BioAtla, Inc. (BCAB) Earnings Call Transcript & Summary

Welcome, and thank you for standing by. I would like to inform all participants that this conference call is being recorded and will be available to clients of JPMorgan. Parts of this conference call may also be reproduced in JPMorgan Research. If you have any objections, you may disconnect at this time. [Operator Instructions]. I would now like to turn the call over to Brian Cheng.

Thanks, again. Good morning, everyone. Thanks for joining us on our Biotech call series at JPMorgan. I'm Brian Cheng, one of the senior biotech analysts here at the firm. Today on our biotech call series, we have BioAtla CEO, CFO, Chief Commercial Officer, Chief Medical Officer and SVP of Clinical Development. Hey, guys, really appreciate you joining us and really thanks for joining us on our biotech call series. Jay, you have had a very busy past couple of weeks we've updated the cost a couple of assets across your portfolio. Can you walk through maybe the key highlights of BioAlta's portfolio today? What are the near-term [ indiscernible ] that investors need to look out for, for 2024?

All right. Thanks, Brian. I really appreciate you setting this up and allowing us to get together today with the team. So as you know, our portfolio contains four clinical assets. Three of those are Phase II and one is Phase I. What's interesting though, it's a very nice diversified set of drugs two in there are ADCs. One is in important immuno-oncology drug targeting CTLA-4 a validated target, which we've applied all of these, we've applied our CAB technology to that widens the therapeutic window. And also, we have in Phase I, our first T cell engager, which is a dual CAB antibody. So all of those are pretty late-stage assets. Certainly, the Phase II ones allow us to move several other studies to potentially registrational trials. Obviously, we're open to partnerships for some of those, but also some for ourselves as well. In terms of near-term catalysts for '24, I would say that we're looking at an important readout on BA3021, our ROR2 ADC assets in melanoma and head and neck cancer, the melanoma study is already enrolled. The head and neck cancer is going to be enrolled roughly around the end of the year, maybe a little bit into January, but it's well [ indiscernible ] very good and on track. In addition to that, a very exciting report we had last Wednesday on our Phase I data, CTLA-4, BA3071 drug. And we basically had cleared the 5 mg per kg level, and we're very active testing the 10-milligram per kilogram and, potentially, if that goes well, we would like to see if we can touch the 14.2 mg per kg, i.e., 1 gram per patient. And so Eric will probably comment on that a little later in this discussion. And then finally, we expect our AXL ADC BA3011 can potentially move forward into a potentially registrational trial in the first half of next year, following completion of our target agnostic and our 2Q 3W cohort in non-small cell lung cancer the latter of which is fully enrolled now. And finally, we are on track to complete the EpCAM BA3182 study in 2024. That's a Phase I study and plan to give greater specificity of timing at the in Q1 of 2024. So in addition to a potential collaboration, there's a lot of data going to roll out significant amounts in the first half. And so we're really looking forward to sharing that with you as we march through this.

Great. Lots of progress that's ongoing. Maybe first focus on AXL. On your [ sarcoma ] side, can you give us a progress update on your ongoing pivotal study in UPS. What is the latest there? Will you be able to provide an interim data cut near term from the first 40 patient so that we can get a sneak peek of the efficacy in UPS.

We have modified that study to only require 20 patients now for the interim cut because we have focused on the 2Q 3W. Originally, if you think back, it was 3Q 4W as one cohort and 2Q 3W was the other one. because of lack of compliance on the 3Q 4W in November 7, we announced that we had focused on the 2Q 3W. So we're pushing that through. Patients are enrolling on that. And the other thing we're doing is evaluating the targeted NAS agnostic approach for UPS as well. And so that's quite active. And so these two modifications to the UPS study, we hope, will expand -- potentially expand the patient population but also allow -- we're going to really get a sense of what that does to the recruitment. And hopefully, early in 2024, we can give more guidance on what the timing of that would be. In terms of revealing because this is a registrational study, it's not clear how much we'll be able to share on that. But obviously, if we were to go forward into the 40 patient -- final 40 patient because it's 20 plus 40 in two steps, that would be a clear message that things are working well, one way or the other. And so -- but we're going to -- we're really going to look at how these two changes we're making, affect that enrollment, and that we'll come back to you early next year and hopefully [ guide ].

