Mersana Therapeutics, Inc. (0M40.F) Earnings Call Transcript & Summary

Hi. I'm Yuko Oku, one of the associates on the biotech team. It's a pleasure to introduce Mersana to the JPMorgan Healthcare Conference today. Just a quick housekeeping note, we'll be hosting a Q&A session right after the presentation in the Victorian Room. And with that, I'd like to turn it over to President and CEO, Anna Protopapas.

Thank you. Before I start, I just want to remind you that I will be making forward-looking statements. 2020 is a very important year for Mersana. It's a year rich in both milestones and data disclosures. Our lead asset, 1536, is a first-in-class molecule addressing important unmet medical needs in ovarian and lung adenocarcinoma. 1536 is in 2 proof-of-concept studies that are on track to complete in 2020 and then subsequently support registration-enabling studies, including fast-to-market opportunities in later-stage ovarian cancer patients. Beyond 1536, we have a new IND and 2 development candidates advancing in 2020, all first-in-class molecules addressing important unmet medical needs. We have novel and highly differentiated ADC platforms that really allow us to continue to advance our pipeline in an efficient manner. These platforms are our product engines and also provide for significant partnering opportunities. We have a strong balance sheet and an experienced team. So with the lead asset nearing proof-of-concept, a pipeline advancing, multiple platforms, partnering opportunities and an experienced and committed team, I think these are all critical capabilities that will put Mersana in a strong position for a very exciting 2020. Our accomplishments in 2019 have really set the stage for this milestone-rich year. In 1536, we have established proof of activity and tolerability. If you recall at ASCO 2019, we disclosed interim dose escalation data that showed confirm responses, durable, stable disease at very well-tolerated doses. Since then, we have continued to dose escalate and have initiated 2 expansion cohorts, putting us on track for proof-of-concept this year. With our next IND, we have not only completed IND-enabling studies in 2019, we've also generated a compelling data set preclinically on differentiation of the molecule. And that puts us in a position not only to rapidly dose escalate in 2020 but to evaluate that differentiation clinically. We've selected and advanced our next ADC, another first-in-class molecule addressing areas of high unmet need. And we have developed a very robust and compelling preclinical package supporting the role of this next ADC in the treatment of patients. This puts us in a position to advance into IND-enabling studies in 2020. And thirdly and lastly, we've taken ADCs beyond chemotherapeutics, and we developed Immunosynthen, a new platform that carries a novel STING agonist. This is a very exciting area where we have demonstrated preclinically, we can stimulate the innate immune system in a targeted way without the severe toxicity seen with other approaches. This could really be a game changer, and we are in a position based on all the data we generated in 2019 to select a first development candidate using the Immunosynthen platform and initiate IND-enabling studies. We've advanced our pipeline significantly in the past 12 months because of the innovative platforms we have. They are efficient product engines that allow us to move molecules forward in a rapid and cost-effective manner. When we select pipeline candidates, we look for a number of things. We look for first-in-class molecules, addressing areas of high unmet need. We look for compelling biology and we also look for the potential for fast-to-market opportunities. In this presentation, I will give you an update on 1536, our lead asset, where we have made significant advancements since our last data disclosure at ASCO, and I will introduce our next IND, 1592 and our 2 new development candidates. Before I do that, I just want to take a minute and describe to you the novel platforms and technologies we have. I'll start with DolaLock, our proprietary payload that is the basis of both Dolaflexin and Dolasynthen. DolaLock has some very unique pharmacology that contributes to the excellent tolerability we've seen with our ADCs. When DolaLock is first released in the tumor cell, it's capable of bystander killing, meaning it can diffuse to adjacent cells in an antigen-independent way, but it's then metabolized, locked in the tumor, still a potent cytotoxic but not able to diffuse further and enter into healthy tissues. Preclinically, we have shown that DolaLock ADCs do not cause the severe toxicities of other ADCs such as neutropenia, neuropathy or ocular toxicity. And I think you'll see from the data we'll share on 1536 that we have now validated that differentiation clinically. There are some other features to DolaLock that make it an attractive payload for an