Shattuck Labs, Inc. (STTK) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Shattuck Labs' conference call and webcast to review clinical data presented at the 36th Annual Meeting of the Society for Immunotherapy of Cancer Conference. Today's call is being recorded. At this time, I would like to turn the call over to Conor Richardson, Senior Director of Finance and Investor Relations of Shattuck Labs. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to the Shattuck Labs conference call and webcast to discuss our first clinical data from SL-172154 and SL-279252 presented at the 36th Annual SITC conference. We will refer to these as 154 and 252 throughout today's presentation. During this morning's call, the Shattuck team will provide a clinical update for both 154 and 252 and provide context for how these distinct datasets inform the overall Agonist Redirected Checkpoint, or ARC platform, our future clinical development plans and our overall company strategy. Before we begin, I would like to remind you that today's webcast contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on these risks and uncertainties, please refer to our most recent annual report on Form 10-K for the year ended December 31, 2020, and our other filings with the SEC, which are available from the SEC's website or on our corporate website, shattucklabs.com. Any forward-looking statements represent our views as of today, November 12, 2021. Joining me on the call today are Dr. Taylor Schreiber, our Chief Executive Officer; Dr. Lini Pandite, our Chief Medical Officer; and Andrew Neill, our Chief Financial Officer. We will begin with Taylor providing an overview of the ARC platform, including key platform learnings to date. Then Lini will review the clinical data from both of our ongoing Phase I clinical programs, 154 and 252. After that, Andrew will lay out our corporate and strategic priorities, and Taylor will be back for some concluding comments. A Q&A session will follow our prepared remarks. With that, I will now turn the call over to Taylor Schreiber, our Chief Executive Officer. Taylor?

Thank you, Conor. Good morning, everyone, and thank you for joining us. Just over 4 years ago, we embarked on a journey to develop cancer therapeutics that could simultaneously block immune checkpoints like CD47 and PD-L1, while activating co-stimulatory receptors in the TNF superfamily like CD40 and OX40. This objective led us to think outside the boundaries of traditional antibody-based therapeutics and instead to develop a class of medicine where the structure of the drug matched the structure of TNF receptor superfamily targets. As you can see on the slide, ARCs are dual-sided Fc fusion proteins which have a hexameric structure that enables these compounds to have unique binding ability to immune checkpoint targets and trimeric TNF receptors. Thus, ARCs were designed to achieve the goal of inhibiting immune checkpoints and activating TNF receptor superfamily targets in a single therapeutic. TNF receptors, including OX40 and CD40, must assemble into a trimer in order to signal, as shown in panel A of this figure. For decades, many efforts have been made across the industry to try and activate TNF receptors using bivalent antibodies as shown in panel B of the figure. Due to the structural mismatch between a bivalent antibody and a trimeric TNF receptor target, these TNF receptor antibodies have been very weak agonists, and dose escalation has been limited by toxicities that are in part due to the need for these antibodies to be cross-linked by Fc receptors. The ARC platform solves this structural mismatch as shown in panel C because ARCs contain 2 preformed TNF ligand trimers and can directly activate TNF receptors. Today, I am very pleased to unveil the first clinical data from the ARC platform, in which we will highlight the direct translation of key preclinical findings for both 154 and 252 into human cancer patients. The data being presented at the SITC annual meeting is from a subset of our ongoing clinical and preclinical pipeline as illustrated by the shaded rows on the slide. This morning's overview will include data from our monotherapy dose escalation trial of 154 in patients with late-stage platinum-resistant ovarian cancer; and data from 252, including monotherapy dose escalation data in patients with advanced primarily checkpoint experience solid tumors. By presenting our initial clinical data from both 154 and 252 side-by-side, you will be able to compare