Q3 2022 Jounce Therapeutics Inc Earnings Call
Okay.
Good morning, ladies and gentlemen, and welcome to the Jounce Therapeutics third quarter 2022 earnings Conference call. At this time, all participants are in a listen only mode.
Later, we will conduct a question answer session and instructions will follow at that time as.
As a reminder, this call's being recorded at the company's request.
I will now turn the call over to your host Eric Law.
Jounce Therapeutics. Please go ahead.
Yeah.
Thank you operator, this is Eric Lau, Vice President of Investor Relations at Jounce Therapeutics.
And welcome to the Jounce Therapeutics third quarter 2022 financial results Conference call.
This morning, we issued a press release, which outlines the topics that we plan to discuss today. The release is available in the investors and media section of our website at Www Dot Jounce T X stock out.
Speaking on today's call will be our CEO and president Dr. Richard Murray.
Who will review our pipeline progress and key milestones.
Followed by our CFO Hugh Cole.
Who will provide an update on business development activities.
Our CMO, Dr. Beth <unk>, who will provide an update on our clinical activities and our CSO. Dr. Dimitri Peterson will then discuss our discovery programs.
Lastly, our CFO Kim Drapkin.
We will review our third quarter financial results.
We will then open the call for your questions before we begin I would like to remind everyone that today's discussion will include statements about our future expectations plans and prospects.
Constitute forward looking statements for the purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1090 fives.
Actual results may differ materially from those indicated by these forward looking statements as.
As a result of various important factors, including the risk factors discussed in our SEC filings.
In addition, any forward looking statements represent our views only as of today November 10.
2022, and should not be relied upon as representing our views as of any subsequent date.
While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.
With that I'll now turn the call over to rich.
Thanks, Eric Good morning, and thank you for joining our call today.
As disclosed in our press release. This morning, we have a number of updates to discuss on our call.
We continue our progress and execution through the third quarter as we advance our proof of concept and eight clinical trial and build our pipeline of oncology candidates.
Our goal is to strive for a meaningful immunotherapy for patients who have few options.
This is at the heart of our approach to novel mechanisms guided by Biomarkers.
To achieve this goal our near term focus remains on our Gtx 80, 64 or little RB two <unk> program and the ongoing <unk> clinical trial in various cancer types.
We look forward to sharing details of our ongoing and eight trial today.
Although we intended to present phase, one and phase II <unk> data at ESMO Io, we will present phase one data at the meeting and will share observations on phase II on our call today.
We recently made this decision after reviewing the most recent data for ESMO Io and based on our stated goal, 2% complete and interpretable picture of the phase II data.
Which we have now determined we will not have by year end.
That will expand upon the reasons for this and give you an overview of the data we have seen to date.
Turning to our discovery efforts, we have two preclinical posters at the <unk> meeting being presented today in Boston, which can mitre will highlight.
At this time I'd like to briefly turn the call over to Hugh to discuss our recent milestone achievement here.
Thanks Rich.
As recently announced we earned a $15 million clinical milestone under our <unk> hundred 11 license agreement with Gilead, which highlights the progress of this program.
As a reminder, this program is an antibody targeting ctr eight and is aimed at depleting T regulatory cells in the tumor microenvironment.
It was discovered using our translational science platform and is another nice example of how we've been able to bring forward therapies across different immune cell types.
<unk> <unk> hundred 11, and other T. Reg targeting programs now in the clinic, we are looking forward to seeing whether the strategy of T. Reg depletion becomes a successful part of I O therapy in the future.
To date, we have earned a total of $40 million of the $510 million in development and regulatory milestones possible under the Gilead license agreement.
Partnerships have always been an important part of our strategy and capital sources that Jounce and we expect that to continue as we advance our pipeline.
With that I'll turn the call over to Bob to discuss our clinical programs in more detail.
Thank you.
I'm pleased to be able to provide an update for you. This morning on our ongoing <unk> study.
As a reminder, we completed the phase one dose escalation for both monotherapy and in combination with pillows Allomap Timney. Our PD one inhibitor selected 700 milligrams as the recommended phase II dose and initiated the phase two expansion cohort.
For both monotherapy and combination treatment in seven different indications.
