Cullinan Therapeutics, Inc. (CGEM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Morgan Stanley's Global Healthcare Conference. I'm Sean Laaman, Head of U.S. Smid-Cap Biotech Equity Research here at the firm. Before we commence, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Cullinan Therapeutics with CEO and Nadim Ahmed; and CMO, Jeff Jones. Welcome and thank you for your time, gentlemen.

Thanks, Sean. Great to be here.

Nadim, I might start out by inviting you to make some comments about Cullinan, what the company does and maybe some of the catalysts potentially coming up.

Sure. Yes, happy to do that. Thanks again for the invite.

Welcome.

So I would say, as a company, we're at an important inflection point. with a series of catalysts ahead in the coming months, which we're very, very excited about. From a pipeline perspective, we focus exclusively on potential first-in-class or best-in-class molecules. That can have a transformative impact so that we can deliver on our mission to create new standards of care for patients with autoimmune diseases and cancer. The other thing I would add is given the very high rate of failure in early phase clinical development, we've taken a multiple shots on goal strategy. And so you'll see following passing important stage gates through discovery, we have put a series of programs in the clinic over the past couple of years. And I think the clinical data from these Phase I studies will be important for us to make near-term go/no-go decisions. And that's really important because making sure you have a higher bar for advancing molecules into late-stage development for us is especially important because we want to make sure we continue to prioritize capital allocation to our highest priority program, which is CLN-978, our CD19xCD3 bispecific T-cell engager, which we're exploring in a range of autoimmune diseases. And our view on the program is we have a very competitive executional position. We have a highly differentiated molecule. And in CLN-978, we feel that we have an off-the-shelf potential best-in-class disease-modifying treatment that can be applied across a broad range of unmet needs across autoimmune diseases. And just last year, when we expanded our R&D efforts beyond oncology into autoimmune diseases, we quickly built out an immunology team, that's focused exclusively on CLN-978 8. And as a result of that, in the same year, we were the first company to actually get an IND clearance by the FDA in the U.S. for a CD19 T cell engager in autoimmune diseases. At the same time, the team stood up a global development program. And now we have 3 ongoing studies in high unmet need indications and large market opportunities, which is very attractive for us. At the same time, we also added additional external immunology expertise to both our Scientific Advisory Board as well as our Board of Directors. And so now we have an ongoing study in lupus, so SLE that's taking place in Europe, U.S. and your home country, Australia, Sean. So excited about that program. We just updated guidance. We have a small change in timing. We have initial data now expected in the first half of '26 from Q4 '25 originally. We have an ongoing RA study also in parallel and working closely with the University of Erlangen Group in Germany who have really led the way for T cell engager development in autoimmune diseases. That timing is per our original guidance of first half of 2026. And we also very recently opened up a Sjogren's disease study, which we're very excited about. And I think the other thing I'd add is we were very pleased to see the recent ULAR data, where we see further validation of CD19 as an important high-impact target as well as T cell engagers as an important new modality for potentially treating autoimmune diseases. So that's kind of the autoimmune disease side of things. From the oncology perspective, we have our EGFR exon 20 inhibitor zipalertinib, which pending FDA discussions, our partner, Taiho, has guided to an NDA submission by the end of this year, important milestone for us as a company. Yesterday, we had 2 oral presentations at the World Congress on Lung cancer, important patient subsets, both patients who received prior amivantamab and uncommon EGFR mutations. And then next month, we're presenting data on the activity of zipalertinib in brain met to ESMO. So a lot to look forward to. zipalertinib clearly is addressing a range of important unmet needs. At the same time, though, strategically based on the deal we have with Taiho. It also can be a source of nondilutive capital for the company where we still owed $130 million in terms of regulatory milestones for U.S. approvals of frontline and second-line non-small cell lung cancer as well as a 50-50 profit share in the U.S. In terms of oncology, we've also guided to initial clinical data in Q4 for CLN-049, another T cell engager, which targets FLT3xCD3, so looking forward to presenting those data later this year. And then finally, from a balance sheet perspective, in our last Q earnings, we reported over $500 million in cash at the end of June 2025, which gives us the resources to execute against our priority programs, generate both near-term and long-term catalysts without the need for any near-term capital raises, which I think is really important in this marketplace. So hopefully, I gave you a snapshot of all of the exciting stuff that's going on at the company at the moment.