and contrast the specific effects of activating CD40 versus OX40, blocking CD47 versus PD-L1, and in the process, gain an appreciation for the characteristics of the ARC platform as a whole. Across these presentations, you will see that 154 and 252 have been very well tolerated, that ARCs are exhibiting predictable pharmacokinetic activity in humans, and that ARCs have stimulated profound systemic immune responses and changes in the immune microenvironment of patient tumor biopsies. With 154, you will see that we have achieved near complete target occupancy of both CD47 and CD40 by the 1 milligram per kilogram dose level, and that this stimulated dose-dependent evidence of mobilization of CD40+ leukocytes from the blood into tissues, large and reproducible increases of multiple serum cytokines associated with antitumor immunity and no evidence of liver dysfunction or cytokine release syndrome which hindered the development of prior CD40 agonists. With 252, you will see monotherapy antitumor activity in PD-1 experienced cancer patients, dose-dependent binding and activation of OX40+ lymphocytes, resulting in margination from the blood into tissues and no evidence of dose-limiting toxicities to date. Taken together, we believe these data validate that the ARC platform is doing what we designed it to do. The ARC platform is engaging and activating TNF receptors in a manner that has evaded traditional IgG-based monoclonal antibodies for decades. Throughout today's presentation, we will provide clinical data supporting this assertion. With that, it is my pleasure to turn the call over to Lini Pandite, our Chief Medical Officer. Lini?

Thank you, Taylor, and good morning, everyone. I'm delighted to present the initial preliminary Phase I results of 154 in patients with platinum-resistant ovarian cancer. Before I begin, however, I would like to thank our investigators and their patients who participated in each of our clinical trials. Now let's take a look at the structure of 154. The [ functional ] domains of 154, which include the extracellular domain of [ SIRPa ], illustrated in orange in the cartoon, will bind and block the CD47's don't-eat-me signal similar to other CD47 inhibitory fusion proteins and antibodies. The Fc domain illustrated in green has been mutated to remove all Fc-gamma receptor binding activity. We are 154 deferred from all other clinical-stage CD47 inhibitor is via that the CD40 ligand domain illustrated in blue. Before we discuss the study design and the objectives, I would like to remind everyone that we chose to conduct our first-in-human clinical trial of 154 in patients with ovarian cancer for a very specific reason. Across all solid tumor types, ovarian cancer had the highest levels of CD47 expression and an abundance of macrophages that target cells for 154 are present in the tumor microenvironment. There is a significant unmet need for effective therapies for patients with platinum-resistant ovarian cancer. Additionally, combination strategies with current standards of care and emerging therapies make this an attractive indication. As of the data cutoff of September 15, 2021, we had enrolled a total of 15 patients across 4 dose levels, from 0.1 milligram per kilogram to 3 milligrams per kilogram, patients with advanced or metastatic ovarian, primary peritoneal or fallopian tube cancer who has failed platinum-based therapies and were ineligible for further platinum therapy were eligible for enrollment. Patients who have [indiscernible] mutations of homologous recombination deficiency genes should also have received PARPi inhibitors with or without bevacizumab. Dose escalation was conducted according to the modified toxicity probability interval 2 trial design. Patients received 154 on either a weekly or biweekly basis with a 28-day cycle. The next dose level is 10 milligrams per kilogram. Our protocol allows for additional dose escalation, if warranted. Patients treated on this trial have platinum-resistant ovarian cancer and were heavily pretreated. The median age of patients treated was 67 years. The median number of prior lines of systemic therapies was 5. Of the 15 patients treated, 9 had ovarian cancer, 4 had primary peritoneal cancer, 2 had fallopian tube cancer. The vast majority of patients had high-grade serous carcinoma. 