C4 Therapeutics, Inc. (CCCC) Earnings Call Transcript & Summary

Welcome to the third day of Cowen's 40 First Annual Healthcare Conference. My name is Laura Christianson, and I'm a Biotech Equity Research Vice President at Cowen. I'm here with CEO of C4 therapeutics, Andrew Hirsch. C4 is developing targeted protein degraders beginning in oncology. We'll have a brief presentation, and at any time, please feel good typing questions into the web browser, and we may have time to answer them at the end. With that, I will turn it over to Andrew. Great.

Thank you, Laura, and thank you all for joining us this morning, and thanks to Cowen for inviting us to the conference. Before I begin, I'll be making forward-looking statements as part of my presentation today, and you can see our legal disclaimer on this matter here. As Laura mentioned at C4, we're focused on making medicines that use a novel approach called targeted protein degradation. Which we believe have the potential to transform the treatment of disease. For most of our industry's history, we've been focused on making small molecule medicines that actually inhibit disease-causing proteins. And that's been successful and led to some really transformative medicines. But it's been limited in really two ways. And you can see that here on this slide. First, really, we've been only able to drug about 15% of the human protium with small molecule inhibitors, where we can find ways to bind to active sites that inhibit the activity. And then second, when we do that, selective pressure can result in resistant mutations that render these inhibitors ineffective. And you can see that here in the middle panel, where we have an image of a melanoma patient who went on therapy and had a nice response at 15 weeks, but at 23 weeks, developed some resistance mutations. And so that really are 2 key limitations to how we've been able to sort of drug these targets in this space. We think targeted protein degradation can overcome these by harnessing the body's natural process for destroying disease-causing proteins and that overcomes a number of these limitations. Now despite these limitations, we've been able to -- and you can see here in the most recent statistic that I've been able to find. Small molecule oncology therapy has generated $63 billion in revenue despite the limitations. And actually, of that $63 million was actually approved targeted protein degrader, a series of them out there, the IMiDs, which may maybe you are familiar with. And by today's standards, they're relatively weak degraders. And so what's really exciting is that we have the potential to overcome these implementations of small molecule inhibitors, but also now that we have the tools and methods to design -- rationally designed highly potent degraders, we can really unlock this potential. And we think C4 is well positioned to become a leader in the space. We have a platform that we've developed and invested in over the past 5 years that has potential to design highly potent to degrader medicines. We have 4 lead programs that we expect to have in the clinic by the end of 2022, and I'll walk you through those later in the presentation. Behind that, we have 14 additional programs that are in earlier stages of preclinical development, both for our own pipeline as well as among the 3 partnerships that we have that have the potential to really expand our platform beyond what we could do on our own and have the potential to bring in some non-dilutive capital. Based on our recent IPO in October of last year, we have a very strong balance sheet with runway to the end of 2023 to execute against this plan. Now many of you are familiar with targeted protein degradation. But for those of you who aren't, I'm going to walk you through a little bit of how this works before we dive into our platform and our pipeline. So I mentioned earlier, the body has a natural process to destroy unwanted proteins. And that's highlighted here in this cartoon on this slide. And so here's an example where there's a misfolded protein that's in the cell. And what happens here in step one is when that happens, a protein called an E3 ligase is recruited and binds to that protein that needs to be destroyed. That binding gets -- results in tagging. That protein gets tagged by another protein called ubiquitin, and it happens multiple times, and that's shown here in bright green. Once that tagging is complete, the ligase releases the target for depredation and that makes its way to the proteins on where it's broken down into its component ammino acids for recycling for creation of another protein that the cell needs to make first cellular function. Now what targeted protein degradation does is we leverage that natural process and co opt it so that we can target ligases to destroy the disease-causing proteins that we direct it to. And I'll walk you through the steps here on this slide. So first, what happens is when we put a degrader medicine into -- dose a degrader metastatic, it gets into a cell. And the degrader medicine here is depicted in the green barbell. It attaches to the protein that we target it to be disrupted, that wants to be destroyed. That complex of target protein and degrader than encounters an E3 ligase. And that binds together with the E3 ligase forming what's called a Ternary complex. Then that Ternary complex acts just like you saw in the previous slide, where that gets ubiquinated and again, shown here in bright