Q2 2023 CytomX Therapeutics Inc Earnings Call
Good day and welcome welcome to the site Telmex Therapeutics second quarter of 2023 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the <unk>.
<unk> you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Chris Ogden 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 you'll be making forward looking statements because forward looking statements relate to the future they're subject to inherit uncertainties and risks that are difficult to predict and many of which are outside of our control.
Important risks and uncertainties are set forth in our most recent public filings with the S. C. C. S C C dot Gov.
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 second quarter 20, twenty-three financial results and highlights recent progress at <unk>.
We encourage everyone to read today's press release, and the associated materials, which have been filed with the S. E C.
Additionally, the press release, a recording of this call and or S. E. C filings can be found under the investors and new section of our website.
With me on the call today is Dr. Shawn Mccarthy say topics as Chief Executive Officer and Chairman.
<unk> will provide a business and pipeline update before I walk through the financial for the second quarter.
With that I'll now turn the call over to Sean.
Thanks, Chris and good afternoon, everyone. Thanks for joining us for an update on recent progressive so perfect.
Before moving to a review of our pipeline I'd like to start by taking a moment to welcome a new chief Medical officer waiting too.
We're thrilled to have waited on board as Chief Medical Medical officer in which capacity. He will oversee the clinical development of a diversified portfolio of property therapeutic candidates.
Whereas the extensive drug developments experience of his career to date has contributed to multiple new drug approvals and spend therapeutic modality, including antibody drug conjugates checkpoints inhibitors, and Bispecific immunotherapies, making him an ideal fit to lead the development of Cytotechs pipeline.
Been a pleasure to get to know Wayne and the team and I'm excited to work with them closely cause we optimize our clinical strategy.
Towards key milestones.
Additionally, I would like to congratulate dawn bedsit on her promotion to senior Vice president of quality product manufacturing and that's today.
Don't enjoying cytotechs in 2022 is head of quality and brings more than 25 years of quality and CMC experienced in the biotech industry.
Don has been a key contributor to slide stomach strong recent execution and we're delighted to have been moving into this newly expanded row.
During Q2 side. So it makes maintained highly focused and disciplined execution across all areas of our company and pipeline.
This is an exciting time for us we're prosecuting more than 15 active programs across a wholly owned in part of the pipeline. We are well financed our goals have never been clearer and we're approaching multiple potentially inflection points. As we look ahead to 2000 2004 and beyond.
Before I covered this causes progress I would like to take a moment to provide some perspective on the evolution of our platform and pipeline.
Optimism to have the current generation of Cytotechs programs have the potential to make a meaningful difference to patients.
As oncology R&D continues to evolve towards increasingly potent formats, such as antibody drug conjugates by specific immunotherapies on site the guidance.
<unk>, we have maintained and unwavering commitment to advancing the field of conditionally active localized biologics to improve therapeutic windows.
We believe that localized therapies will be the future of oncology biologics.
The conditional activation field is continuing to grow and mature that is becoming increasingly established as a novel strategy for therapeutic discovery and development.
The unmatched depth and breadth of Cytotechs leadership and clinical experience in this field, including more than 10 years, a bench to bedside learnings has informed our design choices for our next generation pipeline molecules.
By making judicious experience driven decisions regarding target selection modality effective function and chairman sites, we believe our current programs 690462051.
<unk> one are well positioned.
Moreover, continued forward momentum with our longstanding partners are new collaborations with Regeneron and Moderna also reinforce our scientific leadership and support the view that conditionally activated localized biologics is of strategic importance broadly in the industry.
Now moving to our pipeline I'd like to start with our significant current research and development activity in the area of T cell engaging by specifics.
T sell engaging bispecific antibodies have demonstrated impressive clinical benefit for patients with certain hematologic malignancies.
And this modality holds enormous promise for the treatment of solid tumors.
However, <unk> engages are highly potent at very low doses.
The potency of this modality can lead to widespread.
That make activation of the immune system in the form of cytokine released syndrome and on target of tumor toxicities imposing constraints on therapeutic window.
