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

Good morning. Thanks for joining us for another session at the 42nd JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the Senior Biotech Analysts here. I'm joined by my associate, Sean Kim, who is in the audience today. On stage, we have the whole team from BioAtla, Richard is also in the audience. So we're going to kick off with a fireside chat so to kind of walk through your entire portfolio and get the latest and the greatest. Maybe it will be great to kind of get a recap of the latest development.

December has been a particularly busy time for you across a number of assets in your portfolio. So maybe, Jay, maybe you can kick us off with just what we got in 2023. What were the key milestone they achieved back last year, specifically around December? And as we look into 2024, what are the key goals across each of the programs?

Okay. Well, thanks for inviting us here, Brian, and it's a pleasure to join everyone. 2023 was a very productive year for BioAtla, as Brian just alluded. And in fact, let me highlight 3 key accomplishments. One is that we had very exciting CTLA-4 data, both from efficacy and a safety standpoint, which is a very significant need out there in the marketplace, and that's been illustrated both by obtaining partial and complete responses with our initial readout there. Number two, we have 33% partial responses in a very-difficult-to-treat AXL-positive fourth line non-small cell lung cancer patients. And number three, we've had durable, complete and partial responses in ROR2 in both melanoma and head and neck cancer. In addition, last year, we prioritized our portfolio, which allows us to deliver our -- on near-term key data sets and value inflection points later on this year. Our current cash runway takes us into the second half of 2025 and we would expect to see some of those impacts of that prioritizations really in the second quarter this year. But onward to what's happening in '24, more specifically, we will see readouts -- additional readouts of CTLA-4 Phase II readouts in the first and second half of this year as well as additional exploration of higher doses and that will be completed in the first half. We also expect final readouts on the target-agnostic data for both AXL and ROR2 ADC assets for both of these CAB antibodies, and those will both occur in the first half of this year. And this data that will be coming out will allow us to file a registrational study in either AXL and/or CTLA-4 either independently or together with partners.

Great. So we can do it sequentially. Maybe we'll start off with CTLA-4. That's your earlier program, but we've gotten early signs of efficacy here. Just maybe just to remind me here, your CTLA-4 approach, how does that differ from what we are seeing with the currently approved agents? And the dosing work that you have done, can you just kind of tell us how that compares to the dosing that we've seen with the currently approved CTLA-4 agents?

Eric, do you want to take that?

Sure. I'm happy to take that. Thank you for the question. We're super encouraged with what we're seeing with Jay just mentioning, we had a complete response that's confirmed in a patient with metastatic cervical cancer and then a patient with metastatic gastric cancer now in a confirmed partial response. Your question is about the currently approved agents. Tremelimumab, can be given as a single dose, Ipilimumab can be given at 1 mg per kg every 6 weeks. Sometimes there's a dose limitation at the 3 mg per kg dose level. And with 25 years of experience with CTLA-4 blockade, investigators love what they're seeing in long-term survival benefits from randomized trials, but they're very hesitant to use higher doses and that's the real challenge. So what we've done is we've recently cleared the 5-milligram per kilogram dose with acceptable tolerability and now we're testing 10 milligrams per kilogram.

And I'd add that's in combination with PD-1. So it's, I think, a significant safety buyer.

So when you think about the 10 mg per kg dose, how does that compare to the PK/PD profile that you're seeing and how comfortable are you that you can potentially dose higher? And assuming that you can -- dosing higher means that you can translate to a better efficacy?

Exactly. That's our thesis. Is dosing higher would translate to better efficacy? And we're quite confident that the 10-milligram per kilogram dose will be acceptably tolerated. And we'd like to be able to continue dosing. That's an important point to make is that often with the currently approved drugs, investigators need to stop dosing because of immune-related adverse events, and we'd like to continue that exposure over time. And our PK findings are really normal and expected.

