilead, Amun, and Omeris, compared to licensing and collaboration revenue from Genentech and Astellas, and milestone revenue from Alexion, Amgen, and Novartis collaborations in 2019. Research and development expenditures for the third quarter ended September 30, 2020 were $44.5 million, compared to Total R&D expenses for the nine months ended September 30, 2020 were $121.9 million, compared to $91.3 million for the same period in 2019. Additional spending on R&D for the third quarter and first nine months of 2020 over the same period in 2019 is primarily due to increased spending on our clinical programs, including Plumomeda MAB, XMAP 2717, and our IL-2FC cytokine development program, XMAP 27564.
We received it upfront payment of $5 million and are eligible to receive milestone payments and royalties.
Finally, I just wanted to touch on progress our partners are making an advancing antibiotic therapies that incorporate extend FC demands for the treatment of patients with COVID-19.
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Alexia on is conducting a randomized controlled phase III study of ultimate person hospitalized patients with advanced Covid fear.
John J. Kuch: General administrative expenses for the third quarter ended September 3, 2020, were $7.6 million, compared to $6.3 million in the same period in 2019. Total G&A expenses for the nine months ended September 30, 2020 were $22.1 million, compared to $17.5 million for the same period in 2019. Additional spending on G&A for the third quarter of the first nine months of 2020 over amounts for the same periods in 2019 is primarily due to increased compensation costs related to additional general administrative staffing and spending on intellectual property, including patents and licensing costs. Non-cash, stock-based compensation expense for the 9 months ended September 30, 2020 was $23.1 million, compared to $24.7 million for the same period in 2019. The net loss for the third quarter ended September 30, 2020 was $12.6 million, or $0.22 on a fully-delivered-per-share basis, compared to a net loss of $10.2 million, or $0.18 on a fully-delivered-per-share basis, for the same period in 2019.
Fear has nonexclusive access to our extend FC technology to extend the half lives of Veer 7831, and Veer 73 to both novel antibodies that they are investigating as potential treatments for COVID-19.
Various commenced a phase III clinical study for Veer 73, one for the early treatment of COVID-19 patients who are at high risk of hospitalization and they plan to initiated clinical city of Veer 73, two in the near future.
Our partnership with Veer. Additionally, demonstrates the broad applicability of extended cross viral infection disease is there other antibiotic programs Veer 34, 34, and hepatitis B virus infection in <unk> 2482, and influenzae are both advancing through early stage clinical development.
Now hand call over to John Kusch are CFO he'll review, the third quarter and first nine months financial results John.
Basil during the third quarter <unk> portfolio of partnerships collaborations and licensing arrangements continued generate strong cash flow, which help offset the growing investment in our pipeline of clinical an early stage drug candidates.
This afternoon press release, we reported cash cash equivalents and marketable securities totaling 582.9 million as of September 30th 2020, compared to 601.3 million at December 31st 2019.
The decrease reflects cash used to fund operating activities in the first nine months of 2020 offset by total proceeds of 89.1 million received an upfront payments milestone payments and royalties from licensing agreements.
John J. Kuch: The higher net loss reported for Q3 2020 compared to the same period in 2019 is primarily due to increased RRD spending over increased revenue earned during the period. For the nine months ended September 30, 2020, net loss was $55.6 million, or 97 cents on a fully diluted per share basis compared to net income of 53.8 million, or 92 cents on a fully diluted per share basis for the same period in 2019.
Total revenue for the third quarter ended September 30th 2020 was 35.4 million compared to $21.8 million for the same period in 2019.
Revenues in the third quarter included milestone revenue from Morphoses related to approval Mont Juvie licensing revenue from our Amerce and royalty revenue from oleksiak compared revenues from the same period of 2019, which were primarily reflects milestone revenue from the election, Amgen and novartis collaborations.
John J. Kuch: The net loss report for the nine months ended September 30, 2020, compared to the net income report for the same period in 2019. This is primarily due to higher collaboration licensing revenue reported in 2019 compared to 2020 and increased spending on R&D programs in 2020 over 2019 alone. The total shares outstanding were $57.4 million as of September 3, 2020 compared to $56.7 million as of September 3, 2019.
Total revenue for nine months ended September 30th 2020 was $80.8 million compared to $153 $2 million for the same period in 2019.
