CytomX Therapeutics, Inc. (CTMX) Earnings Call Transcript & Summary

Good day, and welcome to the CytomX conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Chris Ogden, Senior Vice President, Finance. Please go ahead.

Thank you. Good afternoon, and thank you for joining us. With me on the call today is Dr. Sean McCarthy, CytomX' Chief Executive Officer and Chairman. Before we begin, I would like to remind everyone that during this call, we will be making forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise. Earlier today, we announced a strategic collaboration agreement with Moderna to research and develop mRNA-based conditionally activated therapeutics for oncology and nononcology indications. Additionally, we issued a press release providing an update on our therapeutic pipeline and a summary of our company priorities for 2023. We encourage everyone to read both of today's releases and the associated materials. A recording of this call can be found under the Investors and News section of our website. In our agenda for today, Sean will provide perspective on the Moderna alliance and cover pipeline and platform updates, including clinical progress with CX-2029, our expanding efforts in the field of T-cell engaging bispecifics and our key areas of focus for 2023. With that, let me turn the call over to Sean starting on Slide 4.

Thanks, Chris, and good afternoon, everyone. Thanks for joining us and for your interest in CytomX. In the quest for more effective cancer treatments, given the enormous medical need that remains in oncology, the research and development of biologic therapies for cancer has evolved to highly potent formats that include T-cell engaging bispecifics, antibody-drug conjugates and immunotherapies. These approaches offer powerful anticancer potency, but maximizing their potential will require that we find ways to more effectively direct antitumor activity towards cancer tissue and away from normal tissues. CytomX' vision is to transform lives with safer, more effective therapies. We aim to realize this vision for the benefit of patients by leveraging our Probody platform to create high-impact therapeutics that are localized to disease tissue, thereby reducing systemic toxicities and maximizing overall benefit. Our expertise in biologic masking and our understanding of the tumor microenvironment places us at the forefront of this field. Over the past decade, we have translated our leading science into broad clinical progress, having treated more than 500 patients to date, many of whom have benefited significantly. Our continuous advancement in the field of localized biologic therapies has positioned CytomX to potentially unlock some of the biggest challenges in cancer R&D and beyond. Turning to Slide 5. CytomX has pursued a consistent strategy focused on long-term company build around the Probody platform to maximize impact for patients. Our investments to date have resulted in a deep pipeline of therapeutic candidates with potential to deliver significant near and long-term value. As a core components of our business model, we have also leveraged strategic partnerships to extend the reach of our science, maximize our shots on goal and bring nondiluted capital into the company. As a result of disciplined execution of our strategy, CytomX remains very strong, funded into 2025 and highly focused on executing to key milestones over the coming months and years. I'd now like to share some recent highlights regarding our progress at the company, starting with our announcement today of our collaboration with Moderna. So moving to Slide 6. In this new collaboration, CytomX and Moderna will be bringing our platforms together to research and develop mRNA-based conditionally active biologics. Under the terms of the agreement with Moderna, CytomX will receive an upfront payment of $35 million, which includes $5 million of prefunded R&D expense. CytomX will also continue to receive R&D funding for the collaboration and is eligible for up to $1.2 billion in milestones as well as royalties on net sales. Additionally, Moderna has an option to participate in the future CytomX financing. Moderna is our sixth major partner, and we are thrilled to be entering this new collaboration to focus on new opportunities in oncology and also in new therapeutic areas. CytomX and Moderna share a vision of investing at the intersection of biology and technology to transform the lives of patients, and this perspective is central to our partnership. Moderna's global impact has shown the enormous power of mRNA, and we look forward to working closely with our newest collaborator to bring novel mRNA-based localized therapeutics to patients with unmet medical needs. Turning now to Slide 7. Our broad pipeline of Probody therapeutics spans preclinical to Phase II and includes a range of modalities, including T-cell bispecifics, immunotherapies, antibody drug conjugates and now mRNA. Across our internal pipeline and partnered projects, we now have more than 15 active programs at CytomX, including 2 new INDs for wholly owned programs coming later this year. We'll provide a full update at