And maybe just on the combination approach, right, you see -- how do you view it as some monotherapy agents in terms of potential? And then as you think about the optimal combination for dosage for -- to combine it with the nivo for PD-1, do you have a sense of what the target dose is so that you can build on what you already know about the agent?

Yes. Great question. We believe fundamentally that the highest acceptably tolerated dose is the dose we'd like to use in combination. We'd like to use it both as monotherapy and in combination with PD-1 blockade.

And then overall, how do you think about the market that you can penetrate with this asset? Given that doctors that are in the space, they are already -- I mean they know a PD-1, CTLA-4 is really in their playbook already, right? So how do you view your CTLA-4 CAB, right, in the overall market? And when you think about this asset specifically too, do you -- when, let's say, you go out there, you're a sales rep, let's say, 3, 5 years on the line, are they going to pitch this asset, 3071 specifically, is this going to be a pitch for better safety profile or better efficacy?

Yes, I can take that. And I would say both. We view based on our Phase I data that our CAB CTLA-4 has the potential to be a best-in-class CTLA-4 and also holds the promise to be used as opt-in as a PD-1. Our overarching thesis is that the CAB technology enables CTLA-4 blockade in the tumor microenvironment which results in clinical benefit consistent with or even better than the approved agents and also enables the drug to be given for a longer period of time and thus, enables the patient to really experience the full clinical benefit of the therapy. We already have seen compelling profile at the current dose in combination with PD-1. And we're studying higher doses and excited to see what those results will look like, both as a monotherapy and in combination with the PD-1.

So just going back to the December update. You -- aside from the efficacy, which, Jay, you kind of mentioned in your -- the first question that I asked. You laid out 2 specific path for -- right, for this -- for the Phase II. One is for treatment refractory and then the other one is for treatment naive. How are you thinking about just the pluses and minuses to go into the later stage? Because I mean, there's certainly risk going for one or the other, and there is a higher bar to go into the treatment-naive setting. So what are you considering? What are the key factors that would make you want to go one way or the other?

Sure. I'm happy to step into that. So again, both, we're looking at both the treatment naive and the patients that are treatment refractory. And we're really allowing our data to guide us here. So we're exploring not only higher exposures of CTLA-4, but we're also exploring the CTLA-4 monotherapy and in combination in treatment refractory tumors. We'll have the data guide us there for next steps. And very importantly, we're also studying patients that have newly diagnosed metastatic melanoma and metastatic non-small cell lung cancer to obtain data there to guide us for that next steps for the randomized pivotal studies.

So how should we think about -- what we should -- what's the bar to achieve, right? And what do you need to see to get confident around the individual settings? And maybe can you kind of frame how we should think about -- what's the green light a go/no-go decision, right? I mean, when you look at the sarcoma work that you have done, it's very clear cut, right? So as you think about this program, we're just still relatively early stage. So what is the bar here to move into the individual settings?

Sure. I think the bar is to obviously be meaningfully better than the marketed CTLA-4 antibodies, both in terms of safety and efficacy and the ability to deliver it over a longer period of time. Ultimately, the bar in a randomized registration study would likely be progression-free survival in a randomized setting.

Maybe turning to AXL-3011. Let me touch on the first indication first in UPS. What's the latest progress in the ongoing study? Maybe a quick update on just where -- how we should think about the study and also the near-term milestones?

So there's -- first, there's the UPS study and then there's a non-small cell lung cancer study. So the UPS we updated in November that we had focused on one of the 2 doses we were taking forward in the first 40 patients because we focus on a dose now, we've narrowed that to needing 20 patients. We've also are looking at target-agnostic patients outside of that study just to see if there would be another way to increase the pace. So we are going to update the pace of that study and where we're headed with that in the first half, potentially in our fourth quarter earnings call at the end of March, that would be a hope that we can do that and have enough insight on it, but that's kind of where that's at, at the moment. UPS, well, we're going to update on the pace of the UPS and how that goes forward. Whether we'll have all of the data on the target-agnostic, I don't know because I don't see that coming into play until the second portion of that UPS study because the initial portion is 20, the second portion was 40. So it's something that would be brought to bear if it made sense based on the data. And then, of course, with the non-small cell lung cancer data, we are in the midst of -- we have almost completed enrolling the target-agnostic data set, at least at the 2Q 3W level and will subsequently finish the every-other-week dosing. So long story short, both of those are going to read out target-agnostic in the first half. So we'll have completed that entire analysis, and we're -- we believe that we will be able to go forward in non-small cell lung cancer in target-agnostic just like we already have demonstrated at ROR2 and are moving forward target-agnostic there.