Revenues from nine month period in 2020 include royalty revenue from election milestone revenue from morphosis and licensing revenue from Gilead, a moon and mirrors compared to licensing in collaboration revenue from Jeanette Tech and Astellas and milestone revenue from Lexan Amgen Novartis collaborations in 2019.
Research and development expenditures for a third corps ended September 30th 2020, or $44.5 million compared to 29.8 million for the same period in 2019.
Operator: Based on current operating plans, projected spending, and expected proceeds from our partnerships and collaborations, we expect to have cash to fund research and development programs and operations into 2024 and to end 2020 with between $525 and $575 million in cash, cash equivalents, and marketable securities. With that, we would now like to open up the call to your questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. One moment.
It'll R&D expenses from nine months ended September 30th 2020 worked $121.9 million compared to $91.3 million for the same period in 2019.
Additional spending and R&D for the third quarter and first nine months of 2020 over miles for the same period. In 2019 is primarily due to increased spending on a clinical programs, including Paul <unk> X Nap 20, 717, and their IL two FC sided kind development program X map 27 564.
General administrative expenses for the third quarter ended September 30th 2020, 476 million compared to 6.3 million in the same period of 2019 so.
Operator: And our first question comes from Ted Tenthoff of Piper Sandler. Please proceed. Hey, thanks so much, guys, and nice update. I wanted to ask about 14.04.5 U.S.C.
<unk> total G&A expenses for nine months ended September 30th 2020, or 22.1 million compared to $17.5 million for the same period in 2019.
Operator: 123 for AML. I was definitely intrigued to see the clean safety and some responses there. Maybe you can go into a little bit more detail in terms of what the next steps might be, and is there the potential to use that in combination with other agents? Thanks, Ted. I'll just state at the outset, of course, we have some restrictions because of our ongoing partnership with Novartis, around 14.045, about how much we can say. I don't know, Allen, do you want to comment on the population?
This shall spending on chic G&A for the third quarter in the first nine months 2020 over mounts for the same periods. In 2019 is primarily due to increased compensation costs related to additional general administrative staffing and spending an intellectual property, including patents and licensing costs.
Non-cash stock-based compensation expense for the nine months and that's September 30th 2020 was 23.1 million compared to $24.7 million for the same period in 2019.
Net loss for the third Corps ended September 30th 2020 was $12.6 million or 22 cents on a fully diluted per share basis comparison that loss of $10.2 million or 18 cents unemployed per share basis for the same period in 2019.
Operator: Yeah, I have to be cautious here. But you know, it was kind of an interesting scientific observation that we found more activity in patients with a lower burden of disease, and there are specific populations, in people with myeloid malignancies, that will have lower burdens of disease. Ted, I'm sorry I can't say more at this time, but, you know, I think it's fairly obvious where you could go with this. Yeah, and regarding combination agents, I think, you know, we did also observe a correlation of response to people who express certain T-cell markers, so we would potentially explore that as well. But, you know, the next step is, as Novartis and Xencor advance along the timeline to getting the next set of groups of patients enrolled, we'll be able to disclose things more fully. Thank you so much for the update.
The higher net loss for for the third quarter of 2020 compared to the same period. In 2019 is primarily due to increased R. D spending over increased revenue earned during the period.
For the nine months ended September 30th 2020, net loss was $55.6 million or 97 cents on a fully diluted diluted share basis compared to net income of $53.8 million or 92 cents unemployed per share basis for the same period in 2019.
The net loss report for nine months ended September 30th 2020, compared to net income for for the same period 2019 is primarily due to higher collaboration licensing revenue report in 2019 compared to 2020 and increased spending in R&D programs in 2020 over 2019 of months.
Operator: Thank you. Our next question comes from Peter Lawson of Barclays. Please proceed. Hi everyone, this is Mitch Long for PETR, and thank you for taking our questions.
The total shares outstanding where 57.4 million is September 30th 2020, compared to $56 7 million is September 30th 2019.
Operator: For Vivek Kodumab, I can appreciate how you can't say so much about positioning, but could you talk about maybe the bar for AML in this population and how you see that, and then maybe your view on peer CD123, and CD3 data in this space? Yeah, without commenting too much on peer data, I think that, you know, the populations that are possible with this agent, if we focus on a low leukemic burden, there's a variety of different bars depending on the specific subpopulation, so it's hard to give you an answer to that, but we do have good ideas about what the bar is without also disclosing, unfortunately, things we can't disclose. Okay, and then I think you've mentioned potential other indications that the asset could go into. Do you have any ideas of where you might be able to take it beyond the low burden? I would say it's low-burden myeloid diseases in general, that they're pretty broad expressors of CD123, things from myeloid lineages, and there's a variety of myeloid malignancies beyond, in addition to,
Based on current operating plants projected spending an expected proceeds from our partnerships and collaborations we expect to have cash to fund research and development programs and operations into 2024, and the end 2020 with between 525 and $575 million in cash cash equivalents and marketable securities.
