Q1 2024 Mersana Therapeutics Inc Earnings Call

Operator: Good morning, and welcome to Mersana Therapeutics' first quarter 2024 conference call and webcast. Currently, all participants are in listen-only mode. There will be a question and answer session at the end of this call. I would like now to turn the call over to Jason Fredette, Senior Vice President, Investor Relations, and Corporate Communications. Please note that this call is being recorded.

Good morning, and welcome to more summit Therapeutics first quarter 'twenty 'twenty four conference call and webcast. Currently all participants are in listen only mode. There will be a question and answer session. At the end of this call I would like now to turn the call over to Jason.

Jason: For debt senior Vice President of Investor Relations and corporate Communications. Please note. This call is being recorded thank you operator and 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 our plan.

Jason Fredette: Thank you, Operator, and 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 our platforms, product candidates, business strategy, clinical trial execution and data, business development efforts, and cash runway. Each of these forward-looking statements is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements.

Speaker Change: Forum's product candidates business strategy clinical trial execution and data business development efforts and cash runway. Each of these forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. These.

Speaker Change: These risks and uncertainties are discussed in our annual report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2024, and subsequent SEC filings.

Speaker Change: Our filings are available at SEC Gov, and on our website <unk> Dot com.

Speaker Change: Except as required by law, we assume no obligation to update forward looking statements publicly even if new information becomes available in the future.

Speaker Change: On today's call, we have more sun as President and Chief Executive Officer, Dr. Marty Huber, and our Chief operating Officer, and Chief Financial Officer, Brian Just shiner.

Jason Fredette: These risks and uncertainties are discussed in our annual report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2024, and in subsequent SEC filings. Our filings are available at www.sec.gov and on our website, mersana.com. As required by law, we assume no obligation to update forward-looking statements publicly, even if new information becomes available in the future. On today's call, we have Mersana's President and Chief Executive Officer, Dr. Marty Huber, and our Chief Operating Officer and Chief Financial Officer, Brian DeSchuytner. With that, let me turn the call over to Marty to begin our discussion. Thank you.

Speaker Change: With that let me turn the call over to Marty to begin our discussion.

Martin H. Huber: Thank you, Jason, and good morning, everyone. As most of you know, Mersana is an ADC innovator that's advancing product candidates based on its two proprietary platforms. The first of these is Dolosynthin, our next generation cytotoxic ADC platform, and the second is Immunosynthin, a novel platform that utilizes a sting agonist payload. Let's begin today's call with a brief discussion of new insights about dolacinfen that we recently shared at both ESGO and AACR.

Thank you, Jason and good morning, everyone.

As most of you know Masada is an ADC innovator, it's advancing product candidates based on its two proprietary platforms.

Speaker Change: The first of these is Dol are such that our next generation cytotoxic ADC platform and the second is immuno system a novel platform that utilizes a sting agonist payload.

Speaker Change: Let's begin today's call with a brief discussion of new insights about Dulles Simpson that we recently shared at both <unk> and ACR.

Martin H. Huber: As many of you know, severe neutropenia, peripheral neuropathy, and ocular toxicity have served as key limitations for today's leading ADC platform. At those conferences, we presented preclinical and clinical data that we believe demonstrates DolaSymptom's ability to significantly reduce these types of off-target platform-related toxicities, as well as other presumed platform-related adverse events that we saw with our own first-generation ADC platform, Dola Ultimately, our goal is to reduce ADC platform toxicities to the greatest extent possible in order to both maximize monotherapy efficacy and open the door to combination approaches with other chemotherapy and ADC standards of care. That's something that simply isn't possible with many of today's approved ADCs.

Speaker Change: As many of you know severe neutropenia peripheral neuropathy and ocular toxicity have served as key limitations for today's leading ADC platforms.

Speaker Change: At those Congresses, we presented preclinical and clinical data that we believe demonstrates stoller centers ability to significantly reduce these types of off target platform related toxicities as well as other presumed platform related adverse events that we saw with our own first generate.

Speaker Change: <unk> ADC platform Teleflex it.

Speaker Change: Ultimately our goal is to reduce ADC platform toxicities to the greatest extent possible in order to both maximize monotherapy efficacy and opened the door to combination approaches with other chemotherapy at ATC standards of care.

Speaker Change: That's something that simply isn't possible with many of todays approved adcs.

Martin H. Huber: Now, let's move on to XMT1660, our lead dolosynthin ADC that targets B7H4. We're in the midst of a phase one clinical trial that's enrolling patients with solid tumors, including triple negative and ER positive breast cancer, ovarian cancer, and endometrial cancer. B7H4 is a member of the B7 family of immune checkpoint markers. The scientific literature suggests that B7H4 is selectively expressed in tumors with limited healthy tissue expression.

Speaker Change: Now, let's move on to <unk> 16, 60 hour Lee Dolan sent that ADC that targets be seven to eight four.

Speaker Change: We're in the midst of a phase one clinical trial, that's enrolling patients with solid tumors, including triple negative and ER positive breast cancer ovarian cancer and endometrial cancers.

Speaker Change: <unk> four is a member of the B seven family of immune checkpoint markers.

Speaker Change: The scientific literature suggest that these seven H four is selectively expressed in tumors with limited healthy tissue expression.

