Q4 2020 Xencor Inc Earnings Call

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Ladies and gentlemen, please stand by your fourth quarter and year end, John Gorey Conference call will begin momentarily. Thank you for your patience and please standby.

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Unnamed Speaker: Okay, I will transfer your call now. One moment.

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Unnamed Speaker: [inaudible]

Ladies and gentlemen, and thank you for standing by and welcome to the fourth quarter and year end non core conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session basket question. During the session you will need to press star one on your telephone please.

Be advised that today's conference is being recorded for you require any further assistance. Please press star Zero I would now like to hand, the conference over to your speaker today, Charles Liles head of corporate Communications and Investor Relations. Please go ahead Sir.

Thank you and good afternoon.

Earlier today, we issued a press release, which outlines the topics we plan to discuss today. The press release is available at Www Dot net and core dotcom.

Good day on our call Bassil that he is president and Chief Executive Officer will provide a corporate overview and we'll review recent partnership News Allen Yang Chief Medical Officer will review update throughout our clinical portfolio and John Kush, Chief Financial Officer will review financial results and then we'll open up the call for your questions and we'll be joined by John Day, Shirley Chief Scientific Officer.

Unnamed Speaker: Ladies and gentlemen, please stand by. Your fourth quarter and year-end Xencor conference call will begin momentarily. Thank you for your patience, and please stand by.

Before we begin I would like to remind you that during the course of this conference call <unk> management may make forward looking statements, including statements regarding the company's future financial and operating results future market conditions, the plans and objectives of management for future operations, the company's partnering efforts capital requirements future product offerings and research and development programs.

Unnamed Speaker: BF-WATCH TV 2021

Charles Liles: Ladies and gentlemen, thank you for standing by, and welcome to the fourth quarter and year-end Xencor conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Charles Liles, Head of Corporate Communications and Investor Relations. Please go ahead, sir.

Bassil I. Dahiyat: Thank you, and good afternoon. Earlier today, we issued a press release outlining the topics we plan to discuss today. The press release is available at www.xencor.com. Today on our call, Basil Dahiyat, President and Chief Executive Officer, will provide a corporate overview and will review recent partnerships. Allen Yang, Chief Medical Officer, will review updates throughout our clinical portfolio. And John Kuch, Chief Financial Officer, will review financial results.

And the impacts of the COVID-19 pandemic on these topics.

These forward looking statements are not historical facts, but are rather based on our current expectations and beliefs and are based on information currently available to us.

From the events described in these forward looking statements are subject to known and unknown risks uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward looking statements, including but not limited to those factors contained in the risk factors section of our most recently filed annual report on form 10-K, and quarterly report on form 10-Q.

Charles Liles: And then we'll open up the call to your questions, and we'll be joined by John Desjarlais, Chief Scientific Officer. Before we begin, I would like to remind you that, during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the company's future financial and operating results, future market conditions, the plans and objectives of management for future operations, the company's partnering efforts, capital requirements, future product offerings, research and development programs, and the impacts of the COVID-19 pandemic on these topics.

Charles Liles: These forward-looking statements are not historical facts but are rather based on our current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to, those factors contained in the risk factors section of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. First, some housekeeping.

First some housekeeping we have renamed our programs that do not yet have confirmed non proprietary names.

In general where there were five digits, we've shortened for just the final three digits. For example, ex mapped to 0717 is now X Mirth 717 with that let me pass the call over to Basil.

Thanks, Charles and good afternoon, everyone.

And of course approach to creating antibody and cytokine therapeutics is based on our ex Nab protein engineering platform.

It's built on our extensive protein engineering knowledge combined with our suite of X NAV FC domains, which we used to build novel molecular structures improved natural protein and antibody functions and create new mechanisms of therapeutic action.

Plug and play portability of our ex Nab FC domain and the speed of our protein engineering capabilities enable us to rapidly explore different targets and biology's. So we can select the most promising programs to take forward.

Bassil I. Dahiyat: We have renamed our programs that do not yet have confirmed non-proprietary names. In general, where there were five digits, we have shortened to just the final three digits. For example, XMAP-20717 is now XMAP-717. With that, let me pass the call over to Basil.

We're focusing our R&D on the expansion and use of our ex NAV bi specific platform to create antibodies that bind two or more different antigen simultaneously.

And also to engineered cytokines with structures optimized for particular therapeutic use.

Bassil I. Dahiyat: Thanks, Charles, and good afternoon, everyone. Xencor's approach to creating antibody and cytokine therapeutics is based on our XMAP protein engineering platform. It's built on our extensive protein engineering knowledge combined with our suite of XMAB FC domains, which we use to build novel molecular structures, improve natural protein and antibody functions, and create new mechanisms of therapeutic action. The plug-and-play portability of our XMAB FC domains and the speed of our protein engineering capabilities enable us to rapidly explore different targets and biologies so we can select the most promising programs to take forward.

Currently running six phase one studies evaluating such ex NAV by specific antibodies. This way we are taking multiple simultaneous shots on goal in the clinic and a proof of concept data, we generate will guide, which programs, we independently advance, which we partner and which we will terminate.

Last quarter with Friday program updates for our promoter Mab bi specific antibody program targeting CD 20, and CD three including plans for a potentially registrational phase II trial, we expect to start later this year.

We presented interim phase one data for <unk> 717, our PD one by <unk> for bi specific antibody, which showed activity in multiple advanced solid tumors, including prostate cancer, and we announced that we are starting a multi arm prostate cancer crowd. This year.

Bassil I. Dahiyat: We're focusing our R&D on the expansion and use of our XMAP bispecific platform to create antibodies that bind to two or more different antigens simultaneously, and also to engineer cytokines with structures optimized for particular therapeutic uses. We're currently running six phase one studies evaluating such XMAB bispecific antibodies. This way, we are taking multiple simultaneous shots on goal in the clinic, and the proof of concept data we generate will guide which programs we independently advance, which we partner with, and which we will terminate.

We also presented updated data for Viva Coder Mab, a CD 123 by CD three by specific antibody in AML, where we identified a marker for patients more likely to respond to therapy lower baseline leukemic disease burden.

Now shifting to the preclinical front, we expect to begin the phase one clinical trial early this year for ex NAV five six for our wholly owned IL two FC fusion engineered to selectively activate regulatory T cells for the treatment of autoimmune disease.

Bassil I. Dahiyat: Last quarter, we provided program updates for our Promodimab bispecific antibody program targeting CD20 and CD3, including plans for a potentially registrational Phase 2 trial we expect to start later this year. Additionally, we presented Interim Phase I data for XNAV717, our PD-1 by CTLA-4 bispecific antibody, which showed activity in multiple advanced solid tumors, including prostate cancer. And we announced that we are starting a multi-arm prostate cancer trial this year. We also presented updated data for Vibocodumab, a CD123 by CD3 bispecific antibody in AML, where we identified a marker for patients more likely to respond to therapy, lower baseline leukemic disease burden.

It will be our second cytokine in the clinic and will join ex Nab free O. Six are engineered IL 15 for oncology, which is partnered with Genentech.

Following behind that we expect to file an IND for X NAV 819 R. E. N P. P. Three by CD three by specific for renal cell cancer. Later this year and we are beginning development of our first CD 28 by specific a b seven H street targeting molecule for potentially broad solid tumor use including in prostate cancer.

Now our broad <unk> platform also drives our partnering strategy, which provides revenue streams, but also the opportunity to expand our clinical development scale and combination therapy options. For example, our genentech partnership for ex NAV three O six which he initiated dose escalation in combination with the total isn't mab genetics.

Bassil I. Dahiyat: Now shifting to the preclinical front, we expect to begin the Phase 1 clinical trial early this year for XMAB 564, our wholly owned IL-2-FC fusion engineered to selectively activate regulatory T-cells for the treatment of autoimmune disease. It will be our second cytokine in the clinic and will join XMAB 306, our engineered IL-15 for oncology, which is partnered with Genente. Following behind that, we expect to file an IND for XMAB 819, our ENPP3 by CD3 bispecific for renal cell cancer later this year, and we are beginning development of our first CD28 bispecific. A B7H3 targeting molecule for potentially broad solid tumor use, including in the prostate.

PDL, one antibody last quarter after starting monotherapy escalation last March.

And our recently started the CD 28, prostate cancer discovery collaboration with Janssen against an undisclosed tumor target also gives us access to their industry, leading prostate cancer portfolio of preclinical combinations with our agents.

Now before moving onto our clinical portfolio today I want to state that we did not experience significant COVID-19 disruptions to operations during the last quarter. We'll continue to update you on impacts from COVID-19, if and when they emerge now with that I'll, Let Allen Yang our Chief Medical officer of your updates for our clinical portfolio.

Bassil I. Dahiyat: Now, our broad XMAB platform also drives our partnering strategy, which provides revenue streams but also the opportunity to expand our clinical development scale and combination therapy options. For example, our Genentech partnership for XMAB 306, which initiated dose escalation in combination with tezolizumab, Genentech's anti-PD-L1 antibody, last quarter after starting monotherapy escalation last March, and our recently started CD28 Prostate Cancer Discovery Collaboration with Janssen against an undisclosed tumor target also gives us access to their industry-leading prostate cancer portfolio for clinical combinations with our agents.

Alan.

Thanks, Basel today, we will provide a few brief clinical updates and we'll be happy to address your questions in the Q&A session.

Dating for late 2019, we have been presenting early stage clinical data across many of our bi specific antibody programs and the day to have guided our decisions to advance several candidates into new studies scheduled to start from 2021.

First promote them out as our CD 20 by CD three by specific antibody that we are advancing for patients with b cell malignancies, and preliminary safety and antitumor activity from the phase one dose escalation study in patients with relapsed or refractory non Hodgkin's lymphoma were presented at the Ash 2019, Inc.

Bassil I. Dahiyat: Now, before we move on to our clinical portfolio today, I want to state that we did not experience significant COVID-19 disruptions to operations during the last quarter. We'll continue to update you on impacts from COVID-19 if and when they emerge. Now with that, I'll let Allen Yang, our Chief Medical Officer, review updates for our clinical portfolio.

Initial data indicated that <unk> was generally well tolerated and demonstrated encouraging clinical activity as a monotherapy.

Across this competitive class of molecule, we have observed similar efficacy and toxicity profiles, though some datasets have been smaller or more selective than others. We believe that the differentiation for CD twenties will bear out through which combination strategy elicit strong durable efficacy.

Allen S. Yang: Thanks, Basil. Today we'll provide a few brief clinical updates, and we'll be happy to address your questions in the Q&A session. Starting in late 2019, we have been presenting early stage clinical data across many of our bi-specific antibody programs, and the data have guided our decisions to advance several candidates into new studies scheduled to start in 2021. First, Pomodomab is our CD20 by CD3 bispecific antibody that we are advancing for patients with B-cell malignancy.

And maximal tolerability for patients.

So this past November we entered a clinical collaboration with morphosis and insight to investigate the chemotherapy free triple combination or promote a map with toughest sit a mab and lenalidomide in patients with relapsed or refractory diffuse large b cell lymphoma.

Allen S. Yang: Preliminary safety and anti-tumor activity from a Phase 1 dose escalation study in patients with relapse or refractory non-Hodgkin's lymphoma were presented at ASH 2019. Initial data indicated that plumodimab was generally well-tolerated and demonstrated encouraging clinical activity as monotherapy. Across this competitive class of molecules, we have observed similar efficacy and toxicity profiles, though some datasets have been smaller or more selective than others.

<unk> mechanism of action as a CD 20, directed city three by specific redirect T cells to tumors and top of cinema as a CD 19, directed ex Mab antibody that we engineered with our cytotoxic FC domain and subsequently licensed to morphosis in 2010.

