Q2 2021 Mersana Therapeutics Inc Earnings Call

[music].

Good morning, and welcome to Marathon on Therapeutics second quarter 2021 conference call and webcast. Currently all participants are in a listen only mode. There will be a question and answer et cetera, and at the end of this call and I'll like to turn the call over to Sarah Carmody Executive Director Investor Relations and corporate.

Operator: Good morning, and welcome to Marsana Therapeutics' second quarter 2021 conference call and webcast. Currently, all participants are in a listen-only mode.

Communications. Please proceed.

Good morning, welcome to Micron and.

Second quarter.

And 1 conference call.

Today, we issued a press release reviewing our.

Second quarter financial results and business update which will be covered on this call. A replay of today's call will also be available on the investor and media section of our website.

Operator: There will be a question and answer session at the end of this call. I'd now like to turn the call over to Sarah Carmody, Executive Director, Investor Relations and Corporate Communications. Please proceed. Good morning.

After our prepared remarks, we will open the call for Q&A.

Before we begin I'd like to mention that our call will contain forward looking statements within the meaning of federal Securities law.

These are not statements of historical facts and are based on management's beliefs and assumptions and on information currently available they are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially including the risks that result of our ongoing or future clinical studies may be income.

Sarah Carmody: Welcome to Mursana's second quarter 2021 conference call. Earlier today, we issued a press release reviewing our second quarter financial results and business updates, which will be covered on this call. A replay of today's call will also be available on the Investor and Media section of our website.

With respect to the efficacy of our product candidates that we may not meet clinical endpoints with statistical significance.

There may be safety concerns or adverse events associated with our product candidates.

That preclinical testing early clinical results may not be predictive of the results of our success of our on going or later preclinical or clinical studies that the identification development and testing of the company's product candidates and new platforms will take longer and cost more and planned and that our clinical studies may not be and.

Sarah Carmody: After our prepared remarks, we will open the call for Q&A. Before we begin, I'd like to mention that our call will contain forward-looking statements within the meeting of the Federal Security Service. These are not statements of historical facts and are based on management's beliefs and assumptions and on information currently available. They are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially.

This unit or completed on schedule and if at all.

These risks are discussed and the Companys SEC filings, including without limitation. The Companys quarterly report on 10-Q filed on May 10, 2021, and subsequent filings.

In addition, while we expect that the COVID-19 pandemic might adversely affect the company's preclinical and clinical development efforts.

And this operation and financial results.

And of the impact on the company's operations and the value of end market for the Companys conference stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time and such.

As the ultimate duration of the pandemic the severity of additional screens of the virus travel restrictions quarantines, physical distancing and business closure requirements and the U S and and other countries and the effectiveness of actions taken globally to contain and treat the disease.

Sarah Carmody: Including the risk that results of our ongoing or future clinical studies may be inconclusive with respect to the efficacy of our product candidates, that we may not meet clinical endpoints with statistical significance, or there may be safety concerns or adverse events associated with our product candidates, that preclinical testing or early clinical results may not be predictive of the result or success of our ongoing or later preclinical or clinical studies, that the identification, development, and testing of the These risks are discussed in the company's SEC filings, including, without limitation, the company's quarterly report on Form 10Q filed on May 10th, 2021, and subsequent filings.

Except as required by law the company assumes no obligation to update these forward looking statements publicly even if new information becomes available and the future.

And with that I'll turn the call over to Ana Proto puppet Mcdonald, President and Chief Executive Officer. Thank you Sarah Good morning, and welcome to our second quarter 2021, corporate and financial update call. Joining me today with prepared remarks, Brian just shy.

I am also joined by the rest of the executive team, who will be available for your questions.

And most cylinder a key focus for the first half of this year.

Executing on our goals our goals associated with building a free as a foundational medicine and ovarian.

And building out our innovative pipeline of ADC addressing areas of high unmet medical need.

I am very pleased to reported we have made significant progress on both.

<unk> upbeat and the pipeline let.

Let me begin with the agenda for today's call I will start with upgrades on.

On a pre combination trial and platinum sensitive ovarian cancer that has just initiated.

Sarah Carmody: In addition, while we expect that the COVID-19 pandemic might adversely affect the company's preclinical and clinical development, Business operations and financial results, the extent of the impact on the company's operations and the value of and market for the company's confidence stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, the severity of additional strains of the virus, travel restrictions, quarantines, physical distancing, and business closure requirements in the U.S. and in other countries, and the effectiveness of actions taken globally to contain and treat Except as required by law, the company assumes no obligation to update these forward-looking statements publicly, even if new information becomes available in the, And with that, I'll turn the call over to Anna Proto-Popis, Msana's president and chief executive office.

And then I will brief you on uplift a single arm registration strategy in platinum resistant disease.

And also be providing updates on the pre ovarian cancer expansion cohort.

Free lung cancer expansion cohort as well as it could be 15.90 to $6.60, and 2056, let me start with upgrades just last week, we announced that we reached another significant milestone and the development of our pre we'd be initiation of patient dosing and <unk>.

Upgrade of Phase 1 umbrella study designed to evaluate upbeat and coordination with other ovarian cancer therapies.

This study will further explore the role of it.

And platinum sensitive disease.

Starting the study in combination with platinum.

And the therapy currently the mainstay therapy in earlier line platinum sensitive ovarian cancer and.

A large opportunity.

Moving up earlier.

Sorry, moving on.

Into earlier line of therapy could significantly expand the number of patients with ovarian cancer that could benefit from upfront and the duration of time over which we could impact their disease in the current standard of care platinum and tuxedo administered for a fixed number of cycles due to the.

Cumulative toxicity, including alopecia peripheral neuropathy and neutropenia.

Anna Protopapas: Thank you, Sarah. Good morning, and welcome to our second quarter of 2021 corporate and financial update call. Joining me today with prepared remarks is Brian DeScianer. I am also joined by the rest of the executive team, who will be available for your questions. At Mersana, our key focus for the first half of this year has been executing on our goals.

In fact, many ovarian cancer patients have continuing peripheral neuropathy as a result of repeated cycles of the plant and the wood toxic regimen. This phase 1 open label dose escalation portion of the study will determine the maximum tolerated dose and safety and Tolerability.

Although Q4 weekly administration of.