Martin H. Huber: Additionally, we have not seen any clear signs of on-target toxicities in the clinical data presented by our competitors. We believe B7H4's selective expression and dolacitin's ability to reduce off-target platform toxicity have helped us continue advancing the dose escalation portion of our ongoing trial. We are now beyond the dose levels previously investigated clinically with either dolacentin or our first generation platform, and we still have not established a maximum tolerated dose for 1616. Based on preclinical models, we have identified exposure thresholds that we believe are key to clinical activity.

Speaker Change: Additionally, we have not seen any clear signs of on target toxicities in the clinical data presented by our competitors.

Speaker Change: We believe b seven H for selective expression adult assistance ability to reduce off target platform toxicity have helped us continue advancing the dose escalation portion of our ongoing trial.

We are now beyond the dose levels previously investigated clinically with either Dulles center or our first generation platform and we still have not established a maximum tolerated dose for <unk> 60.

Speaker Change: Based on preclinical models, we have identified exposure thresholds that we believe are key to clinical activity.

Martin H. Huber: We also have leveraged our clinical data for 1660 to identify doses and schedules that increase the time above this exposure threshold. Additionally, based on emerging data in the B7H4 space, we are progressing our biomarker strategy in preparation for expansion and later stages of development. Given that a maximum tolerated dose has not yet been established and objective responses have been seen in this trial, we are continuing to advance dose escalation and backfill cohorts in parallel to optimize our dose, schedule, and biomarkers.

Speaker Change: We also have leveraged our clinical data for 16, 62 identified doses and schedules that increase the time above this exposure threshold.

Additionally, based on emerging data on the B seven H for space. We also are progressing our biomarker strategy in preparation for expansion and later stages of development.

Speaker Change: Given that a maximum tolerated dose has not yet been established an objective responses have been seen in this trial, we are continuing to advance dose escalation and backfill cohorts in parallel to optimize our dose schedule and biomarker.

Martin H. Huber: We now expect to be in a position to announce our initial clinical data and initiate expansion in the second half of this year. All of this work is aimed at positioning XMT1660 as a potential best-in-class asset, and we are taking the time needed to accomplish our objective.

Speaker Change: We now expect to be in a position to announce our initial clinical data and initiate expansion in the second half of this year.

All of this work is aimed at positioning X M. T 16 60.

Speaker Change: Potential best in class asset and we are taking the time needed to accomplish our objective.

Martin H. Huber: Now let's shift to XMT 2056, which is the lead candidate we have developed utilizing immunosynthesis. Our immunosymptom platform is designed to deliver a one-two punch by activating sting in a target-dependent manner in both tumor cells and in tumor resident myeloid cells. XMT-2056 is an ADC targeting a novel epitope of HER2 that's distinct from both pertuzumab and trastuzumab. Therefore, in addition to its potential as a monotherapy, we believe there may be a range of intriguing paths to pursue for combination treatments with 2056, including combos with other HER2 targeted agents.

Speaker Change: Now, let's shift to <unk> 2056, which is the lead candidate we are developed utilizing immuno center.

Speaker Change: Our imminent symptom platform is designed to deliver a one two punch by activating staying in a target dependent manner in both tumor cells and in tumor resident myeloid cells.

Speaker Change: <unk> 2056 is an ADC targeting a novel epitope of her two that's distinct from both parties, a mab and Trastuzumab.

Speaker Change: So in addition to its potential as a mono therapy. We believe there may be a range of intriguing paths to pursue for combination treatments with 2056, including combos with other her two targeted agents.

Martin H. Huber: That said, our near-term goal is to advance the dose escalation portion of our phase one clinical trial of 2056. Multiple clinical sites are now open, and we're actively recruiting patients with a range of HER2-positive tumors, including breast, gastric, colorectal, and non-small cell lung cancer. In addition to these LEAD programs, we also continue making progress with the collaborations we have in place with Johnson & Johnson, focusing on dolacynthin ADC discovery efforts, and with Merck KGA for immunosynthin discovery efforts. With that, I will turn the call over to our Chief Operating and Financial Officer, Brian DeSchuytner, to provide a financial update.

Speaker Change: That said our near term goal is to advance the dose escalation portion of our phase one clinical trial of <unk> 2056 multi.

Speaker Change: Multiple clinical sites are now open and we're actively recruiting patients with a range of her two positive tumors, including breast gastric colorectal and non small cell lung cancer.

Speaker Change: In addition to these lead programs. We also continue making progress with the collaborations we have in place with Johnson <unk> Johnson, focusing on Dol is centered ADC discovery efforts and with Merck K G E for immuno since its discovery efforts.

Speaker Change: With that let's turn the call over to our Chief operating and financial Officer, Brian to Shiner to provide a financial update.

Brian C. DeSchuytner: Thank you, Marty. Let's get into the financial highlights for the first quarter of 2024, starting with our balance sheet. We ended the first quarter with $183.1 million in cash, cash equivalents, and marketable securities. We continue to expect our available funds to support our operating plan commitments into 2026.

Brian: Thank you Marty let's get into the financial highlights for the first quarter of 2024, starting with our balance sheet. We ended the first quarter with $183 $1 million in cash cash equivalents in marketable securities. We continue to expect our available funds to support our operating plan commitments into 2026. Please note that our cash runway.

Brian C. DeSchuytner: Please note 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. Turning to the income statement, collaboration revenue for the first quarter of 2024 was $9.2 million, compared to $7.8 million for the same period in 2023. The year-over-year change was primarily related to the timing of research and CMC activities for the Johnson & Johnson collaboration program.

