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

Good morning, and welcome to the Cue Biopharma's Novel Biologics Portfolio. [Operator Instructions] Today's call will focus on a review of Cue's novel biologics development platform for mobilizing the immune system. Joining me on today's call is Cue Biopharma's Chief Executive Officer, Dan Passeri; 2 recognized T-cell researchers, Dr. Richard DiPaolo and Dr. Andrew Cope; and members of Cue management. Please note that this presentation and discussion is being recorded and will be available in the Investors and Media section of the company's website at cuebiopharma.com for the next 30 days. Additionally, some of the statements we make on this call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those stated or implied by these forward-looking statements due to important risks and uncertainties associated with the company's business, including those set forth in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations section of Cue Biopharma's annual report on Form 10-K for the year ended December 31, 2024, filed on March 31, 2025, its quarterly report on Form 10-Q filed on May 12, 2025, and any other filings that we may make with the SEC. In addition, any forward-looking statements represent our views as of today, May 15, 2025. Cue undertakes no obligation to revise or update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise after the date of this conference call. Now I would like to hand the call over to Cue's CEO, Dan Passeri. Dan?

Thank you, Tara, and good morning, everyone. Welcome to Cue Biopharma's novel biologics portfolio event. The agenda for today's call is shown here on Slide 4, with the primary focus of today's call being that we're going to provide an update and convey what we believe to be the tremendous potential of CUE-401 for addressing autoimmune inflammatory diseases. And we also have 2 immunology key opinion leaders joining us on today's call. I'll first begin with a summary of Cue Biopharma's unique and highly differentiated biologics platform, and we'll also provide a brief update from our CUE-100 oncology series. I'm then going to turn the call over to Dr. Matteo Levisetti, our Chief Medical Officer, to introduce the importance of regulatory T cells and the pioneering protein engineering that went into designing CUE-401 as a first-in-class TGF beta and IL-2 bispecific to enable the induction of stable and durable regulatory T cells or Tregs. Following Matteo's introduction to CUE-401, Dr. Rich DiPaolo, a pioneer in regulatory T cells, will share his perspective on CUE-401's mechanism of action for generating Tregs, including in vivo data generated from his lab in an autoimmune gastritis disease model. Matteo will then return to present additional data demonstrating not only proliferation of already existing nTregs, but also the induction of new Tregs from effector T cells, these are referred to as iTregs, which is a key differentiator in what we believe represents a major breakthrough development. Matteo will present data for Treg induction and proliferation in several additional autoimmune disease models, further supporting the premise that CUE-401 is the first-in-class disruptive therapeutic, representing a potential new standard of care with broad application across autoimmune disease and inflammatory disease. Following Matteo, Dr. Andy Cope will share his perspective as a renowned academic, practicing rheumatologist and immunologist, on the potential of CUE-401 to change the treatment paradigm for patients suffering with autoimmune disease. We'll then wrap up with a question-and-answer session, including Dr. Cope and members of the Cue management team. I'll then come back to conclude with a few closing statements. As detailed on Slide 5, I'm going to begin by sharing a high-level summary of the key takeaways of our Immuno-STAT platform and various programs under development. It's recognized and understood that the immune system protects us from serious diseases through selective activation of specific T-cell and B-cell populations. An imbalance in these populations can lead to serious diseases such as autoimmune disease and cancer. And we believe our biologics platform has the potential to restore proper immune balance for the treatment of these serious diseases. We aim to achieve this with our engineered biologics that are designed to mobilize selected T-cell populations by mimicking nature's key regulatory mechanisms or cues, hence the company's name. We believe that CUE-401 holds tremendous potential to become a new standard of care for treating autoimmune and inflammatory diseases representing major markets of unmet medical need, and the data we'll share today aims to further support this premise. We recently announced a collaboration with Boehringer Ingelheim for the development of CUE-501 for targeting and depleting B cells implicated in B-cell mediated autoimmune disease, providing independent positive validation of the CUE-500 series, which harnesses the potential of the body's intrinsic antiviral killer T cells to treat autoimmune disease as well as cancer. To learn more about this program, please listen to our webcast located on our website that we had during April. And I'll now provide a brief update on our oncology programs, which have provided the foundational basis for the engineering and design of our other programs for -- from our platform. The maturing clinical data from our oncology programs continues to demonstrate highly encouraging metrics of clinical benefit and tolerability. Three patients remain on treatment with CUE-101 in the frontline setting of recurrent or metastatic HPV-positive head and neck squamous cell carcinoma in combination with the standard of care pembrolizumab, also known as KEYTRUDA. In the second -- and I'm sorry, the monotherapy trial in a second-line setting and beyond, as shown here on Slide 6, we have observed in heavily pretreated patients notable survival benefit in those treated with CUE-101. In this setting, we observed a highly encouraging median overall survival of greater than 20 months and as compared with the historically reported median overall survival of approximately 8 months observed in the second-line trials that were historically reported for nivo and pembro. Importantly, in the graph on the left panel, notable survival was observed at the higher active dose levels of CUE-101, supporting its proposed mechanism of action. So in the absence of a comparator in this study, the low dose population, which is, in essence, inactive, serves as an internal control. All patients received the same prior and various follow-on anticancer treatment, with the only variable being whether they were treated with the high active dose or the lower doses, which we haven't seen clinical activity at those lower doses of CUE-101. We believe the clinical activity and enhanced survival observed in this trial is due to the repeated stimulation and expansion of tumor-specific T cells given the mechanism of action of CUE-101. The culmination of data positions us well for pursuing strategic alternatives, including prospective partnering options for these assets, and we look forward to giving you updates in the future. The CUE-100 series, importantly, has been foundational to the evolution of our platform, including the CUE-500 series and CUE-401. And what I mean by that is that various key functional components of the 100 series have been deliberately incorporated into these subsequent programs to enable specific mechanistic properties in these molecules. Now pertaining to our CUE-500 series, here on Slide 7, is a synopsis of the recently announced partnership with Boehringer Ingelheim for CUE-501. The CUE-500 series, including CUE-501, is designed to bind specific pathogenic cells and present a defined viral epitope such as CMV, thereby harnessing the patient's intrinsic antiviral killer T cells that are circulating through their blood to attack and destroy the targeted cell that basically has been painted with that viral protein. Our partnership with BI for targeting and depleting B cells represents both a validation and acceleration for the development of CUE-501 as well as providing Cue with nondilutive capital. Importantly, we retain the rights to all applications of the CUE-500 series outside of B-cell targeting and depletion. As you can see on Slide 8, from left to right, each distinct series uses a different combination of molecular components, each designed to confer specific mechanistic properties for the treatment of cancer as well as autoimmune disease. For example, the modified IL-2 from the CUE-100 series has been specifically engineered to bias towards conditional binding, which has also been incorporated into CUE-401, which is a bispecific that conditionally binds to TGF-beta and IL-2 receptors, and Matteo will elaborate upon this momentarily. I'm now going to turn the call over to Dr. Matteo Levisetti, our Chief Medical Officer, to review the data from our CUE-401 program and to describe what we believe represents a promising and unprecedented opportunity to establish a new standard of care for the treatment of autoimmune and inflammatory disease. Matteo?