These two antibodies combine powerful and distinct immune pathways and composite of map itself is easy to use tolerable and can generate prolonged durable responses is the first agent approved for second line diffuse large b cell lymphoma, and it has already received MCC enlisting.

Allen S. Yang: We believe that the differentiation for CD20s will bear out through which combination strategy elicits strong, durable efficacy and maximal tolerability for patients. So this past November, we entered a clinical collaboration with Morphosis and Insight to investigate the chemotherapy-free triple combination of plomodimab with tafacitimab and lenalidomide in patients with relapse or refractory diffused large B- Clomodomab's mechanism of action as a CD20-directed CD3 bispecific redirects T-cells to tumors, and Tafacitamab is a CD19-directed XMAB antibody that we engineered with our cytotoxic FC domain and subsequently licensed to Morphosis in 2010.

Morphosis and insight will provide toughest that amount for the studies, which we will sponsor and fun. We anticipate the first study will start this year other other studies. Additionally planned.

Include Triple combination in relapsed or refractory Follicular lymphoma in first line diffuse large b cell lymphoma.

Next ex mapped 717 is our most advanced tumor microenvironment activator and its mechanism is a dual selective targeting of T cells that express the checkpoints PD, one and CTO like for.

In November we presented updated interim data from an ongoing phase one study at Citi.

Allen S. Yang: These two antibodies combine powerful and distinct immune pathways, and tafacitimab itself is easy to use, tolerable, and can generate a prolonged, durable response. It's the first agent approved for second-line diffuse large B-cell lymphoma, and it has already received NCCN listings. Morphosis and Insight will provide tafacitimab for the studies, which we will sponsor and fund. We anticipate the first study will start this year.

Last year 717 was generally well tolerated in patients across multiple types of advanced solid tumors and as of September as of September 2020 data cutoff of complete response was observed in a patient with melanoma and partial responses were observed in multiple tumor types, including melanoma renal cell carcinoma non <unk>.

Allen S. Yang: Other studies additionally planned include triple combination in relapse or refractory follicular lymphoma and first line diffuse large B cell lymphoma. Next, XMAP-717 is our most advanced tumor microenvironment activator, and its mechanism is a dual-selective targeting of T-cells that express the checkpoints PD-1 and CTLA-4. In November, we presented updated interim data from an ongoing Phase I study at CITSE last year. XMAP-717 was generally well-tolerated in patients across multiple types of advanced solid tumors.

Paul cell lung cancer, ovarian cancer, and castrate resistant prostate cancer or <unk>.

In the first half for this year, we plan to initiate a phase <unk> study of <unk> 707 for patients with certain molecular subtypes of castrate resistant prostate cancer as a monotherapy or in combination with other agents depending on the subtype.

As these patients represent a high unmet medical need.

This year, we also look forward to presenting more data from the phase one expansion cohorts as data.

It was rather early assets, but we have continued to mature in the prostate renal cell and basket cohorts for example.

Allen S. Yang: And as of the September 2020 data cutoff, a complete response was observed in a patient with melanoma, and partial responses were observed in multiple tumor types, including melanoma, renal cell carcinoma, non-small cell lung cancer, ovarian cancer, and castrate-resistant prostate cancer, or CRPC. In the first half of this year, we plan to initiate a Phase 1B study of XMAD-717 for patients with certain molecular subtypes of castrate-resistant prostate cancer as monotherapy or in combination with other agents, depending on the subtype, as these patients represent a high unmet medical need.

Moving on we have previously discussed initial dose escalation data from the ongoing phase one study of <unk> <unk> three by specific antibody that targets the somatostatin receptor in patients with neuroendocrine tumors or net net.

Net sorry in indolent slow growing tumor type and we are following these patients to evaluate progression free survival and clinical utility of tightened about in this patient population.

From the early data, we know that <unk> was generally well tolerated at the dose identified for the study expansion and biomarker analysis are consistent with its proposed mechanism of action. So we're in the final stages now of initiating a new clinical study in patients with Merkel cell carcinoma, and small cell lung cancer, which are somatostatin expressing tumor.

Allen S. Yang: This year, we also look forward to presenting more data from the Phase I expansion cohorts as data was rather early at CIDC, but we have continued to mature in the prostate, renal cell, and basket cohorts, for example. Moving on, we have previously discussed initial dose escalation data from the ongoing Phase 1 study of Tidunumab, a CD3 bispecific antibody that targets the somatostatin receptor in patients with neuroendocrine Nets are an indolent, slow-growing tumor type, and we are following these patients to evaluate progression-free survival and clinical utility of tidudamab in this patient population.

Types known to be responsive to immunotherapy, and we would anticipate a much shorter time per day due to map to potentially demonstrate clinical activity in this patient population.

Compared to neuroendocrine tumors, we expect to dose the first patient early in 2021.

Finally, some brief updates on two other programs a new study of ex mass 698, which was formerly known as Amgen's AMG for two four is being planned to start later this year and we'll update you on the indication closer to the study's initiation.

Allen S. Yang: From the early data, we know that Tidunumab was generally well-tolerated at the dose identified for the study expansion, and biomark analysis is consistent with its proposed mechanism of action. So we're in the final stages now of initiating a new clinical study in patients with Merkel cell carcinoma and small cell lung cancer, which are somatostatin-expressing tumor types known to be responsive to immunotherapy, and we would anticipate a much shorter time for Tidunumab to potentially demonstrate clinical activity in this patient population compared to neuroendocrine tumors. We expect to dose the first patient early in 2021.

And for Baidu by Dakota map program in AML, we presented updated data at Ash in December of last year, where the efficacy and biomarker analysis indicated that responses appeared to be associated with lower baseline disease burden. We continue the dose escalation study and we are reviewing the data with our partner Novartis and planning additional.

Studies.

Paul.

Thanks Alan.

We're always looking to grow this pipeline with new programs and the next entry into the clinic is <unk> 56 for that's our IL two that we engineered to have a bias towards activating regulatory T cells, a promising new mechanism to treat autoimmune diseases. It also has reduced potency to improved tolerability and duration of action for this normally toxic.

Allen S. Yang: Finally, some brief updates on two other programs. A new study of XMAS-698, which was formerly known as Amgen's AMG-424, is being planned to start later this year, and we'll update you on the indication closer to the study's initiation. And for the Vibacodumab program in AML, we presented updated data at ASH in December of last year, where the efficacy and biomarker analysis indicated that responses appeared to be associated with lower baseline disease burden. We continue the dose escalation study, and we are reviewing the data with our partner, Novartis, and planning additional studies. Basil

Cytokine and is fused to an X snap heterodyne FC domain that has our extend technology for longer half life.

Both of these are key elements of the design for <unk> three O. Six also and that's our IL 15 in oncology.

We expect to start dose escalation in healthy volunteers.

Shortly and study in addition to Tolerability changes in levels of regulatory T cells and other immune cells.

Following five six for US ex net 819, which is a bi specific agent against E&P P. Three and CD three and is designed to recruit cytotoxic T cells against renal cell carcinoma.

Bassil I. Dahiyat: Thanks, Allen! We're always looking to grow this pipeline with new programs, and the next entry into the clinic is XMAP564. That's our IL-2 that we engineered to have a bias towards activating regulatory T-cells, a promising new mechanism to treat autoimmune disease. It also has reduced potency to improve tolerability and duration of action for this normally toxic cytokine and is fused to an ExMab heterodimer FC domain that has our Xtend technology for longer half-lives.

And we expect to file the IND. This year. It uses our two plus one by specific format, which has two antigen binding domains to the tumor target providing for more selective binding to the high <unk> density expression on tumor cells compared to the lower density on normal cells.

Mining selectivity of the two plus one format extends the range of targets amenable to CD three bi specifics for example, our partner Amgen's AMG 509 program in prostate cancer uses this format.

Bassil I. Dahiyat: Both of these are key elements of the design for XMAB-306 also, and that's our IL-15 and oncology. We expect to start dose escalation in healthy volunteers shortly and study, in addition to tolerability, changes in levels of regulatory T cells and other immune systems. Following 564 is XNAT819, which is a bispecific agent against ANPP3 and CD3, and is designed to recruit cytotoxic T-cells against renal cell carcinoma. We expect to file the IND this year.

Now onto partnerships are core part of our business is the complement our internal development portfolio with partnering.

These partnerships generate payments from the licensing of <unk> technologies, the clinical advancement of external candidates as well as royalties from sales of approved products. There were no COVID-19 impacts to partner and revenue during the fourth quarter, but we'll continue to monitor potential impacts of course.

Our many partnerships really highlight the plug and play nature of the suite of ex NAV FC domains, we've created.

Bassil I. Dahiyat: It uses our 2 plus 1 biospecific format, which has two antigen binding domains to the tumor target, providing for more selective binding to the high ENPP3 density expression on tumor cells compared to the lower density on normal cells. The binding selectivity of the 2-plus-4 format extends the range of targets amenable to CD3 bias. For example, our partner Amgen's AMG509 program in prostate cancer uses this. Now, on to partnership. The core part of our business is to complement our internal development portfolio with partners.

Currently there are 13 ongoing partnerships for <unk> technology, which have resulted now in two marketed products to date lexicons Altamira for rare blood disorders, and morphosis is marginally as the first second line treatment for patients with diffuse.

Diffuse large b cell lymphoma.

Last year for Altamira, we earned $16 $2 million in royalties and in the fourth quarter $10 million sales based milestone payments.

<unk> guided the decision on ultimate <unk> European marketing authorization application should be in the second half of 2021.

Bassil I. Dahiyat: These partnerships generate payments from the licensing of XMAP technologies, the clinical advancement of XMAP candidates, as well as royalties from sales of approved products. There were no COVID-19 impacts on Parliamentary Review during the fourth quarter, but we'll continue to monitor potential impacts.

We also entered several new partnerships last quarter spanning the different approaches we use to expand our pipeline to enhance our clinical development programs or to extend the use of Rx map technology first we announced an agreement with Janssen to discover a CD 28 by specific antibody against the prostate tumor target. This partnership where we received 50 million.

Bassil I. Dahiyat: Our many partnerships really highlight the plug-and-play nature of the suite of XMAB FC domains we've created. Currently, there are 13 ongoing partnerships for XMAB technology that have resulted in two marketed products to date, Lexion's Ultimiris for rare blood disorders and Morphosis's Monju-V as the first second-line treatment for patients with diffuse large B-cell lymphoma. Last year, for Ultimiris, we earned $16.2 million in royalties and, in the fourth quarter, a $10 million sales-based milestone.

Upfront in addition to potential milestones royalties and an option to co promote the drug in the U S.

It highlights the excitement around this new mechanism of action targeted CD 28 stimulation can potentially boost the activity of T cells in a tumor specific way and enhance both checkpoint inhibitor therapy and CD three directed by specific antibodies.

Bassil I. Dahiyat: Morphosis has guided the decision on Monjuvi's European marketing authorization application, which should be in the second half of 2020. We also entered several new partnerships last quarter, spanning the different approaches we use to expand our pipeline, to enhance our clinical development programs, or to extend the use of our XMAP. First, we announced an agreement with Janssen to discover a CD28 bispecific antibody against a prostate tumor. This partnership, where we receive $50 million upfront in addition to potential milestones, royalties, and an option to co-promote the drug in the U.S., highlights the excitement around this new mechanism of action. Targeted CD28 stimulation can potentially boost the activity of T-cells in a tumor-specific way and enhance both checkpoint inhibitor therapy and CD3 directed by specific antibodies.

A key part of this collaboration is that both parties have the right to access each other's prostate cancer development agents for combination trials with their own agents, so getting access for combinations with Janssen as leading portfolio of prostate cancer will help us in our expanding work in castration resistant prostate cancer, an area with very high unmet need.