Brian: <unk> does not assume any potential milestone payments from our current collaborations or proceeds that we may realize from future collaborations.

Brian: Turning to the income statement collaboration revenue for the first quarter of 'twenty 'twenty, four with $9 2 million compared to $7 $8 million for the same period in 2023 the year over year change was primarily related to the timing of research and CMC activities for the Johnson and Johnson collaboration agreement.

Brian C. DeSchuytner: Research and development expenses for the first quarter of 2024 declined significantly to $18.7 million, compared to $47.3 million for the same period in 2023. For the most recent quarter, approximately $2.5 million of this spending was related to non-cash stock-based compensation. The year-over-year decline in R&D expenses was primarily related to reduced costs associated with manufacturing and clinical activities for uptake and reduced employee compensation following the restructuring we announced in July of 20

Brian: Research and development expenses for the first quarter of 2024 declined significantly to $18 7 million compared to $47 $3 million for the same period in 2023 for the most recent quarter approximately $2 5 million of this spending was related to noncash stock based compensation.

Brian: The year over year decline in R&D expenses was primarily related to reduced costs associated with manufacturing and clinical activities for <unk> and reduced employee compensation. Following the restructuring we announced in July of 2023.

Brian C. DeSchuytner: General and administrative expenses for the first quarter of 2024 declined significantly to $11.6 million compared to $18.3 million during the same period in 2023. Additionally, approximately $2.1 million in non-cash stock-based compensation expenses were included in G&A for the most recent quarter. The year-over-year decline in G&A expenses was primarily related to reduced consulting and professional fees and reduced employee compensation expenses following our restructuring. Please note that this restructuring is now substantially complete with no meaningful costs incurred. And finally, Mersana's net loss for the first quarter of 2024 was $19.3 million, compared to a net loss of $56.2 million for the same period in 2020.

Brian: General and administrative expenses for the first quarter of 'twenty 'twenty four declined significantly to $11 6 million compared to $18 $3 million. During the same period in 2023, and approximately $2 1 million in noncash stock based compensation expenses were included in G&A for the most recent quarter.

Brian: The year over year decline in G&A expenses was primarily related to reduced consulting and professional fees and reduced employee compensation expenses. Following our restructuring. Please note that this restructuring is now substantially complete with no meaningful costs incurred in Q1 and.

Brian: And finally net loss for the first quarter of 2024 was $19 $3 million.

Brian: Compared to a net loss of $56 2 million for the same period in 2023.

Operator: That concludes our business update. Operator, would you please open the call to questions from the audience? We will now begin the questions.

Speaker Change: That concludes our business update operator would you. Please open the call to questions from the audience.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our questions. The first question comes from Tara Bancroft of TD Cohen. Please go ahead.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question comes from Tara Bancroft of T D Cohen.

Tara A. Bancroft: Please go ahead.

Tara A. Bancroft: Hi, good morning. Thanks for taking the questions. So I was hoping you could reiterate or remind us of your expectations for the 1660 data and what exactly you think the bar is. And has that changed at all over time, especially with the data now going from mid-year to the second half?

Tara A. Bancroft: Hi, good morning, Thanks for taking the questions. So I was hoping you could reiterate or remind us of your expectations for the 16 60 data and and what exactly you think the bar is and has that changed at all over time, especially with now the the data going from mid year to the second half. Thank you.

Martin H. Huber: Thank you.

Tara A. Bancroft: Yeah.

Tara A. Bancroft: Thank you, Tara. We're not providing any specific details about what will be included in the initial data set. One thing we'd like to remind you is that we are in a very competitive environment with a few other B7H4 ADCs in clinical development. That said, we do anticipate that these data will provide preliminary but meaningful efficacy data, as well as safety tolerability. In addition, we are looking into our biomarker data as well so that we can clinically characterize the data set. That would be for the totality of the dose escalation population as well as backfill populations.

Thank you Tara we're not providing.

Tara A. Bancroft: Excuse me any specific details about what will be included in the initial dataset.

Tara A. Bancroft: One thing we would like to remind you that we are in this very competitive environment with a few other beef about H force.

Tara A. Bancroft: Adcs in clinical development.

Tara A. Bancroft: As said, we do anticipate that these data will provide preliminary but meaningful efficacy data as well as safety tolerability.

Tara A. Bancroft: In addition, we are looking into our biomarker data as well so that we can clinically characterize the dataset that would be for the totality of the dose escalation as well as backfill populations.

Tara A. Bancroft: Yeah.

Operator: Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

Kaveri Pohlman: Again, if you have a question, please press star, then 1. The next question comes from Kaveri Pohlman of BTIG. Please go ahead.

Speaker Change: Again, if you have a question. Please press Star then one.

Speaker Change: The next question comes from Caveri Pullman of Beachy Archie.

Kaveri Pohlman: Please go ahead.

Kaveri Pohlman: Okay.

Kaveri Pohlman: Wait, good morning. Thanks for taking my question. Can you write just for white any additional color on what... your decision to move the timeline data release to the second half. And I would also appreciate if you could tell us about how you're making decisions on the vaccine cohort. Is it based on the PK PD profile alone? Are you planning to go to dose high to define the MTD dose, or will you be selecting the optimal dose based on the safety and PK PD data alone? And also, will you be defining your optimal dose during the update?

Kaveri Pohlman: Good morning, Thanks for taking my question can you just provide any additional color on what.

Kaveri Pohlman: Our decision, even though the timeline.

