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

So good afternoon, everybody, and welcome to Barclays Healthcare Conference in Miami. Do raise a hand or ping myself or one of my associates if you have questions that need to be addressed. My name is Peter Lawson. I'm one of the biotech analysts at Barclays. I cover mid-cap oncology biotech companies. Really delighted to have up on the stage with me, Sean McCarthy from CytomX.

And first question really is kind of the -- I guess the differentiating factor that we have around your approach, kind of, how is that resonating in the sense of partnerships and how partners are perceiving that activation of kind of a prodrug antibody?

Yes. Thanks, Peter, and pleasure to be here. Thanks for the invitation. So just to briefly recap the core technology that we've been developing at CytomX for now more than a decade. Our belief is that biologic therapies, as they continue to become increasingly potent, whether it's antibody-drug conjugates or bispecifics or cytokines, they will benefit from increased localization into tumor tissue and indeed, potentially in other disease areas as well. And we firmly believe that localization will be the future of biologics, actually. So we've been pioneering our Probody platform for the last 10-plus years. And in short, our approach is to take an antibody or a biologic drug and to mask the drug typically with a peptide and mask it in a protease-dependent manner, so that the mask is removed specifically and selectively within diseased tissue. And the overwhelming amount of work that we've done over the last few years has been in the oncology space. We've known for a very long time, there are thousands of publications in the literature showing that protease biology is disregulated, turned on in tumor tissue. In fact, protease biology plays a fundamental role in tumor cell invasion, migration and metastasis. And so we realized some years ago that we could leverage this protease activity to activate these localized biologics in tumor tissue by removing the mask. So the technology really has an intrinsic differentiation to it. We are the first company to do this. We have seen -- given the progress that we've made in the field, including bringing the company to the public markets in 2015, we have seen a number of new entrants into the field, somewhat related in terms of masking strategies, other companies taking other approaches to localization of biologics. And in our case, the leadership that we've shown has attracted partners. And we've been very proud to form 6 major partnerships over the years with Bristol-Myers, Amgen, AbbVie, Astellas, and most recently, with Regeneron and Moderna. And I think these 2 recent deals, in particular, continue to underscore the leadership and the differentiation in our technology in that both of these partners, our newest partners, are coming on board to access the latest generation of technology of our platform technology and also to take advantage of the more than 500 patients of clinical results that we've generated over the last few years as well. So we're very thrilled to have these new partners and continue to be making significant progress across all of our alliances.

That's always impressive, like 500 patients essentially of [indiscernible] and understanding on how the molecules work. The material collaboration, I find that pretty fascinating. And kind of how does that integrate with their kind of mRNA approach? And how did they come to pick you versus others?

Yes. So it's a very interesting convergence. And as we've said in our discussions of the deal since we announced in January, the 2 companies do share a lot in common in terms of investing at the interface of biology and technology. And the basic concept of the foundation of the alliance is to use Moderna's mRNA platform to encode and express Probody therapeutics or conditionally activated therapeutics. So the foundational work that Moderna has published that led to this discussion was first published a couple of years ago. Actually during the pandemic, they were working on things in addition to the vaccine, of course. And this work demonstrated that the intravenous administration of mRNAs encoding a therapeutic antibody could actually elicit in a dose-dependent manner therapeutically active levels of the antibody in healthy human volunteers. So it's a remarkable study and a foundational study, as I've already said, in showing that mRNA delivery can achieve therapeutic levels of a biologic, opening the door to using the mRNA platform to encode a wide range of different biologic drugs. In a way, Moderna is taking 2 big steps forward with this collaboration. Firstly, they're utilizing their platform to use mRNA as opposed to the more conventional manufacturing strategies that one would go through to make a biologic and put it into a vial and administer that to the patient. So they're able to basically bypass that entire manufacturing step for a typical biologic drug, and also coming to us and leveraging our conditional activation, take yet another step in localizing the biologic once produced by the mRNA into diseased tissue. Now one other very interesting feature of this deal is that it's our first alliance that actually takes us outside of oncology. So as I said, the vast majority of the work that we've done over the years has been in oncology. We are a very oncology-focused company, but we will be working with Moderna in some non-oncology therapeutic areas for application of mRNA-encoded biologics. We haven't said very much at all yet about exactly what that will look like, but we're thrilled to be taking that step. And it potentially opens the door to additional work that we could do potentially with new partners in the future in non-oncology areas as well.

Good. And then just thinking about the pipeline. So CD71 ADC, kind of when should we get updates around kind of go forward around that partnership with AbbVie?

