Aura Biosciences, Inc. (AURA) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Aura Biosciences Virtual Urologic Oncology Investor Event. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Aura website following the conclusion of the event. I'd now like to turn the call over to Elisabet de los Pinos, Chief Executive Officer at Aura Biosciences. Please go ahead, Elisabet.

Hello, everyone. It's a pleasure to be here, and we're going to start with the presentation. I'm going to make some forward disclosures. So we're very proud to have with us 4 of the key opinion leaders in urologic oncology: Dr. Max Kates at Johns Hopkins; Dr. Joe Jacob, Syracuse University; Dr. Neal Shore, Carolina Urologic Research Center; and Dr. Gary Steinberg, RUSH University. Thank you very much for being with us today. I'm also really pleased to have key members of our leadership team participating in today's call. Our Chief Medical Officer and President of R&D, Dr. Jill Hopkins; our SVP, Therapeutic Area, Head of Urologic Oncology, Dr. Sabine Brookman-May; and our Director, Clinical Development Urologic Oncology, Dr. Joseph McQuaid. So let me start with this introduction. One of the greatest areas of progress today is the early detection of cancer. This has translated into a large increase in the number of early-stage cancers. Patients diagnosed with early stage is good news. Unfortunately, that doesn't translate with the amount of innovation in early-stage local disease. There is a growing need for function-preserving organ-sparing local therapies that not only can intercept the course of the disease, it can transform it and impact the quality of life of patients. We believe at Aura, we can do that with our novel technology. Virus-like drug conjugates have the potential to transform early cancer treatment. So VDCs, as we call them, have unique tumor selectivity. They target a key receptor molecule that is expressed really early in the early stages of malignant tumor transformation. It has a dual mechanism of action. With this technology, we can directly target a cytotoxic payload, and at the same time, have a robust immune activation to generate potential CD8 T cell immunity. In addition, this type of technology is tumor and mutation-agnostic. We have tested this in 100 cell lines, more than 15 animal tumors, and it consistently works with high potency. And not only we have done that preclinically at NIH, we have now positive clinical data in multiple early-stage local cancers. We just very recently presented our positive Phase II data in choroidal melanoma, and today, we're very excited for the first time to present our early data in non-muscle-invasive bladder cancer. So how does AU-011 work? First of all, we have a very safe drug, and this is the reason. When you inject bel-sar locally, it's not cytotoxic, but it's very specific to the cancer cell membrane. It will basically bind, with high affinity and high avidity, to the cell membrane of the cancer cell. Once you activate it with infrared light, the cytotoxic payload is able to generate reactive oxygen species that are cytotoxic to the membrane. They basically disrupt the membrane physically, and the cell goes into acute necrosis. That's mechanism number one. But this is highly pro-immunogenic. Not only we have a virus-like particle in the tumor microenvironment, but in addition, we're now exposing tumor neoantigens, releasing damage-associated molecular patterns that activates CD4 and CD8 T cells, generating durable CD8 T cell memory. That's what we call mechanism number two. So now, I am very excited because we are going to continue on how this technology can transform the field of bladder cancer, and I will have our therapeutic area head, Dr. Brookman-May, to walk us through. Thank you, Sabine.

Thank you, Eli. But before I would like to draw your attention to our data of the Phase I study, I would like to take a couple of minutes to talk about the high unmet medical need for function-preserving and organ-sparing therapies in this patient population, patients with bladder cancer. And currently, bladder cancer is the ninth most common cancer worldwide, with an increasing incidence, and it is also associated with one of the highest lifetime treatment costs in the U.S. and other regions. But most importantly, the currently available treatments, the conventional bladder cancer treatment and the treatment paradigm, they are simply suboptimal. And patients having a high treatment burden, suffering from short and long-term side effects with a considerably and negative impact on their quality of life. Most of these patients are diagnosed at a local disease stage, and most of them, about 75%, are diagnosed with non-muscle-invasive bladder cancer. And the treatment paradigm there consists of doing a surgery before. This means a transurethral resection of the bladder tumor, which is a surgery needing an OR, needing general anesthesia. And this treatment is then followed by repeat and multiple adjuvant instillation therapies, for example, with chemotherapy or with BCG. And BCG has been used now for almost 50 years in that setting. And while it has proven also the concept that immunotherapy can work in bladder cancer and bladder cancer is a tumor that could be very responsive to immunotherapy, we also simply just need to acknowledge that about 80% or even more patients don't even get a full treatment course, mainly due to discontinuations because of side effects. And being a urologist myself, I can also just simply acknowledge, having seen these patients and having done so many TURBT surgeries and intravesical treatments, that these patients are really suffering, not only from the tumor burden, but really from the treatment burden. And the patients are waiting for a treatment possibility that can intercept the disease at an early disease stage and that is effective, on the one hand, but it's also safe and less burdensome on the other hand as well. And let's focus just quickly on NMIBC, on a non-muscle-invasive bladder cancer disease space. As you can see here, there are different risk categories. Usually, we categorize in low risk, intermediate risk and high-risk NMIBC, depending on the grade of the disease, which are histopathologically assessed and, on the other hand, also based on additional clinical factors. And as you can see here also, the more the patients go to the higher risk setting, the higher is the progression risk. But in the biggest patient population here, which is the low-grade low and intermediate risk patient population, these patients suffer not necessarily from progression. They suffer continuously from recurrence of their disease. And it's, in most cases, not only one recurrence. When the patient has one recurrence, they will, in most cases, again, get another recurrence as well. So we have the low-grade intermediate risk disease setting where we see the highest unmet need, with about 42% to 84% of patients developing recurrence over time. And this causes, again, the need for additional treatment. Again, a surgical resection, and again, adjuvant intravesical treatment. So there is a continuous cycle of recurrence and additional treatments needed. And with AU-011, we would now like to develop this drug and treatment as a potential frontline immune ablative therapy in NMIBC based on its dual mechanism of action. We will consider the common treatment goals in this patient population, and with AU-011, we would have the chance to do a focal treatment with a direct tumor cell killing, and in addition, with the dual mechanism of action, at the same time, stimulate a broad antitumor T cell response. This could provide the possibility to do a frontline early intervention for local disease with a very low treatment burden and a very favorable safety profile with the chance to ultimately reduce the risk of recurrence and progression over time, and avoid TURBT or surgery in general at the operating room. The administration of AU-011 and its activation may also be optimized for the urology clinic, and the local administration is aligned with what urologists are currently doing in their offices. So the current procedure consists of two separate procedures. We have one local cystoscopic administration of the drug with the standard cystoscopy needle that takes less than 5 minutes for injection, and then there is a separate laser light activation also, again, less than 10 minutes. So we have, overall, and with a very conservative assessment, less than 50 minutes of total procedure time. And when you look on the cystoscopic procedure, but also the injection and the laser light activation, these are familiar procedures for urologists. Because urologists use, on a continuous basis, the cystoscope. They do bladder injections for various different indications, such as also overactive bladder, with Botox injections. They use laser applications for benign prostate hyperplasia or stone disease. So they are very familiar with these procedures. There is no general anesthesia needed for AU-011 treatment, and this is feasible for patients and also with contraindications for general anesthesia and surgery. And you need to consider this patient population, bladder cancer patients. It is an elderly patient population and the majority of these patients has comorbidities. And last but not least, there is no requirement for additional safety precautions in drug handling as there is no risk of viral replication or shedding. And with that, I would like to hand over to my colleague, Dr. Joe McQuaid, to now present the data of our Phase I trial of AU-011 in bladder cancer.