Thank you, Dan. Good morning, everyone. Autoimmune disease is generally driven by a set of inflammatory cells called T lymphocytes. From a simplified perspective, T lymphocytes come in 2 types. The first type is referred to as effector T cells, which are responsible for inducing inflammatory responses that protect us from infections or cancer. The second type of cells, referred to as regulatory T cells or Tregs, are powerful anti-inflammatory cells that control the immune activity of effector T cells, preventing inflammatory responses from going too far and causing damage to cell. Tregs control T effectors by several mechanisms, including secreting multiple proteins that inhibit a broad range of inflammatory cell types. We are born with a population of Tregs called natural Tregs. And later in life, new Tregs can be generated by exposure of T cells to TGF-beta and IL-2. These are called induced Tregs or iTregs. The balance of Tregs to T effectors is critical to maintain health or immune homeostasis. In autoimmune disease, effector T cells turn against specific proteins of the patient's body, resulting in autoimmune diseases such as rheumatoid arthritis, multiple sclerosis, type 1 diabetes, lupus and many others. Tregs are required to control this abnormal T effector immune response, which causes destruction of healthy tissue. Therapeutics aimed at restoring the balance of Treg and T effector cells to treat autoimmune disease have not been effective in achieving this balance to date. Through innovative insights into T-cell behavior and breakthrough protein engineering, Cue has developed CUE-401, designed to bind to the destructive autoimmune effector cells, transforming them into anti-inflammatory regulatory Tregs. This results not only in a quite notable increase in the number of stable and functional Tregs, but also reduces the number of disease-causing effector T cells. The CUE-401 transformation of the autoimmune response is made possible by enabling simultaneous signaling of the TGF-beta and IL-2 receptors on activated effector T cells. We believe this is revolutionary technology. With the potential of CUE-401 to profoundly reverse the inflammatory immune response, we believe new levels of efficacy in multiple autoimmune diseases are possible. We also believe that by returning the patient to immune homeostasis, long-term immune tolerance can occur. In my professional opinion, after overseeing immunology clinical development for over 20 years, I have never before seen a molecule with the potential of CUE-401 to broadly and effectively transform the treatment of autoimmune disease. I would like to make some important points on Slide 11. As you can see from these various scientific journals, TGF beta, together with IL-2, plays an essential role in the induction of regulatory T cells, which is a critical element of immune homeostasis. With that, it is important to point out that TGF beta has been extremely challenging to use as a therapeutic. It has not been possible to either combine IL-2 and TGF beta independent of it or make a functional single hybrid molecule that contains both proteins. Three main challenges that needed to be addressed are: first, wild-type forms of TGF beta and IL-2 have high potential for off-target toxicity. Second, individual wild-type cytokines have very short halflife, making pharmacology very challenging. And finally, large-scale manufacturing of recombinant TGF beta has been challenging due to the characteristics of the protein and is frequently toxic to the cell lines used to reduce the molecule. Our bispecific biologic candidate, CUE-401, is the first and only molecule that we know of that successfully combines the activity of TGF beta and IL-2 into one off-the-shelf molecule, and based on our preclinical studies, appears to have overcome the challenges inherent with TGF beta and IL-2. I will now describe Cue's groundbreaking engineering on this program in the next few slides. Before we present some of our most recent data, I thought I should summarize a few of the key program elements that we will be discussing depicted on Slide 12. First, CUE-401 is a bispecific molecule composed of 2 cytokine molecules, a modified IL-2 and a modified and masked TGF beta, both attached to an Fc backbone that stabilizes the molecule and prolong its pharmacokinetics. Cue's novel protein engineering has demonstrated preclinically simultaneous and conditional signaling of IL-2 and TGF beta in T cells. And in doing so, has enabled Cue to unlock the potential of TGF-beta and IL-2 signaling cascade. The attenuation of both cytokine molecules, along with the design of the TGF-beta mask, fosters conditional binding and selectivity and enhances the therapeutic window. Importantly, the mask also prevents toxicity of TGF-beta to its own producer cells and has allowed Cue to develop a highly productive cell line that has translated into excellent manufacturer building. With its unique design and mechanism of action, we have demonstrated therapeutic benefit of the CUE-401 in 3 distinct autoimmune disease models, in addition to a model of hypersensitivity and inflammation. CUE-401 has been well tolerated in non-GLP toxicology studies across 3 species, including nonhuman primates at dose levels that result in maximum Treg expansion. We should also point out that several components of CUE-401 have come from the CUE-100 series, which has been in the clinic in over 150 patients. We believe this may accelerate some of the development requirements of CUE-401. This robust data package suggests the potential for a new standard of care in multiple autoimmune indications and requires no HLA restriction. Manufacturing and IND-enabling studies are currently underway. The combined signaling of TGF beta and IL-2, as provided by CUE-401 and shown here on Slide 13, is designed to provide a clear differentiation from the other drugs in this space. CUE-401 increases both existing Tregs and induces new Tregs or iTregs by transforming autoreactive T cells into induced or iTregs, thus reducing the number of inflammatory cells and markedly improving the Treg to T effector ratio. The simultaneous signaling of both cascades results in a unique effect on activated cells, as shown in the highlighted section. When IL-2 and TGF-beta act together on existing natural Tregs, robust expansion of natural Tregs occurs. The unique additional effect is that when bound to activated effector T cells, the combined similarly induces the transformation of autoreactive T effectors into stable iTregs, as seen in blue. This transformation results in a reduction in the number of the activated effector T cells and a notable increase in both naturally occurring and induced Tregs. It is important to note that it has been demonstrated that these induced Tregs are highly stable and functionally suppressive. In contrast, looking at the image on the left, on its own, IL-2 and IL-2 muteins stimulate the expansion of natural Tregs, as seen in red. The challenge is that these proceeds can also promote the expansion of the T-effector compartment, thus narrowing the selectivity window and potentially limiting efficacy in autoimmune disease. With the robust increase in 2 types of Tregs, while transforming and reducing the number of autoreactive cells, we believe immune homeostasis can be restored and treatment with CUE-401 may result in a transformative clinical benefit. I will now like to turn the call over to Dr. Rich DiPaolo, who is Professor and Chair of the Department of Molecular Microbiology and Immunology at St. Louis University. Dr. DiPaolo has made significant contributions to the field of regulatory T cells, also referred to as Tregs. Notably, Dr. DiPaolo was among the first to define the in vivo suppressive function of Tregs in autoimmune settings. He also played a pivotal role in early studies that demonstrated the fundamental importance of concurrent signaling from both TGF-beta and IL-2 in the induction of induced Tregs. Dr. DiPaolo will now review data he has generated with CUE-401 in his laboratory.