Yes. So the CD71 program is our CX-2029 asset. This is an ADC, a masked ADC targeting CD71. CD71 is a very interesting cell-surface protein. It's biological role is as the transferrin receptor. It's a protein that, in the course of its ordinary biological role, cycles off the cell surface very, very quickly, actually within seconds, actually, to deliver the transferrin complex into dividing cells. There's been a long interest in leveraging this transport mechanism of CD71 to deliver drugs into cancer cells. No one has exceeded, thus far, until CytomX in actually opening a therapeutic window for targeting CD71 with a therapeutic, and in our case with an ADC, even more impressive, we believe. We have shown in our clinical work-to-date clinical activity in several tumor types, including head and neck cancer, squamous non-small cell lung, and most recently, reported in January, in squamous esophageal cancer. So the drug clearly has single-agent activity in several tumor types. The drug has an overall well-tolerated profile. Anemia is the principal dose-limiting side effect, we can perhaps discuss in a moment. And as I said, the drug candidate is partnered with AbbVie. CytomX has been responsible for running all of the clinical studies so far. So our responsibilities are now beginning to wind down. We've run Phase I dose escalation. We actually published that work. We completed the Phase Ib, or if you like, Phase II expansions. We've passed that data now on to AbbVie. And the next step will be to determine the next clinical pathway for the drug. AbbVie is reviewing that data, and we expect to hear from them this year on their potential next steps. And as I said, we have seen activity in several tumor types, and we look forward to hearing the direction for the future development of 2029.

Got you. If they handed it back to you, would you ponder that again? Or would you move forward with it? What's your kind of...

Yes, I think like in any of these decision points that one comes up to with a major partner, one, there's always a scenario where the asset comes back. We haven't fully thought through what we would do exactly. We've got some ideas, but we'll cross that bridge when we come to it.

Got you. Okay. You mentioned the anemia kind of the strategies there to kind of control it.

Yes. So the principal side effect of 2029 has been anemia, and in part, likely relates to the biology of the target itself. So the reason that no one has been successful developing an unmasked ADC to CD71 in the past is because of the central role that CD71 plays in iron metabolism. But because of the central importance of iron metabolism to erythroid development to red blood cell development, preclinical results would predict that there is a zero therapeutic window for a non-masked ADC because of this impact on hematologic processes. So what we've been able to do by masking the ADC is open the window wide enough to achieve therapeutic exposures in cancer patients that have resulted in clinical activity, as I've already mentioned, in several tumor types. So clear single-agent activity at the recommended Phase II dose of 3 milligrams per kilogram dose every 3 weeks. At these doses, and indeed, we pushed the dose to 4 and 5 mgs per kg in dose escalation, we do see hematologic impact, particularly anemia, but we have shifted the dose response curve such that the anemia is predictable, reversible and we believe manageable with a combination of interventions. And those interventions include red blood cell transfusions, dose reductions and dose delays. And as we gained more experience with the drug candidate over the last couple of years -- and particularly last year, as we were working with the esophageal cohort, I would characterize the anemia management as follows: the paradigm that's beginning to emerge as we gain more experience has been that because this is an ADC, if patients are going to respond, they will likely respond fairly quickly. So over the first few cycles of the drug. So when a patient comes in for their first scan, certainly by the second scan, an investigator will have a pretty good sense as to whether the patient is responding to the therapy, and most patients will get anemia. We have 70-plus percent of patients that get grade 3. So it is very predictable. Most patients will get it. If the patients are in response, what we've been seeing is the investigators are working with the patients to leverage these mitigation strategies, transfusions, dose reductions, dose delays to try to maintain the patient in response. But for patients who have shown activity, whether it's been stable disease or actual confirmed PRs, they've typically been able to stay on drug for significant periods of time for a period of 4 to 6 months or longer. So we'll continue to learn about the drug. We have explored erythropoiesis-stimulating agents like darbepoetin. We haven't seen a lot of impact on the anemia to this point. There may be more we can do there in the future. But it is -- I think it's important to say that we have been gaining more experience as time has gone on. And this does remain -- I think it's important to note, it's still an experimental drug candidate that we'll learn more as we move forward.

Got you. I mean the base technology here, the prodrug approach exceptionally powerful. Just your idea is about exploring, I guess, different toxins, different linkers or different ways of linking. Is that another approach that, at some point, you want to explore?

Yes, absolutely. And just to take a step back in terms of the company's evolution over the years, I mean, we have been successful in raising substantial sums of capital for the company, both through our equity raises over the years and importantly, through the multiple partnerships. We've actually been able to generate more than $500 million of nondilutive capital from partners. And what that's enabled us to do is to go really deep on the science and continue to innovate over the years and make sure that we maintain our leadership position in biologics localization and conditional activation. One of the ways that we're doing that and continuing to capitalize on learnings is evidenced in 2 new INDs that we'll file this year that incorporate learnings from those many hundreds of patients that we've now got clinical experience with, to go back to the lab and optimize the platform. And I'll start with a drug candidate called CX-2051, which is our next-generation masked ADC, targeting a very interesting protein called EpCAM. EpCAM is epithelial cell-adhesion molecule. It's one of the first tumor antigens to ever have been described. Actually, it's broadly expressed on most solid tumors at high levels. It also is the name of the target it might suggest, epithelial cell-adhesion molecule. It's present on most epithelial normal tissues. So people have tried to drug EpCAM over the years and failed because of its normal tissue expression. Antibodies to EpCAM have failed in the clinic due to toxicity. However, we do know that local administration of anti-EpCAM therapeutics can be very effective in shrinking tumors. That's been shown with a bispecific and also with the toxin fusion protein developed by others. So it's a validated target with the potential for significant activity in a range of tumors if we can find a way to dose it systemically. So our masked ADC 2051 is -- that's our strategy to achieve the drugging of EpCAM. And the payload that we've selected for 2051 also reflects our learnings over the years. So the first 2 ADCs that we put into the clinic, 2009, which we deprioritized last year, and 2029, which we've just discussed, the CD71 program, they respectively have leveraged payloads called DM4 and MMAE. The 2051 program has a camptothecin payload, which is a topoisomerase-1 inhibitor, which we anticipate we'll have a broader therapeutic window and is very similar to the payloads on Igs and HER2 and on Gilead's Trodelvy. So we believe that we've got a great target in EpCAM. We've got a great payload in camptothecin. We have a, we think, a very optimized masking strategy. And we think that the probability of technical success for this asset is correspondingly higher as we now move it towards the clinic by filing the IND this year.