It's a snapshot of a lot, a very high level of activity, a bunch of catalysts and well capitalized. So thank you. Just one macro question that I have, and I know that Cullinan has got skin in the game here is with China trying to biotechs rise and innovation. I mean how is that influencing your R&D and business development strategy?

Yes. Great question, Sean. I mean the amount of innovation that's coming out of China is pretty amazing. And ultimately, we think it's going to be good for patients. And our recent transaction to license in velinotamig, a BCMAxCD3 T cell engager is really an example of us kind of trying to capitalize on that opportunity. The very attractive aspect of that deal was that Genrix Bio had already planned a Phase I study in autoimmune diseases. So our very first study with that molecule will be in China, which would then allow us to generate data very quickly, which we expect will allow us to accelerate our regulatory and clinical development plans ex China also and allow us to start studies at clinically relevant doses as well. So for us, it's a really important source of innovation, and we get to not only bring in a molecule from China but also get to do some studies in China first, both in a cost-effective and accelerated way. So we're excited about that opportunity.

Wonderful to hear. I might start with CLN-978. So that's your lead immunology program. Before we dive into the ongoing studies, can you provide an overview of your rationale for developing the CD19xCD3 T cell engager in autoimmune disease.

Sure. Sure. And I think if you look historically, it's often been the case that drugs that were initially developed for the treatment of B-cell malignancies have found great utility when reapplied to the treatment of autoimmune diseases because they're B-cell depleting. And the centrality of the B-cell depletion mechanism is important for the therapy of a number of autoimmune diseases. But that's typically been carried out through monoclonal antibodies. And just as T cell engagers and CAR-T as alternative approaches for CD19 or CD20 directed B-cell depletion are in order of magnitude more potent than monoclonal antibodies. The initial data has been emerging that, that same relationship holds true in the autoimmune disease context where a T cell redirecting approach either through a T cell engager or a CAR-T can achieve a depth of B-cell depletion that not only ameliorate symptoms, but also addresses the underlying pathophysiology of the disease with disease-modifying effect. So allowing patients to discontinue chronic immune suppression and really enjoy some patient free time. This was initially demonstrated through academic experiments with CAR-T, the results of which most of the listeners will be very well aware of that have been further validated more recently by sponsored studies. And we've since seen the same kind of data emerge for T cell engagers, both CD19, CD20, BCMA, but various B-cell-directed targets have achieved depths of response that seemed only attainable with CAR-T, but now with the T cell engager, some of which have clunky administration, narrow therapeutic indices. So we think that an even better molecule like CLN-978 in our portfolio has an opportunity to achieve similar results with an improved therapeutic index, allowing the drug to be administered with potent effect in routine settings of care, which for most autoimmune disease patients in the U.S. is in the community.

Thanks, Jeff. I think somewhat covered the next question already, but I'll ask it anyway. Like following the TCE data sets presented at ELA, what learnings do you take away? And how do you view CLN-978's differentiation from other candidates in development for autoimmune disease?