It's my pleasure to share some of our preclinical data from my lab at St. Louis University showing that CUE-401 selectively expands and induces both natural nTregs and induced iTregs that are stable, suppressive and effective at controlling autoimmunity. Before presenting the data, I'll briefly highlight my background in Treg biology, particularly in TGF-beta and IL-2-induced Tregs. During my post-doc at the NIH, we demonstrated that naive T cells that were exposed to TGF beta and IL-2 can become FOXP3+ iTregs, the key step in understanding peripheral Treg induction and its therapeutic potential. After moving to St. Louis University, my lab extended this work, publishing study showing a TGF-beta and IL-2-induced Tregs generated in vitro are stable, immunosuppressive and effective at suppressing diseases and mouse models of autoimmunity. While excited about the promise of iTregs in treating chronic inflammation and autoimmunity, translating this biology into scalable therapies beyond ex vivo cell-based approaches remained a challenge. That changed with the development of CUE-401 by Cue Biopharma, an injectable biologic that mimics the TGF-beta and IL-2 tolerogenic environment to induce and expand Tregs in vivo, offering a promising drug-based alternative to cell therapies. To evaluate whether CUE-401 can signal through TGF-beta and IL-2 receptors and induce FOXP3 expression by CD4+ T cells, we initiated a series of studies in vitro using FOXP3-GFP reporter mice. We first sorted naive CD4+ FOXP3- T cells and activated them in the presence of either IL-2 alone as a control for CUE-401. As shown in the plots here, CUE-401 was highly effective at inducing and expanding the Treg population that was approximately 90% FOXP3+, demonstrating its potent capacity to drive iTreg differentiation, while IL-2 alone was insufficient to generate significant populations of iTregs. And in data not shown here, when effective memory T cells were activated in the presence of CUE-401, we observed some reduction of FOXP3 expression and reduction in effector cytokine secretion, which is significant as memory T cells have historically been challenging to compare to iTregs. We were also interested in understanding how CUE-401 might affect endogenous CD4+ FOXP3+ Tregs. To assess this, we sorted FOXP3+ GFP+ Tregs and activated them in vitro with either IL-2 alone or CUE-401. Similar to IL-2 alone, which is known to support Treg expansion, CUE-401 also supported robust expansion of these endogenous Tregs. These CUE-401 expanded Tregs maintain stable FOXP3 expression, indicating that it promotes both proliferation and phenotypic stability of preexisting regulatory T cells. Next, we designed experiments to assess the in vivo effects of CUE-401 administration to mice, focusing primarily on its impact on the Treg compartment. To do this, we injected mice with CUE-401, our vehicle and analyze CD4+ T cell populations using a combination of flow cytometry, cell sorting and FOXP3 stability assays. Following a single dose of CUE-401, we observed a robust increase in the frequency of CD4+ FOXP3+ Tregs. In most cases, the Treg population expanded approximately fivefold, with FOXP3+ cells comprising around half of the total CD4 T-cell compartment. These findings clearly demonstrate the potent capacity of CUE-401 to induce and/or expand Tregs in vivo. To further characterize these Tregs, we sorted the FOXP3+ cells from control and CUE-401-treated FOXP3-GFP reporter mice and asked 2 key questions. Were these Tregs epigenetically stable, as indicated by TSDR de-methylation? Was their FOXP3 expression maintained over time? The answer to both of these questions was yes. The FOXP3-TSDR and the CUE-401-induced expanded Tregs was nearly 100% demethylated, which is indicative of a stable FOXP3 expression and comparable to endogenous Tregs from untreated control mice. Furthermore, FOXP3 protein expression remains stable following in vitro restimulation for 6 days, indicating that in vivo treatment with CUE-401 generates a functionally stable Treg population. To summarize, CUE-401 treatment is effective at increasing the frequency of CD4+ FOXP3+ Tregs. Treg induced and expanded by CUE-401 are stable. Tregs induced and expanded by CUE-401 have an activated phenotype. They're CD25 high, CTLA-4 high and GITR high. CUE-401 did not induce the expansion or activation of the effector T cells, unlike some of the IL-2 complex results we had. A subset of CUE-401 induced and expanded Tregs were transcriptionally distinct from Tregs that were expanded with IL-2 complexes. And these Tregs share transcripts previously associated with TGF-beta and IL-2-induced Tregs in vitro. Finally, I'd like to share some data demonstrating the ability of CUE-401 to suppress autoimmunity in vivo. We tested this in a well-established mouse model initiated by CD25+ T-cell depletion, which effectively removes the majority of Tregs. 