So this is a good segue into that specific angle, right? So how confident are you that you can get into the target-agnostic population? And maybe you can also talk about just your work to kind of make sure that this is a case, not -- and in NSCLC and also potentially in UPS as well.

Yes. I will just start off by saying that when we move to target-agnostic for ROR2, and the reason was, and I'll just back up for a second, we were using a biomarker where we're getting 10% positivity rate for ROR2, but it's immunohistochemical assay and it's relatively insensitive. So the level you need for that biomarker is much higher than you need for the action of the drug. So when we move to target-agnostic, we immediately got 2 PRs at a TmPS equal 0 based on that arbitrary detection of that asset. So you realize the companion diagnostic isn't contributing. It's slowing down the process. You're not able to help as many patients. So we moved that. We also saw, likewise, in head and neck cancer, TmPS 0 there. So then when you come back to AXL, which I think is more along your lines of the question, we've seen responses at 100% TmPS score. We've seen responses at 0% TmPS score -- excuse me, at 1%. So it's clear that you get responses across that entire range. So basically, what we're doing is simply testing some additional patients at TmPS 0 and demonstrating some clinical benefit, and that will be the green light that to move this lung study to the registrational trial. And so that will read out in the first half. And we feel like it's very high probability.

Got it. So additional target-agnostic patient data in TmPS 0.

Just showing the clinical benefit and move from there.

And then move into figuring out the next pivotal study.

And by the way, I just should add that I think in general, the vast majority of ADCs that are out there also are target-agnostic. And I think it just simply reflects on the fact that these drugs are very potent and they need less of the receptor on the cancer cell to get an effect than what these biomarkers show. And I think on top of that, with the CABs, you're able to really push dose and keep patients on longer. So it's a win-win scenario to move this direction.

So maybe going back to UPS. I know that we're kind of jumping back and forth. But so just going back to UPS. How do you think about the market opportunity here? And this is a small indication. And so you can definitely go on it commercially by yourself versus and also partnership as well. So what's the latest thoughts around potential partnership for AXL specifically for UPS? I know that you're -- that there is potential partnership discussion currently ongoing, but how do you think about that specific UPS piece in a broader context of -- since it is your lead program in a late stage?

Yes. I'll first start with sort of how we're viewing the opportunities. So UPS represents one of the largest subtypes of sarcoma. And there is a significant unmet need because of the limited therapeutic options. And so when we think about the market and the potential here, we believe that our CAB-AXL ADC can achieve peak of over $0.5 billion worldwide. And with the relatively small commercial infrastructure, as you noted, Brian, and so making it an attractive indication for us to potentially commercialize ourselves, just to comment on the partnering aspect of the question, it's very difficult to partner an asset by indication. And so when we look for a potential strategic collaboration for our AXL ADC, we would be focused on the asset as a whole, partnering in both UPS and non-small cell lung.

Great. And within third line plus non-small cell, how do you think about the bar in terms of the response profile and how should we think of the regulatory path moving forward just based on your interactions with the regulatory agency?

Yes. Thank you for the question. And as we reported on our day with Dr. Carl Gay, we spoke about our regulatory interactions that charted 2 paths forward potentially. And regarding the third line plus, we received agreement from the FDA that an approval would be based on demonstrating improved overall survival in a blinded randomized study versus single-agent chemotherapy. And that was really a gratifying response that enables us both to consider a second-line indication against docetaxel or the third line indication that we just described.