Okay. And is that -- just on the target in the agnostic piece. That's a very interesting development there. Just based on what we saw recently in your non-small cell lung cancer data set. Is that based on what you saw in UPS? Or when you think about the tumor, the expression agnostic approach in UPS. Is that going to be more exploratory to see if you can get also efficacy there? How should we think about the approach there, the target agnostic approach that you get?

Well, I think the one thing to realize is that the UPS study initially was a TMPS score of 50%. So it was different than the lung where it was 1% and above. And we had two PRs in lung at 1%. And you -- if you go back in time and say, well, Jay, why that 50% cut? Well, it was based on a couple of patients out of the Phase I data cut. And did you lose me for a second or i got this screen was frozen. Hopefully, you didn't lose me. But anyway, I just wanted to say, again, 50% was a TMPS score. And so by going below 50%, I don't think it's -- I think it's very high, high probability that we're going to see activity below that. And so -- and this would speed up asking patients to give a biopsy certainly, also if they already have one with the last year, these are real limitations to the recruiting. So if we can bring these barriers down, we have a chance to really putting it in a better position. So long story short, I think it's a high probability in view of the fact that AXL is of such a poor prognostic indicator, meaning that those patients with a higher expression of AXL have become some of the most resistant patients to treatment. So by opening that up to a wider group of patients and some of those with lower AXL, some that are negative by TMPS, in other words, at immunohistochemical assay may read out at 0, but that doesn't mean those patients are actually negative. It just means that, that assay isn't sensitive enough to detect them. So from our perspective, there's still going to be actual positive patients somewhere along the way and a bigger group and faster recruiting. But let's see what we learn on the speed of that recruitment of virally next year. I need to see that rolling to know how to forecast. I can't do that today.

Okay. So maybe let's turn to non-small cell lung cancer, where you had data update very recently. When we think about the prevalence of AXL expression, it's very interesting just based on the data set that you just presented. When you look at the lower expressers, you also see response there. So based on what you've seen so far in non-small cell lung cancer, can you talk about the prevalence of the AXL expression when you think about the high fractures versus the lower ones that you are now trying to tap into? what is the prevalence there? And how confident are you that AXL can be applicable to a broad population that you can go into this market or diagnostic approach.

Yes. Maybe, Eric, you want to take a crack at this one.

Sure. Thanks for the question, Brian. So as we think about AXL, just a quick reminder that AXL is a very poor prognostic marker. It's associated with resistance to not only chemotherapy but PD-1 blockade as well as EGFR, and as Dr. Jay showed in our KOL day with him, there's belief that AXL might be present at diagnosis in small numbers and then really drive the resistance and the resistance clone and subclones that ultimately result in the dominant clone that's present. Your question about what's the prevalence. We would suggest it's about 30% using conventional immunohistochemistry, and that's at the 1% TMPS or higher. Very strikingly in our data set, where we observed 5 out of 15 responses amongst non-squamous, PGFR, prior failure EGFR wild-type patients, two of those occurred among patients with a TMPS of just 1%. So it's really incumbent upon us to now explore a broader population, and we believe that we'll be seeing clinical benefit amongst patients with lower levels of AXL expression.

Which we have done in more 2, which we'll talk about I'm sure.

Yes. And then in terms of the -- I mean, that's okay if you've talk about this a little bit. You talked about the cement paradigm that's currently available in late line patients. But can you also shed light on how you think about the differentiation on safety. When it comes to 3011 in the target indications like UPS and then SDLC, how should we think about the differentiation on the safety piece compared to what's available out there.

Sure. I'm happy to take that as well. So as I think people know, the conditionally binding technology enables us to have binding occur in the tumor microenvironment based on the Warburg effect and the lower PH. And explicitly, we're avoiding binding and delivery of our payload at pH 7.4 and higher. So the whole technology is about really getting the orastatin where it needs to go. And one way that we are differentiated, just one of several examples is with the Genmab ADC targeting AXL using the same payload, the MMAE. But the non-cap technology, they saw a very higher rates of constipation. And gratefully, we saw a much lower incidence and severity of this adverse event. And we think that's just one example of many that illustrates the safety and improvement. And then not only with our ADCs, but then as CTLA-4 and our T cell engagers as well.

