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

Good afternoon, everyone, and welcome to day 2 of the B. Riley Virtual Oncology Conference. I'd like to thank the audience for staying with us today. And it is my pleasure to introduce our next presenters from CytomX Therapeutics. We have with us here today, Chris Ogden, Senior Vice President, Finance and IR; and Sean McCarthy, Chairman and CEO. Sean, please take it away.

Great. Thanks very much, and good afternoon, everyone. I'd like to thank the B. Riley team for the invitation to present today. It's really a pleasure to be here. Before we begin, I would like to remind everyone that during this presentation, I will be making forward-looking statements. Important risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. In my presentation today, I'd like to give an overview of CytomX's business strategy and pipeline, including our outlook for 2023. It's been a very exciting few months for the company as we have successfully navigated a challenging 2022 and entered 2023 with considerable momentum. Now in the quest for more effective cancer treatments given the enormous medical need that remains in oncology today, 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 of course, immunotherapies. These approaches offer powerful anticancer therapy potency, but maximizing their potential will require that we find ways to more effectively direct antitumor potency towards cancer tissue when away from normal tissue. CytomX' vision is to transform lives with safer and 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 will localize the disease tissue, thereby reducing systemic toxicities and maximizing overall benefit. Indeed, we believe at CytomX that localization will be the future of biologics. Our expertise in biologic masking, our understanding of the tumor microenvironment has positioned us at the forefront of this field. And over the past decade, we've translated our leading science into broad clinical progress having treated more than 500 patients to date with Probody therapeutics and many of these patients have benefited significantly from our drug candidates. CytomX has developed the leading platform for localizing potent biologics to disease tissue. We do this by leveraging dysregulated protease biology in the tumor microenvironment. Probody therapeutics are masked protease-activatable biologics designed to be unmasked in the protease-rich microenvironment. Now through the state-of-the-art protein engineering strategies, we're using our platform to address some of the biggest opportunities and challenges in cancer R&D today by creating conditionally activated versions of multiple biologic formats, including T-cell engagers, ADCs and cytokines. Since our early years, CytomX has pursued a very consistent strategy, which is focused on the long-term company build around the Probody platform to maximize impact for patients. Our substantial investments to date have resulted in a deep pipeline of therapeutic candidates positioned to deliver significant near and long-term value. Our robust pipeline includes 4 clinical-stage programs and we expect to file 2 new INDs for wholly owned programs later this year. As a core component of our business model, we've also leveraged strategic partnerships to extend the reach of our science, broaden our pipeline and bring important nondilutive capital into the company. And with our recently announced alliances with Regeneron and Moderna, CytomX now has 6 major partnerships. As a result of the disciplined execution of our strategy, including a restructuring that we implemented and completed in 2022, CytomX remains very strong, well funded into 2025 and positioned to execute to key milestones over the coming months and years. Our broad pipeline of Probody therapeutics encompasses more than 15 active programs. Programs for which we retain full or partial commercial rights include CX-2029, which targets CD71; CX-904 targeting EGFR; CX-2051 targeting EpCAM; and CX-801, a conditionally active interferon alpha. Our fully partnered programs include anti-CTLA-4 Probody therapeutics being advanced by Bristol-Myers Squibb in Phase II and multiple programs across various modalities, now also including mRNA-encoded biologics with our newest partner, Moderna. In my presentation today, I'll cover our pipeline by modality. Firstly, our expanding activity in T-cell engagers; secondly, our antibody-drug conjugate programs; and thirdly, our immunotherapy programs. So starting with our broad activities in T-cell engagers. As we all know, T-cell engages holds enormous promise for the treatment of solid tumors. However, the very potency of this modality can lead to widespread activation of the immune system, imposing constraints on therapeutic window. Localization of the powerful anticancer activity of this class of drugs could unlock the enormous potential for patients by enhancing therapeutic window and CytomX and our partners believe that the Probody platform could be ideally suited to addressing this challenge. Our lead program in this area is CX-904, this is a clinical stage Probody T-cell engaging bispecific targeting EGFR and CD3. This program is partnered with Amgen in a global co-development alliance. EGFR is a highly validated and broadly expressed cancer target, and we see a compelling opportunity to leverage this target to localize antitumor T-cell responses preferentially to tumor tissue. Our published preclinical data showed that a localized bispecific EGFR-CD3 Probody has a widened therapeutic window compared to its unmasked counterpart. These preclinical data led to the advancement of CX-904, and we're now