Also expanding our development reaches our collaboration with MD Anderson cancer Center to execute additional clinical studies for their excellent drug candidates over a five year term, we will work closely with investigators at MD Anderson to start clinical trials in additional indications generate new clinical insights and accelerate development timelines across our entire oncology portfolio.

We expanded this relationship in December to include the discovery and development of novel drug candidates that combine MD Anderson's biological insights and a novel antibodies and targets with our plug and play ex NAV by specific technology.

Bassil I. Dahiyat: A key part of this collaboration is that both parties have the right to access each other's prostate cancer development agents for combination trials with their own agents. Getting access to combinations with Janssen's leading portfolio in prostate cancer will help us in our expanding work in castration-resistant prostate cancer, an area with very high-end men. Also expanding our development is our collaboration with MD Anderson Cancer Center to execute additional clinical studies with our XMAP drug candidates.

We have an exclusive option to develop these candidates and hope to access novel targets for creating new generation of X med by specific antibodies.

Finally, we entered license agreements that extend the use of our platform technologies in therapeutic areas that we're not pursuing internally we announced in December an agreement with radian for a license to apply extend FC technology to antibodies targeting IGF. One are in exchange for common stock valued at $6 million in potential future milestones and royalties. We also entered into a <unk>.

Bassil I. Dahiyat: Over a five-year term, we will work closely with investigators at MD Anderson to start clinical trials and additional indications, generate new clinical insights, and accelerate development timelines across our entire oncology portfolio. We expanded this relationship in December to include the discovery and development of novel drug candidates that combine MD Anderson's biological insights into novel antibodies and targets with our plug-and-play XMAP platform by Specific Technology. We have an exclusive option to develop these candidates and hope to access novel targets to create a new generation of XMED bi-specific animals.

License agreement with a new privately held company, giving them worldwide rights to develop three preclinical programs incorporating ex Nab FC domains for development in autoimmune disease, we received a 15% equity interest in the company and are eligible for royalties.

Now with that I'll hand, the call over to John Kush, Our Chief Financial Officer, who will review key highlights from our 2020 year end financials John.

Thank you Bassil during.

During 2020, our partnerships collaborations and licensing arrangements continue to generate strong cash flow with 165 million upfront payments milestone payments and royalties received which helps offset the growing investment in our portfolio of clinical and early stage drug candidates.

Bassil I. Dahiyat: Finally, we entered into license agreements that extend the use of our platform technologies in therapeutic areas that we are not pursuing internally. For example, we announced in December an agreement with Viridian for a license to apply XtendFC technology to antibodies targeting IGF-1R in exchange for common stock valued at $6 million and potential future milestones in royalties. We also entered into a license agreement with a new, privately-held company, giving them worldwide rights to develop three preclinical programs incorporating XMAB FC domains for development in autoimmune diseases.

We ended the year with cash cash equivalents in marketable securities totaling $604 million compared to ending 2019 was $601 3 million.

Based on current operating plans, we expect to have cash to fund research and development programs and operations into 2020 for an estimate we will end 2021 with between 425 $475 million of cash and cash equivalents.

Bassil I. Dahiyat: We received a 15% equity interest in the company and are eligible for royalty. Now, with that, I'll hand the call over to John Kuch, our Chief Financial Officer, who will review key highlights from our 2020 year-end financials. John?

John J. Kuch: Thank you, Basil. During 2020, our partnerships, collaborations, and licensing arrangements continue to generate strong cash flow, with $165 million up from payments, milestone payments, and royalties received, which helps offset the growing investment in our portfolio of clinical and early-stage drugs. We ended the year with cash equivalents in marketable securities totaling $604 million, compared to ending 2019 with $601.3 million. Based on current operating plans, we expect to have cash to fund research and development programs and operations into 2024. An estimate is that we will end 2021 with between $425 and $475 million in cash and cash equipment.

Total revenues on a GAAP basis for the year ended December 31, 2020, $122 7 million compared to $156 7 million for the same period in 2019.

John J. Kuch: Total revenues on a gap basis for the year ended December 31, 2020 were $122.7 million, compared to $156.7 million for the same period in 2019. Revenues earned in 2020 include royalties and milestones from Morphosis related to the approval of Montjuvi, Alexian royalties and a sales-based milestone related to Altamira's sale, and several licenses of XMAP technologies and drug candidates. This is the 2019 revenue, which is earned primarily from Archimantec and Estella's collaboration.

John J. Kuch: Total research development expenses in 2020 were $169.8 million for the year, compared to $118.6 million in 2019, an increase primarily attributable to increased spending on Xencor's biological antibody and cytokine candidate technology, specifically on additional studies for our Pomona MAB and XMAB 717 programs and our IL-2 program XMAB 564.

Rather it was earned in 2020 include royalties and milestones from our full sales related to improve non juvie Alexia on royalties and a sales based milestone relates to altamira sales several licensees of X mirth technologies and drug candidates.

2019 revenue, which is earned primarily from marching in tech and Astellas collaborations.

Total research and development expense in 2020 for $169 8 million for the year compared to $118 6 million in 2019 and increase was primarily attributable to increased spending on court specific antibody and cytokine candidate technologies.

Specifically on additional studies for a promoter map and ex NAV 717 programs and our IL two program ex NAV for five six for <unk>.

John J. Kuch: General Administrative Expenses were $29.7 million for the year compared to $24.3 million in 2019, and the increase was primarily attributable to increased staffing, professional expenses, and spending on intellectual property. Non-cash stock-based compensation expense for the year was $31.6 million compared to $31.9 million in 2019. The net loss for the year was $13.7 million, or $0.24 on a fully diluted per share basis compared to net income of $26.9 million, or $0.46 on a fully diluted per share basis for 2019.

General and administrative expenses were $29 7 million for the year compared to $24 3 million in 2019, Inc.

Increase was primarily attributable to increased staffing professional expenses and spending on intellectual property.

Non cash stock based compensation expense for the year was $31 6 million.

For it to $31 9 million in 2019.

Net loss for the year was 30, $13 7 million or 24 cents on a fully diluted per share basis compared to net income of $26 9 million or <unk> 46 cents on a fully diluted share basis for 2019.

The net loss reported for 2020 compared to net income for for 2019 is primarily due to higher collaboration or licensing revenue for for 2019, and higher research and development expenses and lower milestone revenue reported for 2020.

With that we'd now like to open up the call for your questions operator.

Thank you as a reminder to ask a question press star one on your telephone to withdraw.

And of course for the rest of the balance sheet, we stay involved with all the Q&A roster.

Our first question comes from Tim <unk> with Piper Sandler.

John.

Great. Thank you very much and are really excited about all the progress in every single one other company.

I just wanted to get a sense of what you might be selling a few are this year and I know, it's a little bit early to be calling out specific conferences with respect to clinical updates do you think for for several months seven update might be.

John J. Kuch: The net loss report for 2020 compared to the net income report for 2019 is primarily due to higher collaboration and licensing revenue for 2019 and higher research and development expenses and lower milestone revenue for 2020. With that, we'd now like to open up the call to your questions. Operator?

What do you think you'll be showing interest.

Hi, Ted I'll I'll take that one this is bassil.

So for ACR I mean, we can't disclose what we're going to be presenting until of course the abstracts publish.

Unnamed Speaker: Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Ted Tenthoff with Piper Sandler, who wishes to use your question.

We always try to use various oncology conferences the highlight both our preclinical progress as we continue to expand our platforms.

As well as clinical programs.

We have guided for X amount of 707 will have data this year, we'll get more specific and granular on timing as we get closer.

Edward Andrew Tenthoff: Great, thank you very much, and I'm really excited about all the progress and everything going on at the company. I just wanted to get a sense of what you might be showing at AACR this year, and I know it's a little bit early to be calling out specific conferences with respect to clinical updates, but do you think that the 717 update might be at PASCO? What do you think you'll be showing in June? Thanks.

And to be clear the kind of information, we're gonna presents should be the mature data from the expansion cohorts that werent debt were really quite immature at sits he last November those would be in particularly to the prostate cancer cohort, which was quite early as well as the renal cell carcinoma cohort and then rounding it out with the basket cohort of other.

Bassil I. Dahiyat: Hi Ted, I'll take that one. This is Basil.

Patients that are where there's no PD one approved so it'll be it'll be that full data set and we'll be able to also guide much more specifically on.

Bassil I. Dahiyat: So for ACR, I mean, we can't disclose what we're going to be presenting until, of course, the abstract is published. We always try to use the various oncology conferences to highlight both our preclinical progress as we continue to expand our platforms, as well as our clinical programs. We have guided for XMAP 717, we'll have data this year, and we'll get more specific and granular on timing as we get closer. And to be clear, the kind of information we're going to present should be the mature data from the expansion cohorts that weren't, that were really quite immature at CITSE last November.

Prostate cancer trial that'll be starting this year as well as other trials.

Awesome, great. Thanks, Bob.

Thanks, Ed.

Yes.

Thank you. Our next question comes from Mara Goldstein with Mizuho. You May proceed with your question.

Yeah. Thanks.

On the on.

On the molecular subtype.

Subtypes and that's C. R. P. C study can you, maybe just kind of give us a little bit more granularity as to what that is and just conceptually what that looks like in terms of patients.

Bassil I. Dahiyat: Those would be in particular the prostate cancer cohort, which was quite early, as well as the renal cell carcinoma cohort, and then rounding it out with the basket cohort of other indications that are where there's no PD-1 approved.

Demographics in populations and then I'm just curious about the <unk>.

Private company transaction that was in the press release and when you'll be in a position to disclose some more details on that and how that relates to just sort of strategy from a BD perspective.

Bassil I. Dahiyat: So it'll be that full data set, and we'll also be able to guide much more specifically on our prostate cancer trial that'll be starting this year, as well as other. Awesome. Great. Thanks, Pat. Thanks, Ed.

Yes.

Sure maybe I'll take the second one first that's a fairly easy one then I'll, let I'll touch on the molecular subtypes me and Alan but.

On the private company when we can announce for granularity its really up to them. They're currently in stealth mode, and and working very hard to move the company into the next steps.

Mara Goldstein: Thank you. Our next question comes from Mara Goldstein with Mizuho. You may proceed with your question.

Bassil I. Dahiyat: Yeah, thanks. So just on the molecular subtypes in the CRPC study, can you maybe just kind of give us a little bit more granularity as to what that is and just conceptually what that looks like in terms of patients, demographics, and populations? And then I'm just curious about the private company transaction that was in the press release and when you'll be in a position to disclose some more details on that and how that relates to just sort of strategy from a BD perspective.

From a BD perspective, we've had.

Just a suite of different molecules, we've characterized preclinical over the years that use different FC technologies to try to gain an advantage and these all happened to be an auto immune disease. They were all molecules we made.

A number of years ago that were never part of our plans to develop clinically that really makes sense for this particular company to start pursuing.

So we help them get going by licensing in these assets.

It's again about non core assets things that arent corridor, our focus on oncology on bi specific antibodies and non cytokine.

Bassil I. Dahiyat: Sure. Maybe I'll take the second one first. That's a fairly easy one.

Bassil I. Dahiyat: Then I'll touch on the molecular subtypes, me and Allen. But on the private company, when we can announce more granularity, it's really up to them. They're currently in stealth mode and working very hard to move the company to the next step. From a BD perspective, we've had, you know, just a suite of different molecules we've characterized pre-clinically over the years that use different FC technologies to try to gain an advantage. And these all happen to be not autoimmune diseases; they were all molecules we made a number of years ago that were never part of our plans developed clinically that really make sense for this particular company to start pursuing.

We want to see moving and we think taking equity in a company, where we like the leadership team is.

