Q1 2021 Xencor Inc Earnings Call

[music].

Good day, and thank you for standing by and welcome to the Q1 2021 Suncor conference call. At this time, all participants are in a listen only mode.

Operator: Good day, and thank you for signing by. Welcome to the Q1 2021 Xencor conference call.

Operator: 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 this 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 zero. I would now like to hand the conference over to your speaker today, Mr. Charles Liles, Head of Corporate Communications and Investor Relations. Sir, please go ahead.

After the speaker's presentation, there will be a question and answer session cash.

Ask the question during the session you will need to press star one on your telephone.

Please be advised that today's conference is being reported.

If you require any further assistance. Please press star zero and I would now like to hand, the conference over of gears teacher of today, Mr. Charles Liles head of corporate Communications and Investor Relations. Sir. Please go ahead.

Thank you and good afternoon earlier.

Charles Liles: Thank you and good afternoon. Earlier today, we issued a press release that outlines 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 partnership news. Allen Yang, Chief Medical Officer, will review clinical updates, and John Kuch, Chief Financial Officer, will review financial results.

Earlier today, we issued a press release, which outlines the topics we plan to discuss today.

The press release is available at www dumped and core dotcom.

Good day, and our call doubtful debt, yet president and Chief Executive Officer will provide of corporate overview from both of them.

For your recent partnership news and.

Yeah, and Chief Medical Officer will review clinical updates and John Kush, Chief Financial Officer will review financial results and then we'll open up the call for your questions.

Charles Liles: And then we'll open up the call to your questions. 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, 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.

Before we begin I would like to remind you that during the course of this conference call and core.

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 future operations, the company's partnering efforts capital requirements future product offerings, and research and development programs and the impacts of the COVID-19 pandemic on these topics.

The forward looking statements are not historical facts, but rather of 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 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.

Charles Liles: These forward-looking statements are not historical facts but rather are 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. With that said, let me pass the call over to Basil. Thanks, Charles, and good afternoon, everyone.

Contained and the risk factors section of our most recently filed annual report on form 10-K, and quarterly report on form 10-Q 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 extra of protein engineering platform is it's built on our extensive protein engineering knowhow combined with our suite of X Nab of FC domain, which we used to build novel molecular structures improve natural protein and antibody functions and create new mechanisms of therapeutic action.

Bassil I. Dahiyat: 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 know-how, 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 in biology so we can select the most promising programs to take forward.

The plug and play the portability of our X amount of FC domains, 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.

We've been focusing on work on the expansion and use of our extra of bi specific platform. The newest X amount of component to create antibodies that bind two or more different antigen and simultaneously and also the engineered cytokines with structures optimized for particular therapeutic uses.

Bassil I. Dahiyat: We've been focusing our work on the expansion and use of our XMAP-Bi-specific platform, the newest XMAP component, to create antibodies that bind two or more different antigens simultaneously and also to engineer cytokines with structures optimized for particular therapeutic use. Now, our many partnerships really highlight its plug-and-play nature.

Now on many partnerships really highlighted the plug and play nature. Currently we have 15 ongoing partnerships for X amount of technology, which have now resulted in two marketed products Alexia on the ultra mirrors for rare blood disorders and more for US just as much UV is the first second line treatment for patients with diffuse large b cell lymphoma.

Just this past March our partner beer biotechnology with its partner GSK submitted an emergency use authorization application to the FDA for beer 73, one their anti Sars COVID-19 two antibodies and incorporates our extend FC technology.

Bassil I. Dahiyat: Currently, we have 15 ongoing partnerships for XMAB technology, which have now resulted in two marketed products. Alexion's Ultimuris is for rare blood disorders, and Morphosis's Monjuvi is the first second-line treatment for patients with diffuse large B-cell lymphoma. Just this past March, our partner VeeR Biotechnology, with its partner GSK, submitted an emergency use authorization application to the FDA for VeeR 7831. Their anti-SARS-CoV-2 antibody incorporates our Xtend FC technology. Based on an interim analysis of the Phase 3 Comet ICE trial, which demonstrated an 85% reduction in hospitalization or death in high-risk adult outpatients with COVID-19 receiving VIIR7831 as mammotherapy compared to placebo, the primary end point of the trial, by the way. Extend was integrated into VIIR 7831 for the purpose of reducing the dose administered and potentially enhancing its lung tissue bioavailability.

Based on an interim analysis of the phase III common ice trial, which demonstrated and 85 per cent reduction in hospitalization or death and high risk of adult outpatients with COVID-19, receiving beer 70, 31 as monotherapy compared to placebo. The primary endpoint of the trial by the way.

And now extend was integrated into Veer 73, one for the purpose of reducing the dose administered and potentially enhancing its lung tissue bioavailability.

This partnership exemplifies our commitment to enabling the broad use of X amount of C technologies outside our core focus of oncology and autoimmune diseases and demonstrates.

Net vast applicability to underserved areas like serious infectious disease now.

Now if authorized share 73 of them would then become the third antibody with our accident and technology to reach the market.

And switching back to internal programs. We are currently running seven phase one studies evaluating <unk> bispecific antibodies and cytokines. This way, we're taking multiple simultaneously simultaneous shots on goal of the clinic and the proof of concept data, we generate will guide, which programs, we independently advance, which we partner and which we will terminate all of the Allen Yang our chief medical.

The loss of review updates for our clinical portfolio.

Alan.

Thanks, Pavel since our last update about two months ago, we dosed the first subject in the phase one study of X amount of five six for our wholly owned IL two FC fusion engineered to selectively activate regulatory T cells or T. Regs for the treatment of autoimmune diseases and the goal of and IL two therapy for all of them and deep autoimmune.

The use is to provide sustained low intensity activation of T regs, while avoiding the pro inflammatory systemic activation of effector T cells and.

Bassil I. Dahiyat: This partnership exemplifies our commitment to enabling the broad use of XMAB-FC technologies outside our core focus of oncology and autoimmune diseases and demonstrates XMAB's vast applicability to underserved areas like serious infections. If approved, VR7831 would then become the third antibody with our XMAP technology to reach the market. Now switching back to internal programs, we're currently running seven phase one studies evaluating XMAP, bispecific antibodies, and cytokines. This way, we're 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. I'll let Allen Yang, our Chief Medical Officer, review updates for our clinical portfolio. Allen?

On the IL two therapy, but of selected for T regs with and expanded therapeutic window of compared to historic IL. Two approaches would have broad potential across many different autoimmune diseases and preclinical studies indicate this may be the case for our program.

It is engineered with reduced the potency to improve tolerability and prove.

And prove duration of action for this normally toxic cytokine.

And using our X mab paradigm and how is the Heterodyne America see domain and extend technology enhances the half life.

Thanks, Matt and 564 is now our second side of claim on the clinic joining ex map three of six our engineered IL 15 for oncology that is partnered with Genentech. The single ascending dose study will characterize the safety Tolerability and pharmacokinetics of X amount of 564 and healthy volunteers and will include and analysis of key immuno modules.

And for Biomarkers.

For the remainder of the year and into early 'twenty to 'twenty. Two we are planning to initiate several additional clinical studies to advance our wholly owned the bi specific antibody drug candidates.

First for X amount of southern one seven and our PD one seat till like for dual checkpoint Bispecific antibody and mid 2021, we plan to initiate the phase III study for patients with certain molecular subtypes of castration resistant prostate cancer as monotherapy or in combination depending on the subtype as these patients represent a high unmet medical.

Allen S. Yang: Thanks, Basil. Since our last update about two months ago, we dosed the first subject in the phase one study of XMAP564, our wholly owned IL-2FD fusion engineer, to selectively activate regulatory T-cells, or Tregs, for the treatment of autoimmune diseases. The goal of an IL-2 therapy for autoimmune disease is to provide sustained, low-intensity activation of Tregs while avoiding the pro-inflammatory systemic activation of effector T-cells. An IL-2 therapy that is selected for Tregs, with an expanded therapeutic window compared to historic IL-2 approaches, would have broad potential across many different autoimmune diseases, and preclinical studies indicate this may be the case for our program It is engineered with reduced potency to improve tolerability and improve duration of action for this normally toxic cytokine, and using our XMAB heterodimeric FC domain and Xtend technology enhances its half-life.

<unk> need.

Previously this was planned as the phase <unk> study, but we have transitioned to a phase II study.

