Q4 2022 Mersana Therapeutics Inc Earnings Call

February 28, 2023

Yes.

Good morning, and welcome to Marsano Therapeutics fourth quarter and year end 2022 conference call and webcast.

Currently all participants are in listen only mode.

There'll be a question and answer session at the end of this call.

I would now like to turn the call over to Jason for that 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.

These statements May 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 designs initiation execution and data releases regulatory plans and objectives commercial opportunities collaborations and potential associated.

David payments operating expenses and cash runway.

Each of these forward looking statements are subject to the 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 Companys quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November seven 2022.

And in subsequent SEC filings, our filings are available at SEC Gov and on our website <unk> dot com acceptance required by law, we assume no obligation to update forward looking statements publicly even if new information becomes available in the future.

Now with that let me turn the call over to Anna <unk>, <unk>, our President and Chief Executive Officer. Thank you, Jason and Hello, everyone. Welcome to our conference call. Joining me today with prepared remarks are chief Medical officer, or the yen and Chief Financial Officer, Brian to Shine.

I'm also joined by other members of management, who will be available to answer your questions.

We are very pleased by the progress we made in 2022, the team's execution on our pre development program, our clinical pipeline and business development has helped advances to the task of multiple milestones in 2023 as we seek to further Sunday.

We saw this role as both a leader and a partner of choice with the ABC space.

Let's please clearly cap so most of our most notable accomplishments over the past year.

First and foremost is the progress we made in executing on a comprehensive plan to establish upgrades as a foundational medicine in ovarian cancer.

R&D in the fourth quarter, we completed a 12 million uplift a single arm registrational trial in platinum resistant ovarian cancer.

Advanced every well many up next on phase III clinical trial of <unk> as monotherapy maintenance treatment in recurrent platinum sensitive ovarian cancer and <unk>.

As a reminder, if this data positive we believe up next could serve as the post approval confirmatory trial of <unk> in the U S support potential approvals outside the U S and support the expansion of upstream into earlier lines of therapy.

More recently, we completed dose escalation and initiated the expansion portion of upgrade.

Our phase one trial of <unk> in combination with Carboplatin in platinum sensitive ovarian cancer.

Beyond the outbreak we brought <unk> 16, 60, and exited 2056 into the clinic, we initiated our phase one trial of $60 60, <unk> product candidate in August and just last month, we began dosing patients in our phase one.

Trials of <unk>, 2056, or hurt to immunize synthetic product candidates. Both $60 60 in 2056 have distinct from Mycological chip mechanism of action that we believe could strong peak differentiate them as we seek to address areas of high unmet medical need.

As a result of these efforts we now have product candidates from all three of our platforms.

<unk> <unk> in the clinic generating data.

In parallel with our clinical progress at <unk>.

<unk> product candidates have attracted the interest of numerous potential collaborators.

In 2022 alone we entered into three new collaborations firstly began soon.

Then with GSK and more recently in December with Merck <unk> we.

We need to see a high level of interest in ATC and collaborations remain fundamental to our overall business strategy. In fact, our beat the successes are already leading to initial milestones.

In summary, 2022 with a year of tremendous accomplishments and we are excited about what lies ahead in 2023.

Before getting into that let's help our chief Medical Officer, RV Yang delve more deeply into our clinical progress Arvind.

Thank you Anna and good morning, everyone. As we approach the uplift topline readout, we thought it might be helpful to remind everyone of the significant unmet medical need faced by patients today with platinum resistant ovarian cancer.

These individuals are at the most advanced point of their disease are heavily pretreated and have very poor prognosis.

Single agent chemotherapy is the only option for most patients past trials have consistently shown an objective response rate or <unk> of approximately 12% our single agent chemo in this setting.

We have enrolled approximately 270 patients that uplift and have included a broad population that includes patients with up to four prior lines of therapy.

The primary endpoint in this trial is the or would that be to the positive population.

For context, multiple datasets have shown that a majority of ovarian cancer patients have not be to the positive expression. In fact, the largest nappy TV data set that has been presented to date includes roughly 400 unique tissue samples and suggest that approximately 59% of the overall Larry in cancer.

Appalachian are <unk> positive.

The study is designed to exclude the 12% objective response rate for today's standard of care from the 95% confidence interval.

In addition to our or we would expect the duration of response or DLR to be evaluated by the FDA, along with safety Tolerability and the overall context of the uplift data.

For context in our dose expansion trial up regenerated or are up 34% across dose levels and a valuable mapping to the positive patients with a <unk> of approximately five months.

Additionally, in both dose escalation and expansion, we saw a differentiated tolerability profile for operate without severe ocular toxicity peripheral neuropathy and neutropenia.