green and that happens multiple times. Once that's complete, there's a dissociation of this complex, much like in the natural process, the protein -- the TAG protein goes to the party zone for destruction. But what's really important and what's unique to degraders is this dissociation leaves the degrader unchanged. So that degrader can go back and start the cycle again. We call this the catalytic cycle. And that's incredibly important to how we design degraders and how degraders are optimized. A certain degrader can do this anywhere from 300 to 3,000 times per minute. And so our goal is to optimize that cycle, develop to graders that can do it more on the 3,000 end than the 300 and because that's where we think we have an advantage, right? You only get advantage over inhibitors or other mechanisms when you have maximally efficient degraders. And so I'll talk about the 4 key advantages of degraders over inhibitor, traditional inhibitors. So the first is improved potency. With an inhibitor, as many of you know, it requires one-to-one binding and high exposure to overcome the natural on off rate to be able to inhibit the activity of that protein. Because of the catalytic cycle I just mentioned, one degrader molecule can actually destroy multiple disease-causing proteins. And so that really drives improved potency. The only real escape mechanism now for that protein is protein resynthesis. And so this results in what we think are deeper and more durable effects. The second is fast responses. We think the quicker and you can degrade a protein that is causing a disease, the better for efficacy and enhanced cellular responses. And we see when we degrade these disease-causing proteins very quickly, that can lead to broader pharmacological effects in the cell that we're trying to impact. Third, there's high selectivity. So in the steps of the catalytic cycle I just walked you through, each of those acts as a filter. So our degrader may bind to a target we don't want to inhibit, but then that degrade or may not form a ternary complex, which is required for ubiquination. And then even if it does form a ternary complex, then the third step, right, that it may not actually be optimally ubiquinated. And so those filters act for selectivity. And then that's amplified by our drug discovery efforts where we design degraders that are specific for the target of interest. And as you'll see, both of our 2 most advanced programs demonstrate singular selectivity for their target. And then the fourth, and this is really what opens the target landscape beyond the 15% of the protium that I mentioned that our inhibitors are limited to, is because we're not trying to have high affinity binder to inhibit activity. What we're really trying to do is just connect that disease-causing protein with a ligase to be tagged for destruction. We really just need a hook. We don't need a high-potency hook. We need to be able to just bring that target protein into the right physical confirmation with the ligase in order for it to be destroyed. And that really does open up the target landscape beyond what can be done with inhibitors. Again, I'll reiterate, though, all these benefits, it's important to note, are only available with degraders that are maximally efficient in completing the catalytic cycle. So we've invested in a platform to do just that, and I'll walk through a number of key elements that we've designed that are important for how we think about and how we design the graders. So there's 4. The first -- and I'll walk through these quickly, and then I have a go through a slide on each. First is our ability to develop both monoDAC and BiDAC degraders. In a second, I'll explain the difference, but that gives us the flexibility to address different targets with a tailored approach that's sort of custom suited for that target protein. The second, as I mentioned earlier, is our focus on catalytic efficiency. Again, our data suggests that optimization of that catalytic process really results in the maximal efficacy out of degraders. And then third, our ability to design, analyze and predict a greater performance can result in really rapid delivery of potent candidates and makes an efficient drug discovery process. And then last, we've made an investment in Cereblon as our E3 ligase of choice for a number of reasons in terms of it's clinically validated as well as being well distributed. So turning to what MonoDACs and BiDACs -- and I'll start focusing on the left side of the panel here. So a monoDAC works slightly differently from the process I described earlier. It's a bit of a simpler molecule. And the way this one works is it binds to the E3 ligase and changes its surface such that it attracts the target of interest that we want to destroy. Whereas a BiDAC is really -- and monoDACs, they're also known as molecular glues in an or generic term. BiDACs or hetero bifunctional degraders, shown here on the right are the green barbell, where, on the one hand, you have a binding mold to a ligase. And on the other side, you have a ligand that binds to the target of interest. And so those can be a bit more engineered. And where we have chemistry that we think is suitable for binding to the target. This is an approach we can take as well as when there's a hook on the target that we think access. So this gives our chemists real flexibility as we think about which proteins we want to [indiscernible]. We want a drug and then gives us the tools to