We continue to expect that we will present more data from the ongoing phase one study expansion cohorts later this year as the data mature and two the study we have added an additional cohort of patients with relapsed or refractory melanoma with the more tightly defined disease population.

Part tied to the map our CD three by specific antibody that targets. The tier two we plan to initiate clinical study and patients with Merkel cell carcinoma, and small cell lung cancer.

<unk> expressing tumor types known to be responsive to immunotherapy and mid 2021 due to our COVID-19 related staffing issue at the study site study startup activities were delayed by a few months.

Shifting to promote them out under our strategic clinical collaboration with Morphosis, we are investigating the chemotherapy free triple combination of promote about our CD 20 by CD three by specific antibody with top of spit them out and Lenalidomide and patients with certain lymphomas, we plan to initiate the first of these studies and patients with.

The refractory diffuse large b cell lymphoma, and aggressive type of non Hodgkin's lymphoma and late 2021 for early 2022. Once we have finalized the recommended dose and our ongoing phase one study and complete operational preparations for the multinational trial, we plan to present updated data from the phase One study later this year.

Allen S. Yang: XMAP564 is now our second cytokine in the clinic, joining XMAP306, our engineer IL-15 for oncology that is partnered with Genentech. This single ascending dose study will characterize the safety, tolerability, and pharmacokinetics of XMAP564 in healthy volunteers, and will include an analysis of key immunomodulatory biomarkers. For the remainder of the year and into early 2022, we are planning to initiate several additional clinical studies to advance our wholly owned, bi-specific antibody drug candidates.

Briefly for X Mab 698, a CD 38 by CD three by specific antibody, which was formerly known as Amgen's AMG for Q4, we plan to support the investigator initiated studies and a new study is currently being planned to start later in 2021.

Last we anticipate filing an IND for <unk> 819 R. E. M. P. Three by city three by specific for renal cell cancer later, this year and initiating a phase one study in early 2022.

819 uses of our multi day like to buy one and by specific format, which has two antigen binding domains for the tumor target providing more selective binding for the high and P. P. Three density expression on tumor cells compared to the lower density on normal cells. The <unk>.

Allen S. Yang: First, for XMAP717, our PD1C-TLA4 dual-checkpoint bite-specific antibody, in mid-2021, we plan to initiate a Phase II study for patients with certain molecular subtypes of castration-resistant prostate cancer as monotherapy or in combination, depending on the subtype, as these patients represent a high unmet medical need. Previously, this was planned as a Phase 1B study, but we have We continue to expect that we will present more data from the ongoing Phase I studies expansion cohorts later this year as the data mature.

Finding productivity of the X map two plus one format extends.

Extends the range of targets amenable for CD three by the specifics for example, our partner Amgen's AMG 509 program partying steep one and prostate cancer uses this format.

In summary, we continue to advance our pipeline and by graduating molecules into phase two and on.

We're bringing new and novel agents into the clinic.

Paul.

Thanks, Alan and now we're always looking to grow this pipeline with new programs as we have with our IL two T Reg and E&P P. Three programs and Allen just mentioned.

And along this front last month at the ACR annual meeting, we presented data from for preclinical stage programs, including our third cytokine and IL 12 FC fusion protein for oncology two additional <unk> two plus one CD three by specific antibodies these warrants target cloud and six and <unk>.

Allen S. Yang: And to this study, we have added an additional cohort of patients with relapse or refractory melanoma with a more tightly defined disease population. For Tidudumab, our CD3 bispecific antibody that targets SSTR2, we plan to initiate clinical studies in patients with Merkel cell carcinoma and small cell lung cancer, SSTR2-expressing tumor types known to be responsive to immunotherapy in mid-2021. Due to a COVID-19-related staffing issue at the study site, study startup activities were delayed by a few months.

<unk> three as well as our PD L blend by CD 28 by specific program all for posters are available on our website.

Now I'd like to take a moment to review this targeted the CD 28 platform, which is the new class of T cell engage your designed to complement other mechanisms of T cell activation, such as checkpoint inhibition of CD three engagement.

CD 28 is the key immune stimulatory receptor on T cells, but it has been difficult and the path to safely and effectively engage therapeutically.

By targeting of CD, 20, and binding domain to of tumor by using the bi specific antibody we have to boost the activity of T cells and of tumor specific way to enhance T cell directed therapies.

The most advanced wholly owned lead CD 28, Kennedy to the <unk> III by CD 28 by specific antibody for potentially broad solid tumor use including and prostate cancer will be seven to eight of these highly express just the molecules.

Allen S. Yang: Moving to plomodimab, under our strategic clinical collaboration with Morphosis, we are investigating the chemotherapy-free triple combination of plomodimab, our CD20 by CD3 bispecific antibody, with papastidimab and lenalidomide in patients with certain lymphomas. We plan to initiate the first of these studies in patients with relapse or refractory diffused large B-cell lymphoma, an Once we have finalized the recommended dose in our ongoing Phase 1 study and completed operational preparation for the multinational trial, we plan to present updated data from the Phase 1 study later this year.

Molecules advancing through preclinical development now.

Of course, the focus of our new collaboration with Janssen that we announced a few months ago is to discover of CD 28, bispecific antibody against the prostate tumor target.

The core part of our business is the complement our internal development portfolio with partners like Janssen and many of the leading companies and the industry. 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 of partnering revenue that we were aware of during the first quarter, but we'll continue to monitor potential impacts of course.

Last quarter, we disclosed the we had entered into a license agreement with the privately held company, which remained undisclosed at that time now we can disclose at this company at <unk> Biopharma, our new cross border company developing immune based therapies for patients in China and around the world. We granted the worldwide rights to develop three preclinical programs incorporating X amount of FC demands for development of <unk>.

Allen S. Yang: Briefly, for XMAB698, a CD38-by-CD3-by-specific antibody, which was formerly known as Amgen's AMG424, we plan to support investigator-initiated studies, and a new study is currently being planned to start later in 2021. Last, we anticipate filing an IND for XMAB819, or ENPP3 by CD3 bispecific, for renal cell cancer later this year XMAB819 uses our multivalent 2-by-1 bispecific format, which has two antigen binding domains to the tumor target, providing more selective binding for the high ENPP3 density expression on tumor cells compared to the lower density on normal cells. The binding selectivity of the XMAB2-plus-1 format extends the range of targets amenable to CD3 bispecifics.

Autoimmune diseases, we received the 15% equity interest and the company and are eligible for royalties.

We also entered the new academic collaboration last quarter with UCLA to extend the use of our <unk> technology pairing novel targets proposed by scientists UCLA and then of course module suite of X amount of technology platforms, what we've done and establish a framework with predefined terms to enter sponsored research agreements and potential license agreements to <unk>.

<unk> and expedite any potential drug candidates that are selected for further development for you.

CLA agreement is our third collaboration Cook's novel target biology to create a new generation of X <unk> Bispecific antibodies, joining those we've entered with the <unk> and MD Anderson and.

And with that I'll hand, the call over to John Kuch, Our Chief Financial Officer, who will review key highlights from our first quarter financials John.

Thank you Bassil <unk>.

<unk> broad protein engineering platform of resulting partnerships and collaborations continue to generate revenue and provide value to support our growing portfolio of clinical and research stage by the civic antibody and cytokine drug programs.

Cash cash equivalents and Rockford.

Marketable investment securities totaled $577 1 million all of the March 31 2021.

For the 600 of 4 million on December 31, 2020.

Bassil I. Dahiyat: For example, our partner, Amgen's AMG509 program, targeting C1 in prostate cancer, uses this format. In summary, we continue to advance our pipeline by graduating molecules into Phase II and are bringing new novel agents into the clinic. Basil.

The decrease reflects royalties and milestone payments received related to licensing agreements net of cash used to fund the operating activities for the first quarter.

Based on current operating plans, we expect to have cash from research and development programs and operations and the 'twenty 'twenty four and we currently estimate that we will end 2021 with between 425 and $475 million of cash and cash equivalents.

Bassil I. Dahiyat: Thanks, Allen. Now, we're always looking to grow this pipeline with new programs, as we have with our IL-2 T-REG and ANPP-3 programs that Allen just mentioned. On this front, last month at the AACR annual meeting, we presented data from four preclinical stage programs, including our third cytokine, an IL-12 FC fusion protein for oncology, two additional XMAP 2 plus 1 CD3 bispecific antibodies that target Cloudin 6 and GPC 3, as well as our PD-L1 by CD28 bispecific program. All four posters are available on our website.