154 has been generally well tolerated with no dose-limiting toxicities to date. Presented here are the treatment-related adverse events that occurred in 2 or more patients as of September 15, 2021. No Grade 3 or greater treatment-related adverse events have been reported. The most common treatment-related adverse events for infusion-related reaction in 8 patients and fatigue in 7 patients. These infusion-related reactions were reported across the dose range of 0.3 milligrams per kilogram to 3 milligrams per kilogram and were Grade 1 or 2 in severity. Not captured in this summary table is 1 patient who had Grade 1 treatment-related anemia that did not require transfusion. Overall, we are encouraged by the safety profile of 154 from both a CD40 agonist and a CD47 inhibitor perspective. Specifically, there has been no evidence to date of cytokine release syndrome or liver dysfunction. Because of the safety profile of 154 is so distinct from prior CD40 agents, we sought to understand the mechanism better. With the anti-CD40 monoclonal antibody first developed by Pfizer and [ 870893 ] and later developed by Roche as [ selicrelumab ], the cytokine release syndrome was associated with a large increase in [ TNF alpha ] and IL-6. Shown on this slide are the [ TNF alpha ] levels in Figure A and IL-6 levels in Figure B reported in the literature for CP-870,893 and the corresponding cytokine levels observed in the 154 study. Notable increases in [ TNF alpha ] and IL-6 were observed with CP-870,893 at a dose of 0.2 milligrams per kilogram and 0.3 milligrams per kilogram. In contrast, only slight increases of [ TNF alpha ] or IL-6 have been observed with 154 at doses up to 3 milligrams per kilogram. Now let's give a look at CD47 target occupancy for 154. While we are certainly encouraged by the emerging safety profile, we recognize that safety in the absence of target engagement and immune activation is not as meaningful. In the next few slides, we will provide you with evidence of target engagement on both sides of our molecule and on target pharmacodynamic effects. We have observed preferential binding of 154 to [ CD47-positive ] leukocytes compared to red blood cells. Binding to leukocytes approaches [indiscernible] CD47 target occupancy at doses of 1 milligram per kilogram or greater. We have not yet been able to fully characterize the pharmacokinetic profile at doses through 3 milligrams per kilogram. However, the increases in target occupancy, such as that a complete PK profile may be seen at 10 milligrams per kilogram. Because 154 is dual sided, on this slide, we will turn to CD40 engagement. CD40 is ubiquitously expressed on nearly all B cells. We have shown that the administration of 154 produces clear evidence of on-target engagement of CD40. In panel A, infusion of 154 leads to CD40 engagement and rapid margination of CD40 B cells from the circulation. Achieving full target occupancy of both CD47 and CD40 in the absence of dose-limiting toxicities bodes well for continued dose escalation and selection of recommended Phase II dose. In panel B, we show that this margination recurs with each subsequent dose of 154. The values in the graph are indicative of the post-dose margination of circulating B cells. Panel C, we show a dose-dependent increase in B cell activation markers of CD86 and CD95 following infusion of 154. Along with CD40 target engagement and margination, we have also observed reproducible increases in CD40-mediated cytokines such as IL-12, CCL2, CCL3, CCL4 and CCL22. These increases are observed following each infusion of 154. Shown on this slide is a dose-dependent increase in IL-12. IL-12 is predominantly produced by antigen-presenting cells, such as dendritic cells, monocytes and B cells and is a regulator of a Th1 response and promotes expansion and activation of T cells and NK cells. Interestingly, the IL-12 levels observed in patients that received 154 approach the peak levels achieved by recombinant IL-12 therapies without the adverse safety profile reported for other agents. In addition to [indiscernible] immune activation, we have also observed immune activation in the tumor microenvironment following administration of 154 as illustrated in pre and on-treatment tumor biopsies from patients A. This [indiscernible] biopsy was collected from our ongoing Phase Ia trial in platinum-resistant ovarian cancer patients. Consistent with 154's mechanism of action, in patient A's biopsy, we have observed an increase in CD68+ macrophages in the tumor microenvironment as shown by the crimson-stained cells in the panels. Additionally, CD40 and MHC Class II activation markers are also increased in the tumor