With that we would now like to open up the call for your questions operator.
As a reminder to ask a question you all need to press star one on your telephone to withdraw your question press the pound key please stand by while we can pile the Q&A roster one moment.
And our first question comes from Ted Ted half of paper handler. Please proceed.
Oh, thanks, so much cause I thought that I wanted to ask with respect for 14 O four five.
Three four a O L O definitely was intrigued to see the croup 50 responses or maybe a little bit more detail approach of what the next steps might be in touch with the.
The company shall with other than it sounds breaks.
Operator: Thanks. Thank you. Our next question comes from Gregory Renza of RBC Capital Markets. Please proceed. Hi, guys. This is Ying Wang for Gregg.
Operator: I also have a question on levocodomab. I'm just wondering, in light of the recent publication on another CD3, CD123 bispecific that demonstrated an association between PPV3 mutations and complete response in AML, just wondering what your thoughts are on the read-through there, and have you explored or plan to explore the potential in subpopulations of AML patients with specific mutations? Thank you. Yeah, I don't think specific mutations are how we orient this molecule. CD123 is a pan marker in various myeloid malignancies, and so we think of it from a sort of a broader use perspective, focusing now on where we see lower disease burden. Um, you know, so I don't I don't think there's too much reading through from there. Did that answer your question? Yeah, yeah, they did!
Operator: Thanks. And I have another one, if I may. I'm just wondering, what's your level of confidence in the tolerability of 27.1.7 based on the data so far? And how do you think the design of the molecule contributes to its differentiation from other PD-1 CTLA-4 bispecific or combination therapies? Yeah, I'll comment on the design and then Allen, maybe you should jump in and talk about our tolerability observations. So the design of the molecule was so that to take advantage of its biospecific structure, it allowed us to design a molecule that requires cooperative binding for strong binding to both PD-1 and CTLA-4. So there's only one PD-1 binding domain, only one CTLA-4 binding domain. They have fairly modest affinity, so if there's only one target or the other on the cell, they're not going to stick too well, which means they don't have a terribly high affinity for cells that have low expression of one or the other of the markers.
The populations that are that are possible with this with this agent if we focus on leukemic burden.
There's a there's a variety of different bars, depending on the specific sub population. So it's hard to give you an answer to that that we do have good ideas about what the bar is without also disclosing Unfortunately things we can't disclose.
Operator: You have to have both. If you have both markers, you get a nice avid binding. You have both arms able to grab on and, and, you know, pull yourself onto the cell. So that was so we could focus the molecule's activity at de-repressing these checkpoints on specific subpopulations that are typically more over-represented in tumor microenvironments. So that's the distinction of the design, and the hope there was to activate the cells that matter for better tolerability and efficacy. So that's the essence of the design, and I think that's distinct from, certainly from a combination therapy of two different antibodies, but it's also distinct from most of the PD-1CHLA-4 by specific antibodies that are in early clinical development alongside 27.1.7. Now, Al, maybe you want to touch on tolerability and the sort of nature of the AEs that we see.
Okay, and then I think you mentioned potential other indications that.
The asset could go into do you have any ideas of where you might be able to take it beyond.
The low burden.
Ammo.
I would say its low burden myeloid diseases in general they are pretty broad expressers of CD 123.
Operator: Yeah, we're very pleased with the tolerability profile to date. You know, as Basil alluded to the design, it's hard to sort of demonstrate differences in safety in a clinical study, especially a phase one clinical study from sort of predecessor molecules. But with that said, there seems to be a suggestion that the AE profile is slightly different. We're seeing a lot of rash. We don't tend to see colitis.
Operator: You know, the way this study was designed, 10 milligrams per kilogram was our sort of top dose, and we didn't hit an MTD, so we're continuing to dose escalate now at 15 milligrams per kilogram to see if we can dose higher. And, you know, the idea is that if you have better tolerability, you could possibly dose higher and then get more efficacy. But, you know, we still have to sort of see what the maximum tolerated dose is. In addition, you know, in the abstract, there was a grade 5 and a grade 4 event, and I can add some color to that. You know, the patient with grade 5 pancreatitis did have pancreatic involvement of metastases, and the one with grade 4 myocarditis had non-small cell lung cancer that involved the myocardium.
