Q1 2023 CytomX Therapeutics Inc Earnings Call
Good afternoon, everyone. Thank you for saying Goodbye.
To the <unk> Therapeutics first quarter of 2023 financial results call. Please be advised that today's call is being recorded.
Now like to end the call over to your host today, Chris <unk> side to make senior Vice President Finance and accounting. Please go ahead.
Thank you good afternoon, and thank you for joining us.
Before we begin I would like to remind everyone that during this call will be making forward looking statements.
Forward looking statements relate to the future.
You inherit uncertainties and risks that are difficult to predict and many of which are outside of our control.
Risks and uncertainties are set forth in our most recent public filings with the SEC.
C C dot Gov we.
We undertake no obligation to update any forward looking statements, whether as a result of new information future developments or otherwise.
Earlier. This afternoon, we issued a press release that includes a summary of our first quarter of 2023 financial results and highlights recent progress as I Tomex we.
We encourage everyone to read today's press release, and the associated materials, which have been filed with the SEC adore.
Additionally, the press release, a recording of this call and our SEC filings can be found under the investors and new section of our web site.
With me on the call today, Dr. Shawn Mccarthy Si Tomex as Chief Executive Officer, and Chairman, Sean will provide a business and pipeline update before I walk through the financials and for the first quarter.
With that I'll now turn the call over to Sean.
Thanks, Chris Good afternoon, everyone.
Thanks for joining us for an update on recent progress Cytotechs.
Well today's call I'll provide an update on the company's pipeline progress and the continued execution towards our key priorities with 2023 before opening up the call to Q&A.
Ah slight mix, we believe that is biologic anticancer therapies become more and more potent.
Need for localizing empowered modality is such as antibody conjugates <unk> engages in cytokines into cancer tissue becomes increasingly important as a way to improve therapeutic window.
Indeed, we believe that localization will be the future of biologics.
<unk> vision is to transform lives with safer more effective therapies.
We have to realize our vision for the benefits of patients by leveraging our property platform to create high impact therapeutics that are localized to diseased tissue, thereby reducing systemic toxicities and maximizing overall benefit.
Are versatile platform for protease based conditionally activated biologics has strategically positioned our company and pipeline at the intersection of some of the most promising areas of oncology research and development.
I'm excited to walk through the progress of the company during the first quarter of 2023.
Threat Q1, we continued to advance diversified portfolio of innovative probody therapeutic candidates for the treatment of cancer, while ensuring disciplined resource allocation.
Slight headaches enter 2023 with robust financial resources positioning the company to execute towards multiple milestones over the next 12 to 24 months.
We remain intensely focused on executing towards these milestones with 6904, continuing to progressive phase, one and enabling activities with 62051 <unk> one remaining on track with.
With iron filings projected for Q4 this year.
With more more than 15 internal and partner programs, we are well positioned to deliver meaningful value to patients through the continued progression of our pipeline.
Before moving to review of our pipeline I'd like to start by taking just a moment to congratulate Dr. Marsha Belden on her promotion to Chief Scientific officer of Cytotechs announced today.
Marshall joined <unk> in 2018 as head of oncology research and has since played a vital role in the translation of key learnings from our first wave of clinical programs into the next generation Probody candidates that make up our current pipeline.
Marcia is a key driver of our research drug discovery and translational strategies and has also been central to our continued business development success.
My colleagues and I look forward to continuing to work closely with Marsha as we maintain our leadership position and biologics localization through conditional activation.
Now moving to our pipeline I'd like to start with our significant R&D activity in the area of selling gauging by specifics.
Southern engages hold enormous promise for the treatment of solid tumors.
However, the very potency of this modality could lead to widespread activation of the immune system imposing constraints on therapeutic window.
Localization of the powerful anticancer activity of this cost of drugs.
Great potential for patients by enhancing therapeutic window.
<unk> with the support of our partners believe that the property platform could be ideally suited to addressing this challenge.
Ali program in this area is six 900 for clinical.
Clinical stage property that Engager targeting Egfr on CD, three partnered with Amgen and a global co development Alliance.
Egfr is a highly validated broadly expressed cats at target and.