100% of new mice that received CD25-depleted splenocytes developed autoimmunity due to insufficient Treg-mediated immune regulation. This model was first described by Sakaguchi et al in 1995, and was instrumental in reviving interest in Tregs in their role in maintaining immune tolerance. Among the spectrum of autoimmune manifestations in this model, autoimmune gastritis developed in 100% of recipient mice. My lab has long studied this condition as a readout of Treg-mediated immunosuppression. And we utilized a CD4 TCR transgenic mouse model specific for semi autoantigen to enable precise tracking of autoreactive T cells. To leverage this, we spiked a small number of these transgenic T cells into the CD25 depleted cells prior to transfer, which allowed us to directly monitor the fate and function of autoreactive T cells in the presence or absence of CUE-401 treatment. A brief overview of experimental design was 25 million CD25 or Treg depleted splenocytes was mixed with a small number of 50,000 of the autoreactive tracer cells. Their frequency was about 0.2% of the starting population. After transfer into new mice, the mice are treated with either vehicle control or CUE-401 on day 1 and day 14, and then we waited out to 62 days to take the mice down, analyze the cells in the stomach, spleen and lymph nodes and analyze the gastric pathology. Here, I present flow cytometric analysis of cells isolated from the gastric lining on day 62 post-transfer, comparing mice treated with PBS or CUE-401. Importantly, this analysis was performed 48 days after the final CUE-401 treatment, allowing us to assess the durability of immunosuppressive effects. The flow POS displayed CD4+ gated cells, and I want to draw your attention to the auto-reactive tracer cells identified on the X-axis by their expression of Thy-1.1. In PBS-treated mice, there's a marked expansion of auto-reactive tracer cells, which began as only 0.2% of the transport cells, demonstrating robust proliferation and accumulation in the gastric lining and the absence of effective Treg-mediated suppression. In contrast, CUE-401-treated mice show a striking reduction in the frequency of these autoreactive T cells in the stomach, indicating a potent suppression of their expansion and/or tissue migration. These data demonstrate that CUE-401 treatment effectively prevents the accumulation of autoreactive T cells in a target organ and supports its potential to mediate long-lasting immune regulation in vivo. Finally, we assess disease severity in mice at 62 days after receiving the initial cell transfer, comparing untreated controls to those that received CUE-401 on days 1 and 14. Representative histological images illustrate the striking difference in gastric pathology. Healthy controls' stomach displayed no inflammation and normal architecture. While PBS-treated mice developed severe autoimmune gastritis characterized by extensive inflammation, glandular atrophy and metaplasia. In contrast, CUE-401-treated mice showed markedly reduced gastric pathology with only mild inflammation and largely preserved tissue structure. Overall, mice treated with CUE-401 exhibits significantly lower pathology scores across all parameters compared to PBS controls, demonstrating that CUE-401 effectively suppressed disease development. These results demonstrate the CUE-401 treatment-induced immune tolerance and provided a long-term protection and a robust model of autoimmune gastritis that's driven by a Treg deficiency. Notably, short-term CUE-401 administration resulted in durable suppression about autoimmunity, underscoring its therapeutic potential in Treg-targeted immune modulation. A brief summary is that CUE-401 functions to induce new Tregs, expand existing Tregs and suppresses some of the effector functions. In vivo administration of CUE-401 is effective at inducing, expanding and activating Tregs. Short-term CUE-401 administration resulted in durable suppression of autoimmunity and a well-established model where autoimmunity develops as a result of deficiency in Tregs. Thank you for your time.

