Crescent Biopharma, Inc. (CBIO) Earnings Call Transcript & Summary

Thank you. Thank you. Thank you. I think we're all ready to go. Well, great. Good evening. My name's Bob Klingenberger. I'm an Executive Director with Morgan Stanley. Thrilled to be here with the Crescent team. For any information regarding research disclaimers, please go to www.morganstanley/research disclaimers. And if any questions arise, please ask your Morgan Stanley representative. I'm thrilled, like I said, to be joined by the Crescent team. And I'll turn it maybe to Josh Brumm, Chief Executive Officer, to give a brief kind of introduction about the company and what you all have upcoming. And then we'll dive into some questions.

Great, and thank you for inviting us, Bob. It's great to be here. I'll give our own disclaimers, so we have to start with the forward-looking statements. So, if you have any questions on that, please see our SEC filings. Again, great to be here. We've got a lot of exciting things coming up for Crescent in the second half of this year, really heading into a lot of things, a wealth of data coming starting Q1 '27. For those of you who may not know, we started this company with the view that synergistic combinations in oncology is the way of the future. That's where the space is moving. We have a two-pronged approach to deliver on that thesis. First is we have a PD-1 bispecific CR-001. That's clinical-stage molecules in development now. And we're very excited about that being a potential next backbone for IO therapy in oncology. And then the other sleeve of our business and that strategy is, we have built our own portfolio of ADCs. The first one we've in-licensed from Kelun-Biotech in a partnership that Jonathan can talk about here in a little bit, called CR-003. It's an integrin beta-6 topo ADC. And then we've also had CR-002, which is a PD-L1 topo ADC, which will be in the clinic relatively soon. So by the end of this year, we'll have three programs in the clinical stage. We're driving towards significant data from the CR-001 program in Q1 2027, which we can talk about here in a little bit, as well as data from our partner Kelun-Biotech with CR-003 coming in Q1 2027.

Great. Well, you know, and Josh, I think it's really helpful to give kind of an overview, but, you know, maybe just to kind of dive in a little bit on CR-001. There's been a lot of interest in the PD-1/VEGF class, as you well noted, and kind of the evolution of external data. Could you just talk about maybe what you all have been encouraged by in terms of recent data sets kind of from some of the other folks in the class and then just a little bit around CR-001's kind of differentiation from your perspective?

Yeah, I mean, I think really to answer that question properly, you should just think about, again, the company was founded around specifically how we designed CR-001, our bispecific, to replicate the cooperative pharmacology of ivonescimab given some of the data they showed at the time in October 2024. And since that time, we've had, I think, with today's OS readout in Harmony 2, four Phase III studies that have read out successfully, across multiple indications now, even outside of lung with the BTC, KISO data that came out a couple weeks ago. And so really has, I think, cemented that this is a new class of drugs that has a real impact and clinical benefit for patients' lives. And I think we will leverage the way we designed our molecule to rapidly advance our clinical development strategy.

Yes. And a big debate in the class has been around geographic differences maybe in some of the data sets. Could you maybe just talk a little bit about how you're thinking about your existing data sets and maybe more specifically how that's, you know, informed a little bit of your initial development plans and how it might kind of going forward?

Yes, maybe what I'd like to do is maybe ask Ellie, our CMO, to talk a little bit about what's been generated geographically, and how we can learn from and have some advantages in the way we're starting our studies for CR-001 within the context as well.

Yeah, I think that's a really excellent question because the clinical development of most, most of all PD-1/VEGF inhibitors until we started global clinical development of CR-001 earlier this year, it all came from China, right? So even ivonescimab Phase III studies, have shown really successful data, superior OS and PFS compared to PD-1 containing regimens, but still people ask about, would Chinese data translate to global population? So there are two sets of key data set that I would like to point to. So, the first one is a more direct one. So, Harmony study, which is ivonescimab's study in EGFR-mutated non-small cell lung cancer patients. They've enrolled the Chinese patients as well as Western population, North American and European population. And once, they have met the follow-up period of the Chinese patients in Western population, we saw that the safety profile of PFS and OS benefit as well, sorry, efficacy profile of PFS and OS, as well as the safety profile between the two populations looked pretty comparable. So that's a direct data of our ivonescimab PD-1/VEGF. And also looking at the available Phase III studies, including immuno-oncology studies. Now we have a lot of data showing that PFS and OS data between Asian population or Chinese or non-Chinese population that are pretty matching well across multiple indications. So we have these two sets of data showing that likelihood of promising data we are seeing from Chinese population into the global population is pretty high. But having said that, how we are going to make the transition of a clinical development from what originally Ipsen started targeting for NMPA and then now they have to work with the FDA, EMA and then other health authority agencies. That execution can be challenging. And then we are seeing some of those challenges from some of its execution perspective. And then that applies to other agents as well, where their clinical development studied in China, whereas in our case, our first-in-human trial of CR-001, the asset, we started in United States, Europe, and South Korea. So the data that we are generating will answer that question head on. And of course, we also have our partner, Kelun-Biotech, generating safety and efficacy data of monotherapy as well as combination data in China as well. So our, you know, we are carefully studying what competitors are doing and then their, how they executed and how that affected the outcome of the studies. And while we are generating the global data of CR-001, we'll take all those learning points and then further optimize our development strategy.

