Q3 2022 Mersana Therapeutics Inc Earnings Call
Yeah.
Good morning, and welcome to the Marsano Therapeutics third quarter 2022 conference call and webcast. Currently all participants are in a listen only mode.
A question and answer session at the end of this call I would now like to turn the call over to Jason Forget Senior Vice President Investor Relations and corporate Communications. Please proceed.
Good morning, everyone. Before we begin please note that this call will contain forward looking statements within the meaning of federal securities laws.
Statements include but are not limited to those related to the therapeutic potential of our product candidates and the potential of our platforms business strategy clinical trial design initiation and execution and data releases regulatory plans and objectives commercial opportunities collaborations and potential associated.
Payments operating expenses and cash runway each.
Each of these forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements.
These risks and uncertainties are discussed in the company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August eight 2022 and in subsequent SEC filings. Our filings are available at SEC Gov or on our website <unk> dot com, except as required by law.
I assume no obligation to update forward looking statements publicly even if new information becomes available.
With that let me turn the call over to Ana prototyping, our president and Chief Executive Officer. Thank.
Thank you, Jason and Hello, everyone welcome to our conference call. Joining me today with prepared remarks are Chief Medical Officer, RV Young and our Chief Financial Officer, Brian just shy.
I'm also joined by other members of management, who will be available to answer your questions.
We have continued our forward momentum here at most on that with a number of significant accomplishments in recent months, let's recap beginning with the progress we have made in executing our comprehensive development plans to address areas of unmet need across the ovarian cancer landscape.
With upgrades.
We achieved a major milestone last month with the completion of enrollment in our single arm registration trial in platinum resistant ovarian cancer.
It's noteworthy to point out that we were able to fully enroll this trial within just one year. We attribute this to three primary factors first and foremost is the significant unmet need faced by patients with platinum resistant disease.
Just a high level of enthusiasm and engagement.
Among the investigators globally.
So it is our teams strong execution.
With uplift fully enrolled we are positioned for what we expect to be a robust top line data readout in mid 2023.
Assuming the data are positive the potential BLA submission by the end of next year.
In addition to uplift we have commenced patient enrollment and dosing in up next.
<unk> III clinical trial of a premium on therapy may not be too positive recurrent platinum sensitive ovarian cancer, which we believe could support approvals outside of the United States.
And then he said upgrade a.
Phase one two clinical trial enrolling platinum sensitive patients for treatment with a combination of a prepaid card popularity. We are pleased to report that we are now nearing completion of the dose escalation portion of the trial to date.
All patients have been enrolled a few of whom are still early in their treatment.
Given the limited data set we have opted against sharing data at this time, we expect to enter the dose expansion portion of upgrade day in the first quarter of 2023 and to present data that are more robust and mature in the second half of 2023.
Beyond <unk>, we're excited to have begun our phase one trial of 16 60, New Thomas Timken product candidate and we received fast track designation by the FDA for that candidate for the treatment of adult patients with advanced or metastatic triple negative breast cancer.
Sir.
Additionally, we recently opened our clinical sites to begin screening activities for a phase one trial of <unk> 2056 or <unk>.
First immuno selected product candidate patient dosing is expected to get underway later this quarter.
In parallel with our clinical pipeline progress. We also have continued to focus on innovation and research leveraging our three highly differentiated platforms as product exits to generate new molecules that have the potential to address important unmet medical needs.
Our platforms provide substantial opportunities for expanding our pipeline either with wholly owned assets or through partnerships.
The agreements we entered into with <unk> in the first quarter and GSK in the third quarter demonstrate our position as a.
D C innovator and a partner of choice and given the breadth of our assets and the interest in the ADC space, we see collaborations remaining a core part of our go forward strategy.
In summary, the most solid team has made great strides across a number of key areas of focus with an uplift topline data readout and potential BLA submission on the near term horizon up next an upgrade in motion two exciting and highly differentiated uhm.
Entering the clinic and a balance sheet, that's been strengthened two significant collaborations I am very proud of what we've achieved thus far in 2022, and we have a strong foundation in place as we head towards what we expect to be a transformative 2023.
With that I will ask our chief Medical Officer, RV Yang to delve more deeply into our clinical progress and plans.
Thank you Anna and good morning, everyone.
I'll begin with our up redevelopment plan and our three ongoing trials within the ovarian cancer landscape.
First there is uplift our registrational trial in platinum resistant ovarian cancer.
In September of 2021, we announced that we would be utilizing a dose of 36 mix per meter square of operating in this trial and within just one year, we enrolled approximately 270 patients in the trial exceeding our initial target.
As a reminder, the design of uplift provides us with two shots on goal. The first is the primary endpoint, which is the overall response rate or our are specifically and the lack of achieving positive population and the second is the or are in the overall population while the analysis of patient biopsies is ongoing we have confirmed that.