microenvironment. These observations are consistent with induction of an innate immune response. It should be noted that ovarian cancer is generally considered to be a T cell-excluded tumor. And this may be one of the reasons that checkpoint inhibitor therapies have not provided clinical benefit in ovarian cancer. In the same patient's tumor biopsies, as shown on the left, we see an increase in tumor infiltrating lymphocytes, as shown by an increase in [ Ki67+ CD8 T cells ] and the granzyme B-positive CD8 T cells. We have also seen an increase in PD-L1 expression by the combined positive score, which suggests that there is the increase in tumor-infiltrating CD8 T cells induces a local interferon response. These findings are all consistent with the design of 154 and the potential of simultaneous CD47 inhibition and CD40 activation to bridge an innate to adaptive immune response. For evaluation of antitumor activity as of October 7, 2021, 14 of 15 patients had a post-baseline scan at 8 weeks and were therefore evaluable for efficacy. 4 patients had stable disease as best response, including 1 patient with stable disease of 16 weeks or greater at 0.3 milligrams per kilogram on Schedule 1. And 9 had progressive disease. As a reminder, we have provided guidance not to expect monotherapy activity with 154. This guidance is based upon the fact that while CD40 ligand is an immune activator, it is not a prophagocytic signal. We expect antitumor activity when 154 is combined with chemotherapy ADCP competent tumor-targeted antibodies or radiation, which provides prophagocytic signals. In summary, 154 has demonstrated evidence of CD47 and CD40 target engagement. Binding of 154 to CD40+ T cells and monocytes leads to rapid activation and margination post-infusion. As [ serum cytokine ] profile consistent with an innate and adaptive immune response is also seen, the tumor biopsy demonstrates that 154 induces an innate and adaptive immune response in the tumor microenvironment. 154 has been internally well tolerated with no dose-limiting toxicities to date. There has been no evidence of cytokine release syndrome or liver dysfunction, which are 2 toxicities that have limited the development of prior CD40 aggregate. 154 has specifically and safely engaged both CD47 and CD40 through 3 milligrams per kilogram and dose escalation proceeds at 10 milligrams per kilogram. Given the emerging safety profile, high target engagement of CD47 and CD40 and the unique PD activity, we believe that we have a highly differentiated CD47 inhibitor, and accordingly, we continue to broaden our clinical development efforts. We are very pleased to announce our plans to initiate a Phase Ib clinical trial of 154 in combination with liposomal doxorubicin in patients with platinum-resistant ovarian cancer. We anticipate beginning to enroll patients in this trial in the first half of 2022. We also have an open IND for a Phase Ia/Ib study in AML and higher-risk MDS, and we plan to begin enrolling patients as quickly as possible. This Phase Ia/b dose escalation clinical trial will evaluate 154 monotherapy and the combination of 154 plus azacitidine in a [ panel ] of standard design in the dose escalation phase. Once the dose of 154 in combination with azacitidine is selected, we will include a combination of 154 with azacitidine plus venetoclax. In the [ expansion ] cohort, we plan to evaluate 154 in combination with azacitidine in treatment-naive higher-risk MDS and TP53-mutant AML and 154 in combination with azacitidine and venetoclax in treatment-naive AML. We also continue to evaluate potential combinations in ovarian cancer and other solid tumor indications. Now I would like to turn our attention to 252, Shattuck's first product candidate derived from the ARC platform to enter clinical trials. 252 is a PD-1 Fc OX40-ligand fusion protein with the hexameric structure, similar to what we previously illustrated for 154. The PD-1 domain of the ARC binds and blocks PD-L1 or PD-L2, and the OX40 ligand domain simultaneously activates the OX40 receptor expressed on CD4+ T lymphocyte. We are conducting a Phase I dose escalation clinical trial of 252 as monotherapy according to the keyboard design. Patients with advanced or metastatic solid tumors or lymphomas as listed on this slide were eligible to participate in the trial. Patients who have received more than 2 prior checkpoint inhibitor containing regimens or has primary resistance to PD-1 or PD-L1 therapies were excluded. Patients received 252 on either weekly or biweekly basis with a 28-day cycle. As of the data cutoff date of June 11, a total of 43 patients were dosed between the weekly and biweekly schedules. Enrollment is ongoing at 12 milligrams per kilogram used in the biweekly schedule in the PD-L1 selected patient population. The median age of patients enrolled in this trial was 64 years, 56% were male, and a median number of lines of prior systemic therapies for metastatic disease was 3. The most common tumor types enrolled were ocular melanoma, non-small cell adenocarcinoma of the lung and gastric adenocarcinoma. 