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

Good afternoon, everyone. My name is Jess Fye. I'm one of the senior biotech analysts at JPMorgan. And we're continuing the 2021 health care conference today with Mersana. Just a quick housekeeping note. [Operator Instructions] So with that out of the way, let me turn it over to Mersana's CEO, Anna Protopapas.

Thank you, Jess. And I should mention that in the Q&A session, I'll be joined by Tim Lowinger, our Chief Science and Technology Officer; Arvin Yang, our CMO; and Brian DeSchuytner, our Head of Finance, Strategy and Business Development. But let me start on Slide 2. Before I go through the presentation, I do want to remind you that I will be making forward-looking statements. Moving on to Slide 3. In the past few years, the introduction of new ADC therapies has accelerated. We now have 9 ADCs on the market and almost 100 in clinical development. Mersana was founded on the vision that new platforms that address the limitations of those first-generation technologies that are used on the current ADCs on the market can really result in even better -- more benefit from ADCs and really allow ADCs to play an even bigger role in the treatment of cancer patients. We have developed a number of highly differentiated platforms the DolaLock payload, the Dolaflexin, Dolasynthen platform that utilize the DolaLock payload and the Immunosynthen platform that aims to activate the innate immune system in a targeted fashion. We have demonstrated the potential benefits of these platforms preclinically and more recently, with an increasing body of clinical data. Unfortunately, I won't have time to go through and describe these platforms in this presentation. But I urge you to look at our website, where we have multiple scientific publications that describe platforms. We've leveraged these platforms to bring forward into development 4 first-in-class candidates that address areas of very high unmet medical need. I will focus most of today's presentations on XMT-1536, our lead asset and the single-arm registration strategy in heavily pretreated ovarian cancer patients that we plan to initiate this quarter. I would only have time to briefly discuss the other 3 molecules that are advancing through key milestones this year. Turning to Slide 4. 2020 was a truly remarkable year for Mersana. First and foremost, let me start with XMT-1536. We completed the dose escalation, established an MTD and demonstrated robust proof-of-concept in an expansion cohort in these heavily pretreated patients in ovarian cancer. We have 4 data disclosures, demonstrating the potential for a robust and consistent level of efficacy and tolerability profile that does not have the severe neutropenia, neuropathy and ocular toxicity seen with other ADCs. We were granted Fast Track designation and had a successful FDA meeting that informed our plans to initiate UPLIFT in Q1. UPLIFT is the name of our single-arm registration strategy. Second, we have observed early signs of activity with XMT-1536 in lung adenocarcinoma. And that supports the role of NaPi2b in this patient group, and we continue to work to increase enrollment and gain further patient experience in this indication. Third, XMT-1592 entered the clinic and is advancing through the dose escalation portion of the Phase I study. Our objective is to clinically validate the differentiation that we observed preclinically. This is not only the second shot on goal for NaPi2b-expressing lung adenocarcinoma patients but also informs platform selection for our future pipeline. Fourth, we have advanced our 2 first-in-class ADCs, addressing areas of high unmet medical need into IND-enabling studies, XMT-1660, our B7-H4 Dolasynthen ADC; and XMT-2056, our first Immunosynthen STING-agonist ADC. We have also made significant progress in expanding our leadership team and strengthening our capabilities, positioning us well to continue to execute on our goals. Lastly, from a corporate standpoint, we have strengthened our balance sheet and are starting 2021 with approximately $255 million in cash, funding our anticipated operating plan for at least the next 2 years. We also have the ability to draw additional funds from all -- from a line of credit. Truly a remarkable year despite the disruptions brought about by the pandemic. Moving on to Slide 5. We anticipate 2021 will be just as exciting for Mersana. There are 5 pillars to our strategy that will drive the next stage of Mersana's transformation. XMT-1536 in ovarian cancer is at the center of our strategy. We will be launching the UPLIFT single-arm registration strategy early in the year followed later in the year with life cycle management studies aimed at exploring the potential of XMT-1536 as a foundational therapy for ovarian cancer patients at earlier stages of their disease. XMT-1536 and XMT-1592 in lung adenocarcinoma provide the second and third strategic pillars. We will seek to establish proof-of-concept for XMT-1536. And together with the clinical data we're generating in parallel with XMT-1592, we aim to make a data-driven decision on the path forward in this indication with a high unmet medical need. XMT-1660, our first-in-class B7-H4 ADC, represents our next effort to leverage our differentiated platform to advance our next molecule into the clinic. We believe that the significant learnings to date will allow us to advance this molecule forward in a streamlined fashion. Lastly, we believe that our Immunosynthen platform, based on preclinical data, has the potential to stimulate the innate immune system in a tumor-targeted manner without the systemic liabilities of other approaches. This could be a game changer. XMT-2056 