<unk> in the field to date for solid tumors by many organizations and institutions.
Built an important foundational knowledge base that highlights the need for strategies to improve therapeutic window.
<unk>, we believe the property platform could be ideally suited to addressing this challenge by localizing the powerful anticancer activity at this class of drugs into tumor tissue.
Building on our work over the past decade, and conditional activation across multiple therapeutic modalities. We now have a broad program of Provote eighty-seven engages both ourselves and with our partners Amgen.
And regeneron.
Our most advanced program in this area is TX 904 a.
Clinical stage Probody C selling gauger targeting Egfr on CD, three partnered with Amgen and a global co development the Lions.
Egfr is one of the most highly validated and broadly expressed solid tumor targets.
Four monoclonal antibodies that block Egfr function as oncogenic driver of tumor growth have been approved for the treatment of various cats the types and many targeted small molecule Egfr tyrosine kinda inhibitors are also in clinical use today.
Given its widespread expression in tumor tissue and clinical validation Egfr has more recently attracted interest as a target for several by specific strategies, including <unk> engages.
<unk> is ideally positioned to unlock egfr as a <unk> engage a target building on the seminal work. We published previously described at the first protease based probody therapeutic based on the Egfr blocking antibodies that talks about.
All were demonstrated the masking of an antibody based on some <unk> substantially reduce systemic side effects, commonly associated with Egfr antibody therapy, while maintaining antitumor activity.
Opening a window to explore and empowered strategy that combines egfr and CD III targeting.
Are preclinical validation of this probody Egfr CD three strategy was also recently published in cancer research.
And and Q2 2000 2002, we launched the phase one clinical evaluation of CX 904.
I would like to highlight a few key points from our preclinical work. This set a framework for our ongoing evaluation of 6904 and the clinic.
As I mentioned earlier.
Teeth I think age is can be highly potent.
Although cross format comparisons can be challenging to affinity molecular weights and other variables.
The pharmacologically active dose ranges of unmask T cell engages.
Generally in the order of micrograms per kilogram.
And the concept of this high potency it has been difficult to date and <unk> to show meaningful separation between doses that caused Crs for example.
And those that lead to achieve a shrinkage, leaving little room to maneuver from a therapeutic index perspective.
Leveraging sites enemies, Probody technology to <unk> engages to reduce target binding in normal tissues. Therefore has great promise.
Are preclinical research strongly emphasize this point with the math Egfr Treselle engages showing 60 fold higher maximum tolerated dose.
And 60 forward less potency for induction of systemic cytokine release in vivo, while maintaining strong antitumor activity.
We are now in the process of translating this preclinical research into the clinic and our phase one program is a bouncing well.
We successfully treated our first patient in May 2022, and we continue to make excellent progress towards our goal of reaching dose levels by the end of this year to facilitate the startup enrollments into backfill cohorts inserts egfr positive tumors, gaining insights into the clinical activity and therapeutic window of this exciting agent.
We aim to share initial phase one dose escalation data Fsba X 904, and the first half of 2024.
Also in 2000 2004 will be working towards the selection of recommended phase two dose as the initiation of phase one b expansion cohorts. These decisions will be taken in conjunction with our partner Amgen.
I'll move now to an update on our upcoming Imd's for the next generation programs 620516 801.
As I've mentioned these programs built on the company's collective clinical experience with our first generation molecules.
Starting with 62051 wholly owned conditionally active probody ADC targeting epithelioid cell adhesion molecule or <unk> also known as <unk> one.
<unk> has been regarded as a compelling oncology target for decades, and it has been clinically validated by others, but it has generally been limited to local administration due to systemic toxicities.
62051 is tailored to optimize the therapeutic window for at kind of expressing epithelioid cancers by matching the target with payload mechanism of action and with tumor sensitivity.
We have optimized protease capability of the mosque and designed it to be paired with a cap to thiessen derivative as the payload, but so far I summarize one inhibitor from the <unk> class.