Thank you, Rich. Dr. DiPaolo has shown you striking data generated by his lab, demonstrating expansion of both nTregs and iTregs occurring with CUE-401, while T effector cells are reduced in animal models. Let me review once again how CUE-401 differs from other approaches, including the IL-2 muteins. On Slide 25, the CUE-401 data shows a highly differentiated mechanism of action, demonstrated in human blood and as such supports the potential application to human disease. The generation of induced Tregs was assessed in an in vitro model of graft versus host disease or mixed lymphocyte reaction. In this particular experiment, Treg-depleted naive T cells from one individual are mixed with antigen-presenting cells from a second individual. The resulting reaction leads to effector T-cell proliferation, which is then modified by exposing the T cells to CUE-401 or a CD25 biased IL-2 mutein. The Y axis is the percentage of CD25+ Tregs at different concentrations of each protein, shown on the X-axis. CUE-401, shown in dark blue, induces a marked increase in the percentage of Tregs, increasing from about 10% to over 40% of the total T-cell population. In contrast, the number of Tregs did not meaningfully change upon exposure to an IL-2 mutein, shown in red. The conclusion from this data is that CUE-401 can induce the transformation of activated effector T cells and to induce Tregs, while an IL-2 mutein only has an effect on existing natural Tregs. And since no natural Tregs are present in the reaction, no meaningful change is noted. Importantly, this mechanistic difference also translates to models of autoimmune disease. Slide 26 pertains to graft versus host disease models used to compare and provide further data, differentiating the activity of CUE-401 compared with IL-2 muteins. In this model, human PBMCs were given to mice, resulting in development of graft versus host disease and death in all animals. The graph on the left shows that treatment with CUE-401 for a limited dosing period resulted in increased survival of animals with GVHD. And remarkably, 50% of animals remained healthy after 100 days. This result is striking, as this was approximately 70 days after the last treatment wit CUE-401. On the other hand, the graph on the right shows published results of animals treated with wild-type IL-2 or an IL-2 mutein. Animals treated with IL-2 actually had accelerated mortality compared with control animals, with all animals dying by day 90. In fact, IL-2-treated animals did significantly worse than untreated animals for the duration of the study, further supporting the therapeutic differentiation of the CUE-401 mechanism. The results on Slide 27 demonstrate further translational data from the graft versus host disease study that we just reviewed with CUE-401. The study showed that after only 3 doses early in this study, CUE-401 significantly increased number of Tregs in the spleen, while also meaningfully reducing systemic inflammatory cytokines. These findings are consistent with CUE-401's intended mechanism of action. While many public GVHD studies are of short duration, this study with CUE-401 showed that there was a continued effect out to day 95 when the study was concluded. In addition, the study showed that there are persistent human T cells surviving out to 95 days, an indication that the grafted human T cells survived without causing significant disease in these animals, which is the ultimate goal of treatment with stem cell and bone marrow transplants. These data thus support the potential for treatment with CUE-401 to confer a durable state of immune tolerance. In addition to the striking effects just shown in GVHD, Slide 28 presents data in 2 other well-accepted models of autoimmune disease, experimental autoimmune encephalomyelitis, also known as EAE, a model of multiple sclerosis, and delayed-type hypersensitivity or DTH, a model of cutaneous inflammation. In EAE, shown in the graph on the left, CUE-401, shown in blue, significantly prolonged disease-free survival of animals compared with vehicle in this rapidly progressing model of autoimmune disease. In a model of delayed-type hypersensitivity shown on the right, a single dose of CUE-401 was compared with vehicle and daily dosing of the powerful immunosuppressant cyclosporine A. You can see that CUE-401, shown in blue, significantly suppressed the immune reaction induced by reactivity to KLH, and was comparable to the active positive control cyclosporine A. Data from these 3 models, GVHD, EAE and DTH, combined with the impressive data that Dr. Rich DiPaolo presented, represent therapeutic effects in a broad range of autoimmune pathologies. Each of the models studied provide insight into the potential benefit in different relevant biologic autoimmune conditions, including skin, gastrointestinal tract, the central liver system and in transplantation tolerance. The range and magnitude of effects in each of these models suggest that CUE-401 has potential as a therapeutic agent for multiple autoimmune diseases. Of course, mice are not humans. We include Slide 29 to demonstrate that CUE-401 has the potential to generate significant Treg expansion across species, including most rat and human primates. Striking differences were noted while the Treg expansions of the mice are clearly therapeutically relevant. As we just showed in multiple disease models, we found that the magnitude of Treg increased -- the magnitude of Treg was even greater in nonhuman primates than in mice or rats when exposed to the same doses of CUE-401. Notably, very low doses resulted in significant Treg expansion in nonhuman primates. These findings suggest that CUE-401 may require significantly lower doses in models to achieve an effect comparable to what was efficacious in our most models. In addition, CUE-401 was well tolerated at doses that resulted in maximal Treg expansion, which de-risk plan GLP toxicology studies. As summarized on Slide 30, Cue is highly optimistic about CUE-401. We see CUE-401 as a pipeline in a product and believe the program represents a transformative first-in-class mechanism based on cutting-edge biology and breakthrough protein engineering. We have demonstrated robust efficacy in multiple animal models of autoimmune disease with strong and supportive PK/PD findings. The breadth of early testing across species has de-risked the upcoming GLP toxicology studies. And importantly, we have developed a very productive cell line for manufacturer. Building on this groundbreaking technology, biology, IND-enabling studies currently underway give us a line of sight to important inflection points for this exciting and potentially transformative program. I'd like to now take the opportunity to introduce Dr. Andrew Cope. Andy is Professor and Head of the Centre for Rheumatic Diseases at King's College London. He's also the Chief Investigator and Chair for several clinical research organizations related to rheumatology. Dr. Cope's research has been dedicated to defining aberrant pathways of T-cell activation and differentiation in the context of chronic inflammatory diseases as well as understanding the contribution of allelic variation in autoimmune disease. Dr. Cope will share his clinical perspective on CUE-401 and participate in the question-and-answer session with us. It is with pleasure that I now turn things over to Dr. Cope to share his impressions of CUE-401.