Thank you, Dr. Brookman-May. The first thing I'd like to emphasize here is that this study is a window of opportunity. That means that AU-011 is administered between a planned scheduled biopsy and the standard of care, TURBT. Clinical response data is measured up to 21 days, and I think that's a key point here, that the final clinical efficacy endpoint is obtained at time of TURBT, and cohort data will be at day 9, and in cohorts B and C, that will be on day 14. We do follow all of our patients up to day 56 for safety, but again, final clinical endpoint is at either day 9 or 14. Now we're going to provide here an overview of the 2 parts of the study and the various cohorts. Part 1 consists of AU-011 alone, no light activation, that's based upon feedback from the FDA and encompasses a total of 5 patients. Part 2 consists of injection of AU-011 with focal light activation. What differs among these various cohorts, in addition to whether or not there's light is the dose. And in Part 1, all patients received 100 micrograms. 50 micrograms of that was injected at the tumor base and 50 micrograms, just a bit deeper into the lamina propria. Within the cohorts in Part 2, we also have slight differences in dose. Cohort A, again, drug plus light, consisted of a total of 100 micrograms, all injected -- 50 micrograms, which is injected at the tumor base, and then another 50 micrograms within the lamina propria. Cohort B consists of 100 micrograms injected entirely at the tumor base. Cohort C is currently enrolling. We have 1 patient evaluable at this time. In cohort C, patients are receiving 200 micrograms, all of which is injected at the tumor base. What we demonstrate here is an overview of the AUA risk classification here on the Y-axis and the tumor grade on the X-axis. The color coding pertains to each of the various cohorts. Yellow pertains to our drug only, no light activation, and the various shades of blue correspond to our light-activated cohorts. And what you'll see here is an overall pattern. The drug-only cohort did have a higher number of low risk and low grade, and then as we continue to progress through the cohorts with light activation, as our PIs became more comfortable, we began to see a higher number of both high-grade and high-risk patients. Let's first start with part 1, that is drug only, no light activation, a total of 5 subjects. Again, total dose is 100 micrograms. 50 micrograms is at the tumor base, 50 micrograms, just slightly deeper and just a millimeter or 2 away, 50 micrograms within the lamina propria itself. We injected on day 1. Again, there was no light activation here. So on day 2, proceeded to TURBT. This is primarily for safety data, again, based upon feedback from the FDA. It was a very safe cohort. We had no treatment emergent adverse events related to the study drug. We had no serious adverse events. We had no dose-limiting toxicities. We had just a single related adverse events that was related to injection and related to procedure, that was grade 1. Moving on now to our light-activated cohorts, cohorts A, B and C. I'm going to review these each in detail with the results of our patients who are enrolled in these cohorts. Again, cohort A consists of 50 micrograms in the base, 50 micrograms in the lamina propria. Cohorts B and C consisted of dose injected entirely into the base of the tumor, cohort B consisting of 100 micrograms, and cohort C with a slight dose escalation up to 200 micrograms. The schedule. Injection on day 1, light activation on day 2. And then depending upon the cohort, we either had a TURBT at day 9, which was cohort A., and in cohorts B and C, we had TURBT on day 14. First, in regard to safety. We had no serious adverse events. We had no dose-limiting toxicities. We did have a handful of related grade 1 AEs. When we consider the drug-related TEAEs, we have less than 10% of patients experiencing a grade 1 drug-related TEAE. We had no grade 2 or grade 3 adverse events related to study drug reporting. Now you're going to see our results here. We've organized these by tumor grade. And this table first summarizes our efficacy data for the TA low-grade patients. Top line, 4 out of 5 low-grade target tumors demonstrated a complete response to AU-011. And I'd like to draw attention to the fact that this is just 7 to 12 days later after light activation. You'll see here patients across cohorts A, B and C, and you'll see our screening diagnoses here. All tumors at time of treatment were low grade. At the time at TURBT, every patient had multiple tumors. AUA screening risk classification is then included below. The majority of patients were intermediate risk low grade, and we've included the AU-011 dose and delivery just below that. We've defined complete response in this population as absence of tumor cells on histopathologic specimen. 4 out of 5 of these patients showed complete absence of urothelial carcinoma within the injected target tumor at time of TURBT. In addition, all of the patients in this cohort had nontarget tumors. For patient A1, 2 out of 2 of the nontarget tumors demonstrated a complete clinical response: absence of urothelial carcinoma. Patient A3, 1 out of 2, and then patient A4, 1 out of 1 nontarget tumors demonstrated a complete clinical response. I think what gets us really excited here is the immune response, and we're defining this as presence of immunocyte infiltration. For all patients with available IHC stain, that's patients A1 through B2, we had an immune response in the target tumor, 4 out of 4 patients. This is where it gets to be interesting. For the nontarget tumors, 4 out of 4 patients who had available IHC staining at this time also demonstrated immune response, immunocyte infiltration within the nontarget tumors. You can see here that 3 out of the 4 patients demonstrated necrosis within their target lesions, and we saw 4 out of 5 patients demonstrating visual changes on cystoscopy at a time of TURBT after those tumors had been treated. Just to recap our immune data here, we have strong evidence of an immune-mediated mechanism of action across the light-activated cohorts, A and B. 100% of target tumor, that is 7 out of 7 patients and tumors, showed an infiltration of effector CD8 T cells and CD4 T cells. This is as early as 7 days after laser activation. 100% of nontarget tumors, 7 out of 7 nontarget tumors and 5 patients available immune staining, showed T cell infiltration. This is, at a distance, is supportive of a bladder urothelial field effect. And again, I would emphasize these nontarget tumors were not treated, they were not injected. Focal eosinophilic infiltration was observed in 57%, 4 out of 7 target tumors and 14%, 1 out of 7 nontarget tumors, and this is supportive of a local innate immune response to tumor necrosis. This harkens back to our dual mechanism of action. What's particularly interesting is the generation of lymphoid follicles. This was observed in 71%, 5 out of 7 target tumors and is supportive of a local adaptive immune response. So in summary, AU-011 shows evidence of producing pro-immunogenic changes in C2 that have the potential to bridge, to activate, and to enhance adaptive immunity, and this is consistent with our mechanism of action. What we have next are 2 case studies on 2 of the subjects we'd like to share with you. First is patient A1. This is a 64-year-old Caucasian male. We have his clinical history here on the left. I draw attention to the fact that he has a long-standing history of recurrent urothelial carcinoma, low-grade, dating back to 2010. He has had multiple prior TURBTs and multiple prior adjuvant therapies, mitomycin, tamoxifen and gemcitabine. What you'll see over here on the right are immune stains. We have our pre-injection bladder biopsy of the target tumor that demonstrates low-grade papillary urothelial carcinoma. After injection and light activation, 7 days later, we have evidence of complete clinical response. We see no urothelial carcinoma in the target lesion, and we're seeing significant evidence of necrosis, inflammatory infiltrate. This circle region here shows necrosis itself. We have our pathology results. The target lesion, again, a complete clinical response. Pretreatment to a papillary urothelial carcinoma, noninvasive low grade. At time of TURBT, that target lesion showed no evidence on histopathologic evaluation of urothelial carcinoma. There were 2 separate nontarget lesions, A and B. Neither of the nontarget lesions showed any evidence of urothelial carcinoma at time of TURBT. And thus, we have a complete clinical response in the target lesion and a bladder urothelial field effect. Here we have higher-powered immune stains, H&E. You can see infiltration of CD3, CD4 and CD8 cells within the target lesion after treatment. Patient A3 is our second case we'd like to share with you, 72-year-old Hispanic male. This is a similar theme. Long-standing history of urothelial carcinoma, in fact, high-grade dating back to 2019, although at time of treatment, it was a Ta low-grade tumor. Multiple prior TURBTs, prior adjuvant therapies, including BCG induction and maintenance up until 2021. Here, we have clinical images. On the left is this bilobed tumor, small biopsy taken over the lower aspect at time of treatment and an injection that was placed just at the base of the tumor, right in between the two lobes. On the right, TURBT. You can see a very slight inflammatory nubbin, but the entirety of the tumor just sloughed off, and there was no further evidence other than that slight erythema there -- that area of treatment. Reviewing our central pathology. Target lesion demonstrated low-grade papillary urothelial carcinoma, noninvasive. Central pathology confirmed at time of TURBT there was no evidence of urothelial carcinoma. We had acute and chronic inflammation. Of 2 nontarget lesions, 1 was negative for urothelial carcinoma, the second did show low-grade papillary urothelial carcinoma. We have a complete clinical response at the target lesion. And with the inflammatory infiltration that we saw in both lesions, we had bladder urothelial field effect. Again, one of the two lesions here demonstrating no evidence of urothelial carcinoma at time of TURBT. Here, we move on to the immune stains for patient A3. You can see pretreatment in the row above, and posttreatment in the row below, H&E, CD3, CD4 and CD8. You can see yourself some meaningful changes here with the degree of infiltration that we're seeing in these posttreatment specimens. We can move on to the next slide. We have some higher magnification views. On the left, the H&E, pre and posttreatment, and on the right, CD4, pre and posttreatment. I think what's really remarkable about this patient in the H&E are several secondary lymphoid follicles. These are visualized in the posttreatment specimen on the bottom left. You can identify these by that rim of consolidating T cells around the periphery, with a clear germinal center that consists of activated B cells. I would highlight that these are the first steps in generating a tissue-specific adaptive immune response, with a long-standing history in the oncologic literature. And again, just a reminder, this tissue was collected only 7 days after laser light activation. Moving on to our Ta high-grade subset of patients. Three out of three high-grade tumors demonstrated immune response to AU-011. You can again see our 3 patients here and a screening diagnosis. Two of the patients had single lesions. Patient B1 had multiple. All had TA high-grade pathology. AUA risk classifications are included as well as the AU-011 dose and delivery. I would again draw highlight to the fact that while we don't have a complete clinical response in histopathology in this high-grade subset, 2 out of the 3 patients demonstrated visually smaller tumors at time of TURBT as compared to before therapy. All patients, 3 out of 3 demonstrated significant immunocyte infiltration of the target tumors after treatment with AU-011. Patient B1, the only patient who had multiple tumors, showed the same immunocyte infiltration of response and IHC staining of that nontarget lesion. Thus in summary, we can say that after only 7 to 12 days, with a single low dose of AU-011, we're generating a robust immune response in 3 out of 3 of our high-grade tumor patients. In addition, we're seeing visual changes on cystoscopy at time of TURBT in 2 out of the 3 patients. This is a very exciting data in this population. And Eli, I'll hand it over to you.