We believe it <unk> is the optimal choice with this program given the tremendous clinical validation, we've seen from TK Unconjugated adc's and multiple cast the types, including of course and hurts and <unk>.
In preclinical studies Cf's 2051, when systemically administered this demonstrated a wide predicted therapeutic index, along with strong activity in multiple chairman's intergraph models, including colorectal cancer.
We expect the Indy submission for this mobile ADC in the fourth quarter of this year.
And we anticipate advancement of this program to the clinic in 2000 2004.
As we near R&D filing we look forward to sharing more details on the early clinical development plan to save 2051, which will initially focus on colorectal cancer in order to expeditiously demonstrate proof of concept and clinical relevance for this program.
Before moving on from our antibody drug conjugate programs just a brief update on our CD 7100, ADC program. We continue to evaluate our strategy and we remain on track to provide an update by the end of the year.
Moving now to see <unk>, one or Julie Muffed interferon alpha to be the lead program within our efforts and the cytokine field.
It's apparent alpha two b as in approved Immunotherapeutic.
As demonstrated clinical activity in multiple cancer types.
But the has been limited due to a systemic toxicity.
We believe there is enormous potential to harness the.
The powerful anticancer activity of cytokines with our localization strategies to direct their activity towards tumor tissue.
And away from systemic immune system activation.
Interferon Alpha stimulators adjutant presenting cells to activate cytotoxic T cells and may combined effectively with checkpoints inefficient offering tremendous potential to enhance immunotherapy responses and unlock checkpoint refractory and or resistant cancers.
Interferon Alpha also has direct tumor cell, killing activity, providing a dual mechanism of action.
Preclinical UCSB one has demonstrated a wide therapeutic index with an enhanced tolerability profile compared to two unbossed interferon.
Along with the preferential activity in the Chiba micro environment.
The preclinical profile of <unk> was most recently presented at the cytokine based drug development summit in June .
We believe CSA to one has the potential to become a differentiated combination therapy for a wide range of tumor types.
As <unk> five one we entophyte on <unk>, one in the fourth quarter of 2023 and to initiate clinical trials in 2000 2004.
That continuing with our work and the immunotherapy area and turning to our partnership with B M. S.
BMS continues to enroll.
Phase two study evaluating the non a few calculated as <unk> for Probody BMS 986288.
As monotherapy and in combination with Nivo in solid tumors.
Additionally earlier this year BMS opened a new study arm evaluating too.
Third line or later colorectal cancer.
We continue to be encouraged by BMS investment into eight eight given their extensive clinical experience with our probody platform is leading expertise and <unk> for therapies.
We're also busy working with BMS on several early stage discovery programs.
Finally, I would like to briefly discuss our ongoing partnerships.
As a core components of our business model, we've leveraged strategic partnerships to extend the reach of our science broaden our pipeline and bring important non diluted capital into the company the latter being particularly importance in today's challenging financial environment.
These partnerships highlight the continued innovation inherent in the Cytotechs platform.
The value that accrues <unk> from our partnering strategy is illustrated by the scope of our work and see that engages in Bispecific immunotherapies.
In addition to see X 904, and I'll work with Amgen, the Astellas and Regeneron collaborations also focus on this important modality are are brought ongoing efforts uniquely positioned us to play a trough swollen tip role in this field over time.
Our partnerships are also in August to explore new frontiers, including the exciting we're conducting with Madonna and mrna based localized biologics that also includes some focus outside of the oncology therapeutic area.
We look forward to continuing to make progress across our apartment research activities and we anticipate translation of multiple programs to the clinic over time and potentially significant milestone flow from this work, but is not currently factored into our financial guidance.
With that let me turn the call over to Chris to provide details of our financials for the quarter.
Thank you Sean I'm pleased to be able to share an update on our second quarter of 2023 financial results with you today.
As of June 30th 2023, we had $181 million in cash cash equivalents and investments.
Which does not include the $30 million received in July as a result of the private placement financing with PBF.
We expect our current cash resources to fund operations into the second half of 2025.