Operator: So, you know, that's sort of something that's in the abstract, but I think this helps to understand the AE profile, and we're actually very pleased with the data so far. Got it. Thank you very much. Thank you. Our next question comes from Jonathan Chang of SVB Leerink. Please proceed.
Operator: Hi guys, thanks for taking my question. First question, can you provide any more color on the planned Pomodomab monotherapy and combination studies in DLBCL? At this time, all we're really able to say is that there are Phase II studies that were, You know, both in relapse refractory DL-BCL, they'll be looking at specific groups of patients or defined populations within there, but more details will be forthcoming. I think that the strategy, though, has always been that the broad use of a CD20, CD3 is gonna depend on the strategy you have for how you combine it with other agents, because there's so many agents of different MOAs that work in non-Hodgkin lymphoma, you know, that what we've seen for the last 20 years with the success of Vertux and chemo is that combining them in the right way gives you the best outcomes.
From.
Certainly from a combination therapy of two different antibodies.
Operator: And I think we're gonna have a whole new generation of these combination regimens to choose from going forward. But monotherapy in this setting could give you rapid acquisition of data and a much faster-to-market strategy, sort of trying to have both prongs going. As I said, we'll have more details forthcoming as the final operational plans and nuances lock into place.
But it's also distinct from most of the PD ones He Chile four.
By specific antibodies that are in early clinical development alongside 20 717, now maybe you want to touch on the Tolerability in this sort of nature of of ease that we see yes, we're very pleased with the Tolerability profile to date, you know as Basil alluded to the design, it's hard to sort of demonstrate.
Operator: And the second question, still on Promotomap, when will we see updated data from that program? We will be presenting updated data next year, and we'll give specifics on the exact timing of that as we get a little closer to the data disclosure. Got it, thank you very much.
Differences in safety in a clinical study, especially a phase one clinical study from sort of predecessor molecules, but with that said there seems to be suggesting that the profile slightly different we're seeing a lot of rash, we don't tend to see coal leidos.
At the the way. This study was designed to 10 milligrams or <unk> milligrams per kilogram was our sort of top dose and we didnt hit an MTD. So we're continuing to dose escalate now 15 milligrams per kilogram.
Operator: Thank you. Our next question comes from Tom Schrader of BTIG. Please proceed. Hi, this is Kaveri for Tom.
Operator: Thanks for taking our questions. For autoimmune disorders, I believe two different approaches are being evaluated in the clinic. One is to suppress auto CD8 or effector T cells, and the other, like yours, which is to stimulate or activate Tregs.
To see if we can dose higher and you know the idea is if you have better tolerability, you could possibly dose higher and then get more efficacy, but we still have to sort of see what the maximum tolerated dose is in addition to know in the abstract there was a great five and a great for event and I can add some color to that the patient with the grade five pancreatitis.
Operator: Can you tell us what the advantages are and what type of autoimmune disorders make sense for your approach? Yeah, I think that it is a bit, it's sort of, suggesting too much to think that anybody really understands the specific cellular etiology and drivers of any particular autoimmune disease. I recall that not too many years ago, MS was considered a T-cell driven disease, and RA was considered a B-cell antibody driven disease. And yet, of course, you see highly effective MS treatments from B-cell targeting therapies like Acrevis, and you see highly effective treatments when you look at T-cell blocking therapies in RA like Orenzia. So I think simple descriptions of what drives a disease make it hard to decide a priori. So, I think that that means that we have to look at factors like population, unmet need, and preclinical models that'll help us pick the indications for our autoimmune IL-2 program.
Operator: But I'm not a big believer in the detailed enough mechanistic understandings of most, the vast majority of autoimmune diseases to really dial yourself in like that. And that's the last one for me. With all the engineering going on around the IL-2 molecules to avoid CD25 binding, which seems to prevent Treg activation and vascular leak syndrome, at least preclinically, how is the IL-15 approach different from these novel attenuated
Operator: So, Aisle 15, and this is for our oncology program, our XMAP 24306, currently in Phase 1 studies with Genentech. Our partner, IL-15 doesn't bind the CD25 or IL-2-alpha receptor. It just doesn't, right?