It's a great way to see value from that so it's again, it's about from a BD strategy standpoint, how to use the depth of our technology to and non core assets and create value and hopefully value for patients.

Now on the molecular subtypes without.

The trial, hopefully will be up and running in the in the coming months, we'll be able to get into all the gory details, but until there is certain we want to be cautious, but I will say, maybe leading to Allen.

We are going to be talking about the the CRP C.

<unk>.

Setting and there's just a variety of places where there's either small molecules or chemo. So Alan you want to comment on what we know about.

Bassil I. Dahiyat: And so we help them get going by licensing these assets. So it's, again, about non-core assets, things that aren't core to our focus on oncology, on biospecific antibodies, and on cytokines that we want to see moving. And we think taking equity in a company where we like the leadership team is a great way to see value from that. So, again, it's about, from a BD strategy standpoint, how to use the depth of our technology and non-core assets to create value, and hopefully, value for patients.

That fields and defer the specifics of our trial until we're certain.

Yeah, I think first of all we're very excited about the early 717 data in prostate cancer and without giving details of the trial design that we've established I can just talk about prostate cancer in general. So after we saw clinical activity. When you look at prostate cancer in general, it's really breaking down by molecular subtypes.

Bassil I. Dahiyat: Now on the molecular subtypes, without, you know, the trial hopefully will be up and running in the coming months; we'll be able to get into all the gory details, but until they're certain, we want to be cautious, but I'll say, and maybe lead into Allen, that we are going to be talking about the CRPC in that field and, you know, defer the specifics of our trial until we're

And remember this is a phase one b. So it can be given 717 will either be given as a monotherapy or as a combination therapy and so.

You think about what's approved for prostate cancer in terms of checkpoint inhibitors for MSI high.

People are using checkpoint inhibitors already as a mono therapy and other subgroups like homologous recombination deficient prostate cancer PARP inhibitor or PARP inhibitors now approved and then there are other forms that are more aggressive debt may be treated with chemotherapy more aggressively in there you might want to think of a combo.

Allen S. Yang: Yeah, Basil, I think first of all, you know, we're very excited about the early 717 data and prostate cancer. And without giving details of the trial design that we've established, I can just talk about prostate cancer in general. So after we saw clinical activity, when you look at prostate cancer in general, it's really breaking down by molecular subtypes. And remember, this is phase 1b.

With chemotherapy, so without saying much on the trial design, which will disclose later in the year, that's sort of how we're thinking about it.

Okay, and if I could just actually ask one question for John and its about Alta mirrors and the sales base royalty rather sales based milestone payments.

Allen S. Yang: So it can be given; 717 will either be given as monotherapy or as combination therapy. And so, you know, if you think about what's approved for prostate cancer in terms of checkpoint inhibitors, you know, for MSI high, you know, people are already using checkpoint inhibitors as monotherapies. In other subgroups, like homologous recombinant deficient prostate cancer, PARP inhibitor or PARP inhibitor is now approved. And then there are other forms that are more aggressive that may be treated with chemotherapy more aggressively. And there you might want to think of a combo with chemotherapy. So without saying much about the trial design, which we'll disclose later in the year, that's sort of how we're thinking about it.

Should we think about additional payments for 'twenty and 'twenty one.

We don't guide on those we do have $20 million in sales based milestones remaining on the agreement but.

You know your model is probably better than ours is for predicting what their sales are to be honest with you Matt.

Okay. Thank you.

Thanks, Matt.

Yes.

Thank you. Our next question comes from Gregory Lorenzo with RBC Capital markets. You May proceed with your question.

Thank you hey, it doesn't seem thank you so much congrats on all the progress maybe just taking a step back and certainly a question that debt. We have received is really what.

Allen S. Yang: Okay, and I could just actually ask one question for John, and it's about Altamiris and the sales-based royalty, or rather, sales-based milestone payment. You know, should we think about additional payments for 2021? We don't guide on those. We do have $20 million in sales-based milestones remaining under the agreement, but your model is probably better than ours as far as predicting what their sales will be. Okay, thanks.

Zen core could look like in say three to five years, certainly a great deal going on a lot as you've alluded to.

A lot of programs advancing a suite of them actually in understanding the management of risk and opportunity assessment I'm just curious how the current profile of so much going on wood would sort of translate to opportunities.

Going forward as these programs advance and potentially derisk. Thank you.

Mara Goldstein: Thanks, Mara. Thank you. Our next question comes from Gregory Renzo with RBC Capital Markets. He may proceed with your question.

Yeah, So the strategy there.

Really a question is central to our strategy says thanks for asking the strategy is about trying to find different different molecules. We can make that have differing scientific and business risks to put into the clinic that have a good hypothesis for how they can help patients and then letting the data guide as soon as the day to guide just some programs we will out license.

Gregory Renzo: Hey, Bazil and team, thank you so much, and congratulations on all the progress. Bazil, maybe just taking a step back, and certainly a question that...

Unnamed Speaker: https://www.youtube.com

Or terminate for example, we out licensed our <unk> 7195, Iga, reducing antibody when it didn't make sense for us to proceed anymore, we did that deal with Amy and Thats now Nestle.

Unnamed Speaker: Thank you.

And so it's about data driving the decisions. We now have data for <unk> and extent of 717. It gives us a clarity on the next step of development and and we hope to continue letting the data from those programs either drive them forward or results and maybe and out licensing or even a cessation. It all depends on the data and having a <unk>.

Bassil I. Dahiyat: Yeah, so the strategy, that's really a question essential to our strategy, thanks for asking. The strategy is about trying to find different molecules we can make that have differing scientific and business risks to put into the clinic that have a good hypothesis about how they can help patients. And then letting the data guide us. And as the data guides us, some programs we will out-license or terminate. For example, we out-licensed our XMAB 7195 IgE-reducing antibody.

Which pipeline behind it so we don't feel.

Tied to any one program at the early stages of development. However, as we start moving into mid and later stages and we're starting to potentially Registrational trial would plan, though we'll see how that goes but as we start moving to those stages will commit more and more resources for the programs that pull us.

Make sure we apply stringent filters to the earlier programs and I think our profile will change if all goes well in the clinic to company that is really focusing on getting mature assets through approval and ultimately to market by ourselves if all goes well.

Bassil I. Dahiyat: When it didn't make sense for us to pursue it anymore, we did that deal with amine, that's now Nestle, and so it's about data driving the decisions. We now have data for Plamodumab and XMAB 717 that gives us clarity on the next step of development, and we hope to continue letting the data from those programs either drive them forward or result in maybe an out-licensing or even a ces It all depends on the data and having a rich pipeline behind it so we don't feel tied to any one program at the early stages of development.

Always maintaining a rich early clinical base, but being pretty ruthless about calling that so I think that the early rich early clinical data. We hope our program base will always remain it'll just start becoming only a piece of the puzzle as our later stage programs for program, even emerge and really solidify.

Bassil I. Dahiyat: However, as we start moving into the mid and later stages, and we're starting a potentially registrational trial with Plamo, we'll see how that goes. But as we start moving to those stages, we'll commit more and more resources to the programs that pull us, you know, make sure we apply stringent filters to the earlier programs, and I think our profile will change if all goes well in the clinic to company, from one that is really focusing on getting mature assets through approval and ultimately to market by ourselves if all goes well, always maintaining a rich early clinical base but being pretty ruthless about culling

That's great. Thank you so much for the color I appreciate that.

Thank you. Our next question comes from Alethia Young cancer. You May proceed with your question.

Hey, guys. Thanks for taking my questions Congrats on the other progress.

It's hard to take a step back from kind of talk a little bit about the IL 15 program I know, there's some other than to space them.

The promise of that potential target and if you have any update with the Roche collaboration that'd be great and my second question is just as it relates to PD, one PD L. A for a program just kind of wanted to get a broad picture of how.

Bassil I. Dahiyat: So I think that the early, rich, early clinical data we hope, or program base will always remain. It'll just start becoming only a piece of the puzzle as our later stage programs, or programs even, emerge and really solidify.

Timelines are going you know in light of some of the Covid volatility that we've seen.

Sorry, which program was that you were asking about timelines.

I think the only for PD one gotcha.

Okay. So for the first one.

Unnamed Speaker: That's great. Thank you so much for the call. I appreciate that.

You know I'll comment on our on our collaboration with Roche and maybe John you can touch on the design philosophy, we use that we hope differentiates us, but the collaboration with Roche as a 50 545, P&L split where share in clinical development costs and hopefully profits.

Alicia Young: Thank you. Our next question comes from Alicia Young with Cantor. You may proceed with your question.

Unnamed Speaker: Hey guys, thanks for taking my questions. Congrats.

Unnamed Speaker: Congratulations on all the progress. I want to take a step back and talk a little bit about the IL-15 program. I know there are some others in the space and the promise of that potential target. If you have any updates on the Roche collaboration, that'd be great. My second question is just as it relates to the PD-1 CTLA-4 program. Just kind of wanted to get a broad picture of how enrollment timelines are going in light of some of the COVID volatility that we've seen. Thanks.

We share a decision making in the clinic and right now they're executing the phase one escalation study.

They did advance from just doing monotherapy escalation to escalation in combo with a total ism add last quarter.

Can't disclose data until we've agreed on a publication plan with Genentech, which we're working on but we really can't say.

When information would come out I think we can say that as new studies emerge or as we engage in different.

Allen S. Yang: I'm sorry, which program was that you were asking about timelines?

Unnamed Speaker: CTLA-4 PD-1

No.

A different new steps of the existing study we will of course announce those.

Bassil I. Dahiyat: Gotcha! Okay, so for the first one, I'll comment on our collaboration with Roche and maybe, John, you can touch on the design philosophy we use that we hope differentiates us, but the collaboration with Roche is a 55-45 P&L split. We're sharing clinical development costs and, hopefully, profits. We share decision-making in the clinic, and right now, they're executing the Phase I escalation study. They did advance from just doing monotherapy escalation to escalation and combination with tesla-lizumab last quarter.

<unk>.

As you know as it makes sense.

But as for data publication plan will come maybe John you want to talk about how we fit in the space.

Yeah, Yeah, so the I mean the.

Probably the most.

Molecule that's been out there the longest is the Alt 803, that's an IL 15 FC fusion.

Also.

Earlier stage molecule, a pergola to dissolve 15 from nectar.

Bassil I. Dahiyat: We can't disclose data until we've agreed on a publication plan with Genentech, which we're working on, but we really can't say when information will come out. I think we can say that as new studies emerge or as we engage in different new steps of the existing study, we will, of course, announce those as it makes sense, but as for data, a publication plan will come. Maybe, John, you want to talk about how we will fit in the space.

And we also compare ourselves to them an extra two one for which is a pegylated IL two that debt basically acts like an all 50 right because it talks to the same receptors in.

And the key distinction with eczema through six is that we started with an off 15 FC fusion using our FC header of Diamond Who's made a nice stable molecule.

And then based on observations, we had in terms of PK with that molecule as well as just.

Understanding the way that these molecules working through their mechanism of action.

John J. Kuch: Yeah, so the, I mean, probably the most popular molecule that's been out there the longest is the ALT803, that's an IL-15-FC fusion. There's also an earlier stage molecule, a pegylated IL-15 from Nectar. And we also compare ourselves to the Nectar 214, which is a pegylated IL-2 that basically acts like an IL-15. Talks with the famous.

We had a good day.

Kind of audacious thing.

Actually dramatically, reducing the potency of the molecule. So we took the wild type all 15 of fusion FC fusion made a few mutations took the quotes eat down a couple of orders of magnitude the idea being that.

These things get cleared through the receptors when they interact with them.

And so what we found pre clinically adept with that point to reduction, we actually got dramatically better half life for the molecule in depot and because of the molecule lasted longer we actually got better pharmacokinetics. So we've got a.

