Q4 2021 Neoleukin Therapeutics Inc Earnings Call

Today's conference call is scheduled to begin shortly please continue to standby and thank you for your patience.

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Good afternoon, and thank you for joining us today from <unk> Therapeutics conference call at.

At this time, all participants are in listen only mode.

Following the conclusion of the prepared remarks, we will conduct a question and answer session and instructions will follow at that time.

As a reminder, today's conference call is being recorded.

I would now like to turn the call over to Julie Rathbun Communications for Neil Lucan Therapeutics Julie. Please go ahead.

Thank you good afternoon, and welcome to the <unk> Therapeutics year end 2021 conference call.

Joining me on the call today from the American Jonathan Jackman, CEO , <unk> Patel, CMO and Sean Smith, Vice President Finance today's call is being recorded it will be available for replay on the Investor Relations section of <unk> website, approximately two hours after the call for at least 30 days before we start I'd like.

To remind you that today's call will include forward looking statements based on current expectations such statements represent managements judgment intentions beliefs and expectations about future events strategies product candidates and operating plans. All forward looking statements included in this presentation are made as of today and involve assumptions risks.

And uncertainties and actual results could differ materially from those anticipated in the forward looking statements.

<unk> undertakes no obligation to update or revise any forward looking statements. Please refer to the company's filings with the SEC, which are available from the SEC or in the <unk> website for information concerning the risk factors that could affect the company I would now like to turn the call over to Jonathan Druckman. Thank.

Thank you Julie and good afternoon.

To begin with a few recent transitions at Neocon first I'd like to take a moment to acknowledge that Bob will be leaving <unk>. After two years as our CFO to pursue another opportunity. He has built a strong finance department in his time with us and leaves us with an excellent team that will be led by Sean Smith, who is joining me on the call.

Today, Shawn has been with <unk> since 2019, as our controller and we will now lead the finance team MBR principal accounting officer until we appoint a new CFO .

I am very pleased to announce that we also have a new member of our board of directors ROE on pilot car, who is currently the CEO of 89 buyout Rohatyn has decades of experience in biotechnology in both small and large companies and has held key leadership positions at J&J at Medivation.

Before becoming CEO of Avenir and subsequently 89 bio I look forward to working with <unk> on the board.

Rowan will be replacing Rusty Williams, who will be stepping off the board. After three years Rusty has been a terrific board member and we have benefited greatly from his wisdom and experience.

And now I'd like to recap our progress in 2021 and look ahead to milestones expected during 2022.

As a reminder, Neil Lukin was founded at the end of 2018 went public in August of 2019 through a merger we submitted our first IND at the end of 2020 and began a phase one clinical trial in May of 2021 <unk>.

During our three year history, Neil look and has built a state of the art computational and protein Engineering research organization.

The science underlying our technology has been published in the prestigious journal nature, and science and we have assembled a talented team of more than 90 scientists clinical developers and biotech professionals to advance our science and develop novel therapies to help patients with serious medical illnesses.

Today I'd like to discuss our progress with the first in human Phase one clinical trial of NL 201.

Our plans for further development of this program and our early stage pipeline that we are advancing towards potential future clinical evaluation.

2021 was a busy year for Nielsen.

For starters, we added several key leaders to our executive team in May Dr. Priddy Patel joined US as Chief Medical Officer <unk> previously served as Vice President head of Hematology clinical development at Astrazeneca and brings extensive experience in clinical development strategy in trial execution of investing.

<unk> therapeutics with specific expertise in oncology in hematologic malignancies.

And last fall Bill Arthur joined US as Vice President and head of research Bill was previously at Sea Gen, where he served most recently as senior director and head of cancer Biology, and was previously at Merck and Rosetta in farm farm Alex.

Leading the discovery of oncology targets predictive Biomarkers and synergistic drug combinations Bill is a skilled research leader who has guided research efforts on therapeutic candidates from discovery through clinical development utilizing novel platform technologies.

Both <unk> and Bill are great additions to our <unk> team and are making significant impacts, leaving our clinical and research efforts.

In may of last year, we treated our first patient in a phase one clinical trial for NL 201, officially making the transition to become a clinical stage company.

We also moved into our new headquarters in Seattle with expanded lab and office space for our team.

