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

Good morning, everyone, and welcome to the Cue Biopharma Conference Call on the CUE-221 CSU Phase II Top Line Results. [Operator Instructions] I would now like to turn the call over to Agnes Lee, Investor Relations and Communications Officer at Cue Biopharma. Please go ahead, Agnes.

Good morning, and thank you for joining us today. Before we begin our formal comments, let me remind you that during today's webcast, we will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These statements represent our views as of this date, are subject to risks and uncertainties and should not be relied upon as representing our views or of any subsequent date in the future. As a reminder, this call is being recorded, and a replay will be made available on the Investors section of Cue Biopharma's website following the conclusion of the event. With me on the call today are Dr. Shao-Lee Lin, our President and Chief Executive Officer; and Dr. Dominic Borie, our Chief Medical Officer and Head of R&D. Dr. Lin will open the call and then hand off to Dr. Borie to walk through the study data. Dr. Lin then close our prepared remarks, and we will take questions. With that, I will now turn the call over to Shao-Lee.

Thank you, Agnes, and good morning, everyone. Thank you for joining us. Today, we are reporting results from the Phase II study of CUE-221 in the chronic spontaneous urticaria, or CSU. We're pleased to share that the study results were positive and that we will be reviewing together those top line clinical results with you today. The key takeaway is that CUE-221 met its primary and key secondary end points in a manner that reinforces our enthusiasm for the precision engineered unique dual mechanism of action of CUE-221 and its potential to offer clinically meaningful and differentiated benefit in IgE-mediated disease. Slide 3 summarizes the salient findings from the study. The study demonstrated robust, durable and dose-responsive clinical effects. The primary endpoint of complete resolution of hives, or HSS7=0 at week 12 was met with the treatment effect further increasing past the final dose at week 16 to its peak at week 22. The key secondary endpoint of complete response or UAS7=0 was statistically significant in the high dose group, further supporting the clinically meaningful impact of CUE-221. These results were achieved in the context of a favorable safety and tolerability profile. Of note, for the CUE-221 high dose group, both the complete resolution of hives and the overall complete response, persisted for 12 weeks or full quarter and on the order of 5 half lives after the last dose. This was not seen for the lower doses or for omalizumab despite a comparable dose level, highlighting a fundamental clinical difference, consistent with the biological design differences between the 2 drugs and supporting the concept that CUE-221 has the potential to be a disease-modifying therapy. This market difference observed off drug at week 28 relative to omalizumab, provides our first clinical evidence supportive of the CUE-221 engineered dual mechanism of action that includes not only blocking of the IgE-mediated emerge cascade, like omalizumab, but also supports the clinical potential of down regulation of new IgE production unique to the design of CUE-221. Additional PK IgA data are of interest. And while not available today, will be the subject of further modeling analyses and future presentations at upcoming medical meetings. Based on this demonstrated potential for differentiated clinical efficacy in CSU and the potential to develop a new tool to target disease modification and the concept of functional cure for IgE mediated diseases, we are more than excited to now plan both a Phase IIb/III next study in CSU as well as a Phase II study for food allergy. I will now hand the call over to Dominic Borie, our Chief Medical Officer and Head of Research Development. Dominic?