ADC. It's not a PGP substrate, and as you know, PGP pumps are a major mechanism of resistance in tumors. In addition, we've demonstrated that DolaLock could cause immunogenic cell death, bringing a secondary mechanism to this payload beyond its cytotoxic effects. Dolaflexin is our lead platform, the platform that is incorporated into 1536, our lead asset. Dolaflexin carries a high drug-to-antibody ratio, approximately 10 payloads per ADC. And the benefits both in efficacy and tolerability of Dolaflexin, we have demonstrated preclinically and now are demonstrating with the clinical data on 1536. Dolasynthen is our new platform. It carries the same DolaLock payload but allows for precise drug-to-antibody ratio, anywhere from 2 to 24. This ability to precisely modulate the drug-to-antibody ratio, this customization on a target-by-target basis leads to differentiated profiles versus Dolaflexin and is important as we seek to optimize each target -- each ADC on a target-by-target basis. And then Immunosynthen, as I mentioned, is our new ADC platform carrying a novel STING agonist. And really, our objective here is to stimulate the innate immune system in a targeted, safe and well-tolerated manner. So with that introduction on our platforms, I want to move forward to 1536. 1536 is a Dolaflexin ADC targeting NaPi2b. NaPi2b is an excellent ADC target. It's broadly expressed in ovarian and lung adenocarcinoma, but it has very limited healthy tissue expression. NaPi2b is a lineage target, not an oncogene, and its role is to transport phosphate across the cell membrane. Interestingly, NaPi2b is highly expressed in lung adenocarcinoma patients that have oncogenic mutations such as EGFR and KRAS. Preclinically, we have demonstrated that response to our NaPi2b ADC is correlated with expression of the antigen, as you would expect with a targeted agent. In fact, response rates are robust, above a certain threshold of expression of NaPi2b. We measure the expression of NaPi2b with something called an H-score that varies from 0 to 300. We have developed a proprietary assay in order to be able to measure the expression of NaPi2b in patients. We have partnered with a commercial diagnostic company to develop a companion diagnostic in anticipation of using patient selection strategies in our registration-enabling study. So XMT-1536 is not only a first-in-class molecule, it's also wholly owned by Mersana. We've shown encouraging activity at ASCO in patients that are very heavily pretreated and not selected for the NaPi2b biomarker. And since ASCO, we have continued to dose escalate. We've initiated 2 expansion cohorts and continued to see a very attractive profile. 2020 is going to be the year of proof-of-concept for XMT-1536, and we will have, as I'll explain, multiple data disclosures throughout the year. Let me start by quickly summarizing the data we disclosed at ASCO in 2019. This is data as of May of 2019. We have dose escalated and evaluated the molecule with 2 dosing regimens, once every 3 weeks and once every 4 weeks. We are proceeding and focusing on the once-every-4-week regimen. The highest dose at the time of the ASCO disclosure was 30 milligrams per meter squared. What you see on the right-hand side is the tolerability profile, the treatment-related AEs. And as you can see, the molecule is extremely well tolerated, mostly with Grade 1 and Grade 2 AEs, and there is absence of the severe toxicity seen with other ADCs. No neutropenia, no neuropathy and no ocular toxicity. We have seen efficacy at these doses as well. We saw confirmed responses with our first confirmed response at 20 milligrams per meter squared and then additional responses at 30 milligrams per meter square. Remember that these patients are very heavily pretreated, have a median line of therapy of 5 and have really exhausted existing treatments as well as, in many cases, experimental therapy. We're also encouraged with the duration of treatment we've seen. Patients that have been treated at therapeutically relevant doses, many of them have been on drug for more than 16 weeks. And that is a clinically meaningful period for a patient group that is so heavily pretreated and really is at the end stage of their disease. I should note that the data as of the time of ASCO was heavily skewed towards ovarian cancer, although we did begin to have some early experience in lung. We had 2 lung patients at therapeutically relevant doses and both had prolonged stable disease. We've increased our experience in lung since the ASCO disclosure. We have advanced this program significantly since last May. On the dose escalation side, we have moved from the 30 milligrams per meter squared to 36 milligrams per meter squared and 43 milligrams per meter squared. In fact, with 43 milligrams per meter squared, we've dosed 3 patients and then added another 4 to get more experience at this dose. All 7 patients did not experience a DLT, and