be able to drug them based on the structure of that protein. The second point on catalytic activity is demonstrated here on this slide. And so on the left panel, you can see 2 degrader compounds. The first here to degrader A and B, this is at a one certain given time point across multiple doses. And you can see degrader A has increased catalytic at each dose in terms of target knockdown. Then when we move to the in vivo model on the right, you can see that, that increased catalytic activity in the Blue dots and the blue line, which is the predicted model, results in much greater target knockdown. And so that's what we mean by the most cally efficient results in the most maximal target knockdown. On our platform, I mentioned the tools we've put in place. So we've made investment in some computational tools and methods to let us rationally design degraders that really can optimize this catalytic activity. We create volumes of high quality data, which we then analyze based on fundamental enzymology principles. That gives us a catalytic fingerprint of our degraders, which we can then use into our models to predict both the depth and duration of degradation at any dose. And it results in our ability to efficiently and rapidly move our candidates forward in the drug discovery process. And then lastly, and I think not minimally, but importantly, we made a decision early on to focus on cereblon as our ligase of choice. As I mentioned, it's clinically validated. It's the ligase used by the IMiD medicines. And it's also expressed in all tissues in an all cellular compartments, which really gives us wide latitude in target selection. We've made an investment in a broad toolkit of 14 distinct chemical series of cereblon binders, and that is important because those binders enable us to really tweak the optimization characteristics and the SAR of our degraders. What's important is exit trajectory and small changes in that and other features of these cereblon binders really can drive changes in the catalytic efficiency of the compound. And so that investment really lets us optimize our degraders as we move through the drug discovery process. So that platform has led to quite a robust pipeline. Our 4 most advanced programs that you see here, we expect to have in the clinic by the end of 2022. And then we have a number of other programs internal to our pipeline as well as 9 additional undisclosed programs working with collaborators that are all in the discovery stage. Our 3 collaborators are really important to how we've built the company. Roche, was sort of the seminal collaboration partner, which we signed very early on, and that continues until we complete 6 programs, and that focus is in oncology. Calico, we signed year after that, and that's a 5-year program, focusing on their areas of focus, sort of treating diseases of aging as well as cancer. And then Biogen is our most recent collaboration, and that's exciting because that brings our platform into neurological conditions with up to 5 total targets. So really expanding the platform beyond what we could do on our own. So let me quickly turn to our 4 pipeline programs, and I'll start with CFT7455, which is our monoDAC targeting IKZF1/3. So IKZF1/3, these are the targets, the depletion of these targets, it's well known, they kill myeloma cells, and there's the same mechanism in lymphoma. These are the targets of the approved image medicines. And we think there's a real opportunity here because, as I mentioned earlier, the approved imids weren't rationally designed degraders. And so we've been able to increase the potency through our platform to develop what we think are the most potent imids. We know that in myeloma, patients progress on imid therapy. And while imids are approved in non-Hodgkin's lymphoma, we know that they're not widely used, given their limited efficacy. The data on this slide is what's really got us excited about moving this into the clinic. And so this is in vivo data in the H 929 myeloma model, which is the workhorse of myeloma research. And what you can see on the left panel here are 2 things. In red, pomalidomide, which is dosed here at 3,000 micrograms per kilogram, which is the clinically relevant dose, really has limited efficacy in this model. And that's why typically, these imids are dosed with dexamethasone to enhance their activity. But then when you look at the data we have here with CFT7455 and compare that to BMS' most advanced imid in clinical development, CC-92480. You can see that we achieved similar efficacy at 1/100th dose. So in the light blue and dark green, you can see 3 micrograms for our medicine and then 300 micrograms for the Celgene compound. And the same at 10 micrograms and 1,000 micrograms. But when we go a little higher to 30 micrograms per kilogram, with CFT7455 in the dark blue at the bottom, you can see real frank tumor regression, which is not seen in these models with imid therapies. And then when you go even higher on the right panel, looking at 100 micrograms per kilogram -- so this is the same experiment. What you can see is really frank tumor regression and complete durable complete responses, well past dosing after the 21-day dosing period. This is plotted here on a per mouse basis. And so you can see that 5 of the 6 animals continue to remain in remission outside of 50 days, which is quite an impressive durable treatment. Looking at models of pom resistance, this is an RPMI-8226 model. You can see