well underway with Phase I. We're making excellent progress with CX-904 in the clinic. We successfully treated our first patient in May 2022, and we've now advanced through the initial single patient cohorts and we're actively enrolling into 3+3 stage of the study. The goal of our Phase I work is to assess safety of CX-904 and to select doses for expansions in future EGFR-positive cohorts. We expect to continue to make progress throughout 2023 with dose escalation for this exciting program. Staying with T-cell engagers, we continue to make progress with our multi-target program with Astellas in which CytomX retains U.S. commercial rights, U.S. co-development and co-commercial rights on a select number of targets, and we look forward to providing additional updates as the year progresses. And continuing with T-cell bispecifics, I'd like to provide some perspective here on our newest effort in this space through our recently announced collaboration with Regeneron. In November 2022, CytomX extended into a multi-target R&D collaboration with Regeneron to discover and develop new bispecific immunotherapies. Under the terms of the agreement, CytomX received an upfront payment of $30 million, and we are eligible to receive up to approximately $2 billion in milestones as well as royalties on net sales as these programs move forward. As we all know, Regeneron has considerable efforts in T-cell engagers and both companies see opportunities to broaden the reach of T-cell bispecifics by utilizing CytomX platform to localize these highly potent agents into tumor tissue widening therapeutic window. This shared vision formed the basis of our discussions last year, leading to the deal we announced in November. And given Regeneron's acknowledged high bar for external innovation, this collaboration is yet another proof point of the validation of CytomX scientific and platform expertise. We're currently launching this important new alliance, and we look forward to advancing paradigm-changing medicines for patients in collaboration with Regeneron. Moving now to the application of our platform in the field of antibody drug conjugates. ADCs are, as we all know, an increasingly important class of anticancer therapeutics with many new drug approvals in recent years. Now conventional ADC targets must be differentially expressed on tumor relative to normal tissue. Otherwise, these potent agents will cause undesired side effects, lowering therapeutic window. At CytomX, we're leveraging the Probody platform to unlock novel ADC targets by localizing drug activity towards tumor tissue and away from normal tissues. And it's important to note here that the Probody ADC concept encompasses masking of the antibody component but not the payload itself. So we need to take this into account as we evaluate these agents in the clinic. I'd like to focus here on CX-2051, a newly emerging wholly owned CytomX ADC program. This is a conditionally active Probody ADC targeting epithelial cell adhesion molecule or EpCAM. EpCAM has been regarded as a high-potential oncology target for decades and has been clinically validated by others. This new program takes advantage of key learnings in our work to date on ADCs and the platform broadly and also the translational cycle of bench to bedside to bench and then back to bedside again, allowing us to design and optimize the next generation of Probody therapeutics. CX-2051 is tailored to optimize therapeutic index for EpCAM expressing epithelial tumors, by matching the target with the payload, and also tumor sensitivity to the payload. We've optimized masking, we've optimized protease capability, and we have selected a captive [indiscernible] derivative, topoisomerase 1 inhibitor in the Tecan class as the payload for this drug. The Tecan payload class has shown exciting clinical results recently with ADCs, including HER2 and Trodelvy, and we really think this payload is the optimal choice for this program. We think EpCAM is a great target for our platform, one of the most attractive aspects of EpCAM as a target is its prior clinical validation. For example, the antibody toxin fusion, Vicineum, developed by Sesen Bio demonstrated impressive clinical activity in non-muscle invasive bladder cancer. But due to systemic toxicities, this drug needed to be administered locally. In short, efforts to generate systemic anti-EpCAM therapeutics have to date not been successful. CX-2051, however, has demonstrated a wide predicted therapeutic index and strong preclinical activity in multiple preclinical models, including colorectal cancer. A few examples of the tumor expression profile of EpCAM are shown here, highlighting that there are many paths to explore in the clinic with this exciting new drug candidate, including very high expression in colorectal cancer. We anticipate filing an IND for this novel ADC in the second half of 2023. Moving now to our most advanced lead clinical stage ADC CX-2029, which is a first-in-class conditionally activated antibody drug conjugate that targets CD71 or the transferrin receptor. Now similar to EpCAM -- similar to EpCAM, CD71 has been regarded for decades as a target with great potential, but it presents unique challenges for the development of anticancer therapeutics because of its wide expression in healthy tissues and its central role in iron metabolism. Essentially, CD71 is an undruggable target using conventional approaches. However, we've proven with our previous Phase I work, and in updated Phase II data presented just a couple of weeks ago that we can successfully target CD71 with our technology. We are the first to have reached therapeutically active levels