Thank you, Shao-Lee. So let me take a couple of minutes to quickly walk the audience for the science behind CUE-221. First, reminding ourselves that IG drives allergic disease by engaging 2 receptors, the high affinity receptor shown here on the left, through which IgE and the allergen will trigger degranulation and allergic symptoms. And the low affinity receptor, also known as CD23, shown on the right, which is expressed on the surface of [indiscernible] and has an important role too as when down by IgE, it triggers a natural negative feedback loop that results in reduced IgA synthesis. On Slide 5, CUE-221 was designed to block IgE binding to the high affinity receptor and in doing so, provides potent IG neutralization or IG blocking. CUE-221 high binding affinity for IgE, shown here on the left, supports a greater potency preventing IgE-mediated cell degranulation over omalizumab, as shown on the graph on the right. On Slide 6, on the flip side, CUE-221 was also designed to preserve IgE binds into CD3. And this was achieved through selecting binding sites on IgE that are distant from the IgE region that engages CD3, whereas the binding site on IgE for omalizumab and its analog, [indiscernible] is the same, as shown on the right, and overlaps with the CD3 binding site and therefore, does not allow the drug IgE complexes to bind CD23. On Slide 7, as the result of the difference in engineering, increasing concentrations of IgE and complex with CUE-221 can bind to the CD23 receptor, as shown by the orange curve on the right, whereas no binding at all was measured with IgE complex with omalizumab, as shown by the gray triangle. On Slide 8, the biologic pro impact of preserved binding to CD23 was demonstrated both at the mRNA and at the protein level where addition of CUE-221 resulted in a significant reduction in IgE synthesis shown by the orange bar, that was not observed for omalizumab, in gray bar, indicating that omalizumab in complex with IgE cannot block new IgE production. On Slide 9, it was therefore very exciting to test the clinical impact of these fundamental biological businesses in the context of a Phase II randomized, double-blind and placebo-controlled study. Omalizumab arm was included for comparative efficacy and safety, but no formal statistical testing was planned. The study enrolled participants with moderate to severe chronic spontaneous urticaria, or CSU, inadequately controlled with H1 antihistamines, and patients were randomized to either 1 of CUE-221 groups at 1, 2 or 4 milligrams per kilogram, administer subcutaneously or to omalizumab at the registered dose or to placebo. All patients received subcutaneous injection every 4 weeks. And the primary endpoint was assessed at week 12 and measure the rate of complete resolution of hive or HSS 7 score of 0. This endpoint leverages an objective assessment of the number of hives, which is carried out by the physician, and achievement requires all clear skin or hives. The final dose in the study was administered on week 16 for all groups and after which patients were monitored off drug for 20 weeks through to week 36. Slide 10 shows the subjects dispositions the trial. Two subjects were randomized but not dosed, 1 in the 4-milligram per kilogram group and 1 in the omalizumab group. The dropout rates are in range with expectations for a clinical trial of that duration, further considering the 5-month observation period of drug. This study was analyzed using a modified intent-to-treat approach. The 2 subjects who were not dosed were are not part of that analysis, but all other subjects were included in the modified intent-to-treat analysis. On Slide 11, the baseline characteristics were overall well balanced across groups. This is duration range approximately for 4 to 6 [indiscernible] across groups, and [indiscernible] urticaria activity score 7 or UAS 7, were in the 28-plus point range, indicative of severe disease activity. On Slide 12, getting into the results, we are excited to report that the study primary endpoint was met. The complete resolution of hives, HSS7=0 at week 12 was significantly higher on the placebo for all those groups in a dose responsive manner with a high P value of less than 0.005 for the high dose group. On Slide 13, the key secondary endpoint of complete response or UAS7=0 was also met, and the difference versus placebo was statistically significant for the high-dose group. On Slide 14, another way to visualize the depth of response is to measure the change from baseline in U.S. sales core at week 12, which was found to be profound and statistically significant across all those groups. On Slide 15, this slide captures the depth of response at week 12 by presenting the percent reduction from baseline in UAS7 across various mechanisms. Although we're not that cross-hire comparisons are for illustrative purposes only and should not be interpreted as a direct comparison of efficacy, across various modalities, CUE-221 seems to come closest to providing full control of disease activity. On Slide 16, if you allow me to shift gears now, I want to focus on additional exciting findings arising after the week 12 primary end point. On the middle graph, across all CUE-221 dose groups, complete resolution of hives continued to increase beyond week 12 and picked at week 22, which is 6 weeks after the last injection in a dose receive manner, more than 2/3 of subjects