Operator: So I think that that's a critical feature that you might be able to tune away IL-2-alpha receptor binding or eliminate it by pegylating in the right spot. IL-15 starts out at that as a baseline. And so that's, we believe, just an inherent benefit and a risk reducer. The other factor is... The potency reduction we do is dependent on, or rather was selected to have the really minimal amount of potency you could have and still activate the cells. And so I can't comment on the exact degree of how people attenuated the potency of their molecules, but we think having a single defined composition of matter that has a specifically well-known potency is an advantage over, say, mixtures of differing potencies or kinetically variable potencies based on some chemical reaction around the molecule.
Some modem that when could we see updated data from that program.
We will be presenting updated data next year and will give specifics on the exact timing of that as we get a little closer.
To the to the data disclosures.
Got it thank you very much.
Operator: And having it attached to our FC domains, with our Xtend technology on it, to sort of smooth out those bumps, I think is also a benefit, and we'll see how that all plays out in the humans in our 24306 program. That's helpful; thank you. Thank you. Our next question comes from Etzer Darout of Guggenheim Securities. Please proceed. Great. Thanks for taking questions, and congrats on the updates here and the progress. Just a couple for me.
Thank you.
Our next question comes from Tom Schrader of P. T. I T. Please proceed.
Hi, This is correct her Tom thanks for taking our questions for.
For the auto immune disorders, I believe two different approaches are being evaluated in the clinic wanted to suppress auto C. D eight or a factor T cells and the other like yours, which is just emulate are accurate a T. Rex can you tell us what are the advantages and what type of auto immune disorders makes sense for your <unk>.
Operator: So first, I just went back to, you know, ClinicalTrials.gov to remind myself of the other two checkpoints, TME, and Biospecifics, and just sort of given that we've been dealing with COVID for the better part of the year, just wondering about the progress of these programs in Phase 1 and what we could expect to see clinical data from those two assets. Right, we like to guide people on when we're going to have clinical data, when we're pretty close to getting those disclosures going. No, those two programs started about a year after our 20717 program, for which we just had our first data disclosures over the last few months. So they're about a year less mature.
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Yeah, I I think that it is a bit it it it's sort of.
Suggesting too much to think that anybody really understands the specific cellular ideology and drivers of any particular auto immune disease I recall not too many years ago.
M. S was considered a T cell driven disease R. A was considered a <unk> antibody driven disease and yet of course, you see highly effective M. S treatments from B cell targeting therapies like like <unk> and you see highly effective.
Therapies, when you look at T cell blocking therapies in or a like <unk>. So I think some simple descriptions of what drives the disease makes it hard to decide or priore, what a particular agent or particular mechanism of action, which specific disease types it might benefit.
Operator: Having been in the clinic now for something like 15 or 16 months each, you know, I can't I can't say without until we get closer and have more definitive information to tell you when we would update those programs. But they are both actively enrolling. They have not had either of them any meaningful impacts from COVID.
So I think I think that that means that we have to look at the factors like population unmet need the preclinical models that will help us pick the indications for our auto Meanwhile to program.
Operator: You know, dose escalation, and they both have dose escalation and expansion cohorts baked into them that we should be able to talk to people about in due course, and hopefully not that long. But, we can't give any specific guidance right now. Yeah, no, that's helpful.
But I'm not a believer that there's a detailed enough mechanistic understandings of most the vast majority of Ottoman diseases to really dial yourself in like that.
Right, Yeah that makes sense and just the last one for me with all the engineering going around the I O two molecules to avoid C. D 25 binding what seems to prevent T wreck activation and vascular leaked syndrome at least break clinically how is the I owe 15 approach different from these not wallet tenure.
Operator: That's helpful. Thank you. And second question, just wondered, you know, I guess, to the extent that you can speak to this, any major differences in patient characteristics that you can speak to and the upcoming VIVA-CODA-MAB data relative to sort of the previously reported data back in FAD-ASH 2018? I guess within the bounds of the abstract, I don't know, Allen, if there's much we can say about the different. I'm assuming you're asking about demographics, Etzer.
Waited I L two molecules.
So I owe 15, and this is for oncology program or X men have 24, three O. Six currently in phase one studies.
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Operator: Yeah. Yeah. There haven't been any significant changes to the inclusion-exclusion criteria, so, you know, in terms of population shifts of the total patients enrolled, there's probably not going to be any change. Yeah, so it wouldn't reflect our insights around the kinds of patients and the lower disease burden that were a better likelihood of response. It would not reflect that.