Yes. So I think there are a couple of -- like before maybe talking about CLN-978 specifically, just what are the key learnings? Well, the key learning is that TCEs can achieve a depth of B-cell depletion associated with disease-modifying treatment effect. And that can be achieved with a therapeutic index that appears acceptable in the autoimmune disease context. And this has been shown across now a range of diseases, inflammatory myositis, systemic sclerosis, places where there aren't many effective therapies as well as in patients where you would think there are plenty of adequate therapies like rheumatoid arthritis, but there are still patients who cycle through all of them and have need for additional therapy. There is clearly a dose response effect demonstrated. It does appear that when patients are treated at doses closer to the oncologic approved doses of these repurposed molecules that the responses are deeper. And it's generally requiring applications of more than one therapeutic dose but still a defined duration of a B-cell depleting dose. So if we look now to CLN-978, we've shown preclinically and in our initial first-in-human study in non-Hodgkin's lymphoma that we could achieve depths of B-cell depletion greater than 95% peripheral blood B-cell depletion at doses that were associated with no ICANS and no higher than grade 1 cytokine release syndrome. And so we believe that in application in autoimmune disease settings that safety profile will likewise hold up. The molecule is designed to be highly potent through specificity for CD19, exceptionally high binding affinity picomolar concentrations, as compared to nanomolar concentrations for the CD3 binding arm. Preclinically and again in our initial clinical experiments, this demonstrated a broad therapeutic window between B-cell depleting doses in the doses where there were high levels of cytokine production that in the clinic would be associated with clinical cytokine release syndrome. The molecule is really small. So in instances where tissue penetration is important 65 kilovalton versus antibody size molecules in the 130-plus range, we think that this drug that through binding to human serum albumin extends half-life to give it antibody-like kinetics, but with BiTE-like features together presents a very compelling molecule for development in autoimmune disease.

Thank you, Jeff. The 978 data in SLE, so you pushed it back slightly from Q4 to 1/8/26. So just -- if you could just provide some flavor as to why and when we see the data, what data should we expect to see?

Sure. Yes, happy to cover that. So as I said, again, a small change from Q4 2025 originally to first half 2026 now. Two important things about that. The first and most important, the update was not based on any adverse clinical findings. So let me just make that very clear. And the update only applies to the lupus study. And so the RA study is still expected per original guidance of first half of '26 for the initial data. So actually, as you think about first half '26, now we'll be able to have a more comprehensive update with data from both studies, lupus and RA. I think the thing that we have found, which I think our industry has found in general, lupus studies are hard to enroll in. So that's the first thing I'll say. However, I would say, at the same time, we have seen a tremendous amount of enthusiasm from both our study sites and investigators, and that was manifested in the way that we saw a very high level of activity in patient screening, which is very, very important. And so Jeff and the team have been really engaged with sites. I'm going to ask him to elaborate on this finding and also talk about our action plan moving forward to make sure we're able to deliver data from the first half of '26.

Yes. And maybe Nadim, I'll just underscore that initial point that you made that investigator enthusiasm has been quite high. And the majority of our sites that are active have screened one or more patients for the SLE trial. But as Nadim alludes, screening has not always led to enrollment. And we've been out speaking to our investigators on site talking to their teams. And what we're finding is that the initial eligibility criteria were a bit too restrictive to facilitate enrollment into the study. And this is really around 2 major issues. The first is around the extent of prior therapy where we previously required patients to be experienced with either a biologic or cyclophosphamide and then secondarily, the SLEDAI score of 8% or higher. So in a protocol amendment that we have implemented, we have broadened the eligibility to include patients who receive biologics or small molecule inhibitors which are much more likely to be given, particularly to patients treated in community settings and lowered the SLEDAI score from 6 to 8, park fund from 8 to 6, which is still the cutoff for moderate disease by the SLEDAI. In reviewing our screening logs, we can see that this would have allowed a significant number of patients to enroll on the study. But as importantly, we understand from our sites and their staff that this would allow more patients to actually enter screening because there's this prescreening rate that it's hard to characterize but we knew that some patients were not being presented the option of the trial because you could just review the record and know they wouldn't be eligible. We're continuing to increase the number of sites. This will increase the number of academic sites, in particular, since they are a bit slower to come online and where they are enriched for patients with higher disease activity and more extensive prior treatment. And we'll do this in the U.S., Australia and Europe to have the broadest reach across the patient population. I'd also emphasize that here in the U.S., we have partnered with some important patient advocacy groups who partner with select companies to accelerate the enrollment of their studies by helping sites activate trials and helping us interact with investigators and site staff and the Lupus Research Alliance, the lupus therapeutics arm runs a loosen network, and we're very proud to be partnered with them and and working to execute this important trial. I think altogether, these things will help compel us to proceed through the dose escalation far more expeditiously.