Great. And then in the overall potential opportunity within NSCLC, how should we think about the market opportunity here? Can you just kind of help us conceptualize the potential commercial opportunity in the key markets?

Sure. So if you look at specifically and extrapolate the population from our Phase II study, right, so PD-1 failure, EGFR wild-type and you extract that population to estimate market potential. Both the second and the third line each represent large billion-dollar-plus opportunities worldwide for us. So both second line and third line would be a substantial commercial opportunity for BioAtla.

Maybe switching gear to ROR2, 3021, there are multiple paths here for ROR2. Where are you in ROR2? Maybe just a quick recap on the indications that you're working on? And what could be the next near-term inflection points in terms of data flow?

Sure. So the key indications that we're looking at are patients that have treatment refractory metastatic melanoma. And we're also looking at treatment refractory head and neck cancer. And importantly, a patient who's had treatment refractory metastatic melanoma continues in a complete response that's lasted over 2 years, and we now have announced several additional patients that have achieved partial responses, one lasting quite a long time as well. And so these studies are now fully enrolled, and we anticipate readouts of both of the data sets in the first half of this year for both head and neck and the melanoma.

Okay. Can you talk about just the opportunities for you with ROR2 and within melanoma and SCCHN as well too? How should we -- is this -- are these big markets for you? And are they commercially attractive to move forward?

Yes. I mean there is a profound unmet need in treatment refractory melanoma as well as treatment refractory head and neck cancer. And so we believe that an effective off-the-shelf ADC with a manageable tolerability profile would have considerable commercial potential in both treatment refractory melanoma as well as in treatment refractory head and neck cancer.

And maybe going back to Eric to the readout that you have in both of the lead indications, right, how should we think about the signal that you're looking for to make sure that these indications are good to go? These are [ derisk ] indications that you can move forward with? So how should we think about the response that you're looking for in the first half?

Sure. In refractory melanoma and head and neck cancer and ROR are an overall response rate of about 25% to 30% with an antibody drug conjugate, I think, is above the bar.

And what about for SCCHN as well?

It might be a little bit lower, but in that range.

Okay. And how many patients could we potentially see in the upcoming readout?

I'll just say that we do have a corporate deck on our website that gives this and the goals for 2024 that just went up this week and -- but we're estimating about 25 patients in melanoma and 20 patients in head and neck or ROR2.

I mean maybe moving on to EpCAM. How do you think about the potential for the Phase I? And maybe just also kind of backtrack a little bit as to talk about the mechanism of action too. We've seen some signals with EpCAM before. Maybe just kind of backtrack as to your EpCAM CD3 approach and then we can talk about the potential of this Phase I study.

Maybe Eric will share this one with me, and I'll just start off by saying this is a dual-CAB antibody. So it has a CAB on the T-cell recruiting CD3 arm. It also has a CAB on the tumor-targeting arm, which is the EpCAM. This is a target that is on a tremendous number of cancers and almost -- can consider it a pan-cancer type drug, which I'd almost consider CTLA-4 in a similar category. But -- because it's also on normal cells, you really need that CAB selectivity that's driven by the pH selectivity that's naturally occurring with cancer cells. And so in the preclinical work, very exciting, over 100-fold improvement in the therapeutic index, which is really unheard of. And just to frame this, I think in the old days, if you saw a two to threefold improvement in therapeutic index, you'd be quite thrilled to see 100-fold is unprecedented. And so I think that gives you a little sense maybe of the molecule itself and we're doing a dose escalation and maybe Eric, I'll allow you to add to that.