Our minimum targeted number of naphtha to be positive patients for the primary endpoint has already been exceeded.
Now, let's turn to Opex.
Our ongoing phase III trial in recurrent platinum sensitive maintenance that is enrolling patients with <unk> positive tumors and is designed to accomplish several important goals.
It is intended to serve as a post approval confirmatory trial of upgrades in the US Additionally, up next is designed to support global registration, while also bringing operate into earlier lines of therapy.
Since this trial is in the maintenance setting where we are looking to keep patients on therapy to maintain disease control or remission for as long as possible.
Utilizing a 30 net per meter square dose of operator.
We plan to enroll approximately 350 patients worldwide in Opex.
These include three types of patients who currently have limited treatment options. The first are those who progress on PARP inhibitors, and bevacizumab, whether taken in combination or in sequence as these agents move to earlier lines of therapy. It increases the number of patients that already exhausted those options.
Second our patients were poorly served by today's maintenance agents, either because of biomarker status or tolerability issues and are resorting to watch and wait as their best option and.
And finally, there are the <unk>.
Patients, who achieved stable disease on platinum who were excluded from PARP maintenance studies and consequently are excluded from park labels.
Now, let's move on to $60 60 in 2006.
<unk> 16, 60, <unk> product candidate that targets <unk> seven each for and is equipped with a precise target optimize drug to antibody ratio of six and our clinically validated <unk> payload with controlled bystander effect.
In August we initiated a multi center phase <unk> trial investigating this candidate in patients with breast endometrial and ovarian cancers, we see <unk> as a compelling target given its high tumor expression in these indications and with limited expression in healthy tissue.
The initial dose escalation portion of the trial will evaluate the safety and Tolerability of $60 60, as a single agent and will be followed by dose expansion portion in which will assess objective response rate duration of response and other measures.
And the next candidate will be entering the clinic is <unk> 2056.
Her two directed immunotherapy.
<unk> agonist.
Yeah.
As you May recall 2056 targets, a novel or two epitope and is designed to locally active extinct signaling and both tumor resident immune cells and in tumor cells.
Preclinical data have shown its potential to have a significant impact on her too high and low tumors what is <unk>.
Monotherapy or in combination with standard of care agents such as inherited.
We expect to begin patient enrollment and dosing in a multi center phase one open label trial. Later this quarter. This trial will investigate 2056 in patients with previously treated advanced or recurrent solid tumors expressing her too such as breast gastric colorectal and non small cell lung cancer.
The initial dose escalation portion of the trial will investigate the safety and Tolerability of <unk> 2056, and we will utilize the data to determine the recommended phase II dose or a maximum tolerated dose.
The dose expansion portion of the trial will continue to assess safety and tolerability as well as the hour or duration of response and disease control rate.
And so we've made significant progress across our entire pipeline and will soon have molecules from all three of our ADC platforms in the clinic.
Our focus from there on we'll be on patient enrollment and data generation.
With that let's turn the call over to our Chief Financial Officer, Brian to China right.
Thank you Arvind, we ended the quarter with $290 million in cash cash equivalents in marketable securities. Additionally, our line of credit with Oxford, and FCB provides us with the opportunity to drawdown, an additional $35 million and low cost capital at our option.
We believe we currently have the funds required to support our operating plan commitments into the first half of 2024. It should be noted that potential milestone from our current collaborations are proceeds that we may realize from future collaboration could extend this runway. Even further we continue to display strong emphasis on business development and view it as an important.
[noise] tool within our financing Arsenal the collaborations we entered into recently with Janssen at GSK are prime examples of how we can leverage our differentiated platforms in Canada and expand our reach while raising meaningful upfront capital given our past successes and the ongoing surge of interest we are seeing in the ADC space, we see the potential for further business develop.
Initiative in the quarters to come now, let's move on to our P&L for the third quarter collaboration revenue for the third quarter of 2022 was $5 6 million compared to an immaterial amount for the same period in 2021 the year over year increase was related to the revenue recognized under our collaboration agreement with Janssen.
<unk> and GSK research and development expenses for the third quarter of 2022 were $50 6 million.
Compared to $35 3 million for the same period in 2021.
Noncash R&D related stock based compensation expense for the third quarter of 2022 was $2 9 million.
Most of the year over year increase in R&D was driven by non recurring costs related to upright antibody manufacturing process qualification lots in preparation for a potential BLA submission, which we had guided to on our Q2 conference call. These costs are now largely behind us other drivers of the R&D increase included higher <unk>.
<unk> costs for operating an excellent 2016, 60 greater costs related to manufacturing for <unk> 2056, and increased head count.
General and administrative expenses for the third quarter of 2022 were $14 6 million <unk>.
Compared to $10 1 billion.