And we see a compelling opportunity to leverage egfr targets expression as an address so localized and harness attitude <unk> responses preferentially to the tumor micro environment.
Our previous work on Egfr published in Science translational medicine demonstrated that mocking of the Egfr therapeutic antibodies. It took some app substantially reduced side effects, commonly associated with Egfr therapy.
This work opened a window to explore empowered anti egfr strategies and 6904 Leverages. This approach.
We're making steady progress with 6904 in the clinic, we successfully treated our first patients. It may 2022, and the dose escalation portion of the study continues to advance.
We have completed the initial accelerated dose titration phase of the study, which allows for a single patient cohorts and we're now enrolling into the three plus three phase.
The primary goal of dose escalation is to assess safety and reached dose levels and exposures by the end of 2023, which enrollments into backfill cohorts and certain egfr positive tumors can begin.
In 2024, a key milestone will be the determination of our phase III dosing strategy.
Potential initiation of expansion cohort.
This decision will be taken in collaboration with our partner Amgen.
We look forward to providing additional 6904 updates later this year.
Continuing our and teeth alligators. We're also delighted to share recently that our partner Astellas nominated the first clinical candidate under our collaboration triggering a 5 million dollar milestone payments as <unk>.
This program is advancing to enabling activities at Astellas side.
<unk> said the status are also collaborating on additional fees I'll engage in programs and services eligible to receive future preclinical clinical and commercial milestones across these programs and also a a taste the option to certain U S development and commercial rights.
We look forward to providing additional updates regarding the status collaboration as these programs progress.
We've also been busy recently kicking off our collaboration with Regeneron in by specific Immunotherapies.
Regeneron of course brings tremendous scientific depth through our lives our.
Excited to be combining our technologies with the goal to widen the therapeutic window for potentially paradigm shifting next generation immunotherapy.
We look forward to continuing to make expeditious progress in this new alliance.
Moving that to our upcoming Ind's for the next generation molecules 6205181.
These programs incorporate the continuing evolution and advancement of our science and platform building on our prior work in the clinic.
Starting with C. X 2051 are wholly owned conditionally active probody ADC targeting epithelioid cell adhesion molecule or <unk> also noticed one.
<unk> has been regarded as a high potential target for decades and has been clinically validated by others in oncology.
However, clinical activity has only been achieved with local administration for example, and non muscle invasive bladder cancer.
2051 is tailored to optimize the therapeutic window for at Cam expressing epithelia cancers by matching the target with payload mechanism of action and achievements sensitivity.
We have optimized proteases capability of the mosque for this molecule.
And selected account to thiessen derivative as the payload for the program a total isomerase, one inhibitor from the <unk> class.
The teacup paler classes showed exciting clinical results with adc's, including adhere to enter Adobe and we think this payload isn't optimal choice for this program.
In preclinical studies 62051, when systemically administered as demonstrated a wide predicted therapeutic index and strong activity in multiple chew Mozena graff models, including colorectal cancer.
We anticipate filing an indy for this level of ADC in queue for this year at advancing the program into the clinic in 2000 2004.
Moving to see X 801 are Julie masked interferon alpha to be the lead program within our broader efforts and the cytokine field.
We believe there is enormous potential to harness the powerful anticancer activity of cytokines by using our localization strategies to direct their activity towards tumor tissue and away from systemic immune system activation.
Interferon Alpha two b as in approved Immunotherapeutic as demonstrated clinical activity in multiple cancer types.
Interfere in office stimulates agio presenting cells to activate cytotoxic T cells and may combined effectively with checkpoints inhibition offering tremendous potential to enhance immunotherapy responses and unlock checkpoint refractory and or resistant cancers.
It's apparent Alpha also has direct <unk>, killing activity, providing a jewel mechanism of action.
However, the powerful anticancer activity of interferon Alpha has thus far been difficult to harvest due to a systemic toxicity.
Preclinically CSA, Taiwan has demonstrated a wide therapeutic index with an enhanced tolerability profile compared to unmask interferon.
Along with preferential activity in the cheaper micro environment.