While the Covid pandemic has impacted our pipeline development, we now have the space and scientific expertise to make rapid progress.

Although our rate of growth slowed somewhat during 2021, we finished the year with more than 90 full time employees.

And finally in the second half of 2021, we presented preclinical data at multiple scientific conferences on topics ranging from NL 201, and its effects on the tumor microenvironment to initial data about our novel IL, two IL 15 inhibitor molecule.

Looking forward, we expect a number of upcoming milestones in 2022.

We expect to report interim phase one dose escalation data on the NL 201 in the second half of the year. We believe this will be the first data of a fully de novo protein in patients.

Next we plan to initiate a combination of NL 201, and pepper Liz map in patients with advanced solid tumors.

In addition, we plan to use information obtained from our solid tumor trial as well as preclinical data to begin evaluation of NL 201 in hematologic malignancies.

And finally, we anticipate providing further information on progress with the research pipeline.

And now turning to our clinical program NL 201.

<unk> hundred one is a highly potent de novo protein that stimulates both the IL, two and IL 15 receptors and.

<unk> hundred one was designed using computational methods and then refined through directed evolution and extensive testing in the laboratory. It is thermodynamically hyper stable more potent than native IL, two and preferentially stimulates naive CDA T cells, and NK cells versus immunosuppressive T regulatory cells.

At low concentrations.

Because the portion of the protein scaffolds that normally interacts with the Alpha sub unit also known as CD 25 has been completely replaced there is no residual or potential bias towards T regs and no other high affinity sites that need to be saturated in order to activate potential cancer fighting immune cells.

I will now ask <unk> to talk about our clinical plans pretty.

Thanks, Jonathan.

To share an update on our clinical program.

First in human clinical trial of <unk>, one is being conducted in patients with relapsed or refractory solid tumors.

Well evaluate that as well.

Thank you.

One in order to with that.

Pharmacokinetics, pharmacodynamics and anti tumor activity.

After a recommended phase II dose schedule is identified we plan to win.

<unk> indication specific expansion cohorts, including patients with renal cell carcinoma and melanoma.

The open label Phase one trial of <unk>, one and currently active at EA play in the United States.

Australia, and Canada with good investigator engagement.

We are enrolling patients quickly please.

Please to present interim dose escalation data at an appropriate in the second half of 2022.

In January this year, we announced the clinical trial collaboration and supply agreement with Merck. The agreement allows for the evaluation of safety and efficacy of <unk> hundred one in combination with Mark anti PD, one therapy, keytruda or pep relative to NAV.

Ongoing phase one trial patients with relapsed or refractory solid tumors, we will receive a standard dose of timberlands and that combined with descending doses of <unk> hundred one in order to define a recommended dose and schedule for the combination regimen.

NL 201, timberlands and that combination will be tested as a separate arm of the ongoing phase one trial and is expected to begin enrollment by mid year.

Last year, we presented preclinical data demonstrating that <unk> hundred one has synergistic activity when combined with anti PD one therapy.

In checkpoint refractory.

Cancer models.

In addition, we showed that <unk> can turn cold tumors hot expanding both the absolute number in total diversity of tumor infiltrating T cells and increasing the amount of interferon gamma and Grand Blanc be produced in the tumor micro environment.

We hypothesized that this combination will enable a greater percentage of patients to benefit from immunotherapy and has the potential to move into earlier lines of therapy as a chemotherapy free regimen.

During 2022, we plan to initiate a new phase one dose escalation trial testing <unk> hundred one monotherapy in patients with relapsed and refractory hematological malignancies, including multiple myeloma and b cell derived non hodgkin lymphoma.

We expect to be able to use information from the solid tumor trial to guide the starting dose and the heat dose escalation plan.

At the American Society of Hematology meeting in December two abstracts reported on preclinical NL 201, anti tumor activity one in non Hodgkin lymphoma, and one in multiple myeloma.

The data in the preclinical model multiple myeloma model demonstrates the ability of <unk> hundred one can delay or prevent relapse following autologous stem cell transplant.

Sentimental results indicate that <unk> hundred one causes expansion of cytotoxic memory CDA T cells and a decrease in T regulatory CD four cell in the murine bone marrow.

Furthermore, T cells in the Marine Bill barrel had an increase in grants idea question and a decrease in the exhaustion phenotype. After NL 201.