Yes. One thing I would add, Sean, on this question is given that -- this is our highest priority program. We're going to continue to make sure we're applying the resources needed to continue to expeditiously advance the program. That's important. And then going back to your question about expectations around the initial data for lupus. And so the way we framed it is it's going to be data from Part A of the study, which is the dose escalation phase. And the 2 key areas, first, safety, obviously, critically important in the dose escalation phase of the study as well as B-cell depletion. So they are the 2 areas we're really going to focus in this initial data cut. Of course, any clinical findings, et cetera, we have we'll report out. But things like durability, et cetera, will be in subsequent reports of the data.

Wonderful. Thank you. And what is the bar for doorus remission SLE? And what can we -- when can we expect to see that data for 978?

Sure. Yes, I think the first most important thing to point out is that today, investigators are not getting their patients into Doris remissions. And so I do think there's still a little bit of a disconnect between investigator expectations and investor expectations. And so that's the first thing because when we speak to rheumatologists, what they tell us is currently when they look at their standards of care, including, by the way, the biologics, the antibodies they're always adding those treatments on top of chronic immunosuppressive background therapy. And I think with the T cell redirecting therapies, CAR-t or T cell engagers, this is the first time they're having the opportunity to take patients off their background therapy and truly get into Doris remissions. And I think the advantage and Jeff alluded to earlier, we've T cell engagers is that you have this off-the-shelf potential disease-modifying approach that rheumatologists can give to their patients in the community where those patients are. And that's where we see the very strong advantage. And when we speak to investors and KOLs ask, what are you looking for, which is really at the crux of your question. And what they tell us is, since I can't get my patients to remission today, if you have something that I can give in the community that can give a minimum of 20% to 30% of patients and get those patients into remission you're going to see systemic widespread adoption. Now obviously, we're going to push for higher. But the point is the bar for T cell engagers is much lower because it's a treatment that they can give in the community, and they don't have to go through all the other things with some of these more complex modalities. And so we're very pleased about the opportunity we have with CLN-978 for those patients.

Wonderful. And perhaps moving away from 978 in SLE, but 978 in RA, first data are expected in 1H '26. Perhaps help us characterize what you see as the unmet need there.

Yes. I think if you look -- I mean RA obviously is a very large indication. So if you think about the U.S., you're talking about just under 2 million patients, almost 1 million patients that are the moderate to severe patients. And then when you look at the truly so-called polyrefractory or difficult-to-treat patient population, the patients that are going to be in our study that have failed multiple DMARDs -- that alone is 60,000 patients. That's all of lymphoma combined. And so this is about the magnitude of these large autoimmune indications. And I think there, there's clearly a significant unmet need. Our starting point will be in those difficult-to-treat patients. But I think if we see good activity there, we have the opportunity to move up in the treatment sequence and much larger opportunities. Yes, right now, the RA study started quite a bit after the lupus study. So the team is really focused on execution in both the lupus study and the RA study, we are actively dosing patients. And so for the RA study, because it started later, we haven't given exact guidance to that first data set, but we will do over the coming weeks and months.

Sure. And can we expect to see tissue penetration data here or other data that will differ from what you will share with the SLE study?