We believe CSA to one has the potential to become a unique centerpiece of combination therapy for a wide range of tumor types and we aim to rapidly biosys potentially best in class program towards clinical evaluation with an iron filings targeted the queue for this year and clinical initiation in 2024.
Will be providing an update on our preclinical evaluation of CSA to one at the international of cytokine and it's a fair on society guests symposium at.
This weekend in Washington D C.
During which we will also be introducing are exciting work on a new wholly owned cytokine program focused on conditionally active localized versions of interleukin 15.
Turning now to our partnership with B M. S. In February of this year BMS announced that they would be prioritising and advancing from phase one to phase two VIP CCNA for non few correlated Probody BMS 90 86288.
BMS continues to enroll into the phase one to study evaluating 288 as monotherapy and in combination with Nemo in solid tumors.
And they recently opened a new study are evaluating the triplet of 288 Nivo at <unk> and third line or later colorectal cancer.
We continue to be excited to have the property platform at the leading edge of their seats for strategy as well as to continue to collaborate on several earliest age ongoing research programs.
Let me answer briefly so I'll work on CD 71, the transparent receptor.
Besides that makes we've had a long standing interest in leveraging the unique molecular properties of CD 71, as an antique as a target due to its rapid internalization right and ability to transport Adcs and other therapeutic modalities itself.
62029 program a probody ADC previously partnered with Abbvie is shown encouraging clinical activity, including a 21% overall response rate in late stage metastatic squamous salvaggio cancer.
So I <unk> recently regained full rights to the CD 71 target from Abbvie and as an exclusive option to re acquire the full rights to see X 2029.
We are assessing next steps for our CD 71 program, including potential partnering and additional clinical studies with 62029 and also next generation strategies for targeting CD 71 will provide further updates in due course.
Finally, I would like to briefly discuss our partnership with Cytotechs newest partner.
But there.
But as a core component of our business model, we've leveraged strategic partnerships to extend the reach of our science broaden our pipeline and bring important nondilutive capital into the company.
This collaboration is yet another proof points of the validation of <unk> scientific expertise in platform breath, which has now been extended to mrna.
Work is well underway with this important new partnership which includes programs both in and outside of oncology.
We look forward to making progress with Madonna and these novel areas of R&D.
With that let me turn the call over to Chris to cover the financials with a quarter.
Thank you Sean I'm pleased to be able to share an update on our first quarter of 2023 financial results with you today.
Having completed a restructuring in 2022 and initiated the new research collaborations with regeneron image or not.
<unk> entered 2023, and a strong financial position with $204 million in cash cash equivalents and investments as of March 31 2023.
Based on our current expectations and corporate objectives, we expect our cash resources will fund company operations to mid 2025.
Our cash runway expectations do not include potential milestone payments from existing collaborations or any new business development.
The cash balance of $204 million as of March 31 compares to $194 million at the beer and 2022 <unk>.
Cash received in the first quarter of 2023 included $35 million as a result of the upfront payment received received from the Moderna collaboration and a 5 million dollar clinical candidate milestone payment earned under the Astellas agreement.
These collaboration payments are examples that underscore our continued ability to access nondilutive capital as well as earn ongoing cash flow the research funding and milestones.
Now, let me spend a few minutes on cash for the quarter and our expectations moving forward.
Normalising for the Moderna and Astellas cash inflows in the quarter cash burn with approximately $30 million for the first quarter of 2023 compared to approximately $42 million in the first quarter of 2022.
The reduction in cash burn versus the first quarter of 2022 was primarily driven by the corporate restructuring as well as pipeline prioritization.
As we execute towards our 2023 and long term objectives. We continued to maintain focus on prudently managing costs include.
Including the execution during Q1 of a sublease for a portion of our facilities that will reduce rent expense starting in the second quarter of 2023.
Looking to the company's goal Ford operational cash needs. We expect overall cash burn to continue to moderate down from 2022, and the first quarter of 2023 as we move through the balance of this year.
Now moving to revenue and operating expenses for the quarter.
For the first quarter revenue was $23.5 million compared to $9 million in 2022.
The increase in revenue was driven primarily by higher percentage of completion for projects under the company's collaboration with Bristol Myers Squibb.