And when you look at your efficacy profile, how differentiated is your response compared to what's currently available for your patients? Based on your doctor check, can you also talk about like how investors should think of the bar that you need to achieve. As you laid out in your pivotal trial plan, where should you hit in terms of response rate moving forward?

Eric, do you want to take the first part of that, at least?

Sure. I think we're right in there in terms of what other ADCs are seeing in this very heavily pretreated our patient population received three prior lines or more typically three was the median. And again, we only enrolled patients that express the AXL marker, which is known to have a very poor prognostic features associated with it. So we think we're right in that range of efficacy that portends a good result in a large randomized trial with PFS and OS as either co-primaries or as OS, for instance, in a third-line setting.

Ben, do you have anything to add to that or thoughts for that?

Sure. I think in terms of the bar, we would like to see OR about 20% and duration of response more than 4 months to secure the clinical benefit and the commercial success in a very heavily pretreated [indiscernible].

And I also think that -- we think that it's very difficult to make these head-to-head comparisons because of the AXL expression. On the other hand, if you go ahead and make it, we're in the mix. And then you have the upside of the fact that we're going into an earlier line set and also target agnostic. And I think those things are quite powerful drivers and give us a lot of enthusiasm on that. And so we'll have a few more -- a little more data to add next year or in the first half of next year as we finish things off in preparation for moving -- advancing in the non-small cell lung area, either with a collaborator or potentially independently. With respect to lines of therapy, I'll just touch on, I think if it happens to be in a collaboration, it's difficult to say what a partner will prefer. Sometimes partners like to do both lines, they like to do -- take you to first line, and we love those partners that have that ability to bring us to that. Independently there is an interesting opportunity in the third line when I sit back and think of it. It doesn't mean that we haven't made a decision yet, but we do look at it because this third line growing target agnostic is actually bigger then the second-line opportunity was when we were looking with a biomarker. So it's not a trivial opportunity, quite substantial in fact. And this blinded randomized study allows you to -- something really very difficult to do in second line because of the docetaxel being required control. you have an opportunity to keep patients on study in that randomized arm of the trial because this is ultimately coming. I know we're talking a lot about ORRs and so forth, but this goes down to PFS and overall survival. And that kind of study really have enabled a study that has a really good chance to allow AXL to shine and really show its benefit. And we've already tested a patient population worse than we would be doing. This is an earlier line. So anyway, suffice it to say, we'll have more to think on and discuss on that. We'll have a little more data to add to that, but that's where we're headed here, at least at this point.

Okay. So I guess just to kind of close the loop on this one is that you laid out two potential paths that you can potentially move forward in [indiscernible] and SLT. One at third line, one at second line, but if you were to do it yourself, you were to take this program without a partner, third line plus is probably where I think where you can create the most value where you see the most commercial opportunity, right? Is that how we should think about it? And I guess, what are some of the factors, I guess, between now and the next data update that you are also trying to also fine tune as well.

I would say that having more data always gives you that more statistics. So it never hurts anything. I think our partnership, they also want to see more data. But we'll continue the discussion. But if I had to pull the trigger today and say, I have a bias toward the third line because of the high probability. I mean, we've already seen data sets that could win in third line, even though we're in fourth line. And the fact that -- and this is a horrible problem, but the need is so high in third line overall survival comes quickly. I mean patients aren't making it much past 7 months. so if you can influence that endpoint, that's really a material contribution. And in some ways, there's 4 or 5 people fighting for second line. It's not 100% clear they're going to be able to keep patients on study. They're at risk running into troubles on is that study viable by keeping people in the PFS and overall survival. So when you look at the overall mix of risk from a clinical standpoint and the other, you've got to consider the third line. But we're not making the decision today, but I can tell you, I'm looking at it very carefully. And obviously, we're talking to a number of people and doing additional commercial analysis, but we'll have more to say on that next year, Brian.

Looking forward to it, then. Maybe switching gear to ROR2. Multiple paths here, you talked about where you were in melanoma and head and neck. What's the latest there in terms of enrollment? And also as we look into 2024, when can we expect data?

Sheri, you want to Kick off this one or you want me to?