JPMorgan next Wednesday. Today, I'll cover select highlights from our pipeline. And I'd like to start with our most advanced antibody drug conjugate CX-2029. Slide 9 provides an overview of CX-2029, a first-in-class conditionally activated antibody drug conjugate that targets CD71, the transferrin receptor. CD71 has been seen for decades as a target with great potential, but it presents unique challenges for the development of anticancer therapeutics because of its widespread expression in healthy tissues and its central role in iron metabolism. However, we've proven at CytomX through our previous Phase I work and now in the Phase II results we're sharing today the CD71 does indeed have the potential to be an effective drug target. We are the first to have reached therapeutically active levels of a CD71-targeted ADC in patients as well as to have demonstrated clinical activity in areas of high unmet need. CD71 is a high bar target by design and we continue to learn from this work how to maximize the potential of CX-2029 and our overall Probody platform. Before going through the latest data, let me remind you of the study design, which is outlined on Slide 10. There were 3 parts to the Phase I/II study. Part A was a 3 plus 3 dose escalation that range from 0.1 mg per kg to 5 mg per kg administered every 3 weeks. This work has been published previously in clinical cancer research. Beginning at 2 mg per kg, additional patients could be enrolled into Part B, a biopsy cohort. Part C encompassed the Phase II expansion cohorts dosed at 3 mg per kg every 3 weeks. The Phase II expansion cohorts included squamous non-small cell lung cancer, squamous head and neck cancer and esophageal and gastroesophageal junction cancers. Esophageal cancer cohorts included both squamous and adenocarcinoma histologies. Enrollment is now complete across the expansion cohorts and this data provides the basis for our update today. Slide 11 highlights the study population, which was heavily pretreated across all cohorts. With the median of 3 prior lines of therapy, including a majority having previously experienced both platinum-based therapy and a checkpoint inhibitor. Patients were not selected for CD71 expression. Slide 12 summarizes efficacy data. Taken together, looking now at the data across the completed expansion phase, encouraging clinical activity was observed in tumors of squamous histology, with objective response rates ranging from 7% to 21% and disease control rates ranging from 53% to 67%. We have previously reported clinical signals for CX-2029 in head and neck squamous cell carcinoma and squamous non-small cell lung cancer. And we've recently been very interested to see another squamous tumor signal emerge in esophageal cancer. Slide 13 focuses on new data for squamous esophageal cancer where the objective response rate was 21% and the disease control rate was 57%. 3 out of 14 efficacy evaluable patients had confirmed partial responses and 5 patients had a best response of stable disease. As of the reported data snapshot, 5 patients remained on study, including the 3 partial responses and 2 patients with stable disease. Slide 14 provides the spider plot across all tumor cohorts in the expansion phase, and I want to again emphasize here that these are unselected and heavily pretreated patient populations. Now there are several things to note here. Firstly, responses to CX-2029 can be durable. Secondly, all responses observed to date with CX-2029 have been seen in tumors of squamous histology. No responses were observed in esophageal adenocarcinoma as shown here in the upper right spider plot. We continue to explore this exciting clinical activity, and we note that it's known in the scientific literature that CD71 amplification is high in certain squamous tumors. Moreover, CD71 has been implicated as a poor prognostic indicator for esophageal cancer. We continue to interrogate this data to develop potential patient selection strategies in collaboration with our partner, AbbVie. Slide 15 provides an overview of the safety data in the study population, which is generally consistent with our previously reported clinical results for CX-2029. Anemia was the most common treatment-related adverse event with 76% of patients experiencing grade 3. Referring back now to the spider plots across the expansion cohorts. It's notable that patients who responded tended to do so fairly quickly, which is not unusual for an ADC. And investigators were generally able to maintain these responses and keep patients on drug through a combination of strategies, including dose reductions, dose delays and transfusions. Slide 16 summarizes our current takeaways with CX-2029. First, we have successfully utilized the Probody platform to open a therapeutic window for an ADC targeting CD71 for the first time. Meaningful clinical efficacy has emerged in heavily pretreated patients with tumors of 3 distinct squamous cancer types, including a newly observed signal in squamous esophageal tumors. Biomarker evaluation for patient selection strategies is ongoing, and we also continue to evaluate anemia mitigation strategies as we