Yes. That's a great question. And just to emphasize that while we would have liked to have included some assessment of tissue level B-cell depletion in the SLE study, we knew that, that would be prohibitive for patient recruitment, on what is already a somewhat challenging setting to recruit patients. On the other hand, in RA, particularly in Europe, where we're conducting the study, synovial biopsies are often obtained as part of standard of care. So we can incorporate synovial biopsies into our RA study at the European centers to look at the level of B-cell depletion in disease-affected tissues. We also have the opportunity in a subset of patients on that study to look at B-cell depletion in lymphoid tissue through lymph node biopsies. In the case of Sjogren's, salivary gland biopsies are also often obtained either for diagnosis or as part of monitoring patients they're minimally invasive, a part of standard of care and can be integrated into a clinical trial and allow us to obtain this important tissue level B-cell depletion data. As Nadim said, the silver lining of presenting the more fulsome data in the first half of 2026 is that we'll be able to have observations from multiple clinical studies.

Thank you, Jeff. The Phase I in Sjogren's, it's rolling in U.S. and Europe. What's the overlap of areas or potential synergy with other autoimmune indications that's you're in?

Yes. I mean primary Sjogren's is still quite common in the U.S., about 800,000 patients. But if you look at the number of patients that are affected with secondary Sjogren's or as an overlap syndrome with another significant autoimmune disease like RA and particularly lupus, the numbers are many, many times that. And sometimes the features of Sjogren's, in either case, primary or secondary, are relatively untreated accept symptomatically with available therapies. And so progress in Sjogren's Has been relatively limited. I think part of it is an increasing understanding that while less common, 15% to 20% of patients with Sjogren's will ultimately develop a severe systemic disease that is every bit as severe as other autoimmune diseases, not just dry eyes and dry mouth. And so for that group of patients, in particular, disease-modifying therapies are necessary. So I think there's an opportunity in Sjogren's Itself. And to the extent that you demonstrate activity in children, there is a halo effect for therapeutic benefit across a broader range of autoimmune diseases that are sometimes overlapping with Sjogren's disease.

You touched on this on the intro and the China question, but with blinotamig, can you talk about what drove the decision and how you see the T cell engager complementing 978?

Sure. Yes, absolutely. So with CLN-978 8, we have a potent B-cell depleter. And with velinotamig, we now have a potent plasma cell depleter. And so between the 2 agents, we now have the opportunity to reach a broader range of autoimmune diseases than either molecule or either approach alone. I think secondly, for us, we still view CD19 as the optimal target given the breadth of the B cell compartment that it covers. And so for those diseases where B-cell dysfunction is a primary driver, then clearly, CLN-978 is going to be the right treatment for those patients. However, there are some diseases where the pathophysiology is driven by these pathogenic autoantibodies that are produced by long-lived plasma cells. And long lived plasma cells typically have very low CD19 expression or no CD19 expression. And that's where velinotamig can be really useful. So I think between velinotamig and CLN-978, we now cover the full range of the B cell compartment. And so it will allow us to again reach more diseases and have a very complementary approach with CLN-978 being targeted for those diseases where B-cell biology is important and for velinotamig, those diseases where plasma cell biology is much more important.

Great. Thank you. And Cullinan will be responsible for further development in autoimmune disease following the completion of the Phase I data by Genrix. That is expected to start by the year-end, I believe. Can you provide more color on what will drive your decision to prioritize which autoimmune disease?

Yes. Sure. Jeff, you don't...

Yes, it's a great question. And I do think there is evidence already existing, that the role of plasma cells, particularly long-lived plasma cells are central to the pathophysiology of certain disorders. And probably the single best example is myasthenia gravis, where anti-acetylcholine receptor antibodies are clearly produced by long lived plasma cells. So in that situation, directly addressing the pathophysiologic the pathologic cells, the long wood plasma cell offers the opportunity for durable benefit in the absence of ongoing therapy, which would really distinguish the T cell engager mechanism of action from other available therapies like FcRn. But there is a broader group of diseases that are clearly antibody driven. There's already some case studies reported for patients with thyroid eye disease, graves disease. We've also seen emergence of the utility of BCMA after CD19 failure in patients with autoimmune cytopenias, which are all antibody driven. So I think there are some places where existing data tells us there are initial good places to go. But I think there are a lot of opportunities, and we're continuing to explore those for a differentiated development strategy from CD19, as Nadim alludes.