Sure. Yes, thanks for the question. So what we've seen to date in melanoma across the Phase I and Phase II is quite significant. In particular, we've seen two of the four responses in ROR2 negative or ROR 2.0 as detected by IT. And so we'll continue that. We expect to have 20 patients through first scan in early 2024. In head and neck cancer, we've also seen a response in a ROR2 negative patient as detected by IHC. And we expect to have 20 patients again in the first half of '24 to look at. So making some good progress on that program to date.

So the -- for head and neck is 20 patients through first scan. Is that correct?

Yes, we expect to enroll the 20 patients by year-end and then have the first scan in those patients in the second -- in the first half of '24.

It might lead into the first week or so in January, but it's roughly in that time frame. But I think that otherwise, we're right on with that.

Okay. And as you look into melanoma and head and neck, how should we think about the opportunity here? And what are the specific signals that you are looking for at the green light, red light, what is the bar for efficacy that you need to hit to move on in the respective indications?

Yes, sure. I can take this one. So we're studying in, again, multi-refractory patients. And so it's melanoma first, majority have had two prior lines of therapy. And so if we look at what the unmet need is there, there's really not a lot for these patients post checkpoint inhibitor failure. And so as we look at the bar to advance anything in ORR between 25% and 30%, I think, would give us confidence and support to move melanoma to the next stage in a refractory population. If you look at head and neck, the unmet need is even greater at the moment, with very limited options for these patients post checkpoint inhibition. And so we believe that an ORR between 15% and 20% would be sufficient to give us confidence to move to the next stage. Ultimately, we would like to see an ORR of over 25% to ensure optimal uptake in commercial success when we were -- when we would get there.

Great. Maybe lastly on the CTLA-4. That's a very interesting data set that you presented last week at your R&D Day. Just first on the dosing. And I think this is a very interesting angle of our CTLA-4 CAB. Can you remind us how the dose that you tested. So the 350 mg that you show. How does that compare to the currently approved CTLA-4. And can you also talk about just any differentiation that you've seen so far in terms of PKBP. And how confident are you that you can get up to a higher dose compared to the current CTLA-4 agents.

Eric, do you want to start on this one?

Sure. I'm happy to. We, too, are very encouraged by the data that we that we presented at our research day. So in brief review, our responses that we observed were at the 5-milligram per kilogram equivalent given every 3 weeks, which is substantially higher than the marketed ipilimumab doses. And just to briefly review, Brian, those are given either as 4 doses at 3 milligrams per kilogram every 3 weeks and then just 4 doses total or there's an alternative regimen where only 1 milligram per kilogram ipi is given every 6 weeks ongoing. So you can see that ipilimumab, the market leader presently is challenged by only being able to give a relatively brief and low exposure. And of course, that's because of the incidence and severity of immune-related adverse events that are observed with that agent. Now there's a lot of history about going higher. There was a study done years ago before PD-1 was on the scene of 10 milligrams per kilogram versus 3 milligrams per kilogram of ipi. And it very clearly showed survival benefits in patients with metastatic melanoma. So we would very much like to continue to drive dose and exposure. And you asked the question about PK and we're not finding any surprises there. So it's been in a very standard manner. So to summarize -- we're at the 5-milligram per kilogram dose with responses, and we're also treating at 10 milligrams per kilogram, where we're pushing it all the way to potentially a gram which would be about 14.2 mgs per kilogram per a 70-kilo adult.

Do you want to comment, Eric, on the probabilities here speculating and where we're at on the current dosing.

Yes, how confident are you that you can dose substantially higher from where you stand today? And I mean, I assume that you're also -- given that you're dosing higher, you also are trying to shoot for a larger delta and efficacy, right? So how confident are you that you're able to achieve that?

We're pretty confident that we can do this. We're in our dose escalation, again, treating at 10 milligrams per kilogram of the ipi equivalent, which is a pretty high exposure with plans to go to a gram every 3 weeks. So we're really confident that we'll be able to do this. And I also want to emphasize that at the 5-milligram per kilogram, which is substantially higher than the marketed product, we're seeing these responses. We're seeing excellent safety, we have some patients that received 14 and 17 cycles. These are two melanoma patients with disease without disease progression we have a small cell patient who spend on over a year, which is 22 cycles, a [ UVL ] melanoma patient with excellent disease control with many cycles. So I think on many levels, you're seeing disease control, you're seeing responses and with a very well-established mechanism over 25 years, the CTLA-4 blockade.