similar efficacy in the left panel that you saw in the 929 model, where you see pomalidomide is relatively ineffective in this molecule almost being no different than vehicle and seeing the same dose response efficacy with CFT7455. In the right panel, in this case, what we did was these animals were growing -- the tumors were grown dosing with pomalidomide. And you can see no efficacy there. And then at day 18, they were switched to CFT7455 at 30 micrograms per kilogram. And that resulted in frank tumor regression. And so this really demonstrates the potential we see for this compound, and we're very excited to begin our Phase I/II clinical study with this program. We were pleased that earlier in the year in January. We got the Study May Proceed notice from FDA, and our team is now actively working on-site and study start-up, and we expect to start that sometime in the first half of this year. You can see this trial design really accomplishes 3 things. It allows us to initially dose escalate in a combined pooled population of myeloma and NHL patients, but then quickly separate out and get discrete doses in both myeloma as well as non-Hodgkin's lymphoma cohorts as it's well-known that these patients have different sensitivities to immaterial. And so we want to find the optimal dose for each patient population. The other thing we're doing is investigating 7455, both with dexamethasone, which is how standard Imids are treat -- are used, but also as a monotherapy. We think the efficacy we've seen in our preclinical models may allow us to have efficacy and utility in myeloma without dexamethasone, which we think would be a huge advantage to patients and physicians and their families who really don't like the side effects of dexamethasone. So we're very excited to get this trial started, and we look forward to updating you on its progress. Turning to our next program, our BRD9 degrader, CFT8634. This is a target many may not be familiar with. BRD9 is a member of the BAF complex, which is responsible for chromatin remodeling. And there are specific mutations with which to drive specific disease. So in the case of synovial sarcoma, that's -- there's a translocation called SS18-SSX, which creates a unique dependence on BRD9 where healthy cells don't have the same dependence. So this is a synthetic lethal approach. And what's interesting here is that the oncogenicity of BRD9 depends on sub domains that can't be addressed by traditional inhibitors. So this is an example of an undruggable target where inhibitors won't work and the degrader approach can. There's also a high unmet need. There's very limited benefit for treatments here for metastatic or advanced synovial sarcoma with only really an 18-month overall survival in a 7-month PFS. So we think there's an opportunity with a single-arm study to get accelerated approval. The graphic here on this slide just articulates the mechanistic rationale that I just talked about. If you look here on the left panel and the cartoon, an inhibitor drug really only inhibiting the bromodomain of BRD9 is not really going to be effective because the oncogenicity is driven by others, such as the duff domain here. Whereas with a protein degrader and we destroy the whole protein that really shuts down oncogenic transcription. And result in efficacy. And you can see that here in our preclinical studies, both in the Yamato xenograft model as well as a PDX model, where you can see a clear dose response in the Yamato xenograft model on the left. And then really, when we look at doses, similar doses across QD, BID and TID, looking at a nice tumor regression here. We expect to have an IND submission for this program in the second half of this year and have this program in the clinic in 2022. Turning now to our BRAF program. This is a program where it's partnered with Roche, and it's designed to overcome the liabilities that we have for the approved BRAF inhibitors. It's known that inhibition of BRAF causes paradoxical RAF activation, which results in diminished efficacy to these inhibitors as well as we know that BRAF resistance occurs over time and that can capitalize on this paradoxical activation, such as BRAF amplification or BRAF splice variants. We know that these mutations occur in about 15% of all cancers and about 70% to 90% of those mutations are the V600e, which is the target that we go after. If you look here on the top panel, you can see an inhibitor approach will inhibit a BRAF V600e. But because of this paradoxical activation, a wild-type does not shut down the signaling. Whereas when we apply a degrader approach and destroy the whole protein, that prevents dimerization and avoids this paradoxical activation. And so we're excited to move this program forward. You can see some of our preclinical data here that on the left panel, comparing this to encorafenib, you can see that both degrader A to different degraders lead to much improved efficacy over encorafenib at the clinically relevant dose. And then in the right panel, we're showing a similar model, but looking at comparing it to debrafinib, and you can see much improved, more durable efficacy than what you see here with debrafinib. This program is currently in late lead optimization and IND-enabling studies and for 2021 this year with moving this program into the clinic in 2022. Our last, sort of, most advanced program is our RET degrader. Very similar approach to the BRAF in the sense that we'll be addressing all