And then execution as well. Yeah. And I think, and you sort of closed with the point on the ASCEND study, which is ongoing. And I know the initial data set is expected in the first quarter. Maybe just give us, to your point, it's going to answer a lot of these questions, but maybe just in terms of kind of what you can say about what you expect to disclose as part of that data set and maybe just give us a sense of where you all are focused as you both compare to competitor data, but also just to inform the ongoing development pathway, frankly.

Yes, we have three, what we call buckets of data, that are coming in 2027. I think to understand those three buckets, maybe I'll ask Jonathan McNeill, our President and COO, to talk a little bit about the Kelun-Biotech partnership that we have. And then Ellie can walk through those three different buckets and how we think about that data coming in 2027.

Sure, yes. So the Kelun-Biotech partnership came together because they share our vision of synergistic combinations being the next wave of oncology therapies for many solid tumors. And as many are well aware, Kelun-Biotech's a leading developer of ADCs globally. Their most advanced asset, sacituzumab tirumotecan (sac-TMT), subject to a multi-billion dollar collaboration with Merck, is currently in 17 registrational trials globally. But as Kelun-Biotech thought about the future, they were looking for a PD-1/VEGF to pair with their entire ADC portfolio, and they knew all the assets in China. But their Chief Medical Officer is PC at Akeso, a molecule that could replicate the cooperative pharmacology and safety profile by ivonescimab. And we at Crescent were looking for ADCs to add to our own portfolio, so there was an alignment of vision there, which led to our partnership. And it's structured as follows, which is that we in-licensed the integrin beta-6 topo ADC, which we call CR-003. Kelun-Biotech calls it SKB105, and we in-licensed the integrin beta-6 topo ADC, has the right to develop that, both as monotherapy and in combination with CR-001, everywhere outside of China. Kelun-Biotech has the right to develop our PD-1/VEGF, CR-001, in China, both as monotherapy and in combination with their full portfolio of ADCs. We get access to the data that Kelun-Biotech generates in any of those combo studies. So you can imagine, now that Kelun-Biotech has initiated their first of multiple ADC combo studies with sac-TMT and our PD-1/VEGF CR-001. The value this provides to both of us as we learn the potential of CR-001, both as monotherapy and as a next-gen IO backbone with multiple ADC combinations.

And so, Ellie, maybe you can touch on the data we're going to have with the ASCEND and the Kelun-Biotech partnership as well. Yes. And we have designed the compound intentionally to match the functionality of ivonescimab. And we try to match the structural aspect as well as the PK aspect of it. And we have demonstrated it in preclinical setting and published the data at SITC last year. And so now we are going into clinical development. We will answer the questions on how the clinical profile of CR-001 then looks like in comparison to ivonescimab, as well as other leading PD-1/VEGF inhibitors. So the global Phase I/II trial of ASCEND, which is the first-in-human study, we have eight different tumor types: non-small cell lung, and four indications in GI, including colorectal, gastric, hepatocellular carcinoma, biliary tract cancer, and three indications under Gyn Onc, ovarian, cervical, and endometrial. So with these eight tumor types, we started dose escalation in February of this year. And while we are doing dose escalation, as we are clearing each dose level, we then get open tumor type specific backfill cohorts at each dose level. So for example, after clearing 20 mcg/kg dose level, to open non-small cell lung cancer backfill, colorectal backfill, gastric backfill, or biliary backfill. And this can happen at each dose level while we are doing dose escalation. So you can imagine that this is a very efficient way of generating PK and pharmacodynamics data, namely receptor occupancy, VEGF neutralization, safety data at each dose level, and also talking about the tumor types, and then efficacy data, right? In terms of efficacy data up to date, PD-1/VEGF bispecific as a monotherapy in post-PD-1 setting, has been modest benefit, I would say. It's difficult to interpret, depending on how much of time between PD-1 treatment and then what was their first response to PD-1 inhibitors. We are including first-line non-small cell lung cancer patient cohort as part of this backfill. And that will be the patient population that will clearly answer the anti-tumor activity of CR-001 because we know as a monotherapy in PD-1/VEGF inhibitors that we've seen so far, response rates have been somewhere around 50% to 70%. So if we can show that we match that, that's the clearest way for us to answer that question. And so, the initial data set that we will release in Q1 2027 will have a triple-digit number of patients in totality coming from dose escalation and backfill, really demonstrating the monotherapy safety, PK, pharmacodynamics and efficacy data are comparable to ivonescimab or any other leading PD-1/VEGF inhibitors that are out there. And then the second bucket of data, which is we are looking at middle of 2027, that will come from expansion cohorts of the study. In that part, we are combining CR-001 with the standard of care chemotherapies of multiple different regimens and tumor types that we are studying in the study. And so that study with the efficacy and the safety data then will clearly answer the questions of more of as a potential to replace PD-1 inhibitors in these indications and being able to combine with the chemotherapy agent, again, another way to clearly demonstrate safety as well as efficacy profile of CR-001. And then we have those optimization cohorts that's included in the ASCEND study as well. So once we have monotherapy safety efficacy profile and then in combination with standard chemotherapy, and dose optimization speaking to recommended Phase II dose, then this comprehensive data set will allow us to choose the indications for registration studies in the global setting in an efficient way. And the third bucket of data is coming from ADC combination, so initial data set. Because Kelun-Biotech, and this is a great benefit that we are getting from Kelun-Biotech partnership, they have many clinical stage assets, including the assets that have approval, such as sac-TMT, and then have recommended Phase II dose. So as Kelun-Biotech is combining CR-001, with their ADCs. That will be the first wave of ADC combination data that we will see starting from mid-2027. And so that data will answer a couple of key questions. As a next wave of innovation, novel novel combination, how CR-001 plays the role of next generation IO backbone, and that data will then help us inform our global development strategy of combination with our ADCs or other ADCs that are out there, as well as molecules with a different MOA as well.