In terms of our overall capital formation progress in the last year the region financing further builds upon our business development success and illustrates the company's strategy and track record of funding the company through a balance of equity based and partnering strategies.
Now, let me spend a few minutes on cash for the quarter and our expectations moving forward.
Cash burn was $23.6 million for the second quarter of 2023.
This compares to a cash firm of approximately $34 million in the second quarter of 2022.
For a year on year decrease in cash burn of approximately 30%.
Looking to the company's goal for cash needs. We expect overall cash burn to continue to moderate down overtime for the full year of 2023 versus 2022, given the company's restructuring in July of last year.
These cast expectations also include higher expected reimbursed R&D work from collaborations in 2023 versus 2022.
Now moving to revenue and operating expenses for the quarter.
For the second quarter of 2023 revenue was $24.7 million compared to $12.9 million for the corresponding period in 2022.
The increase was driven primarily by a higher percentage of completion for research programs in the Bristol Myers Squibb collaboration partially offset by reduction revenue from the Abbvie collaboration as a result of the termination of the CD 71 agreement in the first quarter of 2023.
R&D expenses decreased $10.5 million to $27 million during the three months ended June 30th 2023.
Decrease was primarily due to decreases in personnel related expenses laboratory contract services and certain critical study activities, partially offset by an increase in laboratory contract services related to IMD, enabling activities.
G&A expenses or seven $4 million during the second quarter of 2023.
Decrease of $4.3 million over Q2 2022.
The decrease was primarily due to lower personnel related expenses as a result of the workforce reduction in 2022 and patent related legal expenses.
With that I'll turn the call back to Sean.
Thanks, Chris we appreciate everyone's time and joining us for this update today.
Now well into the second half of 2023 Cytotechs is executing the plan and on track to deliver on key milestones as we advance towards towards 24 and beyond.
With the continued progress of 6904 Bms's ongoing investment in the <unk> Probody program and our two upcoming Ids, we anticipate multiple inflection points over the next 12 to 18 months.
Have the potential to further solidify the importance and value of conditional activation and biologics localization in the treatment of cancer.
Are exceptional highly dedicated team remains focused on our vision admission and as we've said before we care for every patient we learn from every patient and we deeply thank everyone involved in our efforts to make the biggest difference in the treatment of cancer that we can.
With that operates it pleased to open up the call for Q&A.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone.
To be announced to withdraw your question. Please press star one one again.
Our first question.
Our first question comes from Roger Song Jeffries. Your line is open.
Great.
Thanks for taking my question.
A couple of phone that maybe stop wrong, but now for.
So your <unk>.
One data for the hot spot.
Will be banned <unk> current patient number two more time on that you cannot get your <unk>.
<unk> based on that data what will be next.
No <unk> to be able to sustain going forward towards function call. Thank you.
Yes, hi, Roger Thanks for the question so.
So let me just.
Maybe just describe.
Little more detail our objectives.
The 904 program.
And how that.
Oh that looks over the 2023 2024 time period as of right now is we've discussed.
We are in phase one.
Those escalation safety assessment.
Getting an early look how the drug.
It's functioning in patients principally from a safety standpoint, as I as I mentioned in my remarks, we all know that.
<unk> was very potent agents and dose escalation early.
One assessment needs to be done thoughtfully and carefully in order to.
The primary objective, which is to get to.
Safe doses for further exploration and we're on track there.
Our goal by the end of this year as we've communicated is to initiate back.
Backfill cohort so to start expanding and in a limited way sit in the context of phase one a.
In Egfr positive tumor types to get a bit more experience of the drug insensitive, obviously a safety.
Slightly more than one dose level.
And also be looking in the context, those backfields of course for early signs of clinical activity.
Taken together.
That data will inform in 2000 2004 or.
Discussions with our partner Amgen regarding the move from phase one to phase, one b, which would be a 2024 event.
And that would be the.
Phase one beef being of course that the form of expansion phase of this study. So those are our goals of course it is the continuum. So.