John J. Kuch: And the key distinction with XMAP-306 is that we started with an IL-15-FC fusion using our FC heterodimers and made a nice stable molecule. And then, based on observations we had in terms of PK with that molecule, as well as just understanding the way that these molecules work and their mechanism of action, we kind of did the kind of audacious thing of actually dramatically reducing the potency of the molecule. So we took the wild-type L15F fusion, the FC fusion, made a few mutations, took the potency down a couple orders of magnitude, the idea being that...

Higher peak peripheral NK and T cell expansion and snowball gets monkeys, as well as a longer duration of that peak and so we hope and we think everything is pretty well set up for that those kind of properties to translate well into humans.

Great. So.

Next question do you want me to take.

You want me to take the interrupt for I'm, sorry, I completely forgot about for question about enrollment and Covid PD, one particular for I apologize sorry go ahead Alan.

John J. Kuch: These things get cleared through the receptors when they interact. And so, what we found preclinically is that with that potency reduction, we actually got a dramatically better half-life of the molecule in vivo. And because the molecule lasted longer, we actually got better pharmacodynamics. So, we got a higher peak of peripheral NK and T cell expansion in Sinomalgus monkeys, as well as a longer duration of that peak. And so, we hope and, you know, we think everything's pretty well set up for that, those kinds of properties to translate well into humans.

Unnamed Speaker: Great!

Yeah, no problem, so we said that.

In terms of the PD one Cta for 717, we haven't noticed really any sort of decline or delays in our enrollment first of all I'd like to thank the teams all the teams that <unk> been working really overdrive during the pandemic and Covid has interrupted hospital supply chains with hospital systems, but the teams.

Quickly adapted to things like remote and virtual monitoring and so on.

I think there's two factors here.

Answer is a large unmet need if you have cancer, despite the pandemic you'd need to be treated we haven't.

Active molecule, which is also very important and so we've noticed that the studies are enrolling well and two our schedule. So we haven't noticed any delays in that program.

Allen S. Yang: Next question.

Unnamed Speaker: Oh, I'm sorry.

Allen S. Yang: I apologize, sorry, go ahead, Allen.

Thanks Bhavan.

Allen S. Yang: Yeah, no problem. So, Lisa, in terms of the PD-1, CTLA-4, or 717, we haven't noticed any sort of decline or delay in our enrollment. You know, first of all, I'd like to thank the teams, all the teams at Xencor. They've been working really hard during the pandemic, and COVID has interrupted hospital supply chains and hospital systems, but the teams quickly adapted to things like remote and virtual monitoring.

Thanks.

Okay.

Thank you. Our next question comes from Jonathan Chang with SBB Leerink you May proceed with your question.

Hi, Thanks for taking my questions first question on day seven H three how does your CD 28 approach and program compared to other pieces of an interest me approaches and programs in development.

Yeah.

Allen S. Yang: And so, I think there are two factors here. You know, cancer is a large unmet need. If you have cancer, despite the pandemic, you need to be treated. We have an active molecule, which is also very important. And so, we've noticed that the studies are enrolling well and on schedule. So, we haven't noticed any delays in that program. Thanks, Bob.

Sure.

I mean I can I can answer this generally I guess the hope here is to use the 783 of our marker that's expressed on many tumors and is particularly bright in places like prostate as a.

Allen S. Yang: Thanks. Great.

Way to overcome T cells, meaning quiescent or resistance to activation from things like checkpoint therapies or CD three so it's not bringing a cytotoxic payload, it's bringing a co stimulatory payload.

Jonathan Chang: Thank you. Our next question comes from Jonathan Chang with SBB Learning. You may proceed with your question. Hi, thanks for taking my questions. First question on B7H3: how does your CD28 approach and program compare to other B7H3 approaches and programs in development?

And hopefully that doing so in a targeted way can assure a tumor specific effect and avoid.

Bassil I. Dahiyat: Sure. I mean, I can answer this question generally, I guess.

Avoid side effects I think the attractiveness of CD 28 is really about its centrality in the immune system and John maybe you can comment on that.

Yeah.

So the way that T cells are activated or they get they need multiple signals signal one they get through the T cell receptor interaction, where they may see or artificially through CD three by simply for classic T cell engaging molecule.

Bassil I. Dahiyat: The hope here is to use B7H3, a marker that's expressed on many tumors and is particularly bright in places like prostate cancer, as a way to overcome T cells, maybe quiescence or resistance to activation from things like checkpoint therapies or CD3. So it's not bringing aside a toxic payload; it's bringing a co-stimulatory payload. And hopefully, doing so in a targeted way can assure a tumor-specific effect and avoid side effects. I think the attractiveness of CD28 is really about its centrality in the immune system. And John, maybe you can comment on that.

In this case, we're actually doing signal to.

C 48 is the textbook signal too.

If you want to expand T cells in vitro you couple of signal, one and signal two with CD, three and CD 20 beads and expand T cells. So we're just trying to make that happen in the tumor microenvironment, specifically at the tumor cell T cell interface and since some of these three as brightly expressed but a lot of different tumors.

We're trying to promote that interaction and that that's triggering a signal to write up that interface.

John J. Kuch: Yeah, you know, so the way that T-cells are activated is, you know, they get, they need multiple signals. So signal one, they get through the T-cell receptor, interacting with MHC or artificially through a CD3 bi-civic, a classic T-cell engager molecule. In this case, we're triggering signal two, right?

Now in contrast to a lot of the other programs that are out there.

The nice thing about our fee 28 by <unk>. So they could at least this is different bar philosophy is debt.

We can show the signal to all by itself it doesn't actually accomplish anything and so from a safety perspective, we believe that broadly targeting broadly expressed tumor associated antigen. Like these are at age three should be safe and then we're gonna couple that with with either.

John J. Kuch: The CD28 is the textbook signal two. If you want to expand T-cells in vitro, you couple signal one and signal two with CD3 and CD28 on B. So we're just trying to make that happen in the tumor microenvironment, specifically at the tumor cell-T-cell interface. And since B7H3 is brightly expressed in a lot of different tumors, we're trying to, you know, promote that interaction and that triggering of signal two right at that interface.

PD, one blockade or oral <unk> civic to promote the single one debt.

Debt youre getting to the T cell receptor.

Got it thank you.

And just final question when could we see additional promoted Matt critical data.

We.

John J. Kuch: Now, in contrast to a lot of the other programs that are out there, the nice thing about a CD28 by Civic, at least this is what our philosophy is, and we can show this, Signal 2 all by itself doesn't actually accomplish anything. And so, from a safety perspective, we believe that broadly targeting, you know, a broadly expressed tumor-associated antigen like B7H3 should be safe. And then we're going to couple that with either, you know, PD-1 blockade or a CD3 biocivic to promote the signal 1 that you're getting through the T cell receptor.

To have more pull out a map data later this year.

We're wrapping up the dose regimen setting.

Linear complete and we should have it and we hope at a medical conference right after that.

Got it thank you.

Thank you. Our next question comes from David Nearing Garden with would push you May proceed with your question.

Hey.

Just a quick follow up on that.

Updated clinical data for prime, but some amount that's the monotherapy data, presumably right and then.

A couple of questions on the combo studies with insight and more process.

Unnamed Speaker: Got it, thank you. And just one final question, when can we see additional PlamodaMap clinical data?

I do.

Do you plan on reporting or data that you are who who has it under <unk>.

Unnamed Speaker: Xencor Data

Bassil I. Dahiyat: We expect to have more POMODIMAP data later this year. We're wrapping up the dose regimen setting. That's hopefully near complete. And we should have it at a medical conference right after that.

Control of and then you know what are you thinking of it as the bar for success are comparing.

But across clinical studies to the other CD three CD 20 by specifics that are in development.

Unnamed Speaker: Got it, thank you. Our next question comes from David Nierengarten, with which you may proceed with your question. Hey, just a quick follow-up on the updated clinical data for primatumumab. That's the monotherapy data, presumably, right? And then a couple questions on the combo.

Thanks.

Yeah. So the claim of update would be for monotherapy and for the combination studies with insight and morphosis.

Control the studies.

And you know.

Obviously, theres a collaborative element to the data, but but we remain committed to presenting data.

Yeah.

When it's when it's meaningful and interpretable. We don't we don't this is not a partnership that is likely to hold that data back like a large company.

Unnamed Speaker: https://www.kenhub.com

Some of our other partnerships that we've had.

Unnamed Speaker: Do you plan on recording your data that year? Who is it under control of? And then what are you thinking of as a bar for success comparing admittedly across clinical studies to the other CD3, CD20 by specifics that are in development? Thanks.

The bar for success in relapsed refractory.

D L. B C. L. I think it's great you have two highly active <unk>.

Regimens coming together, the CD 20, CD three and the tap a set amount plus land maybe Alan you can comment on how <unk> and PFS play off of each other here.

Bassil I. Dahiyat: Yes, so the PLAMO update would be for monotherapy. And for the combination studies with insight and morphosis, we control the studies, and you know obviously there's a collaborative element to the data, but we remain committed to presenting data when it's meaningful and interpretable. This is not a partnership that is likely to hold that data back like a large company and some of our other partnerships that we've had. You know, the bar for success in relapsed refractory. DLBCL, I think it's great you have two highly active regimens coming together, the CD20, CD3, and Tapacitumab plus LEN. Maybe Allen, you can comment on how ORR and PFS play off of each other here.

Yes so.

Let me back up and answer a couple of questions. So how we're going to put the molecules together, we're not going to disclose the study design, but I think the way you think about these is they are.

Theres actually three agents here they have slightly different mechanism of action the lenalidomide likely synergize. The CD 19, it probably will synergize, the CD 20, as well and so that's one way to think about it. The other thing to think about is toxicity profiles.

Mainly for the bi specific T cell engages and for the Lenalidomide, it's really.

Cumulative neuropathy, and maybe some myeloid suppression and so could you put them together in a way to sort of minimize the toxicity and increase the efficacy and that's something that we're going to we have been actively thinking about it in terms of you know Mike.

Allen S. Yang: Yeah, so let me back up and answer a couple questions. So, you know, how we're going to put the molecules together. We're not going to disclose the study design, but, you know, I think the way you think about these is, you know, there are actually three agents here. They have slightly different mechanisms of action. Lenalidomide likely synergizes with the CD19. It probably will synergize with the CD20 as well, and so that's one way to think about it.

Milestones.

Or sort of referenced benchmark, it's highly dependent on the disease population is the second line diffuse large b cell lymphoma is a third line or after two other therapies.

And then is it monotherapy single agent I think the data from monotherapy Youre seeing good response rates how durable. They are it is not clear and that's why I think everybody is after sort of their monotherapy data is moving quickly to combinations and different companies. After ash have declared what their combinations are and I sort of like our combination because I think it is.

Allen S. Yang: The other thing to think about is toxicity profiles. You know, CRS, mainly for the bispecific T cell engagers and for the lenalidomide, it's really, you know, cumulative neuropathy and maybe some myelosuppression. And so could you put them together in a way to sort of minimize the toxicity and increase the efficacy? And that's something that we're going to, we have been actively thinking about

Novel and its chemo free.

Got it thank you.

Thank you. Our next question comes from Arlinda Lee with Canaccord you May proceed with your question.

Allen S. Yang: And in terms of...

Allen S. Yang: You know, milestones, you know, I think, or sort of reference benchmarks, it's highly dependent on the disease population. You know, is this second line, diffuse large B-cell lymphoma, is it third line, or, you know, after two other therapies, you know, and then is it monotherapy or single agent? I think the data from monotherapy shows good response rates, but how durable they are is not clear. And that's why I think everybody, after sort of their monotherapy data, is moving quickly to combinations. And, you know, different companies after ASH have declared what their combinations are. And I sort of like our combination because I think it's really novel and it's chemo-free.