Thank you very much. As a summary, this was a Phase I window of opportunity for safety, with a single low dose actually with ocular volumes that we ran into for the first time in non-muscle-invasive bladder cancer. It is exciting to see this data. It is exciting to see that it works as we believe, it consistently works in our ocular programs, and we've seen consistently across many, many different types of animal models. So let me just recap 4 things: favorable safety. Not just favorable. Only Grade 1 drug-related adverse events in less than 10% of patients means only 1 patient had Grade 1 adverse events that are related. Again, very similar to what we're seeing in the eye. Rapid immune activation. That is remarkable because we all know that it takes a while to respond, especially with adaptive immunity. The fact that we're seeing 100% of the patients with immune cell infiltration in the target and nontarget lesions is very exciting, probably one of the key differentiating aspects of this new class of drugs. If we can treat the patients frontline with something that has such a powerful immune response, we should potentially see durable responses. Tumor shrinkage and clinical response. 4 out of 5 patients with single dose in low-grade disease. 70% of the patients in NMIBC have low-grade disease. We wish we could treat them with better therapies, and now we believe we have that opportunity. So what's next? A lot of positive things and a lot of work for our team. We have obviously the key goal of expanding this Phase I. We have the opportunity and momentum for these patients to keep exploring potentially higher doses. Can we give multiple doses and explore, really, this immune response to its fullest potential? And we don't want to stop. In parallel, Phase II design. We have fast track designation, and with a dataset like the one we have today, we are going to be very actively in conversations with the FDA to design that Phase II, potentially with the goal of expanding into Phase III and getting the drug to patients as soon as we possibly can. So it is a great day for patients. It is a great day for Aura. And now obviously, we have the privilege of having, as I said, probably the top key opinion leaders in the United States with us to share their perspective on what we have and the potential of the drug. Thank you very much. And now Dr. Sabine Brookman-May will lead the moderation of this panel.