the resistance mutations that develop with frontline RET inhibitors. So as many of you know, RET is a receptor tyrosine kinase, and it plays an important role in development but can cause cancer when it's mutated. We have really 2 relatively new medicines on the market that really have nice efficacy. But we do know that resistance develops when we have to the improved RET inhibitors as new resistance mutations occur, and we don't really have any targeted therapy for these resistance mutations after the first-line treatment. And so you can see this here again in this image on the left panel of the slide, where on the top panel and inhibitor will limit some signaling and limit selling growth. But as secondary mutations occur, signaling returns and that leads to loss of efficacy. And so we actually think a degrader can really do 2 things initially. We can in the second-line setting, we can address some of those resistance mutations by destroying the complex as opposed to just inhibiting it and stopping signaling that way. But also there are potentially an opportunity depending on what the data looks like in the clinic of moving into the front line and avoiding the mutations happening in the first place. This is some in vitro data that we've generated across all the common mutations. So if you look in the left panel, these are the drug naive driver translocation or mutations. And you can see that across both the 2 to approved RET inhibitors as well as a second-generation RET inhibitor, have nice efficacy across all of those as well as our RET degrader. When you look to the right panel, though, and this is where we see both the solvent front and gatekeeper mutation, our RET degrader is the only compound of the 4 that has activity across both of these. This program is also in late lead optimization, and we planned IND-enabling studies for 2021 after declaration of our development candidate. So when you put this all together, we really have a robust later stage pipeline of lead programs that have compelling opportunities to address really unmet need in multiple different patient populations. And importantly, where there's a strong rationale for a differentiation for degrader approach. Our milestones for 2021 really support our progress toward our goal to have all 4 of these in the clinic by the end of 2022. So obviously, the big one that we're all focused on right now is getting that Phase I/II study up and running with 7455. But right behind that, we'll be submitting an IND in the second half of the year for our BRD9 program and then really completing our lead optimization studies this year for the RAF and RET getting to DC and starting our IND-enabling studies with help of getting those programs to the clinic in 2022. So coming back, I think C4 is really well positioned at this point to develop -- become a leader in targeted protein degradation that we, again, can really transform patient care. Our platform, as I've walked you through, is really robust and has -- is designed to efficiently design highly potent degrader medicines. We're going to have 4 programs in the clinic by the end of 2022, and we have 14 programs coming behind that across both our own pipeline as well as across our partnerships. And then as I mentioned, we have a strong balance sheet to execute against the plan that I just walked you through. So I know we're close to the end of time. So let me just close by thanking the entire team at C4T for all of your incredible work to get us at this point, and I look forward to updating everyone on our progress over the course of the year. So Laura, I think -- I don't know if there are any questions, but if we have time, we can probably take a few.

Yes. Thank you for the presentation. So we do have one question that's been asked online. That is do degraders cross the blood-brain barrier, and in particular, for the IKZF and BRAF indications to those across the blood grade barrier?

Yes. It's a good question. It's something that I think the field -- has been an issue for the field. I think the quick answer is that we do -- they do. Certainly, I think the fact that we have a collaboration with Biogen and neurology or crossing the blood-brain barrier is an important factor in targeting some of the -- both the targets and indications of interest in that collaboration. They do. I think the one thing I should note is because of the increased potency and some of the differences between inhibitors, with the traditional inhibitor, you really want to look at highly brain penetrant, almost 1:1 brain plasma ratio. Because you need to have that volume of drug to inhibit the target because of the on off rate. You can get that PK pressure to have an on rate of -- to drive that inhibition. I think with degraders because of their potency, what we've seen at least some of our preclinical models, you actually don't need that much to get across that [indiscernible] efficacy. And hopefully, we'll be able to share that in the future on some of the programs that we've looked at, both in neurology, but also in cancer, where we know brain metastases are important in a number of these indications. And so that's a key feature for a drug to have the right profile to go after those diseases.

Perfect. I think that's all we have time for. I'm sure there's much more to discuss, but we'll have to leave it at that for now. Thank you so much for joining us, Andrew, and for sharing the story with us.

Great. Thanks for having us.