We have announced that the phase one data will be presented as a poster at this year's ESMO Io conference in December .
Dose escalation data will include safety PK receptor occupancy and preliminary efficacy data.
We continue to execute well on the <unk> study and investigators remain very engaged.
We have completed enrollment of the first 10 patients in stage one of our current phase II combination cohorts and are nearing completion of enrollment in stage one of the phase II monotherapy cohort in ovarian cancer.
Well the ovarian combination cohort is enrolling patients who are not being enrolled in the monotherapy arm and we were pleased to see this enrollment quickly pick up again after we completed the ovarian combination enrollment.
We are announcing today that we have met the criteria to expand an additional cohort in second and third line PD, one inhibitor resistant head and neck cancer. In addition to our previously announced tumor types of PD, one inhibitor naive ovarian and PD, one inhibitor resistant renal cancer.
In addition, the PD one inhibitor resistant non small cell lung cancer and announced today PD one inhibitor naive sarcoma cohorts did not meet the criteria to advance from stage one to stage two.
The remaining two combo cohorts still in stage one in first line PD, one inhibitor naive head and neck cancer and PD, one inhibitor resistant cutaneous squamous cell carcinoma, along with the ovarian monotherapy cohort still have the potential to meet criteria to advance from stage one to stage two.
Furthermore, we started enrollment in October in stage, one of a new combo cohort in PD, one inhibitor resistant biliary tract cancers or BTC based on a clinically meaningful and durable confirmed response and a PD one inhibitor resistant patient in phase one in combination with <unk>.
<unk>.
They are valuable math has recently been approved in combination with chemotherapy in first line BTC and we see PD, one inhibitor resistant BTC as a potential differentiated opportunity for Gtx 80, 64, plus PV.
Okay.
In response to frequent questions, we would like to provide more details on our internal criteria for cohort expansion.
Simon's two stage design our goal in the first 10 patients is to avoid rejecting a potentially active drug so as typical in the first stage of a simons two stage, we set the bar on the low side.
Our internal criteria to expand from stage one to stage two for each combo cohort is it 10% or greater response rate confirmed or unconfirmed with the exception of the first line head and neck cohort, which requires at least a 20% response rate.
We believe our decision criteria are appropriate given the small sample size and the fact that the expected response rate for PD, one inhibitor monotherapy and most cohorts is in the single digits.
In addition to meeting the numerical response criteria, we consider additional factors such as the duration and best response to prior therapy, the time elapsed since prior therapy.
The tumor size at baseline and the overall quality of the response in a Nate.
For example, although we have met the numerical response criteria in the second and third line had a net cohort.
We are waiting for additional qualitative data before deciding whether to expand.
Proof of concept is based on confirmed responses in the full 29 patients in an expanded cohort and requires a response rate with a confidence interval that excludes the PD one inhibitor benchmarks.
Moving on to the ovarian and renal cancer cohorts that previously met our stated one criteria for expansion.
The ovarian combination expansion over enrolled to 35 patients and renal expansion is near completion with 26 out of 29 patients enrolled.
An important observation in the <unk> study. So far is the time that it is taking for efficacy data to mature.
Consistent with data from Merck's MK 48, 30 data published in January 2022.
We have seen patients with stable disease with tumor reductions less than 30% at week nine become responders at week 18, which means potential confirmation then has to wait until at least 2007 weeks.
In addition to confirmed responses, we have seen patients with partial responses at nine weeks developed progressive disease at 18 weeks due to new lesions and have observed one pathologically confirmed case of pseudo progression in PD, one inhibitor resistant non small cell lung cancer.
As a result of these observations we aim to ensure that the data. We report includes enough time for responses to be confirmed and to mature.
We believe any new mechanism may have its own inherent kinetics, especially in patients with significant prior therapy history.
In summary in the preliminary data in over 80 patients across all combination cohorts. We believe we have seen signs of clinical activity of Gtx 80, 64, but not broad activity leading to rapid proof of concept.
These results to date raised the possibility that the efficacy of <unk> two inhibitor in combination with a PD one inhibitor may be more tumor specific.
Or may require biomarker enrichment or selection and also reflect the importance of waiting for additional data.
We expect to be able to assess and share clinical and biomarker data in the following way.