Thank you very much, Matteo. Greetings from London and very happy to be part of the team today. And as Matteo said, give a perspective, really wearing my arthritis doctor hat as well as my T-cell biologist lab rat hat. So back in 1992, that's more than 30 years ago, I was at the bedside of the very first patient with rheumatoid arthritis treated with anti-TNF monoclonal antibodies. This was a groundbreaking moment, targeting a single inflammatory protein and demonstrating impressive effects. And we learned a lot: blocking the inflammation reduced pain and swelling, but also had some effects on immunity, particularly T cells. And I spent many, many years studying the mechanisms of dysregulation of T-cell function and trying to figure out what these defects were, with the hope and intention of being able to restore immune homeostasis in the context of my specialist disease, rheumatoid arthritis. And we learned a lot repeatedly and over many years that in fact, immune regulation was attenuated and then, in fact, the normal pathways of immune tolerance just weren't working. So it was clear that we had to take a different approach. Now maybe one of the problems we had was that we were studying established disease, chronic disease, chronic dysregulation, lots of inflammation. On the next slide, you can see that we took a different approach to try and see whether a co-stimulation modulator, so this was a T-cell targeted therapy, could have an impact before the disease even started. And this paper, which was published in The Lancet, demonstrated that an interception or intervention in people at risk of RA was possible. And we also wanted to test whether we could actually prevent the disease by this form of immune modulation. Trying to switch off the pathogenic pathways that lead to progression and to restore immune regulation, that was our goal. The good news is, is that we prevented progression when on drug. But once we stop the drug, these at-risk individuals progressed to disease. So no evidence of durable immune modulation or immune reset. On the next slide, I want to just summarize for you briefly what the problems with current therapies are. We have a large number of targeted drugs which are potent antiinflammatory agents working in a range of different ways, but together really suppressing inflammation. There's little evidence that any of the drugs we use in the clinic induce tolerance. And in fact, none of the things that we do in a routine clinical setting even come close to monitoring immune homeostasis. These drugs are of variable durability. Very often, they lose effect. We call that secondary failure. And as I said, none of them induce tolerance or restore immune homeostasis. This is this balance of effector and regulatory T cells that Matteo was talking about. And the reason we know that this immune tolerance or immune homeostasis is not induced is that if we stop these drugs even when people are in a state of deep, sustained remission, they flare. And I would say that it is of the order of 50% of individuals who flare. So drug-free remission, even in those who get to a point of sustained remission, is a very rare event. So we have to learn how to tip this balance, mobilizing the patient's own immune system to drive that balance away from effector cells and towards regulatory cells. Now on the next slide, you can get a feel for what my own personal vision would be in applying CUE-401 to a portfolio of studies that would prove immune reset in RA. And I can say with confidence that this vision is shared by many colleagues of mine, both in the rheumatology field, but across a range of different immune-mediated inflammatory and autoimmune diseases. Now if you look on this slide, it shows the natural history of RA, starting with an at-risk or pre-RA phase, a recent onset phase where people receive current standard conventional synthetic disease-modifying drugs and then the established phase, where on the whole, people will have episodes of remission and flare over many years and will cycle through multiple drugs. So what you can see on this slide, in the light brown part of the curve, is a relatively rare event where we can induce remission and achieve a drug-free sustained remission state. And I think what is particularly appealing about CUE-401 is that we can test it in established disease, people who have flares. We can test it in recent onset disease where the standard of care has pushed the inflammatory process to a level where the inflammation is not detected. So this will be a state of remission. And at that point, employ -- deploy CUE-401 to switch that effect to regulatory balance, aiming for persistence of remission and then withdrawal of drug. And what I'm trying to highlight here with the full lines and the dotted lines is the flexibility, the precision and personalized nature of introducing this treatment at a phase when it is most useful. And then being able to monitor not only the disease, but the immune signatures and being able to monitor Tregs or this conversion from the generation and detection of these inducible Tregs. And finally, I want to make a point that not only could we do this in established disease, but the thought of being able to switch this balance before the disease has even started, before there's inflammation in the joint and where perhaps this bispecific immune regulator can induce the switch systemically in secondary lymphoid organs in the periphery, preventing inflammatory cells going into the joint in the first place. So in the next slide, I just want to make a few final cursory remarks. It's my belief that we are now in an area where we can genuinely change the immune system in favor of immune homeostasis. And in my field, to be able to do this at several stages not only established and recent onset RA, but maybe even before the disease starts. And this is an area that many of my colleagues are working on across a range of autoimmune diseases, including lupus, scleroderma, psoriasis and psoriatic arthritis. Immuno-STAT is the goal, and you've heard both from Dan and Matteo about this outstanding protein chemistry, which has allowed them to develop these modified IL-2 and masked TGF-beta molecules with a degree of stability so that you can measure and detect the impact of the intervention in bladder and the tissue. And then considering this, the beauty is harnessing the patient's own immune system. We don't need to know HLA restriction, any genetic or other features. But this is applicable to many autoimmune diseases where there is dysregulation and autoreactivity through recognition of self peptides by these T cells. And then in the end, by being able to monitor in a precise and personalized way, we would dream of a durable expansion of Tregs, which will allow long-lasting tolerance, deep remission, withdrawal of drug and drug-free remission, which in my personal view is as close to immune tolerance as you can get. We call it operational tolerance. So that's all for me. I'm going to hand back to Tara and the team who will facilitate the Q&A session.