In combination with Carboplatin and 4.6 cycles than continuation with upper immunotherapy in platinum sensitive patients with high grade serous ovarian cancer, who have received 1 or 2 prior platinum based regimens.

Anna Protopapas: Our goals associated with building UprI as a foundational medicine for ovarian cancer and building out our innovative pipeline of ADCs addressing areas of high and medical needs. I am very pleased to report that we have made significant progress on both UprI and the pipeline. Let me begin with the agenda for today's call.

This design allows us to assess the advantages of combining with carboplatin and replacing Paclitaxel and age of the carry significant toxicities and so.

A reminder, upward current tolerability profile has not included.

Swirls neuropathy or neutropenia, which is promising for combination with talk to them. We believe this is a key differentiator from other ADC platforms and an important prerequisite for moving into earlier lines of therapy.

Anna Protopapas: I will start with Upgrate, our Uprie combination trial in platinum-sensitive ovarian cancer that has just initiated. Then I will brief you on Uplift, a single-arm registration strategy in platinum-resistant disease. I will also be providing updates on the Upray Ovarian cancer expansion cohort, the upper lung cancer expansion cohort, as well as XMT 1592, 1660, and 2056. Let me start with upgrades. Just last week, we announced that we reached another significant milestone in the development of UprI with the initiation of patient dosing in Upgrade, a phase one umbrella study designed to evaluate UprI in combination with other ovarian cancer therapy.

Importantly, the design of upgrades will also allow us to evaluate the additional benefit of continuing treatment with a free as a single agent beyond the 6 cycles of combination therapy potentially providing access to a larger population of patients receiving longer durations of therapy.

As a reminder, the doses per patient portion of the combination study has the potential to move more rapidly because we know the active doses of platinum and we know the active doses of a price.

And it's more of a therapy.

And it is premature to provide guidance on enrollment timelines at this stage, we do believe that the design of this study could generate a significant amount of data during 2022.

We're excited to have this important study underway and look forward to updating you on our progress now.

Now, let me turn to uplift our single arm registration strategy and platinum resistant ovarian cancer. We are encouraged with the interest and the study to date and the engagement of both the U S and EU cooperative groups. As a reminder, we began dosing patients in April with relatively.

Rapid conversion of sites already and bolt and the expansion cohort.

Anna Protopapas: This study will further explore the role of Upris in platinum sensitive disease. We're starting the study in combination with platinum, as platinum therapy is currently the mainstay therapy in earlier line platinum-sensitive ovarian cancer, a large opportunity to move upri earlier.

New sites and the U S EU and other geographies are coming on line to further supported bomb and projections.

The design of uplift focuses both on increasing the potential for label differentiation and the probability of success. We believe uplift is enrolling a broader patient population and other studies and this space with more prior lines more flexible inclusion of prior per by official above treatment.

Anna Protopapas: Sorry, moving upri into an earlier stage of therapy could significantly expand the number of patients with ovarian cancer that could benefit from Uprri and the duration of time over which we can impact their disease. In the current standard of care, platinum and taxane are administered for a fixed number of cycles due to their cumulative toxicities, including alopecia, peripheral neuropathy, and neutropenia. In fact, many ovarian cancer patients have continuing peripheral neuropathy as a result of repeated cycles of platinum and taxane regina.

Consistent with a bit of a system of label and with more on the line comorbidities like baseline peripheral neuropathy.

Up lift also offers 2 shots on goal with a primary endpoint, but not be too beside population and a secondary endpoint and the overall population, allowing us to fully evaluate the role of the biomarkers and enriching for patient outcomes.

In addition, we believe we have carefully designed and executed on the work necessary to be able to embark on uplift with the right diagnostic and place you will recall from our webinar in April that we have taken a systematic approach to the development of a robust predictive and reproducible biomarker.

The tumor proportional score equal or greater to 75, biomarker and richest for responders and has attractive features relative to other types of approaches to ensure reproducibility anywhere in the world across different nuts and pathology when deployed as a commercial diagnostic.

Nick.

Overall, we are encouraged by the current pace of enrollment and uplift, but we're reflate refrain from providing further guidance on the timing of completion of enrollment.

Anna Protopapas: In this phase one, open-label dose escalation portion of the study will determine the maximum tolerated dose in safety and tolerability of a Q4 weekly administration of UprI in combination with carboplatin for six cycles and then continuation with Uprimmonotherapy in platinum sensitive patients with high-grade serious ovarian cancer who have received one or two prioplatin based red blood cell inhibitors. This design allows us to assess the As a reminder, Upper's current tolerability profile has not included severe peripheral neuropathy or neutropenia, which is promising for combination with platinum.

Uplift and upgrade our critical steps and evaluating the potential of a free to benefit both patients with recurrent platinum sensitive ovarian cancer as well as platinum resistant ovarian and.

Remember that annually and the U S. There are approximately 22000 women newly diagnosed with ovarian cancer.

And that's not to mention doses fallopian tube or primary per either Perry to deal cancer treated using the same algorithm.

Unfortunately, even if to frontline therapy, 80% of these patients with relapse, most with platinum sensitive disease ultra.

Ultimately 14000 women die of the disease each year.

Uplift a fast to market registration strategy focuses on those 14000 women and the terminal phase of the disease with upgrades, we have the potential to address the needs of the larger number of patients earlier and that disease, where we believe we have the potential to deliver longer better fit with <unk>.

Anna Protopapas: We believe this is a key differentiator from other ADC platforms and an important prerequisite for moving into earlier lines of therapy. Importantly, the design of upgrade will also allow us to evaluate the additional benefit of continuing treatment with UPRI as a single agent beyond the six cycles of combination therapy, potentially providing access to a larger population of patients receiving longer durations of therapy. As a reminder, the dosis palation portion of the combination study has the potential to move more rapidly because we know the active doses of platinum and we know the active doses of apricis monotherapy. While it is premature to provide guidance on enrollment timelines at this stage, we do believe that the design of this study could generate a significant amount of data during 2022.

Kris treatment duration is combination followed by continuation and we believe these studies provide the roadmap for establishing a pretty as a foundational therapy and ovarian cancer.

Finally for our print ovarian and let me update you on the status of the expansion cohort.

We recently closed enrollment in the ovarian cancer expansion portion of the phase 1 clinical study.

Given the continued support of investigators enrollment momentum continued and we have close to 100 patients enrolled and the expansion cohort.