Kaveri Pohlman: Really the second half and I would also appreciate it if you can tell us about how you are making a decision on back filling cohort is it based on the PK PD profile alone are you planning to go to do high doses to go there or did you find MTV, those and or you'll be selecting knocking them out.

Kaveri Pohlman: Based on the safety and PK PD data alone also will you'll be defining the optimal dose.

Kaveri Pohlman: Great.

Kaveri Pohlman: [laughter].

Martin H. Huber: Thank you. I think I've got all your questions. I'll try to do them in order, but please remind me if I miss one of them.

Thank you I I think I got all your questions I will try to do them in the order, but please remind me if I don't capture one of them.

Martin H. Huber: With regard to the timelines, I think one of the challenges of when you set out guidance on dose escalation studies is that you don't know exactly the timing of how many doses you're going to give. And we still have not established an NTD for 1660. The other thing is, which I think is becoming more apparent for ADCs, is that we're spending a little more time on optimizing the schedule as well as the dose.

Kaveri Pohlman: With regards to the timelines I think we you know one of the challenges when you set out guidance on dose escalation studies is you don't know exactly the timing of how many doses you Gotta go.

And we still have not established at M. T D for $16 60.

Kaveri Pohlman: The other thing isn't what's I think becoming more apparent for Adcs is we're spending a little more time on optimizing schedule as well as steps at each of those requires additional cohorts. So I think.

Martin H. Huber: And each of those requires additional cohorts. So I think, as we've seen with Project Optimist and others in oncology recently, we really want to optimize our dose and schedule before we go into expansion. With regard to the backfill question, that is based on, we have the flexibility to enroll specific tumor types in backfill once we've cleared that dose level. So we're not doing it based on any specific PK PD, I would say, but it's more about making sure we have reasonably sized data sets for some of the tumors of interest and as well as an opportunity to make sure we have enough patients to feel confident in the dose.

Kaveri Pohlman: As we've seen with project Optimus and these others in oncology recently.

We really want to optimize our dosing schedule before we go into expansion.

Kaveri Pohlman: With regards to the backfill question.

Kaveri Pohlman: That is based on we have the flexibility to enrol specific tumor types and backfill once we've cleared that dose level. So we were not doing it based on any specific PK P. D. I would say, but it's more about making sure we have.

Kaveri Pohlman: Reasonably sized dataset for some of the tumors of interest.

Kaveri Pohlman: And as well as an opportunity to make sure we have enough patients to feel confident in the deaths because what youre. Your core design is kind of three plus three yes, you like to have more patients than that in any given does not all of them really get comfortable with our recommended phase two dose.

Martin H. Huber: Because while your core design is kind of 3 plus 3, you like to have more patients than that at any given dose level to really get comfortable with a recommended phase 2 dose. With regard to your question on the high dose, that's still TBD. I mean, we are going to continue to explore, but we have not established an MTD. But I think as to whether we will formally establish an MTD will be based on the evolving data.

Kaveri Pohlman: With regards to your question on the high dose.

Speaker Change: That's still TBD I mean, we are going to continue to escalate to explore but we we have not established at M. T D. But I think as to whether we will formally established an M. D. D will be based on the evolving data.

Speaker Change: Okay.

Kaveri Pohlman: That's helpful. Thank you.

Speaker Change: Okay. That's helpful. Thank you.

Operator: The next question comes from Jonathan Chang of Lyrinc Partners. Please go ahead.

Speaker Change: The next question comes from Jonathan Chang with Leerink Partners. Please go ahead.

Jonathan Chang: Hey guys, this is Dylan Drake, Dr. Jonathan. Thanks for taking our questions today. So you previously outlined some tumor types that competitors have seen efficacy in for B7H4. Do you still view those as potential expansion indications? Or do you have any further thoughts surrounding where you plan to initiate expansion cohorts? And then, second, if I can, you guys also mentioned previously, and again today on the call, that the improved safety profile that you guys are seeing with 1660 may enable potential combination therapies. Do you have any additional thoughts on what that could look like or where you would look to evaluate that?

Speaker Change: Hey, guys. This is Dylan on for Jonathan and Thanks for taking my questions. Today. So you'd previously outlined some tumor types of competitors have seen efficacy in 47 extra or do you still view those as potential expansion indications or do you have any further thoughts around it where you plan to initiate expansion cohorts and then a second one if I can and you guys also mentioned previously in against them.

On the call that improved safety profile that you guys are saying was 16 60 may enable potential combination therapies do you have any additional thoughts on what that could look like or why are you look to evaluate that.

Speaker Change: Yeah.

Martin H. Huber: Let me start on the tumor type question. At this point in time, we have not shifted the tumor types. The four tumor types of most interest to us because they have the highest level remain triple negative breast cancer, hormone receptor positive breast cancer, endometrial, and ovarian cancer.

Speaker Change: Let me start on the tumor type question at this point in time, we have not.

Speaker Change: <unk> shifted the tumor types we.

Speaker Change: Was the four tumor types of most interest to us because they have the highest level.

Speaker Change: Page four extraction romaine triple negative breast cancer hormone receptor positive breast cancer, endometrial and ovarian cancer.

Martin H. Huber: Those are the tumor types we're still focusing on in escalation and in our backfills, and those are the tumor types that we would focus on for expansion. What we haven't provided any further detail on is exactly when we're guiding that we're going to initiate expansion in the second half, we are not going into the details of which tumor types exactly when. But the goal will be that we will be initiating at least one of those expansion cohorts in the second half.