Finally, the potent effect of IL 15.

<unk>, an NK cells has the potential to increase ADC activity in future combinations with <unk>.

Their team of map and other monoclonal antibody.

Our preclinical data suggests that <unk> could benefit patients broadly across many indications and in combination with a wide variety of standard of care and we look forward to generating clinical data in patients with a variety of indications during 2022.

Jonathan will now provide a brief update on our pipeline.

Thanks.

Throughout the past year, we've made strides in our research efforts as we explore the range of opportunities that Neil Lukins de Novo protein technology platform has to offer our approach of designing de novo proteins to improve on native sequences represents an important shift in the way new biological drugs could be developed.

By creating completely new molecules, we can optimize multiple parameters, including potency affinity stability size and exactly which parts of the target receptors are engaged.

In November of 2021, we disclosed Neo <unk> hundred 71 at the American College of Rheumatology annual meeting Neo 571 is a potent and hyper stable computationally design protein that blocks signaling by endogenous IL, two and IL 15 with potential applications in inflammatory and autoimmune.

<unk>, we showed that Neil $5 seven one can withstand acidic environment and is resistant to degradation by common proteases, including Cups and then we also demonstrated that $5 seven one can be fused to a life halfway extending domain and administered systemically with improved survival.

Immunosuppressed mice in graft versus host disease model at.

At this time, we are still testing different disease models and modes of administration, we will provide future updates regarding the status of neo 5171 and potential development plans.

In addition to 571, our current discovery stage pipeline includes a T. Reg agonist program targeting autoimmune and inflammatory conditions and a next generation IL two IL 15 agonist for oncology indications.

We designed <unk> to be a potent activator of IL, two and IL 15 responsive cells without preferentially binding to cells expressing CD 25, our future efforts are focused on modifying the bio distribution of this molecule via targeting <unk> conditional activation.

With that I'd now like to turn the call over to Sean Smith to discuss our year end 2021 financials Sean.

Thanks, Jonathan and good afternoon, everyone. We ended 2021 with cash and cash equivalents of $142 5 million compared to $192 6 million at the end of 2020.

Research and development expenses for the year with $39 2 million compared to $24 3 million in 2020.

The increase in R&D expenses in 2021 was primarily due to increased expenses incurred from clinical trial activities related to our lead product candidate <unk> hundred one.

Personnel related costs in connection with the advancement of other new look and technologies.

The increase was also due to facility related costs associated with the Buildout of Nielsen's, New laboratory and headquarters in Seattle, Washington.

G&A expenses for the year were $21 5 million compared to $17 2 million in 2020.

The increase in G&A expenses in 2021 was primarily due to increases in personnel related costs.

Net loss in 2021 was $60 7 million compared to $33 3 million in 2020.

The increase in net loss as mentioned is primarily driven by increased clinical trial expense related to the NL 201 increase in personnel costs and costs related to the build out of our headquarters in Seattle, Washington.

Our operating cash burn for the year with approximately $50 million after adjusting for noncash items and based on our current operating plan. We believe our cash on hand will be sufficient to fund operations into the second half of 2023.

And with that I will turn the call back over to Jonathan for some concluding comments. Thanks, Sean.

We're looking forward to the coming months as we progress NL 201 through dose escalation and gather information to help US guide optimal dosing and schedule based on Tolerability pharmacokinetics and pharmacodynamics. This will be an important year for <unk> as.

As we learned about how our lead molecule performs in patients and continue to focus on extending the potential of our technology.

We've enjoyed connecting virtually with members of the investment in scientific community over the past year and look forward to meeting in person when the opportunity permits.

We appreciate the dedicated efforts of our talented team at Neal, who can and remain focused on our overriding goal to advance our de novo protein technology platform to benefit patients with serious diseases, including cancer inflammation and autoimmune diseases.

Operator, we can now open the call up for questions.

Thank you you asked the question you will need to press star one of your telephone to withdraw your question. Please.

Please standby.

On a roster.

Our first question comes from Greg Harrison with Bank of America. Your line is open.

Hi, there. Good afternoon. This is Maggie on for Brian Thanks for taking our question.

In regards to approaching the <unk> hundred one monotherapy readout expected in the second half of this year what level of monotherapy activity for 201 in solid tumors would be clinically meaningful to you.