Hard to say right now exactly what that data is going to look like in the first half of next year, but we would expect it to be a meaningful update and we will provide further guidance as the year goes on.
Excellent. Thank you.
So maybe just another question that needs to be 71.
And you say you are well provide the update by the end of this year. We just curious what have you done and then maybe any gurney you can share with us right now.
By the end of this year would that be are <unk>.
<unk> or something you were here and and make a decision like that thank you.
Yes, great question, one of the one of the.
New developments in that regard is of course, our recruitment of Wayne.
He has just joined the team a couple of weeks ago and as I mentioned, we are absolutely delighted to have weighing on board one of the many things that were.
Buffy him with us to do his own assessment of the CD 71 program.
And.
His evaluation of course together with others.
Will lead to the development of our strategy for the program on a go forward basis. So what we will have more to say about that over the next few months.
Alright, <unk>, okay, great. That's that's upon from us and I really appreciate.
Question. Thank you.
You're welcome.
One moment our next question.
Our next question comes from.
J P. Morgan Caroline is open.
Hi, guys. This is priyanka on for auto.
We just had a quick question, it's mostly the preclinical work needed for the <unk> pipeline Inte's completed for that four Q twenty-three timeline.
Yeah. So we're right on track with the.
Enabling activities, including of course CMC in manufacturing.
So.
All of the various.
All of the various components are moving along well and we.
We remain on schedule to get design and by the end of the year.
That's all thank you so much.
You're welcome.
One moment our next question.
Our next question comes from Peter Lawson with Barclays. Your line is open.
Hey, good afternoon, everyone. This is Alex Thank you for taking our questions.
I wanted to come back to something earlier. This year you received a 5 million dollar milestone from the Astellas collaboration and then nominated.
By specific candidate I was wondering if you could say anything about the target here.
And also just remind us the economics from this collaboration and if you could be one could you be eligible for additional milestones. Thank you.
Yeah. Thanks for the question. So yeah, we were delighted to earn that milestone.
This year following so I'm already terrific work by the stellar since I totally seems.
Not at Liberty to disclose the target identities.
From the collaboration but.
I'm really delighted to see that program now in.
Enabling studies.
We haven't disclosed the structure is as is typical of the milestone structure.
For the deal, but as the program makes its way through.
Phase one phase two and beyond.
We would expect over the course of its natural history to receive additional payments for that and other programs in the alliance and across.
Our additional alliances as well so.
I'm glad you brought it up though because.
I think that milestone does reinforce a comment that I made and are prepared remarks, which is that if you look across the.
The alliances that we have.
With so many partners and as I mentioned more than 15 active programs, including.
Partner depend wholly owned programs.
I think that the milestone with a stylus.
Along with a significant amount of milestones that we've earned.
Moslem flow that we've seen in past years.
We do see significant potential for additional milestone.
Payments over the next two to three years that is not currently factored into our cash runway guidance and so.
Astellas is just the latest example of the team's productivity.
Demonstrated track record and earning milestones under our collaboration.
Alex's cross the other thing I would note specific to Astellas.
As we do have select commercial rights and the U S for.
Certain number of program. So I think that's.
Again glad you brought it up something that tend to not be a focus book could create a lot of long term value.
Alright, thank you.
As a reminder to ask a question you will need to press star one one on your telephone.
To be announced.
Our next question.
Our next question comes from Depeche, Pentalpha H C and your line is open.
Thank you Hi, Sean Hi, Chris depressed Patel standing in full Mitchell poor.
When can we expect to hear more about the phase two program.
986288.
Can you provide any additional update on what the future development timeline in scope could look like for this program.
Yeah. Thanks for the question the best.
So.
No real updated there in terms of timing at the moment we are.
We mentioned.
Cited about the continued investments that BMS is making in two a.
The non fee calculated <unk> probody it's.
We think are very interesting and very competitive.
Molecule and.
A growing field of next Gen CCNA force out there.
We are.
Dialogue with BMS regarding potential future communications strategies, but.