Speaker Change: Those are the tumor types, we're still focusing on an escalation added our backfill.

Speaker Change: And those are the tumor types that we would focus on for expansion.

Speaker Change: We haven't provided any further detail on is exactly.

Speaker Change: While we're guiding that we're going to initiate expansion in the second half we are not going into the details of which tumor types exactly.

Speaker Change: But the goal will be but we will be initiating.

Speaker Change: At least one of those expansion cohorts in the second half.

Martin H. Huber: With regard to your second point about the safety profile, I think we'd like to remind you, and this is why we're very pleased with the Dulles-Simpson data, that we avoid neuropathy and neurotoxicity and oculotox. And neuropathy is of particular interest. For example, if you were wanting to combine with a platinum-based chemotherapy, you can't do that if you have an ADC that causes neuropathy. Given the data we've shown to date with UPRE as well as 1592 for our NAPI 2Bs, we're not seeing evidence of meaningful peripheral neuropathy, which would, in theory, allow us, or potentially allow us, assuming 1660 replicates that, to combine with plasma So if you think about that, potential combinations in breast cancer with Tredelby are something that we could consider that would not be possible with a myelosuppressive ADC. So those are just a couple thoughts on combinations.

Speaker Change: With regards to your second point about the safety profile.

Speaker Change: I think we'd like to remind you and this is what we're very pleased with adult with sensor data was.

Speaker Change: We avoid the neuropathy or neurotoxicity in the ocular tox and the neuropathy is a particular interest for example, if you were wanting to combine with a platinum based chemotherapy you can't do that if you have an ADC that causes neuropathy.

Speaker Change: Given the data we've shown to date with a pre as well as 15 92 for our Napa two b's.

Speaker Change: We're not seeing evidence of meaningful peripheral neuropathy, which would in theory allow us or potentially allow us assuming 16, 60 replicates that tick up I would plateau.

Speaker Change: We're also not seeing profound violent suppression. So if you think about that potential combinations in breast cancer with <unk> LD or something that we could consider that would not be possible with a vial of suppressive ADC. So those are just a couple of thoughts on combinations.

Jonathan Chang: Great, I appreciate that. Thanks so much.

Speaker Change: Great I appreciate that thanks, so much.

Operator: Again, to ask a question, please press star, then 1. Our next question comes from Brian Chang of J.P. Morton. Please go ahead. Hey, guys. Thanks.

Speaker Change: Again to ask a question. Please press Star then one.

Speaker Change: Our next question comes from Brian Cheng of J P. Morgan. Please go ahead.

Brian Chang: Hey guys, thanks for checking out our questions this morning. Can you elaborate on your prepared comments related to optimizing efforts behind schedule and biomarker for 1660? How far are you today from identifying the optimal schedule? And are there any specifics on the gating factor they can provide before moving to those extensions? Thanks for taking our questions.

Brian Cheng: Hey, guys, thanks for taking out.

Brian Cheng: Morning, Ken.

Brian Cheng: Can you elaborate on your prepared comments related to optimizing efforts behind schedule and biomarker for 16 <unk>. How far are you today from identifying the optimal schedule and are there any specifics on the gating factor or they can provide before moving to those extension answer to that question.

Martin H. Huber: What I think is important is that we are still in dose escalation and not established in MTV. One of the reasons we mentioned that we were seeing objective responses, we did want to make it clear that we are in clinically relevant dose ranges. And now it's a matter of getting that dose and schedule right, and I think that is the focus. We do have a better understanding of our PK than we had previously based on the evolving data.

Brian Cheng: What I think is important is we are still in dose escalation not establish an MTV. We one of the reasons. We mentioned that we were seeing objective responses, we didn't want to make it clear that we are in.

Brian Cheng: Relevant dose ranges and so now now it's a matter of getting that dosing schedule right.

Brian Cheng: And I think that is the focus we do have a better understanding of our pka than we had previously I'll give all the data.

Martin H. Huber: And that's the other thing we kind of highlighted, is there's this concept of understanding exposure over time is important. And if you kind of put those two together, how do you get that just right? And that's really our focus over the next cohorts that we're studying to prepare so that when we come out with a data set, we have a high degree of confidence in not only the dose but also the schedule.

The other thing we kind of highlighted this.

Brian Cheng: This concept of understanding exposure over time is important.

Brian Cheng: And if you kind of put those two together it how do you get that just right.

Brian Cheng: And that's really our focus over the next.

Brian Cheng: Cohorts that we're studying to prepare so that when we come out with a dataset we have a high degree of confidence in not only the dose but also the schedule.

Operator: The next question comes from Michael Schmidt of Guggenheim.

Brian Cheng: The next question comes from Michael Schmidt of Guggenheim.

Michael Werner Schmidt: Please go ahead.

Michael Werner Schmidt: Hey guys, thanks for taking the time to answer my questions. Yeah, just a follow-up on 1660. You know, I guess, is the PK different from what you had expected, and are you surprised that you're not yet seeing MTDs? I think last time you said you were in dose level 7. You're obviously far into the active dosing range at this point. But, yeah, I'm just curious if there's anything unique going on, or if this is just part of the regular Project Optimist workflow that has to be done.

Michael Werner Schmidt: Hey, guys. Thanks for taking my questions. Yeah, just a follow up on 16 60.