Unnamed Speaker: Got it. Thank you. Thank you. Our next question comes from Marlinda Lee. We can't record. You may proceed with your question. If your line is unread, please read it.

This your line is on mute please UN mute.

Hey, guys congrats on the progress.

I think I.

I had some questions on some of your other.

I O combinations, whether those are as you know.

So.

Still think that youre going to have data on from there.

Other thing if you could provide an update on what else we're at 841.

Sure.

Yeah, So you're talking about our ex Mab, one O for an X mab for one programs the respectively PD one by Iqos by specific for tumor microenvironment activation in the seasonally for by lag three by specific those are both in dose escalation. They started dose escalation in about a year after seven $1 seven so.

There is a little bit behind.

We are.

Expecting to announce data with dose escalation is complete we have a package we haven't guided yet on that.

Unnamed Speaker: Hi guys, congrats on the progress. I had some questions on some of your other IO-IO combinations, whether those are still... You still think that...

I will point out that it was about two years from the start of the seven months have been trial to data and worried about about.

Unnamed Speaker: You're going to have data on this from those, and if you could provide an update on what else we'll...

18, or 19 months now from those trials starting so so without.

Unnamed Speaker: 104 and 841. Thanks.

Commodity who a specific date I think we're starting to approach one will be able to guide on new data from this.

Bassil I. Dahiyat: Yes, so you're talking about our XMAB-104 and XMAB-841 programs, the respectively PD-1 by IQOS bi-specific for tumor microenvironment activation, and the CTLA-4 by LAG-3 bi-specific. Those are both in dose escalation. They started dose escalation about a year after 7.1.7, so they're just a little bit behind. We are, um, um, uh, expecting to announce data when death escalation is complete. We have a package.

For data period for news.

Yeah.

Okay, great. Thank you.

Yes.

Thank you for our next question comes from Tom Shrader with BTG. You May proceed with your question.

Hi, This is career you pull them in for Tom. Thanks for taking our question from my first question is for C. T. L. A for there are other approaches in the clinic that include FC enhanced molecule can you share your thoughts on the role of active FC domain for this drug and with the data expected for F C.

Unnamed Speaker: We haven't got it yet on that. You know, I will point out that it was about two years from the start of the 717 trial to data and word about it. I think we're starting to approach when we'll be able to guide on new data or data period.

And while it killed this year do you plan to do all of your own FC enhanced antibody.

I'll say that we don't have any plans for developing an FC enhanced anti HLA for antibody.

In fact, our molecule our PD, one <unk> for as well as our other one RC Chile for lag three both have F C.

Unnamed Speaker: Okay, great. Thank you.

Kept for binding silence, so there's no effector function drive there and they rely on the co target, whether it's PD, one or lag three to give us selectivity and also to drive further activity by hitting a dual another checkpoint.

Kaveri Pohlman: Thank you. Our next question comes from Tom Schrader with BTIG. You may proceed with your question.

Unnamed Speaker: Hi, this is Kaveri Pohlman on behalf of Tom. Thanks for taking our question. My first question is for CTLA-4. There are other approaches in the clinic that include Fc-enhanced molecules. Can you share your thoughts on the role of the active Fc domain for this drug? And with the data expected for Fc active molecules this year, do you plan to develop your own Fc-enhanced molecules?

So yeah, we'll we'll be interested to look at other kinds of data that comes out from other programs.

And go from there I think.

We're excited by having a dual checkpoint approach.

That I think drives down different pathways than trying to use enhanced effector function for clustering or cytotoxicity I mean, John did I Miss anything there.

Bassil I. Dahiyat: I'll say that we don't have any plans for developing an FC-enhanced anti-CTLA-4 antibody. In fact, our molecule, our PD-1 CTLA-4, as well as our other one, our CTLA-4 LAG-3, both have FC receptor-binding silence, so there's no effector function drive there. And they rely on the co-target, whether it's PD-1 or LAG-3, to give us selectivity and also to drive further activity by hitting another checkpoint. So yeah, we'll be interested to look at other kinds of data that come out from other programs and go from there. I think we're excited by having a dual checkpoint approach that I think drives down different pathways than trying to use enhanced effector function for clustering or cytotoxicity.

Yeah, I would I would just emphasize that you know the FC enhanced approaches are largely built mostly built off of mouse data.

Bassil I. Dahiyat: I mean, John, did I miss anything there?

Where.

Significant away for anti <unk> for us is through T Reg depletion.

The regular breakfast utility for the current consensus based on clinical biomarker data.

For Epilemma mob is debt it is not actually depleting T regs in humans and so.

We prefer the approach.

Our molecule and of course, you wouldn't want to do this with a PD one binding arm anyway.

Silent effector function and no ability to from.

Depletion.

Got it and just the last one so the search for Cameron specific targets is so extensive in the industry. What does M. D. Anderson bring AR. That's novel do you think you need deeper biology to get targets also does the deal help you to move the program to phase one.

John J. Kuch: Yeah, I would just emphasize that the FC-enhanced approaches are largely built, mostly built off of mouse data, where a significant MOA for anti-CTLA-4s is through Treg depletion since Tregs are bright for CTLA-4. The current consensus, based on clinical biomarker data for ipilimumab, is that it is not actually depleting Tregs in humans, and so we prefer the approach on our molecule, and of course, you wouldn't want to do this with a PD-1 binding arm anyway, which has silent effector function and no ability to promote Treg depletion. I got it. And just the last one.

Myles.

I'll answer on the deal structurally John can chime in on why he is excited about working with MD Anderson scientists on the deal structure for.

For the discovery partnership they pay for all of their discovery costs in all of their.

Preclinical costs, we have an exclusive option.

To take rights to the program and we've agreed to contribute our technology, our excellent technology and assist them if necessary making molecules.

Unnamed Speaker: So the search for tumor-specific targets is so extensive in the industry. What does MD Anderson bring to that knowledge? Do you think you need deeper biology to get targets? Also, does the deal help you to move the programs to phase one trials?

So.

So we would imagine that typical kind of deal would be if they show exciting preclinical data we would take it over for clinical development, though I think a natural collaborator for that clinical development.

You'd probably want to consider would be the MD Anderson folks maybe John on the why there is why they're so exciting data so exciting.

Bassil I. Dahiyat: I'll answer on the deal structure; John can chime in on why he's excited about working with the MD Anderson scientists on the deal structure for the discovery partnership. They pay for all of their discovery costs and all of their, you know, preclinical costs. We have an exclusive option to take rights to the program, and we've agreed to contribute our technology, our XMAP technology, and assist them, if necessary, in making molecules. So, we would imagine the typical kind of deal would be if they show exciting preclinical data, we would take it over for clinical development, though I think a natural collaborator for that clinical development that you'd probably want to consider would be MDN. Maybe John on why they're so exciting; their data is so exciting.

Well I guess, the best way to put it in.

I'd love to have relationships like we have with M. D. Anderson setup with with every major research University, because theres a lot of different ideas out there but.

But we prioritize for MD Anderson, because it's one of the top cancer Institute from the country and so on in the World. So that's a really great place to start we're hoping to get you know.

New wide fresh ideas for them that they've got a lot of discovery efforts ongoing at M. D. Anderson and that's a very like you said, it's sort of teed up for affirming clinical relationship downstream and I'll also point out we are definitely eager to find novel targets, we've announced our collaboration with a trigger for exactly the same way.

Great. Thank you and congrats on the progress.

Bassil I. Dahiyat: Yeah, I guess the best way to put it is, I'd love to have relationships like we have with MD Anderson set up with every major research university because there are a lot of different ideas out there, but we prioritize MD Anderson because it's one of the top cancer institutes in the country and so, or in the world, and so that's a really great place to start. We're hoping to get, you know, new, fresh ideas for them.

Thank you. Our next question comes from Matt said, they're out with Guggenheim You May proceed with your question.

Great. Thanks for taking our questions and congrats on all the progress from 2020, I guess, the first one maybe sort of the two.

Two plus one strategy question.

With the progress moving forward you know interesting data so far in acidity tuning, but I guess, where do you see the technology positioned versus other emerging technologies like conditional activation epitope masking et cetera aimed at enhancing tumor selectivity and then the question second question just wondering if you.

Bassil I. Dahiyat: They've got a lot of discovery efforts ongoing at MD Anderson, and it's, like you said, it's sort of teed up for a further clinical relationship down the road. And I'll also point out, you know, we are definitely eager to find novel targets. We've announced our collaboration with Atreeqa for exactly the same. Great. Thank you, and congrats on the...

Could talk a little bit about what's baked into the end of 2021 cash guidance and can we assume that it's you know predominantly maybe a step up in R&D from the breath up from promoted Mab.

Unnamed Speaker: Thank you. Our next question comes from Etzer Darout on behalf of Guggenheim. You may proceed with your question.

Activities that are planned for 2021.

Etzer Darout: Great. Thanks for taking my questions and congrats on all the progress in 2020. I guess the first one may be a sort of a 2 plus 1 strategy question with the program moving forward. You know, interesting data so far in affinity tuning, but I guess where do you see the technology position versus other emerging technologies like conditional activation, epitope masking, et cetera, that enhance tumor selectivity? And then the question, second question, just wondered if you could talk a little bit about what's baked into the end of 2021 cash guidance. And can we assume that it's, you know, predominantly a step up in R&D from the breadth of promotamab activities that are planned for 2021? If you could help with those, please. Thank you.

Thank you.

Yeah, maybe I'll touch on the second question. Your question on what's driving the spending in the 2021 cash guidance.

Is gonna be increases in development programs, not just promote a mab, which as you move to the next stage of trial absolutely. Your credit is going to drive increased spending. It's also increased spending around <unk>.

$700 seven as we go into prostate cancer with its own trial and probably start additional studies in other indications as well as additional spending in our <unk> 306 collaboration with Genentech for IL 15, as that program progresses. I think those are the primary drivers of new R&D program spend and R&D program.

Spend is absolutely the big driver of the cost growth.

And on the two plus one where does this technology position relative to these other.

Bassil I. Dahiyat: Maybe I'll touch on the second question, your question about what's driving the spending in the 2021 cash guidance. It's going to be increases in development programs, not just Plomodomab, which as you move to the next stage of trials, absolutely you're correct, it's going to drive increased spending. It's going to also increase spending around XMAP 717 as we go into prostate cancer with its own trial and probably start additional studies and other indications, as well as additional spending in our XMAP 306 collaboration with Genentech for IL-15 as that program progresses. I think those are the primary drivers of new R&D program spend, and R&D program spend is absolutely the big driver of cost.

Approaches for sort of getting that more selective.

Antibody activity I would say using avidity and and that kind of binding property to get to.

Different target density is just kind of a very well proven phenomenon in antibody engineering going back to the days of the designs of Herceptin and <unk>.

And I think these novel approaches while extremely exciting and I think they have a lot of potential really have yet to bear out debt debt. The selectivity is going to be there and that in the real real.

Real practice.

Devo, it's going to play out so we're very excited to watch those we're certainly open minded.

We think that an avidity approach not just has the advantages though of selectivity, but theres other ones I mean, John you want to touch on the different tricks you can do with the two plus one format. That's by the way very stable and very straightforward and easy to make.

Bassil I. Dahiyat: And on the two plus one, where does this technology stand relative to these other approaches for sort of getting that more selective antibody activity? I would say using avidity and that kind of binding property to get to different target densities is kind of a very well-proven phenomenon in antibody engineering going back to the days of the designs of Perceptin and Erbitux. And I think these novel approaches, while extremely exciting, I think they have a lot of potential, really have yet to bear out that the selectivity is going to be there and that in real practice, in vivo, it's going to work out.