of an anti-CD71 ADC in the clinic as well as they have demonstrated clinical activity in several areas of unmet medical need. Now CD71 is a high-bar target. There's no question about that, and that's by design. And we continue to learn from this work, how to maximize the potential of CX-2029 and also how to maximize potential of our overall Probody platform for ADCs and also for other modalities. We've now completed the Phase II expansion phase of our clinical evaluation of CX-2029 and the study design is shown here. There were 3 parts to this study. Part A was a 3+3 dose escalation that ranged from 0.1 mg/kg to 5 mg/kg administered every 3 weeks. This work has been published previously in clinical cancer research. Beginning at 2 mg/kg, additional patients could be enrolled into Part B, which was a biopsy cohort. And Part C encompassed the Phase II expansion cohorts, where patients were dosed at 3 milligrams per kilogram 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. The esophageal cancer cohort included both squamous and adenocarcinoma histologies and enrollment is now complete across all cohorts. Patients enrolled in the expansion phase were heavily pretreated across all cohorts with a median of 3 prior lines of therapy, including most patients having previously experienced both platinum-based therapy and also a checkpoint inhibitor. Patients were not selected for CD71. Looking across the data over the completed expansion phase and taken together, we saw encouraging clinical activity in tumors of squamous histology with objective response rates ranging from 7% to 21% and disease control rates ranging from 53% to 67%. We've previously reported clinical signals for CX-2029 in head and neck squamous and in squamous nonsmall cell lung. And we've recently been very interested to see another squamous tumor signal emerge in esophageal cancer. This slide focuses on our most recent data for esophageal cancer where the objective response rate was 21% and the disease control rate was 57%. Three out of 14 efficacy evaluable patients had confirmed partial responses. 5 patients had a best response of stable disease. As of the reported data snapshot, 5 patients remained on study, including the 3 confirmed PRs and 2 patients with stable disease. These patients were heavily pretreated and all responders had received a prior checkpoint inhibitor. Interestingly, CD71 has been implicated as a poor prognostic factor for esophageal cancer, and we're excited to be following up on this new signal. The next slide shows the spider plots across all tumor cohorts in the expansion phase, and I want to again emphasize here that these are unselected and heavily pretreated patient populations. And there are several things to note here. Firstly, responses 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 corner spider plot. We continue to explore this intriguing clinical activity to develop potential patient selection strategies as we move the program forward. And it is known in the scientific literature that CD71 is genomically amplified in certain squamous tumors, and this certainly merits further investigation. Turning to safety. The tolerability of CX-2029 across the expansion cohorts remained 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 to the spider plots on the previous slide, 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. In summary, we have successfully utilized the Probody platform to open a therapeutic window for an antibody drug conjugate targeting CD71 for the first time, highlighting the power of our platform technology. 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. Biomarker evaluation for patient selection is ongoing, and we also continue to evaluate anemia mitigation strategies as we learn more about how to utilize this first-in-class, very novel drug candidate. We look forward to working with our partner, AbbVie, throughout 2023 to determine the next steps for this exciting program. I'd like to shift gears now and cover our ongoing work in the cancer immunotherapy space, starting with our emerging work in the field of cytokines. At CytomX, we believe there is enormous potential to harness the powerful anticancer activity of cytokines by utilizing our localization strategies to direct cytokine activity towards tumor tissue and away from normal tissues. Our lead program in this space is a conditionally activated form of interferon alpha-2b. Interferon alpha is a powerful mediator of immune cell activation with, we believe, the ideal properties for cancer immunotherapy if we can better target its activity. Interferon alpha-2b provides an orthogonal activity to IL-2 to IL-12, IL-15, in the cancer immunity cycle. It can kill cancer cells directly leading to immunogenic cell death and also stimulate antigen-presenting cells to activate T-cells directly. These properties confirm the potential for a conditionally active interferon to potentially unlock checkpoint inhibitor refractory or resistant indications, which is an enormous unmet need in oncology today. Our lead molecule in this program is CX-801, which is a duly masked version of interferon alpha-2b. In data presented at SITC 2022, we demonstrated that CX-801 has a wide therapeutic index with an enhanced tolerability profile compared to unmasked interferon. Our data have highlighted CX-801's preferential activity in the tumor microenvironment as well as the potential for synergistic effects when combined with checkpoint inhibitors. We believe CX-801 has the potential to become a unique centerpiece of combination therapy for a wide range of tumors. And we had to rapidly advance this potentially best-in-class program