Michael Werner Schmidt:

Michael Werner Schmidt: I guess it is their PK.

Michael Werner Schmidt: That's different from what you had expected and are you surprised that you're not yet seeing MTGE is I think last time. You said you were in dose level, then you're obviously far into the active dosing range at this point, but I was just curious if there's anything.

Michael Werner Schmidt: Unique going on there or.

Michael Werner Schmidt: Or if this is just part of the regular project Optimus.

Michael Werner Schmidt: Workflow that has to be done.

Martin H. Huber: I don't think there's so much anything unique. I think one of the things was we had gotten with 1592, our NAPI 2B dolacentin, we had hit dose-limiting ILD at 56 milligrams per meter squared. As we've said, as we stated last time, we're over that now. So we're at dose ranges that we haven't been before, and that always, you always want to be careful when you're into new dose ranges on a platform. And I think the other thing is we've always been confident in our PK, as we've stated before with our previous molecules. We haven't provided data on 1660, but we do see antibody-like half-life for our molecules.

Speaker Change: I don't think there's so much anything unique I think one of the things was.

Speaker Change: We had gotten a little weird.

Speaker Change: It was 15 92 aren't happy to be dealt with and then we got hit a dose limiting I L. D 56 milligrams per meter square.

Speaker Change: As we told as we stated last night work, we're over that now so we're at doses ranges that we haven't been before that always you always want to be careful when you earn into new does for agents on our platform and I think the other thing is we've always been confident in our PK as we've stated before on a previous molecules we haven't.

Speaker Change: Provided data on 16, 60, but we do see antibody like half life for our for our molecules and I think when you take that into account and trying to understand what is the optimal schedule to get the right exposure. It is some fine tuning and Ed to your final point on project Optimists.

Martin H. Huber: And I think when you take that into account, trying to understand what is the optimal schedule to get the right exposure, it's some fine-tuning. And to your final point on Project Optimist, that is a factor, because I think historically we would have been very comfortable just getting a dose you're comfortable with and going straight into expansion. And if you had to change the dose, you did. In this current environment, we want to have a higher degree of confidence in the recommended phase to those that we take into expansion.

Speaker Change: That is a factor because I think historically, we would've been very comfortable just get a dose you're comfortable with go straight into the expansion and if you have to change the dose you did I think.

Speaker Change: In this current environment, we want to have a higher degree of confidence in the recommended phase two dose that we take it to the expansion.

Martin H. Huber: So I think it is just a little bit, and this has been, for lack of a better word, personal growth for myself, appreciating the more time and energy spent on dose optimization than we did historically.

Speaker Change: So I.

Speaker Change: I think it is just a little bit and this has been up.

Speaker Change: But for lack of a personal growth for myself is appreciating the more time and energy on dose optimization that historically you did.

Michael Werner Schmidt: Yeah, no, I think that makes sense, and I think other companies have also looked at multiple different schedules before selecting an RP2D. Can you comment?

Speaker Change: Yeah, No I think that makes sense and I think other other companies have also looked at multiple different schedules before selecting an RFP Judy can you comment if it every two weeks I think in the phase one and what are you looking at as alternatives.

Martin H. Huber: So is it every two weeks, I think, in Phase I, and what are you looking at as alternatives?

Michael Werner Schmidt: What we previously disclosed is every three weeks or every four weeks, but the protocol has given us the flexibility to look at alternatives, which we are currently doing.

Judy: What we've previously disclosed is every three every three weeks or every four weeks, but the protocol has given us the flexibility to look at alternatives, which we are currently doing.

Michael Werner Schmidt: And then, yeah, when we look at the Pfizer data that was recently presented at their R&D day, they obviously saw some very nice enrichment of activity in biomarker-positive patients and triple-negative breast cancer. I think it was almost twice the response rate in positive patients. And so, yeah, I'm just curious what your approaches might look like for biomarker development, look at a similar, I think they used an IHC-based assay, or are there any other things that you could consider to enrich for biomarkers?

Judy: And then yeah. When we look at the Pfizer data that was recently presented at their R&D day. They obviously you saw some very nice enrichment of activity in biomarker positive patients in triple negative breast cancer I think it was all the twice the response rate and positive patient then so yes.

Speaker Change: I'm just curious what are your what are your approaches might look like for biomarker development, what do you.

Speaker Change: Look at a similar I think they used an IAC based assay are there any other things that you could consider to enrich for biomarker expression.

Martin H. Huber: Yeah, maybe I can take that. That's a great question. We're currently working on our biomarker strategy, but we have not made any final decisions about it at this stage. We're enrolling patients regardless of biomarker status to ensure we fully understand the relationship between B7H4 expression and the probability of response. In other words, we're retrospectively running an IHC test to establish B7H4 expression levels. But we think this will be an important part of the development program to really nail down. Great

Speaker Change: Yeah, maybe I can take that that's a great question. We're currently working on our biomarker strategy. We've not made any final decisions about it at this stage, we're enrolling patients regardless of biomarker status.

Speaker Change: To ensure we fully understand the relationship between seven and eight for expression.

Speaker Change: The probability of response so in other words, we are retrospectively running in IHT tests to establish a <unk> four expression levels, but we think this will be an important part of the development program to really nail down.

Michael Werner Schmidt: Awesome, great. Thanks for taking my question.

Speaker Change: Awesome, great. Thanks for taking my question.

Operator: Our next question comes from Asthika Goonewardene of Truist. Please go ahead.