Yeah, I mean, not only that I mean, you know back from your original question I would say that what I like about the identity tuning approaches like I feel like I can confidently translate from some in vitro assays in terms of binding selectivity as well as.

Killing selectivity bright versus them.

Reagent flow lines, they feel like they can confidently translate that information too.

What are your other various pieces of information together like I see data from human tumors and feel like that's going to change like well I do think I've always felt like with the other conditional activation approaches.

Bassil I. Dahiyat: So we're very excited to watch those. We're certainly open-minded. We think that an avidity approach not just has the advantages, though, of selectivity, but there are other ones. I mean, John, you want to touch on the different tricks you can do with a 2 plus 1 format that's, by the way, very stable and very straightforward and easy to make.

Little bit more faith based hum.

There's certainly data out there that yes, there are a lot more proteases certain pretty easily from the tumor that is appropriate but at the end of the day. Your your your.

John J. Kuch: Yeah, not only that, but back to the original question, I would say that what I like about the avidity tuning approach is that I feel like I can confidently translate from some in vitro assays in terms of binding selectivity, as well as, you know, killing selectivity of, you know, bright versus dim, you know, reagent cell lines. I feel like I can confidently translate that information into, you know, with putting other pieces I do think I've always felt like with the other conditional activation approaches, they're a little bit more faith-based, you know, hope, you know. There's certainly data out there that yes, there are a lot more proteases, certain proteases, in the tumor than in the periphery. But at the end of the day, you're crossing your fingers, hoping that that all plays out well in terms of toxicity and treatment. No, thank you. Thanks again, and congrats on all the assignments.

Crossing your fingers, hoping that that all plays out well in terms of toxicity and therapeutic index.

Got it no. Thank you thanks, again and congrats on all the progress.

Okay.

Thank you. Our next question comes from Dane Leone with Raymond James You May proceed with your question.

Hi, Thanks, guys and congratulations.

The updates.

So for me I just wanted to.

Joe back can you clarify is the IL 15 program that 50, 545, P&L split with Genentech.

Is that for the U S only or is that global.

That's global net.

Okay. So that is global okay.

Then.

Can you remind us on the altar merits and on.

Jube royalties is that are you lagged in terms of how those get paid out.

John you want to take that one John cash.

We.

We record the royalties as they record for sales.

Unnamed Speaker: Thank you. Our next question comes from Dane Leone with Raymond James. You may proceed with your question. I thank you, guys, and congratulate you.

So for both of them are you have to estimate.

What the sales are to book royalties.

Dane Vincent Leone: I just want to go back, can you clarify, is the IL-15 program, the 55-45 P&L split with Genentech, is that for the US only, or is that global? That's global, Matt. Okay, so that is global. Dane, can you remind us about the Altamiris and Jubi royalties? Are you lagged in terms of how those get paid out?

Latam reported ahead of us so it's really you can pick it up.

For purposes of non children, we have to estimate for the sales or in this case, we picked it up.

And site earnings release.

Okay. That's your question.

Yeah. So basically it's a real time, so it's not that's not organic basis. Okay. That's right I think we're all just trying to figure out kind of where the blended royalty rates are coming in.

Sales ramp.

<unk>.

Okay in terms of this year, we've kind of bounced around on the subject of bid for what the updates are going to be.

Bassil I. Dahiyat: John, do you want to take that one, John Kuch?

John J. Kuch: I'm We record the royalties as they record the sales, so for both of them, we have to estimate what the sales are to book our royalties. Alexander reports ahead of us, so it's real easy to pick it up. For the purposes of Manjuli, we have to estimate where the sales are. In this case, we picked it up off the... Okay.

What's the going back to promote them up for a minute on the monotherapy data, what's the what's going to be the focus of this update.

I guess, what are you, hoping to tease out within the monotherapy setting at this point.

From a more mature data set that's gonna be informative and are you planning on taking that asset for it as a monotherapy from this study.

Unnamed Speaker: Yeah, basically, it's real time, so it's not it's not on a daily basis okay. I think we're all just trying to figure out you know kind of where the blended royalty rates are coming in as these sales ramp up. Okay, in terms of, this year, we've kind of bounced around on this subject a bit on this subject this year as to what the updates are going to be. Going back to Pomodimab for a minute on the monotherapy data, what's going to be the focus of this update?

Or are you going to be more focused on the combination with Bon Jovi.

Yeah, so that the data update would be just to really wrap up the phase one dose escalation and give a clear picture of regimen and and and you know what you can learn about tolerability and efficacy from the small escalation dataset, but it's just really wrap it up and finish it and we expect to be fully rolling with our.

Combination study with <unk> with tap a set of Mab Lenalidomide and we do think combinations are the focus of the strategy, because that's where you're going to have the the regimens that have the most efficacy and that's what's going to win the day in lymphoma. Ultimately we are going to continue monotherapy development.

Unnamed Speaker: I mean, I guess, what are you hoping to tease out within the monotherapy setting at this point from a more mature data set that's going to be informative? And are you planning on taking the asset forward as a monotherapy from this study, or are you going to be more focused on the combination with Bon Jovi?

And we plan to have multiple expansion cohorts in this phase one while we go into combo with tap of Lan in D. L. B C. L will also continue monotherapy <unk> in expansion cohorts in a crew of number of patients that can track along in its own bucket and continue the development of the data looks really promising and <unk>.

Bassil I. Dahiyat: Yeah, so the data update would be just to really wrap up the phase one dose escalation and give a clear picture of regimen and and and you know that what you can learn about tolerability and efficacy from these small escalation data sets but it's just to really wrap it up and finish it and we expect you know to be fully rolling with our combination study with with Tafacitum adalinalinamide and we do think combinations are the focus of the strategy because that's where you're going to have the the regimens that have the most efficacy and that's what's going to win the day in lymphoma ultimately. We are going to continue monotherapy development and we plan to have multiple expansion cohorts in this phase one while we go into combo with Tafalen in DLBCL, we'll also continue monotherapy DLBCL in expansion cohorts and accrue a number of patients and you know that can track along in its own bucket and continue the development and if the data looks really promising and exciting we can you know you could potentially go from go with that data and advance to later development or even You know, just accrue a lot of patience and that data set could be, if the data looks amazing, registrational itself. We'll also look at other indications like follicular lymphoma and others.

Sitting weaken you could potentially go from go with that data in advance to later development or even.

You know just accrue a lot of patients.

And that data set could be if the data looks amazing registrational itself will also look at other indications like follicular lymphoma and others.

Okay that makes sense.

Got it.

And.

And the prostate cancer cohort for.

For the seats.

You see Chile for PD one.

What what.

How large of a group is that I just can't remember what the dose expansion group was.

In general that what separates us from all of the 20 patients in the phase one expansion cohort in prostate.

Yeah.

So what what were what was the disposition of those patients generally a baseline for what it was like the what were you generally accruing.

For prostate cancer yeah.

But yes, so heavily pretreated, yeah and yeah go ahead.

Yes, so we didn't select for certain molecular subtypes in the expansion cohort they were castrate resistant prostate cancer and so they had to exhaust standard of care and so most of them had seen chemotherapy. So this was really a not a chemo naive group and so.

Unnamed Speaker: Okay, that makes sense. In the prostate cancer cohort for the CTLA-4 PD-1, what's, how large of a group is that? I just can't remember what the disk expansion group was. And generally, I would...

They were a difficult group to treat.

Okay.

Sorry, just to clarify your comments around the landscape and prostate where do you where do you think like the unmet need is but.

Unnamed Speaker: This is separate. Oh, the 20 patients in the phase one expansion cohort in prostate cancer. Yeah.

So certain new therapies coming in you know P. S. MAA would be one of them I guess.

Unnamed Speaker: Yeah. So what was the disposition of those patients generally at baseline, or what were you generally able to do?

Well theyre not theyre not in yet right I would say that there's a big unmet need in post chemo after failed salvage in cash.

Unnamed Speaker: for Prostate Cancer?

Unnamed Speaker: Yeah.

Castration resistant prostate cancer is a big unmet need still.

Unnamed Speaker: Like, how heavily pre-treated?

Unnamed Speaker: Yeah, and yeah, go ahead.

Okay, So you're thinking about it broadly not more specifically to a subtype for not allowed to day to God not to let the data guide us.

Allen S. Yang: Yeah, so, you know, we didn't select for certain molecular subtypes in the expansion cohort. You know, they were castrate-resistant prostate cancer, and so they had to exhaust standard of care, and so most of them had seen chemotherapy. So this was really not a chemo-naive group, and so they were a difficult group to treat.

Okay, sorry, I was just kind of trying to understand what you're talking about with the subtypes earlier, whether that was something you're you.

Already have in mind that focus on or whether that was just oh no. It's multiple ones that we're going to explore to see which signals if any signals emerge across subtypes that theres, a particular, one or other that's great right right now we're agnostic.

Unnamed Speaker: Okay, and so sorry just to clarify your comments around the landscape and prostate cancer where do you think the unmet need is? You know certain new therapies coming in, PSMA would be one of them, I guess.

Okay. So basically you have this mix expansion cohort of 20 patients and then youre going to interrogate that cohort for millennia, so like basically.

Unnamed Speaker: Well, they're not in yet, right? I would say that there's a big unmet need in post-chemo after failed salvage in castration-resistant prostate cancer is still a big unmet need.

Sorry, I know that we were unclear. So we have this expansion cohort of 20 patients. That's mixed we're going to report that data.

Also.

Unnamed Speaker: Okay, so you're thinking about it broadly, more specifically about a subtype. Not unless the data got, not unless the data got. Okay, sorry, I was just kind of trying to understand what you were talking about with the subtypes earlier.

This year, we're going to start a completely new trial, just in prostate cancer patients with multiple parallel cohorts of different molecular subtypes, that's a whole other set of patients.

Oh, Okay, alright awesome.

Thank you for giving me over to align with that one.

For he then I'll.

Unnamed Speaker: https://www.youtube.com.au

Sorry for asking you guys.

Thanks, Tim.

Yeah.

Thank you. Our next question comes from Peter Lawson Barclays. You May proceed with your question.

Thanks for taking the question so just to kind of a follow up on Dan's question just around them.

Unnamed Speaker: Okay, so basically, you have this mixed expansion cohort of 20 patients, and then you're going to interrogate them.

Kind of that.

Molecular subtype youre looking for or is that kind of like PD, one levels of PSA levels like BRCA School Patriot. These schools youll thinking through and I guess it is across.

Unnamed Speaker: [inaudible]

Unnamed Speaker: I'm sorry.

Unnamed Speaker: That's, we were unclear. So we have this expansion cohort of 20 patients that's mixed. We're gonna report that data. Also this year, we're going to start a completely new trial just in prostate cancer patients with multiple parallel cohorts of different molecular subtypes. It's a whole other set of patients.

Kind of sub indications, whether it's kind of like post chemo.

Et cetera.

Well I think I think that's going to go ahead, Alan I mean, I think again without having to disclose the details of which will be coming out soon enough I suppose.

Bassil I. Dahiyat: Okay, all right, awesome. Thank you for getting me over the line with that.

Yeah, maybe the best way to think about this Peter.

Unnamed Speaker: Don't worry; I'll stop for ads later.

And sorry for the confusion is.

We treated sort of an unselected cohort as an expansion and that was all comers that with castrate resistant prostate cancer and because of that many of them got chemotherapy because that's the standard of care the.

Peter Richard Lawson: Thank you. Our next question comes from Peter Lawson, Barclays. You may proceed with your question.

Peter Richard Lawson: Thanks for taking the questions. Just a kind of a follow-up on Dan's questions just around that molecular subtype you're looking for is that kind of like PD-1 levels or PSA levels or like BRCA scores, HRD scores you're thinking through, and I guess it is across kind of sub-indications whether it's kind of like post-chemo.