We would first emphasize that the timing of data from any of the cohorts whether the initial eight cohorts or subsequent addition, no cohorts such as those we have described today will depend on when enrollment begins in stage, one and then stage two and will require the data to be sufficiently mature.
For full interpretation.
This is consistent with prior guidance that we want the data that we present to be meaningful and interpretable.
We will continue to provide updates on the progress of the study on our quarterly earnings calls.
We expect to be in position to share additional results from the phase II portion in the first half of 2023.
The specific timing and forum for this will be determined as the study proceeds and more data becomes available to us.
I would also like to remind you that we will present, the complete select data at ESMO I O.
Select is a randomized phase II study evaluating two different <unk> doses in combination with <unk> versus <unk> alone.
The two doses under investigation have different patterns of pulsatile target engagement, which we believe may be important for an agonist antibody.
We believe the results for the low dose cohort are encouraging with a 40% response rate versus 27, 8% for <unk> alone and 80% six month landmark progression free survival versus 36% to date for <unk> alone.
By independent Central Radiology review as will be presented at ESMO Io.
In addition, there is preclinical data and biological rationale for improved activity with pulsatile target engagement by an agonist as.
As the PFS and OS data continue to mature.
We plan to pursue a partnership to enable further development of Oprah 0.03 mix per keg in combination with a PD one inhibitor.
This remains an important year of execution and key milestones for <unk> and we would not be here without the dedication of our team our valued investigators and most importantly, the patients who put their trust in our drugs to make a difference in their lives. We look forward to reporting on our continued progress as <unk>.
We focus on the collection of high quality clinical and biomarker for proof of concept data to guide our programs.
I will now turn the call over to Dmitry.
Thanks Beth.
Later today, our teams will be presenting two preclinical posters at city here in Boston and I encourage you to stop by.
One poster will focus on preclinical characterization of Gtx $14 84, a little are before <unk> three inhibitor and the other will highlight characterization of the expression and function of the RMB, one two and four on human immune cells in tumor and blood samples.
Across different cancer types.
We believe our work highlights multiple combination opportunities as well as multi targeted approaches that could be deployed for this important family of immuno inhibitory receptors.
We're excited to be adding to the growing body of data that points to a little RB positive myeloid cells, including tumor associated macrophages and their contribution to resistance to PD, one or <unk> directed therapies.
Gtx 80, 60 for our most advanced <unk> blocker, which targets immunosuppressive macrophages and other myeloid cells in the <unk>.
<unk> is an example of a patient centric biomarker driven approach in discovery and through development.
This approach is key to the value generating programs we are pursuing.
Our newest development candidate <unk> 14, 84 is advancing through IND, enabling studies towards the goal of submitting an IND next year.
As mentioned earlier <unk>, $14, 84 binds to and inhibits little or before or Iot three little RB family member that is highly expressed on some of the key myeloid cells, including myeloid derived suppressor cells and tolerant journey dendritic cells that orcas.
Straight immune suppression in the Jimmy including resistance to checkpoint inhibitors.
As our sits at poster helps demonstrate louvar before target is distinct from other <unk> family members with respect to its blinking specificity as well as temporal and spatial pattern of expression on immune cells.
Therefore, we see this program is complementary to our ongoing efforts to target <unk> with Gtx $80 64.
Additionally, our pipeline of mono specific Lula <unk> targeted antibodies is further strengthened by the ongoing efforts to develop a potent and specific blockers <unk>. One an inhibitory receptor that is expressed not only on myeloid cells, but also on certain subsets of T.
And NK cells.
Having these high quality building blocks to target three important <unk> family members has enabled us to explore both combinations and multi specific approaches pre clinically by leveraging our knowledge and growing expertise in <unk> biology.
We're confident that the little RV family as well as other targets that we're currently pursuing represent attractive opportunities in immuno oncology with a potential to improve upon and restore responsiveness to PD one inhibitors.
In addition to our efforts and other larvae family, we continue to add to and diversify our discovery pipeline into other exciting areas of immuno biology.
Lastly, I am pleased to share with you today that a manuscript describing preclinical development of <unk> 11, our CCR a targeted antibody for selective depletion of intra Tumoral T regulatory cell, which is now licensed to Gilead has been published in the peer reviewed journal.