Mining with substantial dataset will give us a robust understanding of the profile of free and help us continue to optimize our development strategy.

Our goal is to provide an update on the ovarian expansion cohort this year at the appropriate time.

Lastly on upright and we are approaching completion of enrollment in the upper even on that day. The carcinoma expansion cohort, we plan to wait for the entire expansion cohort to be enrolled value Apple and mature and expect to disclose the topline data and determined on next steps in lung and the fourth quarter.

We want to ensure we have just done and not be to the status of these patients in order to determine the patient selection strategy.

Anna Protopapas: We're excited to have this important study underway and look forward to updating you on our program. Now, let me turn to uplift a single arm registration strategy in platinum-resistant ovarian cancer. We are encouraged by the interest in the study to date and the engagement of both the US and the EU cooperative groups. As a reminder, we began dosing patients in April with relatively rapid conversion of sites already involved in the expansion cohort. New sites in the U.S., EU, and other geographies are coming online.

Knowledge and that the bar for investment and development of a price it's a single agent.

Uh huh.

Hi, 2 to the intensely competitive landscape and lung.

As we have indicated before the prevalence of not be to be high as we defined and ovarian cancer cohort. That's the tumor proportional score greater than 75 is substantially lower than in ovarian cancer.

Appears only about a third of patients with lung cancer average P. P S equal or greater than 75.

This compares to a prevalence of approximately 2 third for ovarian cancer and lung and even higher TPS title might be necessary to achieve the desired response rate, which could further focus the eligible population.

Anna Protopapas: to further support involvement projects. The design of uplift focuses both on increasing the potential for label differentiation and the probability of success. We believe Uplift is enrolling a broader patient population than other studies in this space, with more prior lines, more flexible inclusion of prior publicism of treatment, consistent with the pervasism of label, and with more underlying comorbidities, like baseline peripheral artery disease. Uplift also offers two shots of gold with a primary endpoint in the NABITUB High Population and a secondary endpoint in the overall population, allowing us to In addition, we believe we have carefully designed and executed the work necessary to be able to embark on uplift with the right diagnostic in place.

Vision is to the next step will be based on 2 considerations.

They're all efficacy observed and a biomarker selected population and.

And to the bar necessary for commercial success, given the current and emerging treatments.

Turning now to the pipeline I will start with <unk> and $92 Symphony ADC targeting not b to B remember that our strategy to develop at $50.50, and 92. Its a second shot on goal based on the differentiated profile seen and preclinical studies and lung muscle.

And as we've communicated previously we are we have exceeded the MTB and continue the ongoing exploration of different dosing regimens and our work to fully characterize the profile of the agent and we expect to complete our evaluation of at $17.15, 92 and disclose.

Like data around year end.

Finally with respect to the pipeline we have continued to advance on 2 first in class preclinical ADC addressing areas of high unmet need through IND, enabling studies force.

And for 16 and 6.7.

$784 since and ATC in parallel to the IND, enabling studies, we have initiated early diagnostic development work much like we did with our preferred non peak to peak. We believe this is an important step to ensure that the diagnostic is developing tandem with the development of X and <unk>.

Okay.

For <unk>.

2056 or 4.

Anna Protopapas: You will recall from our webinar in April that we have taken a systematic approach to the development of a robust, predictive, and reproducible biomarker. The tumor proportioned score equal or greater to 75 enriches for responders and has attractive features relative to other kinds of approaches to ensure reproducibility anywhere in the world across different labs and pathologies when deployed as a commercial diagnosis. Overall, we're encouraged by the current pace of enrollment in uplift, but we'll refrain from providing further guidance on the timing of completion of enrollment. Uplift and upgrade are critical steps in evaluating the potential of Upri to benefit both patients with recurrent platinum-sensitive ovarian cancer as well as platinum-resistant ovarian cancer.

First and unit Simpson.

And these safety seat I'm very excited to announce the Tim launcher, Chief Science and Technology Officer has been invited to present on this program at the upcoming virtual 2021 Triple meeting in October as part of the plenary session on drug conjugates during his presentation.

And Tim plans to provide further promising preclinical data for <unk> 2056, and disclose the targets. We look forward to sharing this information and expect to provide more details around the clinical development plan for <unk>.

<unk> thousand 56 later this year.

With that I'll turn the call over to Bryan for an overview of our financial results.

Thank you Anna good morning, everyone and thank you for joining us I'll now review some of the key financial highlights from our second quarter 2021 results and I'll start with our cash position. We ended the second quarter of 2021 with $227.4 million and cash and cash equivalents during the second quarter, we sold approximately $2.3 million share.

Through our at the market or ATM facility, and an average price per share of approximately $15 raising net proceeds of $33.3 million and.

Anna Protopapas: Remember that annually in the US, there are approximately 22,000 women newly diagnosed with avian cancer. That's not to mention those with phallopian tube or primary peritoneal cancer treated using the same algorithm. Unfortunately, even after frontline therapy, 80% of these patients with relapse, most with platinum-sensitive disease. Ultimately, 14,000 women die of the disease each year.

Net cash used in operating activities from the second quarter was $34.5 million and.

In addition to our current cash position, we have the option to draw funds through the debt financing agreement with Silicon Valley Bank refinance and August of last year, we expect that our available funds will allow us to meet our current operating plan commitments for approximately the next 2 years and.

And now some of the key highlights from our second quarter 2021 financial results research and development expenses for the second quarter of 2021 were approximately $32 million compared to $15.4 million for the same period and 2020. The difference was primarily due to an increase and up re manufacturing clinical and regulatory expenses.

Anna Protopapas: Uplift, our faster market registration strategy focuses on those 14,000 women in the terminal face of the D.D. With upgrade, we have the potential to address the needs of a larger number of patients earlier in the disease, where we believe we have the potential to deliver longer benefits with increased treatment duration as combination followed by continuation. We believe these studies provide the roadmap for establishing Upris as a foundational therapy in ovarian cancer. Finally, for Apren ovarian cancer, let me update you on the status of the expansion call.

And it increase and manufacturing activities for our preclinical and discovery stage programs and increase in head count and advancement of the diagnostic development efforts for the Nab and can be biomarker noncash stock based compensation expense included in these research and development expenses increased by $1.7 million related to growth and head count and in <unk>.