learn more about how to best utilize this drug candidate. On behalf of all my colleagues at CytomX and our collaborator AbbVie, I'd like to say that we're extremely proud to have brought CX-2029 to this point, and we're tremendously grateful to our investigators and to the patients, who have participated in this study. We look forward to working with AbbVie throughout 2023 to determine the next steps for this program. Next, I'd like to transition to our expanding activities in the field of T-cell engaging bispecific therapeutics, starting with a brief update on CX-904, our bispecific EGFR-CD3 Probody, which is currently in Phase I and partnered with Amgen in a global co-development alliance. The localization of potent activity of T cell engagers into solid tumors continues to be a major opportunity in cancer R&D, and the Probody platform may be ideally suited to unlocking this modality. Slide 18 outlines the rationale for CX-904. EGFR is a highly validated and broadly expressed cancer target, and we see a compelling opportunity to leverage the target to localize antitumor T cell responses preferentially to the tumor microenvironment. Our published preclinical data show that a localized bispecific EGFR-CD3 Probody can increase therapeutic window for this potent target combination. These preclinical data led to the advancement of CX-904, and we are now well underway with Phase I. The overall goal of the Phase I dose escalation portion of the study is to assess safety and to select a go-forward dose or doses for subsequent expansions in EGFR positive tumor types. Turning to Slide 19. I'm very pleased to share today that we are making excellent progress with CX-904 in the clinic. We successfully treated our first patient in May 2022 and have now advanced through the initial single patient cohorts, and we are actively enrolling patients into the 3 plus 3 phase of the study. We expect to make progress throughout 2023 with CX-904 dose escalation. Staying with T cell engagers on Slide 20, we continue to make progress in our multi-target program with Astellas, in which CytomX retains U.S. co-development and co-commercialization rights on a select number of programs and we look forward to providing additional updates. Finally, regarding T cell bispecifics, I'd like to provide some perspective on our newest effort in this space through our collaboration with Regeneron outlined on Slide 21. Under the terms of the agreement with Regeneron, CytomX received an upfront payment of $30 million and is eligible to receive up to approximately $2 billion in milestones as well as royalties on net sales. Research under the collaboration is funded by Regeneron. Now of course, Regeneron is a world-class R&D organization with a track record of consistently inventing, developing and commercializing new medicines. Regeneron has considerable efforts in T-cell bispecifics, and both companies see opportunities to broaden the reach of T cell engagers by utilizing CytomX platform to localize these highly potent agents to tumor tissue widening therapeutic window. This shared vision formed the basis of our discussions last year, leading to the deal we announced in November. Given Regeneron's acknowledged high bar for external innovation, this collaboration is yet another point of validation for CytomX scientific and platform expertise. We're currently launching this important new collaboration and we look forward to delivering paradigm-changing medicines for patients. Before closing the call, I'd like to briefly cover on Slide 23, the potential events and milestones at CytomX for 2023 across both our partnered and our wholly owned pipeline. For CX-904, we are focused on execution towards dose optimization for potential future expansions. For our wholly owned pipeline, we expect to file INDs for 2 next-generation molecules. CX-2051, our EpCAM targeting ADC and CX-801, our first localized cytokine targeting interferon alpha-2b. Additionally, in 2023, we expect progress in our most mature collaborations, including determining next steps for CX-2029 in conjunction with AbbVie and additional progress with BMS for the ongoing CTLA-4 programs. Lastly, we are really excited to be kicking off work with our newest partners, Regeneron and Moderna and to also continue to make progress across all of our collaborative programs. To sum up, CytomX enters 2023 with tremendous momentum. We continue to lead the field of conditional activation and we and our partners see the localization of potent biologics as a strategic area of R&D and oncology and increasingly, outside of oncology. In addition to our robust pipeline and strong partnerships, we start 2023 in an excellent financial position to continue to weather market uncertainties, and we look forward to a highly productive year ahead. At CytomX, we have pursued our vision relentlessly for more than 10 years, and we have invested heavily in bold clients to build the unique depth and breadth of our platform and pipeline. And we remain steadfast in our commitment to build CytomX into a highly successful long-term company. With that, operator, let's open the call up for some Q&A.