the treatment-related AEs were primarily Grade 1 and Grade 2, a profile not dissimilar with what we saw -- what we disclosed at ASCO at the lower doses. We are currently evaluating 52 milligrams per meter squared. We initiated 2 expansion cohorts in a more homogeneous patient population, still late stage. One of them is in ovarian cancer and the other is in lung adenocarcinoma. These expansion cohorts were initiated at 36 milligrams per meter squared. And we have now amended the protocol and newly recruited patients to these expansion cohorts will be dosed at 43 milligrams per meter squared. We have also gathered significant data on the role of the biomarker. We are collecting archival and fresh tissue, measuring the presence of NaPi2b and really beginning to understand the correlation between expression of the biomarker and efficacy in anticipation of deploying patient selection strategies in the registration trials. So higher dose, more homogeneous populations and the potential for selecting patients for the biomarker, all of these point to significant improvements in an already promising profile. So before we close on 1536, I would like to summarize the studies that are ongoing, the next steps for each one of these studies and the disclosures we will have during the year associated with these studies. On the dose escalation, we are currently evaluating 52 milligrams per meter squared. As I mentioned, we have 36 and 43 milligrams per meter squared as additional dose levels since ASCO. These are, again, very late-stage patients, really counting on investigational agents as their only options. We will be disclosing data on the dose escalation in the first half of the year. We have the 2 expansion cohorts. In ovarian cancer, we are treating patients that are platinum-resistant and have seen no more than 3 lines of therapy, and patients, irrespective of their platinum status, that have seen no more than 4 lines of therapy. We started at 36, we are moving to 43. And it's important to note that these patients, even though they're less heavily pretreated than the dose escalation, these are patients that have very limited options. The options for these patients are single-agent chemotherapy, pegylated doxorubicin or topotecan, old therapies that have not shown a better -- that really don't result in more than 4% to 12% ORR and no more than 3 to 4 months of PFS. Our objective here is to complete the proof-of-concept, the expansion cohort. We have said that, that expansion cohort will be about 45 patients, although we might choose to enrich further and make it a more robust and bigger expansion cohort because our objective is to end 2020 with a robust set of data that could be the subject of a discussion with the FDA about an accelerated path to approval. In lung adenocarcinoma, we're not as advanced in our recruitment of patients as we are in ovarian, but we are intrigued with the early signs we're seeing. We intend -- we are treating patients that have progressed after PD-1 and platinum therapy or patients who have oncogenic drivers and have exhausted their targeted therapies. Again, we started at 36 and are moving to 43 now. Again, these are patients where their options are limited and the impact of those existing options is very -- the efficacy of those existing options is very limited. Our objective here is to complete the 40- to 45-patient expansion cohort in 2020, really characterize fully the profile of the drug in this indication. And what could happen next is either a larger randomized Phase III or further study of this drug in a more enriched population as we seek to find accelerated paths to approval. We will be disclosing early expansion cohort data for both ovarian and lung in the first half of the year and the more mature data in the second half of the year. So a very important and very exciting year for 1536. Let me move on to our next IND. Our next IND incorporates our new platform, Dolasynthen and also targets NaPi2b. 1592, the number for this new IND, has shown very intriguing preclinical differentiation in models of lung cancer. Our objective in bringing it forward is really to explore in a cost-efficient and rapid manner that clinical -- that differentiation clinically and have a second short-term goal in lung adenocarcinoma, an area of very high unmet need and a big market opportunity. Specifically, in preclinical models of lung adenocarcinoma, we have seen a fourfold better efficacy than 1536. This is pretty exciting, given that we've already seen promising activity with 1536 in lung cancer. With 1536, we have a significant -- we have significant patient experience and have a very straightforward path from the proof-of-concept to the market. As I mentioned, the data experience on 1536 in lung adenocarcinoma is not as mature as it is in ovarian, although we will be completing the expansion cohort this year. This gives us the opportunity to move 