Total revenue for the first quarter were $34 million compared with $32 4 million for the same period of 2020.

Revenues for the first quarter include revenue related to our Janssen collaboration milestone revenue recognized from our focus on the royalty revenue from Alexia on the more potent.

And the ruggedness from the same period, and 2020, which were primarily milestone revenue from our closest royalty revenue from Blackstone and licensing revenue from our immune and gilead collaborations.

Research and development expenditures for the first quarter were $41 4 million compared to $33 9 million for the same period and 2020.

The increase was primarily due to increased spending on our ex net three of six X and the $5 six for and X net 819 programs.

Bassil I. Dahiyat: Now I'd like to take a moment to review this targeted CD28 platform, which is a new class of T-cell engager designed to complement other mechanisms of T-cell activation, such as checkpoint inhibition or CD3 engagement. CD28 is a key immune co-stimulatory receptor on T cells that has been difficult in the past to safely and effectively engage therapeutically. By targeting a CD28 binding domain to a tumor by using a bispecific antibody, we hope to boost the activity of T-cells in a tumor-specific way to enhance T-cell directed therapy.

General and administrative expenses for the first quarter were $8 2 million compared to $7 2 million in the same period of 2020 the.

Increased primarily being related to an increase and staffing.

Other income for the first quarter of 2021 was $13 2 million and included the gain of $12 9 million and equity received in connection with the licensing transaction compared to <unk> 7 million for the same period, and 2020, which book, which was primarily net interest income earned from the tier.

John.

The net loss for the first quarter was $2 5 million or for cents on the please moving per share basis compared to a net losses of $8 1 million of 14th kind of police.

Per share basis for the same period of 2020.

The lower net loss reported for the first quarter of 2021.

Net loss for the same period 2000, Twenty's, primarily due to the other income recognized from equity received and the first quarter of 21.

Bassil I. Dahiyat: Our most advanced wholly owned lead CD28 candidate is a B7H3 by CD28 bispecific antibody for potentially broad solid tumor use, including in prostate cancer, where B7H3 is highly expressed. This molecule is advancing through clinical development now. Of course, the focus of our new collaboration with Janssen that we announced a few months ago is to discover a CD28 biospecific antibody against a prostate tumor target. A core part of our business is to complement our internal development portfolio with partners like Janssen and many other leading companies in the industry.

And excess of increased spending on research and development expense for the period.

Noncash share based compensation expense for the first quarter was $8 3 million compared to $6 five day for the same period in 2020 and.

And total shares outstanding were $58 2 million as of March the first 2021 third and $57 million as of March the first 2020.

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

Thank you Sir.

As a reminder to ask the question you want and need to press star one on your it tell us on to.

And you would write your questions you May press the pound key.

Please standby, while we compile the Q&A roster.

And speakers you have you on your first question from Chad can't turn off.

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 partnering revenue that we were aware of during the first quarter, but we'll continue to monitor potential impacts, of course. Last quarter, we disclosed that we had entered into a license agreement with a privately held company, which remained undisclosed at that time. Now, we can disclose that this company is Xenus Biopharma, a new cross-border company developing immune-based therapies for patients in China and around the world.

Of Piper Sandler.

Sir Please ask your question.

Great. Thank you very much from what the code for what's the.

The total.

And whether or not we should anticipate.

And the update.

From the Roche program for IL 15 this year.

And going back to them.

The PD one.

And.

And of course for everyone.

Kevin.

We'll be getting country kit for data, but what other cohorts could we expect from that this year. Thanks, so much guys.

Hey, Thanks, Ted so regarding our X amount of 306, IL 15 program that's the on.

College of collaboration with Genentech, We we are discussing of publication plan with Genentech, We don't have specific guidance for timing of data. This year I will point out that the dose escalation in.

Bassil I. Dahiyat: We granted them worldwide rights to develop three preclinical programs incorporating XMAB FC domains for development in autoimmune diseases. We received a 15% equity interest in the company and are eligible for royalties. We also entered a new academic collaboration last quarter with UCLA to extend the use of our XMAP technology, pairing novel targets proposed by scientists at UCLA with Xencor's modular suite of XMAP technology platforms. What we did was establish a framework with predefined terms to enter sponsored research agreements and potential license agreements to streamline and expedite any potential drug candidates that are selected for further development. UCLA Agreement is our third collaboration focusing on novel target biology to create a new generation of exonab-specific antibodies.

A broad range of solid tumor patients continues monotherapy, which was started last march as well as the we're continuing the dose escalation as a combination with the Tesla lives of Mab and.

There are PDL, one molecule, which started in Q4. So those are ongoing we'll come up with guidance. Once we have agreement with Genentech on the publication plan as well as of course, keeping people abreast of any additional study starts that happen over the next over the next year.

With regard to X amount of 707 of our PD, one <unk> four molecule and yes, there are going to be additional cohorts that we have disclosed data for from from the expansion cohorts of the phase. One study. So in addition to the much more mature data set from our prostate cancer cohort will have.

Our more mature dataset was only partially and rules for a renal cell carcinoma cohort as well as more mature data from our basket cohort of multiple tumors that are not and PD one approved indications.

So we would expect all of that and the second half of this year.

John J. Kuch: Joining those we've entered are TRACA and MD Anderson. Now, with that, I'll hand the call over to John Kuch, our Chief Financial Officer, who will review key highlights from our first quarter financials.

Awesome. Thank you so much and then.

The the CIL to go into the clinic.

Yes, we are too.

Okay.

And speakers our next question from Mara Goldstein of Mizuho Securities.

Ma'am your line is open.

Great and you hear me.

Yes.

Awesome. Thank you.

I wanted to ask on two things. The first is around the strategy of converting that day.

John J. Kuch: Thank you, Basil. Xencor's broad protein engineering platform and resulting partnerships and collaborations continue to generate revenue and provide value to support our growing portfolio of clinical and research staged by Civic Antibody and Cytokine Drug Program. Cash, Cash Equivalents, and Marketable Investment Securities totaled $577.1 million as of March 31, 2021, compared to $604 million on December 31, 2020. The decrease reflects royalties and milestone payments received related to licensing agreements made with cash used to fund operating activities for the first quarter.

And of prostate cancer of the phase two and what you will achieve by that and then the second is around the cytokines strategy and clearly we're seeing the beginnings of a lot of on a lot of early work.

With novel engineered cytokines, and the like and so I'm just curious the Cisco did the what youre thinking from a competitive perspective, and a and a competitive advantage using that as a matter of technology. As you are versus let's say engineered cytokines and other of fusion proteins and the like.

Yep, So I guess on the first question the the shift of the excess of 707, PD, one and two to like for a study in prostate cancer that multi <unk>.

Basket study why shifts with phase one beat of phase two.

And my understanding and Alan you should pipe in here was that it was simply a better reflection of what the study actually was doing given that we have the go forward dose we selected for that study.

John J. Kuch: Based on current operating plans, we expect to have cash to fund research and development programs and operations into 2024, and we currently estimate that we will end 2021 with between $425 and $475 million in cash and cash equivalents. Total revenues for the first quarter were $34 million compared to $32.4 million for the same period in 2020. Revenues in the first quarter include revenue related to our JANTA collaboration, milestone revenue recognized from Morphosis, and royalty revenue from Alexia on Morphosis. This compares with revenues from the same period in 2020, which were primarily milestone revenue from Morphosis, royalty revenue from Lexian, and licensing revenue from our Amun and Gilead collaboration.

The merely that anything to add Allen.

Yes, no. It is a little bit of nomenclature remember of phase one be it could be looking at combination. So we've already sort of disclosed debt. This will explore 71, seven and what sort of key combinations of either chemotherapy or targeted agents.

And then you called out of phase, one b or of phase two with the safety run and I think the phase two of the better accurate description, we sort of know our dose we know the combinations, we want to try and we're really looking for a signal and certain sort of molecular subgroups for clinical subgroups of prostate cancer and so it's more reflective of phase two and planning to go.

Two of eventual of phase III.

Yeah on your second question Mara for the.

The cytokines and the strategy, we're taking for this really rapidly evolving and growing field of engineered cytokines.