The challenge is moving forward in prostate cancer is that people are molecularly subtyping for disease and the question. We have is like where could we be effective where would you know where it could be generate the most value for patients and it could be across all arms. So from a logistics standpoint, you would want to have a clinical trial.

While that anybody with prostate cancer, who walk through that door. That's metastatic could qualify for the study so castrate resistant prostate cancer. So they come through the door and we would want to have an arm or a basket now some of the baskets like recombinant deficiency. They would normally get a PARP inhibitor. So you want to include those patients somehow.

Unnamed Speaker: Well, I think it is.

Unnamed Speaker: ..

Allen S. Yang: Go ahead, Allen. I mean, I think, again, without having disclosed the details, which will be coming out soon enough, I suppose.

Allen S. Yang: Yeah, maybe the best way to think about this, Peter, and sorry for the confusion, is that we treated sort of an unselected cohort as an expansion, and that was all comers that were castrate-resistant prostate cancer, and because of that, you know, many of them got chemotherapy because that's the standard of care. The challenge in moving forward in prostate cancer is that people are molecularly subtyping the disease. And the question we have is, like, where could we be effective? Where would, you know, where could we generate the most value for patients? And it could be across all arms.

Al.

And then some other patients like MSI high would just be a mono therapy and then some of the other ones that have biomarkers may have more aggressive disease, you may need to chemotherapy and eventually you would want to include everybody's that comes through the door and just have an understanding of the activity of seven months of each little basket Molecularly. So we're not really.

Narrowing the indications at this point, we're sort of studying all the indications with the appropriate combination if needed based on the molecular subtype, sorry, if that wasn't clear before.

Allen S. Yang: So, from a logistics standpoint, you would want to have a clinical trial that anybody with prostate cancer who walked through that door that's metastatic could qualify for the study. So, castrate-resistant prostate cancer. And they'd come in the door, and we would want to have an arm or a basket.

That's perfect. Thank you so much.

And just a question around I guess the equity investment in the emerging kind of still for company.

Allen S. Yang: Now, some of the baskets, like recombinant deficiency, they would normally get a PARP inhibitor. So, you want to include those patients somehow. And then, some other patients, like MSI-High, would just be monotherapy. And then, some of the other ones that have biomarkers may have more aggressive disease, and you may need chemotherapy. And eventually, you would want to include everybody that comes through the door and just have an understanding of the activity of 7-1-7 in each little basket molecularly. So, we're not really narrowing the indications at this point. We're sort of studying all the indications with the appropriate combination, if needed, based on the molecular. Sorry if that wasn't clear before.

Is that kind of a new new things that you're thinking through and then just the ideas about potentially selling royalties I didn't know if you can just seems to be an increasing trend in this space.

Yeah. So on the equity piece, we get in these private companies or even new public companies. We don't think of them as investments, we think of them as getting stock in lieu of cash upfront payments.

For licensing of our technology, our licensing a preclinical asset for example in these cases, so it's really it's really when an entity wants to conserve cash and when we think the company has promised and could could grow in value in part based or maybe wholly based on the technology. We're licensing we like the equity piece.

Peter Richard Lawson: That's perfect. Thank you so much. It really helped.

Unnamed Speaker: Just a question around equity investment in an emerging stealth company. Is that kind of a new thing that you're thinking through? And then just the idea of potentially selling royalties. I don't know if you can. It just seems to be an increasing trend in the space.

In lieu of upfront payments.

So it's really just changing one element of a deal we would have and we have royalties on all of those and milestones built into those deals also.

And it just broadens the pool of people that we can get our technology into the hands of.

Bassil I. Dahiyat: Yeah, so on the equity piece we get in these private companies, or even, you know, new public companies, we don't think of them as investments. We think of them as getting stock in lieu of cash upfront payments, for licensing of our technology or licensing a preclinical asset, for example, in these cases. So it's really when an entity wants to conserve its cash and when we think the company has promise and could grow in value in part based or maybe wholly based on the technology we're licensing, we like the equity piece, in lieu of upfront payment.

Now on the selling of royalties you know, we're always assessing the options of how to maximize value in the different assets, we have whether they're financial assets like royalties our own programs.

No we're not.

Those are the kinds of things that.

Debt so.

So many different considerations, we really can't say anything specific.

Okay.

Perfect. Thanks, Thanks for taking the questions.

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Thank you. Our next question comes from Ziv can chew at Ehrenberg you May proceed with your question.

Bassil I. Dahiyat: So it's really just, you know, changing one element of a deal we would have. And we have royalties on all of those, and milestones built into those deals also. And it just broadens the pool of people that we can get our technology into the hands of. Now, on the selling of royalties, you know, we're always assessing the options of how to maximize value in the different assets we have, whether they're financial assets like royalties or our own programs. You know, we're not, those are the kinds of things that, with so many different considerations, we really can't say anything specific.

Thank you.

Afternoon, everyone. Thanks for taking my questions.

My first question is.

Mona ma'am.

The first line therapy combination study.

But for US if in fact, it's running their own from.

My study I guess just wanted.

For your thoughts there why why are you on.

You want to run your own frontline study you know what.

Do you think potentially debt can can beat our chop in the frontline.

Paul.

And then second question is five six for program Io too.

Bassil I. Dahiyat: Okay, perfect. Thanks. Thanks for taking the time to answer the question. Thank you.

I guess I want to hear your thoughts on why why do you think your your molecule potentially is better than any other io to ISI O. Two for autoimmune diseases out there and I guess for this year do you do you see a menu for you to present some of the biomarker data or even some of the activity data.

Unnamed Speaker: Thank you. Our next question comes from Zhiqiang Shu with Pernberg.

Zhiqiang Shu: You may proceed with your question. Thank you. Good afternoon, everyone.

Bassil I. Dahiyat: Thanks for taking my questions. My first question is on PlanModemab, the first-line DL-BCL combination study. I know Mephisto's Insight is running their own frontline study, but I guess I just want to hear your thoughts there.

This year. Thank you.

So on the frontline deal Bcl, we think that.

How these CD 20 cities regions combined with other agents is really completely unknown now and the opportunity to create a chemotherapy free regimen.

Bassil I. Dahiyat: Why do you want to run your own frontline study? And why do you think, potentially, that it can beat our job in the frontline DL-BCL? And then the second question is on the 5-6-4 program, IL-2. I guess I want to hear your thoughts on why you think your molecule potentially is better than any other molecule, bios IL-2 for autoimmune diseases out there? And I guess for this year, do you see a venue for you to present some of the biomarker data or even some of the activity data this year? Thank you.

As opposed to using our chop, but that opportunity. We think is very compelling because of the the drive and the interest in removing chemo.

From lymphoma therapy.

Toxicity concerns long term toxicity concerns. So we think just a strategic driver of having a chemo free regimen that potentially has very high activity is worth that shot to compete with the chemo containing R Chop Regiment.

Why is it better than R. Chop I think aside from being chemo free we.

He will we're gonna be very interest in seeing the synergies we have with an immune stimulant like lenalidomide right in with what happens with tap a city map hitting CD 19 versus other.

Bassil I. Dahiyat: So on the frontline deal BCL, we think that How these CD20, CD3 agents combine with other agents is really completely unknown now, and the opportunity to create a chemotherapy-free regimen, [inaudible] So we think just that strategic driver of having a chemo-free regimen that potentially has very high activity is worth that shot to compete with the chemo-containing RCHOP regimen. Why is it better than RCHOP? I think aside from being chemo-free, we will, you know, we're going to be very interested in seeing the synergies we have with an immune stimulant like lenalidomide, right? And with what happens with tapetitimab hitting CD19 versus, of the CD20. Now on.

CD 20.

Yeah.

Now great John.

Alan do you want to add anything or is that sufficient so I go to the IL two.

I guess, the only thing I could add is I mean, if you look at the data from the toughest sit them Atlanta lit up my combination. The response rate in relapsed refractory was approaching what Kofi a observed in his original R. Chop study in the frontline. So there is this possibility that adding a CD 20, Inc.

Set of CD 20 by specific instead of a CD 20 antibodies could potentiate that.

It's very early but we're excited.

Something that we're very keen on doing sorry, Basel effect here no no that's great and then IL two.

We we believe that the lower the potency you can design into your cytokines in this case IL two.

Bassil I. Dahiyat: Yeah, Allen, do you want to add anything, or is that sufficient? Should I go to aisle two?

Better Tolerability youll see and the longer duration of action and in particular, when you fuse for a long acting FC extend the Pharmacodynamic effect. That's hypothesis, we've seen proven pre clinically with both our IL 15, and IL two and we believe that does create a potential for a best in class.

Allen S. Yang: No, I guess the only thing I could add is, I mean, if you look at the data from the tafacitamide-lenalidomide combination, the response rate in relapsed refractory patients was approaching what Kofiei observed in his original R-CHOP study in the front line. So, there is this possibility that, you know, adding a CD20 instead of a CD20 bispecific instead of a And, you know, again, it's very early, but we are excited. And it's something that we were very keen on.

Best in class therapeutic profile on both the Tolerability side as well as the duration of action of boosting your target cells.

That's the hypothesis again pre clinically it's exact same strategy with them.

With our our IL 15 X men for 306, we hope it plays out here as well.

On day to this year, we can guide on that and we plan to what our initial data timing is going to be as we strive to trial, we'll give further updates.

Bassil I. Dahiyat: We believe that the lower the potency you can design into your cytokine, in this case IL-2, the better tolerability you'll see and the longer duration of action, and in particular when you fuse to a long-acting FC, extend the pharmacodynamic effect. That's the hypothesis we've seen proven pre-clinically with both our IL-15 and our IL-2, and we believe that does create the potential for a best-in-class therapeutic profile on both the tolerability side as well as the duration of action of boosting your target cells. That's the hypothesis. Again, preclinically, it's the exact same strategy with our IL-15 XMEM 306.

Great.

Clarify for both for Io to an IL 15 program.

FC domain.

These inc. Activate it correct. It has it's got no FC gamma receptor binding it that's been completely.

Bladed and it has long half life from our extend technology.

Got it okay. Thank you very much thank you.

Thank you and I'm not showing any further questions at this time I would now like to turn the call back over to vessel.

For any further remarks.

Thanks, so much and thank you everybody for joining us today have a wonderful evening and we look forward to updating you more over the course of the year.

Bassil I. Dahiyat: We hope it plays out here as well. On data this year, we can guide on that, and we plan on what our initial data timing is gonna be as we start the trial. We'll give further updates.

Goodbye.

Okay.

Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

Zhiqiang Shu: Great. Just to clarify, both for the IL-2 and IL-15 programs, the FCE domain is inactivated. Is that correct?

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Bassil I. Dahiyat: It's got no FC-gamma receptor binding, it's been completely ablated, and it has a long half-life due to our Xtend technology.

Zhiqiang Shu: Got it. Okay, thank you very much. Thank you.

Unnamed Speaker: Thank you.

Bassil I. Dahiyat: Thank you, and I'm not showing any further questions at this time. I would now like to turn the call back over to Basil Dahiyat for any further remarks.

Unnamed Speaker: Thanks so much, and thank you everybody for joining us today. Have a wonderful evening, and we look forward to updating you more over the course of the year. Bye-bye.

Unnamed Speaker: Thank you. Ladies and gentlemen, this concludes today's conference.

Unnamed Speaker: Allen Yang, John Kuch, Charles Liles, John Desjarlais, Edward Tenthoff, Dane Leone, Alec Stranahan, David Nierengarten, Dylan Drakes, Matt Kemper, Kurt Kharouf, Xencor Inc.

Hum.

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Yes.

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