Cue Biopharma, Inc. (CUE) Earnings Call Transcript & Summary

Good morning. My name is Cynthia, and I'm a member of the biotech team. It's my pleasure to introduce Dan Passeri, the CEO of Cue Biopharma.

Thank you very much. Good morning, everyone. First, I want to thank Cowen for giving us an opportunity to present at their conference. So Cue is an immunotherapy company dedicated to protein engineering for immune modulation. Our symbol -- NASDAQ symbol is CUE. Just as a reminder, this presentation is being webcast and will be on our web for 30 days after this conference that you can listen to. I'll also reference when -- what slide I'm on. So next slide is forward-looking statements. This presentation may contain some forward-looking statements. Now Slide #3. Cue is dedicated to rationally engineering biologics in therapeutics, in essence, harness nature's cues for selective and specific immune modulation. And next couple of slides will be elaborating from what we mean by nature's cues. It's obviously where the company's name comes from. And in essence, this is basically emulating the signals that T cells receive when we're exposed to pathogenic invasion by viruses, bacteria or the incidence of cancer, for instance. And we will be walking through how we have achieved this rational engineering in a moment. Next slide, to Slide #4. Through this approach, we've designed breakthrough therapeutics for selective T cell modulation. And what's important here is that selectivity occurs inside the patient's body. We're not taking T cells out of the body to modify them. It's through these engineered therapeutics injected directly into the patient. We believe through this approach, we have developed a disruptive platform again based on rational protein engineering in essence to reset immune balance to address cancer, autoimmune disease and infectious disease. Cue Biopharma's Immuno-STAT platform, which is the primary platform out of this engineering approach, is leading the path forward for selective delivery of, again, nature's cues or signals to disease-relevant T cells. That's where the selectivity comes from. It's not a ubiquitous systemic activation. And again, this is directly in the patient's body. And through the modular design and rational approach that we take into the Immuno-STAT platform, it provides us with flexibility and diversity in terms of the therapeutic applications that we can deploy this platform across diseases and indications. And I'll be elaborating upon that in the 2 slides from now. Then clinical development of our lead candidate, which is CUE-101 based on the CUE-100 series, which is an IL-2-based series, that provides us with near-term potential value creation and risk reduction for not just that asset itself, but by implication, the entire CUE-100 series in the platform and therapeutics pipeline. Next slide, #5. This is Cue's growing pipeline of assets. The most advanced is the CUE-100 series, which is, again, based upon IL-2, and we will be elaborating shortly on the manner of which this molecule is designed. Through this CUE-100 series, we've developed a number of candidates in the clinic presently and representative of the CUE-100 series, CUE-101. We have a multi-tiered strategy for maximizing value proposition. We have a monotherapy trial, which was designed, in essence, to demonstrate unequivocal evidence of the molecule's mechanism of action, and this is in second line and beyond HPV+ head and neck cancer patients. This trial, in essence, establishes a beachhead from which we would then expand. We have also recently initiated a combination trial with the checkpoint KEYTRUDA, which is approved in frontline HPV. What this, in essence, allows us to do is expand our patient reach by moving upstream and demonstrating once we're establishing through the monotherapy trial, the mechanism of action and proof of principle and moving upstream to treat a patient population in front line, along with KEYTRUDA, where we should be seeing mechanistic synergy. And then finally, we also have a neoadjuvant trial in HPV+ head and neck cancer, again, moving even further upstream. These are newly diagnosed patients that are scheduled for surgical excision, and they'll be receiving 2 cycles of CUE-101. We would then analyze the tumors for further bolstering our confidence in terms of the increase of infiltrating T cells in the tumor. Behind that, in the pipeline, we have CUE-102, which is Wilms' Tumor 1. We are presently engaged in IND-enabling studies. We're expecting that to enter an IND filing in Q1 of 2022. Then