Same period in 2021 noncash G&A related stock based compensation expense for the third quarter of 2022 with $2 5 million a year over year increase in G&A was primarily related to an increase in consulting and professional fees and increased head count.
Net loss for the third quarter of 2022 was $59 8 million or <unk> 61 per share compared to a net loss of $45 5 million or <unk> 63 per share for the same period in 2021, and finally net cash provided by operating activities was approximately $54 6 million.
For the third quarter of 2022 as a reminder, this includes GSK at $100 million upfront license option payment.
Now Anna will close our formal remarks before we take your questions Anna Thanks, Brian in our vein.
<unk> already has been a very productive year.
Pleated involvement and uplift we initiated our up next and exit 2016, 60 clinical trials, we're bringing 2056 into the clinic and we entered into two significant new partnerships. This positions us for what we expect to be a transformative 2023 highlighted by it.
Top line data readout from uplift in our first potential BLA submission.
Before we turn the call over to Q&A I would like to extend a hearty. Thank you to all of our employees for their stellar work, while also extending updates to the patients in our trials and their families.
And I would like to commend the clinical investigators we are working with an uplift up next and upgrade for their relentless patient advocacy and support as we aim to provide a much needed new ovarian cancer treatment option with.
With that let's open the call for your questions. Operator would you please provide the instructions.
Certainly.
At this time, if you'd like to ask a question. Please press star one on your telephone keypad.
Withdraw your question. Please press star one again, we'll pause for a moment to compile the Q&A roster.
Jonathan Chang with SBB Securities. Your line is open.
Good morning, and thanks for taking my questions first question on the uplift study at a press release indicates that the minimum targeted number of <unk> positive patients has already been exceeded and I'm trying to understand what this means is that a function of strong enrollment in the study overall and ore.
Or are there factors, we should be considering and are you able to tell us how many patients have had evaluable patient biopsies at this point.
Okay.
Thanks.
So Jonathan Thanks for the question does not B to B scores the valuations are still ongoing.
And therefore, we do not have the full number open nappy to be high patients yet, but we wanted to confirm that that minimum 100, we were targeting we have already achieved and exceeded as you would expect from the overall prevalence of naphtha to be high we see.
To date.
Okay.
I understood. Thank you.
Sorry go ahead Greg.
Was there a second part to your question Jonathan.
Yeah. So the second question on the upgrades study.
Are you able to provide any color around how safe TFS look and a limited number of patients to date.
Yeah.
Okay.
As we mentioned on the call we've been gold 12 patients handful of them are still not yet the value our bulks, but based on what we've seen to date.
We are planning to initiate the expansion cohorts in Q1 of next year and we do we are very encouraged with combine ability and the potential benefit of this combination. However, we do need to get more a more robust and mature data set that at that point, we'll be able to disclose.
The data.
Lee.
Understood. Thanks for taking my questions.
Thanks, Jonathan.
Colin <unk> with Baird. Your line is open.
Hi, great. Thanks, good morning, and thanks for taking our questions.
And congrats on completing the enrolment and the uplift trial can you remind us what's the bar for success is that you are looking for an uplift trial.
And do you think will that be solely based on or do you think duration of response or PFS will have any impact on your potential to get accelerated approval.
Good morning. This is <unk>. So the bar for success is discussed with FDA is single agent chemotherapy with maximal response rate.
12%.
And as you know these patients really have a significant unmet need in this space and so the.
Regulatory review that will be based upon both the risk and the benefit.
And.
<unk> is certainly the response rate or <unk>.
Derek number languished the comparison.
But again.
At the broader context safety profile as well as additional parameters to understand.
The ratio of the benefit in order to do that risk benefit analysis.
Okay.
Okay, Great. That's helpful. Thank you and for the upgrade study can you speak to what dose levels, you have escalated to and how many more dose levels you plan to explore before starting expansion.
Yeah clean <unk> evaluated multiple dose levels I think we're going to hold off for details until we have that more robust and mature.
Data set but we have explored multiple data.
Dose levels.
And as we've as I've said, we will be initiating the expansion cohort in Q1.
Yeah.
Great. Thank you and one last one if I can for the ongoing.
$60 60 study can you speak to what your biomarker strategy will be there.
Sure so.
Just to give you context.
Obviously evaluating 784 in the study per se, but we are enrolling all comers and disease types that have higher expression in relationship to these seven each for it based upon whats known.
The public databases.
So obviously, we'll be pursuing and trying to understand if there are enrichment biomarkers that can serve to enhance upon that therapeutic index.
Following very much the playbook, we followed or upgrade where we did not select upfront, but <unk> through the early phase one what's the best enrichment strategy was.
Yeah.
Great. Thanks for taking my questions.
Again, if you'd like to ask a question. Please press star one on your telephone keypad Caveri Polman with BTG. Your line is open.