And I'll, maybe ask John day for Lai, who is actually on the call here to answer questions to chime in about how our design strategy has some commonalities for how we're looking at all of the cytokines.

And yet how we're tweaking it for the individual ones. We agree it's a really exciting area, which is why we're committing a lot of of additional efforts and resources there John.

John when you go to that yeah sure Basil Tomorrow.

And when we first tackle the IL 15.

We went and we fused out 15, two and F C to make a long acting cytokines and we made a critical key discovery debt.

Natural cytokines are limited and the ability to stay around very long and circulation and.

John J. Kuch: Research and development expenditures for the first quarter were $41.4 million, compared to $33.9 million for the same period in 2020. The increase is primarily due to increased spending on our XNAB 306, XNAB 564, and XNAB 819 programs.

So the solution, we came up with was to decrease the potency fairly dramatically.

And in doing so we found out that we actually make a much better drug.

Last a lot longer and circulation and because of the last longer even though slower post the fed actually mediate its part of the apology for a longer period of time.

Also.

The benefit of that it is potency, we book as much better tolerability and much much better control over toxicity.

Escalate.

John J. Kuch: General administrative expenses for the first quarter were $8.2 million compared to $7.2 million in the same period of 2019, the increase primarily being related to an increase in staff. Other income for the first quarter of 2021 was $13.2 million and included a gain of $12.9 million in equity received in connection with the licensing transaction, compared to $0.7 million for the same period in 2020, which was primarily net interest income earned for the period.

Turned around and applied that same concept for the all of two program. Our T. Reg expander found exactly the same result that we got dramatic improvements and pharmacokinetics and pharmacology when we reduced the potency.

So far that seems to be playing out really nicely with the IL 12 program as well as we detailed on our ACR poster. So that's the of unifying theme is and which.

<unk> seems to be pretty unique and the community is going with longer acting lower patency multiples.

Thank you I appreciate that.

Yeah.

And speakers. Your next question some detail losses of Barclays. Sir Your line is open.

Great. Thanks for taking the questions for me.

Thanks.

John J. Kuch: The net loss for the first quarter was $2.5 million, or $0.04 on a fully diluted per share basis, compared to a net loss of $8.1 million, or $0.14 on a fully diluted per share basis, for the same period in 2020. The lower net loss reported for the first quarter of 2021 compared to the net loss for the same period in 2020 is primarily due to other income recognized from equity received in the first quarter of 21, in excess of increased spending on research and development expenses for the period.

Just on I O two when can we see data around that and kind of how do you think about pick and particular tumors and combination pumps and stuff.

Oh, well our IL two is targeting activation of regulatory T cells. So that's our program focused and autoimmune disease or IL 15 is the one that is the collaboration with Genentech is our play with the cytokine for activating T cells, along that same pathway. So do you want.

Do you want us to talk about the IL 15, or do you want to talk about the five six for program or Alex I'm. Just curious if you. If you think of the illusion that IL two is well into oncology or no. No. We don't have any intention to do that at its biology is really tuned as John said.

John J. Kuch: Non-cash share-based compensation expense for the first quarter was $8.2 million compared to $6.5 million for the same period. The total number of shares outstanding was $58.2 million as of March 31, 2021 compared to $57 million as of March 31, 2021.

Well I guess, John it's tuned for potency, but and in addition for that IL two molecule. We actually took the direction like some of our some other companies that are looking at the same approach of increasing the the relative binding affinity to the inhibitory well to the receptor that's more prevalent with expressed on.

The regulatory T cells, the the IL two alpha receptor. So we really feel that's much more appropriate for auto immune indications and we haven't yet guidance specifically on when we expect to have data from the single ascending dose essentially it's a biomarker and safety study the initial work and the clinic with that molecule could be later this year, but we'll guide.

Operator: With that, we would now like to open up the call for questions. Thank you, sir.

Operator: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, you may press the pound key.

Specifically as we as we get a little further into this day, we just opened the study.

Operator: Please stand by while we compile the Q&A roster. And speakers, you have your first questions from Ted Tenthoff of Piper Chandler. Sir, please ask your question. Craig

A week ago.

Right and then.

The piece of it.

<unk> three kind of shortcut.

I think you took for the for and just curious where that is and what are you thinking of.

Edward Andrew Tenthoff: Great. Thank you very much, and thanks so much, guys. So much exciting stuff going on.

<unk> the construct yeah I'll touch on the timeline and then if John wants to jump in on on.

And how we're positioning it so that molecule, we hope to have and the clinic and 2022 of its an active preclinical development now with all of the requisite manufacturing scale of active activity is just getting started.

Edward Andrew Tenthoff: I'm wondering whether or not we should expect an update for the Roche program for IL-15 this year. And also, just going back to... Petey Warren, CTLA-4717, we'll be getting prostate cancer data, but what other cohorts could we expect from that this year? Thanks so much. Hey, thanks, Ted.

John.

Yeah in terms of the thinking about applying that the reason we select the <unk> three of the target is it very broadly the very brightly expressed across a range of solid tumors and we wanted a molecule that we could.

We could use to target too.

Tumors get tumor specific CD 28, co stimulation, which is your signal two and.

Bassil I. Dahiyat: So, regarding our XMAB 306 IL-15 program, that's the oncology collaboration with Genentech, we are discussing a publication plan with Genentech. But we don't have specific guidance for timing of data this year. I will point out that the dose escalation in a broad range of solid tumor patients continues monotherapy, which was started last March, as well as we're continuing the dose escalation as a combination with teslizumab, their PD-L1 molecule, which started in Q4. So those are ongoing processes.

And then you can use debt to build on whatever signal one is being provided right and that signal one can be provided either by just natural T cell activity against the neo antigens in which case you would probably want to be exploring that piece of it is true CD 28, and a PD one combination study.

For signal one could come from any one of our T cell engaging the classic CD three buys civics.

And in our solid tumor pipelines and the first of which will be on the P. P. Three by CD three.

And.

And I guess beyond that I would also say be 73 is particularly interesting target and prostate cancer, it's very bright there.

Bassil I. Dahiyat: We'll come up with guidance once we have agreement with Genentech on the publication plan, as well as, of course, keeping people abreast of any additional study starts that happen over the next year. With regard to XMAP717, our PD-1CHLA4 molecule, yeah, there are going to be additional cohorts that we disclose data for from the expansion cohorts of the Phase I study. So in addition to a much more mature data set from our prostate cancer cohort, we'll have a more mature data set that was only partially enrolled in our renal cell carcinoma cohort, as well as more mature data from our basket cohort of multiple tumors that are not in PD-1 approved indications. So we would expect all of that in the second half of the study. Awesome. Thank you so much. I'm excited to see IL-2 go into the clinic. Yes, we are too.

And we of course would want to explore that and prostate cancer as well.

Great. Thanks, so much thanks for taking the questions. Thanks Peter.

And speakers our next question from Elyse, Yeah Young of Cantore Ma'am your line is open.

Oh, Hey, guys. Thanks for taking the call. This is lee on for the ATM.

I have a follow up on the IL two program.

Since you just recently got it and the trial can you just talk a little bit about.

In Ohio of molecule is differentiated from others and the space and what advantages that you expect to see and the clinical setting.

Right. So the the design follows the the rule of our cytokine engineering, John sort of laid out which was.

And it's taken the natural IL, two molecule and making mutations and it to dramatically dialed down its potency I think where we're north of a 100 fold.

A less potent than wild type IL, two fused to an FC domain and now the things that makes this particularly well suited for.

Mara Goldstein: And speakers, your next question from Mara Goldstein of Missoula Security. Ma'am, your line is open.

For for autoimmune diseases are of protein engineers biased the binding to actually have a significantly higher per our ratio of binding to the CD 25 of our IL two or IL two alpha receptor and then to the IL two beta gamma receptors that receptors is it heavily expressed on regulatory T cell.

Mara Goldstein: And so I'm just curious as to sort of what you think from a competitive perspective and a competitive advantage using, you know, the XMAG technology as you are versus, let's say, engineered cytokines and other fusion proteins and the like.

Tobias of towards T. Reg so how do our designs differ from the.

Bassil I. Dahiyat: So, I guess, on the first question, the shift of the XNAV717 PD-1 CTLA-4 study in prostate cancer, that basket study, why did they shift from a Phase I B to a Phase II? My understanding, and Allen, you should pipe in here, was that it was simply a better reflection of what the study actually was doing, given that we had the go-forward dose we selected for that study. That's all. Yeah, no; it is a little bit of nomenclature.