is our first Immunosynthen STING-agonist ADC, and we expect to advance it into the clinic in early 2022, with the objective of establishing proof-of-concept for our approach and informing our deep pipeline of other immunosynthen candidates. With a promising pipeline and experienced team and a strong balance sheet, we believe we are well positioned to execute on this strategy with the objective of making a meaningful difference for people living with cancer. Next slide. Let me move on to XMT-1536, our first-in-class Dolaflexin ADC targeting NaPi2b, a sodium phosphate transporter expressed selectively on certain tumors, including epithelial ovarian cancer and lung adenocarcinoma. Moving on to Slide 7. Last week, we introduced XMT-1536 has a new name: upifitamab rilsodotin or UpRi for short, as you'll hear me refer to it in this presentation. Moving on to Slide 8. Over the course of 2020, we recruited a heavily pretreated ovarian cancer expansion cohort with over 70 patients. This has allowed us to characterize the efficacy and tolerability of UpRi as well as the role of the biomarker selection in enhancing patient outcomes. This data demonstrates clinically meaningful activity in heavily pretreated patients who have exhausted platinum as well as bevacizumab or PARP inhibitors and have poor prognosis. This data also demonstrated differentiated tolerability profile without the severe neutropenia, peripheral neuropathy or ocular toxicities associated with other ADCs. I will summarize the data that describe the profile of UpRi, but I refer you to our website where you can find details of the 4 data disclosures we have made on this Phase I study over the past 9 months. The potential clinical benefit of UpRi with heavily pretreated patient population with high unmet medical need supports a single-arm registration strategy. This quarter, we will be launching the UPLIFT cohort with a design informed by FDA input and focus both on increasing the potential for label differentiation and the probability of success. I will describe the study design and point out its differentiated features. Lastly, the profile of UpRi points to potential of becoming a foundational therapy in the treatment of ovarian cancer patients, including platinum-sensitive patients in earlier stages of their disease. We will be launching UPGRADE, an umbrella combination study to evaluate UpRi in combination with other agents in platinum-sensitive disease, combining with platinum, the backbone of ovarian cancer treatment will be our starting point. Want to move on to Slide 9. On Slide 9, you will see that UpRi has demonstrated a consistent clinical profile with robust responses including complete responses in these heavily pretreated patients. Note on the best response graph on the right-hand side that a substantial number of patients have deep responses with even those achieving stable disease by resist criteria having reductions in tumor volume. Furthermore, biomarker patient selection can improve outcomes for patients. Moving on to Slide 10. UpRi tolerability data has been consistent with previous data disclosures and has demonstrated a differentiated profile without the severe neutropenia, peripheral neuropathy or ocular toxicities that can be observed for other ADCs. The most frequently reported treatment-related AEs included generally Grade I or Grade II fatigue, nausea and transient isolated AST elevation, which recovers by the next dose. No changes in bilirubin or Hy's law cases have been observed, and the transient AST elevations are easily monitorable with standard lab test. Thrombocytopenia is also transient in nature generally reaching a nadir on day 8 and recovering prior to the next dose. 31% of patients experienced dose delays or reductions or discontinuations due to treatment-related AEs. As we have shown, despite those reductions, some of the patients achieved or deepened their responses while on reduced dose. In these heavily pretreated ovarian cancer patients, we would expect to observe serious adverse events, and some patients may experience adverse events associated with disease progression. The treatment-related SAEs were generally consistent with the known treatment-related adverse event profile. However, with additional patient treated, there was one unfortunate case of Grade V and pneumonitis, which I will provide more color on now on the next slide. This was an 87-year-old patient with recurrent ovarian cancer, who previously received 4 prior lines of therapy, including PARP inhibitors. After 2 cycles of UpRi, she developed dyspnea and was initially treated empirically for an alternative diagnosis in a local hospital. 10 days after her initial symptoms, she was diagnosed and treated for pneumonitis at a cancer center. Ultimately, due to family preference, she was transitioned to comfort care and unfortunately passed away. Upon learning of this event, the Safety Review Committee assembled to evaluate the case. The assessment of the cumulative experience of other identified pneumonitis cases was conducted. Out of 145 patients treated across dose escalation and expansion at the time, 8 additional patients were identified. The majority of these cases were Grade I or Grade II in severity. Cases generally appear to improve or resolve with dose delays, reductions in treatment with steroids. Modifications to the protocol were made to enhance identification and management of pneumonitis as well as dose delays reduction guidelines. This event and the proposed protocol changes were submitted to the FDA, and no further recommendations have been received. Moving on to Slide 12. With that high-level summary of the data, let me now move on to describe