in the high-dose group responded and achieved complete resolution of hives. Now if we look at the week 28 results, this is a time point when patients have been off drug for 12 weeks. This corresponds to approximately 5 half-lives after last dose for both CUE-221 and omalizumab given expected half-life of 2 to 3 weeks for these IgG monoclonal antibodies. Also note that the form per kg dose is for a 70-kilo patient, the molar equivalent of the 300-milligram low-layer dose. At that week 28 time points, where 60% of CUE-221 patients are still experiencing complete resolution of hives, only 24% of patients in the omalizumab group [indiscernible]. And this stark contrast can be explained only by pharmacokinetics as residual circulating drug concentrations are likely extremely low to 0 for both groups. Rather, we think that this indicates the fundamental difference in biology and provides clinical data indicating that for the CUE-221 dose group. There is something different happening, which is more than just IgE neutralization. Note that a [ post harissa exact ] test was run and found that the difference between CUE-221 and omalizumab was statistically significant. On Slide 17, to provide further perspective, we are providing here this line graph showing the rate over time of HSS7 for the 4 mg per kg CUE-221 dose group, shown in orange, versus omalizumab and placebo. After the initial injections, there is a rapid clinical impact and we can then clearly see the curve diverging after the last injection, reaching the maximal difference of week 28, as we previously discussed. This graph clearly shows the sustained high rate of complete highest revolution throughout the 12 weeks that followed the last injection of CUE-221. After week 28, both curves are converging game, trending towards the placebo response in the absence of further administration of drugs be on the week 16 dose. On Slide 18, similar to the results seen for HSS7=0, a similar pattern of efficacy was seen with the response rates or UAS7=0 which was also sustained for over 12 weeks of drug for the high dose group, again, with the same pattern of marked clinical impact of our omalizumab and supportive of a fundamental difference in biology, that is consistent with a differentiated mechanism of action. On Slide 19, building on the prior slides, we can start contracting the features of IgE-targeted therapies. What we think stands out from the week 12 data is that IgE neutral, like omalizumab or [indiscernible], which share the same binding epitopes and therefore, the same biology of IgE neutralization, they appear to perform closer to CUE-221 low doses rather than CUE-221 high dose. Later time point data has not been made publicly available for wrap. Again, we are extremely pleased with the different efficacy profile seen with CUE-221 of our omalizumab at week 28 of drug as it supports fundamental biological differences, which may be directly deriving from CUE-221 engineering. On Slide 20, from a safety standpoint, CUE-221 was well tolerated. There was no treatment-related serious adverse event, or SAE, and no adverse events of anaphylaxis. Treatment-related adverse of special interest was limited to 1 case of grade 2 injection site reaction. There were 2 instances of treatment-related adverse events leading to study discontinuation, namely 1 case of worsening urticaria and 1 [indiscernible] of Insomia. As expected, there were no deaths in the study. On Slide 21, to help place the safety financing context, and because safety considerations will be part of the benefit-risk analysis when clearing across different mechanism of action, this slide provides a summary of anticipated side effect profile for different mechaliums investigated currently in CSU. We believe that CUE-221 dual MOA should not introduce specific mechanism-related safety that will be different for IgE neutralizer, even in the presence of possibly more potage control, and this will be contracting with the recognized mechanism-related safety findings or other MOAs. We do recognize that broad interest for the fees of IgE and IgE-mediated disease results in additional MOAs, currently tested at earlier stages of clinical development. We believe that although still emerging, CUE-221 potential is already more developed and we look forward to further characterizing CUE-221 safety and efficacy profile for IgE-mediated disease. On Slide 22, altogether, we are extremely excited to have clinical results in hand that indicate the potential to reach a functional cure for IgE-mediated disease. This did not happen by chance, but may result from the fact that from the very beginning, CUE-221 was engineered to be different from omalizumab and to not only block the high-affinity receptor but do so while preserving the binding to CD23. The preserved capacity of CUE-221 IgE complexes to bind CD23 results in reduced IgE synthesis at the mRNA and protein level, something that was not seen during omalizumab. And here, we now have clinical data strongly supportive of fundamental biological differences between CUE-221 and omalizumab. We are eager to characterize the PK/PD relationship and will be presenting these additional results at an upcoming scientific conference. On Slide 23, I won't read this final slide, but it may be helpful to keep it staying up during the Q&A session. And thank you for your attention. And now I will hand it back to Shao-Lee.