Now, let's turn to up next our ongoing phase III trial of <unk> as a monotherapy maintenance treatment in recurrent platinum sensitive ovarian cancer that is enrolling patients with <unk> positive tumors.

There is a substantial need for new maintenance treatment options and this need is.

He is expanding even further given the recent label restrictions related to PARP inhibitors clinical.

Clinical practice today is trending towards patients with BRCA and HRD positive tumors, getting PARP inhibitors with or without that this isn't that in the frontline and HRP patients getting bevacizumab in the frontline.

As a result, most patients have exhausted their maintenance treatment options by the time, they have recurrent disease, which we believe increases our opportunity with operator.

Up next is enrolling patients who achieved stable disease or better in response to their prior induction chemotherapy and in recognition of the lack of standard of care and the recurrent maintenance setting. It is randomized two to one to receive <unk> or placebo.

Our primary endpoint for the trial is progression free survival or PFS by blinded independent Central review.

Now, let's move to our upgrade a phase one trial of <unk> in combination with carbo platinum and platinum sensitive ovarian cancer.

Historically, the combination of Carboplatin and Paclitaxel has served as the standard of care in earlier lines of therapy for platinum sensitive ovarian cancer. However, this combination has been limited by distinct tolerability challenges that.

Can include severe neutropenia peripheral neuropathy and alopecia.

We designed to upgrade <unk> to investigate the potential benefits of replacing Paclitaxel with upright in the induction phase of treatment and then continuing opry as maintenance monotherapy.

Earlier this quarter, we were pleased to begin the dose expansion portion of this trial.

And finally on the clinical front, we are excited to have phase one trials of both <unk> 16, and <unk> 2056 now underway.

$60 $60 or dollar Simpson product candidate targeting <unk> for <unk>.

We see <unk> as a compelling target given its high expression and a variety of tumors and its limited expression in healthy tissue.

$16 60 is equipped with a precise target optimize drug to antibody ratio of six and our <unk> payload with controlled bystander effect.

And our multi center phase one trial is investigating this candidate in patients with breast endometrial and ovarian cancers.

In January we were also excited to initiate our multi center phase one trial of <unk> 2056, or her two directed immuno symptoms Sting agonist ADC.

Notably this is the first immunotherapy candidate to enter the clinic the.

The trial is designed to investigate 2056 in patients with previously treated advanced or recurrent solid tumors expressing high and low levels of her two such as breast gastric colorectal and non small cell lung cancers.

As you May recall 2056 targets a novel <unk> two epitopes that is distinct from those targeted by partisan that and Trastuzumab and it is designed to locally activates <unk> signal in both tumor resident immune cells and in tumor cells and.

In preclinical models. This candidate has shown compelling efficacy and high and low expressing tumors, both as a monotherapy or in combination with standard of care agents such as inherited.

And so with products from all three of our ADC platforms in the clinic. Our focus is now firmly on patient enrollment and data generation.

With that let's turn the call over to our Chief Financial Officer, Bryan <unk> for an update on our financials Bryan.

Thank you Arvind.

<unk> touched on business development with a central theme in 2022, as we were able to generate approximately $170 million in upfront capital, which has helped to offset the vast majority of our operating cash needs for the past year.

These deals also provide the potential for significant future payments in the form of over $3 billion in potential milestones plus royalties as Anna mentioned, we are also already seeing the benefits of our collaborations in the form of discovery milestone revenue.

Our most recent success came in the fourth quarter of 2022, as we entered into a research collaboration and commercial license agreement with Merck NGA to discover novel in unison and Adcs directed against up to two targets under the terms of the agreement we received a $30 million upfront payment and are eligible to receive up to $800 million in.

Development regulatory and commercial milestones as well as tiered royalties up to the low double digit percentage on net sales.

We continue to see a significant amount of interest both in ADC and in innate immune modulators and expect business development to remain an important tool within our financing Arsenal moving forward.

Now turning to our financial highlights from our fourth quarter of 2022, we ended the year with approximately $281 million in cash cash equivalents and marketable securities up from $178 million at year end 2021, we also have a line of credit available to us and in early 2023.

We received merck's $30 million upfront payment.

As a result, we are in a strong position financially with the funds required to support our operating plan commitments into the second half of 2024, well pads several potential milestones of significant it should be noted that our cash runway guidance does not assume any potential milestone payments from our current collaborations or proceeds that we may.

Realize from future collaborations.

Net cash used in operating activities was approximately $51 2 million for the fourth quarter of 2022 collab.

Collaboration revenue for the fourth quarter of 2022 was $14 7 million.

Paired to an immaterial amount for the same period in 2021.

The year over year increase was primarily related to our collaboration agreement with Janssen at GSK, including the recognition of an initial discovery milestone under our <unk> agreement.

Research and development expenses for the fourth quarter of 2022 were $45 7 million.