Not much more we can say today.
Okay, and then can you kind of contextualize the reason for a pip it away from the few concentrated version, which is B B M. S 90 96249.
Yeah. So just that that's what I suggest the recap then.
Thanks for the question, we've had two programs with BNS in detail I for one is the mass version of a believer mab itself.
The decade of the few consolidated version the other being 288, which is the non few cause related.
I think if you look at how the field.
Is unfolding in Ccls four first of all.
Continued conviction from BMS and other organizations, there's something pretty unique about ccls for blockade in terms of its immune to biology that leads to deepen gerbil responses, particularly in combination with other checkpoints inhibitors.
And maintained interested.
In.
Finding ways to get more value added.
Impact for patients in multiple tumor types.
Leveraging CCL a four.
The second point being to try to improve.
Efficacy.
And did not few calculated strategy appears to be able to do that the.
Mechanistic hypothesis.
I think it's still.
It's still that as a hypothesis, but the.
The.
The view is that the non fee constellation enhances.
As Jim presentation, which leads to <unk>.
More diversity in.
T cell clones that leads to deeper remote gerbil responses that taken together with the <unk>.
Accessory co stimulatory effects of CCNA for blockade.
Leads to a unique mechanism of action compared to.
AP alone.
One of the.
One of the challenges that has come along with that more potent version obviously is that.
It is expected to be more more.
More toxic it less less tolerated less well tolerated.
Hence the value of the Probody platform. So we're very interested to see how this all plays out would be Ms.
We're excited that there.
Focusing onto a we think it makes sense based on the way the media Biology's as.
Is developing in the field is unfolding.
We anticipate.
That data when they are ready to share.
Great. Thanks, I appreciate the additional color that just a couple more questions.
We talked about CX 900 for our little.
Is this on track to complete by year end of 23 and can you discuss any current thoughts on the back swelling portion into the selected Egfr constitute cohorts in 2004.
Yeah, just just to reiterate my earlier comments and.
And.
Re state I guess, the temporal aspects of the program so.
The goal that we've.
We stated.
All of this year is too.
By the end of this year initiate backfield cohorts. So we're.
Exploring.
This drug.
Various those levels, we will likely want to be in the future.
Expanding per project Optimus and.
Just kind of best practice, these days and and exploring teasel engages in solid tumors will want to be exploring slightly more than one dose as we move.
Later into the program and says <unk>.
Selection of those doses is really a critical success factor for this asset so where we've.
Being thoughtful about this and.
Right now we're focused on dose escalation assessing safety.
Beginning to select doses for initiation of Backfills by the end of the year and then transitioning once that backfield data is in hand, which will start to become available in the first half of next year use that combined data set off the dose escalation on the initial battles to that inform our phase one b four will expand.
<unk> strategy and as I mentioned in my in my comments the move to phase one B expansion is a decision that will take in collaboration with our partner Amgen sometime in 2000 2004, So I hope that upset.
The timeframe for the program.
Got it. Thanks, so much and then last question can you provide an update on the regeneron Mcdonough collaborations and when we can expect these programs to enter the clinic.
Yes, so continue to be Super excited about these new partnerships and.
We're very busy with boats regeneron and Madonna with regenerative in.
Bispecific immunotherapies for cancer with <unk> for.
Investigating.
Mrna encoded localized biologics in oncology and also outside of oncology.
The programs are still relatively early and.
It's really too early to comment on timelines.
This stage, but thanks for the question really appreciate it.
Alright, thanks, very much Sean and Chris appreciate your time.
You're welcome.
That concludes the question and answer session. At this time I would like to turn it back to Shawn Mccarthy for closing remarks.
Thanks, everyone for your time this afternoon and you're interested in Cytotechs on our progress.
Certainly hope this updates and our fraud pipeline has been helpful. Please feel to reach out to our Investor Relations team should you have any additional questions that we look forward to keeping in close touch.
Thank you for your participation in today's conference.
The program you may now disconnect.
Mmm.
[music].
Okay.
[music].