Yes. Thank you, Eli. And I'm very excited now to start with a short discussion for the next 30 minutes now with our key opinion leaders, Dr. Neal Shore, Dr. Gary Steinberg, Dr. Joe Jacob, and Dr. Max Kates. Thank you again for joining us today and for exchanging a bit on the data that we just presented from our Phase I study. Dr. Shore, I would like to start with you and just address one question to you, just after looking at this data right now. We saw complete clinical response in 4 out of 5 low-grade patients, and many of the patients had multiple tumor recurrences and a lot of treatments, partially over several years. What is your initial reaction to this data?

Well, thanks very much, Sabine. What a great pleasure to be here and to be with my colleagues, Gary Steinberg, Joe Jacob and Max Kates and myself. We've all been on the trial. And so we've all have had experience with the injection, the light activation. And we've certainly done many other studies, whether it's intravesical or various types of applications. And I have to say it really is, as you were saying earlier, for non-muscle-invasive bladder cancer patients -- certainly looking forward maybe to even investigating some more advanced stages, but for this, as you point out, these low-grade patients, papillary lesions, a single low dose, which is really right in the wheelhouse for urologists. We treated all of these patients in our clinic, did the resections in our outpatient surgery center. The fact that we're able to see, I think, really very inspiring -- this effect on not only immediately an ablative effect on the target lesion but ablative effects on the nontarget lesions within a very short period of time, 7 days. It also gives me great confidence that this was all read with central pathology with Scott Lucia, who's one of the most world-renowned GU pathologists. So his interpretation, and also the staining quality that they did looking at CD8, CD4, CD3, eosinophilia, all of these things, which, as really nicely presented by yourself and Joe, really demonstrates that, yes, there's dual mechanism of action. So a necrotic ablative effect, and what I find very appealing, this really interesting novel mechanism of action. It's both ablative and an immunologic effect. And so that gives for a potential for really great durability. And it goes without saying, I mean, let's face it, the safety profile in this was extremely impressive.

Thank you, Neal, for estimating how this data could be interpreted also from your clinical opinion. Can I get in one more point a little bit more? You talked about that we were able to show an effect was not only in the target lesions but also in nontarget lesions, lesions that were not injected with AU-011 and still, there was an immune response or partially even another complete clinical response. We would say this, somehow, we call it a bladder urothelial field effect. Could you explain that maybe a little bit better than I did, also in your clinical words, [indiscernible] words, what we exactly mean by that and why it is so impressive?

One of the challenges in cystoscopy is, for some patients, there are always a lot of a variety of anatomy, whether it's the male or female you're doing the cystoscopy on. And so it can sometimes be really easy to completely visualize and map out the entire bladder visually with your cystoscopic equipment, and there's different kinds of equipment. But there's a lot of different anatomy. And then on top of the different anatomy that patients have, which can sometimes make it hard to identify all of the lesions, despite our best attempts with traditional white light cystoscopy, we get improvement with blue light cystoscopy, undoubtedly, but we still can miss lesions. And we may think of some as being benign, or we have -- sometimes we just miss an actual lesion. Despite the fact that we do our best to biopsy, fulgurate or resect the lesion, I guess really what I'm saying is I love the potential of having a field effect, because if I'm injecting right in the tumor base, where I see, and clearly I'm comfortable saying, here's a lesion, but maybe there's another lesion not too far from it, but it's tucked behind the bladder neck or it's down in an area of thickening in the bladder wall that we call trabeculation. Or I just missed it, or maybe the patient became unstable from the anesthesia, and I had to stop the procedure. So having this early signal that not only where the tumor is directly being injected, but there are associated tumors that are showing response not only visually and histopathologically, but also with CD4 and CD8 infiltration, that really kind of augments not only the ablative but also the immunologic effect. And we saw that with the CD4 and CD8 infiltrates. I think it's very, very appealing. We want to decrease the number of times we have to do biopsies and resections. Because over time, patient's bladders, they get a little beaten up from this, and there's clearly morbidities to this, not only the risk of bleeding and infection afterwards and perforations. And -- inclusive of the health economic impact. And that's why your earlier slide, this is -- it's so often said, this is one of the most, if not the most expensive solid tumor that we treat across all solid tumor types. So I think this is -- on this field effect, essentially, maybe a more simplistic way of thinking about it, it makes us better resectionists for the things that we may be missing, and it also allows for potentially a more durable response.