Sort of what's the positioning we hope that are dramatically lowered potency as well as our FC domain, which contains our extend technology gives us and enhanced therapeutic window, we won't know until we see and that we can get.

Excellent T Reg amplification.

And the John Am I missing anything on Oh and.

And maybe John if you want to comment on the monomeric IL, two nature and how that's distinctive and the industry.

Yeah, no that's a good point so we.

We designed our using our FC heterodyne Mers, which enables this we designers to only have a single aisle to for the FC domain, whereas competitors like like Amgen or other of our per caps.

Allen S. Yang: Remember, phase 1B could be looking at combinations. So we've already sort of disclosed that this will explore 717 in combination with sort of key combinations of either chemotherapy or targeted agents. And, you know, whether you call that a Phase 1B or a Phase 2 with a safety run, and I think a Phase 2 is a better, more accurate description, we sort of know our dose, we know the combinations we want to try, and we're really looking for a signal in certain sorts of molecular subgroups or clinical subgroups of prostate cancer.

And with all too we think having the monovalent IL two actually helps reduce internalization through receptor binding.

Sort of go to kind of of classic paradigm in terms of.

Biologics and internalization.

And so bottom line is again, we applied our potency of reduction monomeric IL two.

And we would hope that we have highly competitive or even best in class pharmacokinetics and pharmacodynamics.

Okay, great Thanks and.

And and I have another question on your IL 12 program I know its pre.

Allen S. Yang: So it's more reflective of Phase 2 and planning to go to eventual Phase 3. Yeah, now on your second question, Mara, about the cytokine strategy we're taking for this really rapidly evolving and growing field of engineered cytokines, I'll maybe ask John Desjarlais, who's actually on the call here to answer questions, to chime in about, you know, how our design strategy has some commonalities for how we're looking at all the cytokines, and yet, you know, We agree that it's a really exciting area, which is why we're committing a lot of additional effort and resources there. John, do you want to go next?

<unk> claim and call that just curious how you're thinking about somebody is gaining a molecule that can potentially address the narrow therapeutic window here.

And then John you want to take that and I guess, yeah sure Yeah, Yeah I'll take the yeah again, we found and you can see.

Pretty nice story about this on our ACR poster, we found again that the potency of reduction gave us much better control. So when we when we put the IL two I'm sorry of the IL 12 points of reduced version into monkeys, and comparative tour of Wild type IL 12 FC fusion, we've found that as we dose escalated and.

The non human primates that we saw a much more gradual onset of of.

A key pharmacodynamic marker, which is ICD 10.

John R. Desjarlais: Yeah, sure, Basil. Yeah, Mara, when we first tackled IL-15, we went in, we fused IL-15 to an FC to make a long-acting cytokine. And we made a critical key discovery that natural cytokines are limited in their ability to stay around very long in circulation. And so the solution we came up with was to decrease their potency fairly dramatically. And in doing so, we found out that we actually made a much better drug.

And we're just downstream of it of for Gamma Alright, that's what the IL 12 famously does.

And so as we dose escalated our potency and reduce version of it was a much smoother ramp up on that Pharmacodynamic marker.

And by.

By comparison of the Wild type IL 12 S T and what that tells me is we're going to have a much easier right and when we dose escalate and got much better control over whats actually going to go on and the humans. When we use the reduced potency molecule. So that's that's what we have so far that's what the preclinical data suggests but obviously, we're gonna have to see what happens.

John R. Desjarlais: It lasts a lot longer in circulation, and because it can last longer, even though it's lower potency, it can actually mediate its pharmacology for a longer period of time. Also, you know, the fringe benefit of that reduced potency was much better tolerability and much, much better control over toxicity as you go. Now, we turned around and applied that same concept to the IL-2 program, our Treg expander, and found exactly the same result.

On the corner.

Okay, great. Thank you.

And speakers our next question from et cetera, and are out of.

Guggenheim Sir your line is open.

Great. Thanks, Thanks for the question.

Yeah.

So really for the X map on slide six for I guess.

You sort of see the appropriate therapeutic window do you have any thoughts on how sort of may.

And maybe the low hanging fruit indications, if you will and maybe sort of maybe interesting indications that you could pursue.

John R. Desjarlais: We got dramatic improvements in pharmacokinetics and pharmacology when we reduced the potency. So far, that seems to be playing out really nicely with the IL-12 program as well as as we detailed in our ACR cluster. So that's the unifying theme, which seems to be pretty unique in the community, is going with longer-acting, lower-potency molecules. Thank you. I appreciate it.

Initially, obviously, assuming success and and I have the second question.

Yeah, we're not guiding on specific indications, we're selecting yet that we're hard at work.

Hum.

Putting ourselves in position to hopefully start.

And then as soon as we come out of dose escalation of course, Theres, a multiple ascending dose escalation component to the study that will start after the SAP D and.

And what do we think Theres a lot of opportunity for these novel mechanisms of action like T. Reg inhibition in.

And some of the smaller autoimmune indications and.

And so we're certainly looking there, but you know the.

And I think when you look at what are the competitive landscape in some of the larger indications where there is still open room, we think of lot of our competitors of already have already hit the so more to come on that we are working hard on that.

Mara Goldstein: Thank you; I appreciate that.

Mara Goldstein: Great, thanks for taking the question. Updates.

Now did you of a follow up question got it yes, just the second question I guess on sort of the initiation of the promoter.

Mara Goldstein: Just on IL-2, when do we see data around that? And kind of how, what do you think about picking particular tumors and combinations? Oh, well, our IL-2 is targeting the activation of regulatory T-cells, so that's our program focused on autoimmune disease. Our IL-15 is the one that, in collaboration with Genentech, is our play with the cytokine for activating T-cells along that same pathway. So do you want us to talk about IL-15 or do you want to talk about the 5-6-4 program, our IL-2 program? I'm just curious if you're thinking of moving that IL-2 as well into oncology. No, no; we don't have any intention to do that.

Type of sit in that study and I guess based on the interim remarks as the data from the ongoing phase one if you will sort of the main hurdles to sort of getting that started in terms of sort of the the timeline of variability.

Described.

And I think it's pretty coincident with the operational pieces as well and I think that.

And we hope you will all come together, we are dosing at Q2 week now with the Q1's Q weekly run in <unk>.

Period, much like we've seen from the from other programs. So squaring that away is ongoing and we hope to have that data present late this year like we guided and hopefully start off the phase II.

Great. Thank you and congrats on all of the progress.

Thank you.

Yeah.

And speakers. Our next question from Tom Schrader of E. T. I G. Sir your line is open.

Thank you and good afternoon, and thanks for the update and taking the questions just for five six for what is the theoretical safety concern from too many T regs.

Bassil I. Dahiyat: Its biology is really tuned, as John said. Well, I guess it's tuned for potency, but in addition to that IL-2 molecule, we actually took the direction, like some other companies that are looking at the same approach, of increasing the relative binding affinity to the receptor that's more prevalently expressed on regulatory T-cells, the IL-2 alpha receptor. So we really feel that it's much more appropriate for autoimmune indications. We haven't yet guided specifically on when we expect to have data from the single ascending dose.

I don't know if it's from too many T regs I think it's a combination of being.

Just being non selective and having lots of T cells period amplified.

Is the problem and that can cause the unusual capillary leak syndrome cytokine syndrome. The toxicities that are seen with IL two therapy with Proleukin and so you just need to control of that from coming on too strong and whether it's the T. Regs are amplifying T of factors.

So of the classic basketball and other fixed.

But another way of saying it is we we we optimized for the activity of our IL two for T. Reg.

But there's no such thing as perfect for activities. So at some point, if you dose high enough.

Bassil I. Dahiyat: Essentially, it's a biomarker and safety study, the initial work in the clinic with that molecule. It could be later this year, but we'll guide specifically as we get a little further into the study. We just opened the study about a week ago, and then the B7H3 construct that we talked about earlier. I'm just curious where that is and where you're thinking of positioning. Yeah, I'll touch on the

Gonna start tickling effector cells and the other subpopulations.

And to just dig in a little bit to the last question I mean this molecule could in fact play. Many many places do you think you're likely first trial would be something like psoriasis, where you get a clinical readout very quickly and then you'd be confident to try and many other things where do you think of good biomarker signal would be enough to go into more chat.