The milestone earned under the agreement with Astellas and the completion of the company's obligations under the CD 71 collaboration agreement with Abby.
[noise] R&D expenses decreased by $9.4 million to $21 $2 million in the first quarter of 2023 compared to $36 million for the corresponding period of 2022 pre.
Primarily due to a decrease in personnel related expenses as well as winding down activities related to the <unk> 2009, and see X 2029 programs.
G&A expenses decreased by $2.6 million in the first quarter of 2020 $328 million compared to $10.5 million for the corresponding period in 2022.
Primarily due to a decrease in personnel related expenses from the workforce reduction in 2022 as well as patent related legal expenses.
With that I'll turn the call back to Sean.
Thanks, Chris.
In closing I would like to again emphasize the terrific execution by the site survey team so far this year.
Our scientific depth and biologics localization through conditional activation positions the company at the forefront of potential breakthroughs with potent biologic modalities, such as ADC teasel engages in cytokines.
True innovation takes time.
<unk> current pipeline and financial strength has resulted from the continued execution of our long term strategy in which we invest in big ideas that continuously learn from the translational cycle, a bench to bedside to bench.
In order to deliver meaningful benefit for patients.
We are intensely focused on driving towards key inflection points in our pipeline with particular focus on our newest programs.
We remained well on track with the C X 904 phase one study and variety, enabling studies with 6205161.
Additionally, our scientific leadership has continued to attract valued new partners, allowing us to broaden our pipeline and maintain balance sheet strength.
We look forward to continuing our work and to providing future updates with that operator, please open up the call for Q&A.
Thank you as a reminder to ask a question press Star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please stand by while we compiled Q&A roster.
Our first question comes from Mitchell couple or when it's H C. Wainwright. Your line is open.
Hi, everyone. Thanks for taking my questions just wanted to ask on TX 809, once the ideas file what can we expect for trotted violence strategy would we be able to see you look towards tumor types on the label approved interferon alpha to be or is it <unk>.
Yes, hi image. Thanks for the question is loyalty assuming to say I mean as you rightly.
Alludes to.
<unk> alpha to be.
As shown critical activity at a variety of settings, including renal melanoma, certain leukemias hairy cell leukemia Follicular lymphoma.
And more recently.
In fact quite quite recently the approval of.
The gene therapy targeting it's fair in alpha to Vietnam muscle invasive bladder cancer in the in the.
BCG nonresponsive setting where local administration clearly is is highly active in that indication. So.
So there are a number of places where we know it's apparent alpha is active and we're currently evaluating the optimal strategy.
One of the things that we're giving a lot of thought to us.
Of course, the longterm objective with this program given the potency of interferon Alpha is too.
<unk>.
Move into the area of cold Shivers unresponsive tumors, but as a stepping stone will likely be starting our work and schumer types, where there is known to be more.
More immune responsiveness at least initially teeing up potential combination strategy. So there'll be a step wise approach and we will have more to say as we got closer to filing the indy and initiating the initiating the clinical study.
Okay, Great and then on 904 could you help us characterize what.
Encouraging activity could look like what what the threshold of activity needs to be to trigger an expansion into a particular cohort.
Yeah, Great question and then we.
We are continuing with with phase, one and I think we need to.
Keep in mind, it's a phase one study that we're running in the goal of phase one with diesel engages is.
First and foremost about evaluating safety and really tried to figure out doses to further explore further down the road in the expansion stage. So our goal for the program as we have stated previously as to canoe.
Continue to make progress with dose escalation this year.
To initiate enrollment and said backfill cohorts by the end of the year in certain Egfr positive tumor types.
As we move into 2024 will.
Sit with our partner Amgen and talk about potential expansion strategies now of course moving into formal.
<unk> next year with this program.
In collaboration with our partner Amgen I think it's fair to say, we're obviously going to want to see.
An attractive tolerability profile.
And also some evidence of tumor shrinkage of course as a as a mono therapy, but this is the phase one study and.
Our expectations are principally to show the way to doses to look at.
Okay, great. Thank you Sean.
Thank you and one moment prior next question.
Our next question comes from Roger song with Deference Your line is open.