Speaker Change: Our next question comes from <unk> Goon warning of truest.

Speaker Change: Please go ahead.

Asthika Sarith Goonewardene: Hi, good morning, guys, and thanks for taking my questions. So previously, what Michael just asked about as well, about dose level 7 or 59 mgsq, that was what you guys were on there in Q1 this year, so let me be direct and just ask, how many dose levels above that have you reached right now in patients? And then, Marty, you said that you've seen confirmed responses. Have you seen this in more than one dose cohort?

Goon: Hi, Good morning, guys and thanks for taking my questions.

Goon: So previously what Michael just asked about as well about dose level seven or 50 might make for me to square that was mostly around then in Q1. This year. So let me be direct and just not only dose level above that have you reached right now today in patients.

Martin H. Huber: We're not getting into the details of either dose levels or the response data, but I think it is the response.

Goon: Then.

Goon: But as you said it was people just didn't confirm responses have you seen this in more than one dose cohort.

Speaker Change: We're not getting into the details of either dose levels or the response data.

Speaker Change: I think it is responses, we did make sure we emphasize that.

Martin H. Huber: We did make sure we emphasized that. But I do think... When you start looking at dose and schedule, focusing purely on an exact dose number becomes a little less relevant, because what you're looking at is the total dose intensity of the regimen. And there are ways you can dial that, both from not only the actual dose you administer but the frequency with which you administer it. So I think what's important is we are looking at more dose-intense approaches to the dose and schedule. But we're not getting into the details of exactly what those are. And part of that is that this is something that is a fairly competitive space, and understanding ADC dose and schedule is a competitive issue.

Speaker Change: But I do think when.

Speaker Change: When you start looking at dosing schedule focusing purely on an exact.

Speaker Change: Number becomes a little less relevant because what you are looking at is the total dose intensity of the regimen and there's ways you can dial that both from not only the actual dose you administer but the frequency with which you administer it. So I think what's important is we are.

We're looking at.

Speaker Change: More dose intense approaches too.

Speaker Change: This dosing schedule, but.

Speaker Change: But we're not getting into the details of exactly what those are and part of that is this is something that is.

Speaker Change: Fairly competitive space and understanding ADC dosing schedule is a competitive issue.

Asthika Sarith Goonewardene: Got it. Okay. So should I read that since you've already tried Q3W, Q4W, you might be looking at some of the other more creative approaches like Q2W or two-on, one-off. Is that how we should be thinking about it without getting too specific?

Speaker Change: Got it okay.

Speaker Change: So should I read that.

Speaker Change: Since you've already tried Q3 W. W. You might be looking at somebody other more creative approaches like like Q2, W or 211 offs.

Speaker Change: Is that how we should be thinking about it.

Speaker Change: Getting into specifics.

Martin H. Huber: Yeah, we're really not getting into more specifics. I'm sorry. So, yeah, we're just not going there at this stage. Okay, great.

Speaker Change: Yes, we're really not getting into more specifics Michael.

Speaker Change: He comes sorry.

Speaker Change: So yes.

Speaker Change: We're just not going there.

Speaker Change: This station.

Asthika Sarith Goonewardene: Okay, great. Thanks, guys. Appreciate the update.

Speaker Change: Okay, Great that's nice I appreciate yesterday.

Operator: Once more, if you have a question, please press star, then 1. Our next question comes from Ashiq Mubarack of Citi.

Speaker Change: Once more if you have any question. Please press Star then one.

Speaker Change: Our next question comes from Ashish <unk> of Citi.

ashish: Please go ahead.

Ashiq Alim Mubarack: Hi guys, thanks for taking my questions. I think you already addressed my first one, which is just to confirm that the biomarker you're looking at is a B7H4 biomarker based on IHC. I'm assuming that's correct versus maybe something else. Assuming that's correct, where are you in the development of an assay? Is that something that's been established, or is that something you're building from the ground up, and how robust do you think that assay might be? Thank you very much.

ashish: Hi, guys. Thanks for taking my questions.

ashish: I think you've already addressed my first one was just to confirm that the biomarker youre looking at is at <unk> 74.

ashish: Mark or are based on <unk> I'm, assuming that's correct versus maybe something else.

ashish: Assuming thats correct I mean, where are you in the development of an assay is that is that something that's been established.

ashish: Or is that something you're building from the ground up on how robust do you think it might be.

Martin H. Huber: We're not getting into the details of our specific biomarker. It is IHC. I think we've confirmed that, but what I think we can say is one of the reasons we are taking a little more time in dose escalation and optimization in addition to the optimal dose is that it does allow us to generate a larger data set of patients from which we can further understand the biomarker, define things such as what is the right biomarker, what is the right cut point, etc. So these patients that we're using for dose escalation backfill are helping us understand that as we go into the expansion and pimple study.

Speaker Change: We're not getting into the details of the specifics of the biomarker.

Speaker Change: It is I H C. I think we've confirmed that but what I think we can say is one of the reasons. We are taking a little more time in dose escalation and optimization. In addition to the optimizing does is it does allow us to generate a larger dataset Ah patients.

Speaker Change: In which we can further understand the biomarker to define such as what is the right biomarker what is the right cut point.

Speaker Change: Right.

Speaker Change: So these patients that were using for dose escalation backfill are helping us understand that.

Speaker Change: As we go into expansion in pivotal studies.