Yes, good morning, and thanks for the update for the next trial can you talk about your rationale for selecting lower Joseph sturdy brand square is it something they've done the data from the pivotal uplift study.
Yes, thanks for the call and so we chose 30 milligrams.
Meter square for the <unk> study.
<unk> continued to identify a dose that could control the disease, which is most relevant is that platinum sensitive maintenance.
<unk> setting.
This is as opposed to really in the platinum resistant space where.
Treatment effect at 36 milligram is the intent and the goal in order to shrink the tumor.
And so we believe that we have the ability to then optimize the dose regimen the relationship and the disease space.
That's very helpful. Thank you and my second one sorry go ahead.
I think you also asked on.
Just on what data and I think the answer is based on the holistic data of all the patients we have treated to date dose escalation dose expansion and of course uplift as well.
That's helpful and the second question is also for next study can you tell us what drove your <unk> question, specifically targeting not be to be high patients.
You get activity and not be too below patients from the uplift trial will you be able to you and do you plan to amend the protocol to include those patients.
So let me start with from the standpoint that we're happy to be at.
It's highly expressed within ovarian cancer and so on.
The data sets that we've described that appears to be consistently expressed earlier line and in the late line setting and so when we think about that target product profile or the maintenance setting we want to ensure that we have the most optimized.
Profile in relationship to that and based upon the data sets that we've seen to date. It really indicates that <unk> could serve as an enrichment marker and relationship just optimizing that risk or efficacy that scene.
So that's the rationale in relationship to selecting for <unk> B to B.
Patients in the next study.
And we cannot comment really just in regards to.
What changes would occur or if it will occur in relationship to based upon up lift at this time.
That makes sense. Thank you for taking my question.
David <unk> with Wedbush Securities. Your line is open.
Thanks for taking the question.
I'm just wondering if you've seen any.
<unk> and enrollment for the next.
Steady given the situation with PARP spin in this space.
If there's any upside to timing for full enrollment of that study.
So let me start with.
So first off just in relationship to enrollment.
The investigators continues to be extremely excited just in relationship to additional options within the space.
And so in the platinum sensitive recurrent space there continues to be a significant unmet need.
And this is really furthered by from the standpoint of a couple of different things.
One is that obviously.
Obviously, the available therapy can only serve a proportion of those patients.
But then two is that David I'll go into detail slightly ahead of our patient population. So.
We enrolled patients that are obviously already received and potentially progressed on <unk>.
Billable agents, including Bevacizumab and PARP inhibitors.
But two is that actually we do not require patients to have received the powerpoint that.
And lastly aircraft because of again that differential benefit thats seen in molecular subtypes that seem too.
Identified those that could maximally benefit from PARP inhibitors, and then third is actually that population that only achieved stable disease or the best response to that prior chemotherapy adoption and there is actually nothing approved for those patients.
And so to that end, we're able to potentially fulfill an unmet need within that space and so.
Given given all of this we do see extreme excitement in relationship to the investigators.
Interest in participating in the study.
Thank you.
If you'd like to ask a question. Please press star one on your telephone keypad, Boris <unk> with Cowen Your line is open.
My first question is on uplift study you mentioned there are obviously two primary endpoint theirs are in <unk> to be high patients, which you mentioned you've completed and met the minimum target of enrollment and then there is they are an all commerce can you discuss how the trial may be viewed by the FDA if theres significant difference between those two are numbers.
One is higher than the other way or the other way around.
Yes.
Yes. Thank you Brian I can start the response it in relationship to that and so.
Obviously in order to support a.
Positive risk versus benefit and the all comers.
It will really have to be identified that there is sufficient benefit.
The highlight b to b as well as the loan that <unk> population, but again keeping in mind that.
One of the goals would be to ensure that you don't need.
Right and so if there is sufficient benefit within those populations that could support a broad indication in the all comers again still supported by the potential for a complementary diagnostic to further identify those patients that could have potentially greater benefit.
Got it.
You can broadly stated commercially how many patients would be targeted at always supports and NAFTA to be high versus all comers.
So we have two data sets, we have disclosed that really talks about the prevalence of not be too behind the first one is the expansion cohort where 64% of patients were determined to be not be to be high. The second one is the date.
That said disclose by our diagnostic partner Leica, where they looked at 398.
<unk> samples unique tissue samples from patients and found the prevalence to be 59%.
The prevalence of not be to be high is substantial.
And.
And.
We believe we could benefit a substantial portion of the platinum resistant ovarian cancer population, whether we just when on the NAFTA to be high or of course on the total population.
Great. Thank you very much for taking my question.
Okay.
I will now turn the call back over to CEO Anna protocol for closing comments.
Thank you operator, and thanks to all of you who tuned in for our continued support we hope over anyone Joyce the upcoming holidays, and we look forward to keeping you updated on our progress.
This concludes today's call. We thank you for your participation you may now disconnect.
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