we have CUE-103 as well as a KRAS program targeting the mutation G12V. I want to underscore here that we have a partnership with LG Chem for Asia rights for CUE-101, 102 and 103, and this affords us the opportunity to expand our patient reach into geographic territories, allowing us to focus on the U.S. and Europe. We can -- because of the modularity, we can also look at modifying not just the antigens, which you've seen with these various programs in the CUE-100 series, but we can also alter the co-stimulatory molecule such as CD80 4-1BBL. We're addressing T cells that are sort of in a state of exhaustion, and that's a potential application for infectious disease. We have an ongoing collaboration with the Albert Einstein College of Medicine in that area. Regarding autoimmune disease, the CUE-300 series, Anish will elaborate upon the autoimmune data in a moment. Anish Suri, our President and CSO, is going to be presenting along with me this morning. 301 and 302 are partnered with Merck. These are for 2 indications. The first is type 1 diabetes. The second we have not disclosed yet. And then we also have an application that is for autoimmune disease where the autoantigen identification is not well characterized or known or there are multiple antigens involved. And this is the 400 series, and this is a molecule that has an IL-2 and a TGF-beta moiety in our 400 series for stimulating the iTregs. Okay. Let's now switch to Slide #6 is giving you some background on the way the molecules are designed and when we'll talk about nature's cues. What we're aiming to do is emulate the signal transduction that occurs or the signaling that occurs between an antigen-presenting cell in a T cell. This is how our immune system is able to address a myriad of challenges to maintaining health where T cells are instructed with selectivity for particular T cell populations through the T cell receptor and then the instruction of what they are to do from a behavior standpoint is through signal #2, receiving a co-stim. So there's at least a 2-single system here for T cells to be modified or modulated on a selective basis. Signal 1 is an epitope presented to a T cell receptor via an MHC complex that [ sits ] through the cell membrane of an antigen-presenting cell. There are various classes of MHC, Class I is for CD8, Class II is for CD4s, and that's relevant to our protein engineering. And then there's an instruction signal such as IL-2, which is a co-stimulatory signal. Now it's important to realize that our body does not secrete IL-2 systemically circulating through your body. It's expressed in a very controlled context where a T cell may receive signal 1, and then that same T cell makes IL-2, that's auto occurring or acts on itself or adjacent cells presenting signals to the T cell would present IL-2. So this is important because this is what we're emulating. It's a controlled, contextually defined presentation of the antigen and the co-stimulatory molecule concurrent with that signal 1. And what you see on the right is the schematic of how we've designed this molecule. Again, the peptide being presented in an MHC pocket, which is the only way the T cell receptor will bind to an epitope, which is a piece of an antigen, along with the co-stimulatory molecule. So it's in the context of the 2 signals being administered concurrently off of an Fc scaffold for manufacturing and stability. The next slide goes into more detail. This is designated as CUE-101. What we have here is basically the schematic of 101, which shows the epitope, in this case, is on the HLA-A*02, that's the allele, which represents about 50% of the population, presenting the epitope HPV-E7 for the HPV virus, along with on each side to IL-2. So that's a total of 4 IL-2, which is important for valency. Now the IL-2 molecule has been modified. So it's an IL-2 variant, and it gives it its particular properties. I'm going to turn this over to Anish for a moment just to elaborate on how IL-2 has been modified to create the variant.

Yes. Thanks, Dan. So we spent a fair bit of time on the structural base of the interaction from the IL-2 and its receptor. And the IL-2 has 2 prominent modifications, one abrogates binding to receptor alpha. So in that sense, it's similar to sort of not alpha variance with a better safety profile and avoiding broad effects on regulatory T cells. But we also attenuated binding and receptor beta so we can harness the ability and the [ quartered ] nature of T cell receptor signaling when the right T cell is docked to that central peptide HLA complex.