<unk> and the valuation of stock based awards as a result of stock price appreciation Gen.

General and administrative expenses for the second quarter of 2021 were approximately $8.9 million compared to $5.2 million and the same period and 2020. The increase was primarily due to an increase and head count and consulting and professional fees noncash stock based compensation expense included in these general and administrative expenses increased.

Anna Protopapas: We recently closed enrollment in the ovarian cancer expansion portion of the Phase 1 clinical study. Given the continued support of investigators, enrollment momentum continued, and we have close to 100 patients enrolled in the expansion call. Mining the substantial data set will give us a robust understanding of the profile of Uprie and help us continue to optimize our development strategy.

<unk> by $1.2 million related to growth and head count and an increase from the valuation of stock based awards as a result of stock price appreciation.

Net loss for the second quarter, and 2021 was $40.9 million or <unk> 59 per share compared to a net loss of $19.8 million or 33 per share for the same period and 2020 weighted average common shares outstanding for the quarters ended June 32021, and June 32020 were.

Anna Protopapas: Our goal is to provide an update on the ovarian expansion cohort this year at the appropriate time. Lastly, on UPRI, we are approaching completion of enrollment in the Uprere Lung Adelan Karsenoma Expansion cohort. We plan to wait for the entire expansion cohort to be enrolled, valuable, and mature, and expect to disclose the top-line data and determine our next steps in lung in the fourth quarter. We want to ensure we understand the NAPRI-to-B status of these patients in order to determine the patient selection strategy, acknowledging that the bar for investment in the development of Upris as a single agent is high due to the intensely competitive landscape in Lund. As we have indicated before, the prevalence of NAPI to be high, as defined in our ovarian cancer cohort, that is, the tumor proportion scored greater than 75, is substantially lower than in ovarian cancer.

And at least $70 million and $61 million, respectively. I will now turn the call back to Anna Thank you Brian.

The beginning of the year, we communicated our vision of building a free as a foundational therapy and ovarian cancer.

And then we have made significant progress and executing against that Sun uplift provides the potential to benefit platinum resistant patients in desperate need of back to offices upgraded designed to leverage the differentiated profile of upgrades to explore the potential benefit to a substantial.

And the larger number of patients at an earlier stage of their disease and for loan growth and combination followed by continuation and these are critical.

<unk> steps and achieving our aspiration.

GAAP leasing up free as a foundational therapy and ovarian cancer.

Based on the progress we have made to date on all of our programs, we remain on track to execute against the goals and milestones, including for our free we expect to provide and update on the various expansion cohort this year and we expect to complete enrollment and the upgrade lung adenocarcinoma.

Expansion cohorts disclose top line data and determine our next step in this indication and the fourth quarter of this year.

For <unk> 50, and 92, we expect to complete our evaluation and disclosed topline data around year end and for our earlier stage programs, we plan to disclose the SMT and 2056 target at the upcoming Triple meeting in October and we are working with the completion of <unk>.

Enabling studies for both <unk> and exiting 2056 in a timeframe that we expect will allow us to initiate clinical studies and early 2022 with that I will turn the call over to the operator for Q&A.

Anna Protopapas: It appears only about a third of patients with lung cancer have a TPS equal or greater than 75. This compares to a prevalence of approximately two-thirds for ovarian cancer, in lung, and even higher TPS Katov might be necessary to achieve the desired response rate, which could further focus the eligible population. Our decision about the next step will be based on two considerations.

And as a reminder to ask a question you will need to press star 1 on your telephone and can withdraw your question press the pound key.

First question comes from the line of Jonathan Chang from SBB Leerink. Your line is now open.

Good morning, and thanks for taking my questions.

First question it looks like here.

And then to another update and the uprate ovarian cancer expansion cohort. This year can you talk about what drove this decision help set investor expectations.

Anna Protopapas: Overall efficacy observed in a biomarker selected population, and two, the bar necessary for commercial success, given the current and emerging treatments. Turning now to the pipeline, I will start with XMT1592, our Dola Synpton ADC targeting NAPE 2B. Remember that our strategies to develop XMT1592 as a second shot on goal based on the differentiated profile seen in pre-clinical studies in Lungmo. As we communicated previously, we have exceeded the MPD and continue the ongoing exploration of different doses and regimens, and our work to fully characterize the profile of the agent.

Yeah. Thank you Joseph for the question. So as you know as you know over the past throughout 2020, we had 4 different disclosures. So we have been very proactive and sharing data with investors I think.

And now that we've closed the expansion cohort and close alignment to the expansion cohort, we really have an opportunity to consider the timing for that disclosure I think the exact timing the value is still being considered but we are committed to doing that this year.

Got it.

And so.

And I mentioned, we have almost 100 patients enrolled so we think this is a very data rich set of information that will be helpful. As we really mined this information to understand the full profile of the agent and we'll be very well of course at the right appropriate time, we will share.

Anna Protopapas: We expect to complete our evaluation of XMT 1592 and disclose top-line data around year end. Finally, with respect to the pipeline, we have continued to advance two first-in-class preclinical ADCs addressing areas of high-end met needs through IND-enabling studies. For 1660, our B7H Fort La Synthene ADC, in parallel to the IND enabling studies, we have initiated early diagnostic development work, much like we did with Upr for NAPQB. We believe this is an important step to ensure that the diagnostic is developing in tandem with the development of XMP 1660.

And that with investors.

Understood.

And second question can you talk about the enrollment progress that youre experiencing from uplift when might we see the results from this study and I'm curious to know if you've received any feedback from them right on your biomarker testing strategy.

Net.

Very much it's still early so I think we're cautious about giving guidance.

This early stage, but I can tell you that overall the feedback is positive engagement with sites is high both here and outside the U S and we're very much on track with the plans that we had put in place, but again too early to be giving.

Anna Protopapas: For Exempty, 2056, our first immune therapy against Simpson, Sting, Acronist, and ADC, I'm very excited to announce that Tim Loinger, our chief science and technology officer, has been invited to present on this program at the upcoming virtual 2021 triple meeting in October as part of a plenary session on drug conscience. During his presentation, Tim plans to provide further promising preclinical data for Exempty-2015 and disclose We look forward to sharing this information and expect to provide more details around the clinical development plan for 2056 later this year. With that, I'll turn the call over to Brian for an overview of our financial results.