Thanks for the question. So the question was.

As we look at our readout what are we looking for in terms of.

Of activity and.

Why don't I have <unk> take that question.

Sure.

And I think it's Tom.

<unk> is currently in a phase one clinical trial with all comers in solid tumors, relapsed and refractory where testing to schedule. Those day. One every three weeks in day, one and eight.

Scheduled at.

Mono therapy and the initial data that we plan to present in the second half of 2022.

What we've guided to we'll focus on safety and Tolerability, mostly and then addition will look at PK PD.

From that dose escalation data I think.

At the end of 2022, there will be some.

<unk>.

Have a therapy that will take a look at our goal is to sell.

It can have some monotherapy activity.

We think about potential combination strategies.

And just to add a little bit to that.

The.

The interim data will be based on dose escalation and not in.

Indication specific cohorts, it's going to be hard to have a real estimate of activity. So as <unk> mentioned, we're really going to be looking for what is the balance of tolerability and activity and how does that start to influence the way we think about this moving forward into.

Into the expansion cohorts.

Thank you. Our next question comes from Joe Kennedy.

With Piper Sandler your line is open.

Hey, guys. Thanks for taking my questions and congrats on the progress that I wanted to follow up on the last question.

That's good in a slightly different way.

I wonder whether you see some PD marker as being more predictive of potential clinical activity, whether that overall cba's expansion or CDA T Reg ratio.

What we've seen historically in this space, whether there has been good correlations between some of these PD markers and ultimately the monotherapy clinical activity, that's observed and I have a follow up.

Sure well I'll start with the answer I think it's really hard to look at Biomarkers.

Because although we have a good sense of what a.

Our molecule can do pre clinically there isn't good correlation with high dose IL, two or prior experiments or prayer.

Studies to predict pharmacodynamics with clinical outcomes I think one of the things that's exciting about NL 201 is that.

Low doses is immune activating and so we may not.

<unk>.

Have to go to the very high doses that for example, the fluke and does in order to have a favorable immune activation versus.

Versus immunosuppressive ratio.

So.

I think that.

It's something that we're going to learn during the during this process.

But we are thinking that potentially.

There may be a difference with this molecule because of the.

The favorable benefit to immune activation at low doses.

Prepay anything that you'd add to that.

No nothing further.

Okay got it.

That is helpful.

Understand.

A follow up I'm wondering at the moment, where do you plan stand for potentially exploring intra tumoral delivery and how is the current systemic trial informing whether thats an approach.

Worth pursuing.

That's great question pretty you want to take that.

Sure.

We're really interested in the scientific approach of intra tumoral dosing and.

This is what we're hoping to learn we're looking for further opportunities to explore this.

There are other companies in this space, who are looking for instance at the interim ethical approach in bladder cancer and so it's a it's the method.

Delivery that we think could be suited very well for our drug and we're exploring opportunities to look at.

Yes, there is a long history of people using IL, two as intra tumoral treatment local treatment for melanoma and other accessible tumors.

Okay, great. Thanks, Thanks for taking my question.

Thank you. Our next question comes from Charles <unk> with Guggenheim. Your line is open.

Good afternoon, everyone and thanks for taking my questions and I guess also hasnt been will follow up to some of the prior questions.

How should we think about where you are in your dose escalation relative to where the potential efficacious windows a lot similar to that.

Should we also think about the potential patient follow up that youll have especially given that immuno oncology approaches.

Perhaps likelihood this between clinical benefit longer term, but may not be as obviously observed early on and something like early.

Response thanks.

Thanks for the question Charles.

So just as a reminder.

First patient was dosed in may of last year and as we've mentioned previously due to the pandemic, particularly in 2021, there was some delays at some of the sites and getting both and so they're there.

It took a little while to get up and running now has pretty mentioned in our prepared comments.

Things are going really well, we've got eight sites open across three countries and so we're having good enrollment and investigator engagement.

The.

So.

Our dose escalation.

<unk> is going as we would predict we haven't commented on exactly where we are in terms of dose escalation, but given the potency of the molecule. We would not expect to have to go very far through the process to start seeing.

At least pharmacodynamic effects.

201, and as far as follow up goes Youre right.

For immuno oncology.

Our products one of the benefits is to have a long lasting benefit.

And.