Yes, I want to thank Dr. DiPaolo and Dr. Cope for their excellent contributions to today's discussion. And before I turn the call over for questions, I just want to point out, it's been brought to our attention that one of our slides had a technical difficulty where the image wasn't projecting properly. That was Slide 29. I just wanted to remind everyone that slide will be posted on our web fully, and as we conveyed with Matteo, described with nonhuman primates, a very impressive increase in the desired activity with a market expansion of Treg. So thank you. And I can now turn the call over for questions. Tara?

Great. Thank you, Dan. Yes. So we'll be conducting a question-and-answer session with our speakers. So our first question comes from Sam Rodriguez at JMP Citizens Bank.

I have a few about one each for each series. For the CUE-100 series, what's the status on that program? And what's the -- kind of how do you see BD activities regarding that series? For the CUE-400, you showed a pretty provocative data and different indications. For the IND coming next year, which indication would you be prioritizing? And then for the CUE-500 series, do you have any other cell lines that you could target with that asset?

Sure. Thanks, Sam. So take those in sequence. So your first question, you're looking for kind of a status update on the CUE-100 series, I believe, and if I could provide some color there. What I want to underscore is that we have very supportive data. We have, as we've conveyed previously, we've enabled the data. I've been watching the data mature. The reason we did that is we believe the real advantage of our mechanism is we're simulating in the patient's own T cells to recognize cancer as foreign. And so in essence, it's almost endogenous cell therapy that we're enabling. The drug itself is not having an impact on cancer. That survival benefit that we talked about is, from our perspective, is quite profound. You typically see cytotoxic agents, targeted therapeutics getting approval on, obviously, RECIST criteria, but a couple of months of expansion of survival can often result in approval. We have a multiple of that out of what we're observing, and we believe that's from the stimulated T cell. So the point I'm getting at is while we did not see classic RECIST criteria, this is not a classic cytotoxic or targeted therapy. It's stimulating the patient's own endogenous T cells that by essence of having cancer, they're compromised. They're infrequent and they're usually exhausted. And over time, we're seeing a demonstrable survival benefit in combination, appears we've more than doubled the response rate. Our own prediction is as the market continues to mature with data from competing approaches, while those approaches may be showing what appears to be impressive response rates initially, we're confident that we're going to have superiority on the survival. So we'll see how that plays out. And that's getting attention on various partnering prospects. So we look forward to clarifying our strategic initiatives. During the second half of this year, we're expecting to be able to clarify our intentions there. 401, you asked about the IND filing and what the likely IND indication is. I'm going to turn that over to Matteo, both to describe the indication, but the rationale for what we're doing, frankly.

Yes. Thank you for the question. And again, given the mechanism of action of CUE-401, I think it's clear in part based on the data that we just shared across multiple animal models, that it's a relevant mechanism of action in multiple autoimmune diseases, inflammatory diseases in different tissue systems. So including dermatologic indications, inflammatory diseases of the gastrointestinal tract, like IBD, multiple sclerosis, transplantation. So we're really now considering and strategically assessing how best to proceed, and we anticipate having the data sort of lead us into we're the best fit for the mechanism and therapeutic benefit is. Of course, taking into account the commercial opportunity in different indications that have time and development. You then, I think, asked Sam a question about 500. And so yes, we've been exploring other potential targets. And so we see the 500 mechanism as a way to sort of, if you will, with sort of an immune scalpel, deplete certain pathogenic cell populations. And so in our collaboration with BI, we're looking at the B-cell lineage. That's perhaps the space where most clinical activity has been happening in the last 2 to 3 years, but we see the opportunity in many other cell lines as very attractive candidates, such as mast cells and eosinophils. So as you know, there's a whole series of different approaches that have derisked to a certain degree, via deletion by ADCC or other methods and provide therapeutic benefit in some atopic diseases, okay? And then if we even go further, fibroblast, and so FAP is a protein that's expressed on some activated fibroblast and some inflammatory diseases, including scleroderma and even rheumatoid arthritis. There is also a unique monocytic disease lineages and subsets that are targets in certain vasculitides. And then certainly, as the field knows more about certain T-cell subsets, one can envision targeting certain pathogenic T cells. And then, of course, I think as is quite obvious, there's a whole application of this technology in the realm of oncology. So again, a long-winded answer to your question, but I think it underscores the sort of the breadth of what these molecules can address in terms of human disease.

So our next question comes from Amin Makarem at Jefferies.

This is Amin on for Maury. A few questions from us as well. First, on the on the Treg induction, it seems clear that it works. For the Treg activation profile with cell positive for like CD25+ or CTLA-4+, do you see that down regulate as the disease pathology improves? I would assume that the Treg's functionality normally -- functioning normally from start to finish. And I have a couple of follow-ups.

Okay. Thank you for the question. Steve, Will, if you don't mind taking that question and respond?

Yes. Happy to. This is Steve Quayle. I'm the Senior Vice President of Research and Translational Medicine at Cue. So I appreciate the question. We have been looking at kind of kinetics of how these markers of activation increase in response to CUE-401 that are associated with the suppressive phenotype of Tregs. Both Dr. DiPaolo and we have seen this consistently. We've seen no evidence of reduced functionality of the Tregs being expanded by CUE-401 at later time points, consistent with the data both that Dr. DiPaolo showed in his autoimmune gastritis model as well as the data from the GVHD system, where the maintenance of tolerance persisted long after the completion of CUE-401 therapy. So we see this as a strong evidence that a functional Treg population has stayed and is keeping the relevant effector cell populations in check.