And so at this point RV and anything to add on the diagnostic. Thank you Ana So just in regards to the diagnostic that the sites have been <unk>.

Right.

<unk> by the approach, we're taking it from the standpoint that we and number we test.

Once patients come on study. So there is no turnaround and relationship to testing results and order for patients to come on and so which really allows for the acceleration and the ability for patients to come on swiftly and so this also then supports what we've talked about is our 2 shots on goal and relationship to the potential for uplift.

As far as and a biomarker selected population as well as a potential intention to treat or that broader population.

Understood. Thanks for taking the questions.

And your next question comes from the line of Tom Shrader from <unk> Junior loans now open.

Hi, This is kerry on topline and thanks for the update and thanks for taking our questions.

For the Sting ADC.

Safety allows will you or can you start and earlier lines, maybe somewhere that I on monotherapy and frontline.

Brian C. DeSchuytner: Thank you, Anna. Good morning, everyone, and thank you for joining us.

I think it's a little early for us to share development strategy I think we will as we advance this program closer to <unk> and as we indicated as I indicated we will have an opportunity to outlay R. R.

Brian C. DeSchuytner: I'll now review some of the key financial highlights from our second quarter of 2021, and I'll start with our cash position. We ended the second quarter of 2021 with $227.4 million in cash and cash equivalence. During the second quarter, we sold approximately $2.3 million shares through our at the market or ATM facility at an average price per share of approximately $15, raising that amount of $33.3 million. The net cash used in operating activities in the second quarter was $34.5 million.

Our development strategy.

And just to.

Add to that briefly as from the standpoint, remember Sting offers an opportunity and relationship to a space that checkpoint inhibitors have.

<unk> not been able to address really through the innate immune system relative.

Relative to the checkpoint inhibitor so.

And just providing context and relationship to the differentiation of <unk> versus the checkpoint inhibitors.

Got it and for non small cell lung cancer. These patients are often treated with cable and targeting chemotherapy and earlier line do you think.

That can impact the efficacy of your ADC.

So remember I mean, the adcs do allow for targeting specifically and a more potent payload. So the question is obviously not determined yet just in relationship to whether or not the <unk>.

Brian C. DeSchuytner: In addition to our current cash position, we have the option to draw funds through the debt financing agreement with Soton Valley Bank, which was refinanced in August of last year. We expect that our available funds will allow us to meet our current operating plan commitments for approximately the next two years.

And can impact the impact of or efficacy evaporate, but keep in mind that and ovarian cancer. We have achieved proof of concept right. We have demonstrated significant activity and these populations, where they're also receiving multiple lines of prior chemotherapy, including potential tubular and inhibitors.

Brian C. DeSchuytner: And now some of the key highlights from our second quarter 2021. Financial, Research, and development expenses for the second quarter of 2021 were approximately $32 million, compared to $15.4 million for the same period in 2020. The difference is primarily due to an increase in up-re manufacturing, manufacturing, clinical, and regulatory expenses, an increase in manufacturing activities for our preclinical and discovery stage programs, an increase in headcount, and advancement of the diagnostic development efforts for the NAPI-2B biomarker.

Makes sense. Thank you.

And your next question comes from the line of Boris Becker from Cowen. Your line is now open.

Good morning, I'd like to ask a question about the upgrade study and I'm. Just curious what are the key efficacy parameters that we should be focused and they are pretty combo with platinum is it response rate. The durability of response I can kind of put it in context for us what is the normal response rate and durability of responses.

And for second line and third line.

And patients.

Right. So I can start out and obviously, Tim can add on it and regards to the treatment landscape, but on the primary efficacy and a single arm study is response rate and so that's the.

Primary and measure are recognizing that event driven endpoints, such as PFS and overall survival.

And typically it's better to measure them and randomized.

Brian C. DeSchuytner: Non-cash, stock-based compensation expense included in these research and development expenses increased by $1.7 million related to growth and headcount and an increase in the valuation of stock-based awards as a result of stock price appreciation. General and Administrative expenses for the second quarter of 2021 were approximately $8.9 million compared to $5.2 million in the same period in 2020. The increase was primarily due to an increase in headcount and consulting in professional fees.

Randomized fashion in order to compare with the control on but certainly the response rate and the duration of response that depth of response, meaning the fear and the PR. These are all type of efficacy endpoints that would be evaluated to better understand the profile of again, a operate which offers not only the potential for greater activity, but also.

Safety profile that we've seen in regards to the lack of the severe neutropenia ocular toxicity and peripheral neuropathy, which would support again the combinations.

And the ability for effective combinations with platinum as well as potential other agents and.

And Bob maybe I can just comment on.

The historical benchmarks in this space there are 2 benchmark studies and the space that studied the addition of bats, and the platinum based chemotherapy.

These are ocean and <unk> 2014, the control arm. So those studies are informative, but I would just caution that these were and the pre.

Brian C. DeSchuytner: Non-cash, stock-based compensation expense included in these general and administrative expenses increased by $1.2 million related to growth in headcount and an increase in the valuation of stock-based awards as a result of stock price appreciation. The net loss for the second quarter of 2021 was $40.9 million, or 59 cents per share, compared to a net loss of $19.8 million or 33 cents per share for the same period in 2020. The weighted average number of common shares outstanding for the quarters ended June 30th, 2021, and June 30th, 2020 were approximately 70 million and 61 million, respectively.

Frontline PARP and pre frontline Bev treatment landscape. So today patients are more heavily pretreated and there's some evidence that.

Treatment with PARP.

Effect platinum responsiveness and later line, but the.

The response rate and the control arms for both of those studies were in the 50% range.

Got it and just lastly can you just remind us exactly what is the mechanistic differentiate and $15.92 and a free.

Yeah.

Okay.

Tim could you take that.

Sure.

So mechanistically Boris.

Both.

Share the same antibody and the same payload.

Really the difference with 50, and 92, and it's a fully homogeneous ADC, which in head to head comparison.

We saw it was 2 to 4 fold more efficacious.

Anna Protopapas: I'll now turn the call back to Anna. Thank you, Brian.

And as well as better tolerated.