That requires a lot of follow up so I would really think about the data we're going to be presenting this year as preliminary and.

And early and really informing what is the potential for <unk>.

NL 201, but it's not going to be a complete story, because we're not going to have that.

A long follow up with large numbers of patients with specific indications.

Understood that makes sense, thanks for that color and detail, perhaps just one more.

Look towards potential single agent expansion cohorts I think you mentioned in RCC as well as melanoma, obviously selection of our PTC will be.

Keep that fully Dolby Atmos.

I'm also kind of wondering though.

Extend just given based on the inclusion criteria of your dose escalation will you might you also have.

Pure recall data specifically within those patients heading into expansion cohorts.

So youre, asking specifically about renal cell and melanoma within our dose escalation and that sort of mix of patients I'll, let <unk> comment on that.

So I think.

It is we're trying to get to a dose and schedule as quickly as possible and as a result, all relapsed and refractory tumors.

This trial there will be.

Some renal cell and melanoma and that mix, but there's a wide variety of tumor types in dose escalation I think the purpose of the expansion as we get to RPT is this the last validated tumor types, where we know IL. Two has activities that we get we can get a better sense than what efficacy looks like.

Great.

Great. Thanks for that color and thanks again for taking my questions.

Welcome.

Thank you. Our next question comes from Mara Goldstein with Mizuho. Your line is open.

Great. Thanks, so much.

Question about the combination trial with Kimberly to map and.

Enrollment in that trial enrollment dynamics and what you expect.

That versus the monotherapy trial, just given the timing issues associated with the monotherapy trial.

Press releases child.

Well up to I think it was 100.

23 patients or something like that and do you how close do you think youll get to that before you have data to speak of.

<unk> you want to comment about the plans for the <unk> combination.

Sure. So we're opening that trial as part of that the monotherapy trials, we will be utilizing the space that we have opened already eight plus sites will be open with investigators that are already engaged and familiar with that compound.

We expect dose escalation.

At that dose level.

And these are learnings from what we've learned in monotherapy, so maybe not having to start at the very beginning of dose escalation. There's a lot of interest among investigators to start this combination in various tumor type.

The patient number is really based around.

Some expansion groups that we may want to look at in this setting renal melanoma et cetera, but those expansions will really be further definitely once we get to an RP QD in the combination with keytruda.

Okay.

I'm going to ask it maybe.

A question not so much about a competitor per se, but there is a fair amount of data.

<unk> been pegged to al <unk>.

Over the next weeks and months.

And I'm curious as to you.

But if any type of contingency plan for enrollment.

That you might make depending on what that data is.

As far as well first of all we're we're excited to see the data we're excited for patients and also for the concept of <unk>.

Trying to improve upon.

<unk> a proven mechanism of action in IL two so.

With.

Theres a lot of interest obviously in this space. So I think thats because IL two has one of the few immunotherapy drugs that it's actually been shown to work. So we are.

Hoping for positive results.

And I don't think at this point that we feel that.

Those data.

It would have an immediate impact on our.

Enrollment or plans.

We would have to see how that how that goes but we're not expecting that to have a big impact at this point.

Alright, Thank you for taking the question.

Sure.

Our next question comes from Ben Burnett with Stifel. Your line is open.

Good afternoon. This is Neil on for Ben.

Taking a question.

Do you plan on developing NL 201, as a monotherapy in hematologic malignancies or do you have a plan.

Maybe an agent in mind that you think makes sense alongside as part of our company.

Well I think that.

NL 201 could be a really interesting monotherapy.

Both in solid tumors and in hematologic malignancies, and we've seen that in our preclinical data. The fact that we have such a potent IL 15 activity on NK cells suggests that.

<unk> hundred one could work really well with monoclonal antibodies and also the potent effect on T cells could work really well with things like cellular therapy.

So we actually see the opportunities is very broad and we're starting off with monotherapy activity to see what.

The data looks like and then we would.

Start to explore a number of different combinations that I think that.

Many of them.

Many of standard of care agents could work very nicely with.

A very potent IL two IL 15 agonist.

Great. Thank you.

Thank you.

There are no more questions I'd like to turn the call back to Jonathan Druckman for closing remarks.

Great. Thanks, everybody for joining our call today, we look forward to sharing our progress with you in the months ahead.

All right.

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

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