Great. Thanks for that day and that taking all question, maybe just two quick what it's from us.
The first one is now for understanding you will provide some updates later this year just curious what are the nature of the update you will provide and that you know.
You will.
Not too bad you know.
[noise] in that you can't find humor type and all.
That data portion what should we.
Expecting.
This year.
Almost level, maybe follow up and that the second question are needed today <unk> 71.
Given you have her you know analyze the data.
For some time what are what are the current thinking I around the next generation strategy or.
You know why are you going to do.
To the App.
Current program 21 2029, thank you.
Yes, hi, Roger Thanks for the questions I'll tell you. The second one first if I may not.
Not a whole lot of new.
Updates today on CD 71.
We're in discussions with that be regarding getting the license back to 229, those discussions are progressing well we.
We will have more to say about our CD 71 strategy.
A little later in the year.
Regarding 904, because I've already mentioned are.
Goal for this year the operational goal for the program is to initiate enrollment into backfills by the end of this year. So that that's that's.
That's the objective that we have.
We're we're not ready at this stage.
To guide towards timing of any data presentations, we want to make more progress get these backfills underway continue.
Continuing close dialogue with our partner.
And we'll be issuing further guidance as the year progresses.
Alright, thank you.
You're welcome.
Thank you one moment for our next question.
AH question next question comes from Mara Goldstein with <unk> Mizzou Hall your lines open.
Hi, This is <unk>. Thank you for taking our questions and congrats on the progress.
6229.
Still a work in progress.
I'm just curious what can you if you can elaborate on on gating factors.
On <unk> under consideration to re acquire.
The license back from Abbey versus developing a next generation are both options on the table.
Yeah, I haven't everything's still on the table and as I said I think that will have more to say about it once we've we've completed our.
Internal evaluations and there are multiple.
Potential ways forward, we think so.
I think this is kind of a state of stay tuned moment for the CD 71 program.
Okay, and then and then for the next generation CD 71.
Maybe you can elaborate on what <unk> you hope that you can incorporate to make it a better compiled.
<unk> two nine.
Yeah, I think I think simply put.
Our next generation strategies that we've been working on internally.
Over the last couple of years would be aimed.
Further increasing the therapeutic window.
Sure.
It's clear that we've shown that we have open the window facility 71 with 2029.
We are the first company to achieve therapeutically active levels of an ADC targeting.
CD 71.
With activity across several chimar types.
We.
We have reason to believe we can do better and so it was a further opening the window and again, we will we will have more to say about that in due course.
Got it got it thank you so much.
You're welcome.
Thank you.
And we have a question from.
A new Palm Rama from J P. Morgan Your line is open.
Hi, good evening.
Thanks for taking the question. This is actually Malcolm Kuhner lawn for auto pump.
So when should we expect to learn more about.
Which indications are going to be prioritized for.
Six 2051, and then kind of what characteristics, where you believe you're looking for in making that determination.
Determination.
Yes, Thanks Malcolm.
One of the things that we we really love about that camera as a target for 2051 is the breadth of its expression across epithelia tumors now if you if you look into the databases.
And then there's a ton of information available regarding the expression of outcome and shoes and.
Of course, one that really jumps out as CRC. So.
Where.
You're very likely to include CRC is one of our lead indications once we get into the clinic.
The payload has also been selected the cap a decent payload the type of one inhibitors also been selected with this in mind.
However, there are multiple other tumor types, where <unk> is highly expressed including gastric ovarian endometrial lung prostate so it's a.
Long list and so there's a lot of ways, we could potentially go.
I think what we're what we're thinking through us.
The right balance of focus in phase one versus breath, and we haven't made a decision on that yet but.
Like us to include CRC potentially other indications.
Great. Thank you.
Thank you and I'm showing no questions in the queue I'd like to turn the call back to Shawn Mccarthy for closing remarks.
Great well thanks, everyone for your time this afternoon and for your interest in Cytotechs out. This update on our brought pipeline progress has been helpful and please feel free to reach out to sight Taiwanese Investor Relations should you or your teams have additional questions.
Thanks very much.
This concludes today's conference call. Thank you for participating you may now disconnect.
Mmm.
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