Compared to $37 4 million for the same period in 2021 noncash R&D related stock based compensation expense for the fourth quarter of 2022 was $2 8 million.

The year over year increase in R&D expenses was primarily related to higher manufacturing and clinical costs related to <unk> phase one clinical trial startup activity for S&P 660, <unk> 2056, and an increase in head count.

General and administrative expenses for the fourth quarter of 2022 were $14 8 million compared to $10 7 million. During the same period in 2021 noncash G&A related to stock based compensation expense for the fourth quarter of 2022 was $2 5 million.

Year over year increase in G&A expenses was primarily related to an increase in consulting and professional fees and head count.

<unk> net loss for the fourth quarter of 2022 was $44 9 million compared to a net loss of $49 million.

For the same period in 2021 and.

And now I'll turn the call back over to Anna for a few closing remarks.

Thanks, Brian and <unk>, when we had an incredibly productive 2022.

Now fast approaching multiple significant milestones. These include our plan to report top line data from uplift in mid 2023, following the major oncology conferences in June .

Assuming a positive outcome. Our plan would then be to file our BLA around the end of this year.

We plan to significantly advance up next involvement and report interim data from upgrades in the second half of this year, we will advance our phase one trial of <unk> 2056, and complete the dose escalation portion of a phase one trial of exited 2016 <unk>.

In this year.

And we intend to execute against our existing collaborations while proactively evaluating new collaboration opportunity that could help to expand the reach of our platforms maximize the development of product candidates and generate non diluted capital.

With our highly differentiated ADC platforms and product candidates, increasing industry recognition and a strong financial position, we are aiming to make 2023 and transformative year for <unk> and look forward to keeping you updated on our progress with that.

Let's open the call to your questions operator would you please provide the instructions.

Thank you I'd like to ask a question. Please press star followed by the number one on your telephone keypad to withdraw your question. Please press star one again, we'll pause for just a moment to compile the Q&A roster.

Our first question comes from Jonathan Chang from SBB Securities. Please go ahead. Your line is open.

Good morning, Thanks for taking my questions.

With the phase III Mirasol data expected near term can you share the latest thoughts on how the results of that study could impact or not.

Strategy with operating in the event of a positive or negative result.

And also how should investors be thinking about the overlap of night b to B and fully receptor alpha. Thank you.

Thank you John maybe I can talk a little bit about the overlap and then our green color.

Andy.

Any other aspects of your question. So as you are aware and as we.

<unk>.

Closed in multiple data disclosures not be to be high represents the majority of patients in the largest IP. We have published together with our diagnostic partner, we looked at 400 unique tissue samples from ovarian cancer patients.

Demonstrated that 59% of them were not be to be high and thats consistent with the results from our expansion cohorts and other smaller tissue banks therapies.

We understand from the FDA materials published.

With the approval of motto that fully Cai is about 29%. So there is a small overlap, particularly as you take.

Take into consideration. The fact that these two antigens are not correlate that.

So obviously, there's a very high unmet need and this is for these patients but the overlap between the two antigens is fairly small.

Or when do you have any comments in terms of the outcome of Mirasol.

Yeah. Thank you Anna and Jonathan So just to follow up on the question and.

In relationship to if mirasol fails or successful it does not impact the development pathways for upgrades and uplift in particular.

Recognizing that the Mirasol study is actually conducted in AR.

Very similar if not identical population to the original psoriasis study and number of the toxin that whereby.

Our uplift study.

And our confirmatory study of up next is in earlier line population.

And it's also in a smaller population is Anna had just alluded to in relationship to.

Mirasol falling alpha receptor prevalence relative to the <unk> prevalence.

Got it thank you.

Okay.

Once again to ask a question. Please press star followed by the number one on your telephone keypad.

Our next question comes from Ashish <unk> from Citi. Please go ahead. Your line is open.

Hi, James Thanks, very much for taking my questions.

We've got a lot of questions on duration of response for upright. So maybe for uplift can you comment at all on your expectations for duration relative to the phase one.

We know that five number from the phase one as it was of course based on a relatively small number of responders snow or not be to be high. So just wondering how youre thinking about the potential variability of the duration number maybe to the upside or to the downside.

Our win could you take this.

Sure absolutely. So thank you for the question. So we believe actually that duration of response of five months is quite clinically meaningful. This is based on discussions with our clinical investigators and Don as you described this as what we had seen from our expansion data.

Just to further comment on that.

Variability keep in mind that for regulatory review as the primary efficacy endpoint is the objective response rate, which.

Which we've already indicated is that 12% benchmark based off a single single agent chemotherapy.

Now certainly duration of response will also be taken into consideration, but recognizing that it's a time of event driven endpoint and it won't be incorporated into the considerations.