LNG applications.

It's a great question, because thats something that with many programs, we mulled over and I think we're on the industry and all over do you want to get some kind of disease modification signal, even if it's an indication that is not necessarily of great development path because of competitive density or do you trust. The biomarkers I think that the the thesis around T regs.

Bassil I. Dahiyat: And then if John wants to jump in on, you know, how we're positioning it. So that molecule we hope to have in the clinic in 2022 is in active preclinical development now with all the requisite manufacturing scale-up activities just getting started.

Growth in modifying the disease activity is one risk that most companies seem to be willing to take as long as you can get the good biomarker movement and I mean, you know what you're trying to do how that plays into disease I Wonder if even if you've proved it and something like psoriasis, which is probably the top of hill to climb from the development of the competitive standpoint, even.

John R. Desjarlais: Yeah, in terms of thinking about applying that, the reason we selected B7H3 as a target is that it's very broadly, very brightly expressed across a range of solid tumors. And we wanted a molecule that we could, you know, that we could use to target tumors and get, you know, tumor-specific CD28 co-stimulation, which is your signal 2. And then you can use that to build on whatever signal 1 is being provided, right?

If you showed disease modifying activity there I don't know how well it would translate so I don't know if <unk> really favors that approach as opposed to like many of our competitors looking at the T. Reg counts and the other T cells as the biomarker, that's really kind of definitive for of go signal.

Okay, great. Thank you very useful and.

Yeah.

And speakers our next question from seeking shell of the.

Marrying Berry please ask your question.

Hi, good afternoon, and thanks for taking my question.

And a few of the first one on several one seven and argue that that youre going to move to the the combination.

John R. Desjarlais: And that signal 1 could be provided either by just natural T cell, you know, reactivity against neoantigens, in which case you'd probably want to be exploring that, you know, our B7H3 CD28 in a PE1 combination study. Or signal 1 could come from any one of our T cell engagers, our classic CD3 by CIVIX, in our solid tumor pipeline, the first of which will be an EN And I guess beyond that, I would also say B73 is a particularly interesting target in prostate cancer. It's very bright there. And we, of course, would want to explore that in the prostate.

Trial.

In prostate cancer.

Kind of combinations and are you thinking to potentially move to the true.

The different subgroups.

And that groups. The that's the first one.

So we're not saying explicitly I think and Alan jump in if I'm missing anything, but depending on the subtype of and what's known about how they respond or don't respond. The treatment. They will include both chemo combinations as well as some targeted therapies that makes sense for certain molecular subtypes I don't know if we can say more than that Allen right.

Yeah, I think it's fairly obvious there are some targeted agents that have been approved for <unk>.

For prostate cancer like PARP inhibitors.

And then the chemotherapy is still used and a certain aggressive types as well. So those subtypes of you'd have the combo with growth of checkpoint inhibitor and so obviously, we're going to explore those.

Peter Richard Lawson: Great. Thanks so much. Thanks, Peter.

Got it Okay, and then for the I'm just curious about the CD 28 balance here whats the I guess.

Alicia Young: And speakers, your next question is from Alicia Young of Cantor. Ma'am, your line is open.

Alicia Young: Hey guys, thanks for taking the call. This is Leone from Lythia.

Broadly what's the difference between the two.

Bassil I. Dahiyat: We just have a follow-up on the IL-2 program. Since you have just recently started the trial, can you just talk a little bit about how your molecule is differentiated from others in the space and what advantages you expect to see in the clinical setting?

And 28 and specific kind of versus <unk> three five per cent from.

The safety and efficacy standpoint.

Is it more yeah.

And that says that the long question, John why don't you try and executed.

The ticketed on briefly go ahead.

Yeah, Yeah. That's that's of Great question. So the.

And the CD three is kind of a bigger hammer right. So the CD three of signal one on the T cells.

Bassil I. Dahiyat: So the design follows the rule of our cytokine engineering that John sort of laid out, which was, it's taking the natural IL-2 molecule and making mutations in it to dramatically dial down its potency. I think we're north of a hundred fold less potent than wild-type IL-2 fused to an FC domain. Now, the things that make this particularly well suited for autoimmune diseases are protein engineers biased the binding to actually have a significantly higher ratio of binding to the CD25 or IL-2 alpha receptor than to the IL-2 beta gamma receptors. That receptor is heavily expressed on regulatory T-cells to bias it towards Tregs. So how do our designs differ from what's the positioning?

And it's it's not it's not specific to any of that particular T cell population of right at the point of the C. D. Three is to grab any T cell and the vicinity and mobilize it against the tumor and.

And so of course, that's and that's gonna be a little more debt.

More challenging in terms of safety profile.

Either in terms of Crs, but also in terms of just you know.

On target off tumor toxicity with the C 28, it's a pretty intriguing concept because of its providing the signal two which to amplify the signal one and then it can build off of the signal one that's coming elsewhere right and like I was saying with one of the earlier responses.

The one could come from and endogenous T cell reacting with the tumor cell and now you're adding and that signal too with the 10 and 28 and amplifying the natural endogenous T cell anti tumor response, auris and the one could come from of CD three by Civic and you can combine the two and so we're obviously contemplating both approaches.

John R. Desjarlais: We hope that our dramatically lowered potency, as well as our FC domain, which contains our Xtend technology, gives us an enhanced therapeutic window we won't know until we see, and that we can get excellent Treg amplification. You know, John, am I missing anything on... Oh, and maybe, John, if you want to comment on the monomeric IL-2 nature and how that's distinctive in the industry. Yeah, no, that's a good point.

Yes.

Okay.

Got it. Thank you kind of final quick one on kind of six.

698.

The increase of <unk> 38, a molecule like this.

Where do you see this molecule.

Oh go on.

And the secret to go on that.

So right now we are following the lead of some investigators who are enthusiastic about of CD 38 CD three.

John R. Desjarlais: So you know, we designed ours using our FC heterodimers, which enables this. We designed ours to only have a single IL-2 for the FC domain, whereas competitors like Amgen or other efforts have a bivalent IL-2. We think having the monovalent IL-2 actually helps reduce internalization through receptor binding. That's sort of a kind of a classic paradigm in terms of, you know, And so the bottom line is, again, we applied our potency reduction monomeric IL-2. We would hope that we have, you know, highly competitive or even best-in-class pharmacokinetics and pharmacodynamics.

You'll note that Amgen decided to jump out of development and really this was the molecule. We had enabled with our technology, but hadn't actually made for them. They just took our various building blocks and put them together for <unk> 38, and I've seen them in and.

And in myeloma, they felt that the AE profile was it consistent with the go forward to go forward with it.

And we'll say that without disclosing until we've got the trial up and running there are other hematologic malignancies that express CD 38, where the.

And the Tolerability profile might seem quite reasonable.

And in that context, so more to come on that.

Great. Thanks, very much congrats on the progress.

Yeah.

Yeah.

And speakers our last question from idled and then.

Of Canaccord Genuity Ma'am your line is simple.

Hi, everybody. Yeah. This has been calling in for arlinda. Thanks for taking my questions.

Alicia Young: And I have another question about your RL12 program. I know it's preclinical, but I'm just curious how you're thinking about designing a molecule that can potentially address the narrow therapeutic window here.

And one of them and have been answered and I just wanted to ask a few on the $71 seven and plum most of the map.

For.

<unk> PD, one and CTO for programs have data and it has been presented at this point.

John R. Desjarlais: Thanks. I mean, John, you want to take that, I guess? Yeah, sure, yeah. Yeah, I'll take that.

And I'm, just wondering regarding 71, seven and how's the safety of looking.

Versus <unk> versus and if the combination regimens and what do you guys ultimately hope to show and.

John R. Desjarlais: Yeah, again, we found, and, you know, you can see, you know, a pretty nice story about this on our ACR poster. We found, again, that the potency reduction gave us much better control. So when we put the IL-2, I'm sorry, the IL-12 potency-reduced version into monkeys and compared it to a wild-type IL-12 fc-fusion, we found that as we dose-escalated in non-human primates, that we saw much more gradual onset of, you know, a key pharmacodynamic marker, which is IP10, which is downstream of interferon gamma, right?

And the data.

And.

I guess I'll ask the the first so the first of all what do you hope to share on the data we have to share that and we can find an indication of where we can make a difference for patients whether that's in the relapsed refractory setting.