And also, when you think about the combination, the combinability of your CTLA-4 CAB with a PD-1 and like vivo, do you have a sense of what is the optimal dosing range for CTLA-4 CAB? And is there a target dose in terms of circulating concentration that you're trying to reach to maximize the potential -- the combination potential here?

In short, we believe that the highest acceptably tolerated dose of our BA3071 is likely going to combine very nicely with the PD-1 inhibitor. And that PD-1 inhibitor could be any one of a number of marketed products. So we don't really have any strong preference. Our study has been conducted with nivolumab to date. But we think that CTLA-4 has been well established in combination with PD-1 blockade.

So looking ahead into your Phase II, you have two paths in a Phase II wanted for trimming refractory. The other is [ trim and naive ]. What are the process and risk that you are going into for the individual path in a later stage? And how should we think about the factors that you ultimately need to consider -- when do you have that data set?

So we reported on our data from 18 patients, and I'm really glad you're illuminating our plans to not only pursue the monotherapy pathway but a combination pathway together. So I'll just briefly outline what we're planning to do. So first, because the agency needs clear attribution of clinical benefit associated with the molecule being tested, where we have a monotherapy strategy to clearly demonstrate the association of clinical benefit with our agent. And that's enrolling patients with advanced melanoma and advanced carcinoma. So it's a basket trial the first of potentially several Phase II doses of 350 milligrams was selected. And ultimately, we would then plan to weave in a combination strategy with PD-1, given that's how it's typically used in the clinic. And then second, in Phase II, we have a combination strategy, which is to set us up for doing pivotal randomized clinical trials in frontline melanoma and potentially front-line lung cancer as well. And so those trials are on -- that effort is ongoing as well as the monotherapy effort.

And if we clear these other higher doses, Brian, we could then elevate or increase those doses in those studies depending on what we're seeing. And we have an expectation that's a reasonable possibility at this point.

So maybe just picking a step back when you -- as you think about potential partnership or potentially one or more of your assets. Is there a specific characteristics of the partner that you're looking for? I mean, for CTLA-4, I think that it may make the -- at least from our standpoint, it looks like it makes sense to buying a partner that already has an existing PD-1. Just where do you stand in terms of your progress in finding a partner? And also what are you looking for in a partnership?

Yes. So we -- so first off, we think that a partner that can expand the number of indications or the line of treatment, if we can go to earlier lines, in particular, first line of therapy. And those are really compelling. So those tend to be larger groups that can do that. And that gets reflected in the IRR opportunity of the drug. So it's simple math. It's okay to share some of your drug if it's going to become a bigger pie. And so that's very interesting to us. We also, of course, are open, in particular, cases to regional partners that may be -- for example, in Europe and other places that could be something of interest. We do keep an eye on our sharing in North America, in particular, in the United States. That's a fundamental area is where we sit and operate. So we want to keep that in mind as well. But we are listening in and discussing to both of those groups and keeping in mind that some of our assets, likelike ROR2, I think that melanoma data, potential head and neck data is going to drive more of those discussions. Probably starting next year, even though we have people inquiring at the moment and some discussions in that area, I think Obviously, the data set from CTLA-4 and AXL are -- have provided a lot of important information. And if I sit back and think about the opportunities of something like a CTLA-4, it's quite interesting what happened with PD-1. It's been safe. It certainly activates T cells that are in the tumor, but everyone finally recognized, well, I got to use this in combination with all of my drugs because it adds to it's additive. And what CTLA-4 doing? Well, it's recruiting new T cells into the tumor and activating them as well. And so this is -- it tends to be a far more powerful drug. I mean, I was talking to Jim Allison a few weeks ago about it because I've always thought that CTLA-4 had this much larger potential than PD-1. And in fact, when you think about it in combination, why hasn't happened whilst the safety has prevented it. You really couldn't do it. So maybe we could open that door to allow this to take a new position in that whole IO space. And so that's why we're so enthusiastic about it. And it could complement ADCs, it can complement many different types of drugs. So we -- we think there's a tremendous opportunity across the board and very much looking forward to it and large partners may be required to take advantage of such an asset.