Amongst other variables such as the safety and Tolerability of the asset.

Got it that's very helpful and if I could ask one more.

You've indicated that to be up next confirmatory phase III enrollment will be largely completed by the time that the FDA has to make sense.

Accelerated approval decision on <unk>.

I'm just wondering if you can give any commentary on if the FDA signed off on this plan.

Further discussions are necessary and how confident you are that this strategy meets the sort of usual regulatory criteria for a confirmatory trial to be.

Quote unquote substantially enrolled.

Actually it's a good question.

As you're fully aware that recent fedora passage.

In December indicate that's where the FDA indicated that they expect the confirmatory trial to be underway at the time of the accelerated approval.

There is no further definition.

What underway means but obviously as you know we started up next in the second half of last year.

And therefore, you can expect that we will be well underway by the time there was a decision on.

Next.

Perfect. Thank you very much.

Our next question comes from <unk> <unk> from <unk> Securities. Please go ahead. Your line is open.

Hi, Good morning, guys. Thanks for taking my questions.

To get your thoughts on up next given that you're recruiting.

Spectrum of patients could be second line and amendments I think I'll first line maintenance setting how do you think about the bar to beat for maintenance.

And then sort of related to Ashish question.

So with the immunogen.

The experience.

I also wanted to take a look at some of the data of the Mirasol study.

Others are deciding on.

How do you think the FDA is going to want.

We want to see data next and what it means they'll be looking for.

Are they can you take this question, yes no.

No absolutely. So let me start with the first question just in relationship to what the potential bar would be in relationship to the control on for up next.

I think the best.

Apple or comparison really would come from Niraparib in the Nova study.

And this is a trial with a historic PFS and the recurrent platinum sensitive maintenance setting.

In the placebo arm in that study actually demonstrated a PFS of approximately four five months, but also keep in mind a couple of additional variables is that since the time of conduct of that study the treatment landscape has evolved.

Our now more patients that are heavily pretreated with PARP inhibitors or bevacizumab in the earlier line and then in addition to that.

<unk> includes stable disease patients in our eligibility criteria, which were not included in Nova.

One might reasonably expect the PFS to be lower than the PFS.

$4 five that I just described.

As far as the second question.

Could you remind me just briefly.

Second question about unmatched.

And so what we saw with <unk>.

Immunogen experiences that the FDA did when I look at the Mirasol data.

Making the decision on the psoriasis study.

Wanted to ask do you think do you expect the FDA to look at that mix. When they are taking a look at uplift and what do you think they'll get them for in the data.

That's a great question and so.

Obviously, we can't comment on yet, but keep in mind that up next is a different line setting relative to uplift and.

So in the setting of near solid Soraya.

This was an since where they were studying essentially very similar if not identical populations and so one can speculate that that could be the rationale by which they would ask for that information. So.

So recognizing that <unk> is in a different line population. It's also a placebo.

Double blinded study in relationship to that.

And when would then question whether or not there would be any utility in looking at the next data.

Got it thanks for taking my questions guys.

Once again to ask a question. Please press star followed by the number one on your telephone keypad.

Our next question comes from Boris <unk>.

<unk> from Cowen. Please go ahead your line is open.

Great. Thanks for taking my questions first I just want to clarify on the uplift data anticipated in the middle of this year can you comment specifically on what data will we get when we assume that we'll get a response rates, but we also get.

Durability of responders with all the responders the confirmed at that point any other efficacy metrics.

So.

<unk>.

Thank you Paul for the question, we expect to have top line data.

Mid year, and we have clarified that that would be subsequent to some of the major medical conferences that occur.

In June .

At that point, we lock the database is closed top line data we will have to.

Typical data set that's seen with other disclosures that will include overall response rate will include.

Safety as well as the duration of response at that point.

Okay. So let me just clarify.

The data is going to be subsequent some medical meeting conference in June which I.

<unk> so the data should come after <unk>.

Yes, we wanted to make sure that that was clear it will come midyear, but after at scope.

Got it Okay and then just my last question.

On <unk>, four which has been doing some work on that what are the companies are pursuing this target MLR we get.

Some additional data on a target yes, yes are they do you want to describe.

Other companies here and what we know.

No. Thank you. Thank you.

We're aware of at least two other companies that are working on the same target seven H for I'll start with Seattle genetics.

Just to give you a context, we do differentiate relative to the fact that.

<unk>, our Dover symptom platform, where we have.

The antibody ratio of six and this is relative to their drug antibody ratio of three five.

And the payload is actually also significantly different.

We utilize the same dollars payload that we've clinically demonstrated utilize within operate.

We're in that instance.

<unk> been able to characterize the differentiated safety profile with <unk>.

A lack of peripheral severe peripheral neuropathy neutropenia as well as ocular toxicity.