towards clinical evaluation with an IND filing targeted for the second half of 2023. Wrapping up my review of our broad and deep pipeline, I'd like to briefly cover our collaborative work with Bristol-Myers Squibb on next-generation anti-CTLA-4 Probody therapeutics. CTLA-4 continues to be an important target and a foundational immuno-oncology strategy, but CTLA-4 blockade does have a narrow therapeutic window. Our work with BMS encompasses 2 clinical stage programs designed to broaden the therapeutic window for CTLA-4 therapy and to expand the clinical utility of this foundational target. BMS-986249 is a Probody version of ipilimumab, which BMS continues to evaluate in a randomized Phase II study in patients with metastatic melanoma in combination with nivo. 249 is also being studied in several additional expansion cohorts in additional tumor types. BMS also continues to study the non-fucosylated CTLA-4 targeting Probody, BMS-986288. And this is in Phase I. This strategy is aimed at enhancing the clinical benefit of ipi via superior APC mediated T-cell priming. We continue to be excited to be playing such an important role in BMS next-generation CTLA-4 efforts, and we look forward to future clinical updates on these programs. Returning now to our announcement last week of the latest accomplishment in our partnering strategy, which is our strategic alliance with Moderna. In this new collaboration, CytomX and Moderna will be bringing our platforms together to research and develop mRNA-encoded conditionally activated biologics. 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. Under the terms of the agreement, CytomX will receive an upfront payment of $35 million, which includes $5 million of prefunded R&D expense. CytomX will also receive -- will 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 a future CytomX financing. Moderna is our sixth major partner, and we are thrilled to be entering this new collaboration to focus on opportunities in oncology and also in new therapeutic areas. We're particularly excited to be moving into new therapeutic areas outside of oncology with Moderna because we've known for a long time that the protease microenvironment is dysregulated in many diseases in addition to oncology, and we had a long-standing interest in developing our platform in non-oncology therapeutic areas. We look forward to making progress with Moderna in these new directions. Now Moderna's global impact, of course, 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. I'd like to close by reiterating the depth, the breadth and the scale of our work at CytomX as we advance our multimodality Probody therapeutic pipeline with more than 15 active programs, strong partners, significant retained pipeline ownership and an increasingly validated platform. Our company has never been stronger, and we look forward to making substantial progress over the next 12 to 24 months. To sum up, CytomX enters 2023 with tremendous momentum. We continue to lead the field of conditional activation and we and our partner to see the localization of potent Biologics as a strategic area of R&D in oncology and increasingly outside of oncology. Looking to 2023 and our outlook. This will be a year of focused execution by the company across both our partnered and our wholly owned pipeline for CX-904. We're intensely focused on execution towards dose optimization for future expansion phases. For our wholly owned pipeline, we expect to file INDs for 2 next-generation molecules, CX-2051 and CX-801. Additionally in 2023, we expect to progress our most mature collaborations, including determining next steps of CX-2029 with AbbVie and we expect additional progress from BMS for the CTLA-4 programs. And then lastly, we're just super excited to be kicking off these new alliances with Regeneron and Moderna and also to be making progress across all of our collaborative programs. So thanks very much for your time. I'm happy to take questions at any remaining time.

Excellent. Really helpful overview of the pipeline. And it looks like it's going to be quite exciting 2023 over at CytomX.

So I did get a couple of questions come in from investors that would be great to touch on briefly. Maybe starting on the CX-904 program, can you talk about maybe qualitatively how the enrollment is tracking there? And also, how might you be considering the strategy for potential expansion cohorts, whether it be GBM and others?

Yes. Thanks for the question. So as I mentioned in my comments, we're very pleased with how enrollment is going. The study -- we're able to start the study in single patient cohorts given the relatively low starting doses, and we've successfully navigated those purity cohorts very swiftly actually, to then be able to get into the 3+3 stage, which is where we are right now. This will be a fairly methodical dose escalation as we go through this year. We have -- from our extensive quantitative systems pharmacology modeling, we have very sophisticated models as the way we would anticipate reaching biologically effective doses. But I'm certainly empiricist at heart, and we need to see the data, do the experiment. So -- so this is a year of focused execution to continue escalation. And not really much what we can say right now until we get to those doses where we're comfortable that we're in that biologically effective range to start expanding other than that we will expand in EGFR positive tumor types, and we'll probably expand at more than one dose given the ongoing dialogue with FDA in the industry around project optimists and how to optimize mid-stage clinical development for dosing of investigational therapeutics.