Anna Protopapas: Thank you, Brian. At the beginning of the year, we communicated our vision of building Upris as a foundational therapy in ovarian cancer. Since then, we have made significant progress in executing against that plan. Uplift provides the potential to benefit platinum-resistant patients in desperate need of better oxygen. Upgrade is designed to leverage the differentiated profile of Upris to explore the potential benefit to a substantially larger number of patients at an earlier stage of their disease and for longer in combination, followed by continuation. These are critical steps in achieving our aspiration of establishing Upray as a foundational therapy in ovarian cancer.

And the non critical.

Model.

Got it. Thank you very much for taking my question.

Okay.

And again, if you would like to ask a question per store and the number 1 and that's all the phone keypad.

Question comes from the line and Jessica Fye from Jpmorgan. Your line is now open.

Hey, guys. Good morning, Thanks for taking my questions and just a few here and.

And so while you and I'm talking about the timing.

For enrollment completion for uplift or the timing for data can you, maybe just remind us how soon from enrollment completion.

You will be able to report top line results and just what that kind of GAAP would be.

And second can you elaborate a little bit and dose exploration work Youre doing with 15.92, I think you've previously talked about data there and the back half and now it's around year end. So hoping you can just share a little more detail and to help us understand and what you're evaluating and this additional dose exploration and.

And last 1 just this quarter's R&D is that a good run rate going forward or was it may be inflated a little bit by the upgrade and manufacturer and you mentioned.

I'll take the 15.92 quickly on Alaska, RV and to take and Bryan to take the others. So our focus in the dose escalation portion is really to find the optimal.

Anna Protopapas: Based on the progress we have made to date on all of our programs, we remain on track to execute against the goals and milestones, including for UprRI. We expect to provide an update on the variant expansion cohort this year, and we expect to complete enrollment in the Uprilangadenocarsinoma expansion cohort, disclose top-line data, and determine our next step in this indication in the fourth quarter of this year. For XMT 1592, we expect to complete our evaluation and disclose top-line data around year end.

Dose and regimen to go forward.

On the 1 that delivers the best efficacy based on their ability if you'll recall back too.

I would draw a parallel with a free if you recall, we were dose escalating on on.

Once every 3 week regimen, and then analyze the data and decided through the clinical data and some additional work we did pre clinically that going to a 4 week schedule, which worth exploring we tried that and really ended up with that would be the optimal.

Schedule, so without getting into the specifics until we have the complete data set I would point to a parallel here, where we're exploring how to find the optimal.

Regimen and before we can decide.

How to best go forward with the next step.

Great. Thanks, Thanks, and and maybe just just got good hearing from you for briefly just in regards to the uplift as far as enrollment moving forward on what would be quite standard as Jeff and relationship to after that last patient has received first dose therapy and need to have certain amount of follow up and so 6 months follow up for that patient.

Anna Protopapas: And for our earlier stage programs, we plan to disclose the XMT 2056 target at the upcoming triple meeting in October, and we are working towards the completion of I&D enabling studies for both XMT 1660 and XMT 2056 in a timeframe that we expect will allow us to initiate CLOBELA studies in early 2022. With that, I will turn the call over to the operator for Q&A.

And would likely be sufficient and a way to follow them for durability and and treatment, which would then lead to the top line.

And and maybe I can just speak to the point that you raised about the operating expenses, so as U S and.

Notice our operating expenses have recently gone through and inflection point as a result of our increased investment and crude directly to the organization to support building up REIT and building out the pipeline.

As you wisely commented on manufacturing can be really chunky, because it generally starts and ends and and and 1 quarter and believe.

Operator: And as a reminder, to ask a question, you will need to press star 1 on your telephone. And to withdraw your question, press the number 0. Your first question, go to the line of Jonathan Chang from SVB Lerink. Your line is now open. Good morning, and thanks for taking my questions. First question, it looks like you're now guiding to another update in the Upree Ovarian Cancer Expansion Cohort this year. Can you talk about what drove this decision and helped set investor expectations for this?

We would expect the rate of growth to moderate from here and we have a very lean cost structure and remain nimble and and disciplined and our capital allocation decisions as we as we really advance our molecule and we think could be transformative and Auvergne.

And cancer and a number of first in class pipeline assets.

Great and.

And I guess follow up on the comments on 15, 92, and it sounded like and the past there was going to be sort of an interplay or on the agreed day day, you're generating and long and comparing that to some of the initial 15.92 data and long so it is.

And 92 data still.

Necessary to make a decision on how to proceed with a free and lung.

Yes. It is I think there is an interrelationship between the 2.

A couple of reasons, 1 I think we're understanding the prevalence of not b to b by studying upstream and lung and and where where is expression and what is the level of expression. So that's 1 and the dose escalation and dose exploration work we're doing.

Anna Protopapas: Yeah, thank you, Jonathan, for the question. So as you know, as you know, over the past, you know, throughout 2020, we had four different disclosures. So we have been very proactive in sharing data with investors. I think, you know, now that we've closed the expansion cohort and closed enrollment in the expansion cohort, we really have an opportunity to consider the timing for that disclosure. I think the exact timing and the exact venue are still being considered, but we are committed to doing that this year.

We are very focused on getting to the right dose quickly. So I have I have to say that a lot of the patients are ovarian we have not chosen to just focus on lung because what we're trying to understand is really the optimal dosing regimen, there and it gives us an opportunity to.

Compare a number of factors.

And on upstream exposure a side effect profile efficacy profile. So the 2 data sets need to come together to make a decision as to where we'd go index.

Okay. Thank you.

And your next question comes from the line of clean closely from Baird. Your line is now open.

Hello. This is Ben from pollution on for choline and just a few questions for us as it relates to the upgrade study and earlier ovarian cancer.

Believe it or not pre selected for <unk> expression.

Anna Protopapas: Got it. As I mentioned, we have almost 100 patients enrolled, so we think this is a very data-rich set of information that will be helpful as we really mine this information to understand the full profile of the agent, and we'll be very, you know, of course, at the right time, we will share that with investors.

Would you expect to potentially different and that'd be true cut off for the chemo combo and then do you see potential for efficacy and patients regardless of the net b 2 expression or would you expect.

And youll use on a different and that would be to cut off. Thank you.

Yeah.

So this is all and thanks for the question. So we will not be selecting patients by <unk> status.

For the upgrade Carboplatin combination.

And that's in order for us to understand really the role of not be to the when combined with monotherapy. We've had a robust program and relationship to defining the cut off of that would be to be and the monotherapy program.