Some of the areas. We're looking at are even more exciting we think is and areas where there arent checkpoints approved where the combination of <unk> and the tolerability profile of the combination of Cta for the PD. One can move the needle that hasnt been the before and I think prostate cancer is of great potential example, there.

Regarding the safety profile, we've observed so far I'll, let Alan and take that question.

Yeah vessels. Thanks so.

It's fair to say that the needle at the combination is probably more effective and PD one blockade alone, but clearly you've got a lot of toxicity only about a third of patients remain on study passed a few courses so the.

John R. Desjarlais: That's what IL-12 famously does, and so as we dose-escalated our potency-reduced version, it was a much smoother ramp-up on that pharmacodynamic marker. And, you know, by comparison to the wild-type IL-12 f. And what that tells me is we're going to have a much easier ride when we dose escalate because we've got much better control over what's actually going to go on in humans when we use this reduced potency model. So that's what we have so far. That's what the preclinical data suggests, but obviously, we're gonna have to see what happens. Okay, great.

The most common toxicities of colitis. This is the most common toxicities of me. The most talk call the toxicity that leads to interruption or discontinuation and so we haven't seen that high frequency of colitis.

We believe that the indications as Basil alluded to is where PD, one plus <unk> for its been shown to be synergistic.

And perhaps you haven't seen that much improvement activity prostate cancers. The classic example of that.

Okay, Great that's very helpful.

And gears to plumb aftermath of and I understand that more for.

Alicia Young: Okay, great. Thank you.

Etzer Darout: And speakers, our next question is from Etzer Darout of... Guggenheim. Sorry, your line is open. Great. Thanks. Thanks.

Losses might be driving on one of the bus here.

It's a competitive space for now and I'm just wondering how do you think of them.

And that'll come out.

And the competitive positioning.

Etzer Darout: Great. Thanks for the question. So really, for XMAB 564, I guess, you know, if you sort of see the appropriate therapeutic window, do you have any thoughts on how, you know, sort of maybe the low-hanging fruit indications, if you will, or maybe sort of maybe interesting indications that you could pursue initially, obviously, assuming success? And then I have a second question.

And maybe can you comment on what you think the development strategy will be.

Do you expect maybe data in 2022 at some point.

Yeah, So I'll take that one so the positioning for climate Youre right. Its a very competitive various cities and 20, <unk> and and already competitive indication and in lymphoma.

And we think that the approach we're taking is recognizing that that competition is going to be hard and that we need to go with something that is really combining the two most active regimens. We can and has the best scientific rationale, we can think of and to see if we can go for the best approach.

Sorry for the best combination approach that and this is the key point is chemotherapy free.

Bassil I. Dahiyat: Yeah, we're not guiding on specific indications we're selecting yet, but we're hard at work. Putting ourselves in a position to hopefully start them as soon as we come out of dose escalation. Of course, there's a multiple ascending dose escalation component to the study that will start after the SAD. You know, we think there's a lot of opportunity for these novel mechanisms of action like Treg inhibition in some of the smaller autoimmune indications.

A direction of the field desperately wants to move in and lymphoma, just like has happened in in leukemia based on the success CLO.

Hello, and brute nib, and and Venetic class used with antibodies.

The plant of <unk> tap of land combination is tap a set amount of Lenalidomide is the most active and a very durable combination therapy.

Second line and later.

Aggressive lymphoma, it's a well tolerated regimen and it uses orthogonal mechanisms of action to plan mode of of CD, <unk> effector cells, and Nate effector cells, driven by the FC technology that we put into of tap a set of map and CD 19 binding so of different target also then of <unk> 2000, and CD three so it really seems like a.

Etzer Darout: And so we're certainly looking there, but, you know, when you look at the competitive landscape in some of the larger indications where there's still open room, we think a lot of our competitors have already hit those. So more to come on that. We are working hard on that. Now, do you have a follow-up question? Got it.

Really totally perpendicular mechanisms of action that hopefully can complement each other and so we wanted the combined with the most active agent that was really tolerable. So that's our strategy, it's going for a chemotherapy free regimen and there could be super active and Thats, how we hope to distinguish ourselves.

Bassil I. Dahiyat: Yeah, just a second question, I guess, on sort of the initiation of the POMODA map and the Tafessitimap study. And I guess, based on the intro remarks, are the data from the ongoing phase one, if you will, sort of the main hurdles to sort of getting that started in terms of sort of the timeline, you know, and variability that you described? I think it's pretty coincident with the operational pieces as well. And I think that, you know, we hope they'll all come together.

Okay great.

So that would be a simpler regimen and the existing regimens right now.

Well, hopefully I get more tolerable and without the the chemotherapy type of toxicity, which can often include long term toxicities and secondary malignancy risks and there's a whole host of others.

Okay.

And it sounds like it might be to now go ahead go ahead, Alan and sorry before you before you go on for another one Ben so and.

Maybe I can add some color, yes, maybe I'll just add some color. So the strategy that had been sort of declared by our competitors right and so there's two chemo regimens that are often used for the second line that's either.

Bassil I. Dahiyat: We are dosing at Q2 week now with a Q1, a Q weekly run-in period, you know, much like we've seen from other programs. So squaring that away is ongoing. And we hope to have that data present late this year, like we guided and hopefully start off phase two. Great. Thank you and congrats on all the progress.

Gem ox for Bendamustine Rituxan and the strategies that our competitors are using are either to compete against that directly as a single agent or add on to that regimen like gem ox.

And as Basil alluded to our strategy is sort of a little bit different type of sit them out at least and the transplant in eligible populations have been already approved for that second line indication right and so now we're adding our CD 22, their CD 19, and then of course of Lenalidomide potentiate, the CD 19, it could potentially potential.

Tom Schrader: And speakers, our next question is from Tom Schrader of VTIG. Sir, your line is open.

Tom Schrader: Thank you. Good afternoon.

Tom Schrader: Thanks for the update and taking the questions. Just for 564, what is the theoretical safety concern from too many Tregs? I don't know if it's from too many Tregs. I think it's a combination of just being non-selective and having lots of T cells period amplified is the problem, and that can cause your usual capillary leak syndrome, cytokine syndrome, and the toxicities that are seen with IL-2 therapy with proleucin. So you just need to control that from coming on too strong, whether it's the Tregs you're amplifying or the T effect. So it'd be classic and maybe... Yeah, Basil, another...

On the CD 20, as well so that is the sort of differentiating approach. So we think our approach is vastly different from the others.

Okay, great sorry about the event.

Im sorry going on.

And so the data readout do you think might be in 'twenty, two 'twenty 'twenty two or maybe later.

We're not guiding on that yet we want to get the trial started and we'll give we'll give specifics.

Okay.

Thanks again for taking my questions I appreciate it thank you.

Alright, well I guess, if that's the last question, we'd like to thank everybody very much for joining us today.

Hope you have a wonderful rest of the afternoon, and we look forward of cashing up again, and giving further updates on our progress throughout the year. Thank you.

Bassil I. Dahiyat: But another way of saying it is that we, you know, we optimize selectivity of our IL-2 for Treg. But there's no such thing as perfect selectivity. So at some point, if you dose high enough, you're going to start, you know, tickling effector cells and other cells. And to just dig in a little bit to the last question, I mean, this molecule could, in fact, play many, many roles.

This concludes today's conference call and thank you all for participating you may now disconnect.

And then.

[music].

Tom Schrader: Do you think your likely first trial would be something like psoriasis, where you get a clinical readout very quickly, and then you'd be confident to try many other things? Or do you think a good biomarker signal would be enough to go into more challenging applications? Yeah, it's a great question, because that's something that with many programs we mull over, and I think people around the industry mull over, do you want to get some kind of disease modification signal, even if it's an indication that is not necessarily a great development path because of competitive density, or do you trust the biomarkers?

Tom Schrader: I think that the thesis around Treg's role in modifying disease activity is one risk that most companies seem to be willing to take as long as you can get the good biomarker movement going. I mean, you know what you're trying to do, and how that plays into disease. I wonder if even if you proved it in something like psoriasis, which is probably a tough hill to climb from a development and a competitive standpoint, even if you showed disease-modifying activity there, I don't know how well it would translate.

Yes.

And.

Okay.

[music].