That's a great point, Neal, especially also considering how, for example, the quality -- in the individual, quality of resection makes an impact also on recurrence and progression rates in that setting. And that could it make more reproducible also despite -- even if you don't see any single tumor, it's still treated despite not injecting it everywhere. Let's talk a little bit more about the immune response. Do you think that this treatment, based on the immune mechanism, could also be immunoablative and a possible replacement for TURBT?

Well, that would be a wonderful thing. As I said, we're surgeons, and we're always in the mindset of how do we kind of make our services less required, put ourselves out of business. And even though that's what we get trained to do, there -- as I alluded to, there is a morbidity and there is a cost, and there are person hours away from work that are always involved when we give anesthetics, general anesthetics in particular, and resective or biopsy treatments. So the fact that we've just seen this type of response -- I'll caveat it and be the first to say it's only 12 patients. And so it's very exciting and very -- extremely promising. Single dose, and we're still tweaking the dose, and we're tweaking the light activation, but already, we're seeing these types of responses. So my answer would be absolutely yes. This would be phenomenal if we can start to cut down on the number of required transurethral resections of bladder tumors. The fact -- and it was alluded to earlier, and I hope the folks listening appreciate this, this is extremely user-friendly to urology clinics, whether they're in sophisticated centers, tertiary academic centers, or out in rural America, suburbia, metropolitan, urban areas, anywhere, because everybody has a cystoscope and has a table where a patient can undergo cystoscopy. I really like this because this leads to the ubiquity of application, should it get approval. Certainly, I think for doing the studies, it makes it very, very appealing. And more and more, we have some other challenges in our health care system of person power shortages, and the more we can do in the clinic and avoid in-hospital required procedures, whether they're at academic or community centers or even ambulatory surgery centers, this is a clear treatment theme in health care. So I think this is a very -- potentially very interesting and exciting opportunity for both ablative, with its long-term impact. And sure, if we can cut down on the number of TURBTs we do, I think that would be very welcomed by the urologic community and certainly by patients.

Thank you for this feedback, Neal. Dr. Steinberg, I would now like to talk with you about the immune-mediated mechanism of action. We recognize that this Phase I study, it was a window of opportunity study, not designed to even assess any durability of response. However, what are your thoughts about the potential for longer-term antitumor immunity similar to what we have seen in preclinical models, and particularly also given that we have seen a very rapid antitumor activity and an immune response just in a matter of a few days?

Yes. Well, certainly -- well, thank you for the question. And certainly, I reiterate a lot of what Dr. Shore has said. But one of the biggest challenges we have with immunotherapy is actually getting the immunotherapy into the tumor. And so the tumor microenvironment is a critically important concept. And many times, tumors release a number of substances that are immunosuppressive. And so the concept of being able to inject directly into the tumor to alter the tumor microenvironment with a VDC, a virus drug conjugate, that is going to be readily taken up by the tumor, and then releasing all of the different neoantigens and virus-like particles that will turn on and stimulate the innate immune system, the TLR receptors as well as then ultimately the adaptive immune system really is quite important in the overall treatment. A lot of times, we're using immunotherapy in the bladder, but it's in an intravesical solution, and we're hoping that it will bind to the urothelium. We know that it's critically important for BCG to bind to the urothelial cells. We know that with all of our intravesical therapies, whether they're chemotherapy or immunotherapy, it's important to bind to the cell, bind to the tumors, so that you can begin to turn it on the immune system. And then the critically important factor for turning on the innate and adaptive immune system is you create T cell memory. And once you've created a T cell memory, you're really golden. When we talk about, for example, COVID vaccinations, and a lot of the COVID vaccinations are initially through the humoral B cell immune system. But the patients that really do the greatest are the ones that also had T cell activation and T cell memory. And so that's really our goal with all of our immunotherapies. And if you're able to inject a tumor directly and create specific neoantigens and specific T cell receptors, which create T cell memory, you really are off to the races in that you can have prolonged immune effectiveness. And again, I think that to look at this after a week is really shortchanging the technology, because we know that the immune system and T cell infiltration in adaptive and immune system and T-cell memory takes quite a bit longer. It takes at least 3, 4 weeks. We know that when we treat patients with checkpoint inhibitors that we start seeing tumor responses, but it's not until about 1 and 2 cycles, 3 to 6 weeks and so forth. So there's really a golden opportunity with this novel concept to really truly not only get immunoablation in treatment of the tumor as well as potentially abscopal effects. These are tumors that are outside of the tumor that you're injecting, but to get a long-term immune surveillance to help prevent the recurrence because, as Dr. Shore alluded to, the one thing that the patients really, really want, not only do they want the tumor to be eliminated, they don't want it to come back. And the recurrence rate is really a critical driver in tremendous cost for treating patients with non-muscle-invasive bladder cancer. It's a tremendous cost of patients and their family members losing days of work, financial toxicity. And certainly, it's a psychological effect. When you've got a patient in the clinic and you're doing their surveillance system, they got more low-grade recurrent tumors, that's enough to make them almost shriek out in frustration. So there really is a tremendous benefit that if we can obtain active immune surveillance to help prevent these tumors from coming back. And I think that this is a really novel way to do that.