Anchor immunology, we are proud to have collaborated without gilead colleagues on this publication.
I will now turn the call over to Kim for a discussion of our third quarter financial results Kim.
Thank you Dmitry.
We reported in this morning's press release cash cash equivalents and investments as of September 32022, or $130 3 million compared to $220 2 million as of December 31 2021 the.
The decrease was due to cash burn from operating expenses incurred during the period.
The $15 million milestone earned under the Gilead license agreement.
Tober is expected to be received in the fourth quarter of 2022.
Turning to the P&L no revenue was recognized during the third quarter of 2022 or 2021.
During the third quarter of 2022, we incurred $23 8 million in research and development expenses compared to $23 3 million for the same period in 2021.
The increase in R&D expenses was due to increased manufacturing activities and lab supply purchases to support research activities, partially offset by decreased external clinical and regulatory costs for our <unk> development program.
General and administrative expenses were $7 7 million for the third quarter of 2022 compared to $6 9 million for the same period in 2021 the.
The decrease in G&A expense was attributable to increased compensation cost due to increased head count.
Net loss for the third quarter of 2022 was $31 million, resulting in a basic and diluted net loss per share of <unk> 60.
As compared to a net loss of $30 1 million for the same period in 2021, resulting in a basic and diluted net loss per share of <unk> 59.
The increase in net loss is attributable to increased operating expenses in the third quarter of 2022 as compared to 2021.
We continue to look for opportunities to contain costs in this difficult market environment while.
While investing in both our clinical and discovery programs, we work to identify areas in which we can continue to create value, but also decrease expenses.
We are reiterating our guidance that cash is expected to provide runway into the first quarter of 2024.
Based on our current operating and development plans, we continue to expect to be on the lower end of our gross cash burn guidance for the full year 2022 of approximately $115 million to $130 million.
I'll now hand, it back to rich for some final words.
Thanks Kim.
<unk> were driven by science and are motivated to address the growing unmet medical need of cancer patients today.
This is exemplified by the extraordinary effort behind our research discovery and development.
I would like to take a moment to thank the Johnson employees clinical investigators and patients for their unyielding commitment and continuing efforts to bring the right immunotherapy to the right patients.
With that we'd like to now open the call for your questions operator.
If you would like to ask a question. Please press star one one.
Okay.
Our first question comes from Steve <unk> with Raymond James Your line is open.
Hey, good morning, Thanks, so much I'll just leave my questions.
And Nate.
It just it didn't sound like.
Satellite.
Is there any part of this decision for competitive reasons or can we just take sort of the statements.
Basically implying the data is still immature at face value.
Yes. Thank you.
Sorry.
Go ahead Rick.
Hi, Steve.
Yes.
Right the way best laid that out that's really that's really what we see and Thats, what we wanted to communicate today on the call.
Okay.
The confidence interval that you mentioned for stage two exceeding the relevant PD one comp I was hoping you could just put some numbers on that to sort of help us understand the buffer.
And the stats there so like if the PD one precedent is.
A 5% response rate I mean, what do you need to see in 30% to 35 patients to meet.
What you would call post proof of concept criteria in stage two.
Yeah. So it really depends we have to wait until we actually see the data it depends on the variability in the data so the confidence central goal is.
Okay.
A number that that comes one once we have all the data and when we see what the 95% confidence interval is.
The idea is it's got to be above that 5% response rate.
So I can't give you any more specifics on that.
But our feeling is any any response rate with a confidence interval that excludes that PD one inhibitor benchmark is something that could potentially.
Be used.
To inform our registration path.
And that tends to also find efficacy that could support registration.
Okay.
So to be clear I mean, it seems like you don't you don't precisely have that in hand, yet, but you believe that that maybe forthcoming from one or more of these cohorts, which is why you are waiting.
To present, the correct Phil.
It's still possible for the two cohorts that are.
We have already extended and then we.
It's encouraging that we've met criteria to expand another cohort.
<unk> started a new cohort and biliary tract cancers based on really encouraging response that we saw in phase one. So we still think there's there's a lot of potential it's just.
It's just too early.
And we need more time for the data to mature.