Sure. I'm happy to, Jay. So several years ago, Amgen tested an agent called solitomab. It's an EpCAM CD3 bispecific T-cell engager that's obviously not conditionally binding. They -- through a Phase I study, they ran into gastrointestinal toxicity, hepatic transaminase elevations. But there were some inklings of clinical benefit in that study. And they really, really tried to push the dose, but because of those toxicities, were not able to go forward. So our strategy is with the conditional binding arms both as Jay had mentioned, on the EpCAM sign and the CD3 that we're really further amplifying the therapeutic window and we see multiple other sponsors interested in EpCAM as well. So it's so widely expressed on adenocarcinomas and we're very enthusiastic. We have a committed set of investigators that are actively enrolling patients on that trial.

And we anticipate finishing the Phase I this year and reporting out on it and hopeful that we can advance it into Phase II later in the year.

Okay. And then how should we think about the bar here in adenocarcinoma for the Phase I and if -- and just to remind me, is this a dose escalation study for Phase I? And how many doses are you testing?

Yes. And as Jay mentioned earlier, we have a slide in our corporate deck that is quite detailed on illustrating our dose escalation, the dosing groups, an accelerated titration pathway as well as the potential if we needed to go to it to give a prime dose. We really built all of that into the protocol. And you asked about the bar, and it's really an interesting question. So if you think about it, this is all adenocarcinoma. So all cancers that -- from glandular tissue, which would include all the gastrointestinal malignancies, breast, prostate, lung, others.

Colorectal.

Quite a few. So it's hard to really establish a bar, but in treatment refractory setting, if we were to see multiple confirmed responses per RECIST, I think that would give us indication that we have a very promising agent. And then we would look to the market potential of these different opportunities, the competition and then guide for which indication we would pursue.

Okay. And we did clear the second dose on that dose escalation chart. You'll see in the corporate deck and it's labeled cleared, so you'll know exactly where we're at.

Any early thoughts about the safety?

So far, so good, but I would say that it seems like it's going to be potent. So we're going to -- and so far so good on the safety. So we'll keep watching.

And just to kind of go back to your point about the multiple indications within this broad indication. Can you talk about just what is the lowest-hanging fruit here just based on what we had seen in the past from other EpCAM CD3 approach? How do you think about the lowest subset of indications to grab as we look into potential updates sometime this year?

Well, I'll just say the colorectal cancer is certainly one of the ones we talk about. I would stop short of saying that's a decision but I just want to point -- highlight that one area. It's a huge unmet need, and this is a drug that could really make some impact there. So anything else you guys like?

Yes. I was just going to say, of course, we'll let the data help to guide our decision in terms of what to pursue. But I was going to also reiterate that colorectal cancer certainly is a significant unmet need and one with, I think, very large potential.

Maybe Jay, so maybe just taking a step back now. Now I think we did a discussion on each of your assets, maybe taking a step back on to your entire platform, right, we've seen a number of ADC deals in the last couple of months. And it's been an interesting thought that how different are these ADC platforms overall. So in your approach, your CAB-ADC approach, can you just talk about just how different is your CAB approach and how potentially applicable to other indications -- to a set of indications compared to other ADCs companies that we have seen out there?

Yes. So the CAB platform can work in any cancer indication, across the board. There's no limitation from that standpoint. And I would also say that CABs can improve any ADC system because it really eliminates on target binding. So what does that mean? That means if there's a receptor on your normal cells where you don't want the ADC to attack, are using the CAB technology, it won't go after those receptors on normal cells. They will only go after those cancer cells that have that receptor. And that's based on this pH mechanism that we developed. We identified and then further developed the CAB antibodies, too. So it's very interesting. So in our initial 2 CABs, we're using MMAE and peptide linker, but as we have newer generations, we've also moved to the sugar linker downstream and expect an IND in the first half of this year for that. But I have to say we're mostly focused on our clinical assets at the moment for obvious reasons. But nonetheless, I think the CAB technology brings to bear a therapeutic index improvement that's really quite difficult to attain with any other ADC technology that I'm aware of. I mean, the closest you might say is if somebody tries to target 2 receptors on the same cancer, so they're trying to get there. But this is a very clean play and doesn't require that dual receptor requirement, but the technology would actually improve that system as well.