Very helpful. And just curiosity across the studies on mice. Any specific adverse events you've observed?

No. CUE-401 has been very well tolerated across all of those different disease models, both more frequent and less frequent dosing regimen. So we're very encouraged by the tolerability profile we're seeing preclinically at this point.

Great. And in the NHP data that you showed, why do you think the NHP model is showing much better responses versus the other models? And any specific safety signal there as well?

Yes. Great question. This is something we continue to examine, really seems to be at the level of the Treg expansion and induction, really just a much greater fold magnitude of increased set of Tregs. We see this as encouraging as we move ahead to human testing in the future with, of course, the nonhuman primates being our closest relative. And just, again, speaking to a strong potential activity for CUE-401 in humans. I'm sorry, what was the second part of your question? No specific tolerability signals at these dose levels that, sorry, that you couldn't see the figure there of even a 25-fold increase of Tregs in nonhuman primates are very well tolerated at these dose levels.

Our final question comes from Leland Gershell at Oppenheimer.

Just a few from us. First for Dr. DiPaolo, so very striking results in the autoimmune gastritis. I'm curious, in addition to the histology, did you look at cytokines in those in vivo samples? And any comment on kind of any patterns of cytokines and the duration of those over time? Then I've got a couple of follow-ups.

Apologies, but Dr. DiPaolo wasn't able to join us live today. He provided a recorded presentation. To my knowledge, he did not assess cytokines over time in this system. Matteo had shown in our GVHD model, where we've looked at inflammatory cytokines systemically in the blood where multiple inflammatory cytokines were significantly reduced including interferon gamma, TNF-alpha, et cetera. Rich has performed limited studies looking at directly exposing effector T cells to CUE-401 in vitro and showing inhibition of effector T-cell responses there, but that is an in vitro system.

I want to ask, it seems like you've seen activity here in multiple tissue types and compartments. Are there any parts of the body that we would expect 401 to not be particularly appropriate for at this point?

My research opinion is that no, I don't see that as a concern. And this really comes down to the natural function of Tregs. These have evolved over millions of years to be able to regulate immune homeostasis throughout the body, and that is consistent with the data that we've shown, where even in the EAE model, seeing significant suppression of demyelination in the CNS, for example. So we're very encouraged by the potential to expand the Treg population that is able to survey the body, identify sites of inflammation and exert immunosuppressive function locally.

Yes. And I will just add to that, Steve, and this is Dr. Levisetti is that from the clinical perspective, I would be very much aligning with that. And I've done quite a bit of development in the Treg space over the last 20 years and one characteristic of enhancing the Treg population as a means of controlling autoimmune diseases is it's not holistically immunosuppressive because that's the natural mechanism whereby we maintain tolerance to cell. And so we see no evidence of vulnerability with response to immunosuppression that you might see with another immunosuppressive drug, for example, cyclosporine, and that's really a wonderful, unique feature of the whole concept of this mechanism of action really resetting natural immune operational [ calling ].

Great, great. And then lastly Dr. Cope made the point about the lack of tolerance-inducing drugs in the RA setting, just kind of limited to antiinflammatories. I'm not sure if you had alluded to, is there a potential for -- on maintenance dosing, this is thinking way down the road, of course, with 401 where you have tolerance induced and you don't have to give the drug, let's say, every 2 weeks or where it may end up being? Or is it too early to say?

So Leland, this is an important question. And I think at this stage, it's too early to say. But what I can say is that we will learn a lot from the very initial studies in whichever disease they are done to get a feel for PK/PD equivalent and to get a feel for the durability from a single shot. My personal view is that we probably overtreat people with established disease. We just say, go away, we'll see you in a year. Keep shooting up every week. It's crazy. And to be able to have something with a measurable effect, which is durable and you understand the biology and you can measure it, I think is super attractive. So the monitoring comes down to monitoring blood as well as the disease and picking up signatures that tell us it's time for another shot. And that's going to be variable from individual to individual and will depend on dosing, too. And it may be that the range of dosing that we need is going to be different in different patients. And this is the beauty of the off-the-shelf approach.

So this concludes today's Q&A session. I'll now turn it back over to Dan for closing remarks.

Thank you, Tara. I'd like to summarize few key takeaways listed on Slide 39 to conclude today's call. First, it's going to clear immune balance is essential in maintaining human health. Second, we believe our biologics platform can restore that immune balance using our engineered biologics to precisely modulate selected T-cell populations, whether that be in cancer or autoimmune and inflammatory disease. Third, we believe that CUE-401 could transform the standard of care for treating autoimmune and inflammatory diseases. Fourth, we believe CUE-501 could represent a novel approach to eradicate selected pathogenic cell types by leveraging the intrinsic viral killer T cells that patients harbor. We're excited to be working with Boehringer Ingelheim and look forward to further updates and welcome the validation this important collaboration brings to the program. And fifth, the CUE-100 program has been foundational to our platform, not only are we very pleased with the survival data that's been emerging, and we continue to monitor patients as the study wraps up. We believe this data could form the basis of an important strategic oncology partnership. And it's also led to the rest of the platform the learnings we have and the different components that we've applied to these various molecules for particular functions. And lastly and importantly, we believe our resources are expected to support key developments of our corporate strategy going forward. I want to thank those of you listening in on today's call. Appreciate your continued interest and support of the important work Cue has committed to progress forward for patients suffering from debilitating autoimmune disease and cancer. So thank you very much, and have a pleasant day. Thank you.