So, clearly a lot of data coming across these three buckets for CR-001, and I will just walk through all of that data. And I think the objective for us is to generate meaningful clinical data in the CR-001 program by middle of next year, and then rapidly turn that into potential Phase III study starts. In addition to that data that Ellie went through, we have CR-003 data coming with the CR-003 ITGB6 ADC that Kelun-Biotech's running monotherapy study in China, that will also be coming to Q1 2027. And then early next year we'll see them start a CR-001/CR-003 combination study. And then our own, our second ADC program, CR-002, the PD-L1 topo ADC, will be in the clinic this year, and that will have a data readout by end of 2027 as well. So we have data coming across all of the entire portfolio, both from our chemotherapy, combination of standard care chemo, and combination with ADCs across a very robust portfolio.

Yeah. It's going to be a busy 2027. I guess just to maybe go back, Ellie, as you were describing the buckets, right, as you think about maybe kind of the first two buckets of data, and I think you really nicely described, right, the eight different tumor types. I think I counted correctly. You know, how do you think about, and appreciating, right, you sort of described it as triple-digit number initial data set. Yes. That patients obviously divided in terms of number of tumors, it could be smaller. You think about kind of what you might be looking for and how much detail you're going to get sort of on a bi-tumor type basis to be able to kind of make some of those decisions, Josh, you talked about in terms of the kind of pivotal or registrational study starts?

Yes, we have three, what we call buckets of data. So in each indication that we are looking into potential registration enabling studies from monotherapy data, coming from dose escalation and backfill, as well as expansion cohorts, where we are combining with currently used standard of care chemo combinations, we will make sure that there's a comprehensive data being generated from the safety and efficacy perspective so that the data informs us which indications that we should choose for probability of success perspective. Right. But also... Sorry. We can utilize the competitive intelligence. Yes, especially ivonescimab data, because of the. So with the similarity of the compound, we can look at their data and see how we compare and then how much we can really delve into the population that they studied and then help us navigate into the indications. But also what's encouraging is that not just ivonescimab, other PD-1/VEGF inhibitors that producing data in multiple indications. Now we are seeing pretty much comparable efficacy data in the early Phase I/II study setting. So those data and then how the order of a potential registration studies that are being launched in the global setting. We are carefully looking at those as well.

Yes. And maybe I'll just be specific about this, so your question on number of patients as it gets smaller as you go to cohorts. What we said for the monotherapy, non-small cell data, would be a cohort of 12 patients, so a robust cohort, you know, at a dose that will be, you know, clinically meaningful. And that's where, for the Q1, we're looking at, you know, ORR is the readout for efficacy there. When we get to the standard care chemo combo cohorts, and, you know, and we'll announce what those are later this year. There'll be multiple cohorts there. There'll be a minimum of 20 patients, so 20 to 30 patients per cohort. Right, so you're going to get a robust read across multiple different indications and lines of therapy with standard care chemo combos and different chemo agents in combination. So you'll get to see a really good detailed view of safety and tolerability across multiple chemo agents as well as indications, lines of therapy, and that's where you start to get to hundreds of patients of data.