our development strategy informed by FDA feedback as well as significant input from the global ovarian cancer KOL community. Platinum-resistant ovarian cancer patients represent a population of high unmet medical need. Single-arm studies can be a path to registration acceptable to the FDA for populations of high unmet medical needs. These 3 contemporary studies are the best current benchmarks for the performance of the standard of care, consistently demonstrating an overall response rate of no more than 12%. This data put into context, not only the substantial unmet medical need, but the potential for UpRi to have a clinically meaningful impact on outcomes for these patients. Remember that our expansion cohort enrolls a more heavily pretreated population with up to 4 lines of therapy with a significantly larger proportion of patients having received prior PARP and prior bevacizumab pretreatment. Turning to Slide 13. Based on the alignment with the FDA, we have defined a target population for the UPLIFT cohort that reflects patients with high unmet medical need. We have agreed with the FDA that the uplift cohort will be initiated as an amendment to the ongoing study, affording significant advantages in speed and capturing enrollment momentum. UPLIFT will be enrolling platinum-resistant patients who have received up to 4 lines of therapy, consistent with the population in the expansion cohort, where we have seen data supporting the potential for robust activity. Note that platinum-resistant patients who received up to 2 lines of therapy but are bevacizumab naive will be excluded from the UPLIFT cohort. But broader premises on pretreatment requirements are not necessary for patients with 3 or 4 lines of therapy, consistent with the bevacizumab label. This is an important differentiator. This would allow us to explore the potential of UpRi to address the unmet medical need of patients who have not been previously treated with bevacizumab. We will enroll all eligible patients regardless of NaPi2b expression, but the role of the biomarker will be evaluated. Specifically, the primary endpoint for UPLIFT will be overall response rate in the higher NaPi2b population. The key secondary endpoint will be the overall response rate in the overall population. This cohort is designed to allow us to more fully evaluate the role of the biomarker to enhance patient outcomes. Enrolling patients without waiting for the biomarker results is also an important differentiator that we believe will contribute to the speed of enrollment. Other secondary endpoints will include duration of response and safety in both the higher NaPi2b and the overall population. We expect to enroll approximately 100 NaPi2b high patients in the UPLIFT cohort, which can include up to 180 patients in total, depending on the exact NaPi2b prevalence. Moving on to Slide 14. Slide 14 outlines how the design of UPLIFT ensures that we have a systematic and robust strategy for the development of the planned commercial diagnostic assay. As you are aware, in the current expansion cohort, we are evaluating expression based on our clinical assay. At this point, we have over 70 patients enrolled in the expansion cohort and additional patients at relevant doses in the dose escalation cohort that informed the preliminary biomarker cutoff. With our diagnostic partner, we are repeating the evaluation of the expression in these patients using a planned commercial assay to finalize the cutoff and ensure we have a highly reproducible assay. This planned commercial assay will be used in a prospectively defined retrospective analysis of the UPLIFT cohort. This approach should allow us to evaluate both the higher NaPi2b and the overall population. And based on the results, we expect to deploy either a companion diagnostic or a complementary diagnostic, depending on which strategy we think will be most beneficial for patients as well as feedback from regulators. Turning to Slide 15. With the constructive input from the FDA, we are well on our way to finalizing the amendment to the protocol for UPLIFT cohort and expect to initiate patient dosing this quarter. We believe the design of UPLIFT provides the potential for significant advantages. First, it includes a broad patient population with a high unmet medical need, consistent with the heavily pretreated patients that benefited from UpRi in our expansion corporate. Second, it incorporates development and validation of a planned commercial assay based on an establishing [indiscernible] from the expansion cohort and validating the potential commercial assay in the UPLIFT cohort in a single study. Third, given that this is an amendment, it will accelerate the ability to initiate the cohort. Moving on to the next slide. In conclusion, we believe the efficacy and safety data generated from the expansion cohort support the potential of UpRi to make a difference in ovarian cancer patients. Our vision is to first bring UpRi to a high unmet need ovarian population through the single-arm UPLIFT cohort, and in addition, explore the potential of UpRi through the UPGRADE umbrella study and other studies to become a foundational therapy for ovarian cancer patients. We will be providing more information on the life cycle management plans over the course of the year. With the limited remaining time, I'd like to move to the next slide and really update you on our earlier pipeline, starting with XMT-1592. Moving on to Slide 18. XMT-1592 also targets NaPi2b and leverages our Dolasynthen platform to provide a homogeneous ADC with precise drug-to-antibody ratio. Preclinically, we observed a fourfold greater efficacy with at least as good tolerability in