Whereby the Seattle genetics platform.

My understanding is that it's off patent as well as it does have limitations associated with peripheral neuropathy and neutropenia.

The other company also to focus on is accurate zeneca.

And we understand that they are developing would be seven each for with this new topoisomerase platform, which.

Which had not yet been evaluated clinically accepted in this scenario.

Thinking about the development pathway it may not be ideal for breast cancer patients knowing that.

Many of these breast cancer patients would have already received the <unk> payload earlier prior line of therapy.

So completing the thought on we've guided toward completing dose escalation for RMB seven each for our 16 60 molecule by the end of this year.

Thank you very much for taking my questions.

We have no further questions in queue I'd like to turn the call back over to the company's CEO Anna <unk> for closing remarks.

Thank you operator, and thanks to all of you who choose <unk> for your continued support we will be participating in conferences hosted by Cowen and <unk> in the weeks ahead and look forward to seeing many of you there enjoy the rest of your day.

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

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Good morning, and welcome to Marsano Therapeutics fourth quarter and year end 2022 conference call and webcast.

All participants are in listen only mode.

There'll be a question and answer session at the end of this call.

I'd now like to turn the call over to Jason for that 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. These statements may 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 does.

Signs initiation execution and data releases regulatory plans and objectives commercial opportunities collaborations and potential associated payments operating expenses and cash runway.

Each of these forward looking statements are subject to the 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 November seven 2022.

Now with that let me turn the call over to Ana Proto purpose, our president and Chief Executive Officer.

Thank you, Jason and Hello, everyone welcome to our conference call. Joining me today with prepared remarks are chief Medical officer, or the yen and Chief Financial Officer, Brian I'm also.

<unk> joined by other members of management, who will be available to answer your questions.

We are very pleased by the progress we made in 2022.

<unk> are now a pre development program, our clinical pipeline and business development has helped advances to the cuts of multiple milestones in 2023 as we seek to further solidify <unk> role as both a leader and a partner of choice with the FDA.

<unk> space.

Let's please clearly cap so most of our most notable accomplishments over the past year.

First and foremost is the progress we made in executing on a comprehensive plan to establish upgrades as the foundational medicine in ovarian cancer.

Early in the fourth quarter, we completed enrollment in uplift a single arm registrational trial in platinum resistant ovarian cancer.

Advanced as well mainly up next on phase III clinical trial of <unk> monotherapy maintenance treatment in recurrent platinum sensitive ovarian cancer and <unk>.

As a reminder, if this data positive we believe up next could serve as the post approval confirmatory trial of <unk>.

In the U S.

Potential approvals outside the U S and support the expansion of upbeat into earlier lines of therapy.

More recently, we completed dose escalation and initiated the expansion portion of upgrade.

Our phase one trial of <unk> in combination with Carboplatin in platinum sensitive ovarian cancer.

Beyond a pre we brought excellent $60 60 at exiting 2056 into the clinic, we initiated our phase one trial of 6060 <unk>.

Seven each for deluxe tinnitus product candidate in August and just last month, we began dosing patients in our phase one trial of <unk> 2056, or hurt to immune cell product candidate both $60 60 in 2056.

Pharmacological features mechanism of action that we believe could strong peak differentiate them as we seek to address areas of high unmet medical need.

As a result of these efforts we now have product candidates from all three of our platforms.

Alexia <unk>.

And any other symptoms in the clinic generated data.

In parallel with our clinical progress our platform product candidates have attracted the interest of numerous potential collaborators in 2022 alone we entered into three new collaborations firstly the yadkin.

And with GSK and more recently in December with Merck <unk>.

We continue to see a high level of interest in Adcs and collaborations remain fundamental to our overall business strategy in fact, our BP successes are already leading to initial milestones.

In summary, 2022 with a year of tremendous accomplishments and we're excited about what lies ahead in 2023.

Before getting into that let's help our chief Medical Officer RV Yang.

Deeply into our clinical progress.

<unk>.

Thank you Anna and good morning, everyone. As we approach the uplift topline readout, we thought it might be helpful to remind everyone of the significant unmet medical need faced by patients today.

Mmhmm resistant ovarian cancer.

These individuals are at the most advanced point of their disease are heavily pretreated and have very poor prognosis.

Single agent chemotherapy is the only option for most patients past trials have consistently shown an objective response rate or <unk> of approximately 12% our single agent chemo in this setting.

We've enrolled approximately 270 patients an uplift and have included a broad population that includes patients with up to four prior lines of therapy.

The primary endpoint in this trial is the <unk> that would that be to the positive population.

For context, multiple datasets have shown that a majority of ovarian cancer patients have not be to the positive expression. In fact, the largest mapped to the dataset that has been presented to date includes roughly 400 unique tissue samples and suggest that approximately 59% of the overall varian cancer pop.