Thank you, Dominic, and thanks to those who have dialed in to be with us today. As you can see, we are very pleased with the potential that CUE-221 has now demonstrated clinically and which is consistent with its novel precision engineered dual mechanism of action. Based on these exciting positive results, we are working towards the initiation of a Phase IIb/III study in CSU in addition to our planned Phase II study in food allergy. I would like to thank the Genesis Life Sciences team for designing and executing a robust Phase II trial. I would also like to extend our gratitude to all the patients, investigators and study staff who participated in this trial and support the advancement of CUE-221 for allergic disease. It has been a privilege to be at key role over the past 5 months and witnessed all the hard work progress across our portfolio. And I want to thank the entire Cue team for their commitment to our mission to identify and advance transformative therapies, designed to enable functional cures across immunologic diseases. We could not do what we love to do without the support of our Board, investors and the patients we strive to serve. With that, I'll open the call for Q&A.

[Operator Instructions] And our first question coming from the line of Maurice Raycroft with Jefferies.

Congrats on the data update. For the Phase IIb/III CSU study, should we expect a longer dosing interval than the every 4-week schedule using the current study? And will you also evaluate additional dose levels? Is there anything additional on timing for when the CSU and food allergy studies could start?

Yes. Thanks so much for joining us, and thanks for the question. So yes, I think we wanted to indicate with the IIb part of the Phase IIb/III that we're interested in understanding a little bit more about the PK IgE and response. And so we're likely -- we feel like we have a fantastic dose at this point with monthly dosing that's differentiated. So we'll likely utilize that as an anchor, but nothing is definitive yet. And then we're going to also explore given the biology that we're seeing of how best to optimize dosing for each indication. And so for CSU -- or actually for any indication, for instance, we think that we have something where we can think about fixed dosing. We think based on the profile that we're seeing, there's a potential to think about things like an induction and a maintenance regimen where we're fundamentally modifying some disease biology in the background. We think about this bathtub analogy, sort of not just emptying the bath up from blocking or neutralizing IgE, but all turning off the spigot relative to the formation of new IgE. And so one can imagine, if you can continue to turn that off better and better over time that you might reach a point where the interval of dosing now instead of induction to achieve that time point, becomes a lower dose and less frequent in terms of the maintenance. So all of these things, I think, we're going to explore, interrogate the data carefully and determine what the best sort of approaches to continuing to collect information about this new tool that we have to to help patients with IgE-mediated disease. And so that's how we're thinking about it for CSU. From a timing perspective, obviously, we think we have something important for patients, and we'll move as quickly as we can relative to that. I'd say for food allergy, something completely different. So we're -- we think of food allergy as a life-threatening disease. And in the context of thinking about that in that way, we think that this new tool gives us, as Dominic was saying, the potential to approach this from a functional cure perspective, meaning that we don't want just 2/3 of patients having protection against 3 peanuts, some of the time, we want to get as close as possible to 100% of people, having 100% protection all the time. As close to that as one can imagine getting. And so we'll approach at this sort of new tool of mechanism, new potential to modify disease in a way that will aggressively pursue that idea. And we don't think about this from a convenience perspective. Careless in that instance, if it's achievable, whether this is dosed every 6 months, 3 months or even weekly, but really about whether or not I can create an entirely different paradigm for ourselves and our kids and our families who have this life-threatening condition. So I hope that helps. And thank you for your question.

Yes, all makes sense, great perspective there. And one other specific question on the data. You reported change from baseline in UAS7, which appeared fairly similar across the CUE-221 dose groups and omalizumab. How did HSS7 change from baseline compare across the treatment arms? And are you seeing a similar pattern there as well?

Yes. The patterns that we've seen across the endpoints have been very similar, which has been comforting to us from a robustness of the signal that we're seeing. So -- and I -- and we chose the change from baseline percent to compare with others because there are some studies that have placebo and some don't, and some have active comparators, and others don't. And this was the best way to have an internal sort of a given arm to itself comparison within the context of its own study.

And our next question in queue coming from the line [ Mayank Montani ] with B. Riley Securities.

Congrats on the spectacular data here. So on the response building for 6 weeks after the last dose, which was not a phenomenon for omalizumab, is there anything in the diary data that separates continue deepening existing responders from maybe new for converting rate? I was obviously interested in that because the neutralize long half-life can only hold an effect, whereas your mechanism maybe can have that depth of response coming in late. If you could talk to that.

Yes. Thank you for that. So I think maybe the best place to see that is in the line graph or in the bar chart before that. And I know we're not sort of synchronized in terms of projecting. So all I have to ask you, the audience, to go to those slides yourselves. But the bottom line is all of these representations are actually for a complete resolution of -- so resolution of hives what we've shown in the line Graph IV. And so there's no sort of deepening of response beyond the 0, right? And so the percentage just tells you the percentage of individuals that achieve that complete resolution of, in this case, hives, response. So we are definitely getting that. And if you look at the what we think is particularly amazing about the line graph is what I'm looking at currently is you start to see the separation by week 8, you see the space between the gray line and the orange line, which is [ Alere ] versus the 4-milligram group. And that area under the curve is really quite striking. If you follow gray line, which is omalizumab, for the last dose, which is week 16, sort of -- and follow your eye down to the week 30 time point and extend that line, you can really see how that continues to degrade towards the placebo line. There was maybe one subject that sort of even off drug at that period of time, spontaneously improve, which happens in this disease state and certainly happens to small numbers. But you can see how that's degrading towards placebo, which you would act 5 months off of drug. What was surprising was the durability of the 4-milligram group off of drug. Again, as Dominic pointed out, sort of same milligram dose level, say, therefore, same molarity because they're both monoclonal antibodies, same sort of number of half lives off of drug, which is like 4 to 5, so the drug itself really be gone, and yet the effect is still there. And it tells us that there something fundamentally different in terms of the biological effect that's happening in those outer weeks between omalizumab and 221. And for us, given that 221 was engineered specifically with a second mechanism, our assumption at this point is that, that's that second mechanism in terms of synthesis and new IgE that's kicking in. And one can imagine then, for instance, that over time, if you are, in fact, effective against -- again, turning that spigot off that -- and decreasing free IgE over time that, that may actually cross 0 at some juncture and modify the way that you approach the dosing of the disease itself as well. So you can think about mechanistically things like total IgE and receptor engagement on the effector cells or the high-affinity receptor, really downregulating those receptors and making those affect receptors more quiescent over time, and then you can think about also turning off the synthesis of new IgE and reaching some sort of steady state that fundamentally is disease modifying for these patients. And so that's what we're going to explore at a bare minimum, purely clinically all of the scientific hypothesizing aside, the bottom line is that we have a remarkable clinical difference here that we think is meaningful for patients and pointing to the fact that there this molecule is providing a new tool by which we can approach getting more for each of these patient types.