Wonderful. Thank you, Jeff. Moving to zipalertinib. You presented the RESILIENT-1 results yesterday. Can you provide a recap of the data shared?

Jeff?

Sure. So with our partners at Taiho, we actually presented 2 data sets: one, RESILIANT-1, which is our Cullinan sponsored Phase II study. And the data that we presented was from a cohort of patients, 84 in total, who had received prior therapy with amivantamab, which as many following the space will know, is a fully approved drug for the treatment of exon 20 patients. In that group of patients, we showed that in patients who had received amivantamab prior therapy in the broad group, a 27% overall response rate with a clinically meaningful durability. If we drill down to the subgroup of patients who had only received prior amivantamab and no other exon 20 directed therapy like a TKI, the response rate rose to just above 30% durable out to about 8 months, which is a clinically meaningful response and then clinically meaningful durability in a very heavily pretreated group. The safety profile so far is very similar after amivantamab as in patients who had only received prior chemotherapy with most of the adverse events being typical for EGFR inhibitors low grade in most cases.

And Taiho, I believe, is on track for the regulatory submission to be completed by year-end. Can you talk more on the strategy of -- and the launch preparations?.

Sure. Yes, happy to do that. So the first thing I would say, our partners at Taiho are leading the commercialization efforts. And so they have a strong track record in the U.S. of being able to commercialize targeted therapies very effectively. We do have a co-promotion option, which would be post approval of the drug in the frontline setting. So we have plenty of time to decide whether or not we want to opt in. Again, I would say the way the deal is set up, we are still owed at $130 million for first line and second-line approval. And then we do have that 50-50 profit share in the U.S. So -- the 50-50 profit share, the cost part of that applies whether we have our own field force or Taiho has 100% field force. And again, we don't have to make that decision yet until the frontline approval.

Yes. Wonderful. And I believe data from RESILNT-2 cohort in patients with active brain metastases they're expected at ESMO. How should we think about the additional market opportunity in the 2 RESILIENT-2 cohorts?

Yes, I would say -- so if you look at the uncommon EGFR mutations, that's about 12% of all EGFR mutations. So it's of a magnitude of size that's similar to the exon 20 population. So that's quite an attractive opportunity. With brain mets, if you have a molecule that can solicit intracranial responses, then that can apply across both exon 20 and non-exon 20 subsets. So that would really be the hallmark of a very differentiated molecule. So that, of course, opens up a pool of broader patients because as patients' disease progresses, you see the incidence of brain mets accumulating. So it really is a significant problem. So generating data that again shows intracranial activity would be important from a differentiation perspective.

And I think just to add to your point, Nadim, it's also very important for moving the drug up earlier in lines of therapy, where the size of the patient pool is larger since that investigators have told us consistently that drugs with intracranial response rates are important as part of frontline therapy as well as opportunities for adjuvant therapy after surgery, where you're really focused on preventing intracranial metastasis and prolonging overall survival.

Okay. Second to last question. Just remind us of the balance sheet and the runway position.

Yes. I think so in our last quarterly earnings, we reported over $500 million in cash, end of June 2025. And as we think about this catalyst-rich period ahead of us, that does give us the resource to have both near-term and longer-term catalysts. And I think just as importantly, ensures that we don't have an immediate near-term need for capital raise, which in this market is pretty important. So I think, as you alluded to, Sean, we have cash. We have catalysts and we have the programs in place to kind of continue to drive value for patients, but also our shareholders.

Great. One final question. What did I ask that I should have?

I think one area that we're excited about is in Q4 of this year for the first time, we'll be presenting our initial data for CLN-049, which is our FLT3xCD3 T cell engager. So it's another T cell engager. T cell engager has become a core expertise for the company. So we look forward to presenting those data in Q4.

Wonderful. We're coming short on time. So thank you, gentlemen, for your time today and attending the conference. I appreciate it.

Appreciate it.

Thank, Sean.