[Operator Instructions] Our first question will come from the line of Mitchell Kapoor with H.C. Wainwright.

Sean, this is Dipesh Patel on behalf of Mitchell Kapoor. A few questions here. The first one is, can you point to any reasons the Phase II data from CX-2029 in squamous non-small cell lung cancer was delayed from the fourth quarter of '22? When do you expect to have this data? And do you expect any delays in other pipeline programs due to these same factors?

So the update -- thank you for the question. The update today is, of course, across all of the cohorts in the expansion study, the lung cohort, the head and neck and also the new data on esophageal, which we haven't reported at all previously. So as I remarked in my comments and detailed in the slides and in the press release, there are indeed full updates across the fully enrolled cohorts for each tumor type.

Okay. Great. Second question, how do you view yourselves compared to competition that may be using conditionally activated molecules in the space, such as Werewolf Therapeutics? Who are the key competitors as of today? And what are the key attributes that you are watching the closest?

Yes. That's a great question. We're really pleased to see other -- we have been pleased over the years to see other entrants into this field. As you know, we already pioneered this field and we continue to lead the field at CytomX. And it's great to see others following that lead. We continue to believe that we are a very long way ahead in terms of the depth of the science, the breadth of the pipeline, the extent of our clinical experience. And I think that's very much evidenced by these new collaborations with Regeneron. And today, we've announced with Moderna. We now have 6 major partnerships, and it's our leadership in the science and in the clinical realm that has attracted these partners. So we plan to maintain this lead.

Okay. And any kind of comments on any competitors that you're watching today and who are the ones that you're watching the most closely?

I think we're watching the whole field with very close interest and that's a pretty significant number of companies. I wouldn't want to single out any particular company at this stage.

Great. And then my last question given the research collaboration announcement with Moderna today, when might we expect to hear additional details on the planned programs and when could these programs begin?

Well, we'll be kicking this collaboration off very, very shortly. There are no details provided today regarding the nature of the targets or the programs we'll probably be holding that type for some period to come. It will -- the collaboration will begin life as some initial research that we'll need to do on these programs. So we'll guide in the fullness of time.

One moment for our next question. And that will come from the line of Etzer Darout with BMO Capital Markets.

Just one, just if you could maybe frame the opportunity a bit more for squamous esophageal similar to what you did in the past with squamous non small cell lung, just a sense of sort of the opportunity there and potential benchmarks that you would look out for sort of this medium 3 prior lines obviously refractory population, just to give a sense of what we could sort of view will go forward -- path forward, if you will, for the program, given the response we saw today?

Yes. Thanks, Etzer, for the question. So it's a very interesting -- actually super exciting new signal that we've got in esophageal. As I'm sure you know, there's a pretty aggressive disease and where we are in the late-line setting. And so I think it's fair to say that by the time patients get to the third line, there are very, very few options for patients with a very rapidly progressing disease. And we've seen some very interesting confirmed responses. First-line, second-line therapy is quite variable, actually, but it tends to be chemo and then chemo plus a checkpoint inhibitor. The population, there is a pretty strong skewing of the squamous esophageal patient population to Asian countries. It's not -- I mean there is a significant number in the U.S., but it's really quite prevalent condition in many Asian countries. And indeed, we did some of our clinical work there. And in talking to investigators about the speed of some of the responses we've seen and the benefit that we've had for patients has really encouraged us. It's really too early to talk about any benchmarks. We're obviously in close collaboration and discussion with our partner, AbbVie. But -- so I don't really have anything to say there today. It's still a little too early in the program to comment. But we're very excited about this activity in this late line setting.

One moment for our next question. And that will come from the line of Mara Goldstein with Mizuho. .

This is [indiscernible] for Mara. One question on 2029. You indicated that you were in discussion with AbbVie. I'm just curious what could that next step in tell? And when -- like what sort of time line are we thinking about to hear about the next step for that program?

Yes. Thanks for the question. So the way that the collaboration with AbbVie is structured CytomX had responsibility for running the expansion phase of the Phase I/II study. And that's the data that we've updated today. And that expansion phase is now largely complete. After the expansion phase wraps up, the program per contract goes back to AbbVie to run the next studies. So we'll be having, obviously, close dialogue with AbbVie in the coming months regarding what those potential next studies could be. And I can't really comment any more than that at this point in time.