I'd love to pick your brains on the Bristol collaboration. They've moved one of the molecules forwards, the non-fucosylated version. And just -- what's your tea leaf reading around that?

Yes. So it takes a little bit of time to work through the multiple programs. We're doing so much with BMS. So just bear with me for a moment. So we are working with BMS on 2 particular Probody approaches. One is a Probody version of ipilimumab itself, so Yervoy, that's called 249. We're also working with them on a Probody version of what's called 218. 218 is Bristol's non-fucosylated anti-CTLA-4 antibody. It's a nonfucosylated version of ipi. And the design of that program, the goal of 218, of their antibody, is to be a more potent version of ipi. The Probody version of 218, we call 288, is designed to be a masked version of 218. So it's meant to be a safer, more effective version of the non-fucosylated ipi. At their earnings call, a few weeks ago, BMS announced their prioritization of that non-fucosylated Probody, which now is the leading edge of their next-generation CTI-4 program. We're really excited about this. It means that CytomX technology is on the leading edge of BMS' next-gen CTLA-4. And if you look at the data that BMS presented at SITC last year on 218, the non-fucosylated antibody, you can see that they made a lot of progress in Phase I. They showed that the drug has clear activity. It shows intriguing activity in MSS CRC, so microsatellite-stable colorectal cancer. They were able to escalate to doses of about 70 milligrams. And you could infer from that poster that there may be some value in dosing higher, and that will be one of the things that I would anticipate and I will be looking at with the Probody. And the reason I say that is that the 249 ipi Probody that they presented Phase I data on at ESMO last year, updated Phase I, they were able to take the very high doses in Phase I because of the masking. So we know masking works. We know masking can achieve higher doses, and it's going to be very exciting to see where BMS takes the 288 program now in -- as they progress into Phase II. And they also announced the advancement from Phase I to Phase II at earnings. So we're thrilled with the progress with our partner, BMS, on next-gen CTLA-4.

That's great data, great collaboration there. Kind of where do you think they'll end up prioritizing the molecule moving forward?

Yes. We really don't know at this point. Their strategy -- their Phase II strategy is under development. I mean, obviously, they have a long-standing interest and a big franchise in melanoma. But I think the activity that they've shown in CRC and these 2 recent posters for 249 and 218 is noteworthy. That's a major unmet area of medical need where ipi is not currently indicated itself. And I wouldn't be surprised to see them move into other tumor types as well. So we're excited to see where they take it.

Got you. And then I guess in the last minute or so, just on your T-cell engager, your EGFR t-cell engager, again another interesting construct. When can we see initial data? And when do you think we get to a recommended Phase II dose?

Yes. So very excited about 904. This is our first masked bispecific entered into the clinic. This program is partnered with Amgen and a global co-development relationship. We retained significant U.S. commercial rights. The vision of the program is to target EGFR-positive tumors with this bispecific immunotherapy to essentially increase the immune cell activity in EGFR-positive solid tumors. We are in dose escalation. We're making progress. We have announced that we have cleared initial single-patient cohorts in early Phase I. So moving along nicely. And we're now in the 3-plus-3 phase. We're not quite ready to guide on timing of data, but we are thrilled with the progress and looking forward to seeing what this program will do for patients. I would emphasize also that, of course, Phase I is principally about safety and attaining a recommended Phase II dose to move into subsequent expansions, and that's the main goal of the work that we're doing right now.

Got you. And where do you think it would fit into current treatment regimens?

Well, I think there's a lot of places that can fit in. If we just think about EGFR therapy itself, we have the EGFR antibodies, of course, cetuximab, panitumumab they have their place. We have the TKI inhibitors, which have their place, a different strategy, of course, inhibiting mutated kinases in various tumor types. This is a very different mechanism and a very different way to leverage eGFR from an immunobiology standpoint. So I think there's a wide range of potential applications. We'll have to see, as always, where the early clinical data guides us.

Perfect. And into extra time so thank you so much, Sean. It was a pleasure.

Thanks very much, Peter. It's been a pleasure.