<unk> are not be to be positive.

The study is designed to exclude the 12% objective response rate for today's standard of care from the 95% confidence interval.

In addition to our or we would expect the duration of response or DLR to be evaluated by the FDA along with the safety Tolerability and the overall context of the uplift data.

For context in our dose expansion trial of regenerated or are up 34% and across dose levels and a valuable not be to the positive patients with a <unk> of approximately five months. Additionally.

Additionally, in both dose escalation and expansion, we saw a differentiated tolerability profile for operate without severe ocular toxicity peripheral neuropathy or neutropenia.

Now, let's turn to Opex, our ongoing phase III trial of <unk> as a monotherapy maintenance treatment in recurrent platinum sensitive ovarian cancer that is enrolling patients with <unk> positive tumors.

There is a substantial need for new maintenance treatment options and this need is.

He is expanding even further given the recent label restrictions related to PARP inhibitors clinic.

Clinical practice today is trending towards patients with BRCA and HRD positive tumors, getting PARP inhibitors with or without bevacizumab in the frontline and HRP patients getting bevacizumab in the frontline.

As a result, most patients have exhausted their maintenance treatment options by the time, they have recurrent disease, which we believe increases our opportunity with operator.

Our primary endpoint for the trial is progression free survival or PFS by blinded independent Central review.

Now, let's move to our upgrade a phase one trial of <unk> in combination with carbo platinum and platinum sensitive ovarian cancer.

We designed to upgrade <unk> to investigate the potential benefits of replacing Paclitaxel with upright in the induction phase of treatment and then continuing upward as maintenance monotherapy.

Earlier this quarter, we were pleased to begin the dose expansion portion of this trial.

And finally on the clinical front, we are excited to have phase one trials of both <unk> and SMT 2056 now underway.

<unk> hundred 60 is our <unk> product candidate targeting <unk> for <unk>.

<unk> as a compelling target given its high expression and a variety of tumors and its limited expression in healthy tissue.

$60 60 is equipped with a precise target optimize drug to antibody ratio of six and our <unk> payload with controlled bystander effect.

And our multi center phase one trial is investigating this candidate in patients with breast endometrial and ovarian cancers.

In January we were also excited to initiate our multi center phase one trial of <unk> 2056, or her two directed immuno symptoms Sting agonist ADC.

Notably this is the first immuno symphony candidate to enter the clinic.

As you May recall 2056 targets a novel or two epitopes that is distinct from those targeted by partisan that interested in that and it is designed to locally activates <unk> signal in both tumor resident immune cells and in tumor cells and.

In preclinical models. This candidate has shown compelling efficacy and high and low expressing tumors.

As a monotherapy or in combination with standard of care agents such as inherited.

And so with products from all three of our ADC platforms in the clinic. Our focus is now firmly on patient enrollment and data generation.

With that let's turn the call over to our Chief Financial Officer, Bryan <unk> for an update on our financials Bryan.

Thank you Arvind.

Touched on business development with a central theme in 2022, as we were able to generate approximately $170 million in upfront capital, which has helped to offset the vast majority of our operating cash needs for the past year.

Our most recent success came in the fourth quarter of 2022, as we entered into a research collaboration and commercial license agreement with Merck <unk> to discover novel in unison and Adcs directed against up to two targets under the terms of the agreement we received a $30 million upfront payment and are eligible to receive up to $800 million in.

Development regulatory and commercial milestones as well as tiered royalties up to the low double digit percentage on net sales.

We continue to see a significant amount of interest both in ADC and innate immune modulators and expect business development to remain an important tool within our financing Arsenal moving forward.

Now turning to our financial highlights from our fourth quarter of 2022.

We ended the year with approximately $281 million in cash cash equivalents and marketable securities up from $178 million at year end 2021. We also have a line of credit available to us and in early 2023, we received merck's $30 million upfront payment.

As a result, we are in a strong position financially with the funds required to support our operating plan commitments into the second half of 2024, well pad several potential milestones of significant it should be noted that our cash runway guidance does not assume any potential milestone payments from our current collaborations or proceeds that we may.

Realize from future collaborations.

Net cash used in operating activities was approximately $51 2 million for the fourth quarter of 2022 collab.

Collaboration revenue for the fourth quarter of 2022 was $14 7 million.

Paired to an immaterial amount for the same period in 2021.

The year over year increase was primarily related to our collaboration agreement with Janssen at GSK, including the recognition of an initial discovery milestone under our <unk> agreement.

Research and development expenses for the fourth quarter of 2022 were $45 7 million compared.

Compared to $37 4 million.

For the same period in 2021 noncash R&D related stock based compensation expense for the fourth quarter of 2022 was $2 8 million.