Okay last question for me just on predictive Biomarkers I'm wondering if you've done any work there between now and when you present the data in the first half of 2023 is that work will be important if were just clarifying like in responders versus non responders across the tissue types that theres some type of profile in the biomarkers.
Showing a trend.
That could be another path forward, so if youre not going forward.
Maybe on predictive biomarker. Thanks for taking the question, yes, absolutely and actually our team has done a fantastic job. We have all the predictive biomarker data on the patients by the time, we get there clinical data we have the biomarkers.
It's just again the biomarkers need to be interpreted in the context of mature clinical data. So we absolutely will do an analysis of the biomarker correlation with the clinical outcomes. Once we have the mature clinical dataset and I think it is one of the strengths of the study that we have.
Multiple predictive biomarkers that were all that we're analyzing in correlation with the efficacy we just need to wait for the efficacy data to mature before we can do a really good analysis there.
Thanks, so much.
Our next question comes from bore Speaker with Cowen Your line is open.
Great.
Two questions first I don't know if you can make any comments on the timing of Merck's competitive 48, 30 data and should we be expecting it.
Okay.
Since you completed the stage one portion all indications at this point and is it reasonable to expect that on the next update whenever that next update comes around some of these indications will be discontinued.
So first of all regarding Merck.
No. We don't know when they will be presenting data next we continue to be encouraged by.
The breadth and depth of their program and this target and the fact that they have added some.
Some phase II studies, where there is a control arm so they're randomized studies.
With respect to your second question.
Again, because the data takes longer.
To mature I mean, sometimes as I mentioned, we don't see the first response to 18 weeks than.
And then we have to wait for 27 weeks.
Sometimes we have people who are stable for quite some time.
We will if any cohorts close or meet the criteria to expand we will certainly announce them on our next earnings call, but I can't be sure that we will know more cohorts are closed by that time.
Alright, Thank you for taking my questions.
Youre welcome.
Our next question comes from Edward <unk> with Piper Sandler Your line is open.
Great. Thank you very much and congrats on progress appreciate all the detail on the update.
Some quarters have a presentation or the closer or are you a little bit I wanted to get a sense of kind of you mentioned partnering in the past and partnering in the future.
Would you consider partnering different components or the little RB.
Or is that something where there is really more of an opportunity to maybe keep.
Those assets to do future internal combination I know, it's early to be kind of thinking through that but just maybe at a high level you can share your thoughts. Thank you.
Hi. This is this is here. So I think the answer is all of the above to some extent I mean, we do always think strategically about our programs and what would be good partners for our programs and what would be the right time point for those partnerships Hello Barbie family is of course very interesting group of targets.
One could think about partnerships that would include more than one of those potentially but it is it is early.
Get into any more specifics like that we always.
Always think ahead about partnerships and we're always out there talking to potential partners about different types of opportunities. So that's really all I would say for now.
Great. Thanks, so much.
Our next question comes from David Day, with SMB see your line is open.
Hey, great. Thanks for taking my questions also congrats on the progress of bar. So two questions. One is just on the ovarian cancer patients credit and clarifying surrounding enrollment of these patients are you enrolling mostly and resistant ovarian cancer or are you also including the platinum refractory population into stage one.
Page two.
So the requirement is that they'd be platinum resistant.
Requiring platinum refractory so we have a mix of patients.
But its second third line ovarian cancer that has progressed.
Progressed on a platinum resistant.
Got it that's helpful and then another question on the.
The responses in the biliary tract cancer could you shed some additional color on the depth of response and durability of response to that patient.
Sure sure so.
That patient actually.
Had sailed both had a best response of progressive disease to first line Chemo and then to second line <unk> in combination with chemo.
<unk> came into our study never having had responded to anything.
And then the patient had by nine weeks had a partial response.
The other important thing and that was then confirmed.
On the subsequent skin, but the important thing is when these patients entered the study.
They had liver and bone metastases and work very cachectic with really terrible bone pain requiring narcotics.
By nine weeks.
All of those things were getting better and by 18 weeks when the partial response was confirmed.
The patient had gained 30 pounds and was off pain medications.
And this patient was able to return to work as a farmer. So not so much just sits on zoom calls all day like us.
So he had a really really meaningful clinical response he remained in a partial response for.
A little over six months at that point he had one new lesion.