Thank you, Dr. Steinberg. Dr. Kates, I would now like to exchange with you also a little bit more on that topic. So currently existing bladder immunotherapies require multiple and broad administrations, and AU-011 is finally novel due to its focal nature with the injection and application. Can you provide your thoughts also about the differences between a more global versus a focal bladder immune therapy? And having addressed that, can you also comment on the immune response we have seen in our Phase I study in the distant nontarget lesions in these early data?

Yes. And thank you for having me with these phenomenal colleagues. And I couldn't agree more with much of what's been said. It's a great day for our patients, I think, was previously said. And why is that? Because when I give BCG or intravesical therapies right now, I'm treating healthy tissue. And as a clinician, I'm sick of that. I know that when I treat healthy tissue, I'm delivering toxicity to part of the bladder that does not need the treatment. And so when we give intravesical therapies, we're faced quite often, actually, with varying forms of cystitis, which is an inflammatory condition of the bladder, that's almost expected when you give intravesical BCG, intravesical chemotherapy. And so this notion that we can just treat the tumor without treating healthy tissue is quite appetizing to me because that way, I can avoid treating healthy tissue that does not need that toxicity. And I think we saw that with the data presented. Then when you put, on top of that, that not only are we treating those tumors, but we're treating nontarget lesions, that's even more exciting because it speaks to something that Dr. Shore said, which is this idea that there may be tumors that we can't easily see in the bladder. And so maybe you might argue, okay, well, the intravesical therapies treat all this healthy tissue, but they may also treat unseen tumors. So the fact that we're seeing nontarget effects is this golden opportunity to both treat the cancer cells, [indiscernible] treating healthy cells, this field effect or this abscopal effect really speaks to an adaptive immune response, which is something alluded to by Dr. Steinberg, which is this idea that how are we seeing nontarget lesions respond? Well, there has to be immune cell recruitment and memory, probably in the form of T cells. We don't know exactly, but there has to be an adaptive immune response in order to see those types of effects. So taken together, clearly, a therapy like this is a better option if it were to have these nontarget effects than an intravesical therapy where we're treating cells that don't need it.

Thank you, Dr. Kates. Dr. Jacob, I would now like to talk with you about what is safety profile and how we bring that into the clinical context overall. In this Phase I study, we have seen only Grade 1 drug-related adverse events, and we have just seen in less than 10% of patients, only 1 single patient, what type of patients under this consideration do you think would benefit from this type of treatments?

First of all, thank you for the question. And I don't know if I can say better than Dr. Shore, Dr. Steinberg, Dr. Kates. I don't know if anyone in the world could say better, but I'll just add a couple of things. So with this type of safety profile, I mean I could see this being used, of course, in the patients that you want to avoid the OR, the patients that maybe are too sick for the OR. But with this safety profile, I could see this being applied to any or all patients. And just to sort of feed off of what Dr. Shore was talking about with the current health care system, for me, at least, it's so hard to get patients to the OR. OR time is like more precious than gold. There's a shortage of anesthesiologists, there's a shortage of OR nurses, OR assistance. And so the amount of work and the amount of time it takes to get somebody into the OR is very frustrating. And so I could see this being applied quickly in the clinics and I could see it being applied widely to a broad group of patients because of the safety profile. Just to give you an example to the people on the call that may not be familiar with our types of workflows. So in the clinic, I'll see a few patients and then the nurse will have -- the clinic nurse will have the patient prepped, basically consented, you go into the room, you can do a cystoscopy with a quick treatment and then you can leave the room and that whole interaction may take 10 to 15 minutes, and then I go on and see my next few patients. In the OR, it's totally different. Even if you're running a completely efficient surgical center, let's say, I have a 7:30 start, I have to go see the patient at 7:15. By the time the patient gets the OR asleep under anesthesia, prepped probably starting around 8:15, 8:30, depending on what system you're in. I may work for about 20, 30 minutes doing an endoscopic resection. And then the patient wakes up, then I go talk to the family, then I go check on the patient. That's about 2 hours' Worth of time versus a procedure that I could have done hopefully, in the clinic in less than 15 minutes.

Thank you, Dr. Jacob. Dr. Steinberg, I have another question for you considering all the immunotherapy effect. When we consider a traditional immunological model with a prime and a boost to activate the immune system in an efficient way. In the light of the favorable safety profile we have seen here in the Phase I study, would you also be comfortable with studying additional treatment cycles with AU-011 while seeking possible additional efficacy and long-term durability?

Thank you for the question. And absolutely, I think that if you look at our present algorithms for treatment for patients with non-muscle-invasive bladder cancer, we frequently are dosing patients once a week for 6 weeks. We're then many times following that up with maintenance therapy either once a month or 3 weekly installations at month 3, 6 and 12. Patients are used to getting multiple treatments. However, if they had their druthers, they would get fewer treatments, not more. And so there clearly is a benefit to trying to treat effectively but treat less often. If we can somehow design a treatment where we're getting the best ablation, we're getting the best complete response rate as well as durable response rate, I think that's the goal. And I see no reason why you can't treat patients say, once every week, once every 2 to 3 weeks. There are probably some immune biomarkers we can assess in the urine, various cytokines such as IL-12, IL-6, IL-10. All these different cytokines, interferons kind of give us an idea of how much we're turning on the immune system, how much we're suppressing the immune system. So that we can get an idea of how often we would want to boost the patients to get the optimal immune stimulation while not overdoing it and causing immune suppression because there's a lot of negative feedback loops anytime we stimulate immune system. There's also no reason why you can't retreat patients. So if you get a good response, re-treat the patient. I think that one of the things that we do all too often in non-muscle-invasive bladder cancer because we're using adjuvant therapies. So we're using surgery to remove the tumors completely and they were giving an adjuvant therapy to help prevent it from coming back, not knowing if we need that adjuvant therapy or not. Certainly, the adjuvant therapies do add to cost and time and so forth. So if we can figure out how we can [ immunoablate ] and when would be the time to potentially add a boost or a maintenance dose, I think that would be critically important. And I -- again, in an office-based procedure that has minimal as we've ascertained to date, local symptoms and side effects. Certainly, we're not seeing any systemic immune-related adverse effects. But I think that there's plenty of options to really truly optimize the dosing regimen. So that not only can you treat low-grade non-muscle-invasive but potentially, there's no reason why you cannot treat high grade non-muscle-invasive. The mechanism of action would allow you to treat any non-muscle-invasive bladder cancer, whether it's low grade or high grade because of the uptake of the VDCs, cytotoxic payload and the immune cell death that we're creating, which then is stimulating DNA in the adaptive immune system.