head-to-head studies with 1536 [ single arm ]. We are in the midst of dose escalation with XMT-1592, and we expect to report results in the second half of the year. Recall that our strategy is to compare the data from the ongoing UpRi lung adenocarcinoma expansion cohort with the dose escalation study from XMT-1592 to make a data-driven decision as to our next steps in lung adenocarcinoma. Moving on to the next slide. XMT-1660 is our first-in-class B7-H4 ADC. Moving to Slide 20. Slide 20 shows that B7-H4 is expressed not only on tumor cells, but also on immunosuppressive tumor-associated macrophages, providing the potential for an ADC to target both cell types, with both cell types contributing to the anti-tumor response. B7-H4 is expressed on multiple tumors with high unmet medical need. And what's interesting is that B7-H4 is in the same family as PD-L1, but literature suggests their expression is mutually exclusive, providing for the potential for addressing unmet medical needs in patients who either do not respond or progress with checkpoint therapy due to lack of PD-L1 expression. We leveraged Mersana's unique ability for DAR ranging to select XMT-1660, which demonstrated the best efficacy and tolerability from a number of variant options we evaluated. We expect to complete IND-enabling studies by year-end and to initiate clinical studies in Q1 of 2022. Let me move on to the next slide. Lastly, I would like to quickly highlight our Immunosynthen platform and XMT-2056, our first Immunosynthen ADC. I would point you to our website and the November 19 webinar for a lot more information on this exciting new platform and pipeline. Moving on to Slide 22. Stimulating the innate immune system is a potential huge next step in immuno-oncology. The STING-agonist pathway has been studied extensively and validated, but delivery challenges to date have limited it from reaching its full potential. Immunosynthen leverages our unique expertise in ADC design and optimization to overcome those limitations and deliver a novel STING agonist to tumor cells and tumor-resident immune cells in a precisely targeted manner with the potential to increase therapeutic index. Slide 23 shows how our approach is differentiated from approaches that others have taken with ADCs carrying toll-like receptor agonist payloads. In contrast to those, STING is expressed in both tumor cells and immune cells, and we have demonstrated clinically that we can activate the STING pathway in both these cell types in a concerted fashion, delivering a one-two punch, something that is not possible with the toll-like receptors due to lack of expression in tumor cells. Moving on to Slide 24. We have validated the potential of our Immunosynthen ADCs, not only for a single target, but across multiple targets and multiple animal models demonstrating robust activity after a single low dose. We have also demonstrated excellent tolerability in multi-dose nonhuman primate studies under IV dosing, achieving exposure levels far exceeding those that result in complete responses in mouse models, indicating the potential for a wide therapeutic index. Moving on to Slide 25. For these multiple diverse candidates, we have selected our first Immunosynthen ADC, XMT-2056, which is progressing through IND-enabling studies and with the objective of moving into clinical development in early 2022. Finally, on Slide 26, let me outline our anticipated goals and milestones for 2021. I'll start with UpRi and recap what you've already heard today. First, we expect to initiate the planned UPLIFT single-arm registration strategy this quarter. As for the longer-term life cycle management study for UpRi in ovarian cancer, our goal is to initiate the dose escalation portion of UPGRADE, starting with a combination study with platinum in Q3. And lastly, for UpRi, we expect to have a meaningful number of lung cancer patients enrolled in the expansion study and to be able to provide a data update from the cohort in the second half of 2021. Moving on to XMT-1592, we are pleased to say the dose escalation portion of the Phase I study is moving forward as planned. We are encouraged by the data from the early dose cohorts. We plan to disclose dose escalation data in the second half of 2021. And as we have said in the past, our objective is to compare the XMT-1536 lung adenocarcinoma expansion data with the XMT-1592 data to make decisions as to which molecule we will look to take forward. As such, we expect to be able to outline our further development plan for XMT-1592 in the fourth quarter of this year. For XMT-1660, we plan to complete IND-enabling studies in 2021 and initiate the Phase I dose escalation study in early 2022. And lastly, XMT 2056, our Immunosynthen ADC, is on a similar time line, where we plan to complete IND-enabling studies and disclose the target by the end of this year and initiate Phase I dose escalation in early 2022. We will also continue, as we have done in the past, to evaluate opportunities to provide further updates with preclinical and clinical data at the various scientific and medical meetings for each of our programs throughout the year as appropriate. Finally, we will continue to leverage our platforms and continue to expand the pipeline of innovative ADC candidates, while proactively evaluating potential collaborations for current and future programs. And finally, on Slide 27. At Mersana, we're committed to bringing forward differentiated ADCs that address unmet medical needs. And to do that in a scientific, rigorous and expeditious manner because we fully recognize that cancer patients are waiting. This concludes my formal presentation, and I will turn it back to Jess for a Q&A.