Okay. Thanks, Anish. Okay. Next slide, Slide 8, this is just showing how we have deployed 101 to maximize patient exposure or access and trying to gain as much insight as we can mechanistically. We brought the drug forward from monotherapy trial in second line and beyond, and I'll provide you with further details in a moment. We've just launched a combination with pembro, and then we -- which is upstream and front line, and then going even further upstream with the Phase I neoadjuvant study. Slide 9 is showing you the classic dose escalations, a 3 by 3, 3 patients in each cohort. We have completed dosing up through Cohort 7. We will be expanding the Cohorts 4, 5 and 6 up to 9 patients to establish the optimal dose. We have seen really good dose proportional of PK, which is exposure. We've also seen good dose-correlated pharmacodynamics, which is associated with the target T cell population. And most importantly, we've seen clinical activity actually in a variety of a number of these cohorts starting actually in Cohort 2. But the best data we've seen so far is from Cohort 4 up to 6, that's why we're going to be expanding those up to 9 patients per cohort and then select the dose for expanding up to 20 patients. Okay. Let's now switch to, most importantly, the summary of some of the data that we have seen, Slide 10. This is a patient from Cohort 4. What I want to bring to your attention is this patient's therapeutic history. Prior to coming on to this trial, this patient had received a number of therapeutics. Most recently was on pembro. They stayed on pembro for approximately 9 weeks and resulted in progressive disease. And what we've observed in this patient was a long-term stable disease on a scan, and that's a quantitative measure. Looking at the size of the tumor, we did see a nice fold increase in circulating blood of the target T cell population. This patient went out to a period of 18 weeks, showing basically no growth at all of the tumor. It was decided, however, to surgically excise that lesion because of its proximity on an arterial wall. And to our surprise, when they analyzed that tumor, histopathology showed widespread necrosis, infiltration of CD8s, tumor expressing PD-L1. We will show you the details of that data in the upcoming earnings call on March 16, going through more detail on the clinical metrics. But what's important is we saw a discrepancy between what we saw on a quantitative measurement via the scan versus the qualitative analysis of that cancer upon histopath analysis where we saw widespread necrosis. So next patient is another example of sort of variable data that you see in immunotherapies versus classic RESIST. This patient was on study for approximately 28 weeks. This is in Cohort 5. What's important here, we have a number of lesions that we were following. And if you look at the data on the first scan, if that sort of orange line went up to 18% growth, if that tumor had gone just 2% or 3% more, that patient would have been designated progressive disease. Then yet on the next scan, following up that tumor actually collapsed on itself and went down dramatically, in fact, on the third scan all the way down to baseline. And that's indicative of what's known as pseudo progression in immunotherapy, where the scan itself does not qualitatively capture what's happening inside the cancer. And we believe what that is representing is an infiltration of immune components that are, in essence, infiltrating the tumor. And then the first scan, looks like the tumor is growing. When, in fact, it's likely swelling from [indiscernible] infiltrates. So this is also going to be defined further in the upcoming earnings call with more detailed data on patient observations. I just want to bring to your attention some of these observations that we're highly encouraged by. And again, I remind you there's some monotherapy in highly refractive patients. So in summary, the takeaway is on this ongoing Phase I monotherapy trial. 101 appears to be very well tolerated throughout the dose escalation. Study with no dose-limiting toxicities observed. The PK shows very good dose proportionality for drug exposure. The pharmacodynamics, PD, shows dose-dependent proliferation of E7 specific T cells in peripheral blood. But also to remind you, we're likely to be seeing a proliferation of resident T cells inside the tumor. Antitumor effect of 101 has been demonstrated by decreases in lesion size and evidence of tumor necrosis, highly encouraging with this early data set. CD8 cell infiltration in heavily pretreated patients have progressive disease. And again, this data is going to be discussed in more detail in the upcoming earnings call. And most importantly, we're also going to see an emerging evidence of survival benefit in patients with HPV-positive head and neck cancer after they're discontinuing on 101 because what appears to be progression, but we're seeing what certainly looks like a pretty significant survival benefit. We will elaborate upon this in the earnings call. Okay. I'm going to switch now to the combination study where we're expecting to see really good synergy between the mechanisms of 101, which is to increase the relevant T cell population and pembro, which is, in essence, is the checkpoint blockade, which turns down activated T cells. We've just launched first patient enrolled in February to Cohort 1, and we're looking forward to providing further data as we dose more patients and progress in that trial. What I'd like to do is turn this over to Anish to just elaborate upon some observations we have in the preclinical setting in combination. This is on Slide 14.

Okay. Moving on. So we have published this data last year. This essentially highlights the mechanistic synergy between CUE-101 and checkpoint blockade. And in a way, makes sense, checkpoint blockade, one of the assumptions one made is that you have the right repertoire in place, which CUE-101 ensures. So what you're seeing on the left is survival curve in a preclinical model of an E7-driven cancer. Again, notice that pembrolizumab -- I mean, an anti-PD-1, the mouse surrogate, in this case, in blue, has no activity. We see monotherapy activity with CUE-101, the mouse surrogate, and when combined together, you see about 90% survival, again, highlighting the potential. That correlates very nicely with both an uptick in tumor-specific T cells, which is shown on your right panel there, in blood, but most remarkably in the tumor lesion where you see a massive infiltrate of tumor-specific T cells, hence, again, the enthusiasm for exploring this in a clinical setting. Dan?