Anna Protopapas: And second question, can you talk about the enrollment progress that you're experiencing for uplift? When might we see the results from this study? And I'm curious to know if you've received any feedback from the site on your biomarker testing strategy.

Which we've previously described the process and the robustness and relationship at defining that cut off but we do want to better understand and when combined with chemotherapy.

Whether or not and not be TV plays a large role just and relationship to optimizing the benefit risk for these patients.

Anna Protopapas: You know, it's still early, so I think we're cautious about giving guidance at this early stage. But I can tell you that overall, the feedback is positive, the engagement with sites is high, both here and outside the U.S., and we're very much on track for the plans that we had put in place. But again, it's too early to be giving guidance at this point. Marvin, anything to add to the diagnostics? Thank you, Anna. So, just in regards,

Yeah.

Perfect. Thank you so much and then I'm just curious for the upgrade study.

Have you had any conversations with physicians as to not including Paclitaxel.

And how comfortable do you think the physicians are with only a dosing turbo and the earlier lines of ovarian and I don't know if there's any examples you can maybe on the speed you. Thank you.

Okay.

I would just say that this is the trial day investigators were most excited about.

And as we were getting input on our on our whole plan for outbreaks I mean, I think there were this was a top priority are great and just to add the clinical elements to it is that and as we described earlier upper provides and efficacy profile.

Arvin Yang: Thank you, Anna. So just in regards to the diagnostic, the sites have been quite encouraged by the approach we're taking from the standpoint that, remember, we test once patients come on study. So there's no turnaround in relationship to testing results in order for patients to come on, which really allows for the acceleration and the ability for patients to come on swiftly.

We believe the active but also in addition has.

Safety profile with again without that neuropathy.

Ocular toxicities, and so forth and so it could be foundational and relationships a combination with carboplatin and so on the idea there is that could it potentially.

A replay paclitaxel and 1 of the statements we've made yeah, and and an important but maybe subtle point here is that this affords the opportunity for continuation therapy from 1 of the challenges with a platinum plus taxane has been that it can really only be dose for a fixed number of cycles before the cumulative toxicities or become.

Arvin Yang: And so this also then supports what we've talked about as our two shots on goal in relationship to the potential for uplift as far as in a biomarker selected population as well as a potential intention to treat or that broader understanding. Thanks for taking the questions. And your next question, call the line of Tom Schrader from BTIG. Your line is now open. Hi, this is Kavari on Townsline. Thanks for the updates and thanks for taking our questions. For the Stink ADC, if safety allows, will you or can you start in earlier lines, maybe somewhere where IOMONotherapy is frontline?

And welding there had been studies quite a quite some time ago now that looked at longer duration taxane therapy, So 12 cycles and so the 6 cycles and what it showed was you could really increase BFS. If you did that but the patients were so beat up at the and that all of that benefit was lost and the subsequent lines.

So that this has been and objective of the Kols community for quite some time question is what is the tool what is a transformative medicine that could actually allow us to achieve to occur.

Terrific. Thank you so much for your comments.

And there are no further questions at this time I'll turn the call back over to Anna.

Well I just want to thank everyone for listening to our call and we all look forward to updating you as we advance upgrades and the rest of the pipeline.

Anna Protopapas: I think it's a little early for us to share development strategies, but I think as we advance this program closer to I&D, as I indicated, we will have an opportunity to outline our development strategy.

And this concludes today's conference call. Thank you for participating you may now disconnect.

Arvin Yang: And just to add to that briefly, from the standpoint of remembering that Sting offers an opportunity in relationship to a space that checkpoint inhibitors have not been able to address, really through the innate immune system relative to the checkpoint inhibitors. So just providing context in relationship to the differentiation of Sting versus the checkpoint inhibitors. And for non-small lung cancer, these patients are often treated with tubulin targeting chemotherapies in earlier lines. Do you think that could impact the efficacy of your ADC? So remember, I mean, the ADCs do allow for targeting specifically of a more potent payload.

[music].

Anna Protopapas: So the question is obviously not determined yet just in relation to whether or not tubulin can impact the impact or efficacy of upri. But keep in mind that in ovarian cancer, we have achieved proof of concept, right? We have demonstrated significant activity in these populations where they're also receiving multiple lines of prior chemotherapies, including potential tubulin and Makes sense. So thank you. In your next question, gone from the line of Boris Speaker from Cohen. Your line is now open.

Anna Protopapas: Good morning. I'd like to ask a question about the upgrade study. I'm just curious, what are the key efficacy parameters that we should be focused on in the upper-ecombo with platinum? Is it response rate, is it durability of response? Can you kind of put it in context for us?

Anna Protopapas: What is the normal response rate and durability of responses for second-line and third-line patients? Right, so I could start out, and obviously the team can add on in regards to the treatment landscape, but the primary efficacy of a single-arm study is response rate as the primary measure, recognizing that event-driven endpoints such as PFS and overall survival are typically better to measure them in a randomized fashion in order to compare with a control.

Anna Protopapas: But certainly, the response rate, the duration of response, the depth of response, meaning the CR and the PRs, these are all types of efficacy endpoints that would be evaluated to better understand the profile of, again, Opry, which offers not only the potential for greater activity but also a safety profile that we've seen in regards to the lack of severe neutropenia, ocular toxicity, and peripheral neuropathy, which would support, And Boris, maybe I can just comment on the historical benchmarks in this space.

[music].

Anna Protopapas: There are two benchmark studies in space that studied the addition of Avastin, the platinum-based chemotherapy. Those studies are Oceans and GOG-213. The control arms of those studies are informative, but I would just caution that these were in the pre-frontline PARP and pre-frontline Bev treatment landscape. So today, patients are more heavily pre-treated, and there's still. some evidence that, you know, treatment with PARP will affect platinum responsiveness in later lines. But the response rate in the control arms for both of those studies was in the 50% range. And just lastly, can you just remind us exactly what the mechanistic difference is between 1592 and Upre? Thank you.

Tim: Tim, could you take that?

Tim: Sure. So mechanistically, Boris, they both share the same antibody and the same payload. Really, the difference with 1592 is that it's a fully homogeneous ADC, which in head-to-head comparisons, we saw was, you know, two to four-fold more efficacious, as well as better tolerance, in the non-critical model.