Tom Schrader: So I don't know if Xencor really favors that approach as opposed to, like many of our competitors, looking at Treg counts and other T cells as the biomarker that's really kind of definitive for a GOSIG. Thank you. Very useful.

Sikeng Xiao: And speakers, our next question from Sikeng Xiao of...

Sikeng Xiao: Hi, good afternoon. Thanks for taking my question. I have a few.

Sikeng Xiao: The first one, on 717, you said that you're going to move to a combination trial in prostate cancer. What kind of combinations are you thinking of to potentially move to treat different subgroups there? That's the first one.

Bassil I. Dahiyat: So we're not saying explicitly. I think, and Allen, jump in if I'm missing anything, but depending on the subtype and what's known about how they respond or don't respond to treatment, they will include both chemo combinations as well as some targeted therapies that make sense for certain molecular subtypes. I don't know if we can say more than that, Allen, right?

Allen S. Yang: Yeah, you know, I think it's fairly obvious, there are some targeted agents that have been approved for prostate cancer, like PARP inhibitors. And then chemotherapy is still used in certain aggressive types as well. So, you know, those subtypes you would have to combine with the checkpoint inhibitor. And so obviously, we're gonna explore that.

Sikeng Xiao: Okay. And, and, and then for the, um, I'm just curious about the CD28 biology here. Um, what's the, I guess, uh, broadly, what's the difference between, uh, a CD28 bi-specific versus, uh, a CD3 bi-specific from, I guess, a safety and efficacy standpoint? Uh, is it more, yeah, that's a long question, John. Why don't you try? I mean, I guess you could answer it briefly.

John R. Desjarlais: Go ahead. Yeah, there's, yeah, that's, that's a great question. You know, so this CD3 is kind of a bigger hammer, right? So CD3 is signal number one on the T cells. And it's, it's not, it's not specific to any particular T cell population, right? The point of a CD3 is to grab any T cell in the vicinity and mobilize it against the tumor. So of course, that's going to be a little bit more challenging in terms of, you know, the safety profile, either in terms of CRS but also in terms of just, you know, on target, off tumor toxicity.

John R. Desjarlais: With the CD28, it's, it's a pretty intriguing concept because it's providing signal two, which can amplify signal one, and then it can build off of a signal one that's coming elsewhere, right? And, you know, like I was saying, signal one could come from an endogenous T cell reacting with a tumor cell, and now you're adding in that signal two with the CD28 and amplifying that natural endogenous T cell anti-tumor response. Or signal one could come from a CD3 biocytic, and you can combine the two. And so we're obviously contemplating both approaches.

Sikeng Xiao: Got it, thank you. Final quick one on 698, the CD3, CD38 molecule. I guess, where do you see this molecule? ago in the future as well.

Bassil I. Dahiyat: So right now, we're following the lead of some investigators who were enthusiastic about a CD38-CD3. But you know, we'll note that Amgen decided to jump out of development, and really, this was a molecule we had enabled with our technology but hadn't actually made for them. They just took our various building blocks and put them together for CD3, CD38, and FCmin. And in myeloma, they felt that the AE profile wasn't consistent with a go-forward decision to proceed with it. We'll say that, without disclosing until we've got the trial up and running, there are other hematologic malignancies that express CD38 where the tolerability profile might seem quite reasonable in that context.

Sikeng Xiao: So more to come on that. Great. Thanks very much. Congratulations on the progress.

Arlinda Lee: And speakers, our last question is from Arlinda Lee of Ken Accord Genuity. Ma'am, your line is open.

[music].

Arlinda Lee: Hi everybody, this is Ben calling from Fireland. Thanks for taking my question. I don't know if a lot of them have been answered, but I just wanted to ask if you and Plum Moulton have... A few PD-1 CTLA-4 programs have data that have been presented at this point, and I'm just wondering, regarding 717, how's the safety looking versus NEVO versus NIPI combination regimens? And what do you guys ultimately hope to show in the data? I guess I'll ask the first question: what do you hope to show in the data?

Bassil I. Dahiyat: We hope to show that we can find an indication or we can, you know, make a difference for patients, whether that's in a relapsed refractory setting, like some of the areas we're looking at, or even more exciting, we think, is in areas where there aren't any checkpoints approved, where the combination of MOAs and the tolerability profile, the combination of CTLA-4 and PD-1 can You know, regarding the safety profile we've observed so far, I'll let Alan take that question. Yeah, Basil, thanks.

Allen S. Yang: So, you know, it's fair to say that the Nevo-Ipi combination is probably more effective than PD-1 blockade alone, but clearly, you get a lot of toxicity. Only about a third of patients remain on study past a few courses. So, you know, the most common toxicity is colitis. This is the most common toxicity, excuse me, the most common toxicity that leads to interruption or discontinuation. And so we haven't seen that high frequency of colitis.

Allen S. Yang: You know, we believe that the indications, as Basil alluded to, are where PD-1 plus CTLA-4 has been shown to be synergistic. And perhaps, you know, you haven't seen that much improvement activity. Prostate cancer is a classic example.

Arlinda Lee: Okay, great. That's very helpful. Switching gears to Plymouth, and I understand that... Morphosis might be dry. It's a competitive space, and I'm just wondering, how do you think of Plum Village Connect in a competitive position?

Bassil I. Dahiyat: And maybe you could comment on what you think the development strategy, maybe dated 2022 Yeah, so I'll take that one. So the positioning for polymer, you're right, it's a very competitive area, CD20, CD3s, in an already competitive indication in lymphoma. And we think that, you know, the approach we're taking is recognizing that that competition is going to be hard and that we need to go with something that is really combining the two most active regimens we can think of that has the best scientific rationale we can think of and to see if we can go for the best approach, Sorry, the best combination approach that, and this is a key point, is chemotherapy-free.

Bassil I. Dahiyat: A direction the field desperately wants to move in, in lymphoma, just like it happened in leukemia, you know, based on the success of CLL, Brutinib, and Venetoclax used with antibodies. So the PLAMO-Tafa-Len combination is Tafacitamab lenalidomide the most active and a very durable combination therapy in second line and later aggressive lymphoma. It's a well-tolerated regimen, and it uses orthogonal mechanisms of action to PLAMO on a CD20-CD3. It's effector cells, innate effector cells, driven by the FC technology that we put into Tafacitamab and CD19 binding, so a different target also than a CD20-CD3.

[music].

Bassil I. Dahiyat: So it really seems like a totally perpendicular mechanism of action that can complement each other. And so we wanted to combine it with the most active agent that was really tolerable. So that's our strategy. We're going for a chemotherapy-free regimen that could be super active. And that's how we hope to distinguish ourselves. Okay, great. So that would be a simpler regimen than existing regimens. Well, hopefully, I get more tolerable and without the chemotherapy type of toxicities, which can often include long-term toxicities and secondary malignancy risks, and there's a whole host of others. Go ahead; go ahead, Allen.

Allen S. Yang: Sorry, before you go on to another one, Ben. So, you know, maybe I can add some color. Yeah, maybe I can add some color.

Allen S. Yang: So, you know, the strategies have been sort of revealed by our competitors, right? So there are two chemo regimens that are often used for the second line. It's either GEMOX or Bendamustine Rituxan.

Allen S. Yang: And, you know, the strategies that our competitors are using are either to compete against that directly as a single agent or add on to that regimen, like GEMOX. But, you know, as Basil alluded to, our strategy is sort of a little bit different. Tapastitimab, at least in a transplant ineligible population, has already been approved for that second line indication, right? And so now we're adding RCD20 to their CD19. And then, of course, lenalidomide potentiates the CD19, and it could potentially potentiate the CD20 as well.

Allen S. Yang: So, you know, that is the sort of differentiating approach. So we think our approach is vastly different from the others. Sorry, back to you, Ben. No worries. I'm sorry to interrupt you. And so data readout, do you think might be in 2022 or maybe later? We're not guiding on that yet. We want to get the trial started, then we'll give specifics.

Arlinda Lee: Thanks again for taking my questions. I appreciate it. Thank you. All right. Well, I guess if that's the last question, we'd like to thank everybody very much for joining us today. I hope you have a wonderful rest of the afternoon, and we look forward to catching up again and giving further updates on our progress throughout the year. Thank you.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect.

Operator: © BF-WATCH TV 2021 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , https://www.patreon.com https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk www.mytrendyphone.co.uk www.mytrendyphone.co.uk www.mytrendyphone.co.uk