Thanks, Anish. Okay. In summary, also, I'm going to show you just Slide 15. We've seen this before. This is basically the clinical development network we've put into place. This is really the luminaries of HPV-positive head and neck cancer. So we're very proud of having this distinguished list of clinicians working with us on a study of 101 in this setting. I'm now going to switch to changing the antigen in the CUE-100 series, a brief overview of 102 for WT1 in KRAS, again a mutation G12V. What you're looking at here is 101 framework with the HPV epitope. What we've done is take that same framework and change out the epitope. In the case of 102, it's WT1. The sequence is 37 to 45. And you can see the blood staining here for exposure in human blood for this molecule of human T cells. You can see in that square that's bordered in the upper right-hand corner, when it's treated with 101 with tetramer staining, you're seeing a dramatic increase in those T cell populations. This is highly encouraging of the drug's ability to the target selective T cells and proliferate them and the same representative data for KRAS mutation. Okay. Now I'm going to switch quickly to Neo-STAT, which is a derivative of 100 for, in essence, addressing the heterogeneity of tumor cells as well as increasing our productivity and flexibility. One of the challenges we have with 101 -- and I'm now on Slide 19 -- with 100 is that we have to make a dedicated cell line each time we change the epitope. With Neo-STAT, we can make a construct with an empty MHC pocket. That pocket has been stabilized. So we have a cell line that makes the drug without the epitope in it. We can then chemically attach that epitope covalently. And what you're seeing here is representative data with CMV and MART-1, which is an epitope of melanoma. On the right, comparing it with the 100 series of classic Immuno-STAT, where it's a fusion protein, and it's basically equivalent. So this development allows us to dramatically enhance our productivity, flexibility and our ability to look at multiple epitopes more creatively for clinical strategies with complex tumor situations, which I covered here in Slide 20, our evolving strategy off of the 100 framework where 101 is, in essence, de-risking the applications of this molecule because it's the same construct, the same IL-2 moiety is changing the epitope. We have 102 and 103 next in the pipeline and, again, benefiting from the clinical observations of 101. Neo-STAT is that same molecule with an empty pocket. This allows us to address tumor heterogeneity where there may be multiple epitopes involved that we may want to target at the same time. And then finally, on the right, also addressing an escape mechanism in tumors, which can be up to 20%, 30% of situations. As a tumor evolves, it can down-regulate HLA or MHC where the tumor is not presenting the epitope. So it's basically shielding itself from detection by a T cell. And we've designed this sort of construct that's a derivative where we're taking the observation that these tumors often harbor viral T cells as a means of your body protecting itself when there's inflammation. Viral T cells will migrate there in case there's a viral infection. And what we can do is basically trick those T cells to think that the cancer is invaded with a virus they will proliferate because of the Immuno-STAT attached to the cancer via this antibody fragmented at the body. So this is an early design stage, but we've made very significant progress in terms of the promise of that molecule. This next Slide 21 just shows the really profound diversity that we can achieve and flexibility by changing out various epitopes, the MHC molecule, the co-stim, even the Fc backbone can be modified. For the purpose of saving time, I'm just going to keep moving here. I'm now going to move to the 300 series, which is partnered with Merck for 2 indications. Type 1 diabetes, the second one is undisclosed. This is for autoantigens where we know well-characterized antigens are known, and you want to target selective T cell populations. I'm going to turn this over to Anish, our approach in autoimmune is basically twofold. This is on Slide 23.