Thank you, Dr. Steinberg. Dr. Jacobs, I have another question once again related to the TURBT. And you mentioned already, there were also some challenges related to the integration also in the daily routine practice. What are your challenges you see with the TURBT right now in that setting? And also, could you also comment in general on the trend to transition bladder cancer care more from the operating room into the urological office?

Yes, absolutely. And I think it's a great question. I think it's important and how we treat bladder cancer in the future. As I mentioned before and as some of the advisers have mentioned that there are economic and practical issues with our current health care system and getting a patient to TURBT is not easy. There's loss of time on surgeon time, patient time, loss of work. But moreover, it's a more morbid procedure for patients. Patients sometimes have to stay the night. Sometimes they have to go home with a catheter after TURBT. And as far as economics go, it's not the most important thing that we're going to talk about. But TURBT is generally a money loser for the hospitals. I mean it's not a high-paying procedure. And these procedures are really being pushed more and more to the surgery center type models and the hospitals don't really want these procedures. From a payer [ standpoint ] from a surgeon standpoint, as far as doing a procedure like a local ablation or local treatment in the clinic, you really get paid very similarly to what you would get paid taking a patient to the OR and doing some kind of resection in the OR. So from a urologic standpoint, I think people are more motivated to accomplish. If they can safely accomplish an efficacious treatment in the clinic, I would say there's already a push. There's already a movement of trying to take care as much as we can in the clinic. I can tell you from my standpoint, I'm sort of stretching the limits of what we can do right now in the clinic. I mean we have small little biopsy forceps, and we've got electrocautery tools that we can use in the clinic. I'm trying to stretch that as much as I can and trying to take care of these patients as much as I can in the clinic because of all those reasons. But I would say the field is starving for more tools, more opportunities, more ways that we can treat these patients in the clinic effectively and safely.

And do you think also AU-011 could potentially fit into that basically ambulatory clinical setting under these considerations?

Yes, I do. I think with the early data and the ease of use and the safety profile, I think it has a great potential to become another tool that urologists can utilize in the clinic.

Dr. Shore, I would like to talk with you about also one of your quotes I've heard from you before. You frequently described the cystoscope as the urologist stethoscope and I would agree with that as a urologist. And the audience today has also heard about various techniques utilized in AU-011 administration and activation, specifically also bladder injection needles and the laser light activation. Would you mind commenting on urologist comfort, also the comfort levels not just with the cystoscopy but also with laser application and injection techniques?

Sure. Happy to. I think I need to apologize to Rene Laennec, the inventor of the stethoscope. But all kidding aside, it is the piece of equipment that every urologist, it's like really the first thing we learn in our early part of our training. And it's funny, I was talking to Gary Steinberg about this at an earlier point. And I think this younger generation of urologists because of their incredible facility and expertise in -- with electronics and games, they are remarkably nimble and facile with all sorts of endoscopic, cystoscopic, laser, fine motor skill equipment, not that older urologists aren't. And I think this technology that we're talking about is -- it fits both generationally, whether you're in a busy academic center or you're somewhere anywhere in the community, we do a lot of laser work. We have laser ablative technologies well into 1 to 2 decades now for treating stones, for treating tumors in the ureter, for treating prostate -- enlarged prostate. We have a tremendous experience with needles, not only in doing prostate biopsies, but inserting needles to inject directly into the bladder for neurogenic bladders and overactive bladders in the form of Botox. And this is done -- that injection technique is done routinely in the clinic. So we have this really kind of very, very clear oncologic, non-oncologic experience, multigenerational now regardless of where you're practicing and as Gary did a great job in outlining all the different immunotherapeutic mechanism for why it's effective both in innate and adaptive system. And urologists already -- we're proud of the fact that really BCG was one of the first immunotherapies that had an impact not only on delaying recurrence, but also on decreasing a progression in the urothelium. So it's not far afield, intravesical immunotherapeutic in the bladder. Of course, we see many other advances of immuno-oncologic therapy in advanced bladder and kidney cancer and even unlimited examples in prostate cancer. So the entire urology world I think would be very comfortable and very, very intrigued to get a better understanding of how this could be adapted for non-muscle-invasive bladder cancer.

Dr. Kates, I will summarize the next two questions to one question, just in the interest of time. And I would like to talk with you about the patient population. On the one hand, what are your thoughts about the low-grade intermediate risk patient population where we have demonstrated complete responses in multiple patients? And do you think this is the patient population or is it in undetected patient population independent from any biomarker selection? Do you think this is the right patient population that would benefit from a novel therapy like that? And directly as a follow-up question, and if yes, do you think also is this the right patient population for a transition from the operating room into the office? Or would you have any concerns with regard to not doing the TURBT or losing the TURBT as a surgical procedure?

Yes. Some great questions there. Low-grade intermediate risk is the perfect population for this drug. It's a clearly defined disease state by the FDA. It's incredibly common. And urologists are largely already managing this in the clinic. It's very common for urologists to full grade lesions like this, to biopsy them as was previously said in the clinic. And so it's very natural for urologists to do something like this in the clinic. So it's the perfect disease state to do this. And then when you think of this idea that it's unselected, and is it okay that it's unselected. I would say it almost has to be unselected. So to do a biomarker, especially a tissue-based biomarker for low-grade non-muscle-invasive bladder cancer, means that urologists are going to start sending off genomic assays for this disease state, which nobody currently does. So one of the main problems with a biomarker selected therapy for this disease state is you're asking clinicians to do something they currently don't do. And so the fact that this is unselected is actually preferable. And when we think about this being ablative and not adjuvant, I would argue that ablative is going to treat far more patients if successful, than adjuvant. I use the analogy that go to a -- you're a member of -- a fan of a rock band and they send out an early release for tickets -- and by the time -- and you do the early release and by the time the tickets are available to the general public, 90% of the seats are taken. And that's what's happening with ablative therapies, they're going to end up taking 90% of the patients, hopefully, if they're successful. And the ones that aren't -- the ones that it's not successful in will be those few 10%, 20%, 30% of patients that end up getting adjuvant therapy. So for all those reasons, this is actually the perfect disease population.