1592 forward in parallel, understand whether the preclinical validation -- the preclinical differentiation translates into the clinic. And if it does, we could be in a very exciting position in a very large market opportunity and really have additional paths to registration with accelerated paths to registration. And we can achieve that clinical validation in a very rapid and cost-efficient way. Because of the commonalities between the 2 molecules, they share the same antibody and the same payload because we know the target, we know the patient population, we have the relationships with the investigators and we have sites up and running to do clinical trials. So this is our second short-term goal that strengthens our leadership in NaPi2b and gives us additional opportunities to pursue in lung adenocarcinoma. Our next development candidate using our DolaLock payload is B7-H4, another first-in-class molecule. B7-H4 has a very interesting expression pattern that is ideally suited for a DolaLock payload. B7-H4 is expressed on tumor cells but is also expressed on immunosuppressive tumor-associated macrophages. So the ADC binds to the tumor, the payload is released and is cytotoxic to the tumor cell. The ADC also binds to the tumor-associated macrophage which catabolizes the ADC, releases the DolaLock payload into the tumor microenvironment. And remember that DolaLock payload is capable of bystander killing, but it's also capable of activating the dendritic cells and causing immunogenic cell death. So here, we have 2 targets and 2 mechanisms that are in play. B7-H4 has also an interesting expression profile that provides intriguing paths forward in areas of high unmet need with potential for fast-to-market registration strategies. Specifically, B7-H4 is highly expressed in patients that don't -- in tumors that do not express PD-1 and in areas of high unmet medical need, such as triple-negative breast cancer, where only less than half of the patients express PD-1 and respond to the PD-1 therapies, that could provide an exciting development path and a fast-to-market opportunity. We -- we have a compelling data on B7-H4 with both Dolaflexin and Dolasynthen. We'll be finalizing our selection of our next -- of the development candidate and moving into IND-enabling studies this year. We will be disclosing data on this development candidate at a scientific conference in the second half of the year. Lastly, I'd like to quickly cover our Immunosynthen platform. As you're aware, really being able to stimulate the innate immune system in a safe and well-tolerated manner, in a targeted manner where it's stimulated in the tumor and the tumor microenvironment but does not cause systemic toxicities could be a real game changer. And ADCs provide the ideal way to do that. We have used our expertise and technologies in ADCs to design Immunosynthen from the bottom up, picking the right payload appropriate for this application, the right linker, the right -- sorry, the right linker, the right payload, the right drug-to-antibody ratio and have some very exciting data. I'll run through it very quickly. We have demonstrated across multiple targets that we can cause deep regressions with one dose of our ADC. Furthermore, we have demonstrated that we can cause immune memory after treatment in tumors that have been cured with the first treatment. We have shown immune response in the tumor consistent with this therapy. And we have shown that systemically, we do not see secretion of cytokines, and we see a very good tolerability profile, both in mice and nonhuman primates, despite the high exposure and long half-life of the ADC. So we are on track to pick a next ADC and move into IND-enabling studies with this platform. I want to quickly finish with our milestones, 1536, 2 data disclosures in the first half of the year, a second disclosure in the second half of the year of more mature proof-of-concept data. 1592, we will enter the clinic in the first half of the year and begin dosing patients as we seek to validate the differentiation clinically. B7-H4 will advance into IND-enabling studies and so we will do the same with Immunosynthen. We'll continue to leverage our platforms to continue to build the pipeline, and we will continue to evaluate strategic partnerships where they make sense and help us move the business forward. And lastly, this is really an exciting year for Mersana, one that creates significant value for patients and for shareholders as we move our lead asset forward through proof-of-concept studies and prepare for registration-enabling studies as we move our next ADC forward, strengthen our leadership in NaPi2b, continue to move the pipeline with first-in-class molecules and continue to search for new molecules, enter into partnerships and continue to build the team. With that, thank you very much. I moved through a lot in a very short amount of time, but we can move on to Q&A.