Great. Thanks, Anna, and we'll give it just a moment here for your colleagues' video to pop up as well. [Operator Instructions] But in the meantime, maybe I'll get started. You described the UPLIFT registration-enabling trial at the recent Investor Day and its design. Can you talk about how you arrived at that design going after that patient population and using this approach of starting with an unselected group, but ultimately evaluating higher expressers?

At the high level, I would say, we took the learnings from the expansion cohort, and we focused on how could we have the highest probability of success study with the broadest label. So maybe without his background, Arvin could give you -- could describe in more detail how we -- how the study is designed.

Sure. Thank you, Anna. And maybe just to summarize, as I know you briefly outlined it earlier. But just as a reminder, the design of UPLIFT was in coordination and alignment and informed by global thought leader feedback as well as informed by FDA feedback. And so as you know, in a heavily unmet need refractory population, a single-arm study, or an amendment actually in this particular case, can lead to registrational acceptable approvals, per se. And in agreement with the FDA, we went through all of the different variables in regards to defining what the benchmark should be in regards to regulatory approval. And that was 3 contemporary studies, including the failed Forward 1, the Javelin and the Coriell, that essentially defined that single-agent chemotherapy demonstrates an overall response no more than 12%. And so reminder is really that these studies were conducted actually in populations of patients that were actually less heavily pretreated with fewer lines of therapy, not having as much therapy in regards to bevacizumab or PARP treatments relative to actually what our study has shown in the expansion cohort per se. And so I think where I'll go with this is that we're enrolling all patients per se, but we'll be identifying in a prospective, retrospective fashion, essentially approximately 100 higher NaPi2b patients in order to perform the objective response rate in that population. But in addition to that, we have the second shot on goal in relationship to the overall population. And based upon prevalence that we've seen from our expansion cohort in approximately 65% to 70% patients, we may need upwards of 150 or maybe upwards to 180, but we'll essentially be able to do our analysis once we have that 100 NaPi higher patient population. And that's our second shot on goal because then we would have the ability to look at the data within the overall population, which is broader and includes both the higher and lower. And maybe the last point I'll make to the question is just in relationship to our patient population. And there is a differentiation there because, as Anna was describing earlier, we're actually permitting patients to have received upwards of 4 prior lines of therapy. As opposed to other studies where may be limited at 3 prior lines of therapy. And in addition to that, bevacizumab would only have been required to have been received in the patients that have received 1 or 2 prior lines of therapy. And the patients that have received 3 to 4 prior lines of therapy will not have been required to have received bevacizumab, which is consistent with the label.