Anna Protopapas: Got it. Thank you very much for taking my question. And again, if you would like to ask a question, press Thor, then the number one on your telephone keypad. For your next question, come from the line of Jessica Fye, from J.P. Morgan. Your line is now open. Hey guys, good morning. Thanks for taking my questions. Just a few here.

Jessica Fye: So while you're not talking about the timing for enrollment completion for uplift or the timing for data, can you maybe just remind us how soon from enrollment completion you will be able to report top-line results, so just what that kind of gap would be? Second, can you elaborate a little bit on the dose exploration work you're doing with 1592? I think you've previously talked about data there in the back half, and now it's around year end, so I'm hoping you can just share a little more detail to help us understand what you're evaluating in this additional dose exploration. And last one, just this quarter's R&B. Is that a good run rate going forward, or was it maybe inflated a little bit by the upgrading manufacturing you mentioned?

Anna Protopapas: I'll take the 1592 quickly, and I'll ask Arvin to take and Brian to take the others. So our focus in the dose escalation portion is really to find the optimal dose and regimen to go forward. The one that delivers the best efficacy with the best tolerability. If you recall back to Upri, if you recall we were dose escalating on a once every three-week regiment and then analyzed the data and decided, through the clinical data and some additional work we did preclinically, that going to a four-week schedule was worth exploring.

Anna Protopapas: We tried that and really ended up with that being the optimal schedule. So, without getting into the specifics until we have the complete data set, I would point to a parallel here where we were exploring how to find the optimal regimen before we could decide how to best go forward with the next.

Arvin Yang: Great, thanks, and maybe just Jessica, good hearing from you briefly. Just in regards to the uplift as far as enrollment moving forward, what would be quite standard is just in relation to after that last patient has received the first dose of therapy, you need to have a certain amount of follow-up. And so six months of follow-up for that patient would likely be sufficient in a way to follow them for durability and treatment, which would then lead to the top line.

[music].

Brian C. DeSchuytner: And maybe I can just speak to the point that you raised about operating expenses. So, as you notice, our operating expenses have recently gone through an inflection point as a result of our increased investment, including growth in the organization to support building upri and building out the pipeline. As you wisely commented, manufacturing can be really lumpy because it generally starts and ends in one quarter. But we would expect the rate of growth to moderate from here.

Brian C. DeSchuytner: And we have a very lean cost structure and remain nimble and disciplined in our capital allocation decisions as we really advance a molecule that we think could be transformative in ovarian cancer and a number of first in class pipelines.

Anna Protopapas: Great, Anna, can I just follow up on the comments on 1592? It sounded like in the past there was going to be sort of an interplay around the upree data you're generating in lung and comparing that to some of the initial 1592 data in lung. So is the 1592 data still necessary to make a decision on how to proceed with upri in lung? Yes, he's

Anna Protopapas: Yes, it is, I think there is an interrelationship between the two. A couple of reasons. One, I think we're understanding the prevalence of NAPI to be by studying the upper lung and where there is expression, and what is the level of expression. So that's one.

Anna Protopapas: In the dose escalation and dose exploration work we're doing, we are very focused on getting to the right dose quickly. But I have to say that a lot of the patients are ovarian. We have not chosen to just focus on the lung because what we're trying to understand is really the optimal dosing regimen there, and it gives us an opportunity to compare a number of factors with what we learned about upbringing, exposure, side effect profile, and efficacy profile. So the two data sets need to come together to make a decision as to where we go next.

Anna Protopapas: In your next question, going from the line of Colleen Cousy from Beard. Your line is now open. Hello, this is Benjamin Kalu, Chanford Cousy. Just a few questions for us.

Operator: As it relates to the upgrade study in earlier ovarian cancer, I believe you're not pre-selecting for nappy expression. Would you expect a potentially different NAP-B2 cutoff for the chemo combo? And then, do you see potential for efficacy and patients regardless of the NAP-B-2 expression, or would you expect you'll use a different NAP-2 cutoff? Thank you. So this is Arvin. Thanks for the question.

Arvin Yang: So we will not be selecting patients by NAPB2B status for the upgrade carboplatinum combination. And that's in order for us to understand, really, the role of NAP2V when combined with monotherapy. We've had a robust program in relationship to defining the cutoff for that B2B in the monotherapy program, and we've previously described the process and the robustness of defining that cutoff. But we do want to better understand, when combined with chemotherapy, whether or not NAPDV plays a large role just in relationship to optimizing the benefit risk. Perfect, thank you so much.

[music].

Arvin Yang: And then I'm just curious about the upgrade study. Have you had any conversations with physicians as to not including Pachl? How comfortable do you think physicians are with only dosing tarbo in the earlier lines of ovarian cancer? I don't know if there are any examples you may be able to speak to.

Anna Protopapas: I would just say that this was the trial the investigators were most excited about as we were getting input on our whole plan for Uprits. I mean, I think there were, this was the top priority.

Anna Protopapas: Agreed, and just to add the clinical elements to it is that, as we described earlier, Upride provides an efficacy profile that we believe is similar to active, but also, in addition, has a safety profile again without that neuropathy, the ocular toxicity, and so forth, and so it could be foundational just in relation to combination with carboplatinum. And so the idea there is that it could potentially replace tachotoxyl, which is one of the statements we've made.

Anna Protopapas: Yeah, and an important but maybe subtle point here is that this affords the opportunity for continuation therapy. So one of the challenges with platinum plus taxane has been that it can really only be used for a fixed number of cycles before the cumulative toxicities become overwhelming. There had been studies quite a long time ago now that looked at longer-term taxane therapy, so 12 cycles instead of six. And what it showed was you could really increase BFS if you did that, but the patients were so beat up at the end that all of that benefit was lost in the subsequent line. So this has been an objective of the KOL community for quite some time. The question is, what is the tool, what is the transformative medicine that could actually allow this to occur?

Anna Protopapas: Perfect. Thank you so much for your comments. And now, if there are any further questions at this time, I'll turn the call back over to Anna.

Anna Protopapas: Well, I just want to thank everyone for listening to our call, and we all look forward to updating you as we progress with Upris and the list of the pipeline.

Operator: And this concludes this conference call. Thank you for participating. You may now disconnect.

Operator: BF-WATCH TV 2021 Thank you, and and and so you know, and Thank you, and Thank you. Thank you. Thank you, and Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, and thank you. Thank you. Thank you. Thank you, and and Thank you.