Dr. Steinberg, one follow-up question about the patient population, low-grade intermediate risk disease patients. How big do you think is this patient population? How many patients do fall in that category?

This is a huge unmet need. But to reiterate what the other speakers have said and what Dr. Kates was saying, there's a regulatory pathway that needs to be followed. So for commercial development of new drugs, there is a regulatory pathway that needs to be followed that the FDA has outlined. The American Urology Association, Society of Urological Oncology have all kind of come together and have kind of a general meeting of the minds of the regulatory pathway. And so I think the intermediate risk patient population is an ideal regulatory pathway for this particular drug. Having said that, once the drug gets into the hand -- once this treatment gets into the hands of the urologists, I'm certain they will use it to treat all non-muscle-invasive bladder caners. So they're going to treat the TA high-grade especially in patients that they've treated -- they may have a recurrence, so treat them again in the operating room. The third time as well, they've got the small recurrence, they haven't progressed. It's a relatively stable disease. Yes, they've got another TA high-grade tumor. Let's go ahead and treat them. So I think that when we look at the intermediate risk low-grade disease population, that's probably one of the largest groups of non-muscle-invasive bladder cancer patients we have. It's a highly prevalent disease. It's a highly unmet need, but to go a step further, once urologists have an FDA approval, they're going to use this for a lot of patients. And I suspect that the insurance companies and third-party payers will be okay with that because I think ultimately, this treatment will be less expensive than bringing patients multiple times to an operating room for general anesthesia and so forth. So that's kind of the way I see this patient population.

Thank you, Dr. Steinberg that you have also already answered my next question. I would have had on this also the potential to develop it in other indications or other risk categories. So to your opinion, nothing also speaks against that. I would like to sum up now because in the interest of time, we need to get to the Q&A [ finally ]. But maybe one final question, just really very quickly. We have 2 minutes left, and I would like to address that question to Neal Shore. As you know, we have the Phase I trial ongoing and with this positive early data in mind, how would -- how wide we optimize development also in the Phase II study. And I would just really need to get a quick assessment and a fast response from your opinion. You're on mute.

Sorry. Sorry. Yes, super quick. Now that I'm unmute. Just quickly recapping, we see small numbers but remarkably well tolerated. So that's great, that's why we do early phase studies. That's been accomplished. We need to further get a better understanding of the dose, number of treatments. We need to better understand the time between when we dose and when we light activate. I think that having some flexibility in that development plan is going to be very important to the clinician community.

Thank you. So in the interest of time, I will skip the last questions we had on the list, but I would like to thank everybody again, all our 4 great experts [ in this round ] to participate here to provide their expert opinion and bring the data into context. So thank you again for this very valuable insights and discussion.

Thank you. So now we're going to open to the Q&A from our participants in the call, analysts, investors. Thank you so much.

Thank you, Eli. So yes, we'll begin our question-and-answer session, so please hold for a brief moment. So our first question comes from Andy Berens at Leerink.

Next question. I think we can't hear.

Yes, we will go to the next analyst, while Andy figures out he is mute. So our next question comes from Philip Nadeau at Cowen.

Congrats on the data. Just two from us. First, in terms of defining the dose, can you discuss in the current data, was there any signal as to which of the doses that were tested were better? And then more broadly for the company, how will you determine what is the right dose through the Phase I trial? Can you give us some sense of how you defend that? And then a follow-up question to the one that was asked to Dr. Shore. Just in terms of the Phase II design for the physicians -- for the other physicians, what do you want to learn from Phase II? How would you design that Phase II trial?

So the first question on how we determine the best dose, Sabine?

I would like to comment on that. So thank you for this question. And based on the current data, we have just presented today, we will now work immediately on an expansion on the Phase I study to also test different dose regimens and finding multiple doses in that patient population. So this will also determine how we are going forward and to determine also which is the dose that gives us the highest efficacy, but this still needs to be determined and also gets into our further development plan.

And I think there was a second question addressed to Dr. Shore on how do we learn from what we have now implementing that into Phase II. [indiscernible] I can't remember what the physician...

Yes. No, I think it's already sort of been alluded to. I think there's some really -- there has already been said, there's a huge unmet need in the patients in the intermediate risk category. There's a lot of interest in that space. It's a huge population of patients. These are patients who really could benefit from AU-011's unique mechanism of action, both ablative and immuno-oncologic. And I think ultimately, we're certainly going to look at response rates. I think that already having some biomarker in terms of CD4, CD8, eosinophilia, eosinophilic granulomas are really very, very positive in terms of things that we can further evaluate and I think has been already said, I think FDA, particularly in the bladder cancer space has been very amenable to new endpoints and new trial designs. So I think there's -- that's sort of a Phase II. Obviously, it's a big question that was asked, and it's going to take a lot of very careful thought. I think the early appreciation of getting the dosing right, the timing for laser application is going to be very important in that Phase II development plan.

When we talk about dosing, we're not talking necessarily about the concentration of the VDCs. We're talking about can we do multiple injections -- so can for -- depending on the size of the tumor, can we inject in multiple sites? Can we also potentially inject kind of in a random -- each part of the bladder randomly to again improve our abscopal effects or our smaller tumors that we don't visibly see. So when we talk about dosing, it's not just the concentration of the VDC and the solution. It's the amount of VDC injections that we can use and the total volume of drugs that we can use throughout the bladder. And so those are questions that we still need to think about.