Operator: Great. Awesome. Well, I can always follow up as well after the presentation, but thank you. Thank you. Thank you.
Operator: Our next question comes from Gabriel Thung of Mizuho Securities. Please proceed. Hi there, this is Gabriel from Mara Goldstein.
Operator: Just a question here on the IL-15-24306 candidate. How are you thinking about planning for expansion studies, or how are you thinking about the planning of expansion studies moving forward with these demoralized combinations with portfolio products or leaning more towards external candidates? And does the agreement with Genentech have any restrictions on which targets either party can explore? I'll take that one.
Operator: So in terms of timing, of course, you have to establish safety and dose schedules for the agent before we can kick off other combinations. We would look at not just our own internal candidates but also third-party molecules, some of which have been predefined in the contract that we're planning on doing combination studies with, some of which we can just, you know, propose and initiate. There are some restrictions around, of course, creating problematic safety signals and things like that. Those are sort of part of the course for accommodation studies.
I'm here in the progress or just a couple for me. So first just went back to you know clinical trials go to remind myself of the other two checkpoints.
T any by specifics and just sort of given you know sort of we've been dealing with covid for the better part of the year just wondering about the progress of these programs and then phase wondering what we could expect to see clinical data from from those two assets.
Operator: But also, we cannot, and we would not want to have the same exact mechanisms of action compete with each other within the sort of overall study approaches, right? So it'll be fairly broad. And we know Genentech has a pretty broad view beyond just in phase one, doing that initial combination with teslizumab, which is something that's been disclosed. Right. Good.
Operator: And also, just one extra quick question on Vibrocodumab earlier when you discussed that you see more rash than colitis. Could you provide more color as to your discussions with the physicians on the trial as to how meaningful this difference is and if maybe a physician would prefer a rash event over colitis events for the drug? Yeah, Allen, do you want to take that without obviously speaking for all the doctors and oncologists in America? Yeah, so, you know, again, just to clarify, it wasn't for VIVA-Codamab; it was for XMAB-2717 or PD-1 CTLA-4. And, you know, I think it's still early in the development to say that, you know, we're going to sort of distinguish them based on their safety profiles, but I think it does suggest differences in the design of the molecule, and it's doing the things that we're hoping it's doing. So at this stage, I'm optimistic, but I'm not going to go and say that people are going to use them or prescribe them differently based on the profile. That's always been challenging in oncology because when you talk to oncologists, they always talk about efficacy. God, thank you very much.
Operator: Thank you! Our next question comes from Arlinda Lee of Canaccord. Please proceed. Thanks for taking my questions. I had questions about your dose escalations for 14.045 and... So neither of these you've reached an MTB, and I'm wondering if you're still in...
Operator: Exploring what you're looking for to decide whether to go-forward and then on. Do you think that going into a lower-burden myeloid malignancy would, So there are several layers of questions there. Maybe to start with the first. So you're talking about one program here, Viva Codemap, right?
Okay are are insights around the kinds of kinds of patients in the lower disease burden that we're better likelihood of response would not reflect that.
Great also more like an always follow up as well after the presentation, but thank you.
Thank you.
Operator: Well, mainly the Vibacoda Man, but I'll... Okay, so now I can multiply all that by two. Hold on a sec. Let me just make a note. So, um, I think that the places we're still nailing down the details around the dosing regimen for 14045 are around exactly the schedule of priming doses to give. So that's that piece.
Operator: That's always the last bits of details. And it's fair to say that the restrictions around dose changing and escalation within a patient that we had put on us by the FDA coming off the clinical hold definitely make that a little slower of a process. So that's fair to say that that made it definitely more difficult. So you then ask the question about lower-burden diseases having necessarily the same or a different dose. Allen, you might wanna take that. I guess you would expect more flexibility around the tolerability of the agent with a lower disease burden. Yeah, it's a great question, Erlinda.
Operator: And, you know, it's really around, Not so much the dough, but you know we're giving ours intermittent dosing, so every other day or weekly, and you know the schedule and how quickly you can escalate because we know that you can give fairly high doses they can tolerate, but they have to be sort of primed, and you have to sort of move up to that dose. And so it's really a balancing act of how quickly you want the dose to go up and how high you need it to go up to get the efficacy that you want to see. And, you know, I think there's a little bit of work that still needs to be done. Clearly, if you have lower burdens of disease, you may need a different dose or schedule. But I don't think we have that completely figured out yet. And then it's a lower CRS with a lower burden of disease. I don't know that we have enough data to even comment on that, though. Nothing jumps out at me.