So yes. Thanks, Dan. So we focused on 2 broad strategic areas for autoimmune diseases, antigen-specific, as Dan pointed out, for Immuno-STAT to go after selectively targeting the pathogenic or the reactive T cells and diseases with well-characterized antigens. Type 1 diabetes is actually a quintessential one. The second one is looking at broadly for immunoregulatory outcomes in activation of induced Treg. We call this the pathway-specific approach. Moving on to the next slide. As you can see here, in the next slide, we've got both sort of sets of opportunities laid out here. With Merck, we've developed our first set of Immuno-STATs targeting proinsulin-specific T cells in Type 1 diabetes. This data was recently presented at a [ conference ] meeting, and we are -- we've extended obviously this agreement to focus on this asset to further optimize it towards a clinical lead candidate. On the pathway specific, we've developed a novel fusion protein that has the 2 key components for induced regulatory T cells, which are the signals of IL-2 and TGF-beta variant. Mind you, the IL-2 is derived from the CUE-100 series. So there's clinical de-risking for that part of the molecule. This strategy is very different from the other strategies exploring natural Tregs with IL-2-biased variants -- variance that have been described. And there are a number of reasons why we feel iTregs are better than natural Tregs. Next slide. So the target rationale for Type 1 diabetes is actually what is shown on this slide on Slide 25. This is CUE-301. It's got a proinsulin peptide, along with a PD ligand variant here. Moving on to the next slide. You can see the biological response of this particular molecule in 2 different type of diabetes donors of selective suppression of autoreactive for insulin specific T cells. No effects from the peptides derived from the GAD protein. So it's specific. On the right, you're seeing again punching of the response and [indiscernible] transgenic mice, which have the Class 2 HLA that predisposes to diabetes, again, with proinsulin selectively down-regulate those T cells to have no effect in the hemoglobin specific T cells, and again, showing in vivo specificity, both in vitro and in vivo. Let me spend a bit of time on Slide 27, which is the CUE-400 series, talking about this new asset class of regulatory T cell-based therapies, which we think has enormous potential in broad autoimmune applications. Slide 28 again shows you how we positioned ourselves, which is to rather than focus on an IL-2 variant going after natural Tregs, which are few and limited in number, and in the first place, may not be working, which is why the patient has autoimmunity in the first place. We focus on the broader compartment of CD4 that can be modified to become regulatory T cells with the hope that even so the pathogenic rapid working to convert. So we spent a fair bit of time on protein engineering, we'll be revealing the details of this at a future meeting. But you can see proof-of-concept with healthy donors taken CD4 T cells, converting them, exposing them in addition to the T cell receptor signal with TGF-beta and IL-2 wild type. You can see the floor panel up there. You see an expression of FOXP3, which is the master transcription path of the regulatory T cell. About 24% of them get turned on by the wild type cytokine between solution phase, and then we've got a molecular staff hold with CUE-101, where the same sales now up to north of 60% start expressing this master transport for regulator. We can demonstrate the same in T cells that we will evaluate from autoimmune patients, an example with several array donors that's shown in the bottom here. And again, you can see nice induction of iTregs expressing FOXP3. With that, Dan, I'll turn it back to you.

Okay. Thanks, Anish. Okay. So in closing, first, I want to just emphasize, we're highly encouraged by the data that we're seeing emerge in the monotherapy with 101, which is representative of the CUE-100 series. We've just launched the combination study where we're expecting to see mechanistic synergy with our molecule combined with pembro. Regarding our upcoming milestones, we believe we're very well positioned going forward in 2021. We are looking at, in the first half of this year, selecting a recommended Phase II dose for CUE-101 monotherapy. We're in the process now of the expansion of 4 cohorts and then selecting which optimal dose we want to go forward to Phase II. Second milestone we have upcoming is reporting the initial results of CUE-101, along with pembro. This is obviously a very important study, and we expect to see synergistic mechanism based on what we've observed clinically as well as in the combination data preclinically. That will be mid-2021 into second half of the year. We initiate CUE-101 neoadjuvant study to enable intratumor PD analysis. Again, that's going to be launched in Q2 of this year. Continuing CUE-102, which is WT1 IND-enabling studies, with the IND filing in the first half of 2022. Continuing to initiate and expand KRAS program as well as Neo-STAT. This is with CMC in the second half of this year. Achieve optimization of our candidate for 301 in our partnership with Merck second half of this year. And then finally, as Anish presented in the presentation, we're deploying the 401 autoimmune program, TGF-beta, IL-2 to establish functional activity of human iTregs in the second half of this year. With that, I thank everyone for your attention, and have a nice day. Thank you very much.