Got it. And then just one more question on 2029. So you mentioned that one possibility of potentially enhancing the -- the 2029 is true biomarker selection. I just curious if you have a look at patients, who may have responded or stay in disease control, whether there are certain biomarkers that correlate to the efficacy of 2029? And if that's the possibility of exploring that with AbbVie further?

It's a key focus of our work with AbbVie at the moment, and we're exploring a number of different directions for potential patient selection strategies. Of course, the obvious one being CD71 expression itself. I think as we commented previously, and in fact, in the clinical cancer research publication that we put out about 1 year ago. I don't think we can say that a target -- from the Phase I work at least that a target response relationship has jumped out at us from the data. And it could be that there are some unique characteristics about CD71 as a target because one of the reasons we've always liked CD71 so much is that it's such a rapid internalizer. We just don't know how much target is necessary to give a response. And it may turn out to be that the biology is a bit more complex than a direct response to target level correlation. So we need to do more work, and we are doing that work with AbbVie. But it's not lost on any of us, of course, that anything that we could do to select patients and decrease the denominator here would be advantageous as the program moves forward into potential later-stage studies.

Got it. And then if I may, just to squeeze one more in on the Moderna collaboration. I know you're keeping tight lip, but could you just maybe give a little bit of color on what could like in terms of the characteristic of the product, because when we think of -- on the CytomX Probody technology, we typically think about proteins, engineering type of product, what could mRNA-based conditionally activated therapy looks like?

Yes. Thanks for asking the question. I'm very excited to answer it. So -- this is a very interesting convergence of the platforms of the 2 companies. And here's why. So Moderna has published some very interesting work showing that intravenous administration of mRNAs that encode therapeutic antibodies can actually lead to therapeutically relevant levels of antibodies in patients. And as you know, and I really don't want to speak too much for Moderna, not appropriate for you to do so, but you will, of course, be aware that Moderna is very, very actively and very aggressively moving into therapeutics with their mRNA platform. So that work is really very important because it shows that -- it opens up mRNA-encoded biologics to their platform. And with -- and of course, CytomX has one of the most, we believe, one of the most sophisticated biologics platforms out there in terms of our ability to localize biologic therapy into tumor tissue, and we believe into other disease tissues as well. So the program, the collaboration will be focused on, mRNA-encoded biologics, and that's really all we can say at this point. But it is just super exciting to be working together with Moderna, and we can't wait to kick this collaboration off.

One moment for our next question. And that will come from the line of Roger Song with Jefferies.

A couple from us. The first one is also about the 2029. So I think in the past, you were guiding the squamous non small cell lung cancer, probably 20% is the bar for the ORR and the esophageal and GEJ is a little bit kind of more complex. But in terms of the next step you are discussing with AbbVie -- so you also talked about the biomarker and anemia mitigation strategy. So will that be part of the discussion to further improve the efficacy profile, you will move forward or that kind of effect profile may be sufficient to -- for the next step kind of for the -- maybe less heavily to pretreated patient population?

Yes. Roger, thanks for the questions. So I think you touched on a number of different components to the program and to the ongoing thinking that we're doing with AbbVie regarding 2029. And as is usually the case, of course, as one gets more experience with a very unique drug candidate like this. One has more data to work with in terms of thinking about what the levers are in terms of optimizing the way that we could use the drug in the future. And so -- yes, absolutely, biomarker strategies, target selection of these types of strategies, we're going to be looking at very aggressively. Anemia mitigation, it's been quite interesting actually in the -- as we've continued the expansion phase, and I mentioned in my prepared remarks, our observations really over the last year as we've been continuing to gain experience with 2029 are that if patients respond, they're going to respond pretty quickly. And the anemia does come on pretty rapidly as well. But with more experience utilizing the drug, of course, positions are much more on the lookout for it and ready if patients are responding to think about leveraging mitigation strategies such as dose reductions, dose delays, and transfusions. I can tell you that about 80% of patients do get transfused. And so that is a strategy that can keep patients on drug. And we continue to learn with our investigators, how to manage patients when they are responding. So there's plenty to work with here, we think. In terms of what -- how response rate relates to specific next steps devil's in the detail there, and there's nothing more we can say, as I've already commented, we have to talk to AbbVie more. But I would say that we're pretty interested in this esophageal signal because there's very few options for these patients in the late line.