And the decision was made to allow him to remain on treatment and radiate that lesion and he remains on study doing well.
Yes.
Okay. Thanks, so much for the.
<unk> here.
Youre welcome.
Our next question comes from Arthur He with H C. Wainwright Your line is open.
Hey, good morning, everyone.
This is also <unk>.
Most of my question on the <unk> has been yes.
So I just wanted to follow up on the program.
So for the.
One O three cohort could.
Could you.
With the baseline characterization for the.
Patient compared to the <unk> cohort.
Yes, that's an excellent question Arthur Thank you so.
We saw really no differences across the cohorts across the mono therapy in either of the low for combo cohorts they were very well balanced.
We've looked very hard to see if there is a reason why that low dose cohort did so much better.
Aside from the fact that it's a lower dose we don't see any other reasons and and we really do believe theres a good biological rationale why a lower dose.
Result in constant target engagement is is a good thing for an agonist antibody.
Yes, there'll be there'll be a lot more a lot more information on our poster at ESMO Io on all of that.
Okay awesome.
I guess on the ESMO poster were also talking about the.
The duration of the response as well or.
Correct, Yes will I will report on the duration of response that suggests where there was really.
A very very nice improvement in PFS for.
For the patients to the low dose arm.
And we're also seeing that borne out by the number of patients who are remaining on study.
And all of that will be included at ESMO Io.
Awesome.
For the year.
I guess.
Regarding the milestone getting from.
Good Ed.
I don't think you guys breakdown.
Mike Doyle.
Previously, but just curious.
For this one is related to what kind of achievement can you guys disclose or.
Hi, This is Hugh we can't disclose any more details.
Than that.
As we said it is the programs in the clinic, it's a clinical milestone.
We have disclosed that there is a total of $510 million in development and regulatory milestones.
And we've now achieved $40 million of those so.
We'll obviously keep close eye on the program as it continues to move along there is the opportunity for further milestone payments.
Got you thanks.
Thanks for taking my question and congrats on the progress.
Thank you.
Our next question comes from colleague conclusion.
With Baird. Your line is open.
Hi, good morning, and thanks for taking our questions.
Can you clarify where your original plans for the data at ESMO.
<unk>.
Follow up of 18 weeks for all patients.
Based on a better understanding of the mechanism.
What youre seeing so far and the rationale is really you need 27 weeks to have a more meaningful dataset and then another question just based on the mechanism and the data that you've seen so far do you have any comments on the potential of adding chemo to Gtx 80, 64, and PD, one or any other combination.
<unk> do.
Do you see a role for that thank you sure sure. So to your first question.
We expected and we do have 18 data on the majority of the patients and yes, it's really needing to wait for 27 weeks to.
To really get a really full picture.
We always knew we would have some patients who still had just nine week data, but the majority would have 18 week data.
So really yeah, it's primarily this need to wait longer to make sure that.
No responses that appear at 18 weeks are confirmed and to your second question. That's a great question.
We have done preclinical work and we've done a lot of thinking about other potential combinations, including chemotherapy combining with standard of care.
Our number one priority is to first demonstrate that J T. X 80, 64 is adding benefit over what you would expect with a PD one inhibitor alone.
And once we have the final data and we know how the magnitude of that difference then we'll be able to think about other combinations to make sure where we will do whatever we think is the best thing for our registration path. So we certainly could combine with chemo and given the excellent safety profile.
Of the combination we think that will be very very doable.
Great. That's helpful. Thank you and then a quick follow up just on the on the preclinical data that you'll present at subsea for Gtx 14, 84 can you should we keep in mind, what should we keep in mind as we compare the profile for that drug versus some of the other Iot three assets that are in development.
Hey, Collin this is dmitry. Thanks for the question.
Yes, I mean first and foremost we believe that the little larvae for target is quite interesting potentially distinct from.
The other larger family members with respect to ligand specificity and also pattern of expression on immune cells.
We continue to study the mechanism of action of our molecule. We believe there are signs of molecular differentiation that are emerging.
J T X $14 84, and look forward to presenting these data when when when it matures.
Great. Thanks for taking my question.
Okay.
There are no further questions. Thank you for your participation. This does conclude the program and you may all disconnect everyone have a great day.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
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Okay.