And are now fast approaching multiple significant milestones. These include our plan to report top line data from uplift in mid 2023, following the major oncology conferences in June .

Fuming a positive outcome our plan with Denby to plan <unk> around the end of this year.

We plan to significantly more plans up next involvement and report interim data from upgrade a and the second half of this year.

We will advance our phase one trial of 2056 and complete the doses correlation portion of our phase one trial of exit 216 60 this year.

And we intend to execute against our existing collaborations while proactively evaluating new collaboration opportunity that could help to expand the reach of our platforms.

My is the development of product candidates and generate Nondilutive capital.

With our highly differentiated ADC platform said product candidates, increasing industry recognition and a strong financial position.

To make 2023 at transformative <unk> and look forward to keeping you updated on our progress.

With that let's open the call to your questions. Operator would you please provide the instructions.

If you would like to ask a question. Please press star followed by the number one on your telephone keypad.

Try your question. Please press one again what passed for just a moment to compile the Q&A roster.

Our first question comes from Jonathan Chang from SBB Securities. Please go ahead. Your line is open.

Good morning, Thanks for taking my questions.

With a phase III Mirasol data expected near term can you share in later.

On how the results of that study could impact or not Youre strategy was opry in the event of a positive or negative result.

And also how should investors be thinking about the overlap of night B, two b and flipped receptor alpha. Thank you.

Thank you, Jonathan maybe I could talk a little bit about the overlap and then our brain can cover.

Any any other aspects of your question. So as you are aware and.

And as we've.

And multiple data disclosures nappy to be high represents the majority of patients in the largest study we helped publish together without diagnostic partner, we looked at 400 unique tissue samples from ovarian cancer patients and <unk>.

I'm on straight at that 59% of them were not be to be high and that's consistent with the results from our expansion cohort and other smaller.

Schupak studies.

We understand from the F D. A materials published concurred with the approval of months that for like high is about 29 per cent. So there is a small overlap, particularly as you.

Take into consideration. The fact that these two and teachers are not correlated. So obviously, there's a very high unmet need in this in this for these patients but the overlap between the two teachers is fairly small.

Do you have any comments in terms of the outcome of mirrors song.

Yeah. Thank you and Jonathan So just to follow up on that question.

In relationship to is Marisol sales or six is successful it does not impact the development pathway for upgrades and uplift in particular.

Recognizing that the Mirasol study is actually conducted and.

Very similar if not identical population to the original survivor study and number of Rituxan map whereby are uplift study and our confirmatory study up up next is an earlier line population and it's also in a smaller population is Anna had just alluded to in relationship to that Mirasol fall at all.

<unk> receptor prevalence relative to the nappy to be preference.

Got it thank you.

Mmm.

Once again to ask a question. Please press star followed by the number one on your telephone keypad.

Our next question comes from a chic Mubarak from city. Please go ahead. Your line is open.

Hi, James Thanks, very much for taking my questions. We got a lot of questions on duration of response for a brief submitted for uplift can you comment at all on your expectations for duration relative to the phase one.

We know the five months number from the first one was a it was a course based on a relatively small number of responders snow or not be to be high. So I'm. Just wondering how you were thinking about potential variability of the duration number maybe to the upside or to the downside.

Alright could you take this.

Sure absolutely. So no. Thank you for the questions. So we believe actually that the duration of response of five months is quite clinically meaningful uhm. This is based on discussions with our clinical investigators and as you described this is what we have seen from our expansion data just to further comment on that <unk>.

<unk> keep in mind that for regulatory reviews.

Primary advocacy endpoint is the objective response rate, which we've already indicated is that 12% benchmark based off of single <unk> single agent chemotherapy.

Now certainly duration of response will also be taken into consideration about recognizing that it's a time event driven endpoint and there'll be incorporated into the considerations.

Amongst other variables such as the safety and Tolerability at the asset.

Hello. This is very helpful and if I could ask one more.

Indicating the feet up next thanks laboratories, those three enrollment will be largely completed by the time that the F. D. A has to make them.

An accelerated approval decision on upgrades.

I'm just wondering if you can give any commentary on if the F. D. A signed off on this plan or for.

Further discussions are necessary and how confident you are that the strategy meats.

Usual regulatory criteria for a confirmatory trial to be.

Quote unquote substantially enrolled thanks.

She gets a good question and as you're fully aware that Lisa.

Fedora passage in December indicate that's where the FDA indicated that the expect the confirmatory trial to be underway at the time of the accelerated approval.

There is no further definition in what underway means but obviously as you know we started up next in the second half of last year.

And therefore, you can expect that we will be well underway by the time there was a decision on up next.

Perfect. Thank you very much.

Our next question comes from <unk> from tourists Securities. Please go ahead. Your line is open.