So I think it was a good segue getting into your -- the partnership question, right? So when -- I think late last year, we talked about your interest in potentially partnering of 1 or 2 of the assets. What is the specific characteristic of these partnership interactions that you're looking for to make sure that the baby that you have grown is -- are in the right hands?

Yes. I'd just start off by saying that with the recent as well as the emerging data, we think that this is the optimal time for BioAtla to really seek strategic collaborations. And we're looking for partners who can -- who are able to support robust, pivotal clinical development paths. And when we look at CTLA-4 specifically, there are so many indications that can be pursued with this particular asset. So looking for -- I think the ideal partner would be a larger pharmaceutical company, who has a PD-1 on market or a PD-1 in late-stage clinical development. I would also say that partners that are able to, like I said, support pivotal development paths that will actually expand the market potential and help us maximize the value of these assets, given the broad applicability of these ADCs and CTLA-4.

So let's say, we have the same conversation related to portfolio, let's say, 2 years from now, 2026 at this conference, what do you think we'll be looking for? How do you think your pipeline chart is going to look like? And I think this gets back to your question of what do you want to keep? What do you want to partner on?

Yes. I think first off, we -- I talk a fair bit about technology because I know the power of it. But really, what is our mission? Our mission is to bring life-saving cures to cancer patients. And what I'm very encouraged about is that -- and excited about actually is we're already seeing durable, complete responses and partial responses in patients. So that's fundamental. And we're seeing it in each of our three Phase II clinical assets, all of them. And so at a minimum of a couple of years, let's call it, 2026 like you said, Brian, I'd expect to see 2 assets in late-stage Phase III development in collaboration with partners preparing for commercialization. In addition, we would like to advance at least one of our existing clinical assets into Phase III clinical development, where we can develop it on our own. And then in addition, of course, we would like to out-license multiple preclinical assets with partners as well, so we can lever -- further lever our platform.

Great. In terms of just the -- I guess, -- just to kind of wrap up what we discussed today, can you talk about what we could expect beyond the set of assets that you have for clinical work at this stuff where your work that you have done, any -- can you give us some insights on what -- potentially what you're looking at? And then just to kind of wrap up is what are the near-term data catalysts for the rest of '24?

Well, I'm not sure I'll doing the near-term data catalyst, but I think in terms of preclinical assets, and obviously, we did a portfolio prioritization to make sure that we can extend the runway into the second half of '25. So we really hit these key milestones. But I think that we have a blend of CAB ADCs and CAB T-cell engagers as our primary group of preclinical compounds and a next-generation ADC-CAB system will be out. And so when we look at how we're reviewing this portfolio, we're really looking for partners in that area that can really take some of these novel assets and push them forward. So -- but the other part of the question, I'll let Sheri touch on.

Yes, Sheri, data flow for the rest of the 2024. What should we look for?

Yes, absolutely. So 2024 is a very exciting year for BioAtla. There are a couple of important catalysts that I'll highlight and leave you with. The first is safety and efficacy data of our CAB CTLA-4 at higher doses, potentially even up to 14.2 milligrams per kilogram as well as Phase II data in combination with a PD-1 in refractory solid tumors. That's the first one. The second one are those data sets in target-agnostic populations for both our CAB-AXL ADC and our CAB-ROR2 ADC. The third is initiation of potentially registrational study with either our CAB-AXL ADC in non-small cell lung cancer and/or our CTLA-4 in a refractory tumor. And finally, completion of a strategic collaboration transaction for our CAB CTLA-4 and/or one of our CAB ADCs.

Great. Yes, go ahead.

And I'll just say, Brian, thank you for having us here today. It's been an exciting year, and we're focused on execution and delivering these key value inflection points throughout the year.

Great. It's always a pleasure to have you. Thanks for joining us and looking forward to seeing the number of data catalysts that you have for the rest of the year.

Thank you.

Thank you.

Thank you.