So when we think about your portfolio, let's say, 2 years down the line, how should we think about the framework of your pipeline and technology platform, which assets today do you think that you definitely want to keep? Are you also thinking of disclosing additional assets as well?

Well, we have a number of -- well, first, I'm not going to say which we're going to keep because that's a strategic -- it could be a strategic disadvantage for us to end our discussions with potential collaborators. So we're not going to share that. We're going to drive it based on the economics of the right deal. And so that's the best I can give you on that. But will we -- we do have preclinical assets. We've slowed some of them down. We're going to update maybe at your conference in January on where -- what may be on the near-term horizon for the next IND. But keep in mind, these things -- most of the companies these days, including us, are driven by our later-stage assets. And so we recognize that. So we've focused there. But there are clearly groups interested in our next ADCs that are coming up. Our T cell engagers that are coming up. So we would potentially partner beyond these clinical assets, and I think in terms of what we take forward, if you think about I think one of these three we want to take forward and because each of these drugs has multiple indication opportunities, there's big opportunity sitting in each one of those. So at this point, we'll move forward to discussions and learn as we go.

Just given the continued interest in the ADC space, without naming the specific company at least recently, you see a lot more acquisitions in ADC space, right? How unique is your case sensitive ADC approach from a neurological standpoint, how hard is it to potentially replicate what you know? How strong is your know-how in this space?

Well, it's very unique. It's really a one and only. And it's fundamentally different than prodrugs, which people often use a name conditionally activated biologics, which created some confusion because ours conditionally active, meaning that we don't have to activate. They are always active. And there's -- and that's a big feature. The fact that they're always active in the tumor microenvironment. But when they go out into the normal circulation, those targets are not there. And so there's no requirement for clipping and -- and we refer to them as reversible because that reversibility is really the fact if they're in that low pH tumor microenvironment, they're always going to be active. Because those epitopes are visible when they're out in the normal environment, which all drugs will recirculate out there, they're always off. And so that increases efficiency and widens the therapeutic window. I mean this was particularly evident in the T cell engagers because when you -- there was a study that showed when you use the pro drug on both arms, if you got -- let's just say you got 40% efficiency in one arm and 40% efficiency in the other arm, that's a 16% overall efficiency just by definition. Well, you don't have that activation requirement with the dual CAB. They're both active. So you're getting the full punch when you come into that tumor. And then when you circulate it out, they're both off and they stay off. They don't cut -- what's activated, the prodrug has that challenge. So -- we believe that our technology adds to any ADC platform from a linker payload perspective because it wides a therapeutic window by eliminating on-target talks, and it actually ends up because you're reducing that target mediated drug disposition by not going after normal targets, you're also lowering the off-target tops that comes from the free payload. So these things -- this technology adds to any platform and I think is highly differentiated with hundreds of patents issued on it and around it that has been built over a number of years. So to me, it's is a unique opportunity, and it's going to -- and I think it's already proven itself in actual ADC by reducing the constipation that was seen by alternatives that did not have this technology I think it's already being seen in CTLA-4 by the level of dosing we have relative to ipi with low immune-related adverse events and the length of time that the patients have been able to stay on drug and get benefit.

So at the conference in just a couple of weeks, JPMorgan Conference in a couple of weeks. What should we expect there, Jay? Are there any specific angles or focus of -- area of focus that we should look at? What's the expectation there?

Well, I think we're going to try to give a portion of the full set, our initial portion of some of our goals with tighter time lines into next year. But I think generally, we often do that in the fourth quarter call to tighten that. But I think we'll give some sense of that. We may be able to give an update on where we are with our EpCAM T cell engager, fingers crossed on that. And I think also maybe may not have a lot more on CTLA-4 as we just gave the update today. But I think -- at least those are some pieces of it and -- and we certainly look forward to the discussion with you [ indiscernible ].

Yes. Likewise, definitely looking forward to our discussion at the conference in just a couple of weeks. That's the end of our biotech call series with BioAtla. Guys, thank you so much for joining us today. Happy holidays to you and we really look forward to seeing you in a couple of weeks at the JPMorgan Healthcare Conference.

Likewise to you, Brian and the JPMorgan team, and thanks for our investors and analysts that are watching our potential partners. Thank you.

That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.

Thank you.

Thank you.