Hi, Good morning, guys. Thanks for taking my questions.

Your thoughts on up next given that should be recruiting.

Extra milk or patients could be second line and the amendments material fourth line maintenance hitting I didn't think about the bar to beat the maintenance.

And then.

Sort of related to achieve question, we saw with the immunogen.

Experience. The FDA also want to take a look at some of the data.

Their self study.

While the the deciding on Sir how do you think the Fda's.

Wanted to see your data text and what do you think they'll be looking for things.

<unk> can you take this question yeah.

Absolutely. So let me start with the first question just in relationship to what the.

Potential buyer would be in relationship to the control on for up next I think the best.

Example, or comparison really would come from Niraparib in the middle of the study and this is a trial with a historic PSS.

Current platinum sensitive maintenance setting in the <unk> in that study actually demonstrated PFS approximately four and a half months, but also keep in mind a couple of additional variables is that since the time of conduct in that study. The treatment landscape has evolved there are now more patients that are heavily pretreated with.

Park inhibitors or Bevacizumab.

Earlier line and then in addition to that we include stable disease patients and our eligibility criteria, which were not included in Nova.

So one might reasonably expect the TFS to be lower than the P. S. Four.

4.5 that I just described.

As far as the the second question.

Could you remind me just briefly of the.

Second question about <unk>.

So what are we serve it with the experienced is that the updated when I look at the mirror solid data.

Making the decision on the psoriasis study.

They're going to ask you can you expect the FDA to US look at the next window take you look at uplift and what do you think they'll get that four and the data.

That that that's a great question and so.

We can't comment on yesterday, but keep in mind that up next is a different lines setting relative to uplift and so uhm in the setting of <unk>. This was an incident, where they were studying essentially very similar if not identical populations and so one can speculate that.

That could be the rationale by which they would ask for that information. So recognizing that up next is in a different mind population. It's also a placebo double blinded study in relationship to that and when when would then question whether or not there would be any utility in looking at the next data.

Got it thanks for taking my questions guys.

Once again to ask a question. Please press star followed by the number one on your telephone keypad or.

Our next question comes from Forest Peak peak hour from talent. Please go ahead. Your line is open.

Great. Thanks for taking my question is the first I just want to clarify on me uplift at anticipated in the middle of this year can you comment specifically on what data will we get what we assumed that will get a response rate, but what we also get the ability of responders will all the responders be confirmed at that point any other efficacy metrics.

So.

<unk>. Thank you for as for the question, we expect to have <unk> <unk> and we have clarified that that would be subsequent to some of the major medical conference is that correct.

In June .

At <unk> at the point, we lock the database is closed <unk> data.

We'll have a typical data set.

Scene with other disclosures that will include all they're all response rate will include safety as well as the duration of response at that point.

Let me just clarify that data is gonna be subsequent some medical meeting constant January <unk>.

<unk> so that.

Data should come after <unk>.

Yes, we wanted to make sure that that was clear it will come mid year, but after azgul.

Got it Okay and this is my last question on B seven H four she had been doing some work on that what are the companies are pursuing this target and what will we get.

Some additional data just on a target yeah, Yeah, Alright, do you want to describe the other companies here and what we know.

Thank you. Thank you.

So we're aware of at least two other companies that are working on the same card could be 784, I'll start with Seattle genetics, and just to give you a context, we do differentiate relative to the fact that where.

<unk> using our Dover symptom platform, where we have Ah Ah drug the antibody ratio of six and this is relative to their drug antibody ratio of 3.5.

And the payload is actually also significantly different uhm, we utilize the same <unk> payload that leads clinically demonstrating utilize with an opry. We're in that instance, when you've been able to characterize that differentiated safety profile with <unk> lack of peripheral severe peripheral neuropathy neutropenia as well as <unk>.

Killer toxicity, whereby the Seattle genetics platform my understanding is that it's off patent as well as it does have limitations associated with peripheral neuropathy addiction.

The other company all sort of focus on his accident occur.

And we understand that they're developing a b 784 with this new till by some raised platform, which had not yet been evaluated clinically except in the scenario.

And thinking about the development pathway may not be ideal.

For breast cancer patients knowing that many.

Many of these breast cancer patients would've already received a <unk> payload.

Earlier prior line of therapy.

So completing the thought wheat guided toward.

Completing dose escalation for our T 784, or 16 60 molecule by the end of this year.

Fantastic. Thank you very much for taking my question.

We have no further questions in queue I'd like to turn the call back over to the company C. L and I've heard a purpose for closing remarks.

Thank you operator, and thanks to all of you who chewed and for your continued support we will be participating in conference hosted by Cowan and <unk> in the weeks ahead and look forward to seeing many of you there enjoy the rest of your day.

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

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