Ashiq Alim Mubarack: Okay, that's very clear. And then one more on the sequence of events in the second half of the year. I think before, the plan was to announce the initiation of the expansion cohorts and then share the data. Is that still your thinking, or is this all going to be kind of at once in the second half of the year?

Speaker Change: Okay, that's very clear and then one more on the on the sequence of events in the second half of the year I think before the plan was to announce the initiation of the expansion cohorts and then share. The data is that still your thinking or is this all going to be kind of at once now in the second half of the year.

Martin H. Huber: Yeah, we haven't predefined that, so really, the guidance that we've shared for both entering expansion and sharing clinical data, we're just going to leave it at second half for the time being.

Speaker Change: Yeah, we haven't predefined that so really the guidance that we've shared for both.

Speaker Change: Entering expansion and sharing clinical data, we're just going to leave it at the second half for the time being.

Ashiq Alim Mubarack: Okay, thanks very much.

Speaker Change: Okay. Thanks very much.

Operator: To ask a question, please press star, then 1. Our next question comes from Colleen Kusy of Baird.

Speaker Change: Can I ask a question. Please press Star then one on.

Choline QC: Our next question comes from choline QC of Baird.

Choline QC: Please go ahead.

Colleen Margaret Kusy: Thanks. Good morning, and thanks for taking our questions. Are you able to clarify whether the multiple responses you're seeing are in one or multiple tumor types? And then can you just confirm whether the biomarker data will be in the second half data update?

Choline QC: Thanks, Good morning, and thanks for taking our questions are you able to say to clarify went into multiple responses, you're seeing or in one or multiple tumor types. And then can you just confirm whether the biomarker data will be in the second half a data update.

Martin H. Huber: Yeah, so Colleen, we're not going to give more specifics than what we've already shared about responses, and in terms of the biomarker, you know, I would say we're not going to commit to that today. It's something that we're looking very closely at, but that decision will be made at a later date.

Speaker Change: Yeah, So colleen.

Colleen: Not going to give more specifics than what we've already shared on responses and in terms of the biomarker.

Speaker Change: I would say, we're not going to commit to that today.

Colleen: Something that we're looking very closely at.

Speaker Change: But that that decision will be made at a later date.

Colleen Margaret Kusy: And then for the expansion cohorts, would you plan to bring multiple dose levels forward in expansion, or would you select just one?

Colleen: Understood. Thank you and then for the expansion cohorts would you plan to bring multiple dose levels for an expansion or would you select to just one.

Martin H. Huber: That at this point in time, that's still TBD. The protocol gives us the option of multiple doses, and I think that will really help. But I think in a project-optimist environment, at some point in time, you are going to have to study more than one dose. The exact timing of when you do that is something that is... flexible.

Colleen: Yeah at this point in time, that's still TBD.

Colleen: Protocol gives us the option of multiple doses.

Colleen: I think that will really.

Colleen: Well I think in a project optimists environment at some point in time, you are going to have the study more than one does the exact timing of when you do that.

Colleen: That is.

Colleen Margaret Kusy: And we will be considering it, I think. But we do have the option. Should we feel we need to do that expansion, we can. Great. Thanks for taking the time.

Colleen: Flexible and we will be considering I think but we do have the option should we feel we need to do that expansion we can.

Colleen Margaret Kusy: Great, thanks for taking our questions.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: Yeah.

Operator: The next question comes from Asthika Goonewardene of Truett.

Speaker Change: The next question comes from <unk> Goon warning Oh truest.

Speaker Change: Please go ahead.

Asthika Sarith Goonewardene: Hey guys, sorry, thanks for taking my follow-up. Just one quick one. What's the most important next step right now? Is it pushing to a higher dose level or optimizing exposure? I think you kind of alluded to this already, but I just want to confirm. Thank you.

Goon: Hey, guys. Thanks for taking my follow up just have one quick one what is the what's the most important next step right now is it pushing through a higher dose level or optimizing exposure I think you've kind of alluded to this already but I just wanted to confirm thank you.

Martin H. Huber: I think it's an element of both, but really, from our point of view now, as we better understand how our drugs work, it is this focus on exposure and really getting an optimal dose that we're confident in, so that when we take it into expansion, we won't have to further modify the dosage schedule. Ultimately, that's really what's most important.

Speaker Change: I think it's an element of both but really it's from our point of view now as we better understand how our drugs work. It is this focus on exposure and really getting at the optimal dose that we're cockpit I'd add that when we take it into expansion, we're not gonna have to further.

Speaker Change: Five the dosing schedule.

Ultimately to accurately what's most important.

Asthika Sarith Goonewardene: Thanks. That's really clear. I appreciate it.

Speaker Change: Okay, that's really clear I appreciate it.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Dr. Marty Huber for any closing remarks.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Dr. Marty Huber for any closing remarks.

Martin H. Huber: Thank you, Operator, and thanks, everyone, for dialing in. We have several investor events that are taking place over the next several weeks, including we're going to be at the Cal Oncology Summit, as well as at the Goldman Sachs Health Care Conference. We hope to see some of you there.

Thank you operator, and thanks, everyone for dialing in we have several investigator investor events that are taking place over the next several weeks I agree with Bill Kaelin oncology summit as well as at the Goldman Sachs Healthcare Conference, we hope to see some of you there.

Operator: And that includes the call, Operator. Thank you.

Speaker Change: That includes the call operator, thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: BF-WATCH TV 2021

Speaker Change: [music].