So it will be fairly broad and we know genentech has a pretty broad view be.
Beyond just in the phase one doing the initial combination with the Tesla isn't that which is something that's been disclosed.
Right.
And also just one extra quick question on the.
Operator: Yeah, we are watching that. I will say from the history of bispecifics, that has been sort of demonstrated, you know, clearly with blinsido, the higher leukemic burden has more CRS, etc. So it's something that we would expect to see, and we will keep an eye out for that. Yeah, now for 7.1.7, because we saw activity at 10 mg per kg, we did expand there, and it's a tolerable dose, and we're exploring higher doses, but we're not letting exploring higher doses hold us back from really pushing forward with 10 mg per kg, and then maybe adjusting later if higher doses are But we are confident that 10 mg per kg is an effective dose.
Operator: Okay, great. Thank you. Our next question comes from Zhiqiang Shu of Barenburg.
Operator: Please proceed. Thanks very much. Congratulations on the progress. I have a few questions here. So in your prepared remarks, you mentioned the strategy for companies to decide which program to move forward with, which program to terminate. I guess at the current state of all the assets, which ones would you say that you would definitely move forward with? Well, they're all moving forward right now to get that key proof-of-concept data that gives you that ability to make the decision. And that's essentially where most of our programs stand.
What you're looking for to decide on a go forward dose.
And then on 14 of four or five.
Is it.
Do you think that going into a lower burden myeloid malignancies would have the same dose.
I'm curious on the better efficacy that you're seeing are you also seeing lower Crs.
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So there's a several layers of questions there.
Maybe to start with the first.
Operator: I think our Plamodemab and 20717 programs are at that point where the proof-of-concept data is emerging as we watch. It doesn't all happen at once in these open-label oncology trials. Data emerges and rolls out and gives you the directions to take. So we're in the midst of that decision process for how to advance PLAMO and 20717, and we're actually optimistic about both. I think we feel pretty confident that both are going to continue advancing.
And I.
Operator: For the others, we await data, and we'll have the thumbs-up, thumbs-down on those as data. Okay, great. And then for IL-12 and IL-15, I understand both are from oncology. Based on, I guess, preclinical or translational data, do you see the difference in terms of which indications for either program? You know, not really.
Operator: I think that they both have a broad activity at improving T cell function and number. I don't think there's anywhere near the granularity of data you would want to look at indications based on their specific mechanism. And finally, for the IL-2 program for autoimmune diseases, I understand that you mentioned that, eventually, this will probably be partnered out as companies focus on oncology. When do you think would be a good time for the company to start looking? Do you want to get the phase one data ready now, or are you looking for parties outside right now?
Pretty high doses, they can be tolerated, but they have to be sort of prime then you have to sort of move up to that does.
Operator: You know, I would actually park the idea that we're definitely going to partner with the IL-2 program. I think it really comes down to the indication strategy that we select that we're right now pulling all the pieces together on that we would implement immediately after we come out of our healthy volunteers dose escalation, which we hope happens very quickly, because that's the beauty of healthy volunteer studies in these autoimmune indications, just to get your mechanism of action, your pharmacodynamics, your PK nailed down. That that indication strategy is going to drive whether we want to keep the asset for the long haul or partner with it. I think that we have to be realistic and that sometimes autoimmune disease partnership is what you need to do. But I don't want to make that a predicate if that's what we're definitely going to do with that program.
And so it's really a balancing act of how quickly do you want the dose to go up and how high do you need it to go up to get the efficacy that you want to see and you know I think there's a little bit of work that still needs to be done. There clearly if you have lower burden of disease, you may need a different dose or schedule.
But I don't think we have that completely figured out yet.
And then it's your lower Crs with lower burden disease, Uhm I don't know that we have enough data to even up comment on that though nothing jumps out.
Operator: We'll be able to give more color on that as soon as we can start publicly disclosing our strategy. Got it. Thank you very much. Thank you. I would now like to turn the call back to Basil Dahiyat for closing remarks. Thank you very much, Operator, and thank you, everybody, for joining us today. Take care of yourselves. Have a great evening. We look forward to updating you again over the coming weeks. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect. Thanks for watching!
One data ready or.
Or are you are you looking for them.