Okay. Got it. With the duration of response estimated as about 5 months in the NaPi2b high expressers, from your presentation last week, what are your expectations around what 1536 could achieve in the UPLIFT study, the -- to your point, some nuance differences in patient population?

Arvin, do you want to take that? Or do you...

Yes, sure. Let me start and if there's -- what you'd like to add. But obviously, the forward-looking data will inform. And keep in mind, our expansion cohort has relatively similar inclusion criteria relative to the UPLIFT. Putting this 5 months, so into context, I think it's critically important to understand that this is a heavily refractory population. Median overall survival is less than 12 months in this population. And so we've heard from investigators that the 5 months of duration of response is certainly clinically meaningful from their perspective. And this certainly does not even account for the period of time that it takes to achieve the first response. And so that's approximately 2 months. And so if you add that together, you're really talking about potentially 7 months in relationship to a patient gaining clinical benefit in a setting where the median overall survival, again, is so limited in regards to 12 months.

Got it. Earlier today in their presentation, ImmunoGen noted that for the SORAYA trial, they also have to exclude the 12% ORR seen with chemo. But they suggested that on DOR, the FDA wanted to feel confident that they would have something stronger than a DOR of about 5 months, which is what they cited for chemo, and therefore, they were hoping to show 6 months. So I'm curious if in your interactions with the FDA, they said anything to you about what they wanted to see for DOR?

Thank you for the question, Jess. As we've indicated last week at our Analyst and Investor Meeting, the focus of our discussions with the FDA, which were very constructive, was around response rate, the design of the study, the benchmarks for response rate, and the feedback was that duration of response and safety were going to be seen as part of the totality of the data. I must say that -- I don't know if this -- have another chance to regroup with my team, but I was surprised with the mention of 5 months for the standard of care. We have looked at every published study that had recently on the standard of care, and there's mention of the PFS being anywhere from 3 to 4 months, but no data on the duration of response. The only data we have been able to get our hands on for the standard of care in terms of duration of response is the Phase II study for LIFA. If you remember, they did a Phase II study against pegylated doxorubicin. The study was small, the duration of response for pegylated doxorubicin was less than 4 months. And again, that was a study done before the introduction of PARPs and bev, and that was a study done on patients with less lines of therapy. So I was a little surprised to hear the 5 months. It's inconsistent with any data we have been able to get our hands on. And of course -- and definitely not a topic of discussion in our interactions with the FDA.

Okay. Understood. It seems like you've got this nice approach with UPLIFT with -- using the amendment to kind of build on the momentum from the existing expansion cohort. So I'm curious just if you could outline what, if anything, is gating to actually start enrolling UPLIFT patients? And how long you think it could take for that trial to enroll?

Not much -- nothing major gating. We have to execute on finalizing the amendment and getting it to the sites. We are very confident that we'll be dosing patients in UPLIFT in Q1 of this year.

And do you have any expectation for how long it could take to enroll?

Yes, that's a good question. You know what I said last week at the Analyst and Investor Meeting. We are holding off giving guidance. We have a lot of enrollment momentum. You can see that just looking at the last few months of 2020, we were probably enrolling 10 patients a month. There's increasing momentum on enrollment as we bring on more sites. We have about 40 sites in the U.S., Canada and Australia. We're talking to almost as many sites in Europe and/or different stages of contracting and bringing them up. So I think we feel bullish about our rate of enrollment. We have not given guidance because we'd like to get the study up and running. There is this -- we are in the midst of a pandemic. And last year, we were fortunate we were able to achieve and exceed our enrollment calls with -- despite the pandemic. But I thought -- we thought it was wise to wait and bring the study up before we give more definitive guidance or time lines.

Okay. Makes sense. So we're just about out of time, so we'll stop it there. But thank you, everyone, for tuning in, and thanks to the Mersana team.

Thank you, Jess, and thanks, everyone. Bye.