58% of patients were checkpoint experienced. The remaining patients did not receive checkpoint inhibitors and had tumors that were generally unresponsive to checkpoint inhibitors or were enrolled in territories where checkpoint inhibitors were not approved or available in that indication. 252 has been very well tolerated, and we have observed no dose-limiting toxicities to date or [indiscernible] schedule. The most common treatment-related adverse events were maculopapular rash in 4 patients and infusion-related reactions in 3 patients. We have observed the transient treatment-related Grade 3 neutropenia in 1 patient. No Grade 4 or greater treatment-related adverse events have been observed. Infusion-related reactions occurred in 3 patients, these events were manageable and did not prevent completion of dosing. A linear increase in 252's Cmax and AUC was observed up to 3 milligrams per kilogram, while a greater than proportional increase in AUC was observed at 6 milligrams per kilogram, suggesting potential target saturation at 6 milligrams per kilogram. [ Within subject ] exposure was similar on Days 1, 15 and 29, indicating no accumulation or time-dependent changes in PK on either schedule. The preliminary half-life is approximately 23 hours. As noted, we are continuing to dose escalate at 12 milligrams per kilogram in order to fully characterize the pharmacokinetic profile of 252. OX40 is expressed by a subset of CD4+ T cells in the peripheral blood. Within 2 hours of infusion of 252, we observed that this OX40+ CD4+ T cells rapidly marginated from the peripheral blood. This is an expected on-target effect of OX40 stimulation and consistent with the data we generated in non-human primates with 252. Additionally, as shown on this slide, we observed that the percentage of OX40+ CD4+ T cells that [indiscernible] from the circulation post-infusion on day 1 and on day 29 increases as 252's maximum serum concentration increases, but has not yet plateaued. Increases in the number of proliferating CD8 central memory and effective memory T cells were observed in the peripheral blood of some patients at higher peak 252 concentrations, corresponding to doses of 1 milligram per kilogram or greater. No consistent changes in serum cytokines or chemokines were observed following IV dosing with 252. In addition to evidence of peripheral immune activation, we have also observed changes in the tumor microenvironment following administration of 252. We have collected [indiscernible] tumor biopsies from a subset of the total patients dosed on our trial. This slide shows pre and on-treatment tumor biopsies from a single patient, patient B, with MSI high colorectal cancer enrolled in our Phase I clinical trial. Consistent with 252's mechanism of action, in patient B's biopsies, we have observed an increase in CD8+ T cells and CD8+ granzyme-B+ T cells as well as an increase in NK cells in the tumor microenvironment, as indicated by the arrows in the panels. These observations are consistent with the induction of an adaptive immune response within the tumor following infusion of 252. Similar changes in the tumor microenvironment were observed in other patients with several patients seeing greater than a threefold increase in certain markers. We are very pleased to report antitumor activity with 252 in a heavily pretreated patient population with what we believe to be a suboptimal dose. The best response to therapy has been 1 confirmed partial remission in a patient with ocular melanoma who remained on treatment for greater than 1 year. This patient was heavily pretreated with 4 prior systemic regimens and was checkpoint experienced. In addition, stable disease was seen in an additional 12 patients. In 5 of these patients, stable disease was sustained for greater than 24 weeks. 1 unconfirmed partial remission was observed in a checkpoint inhibitor-experienced patients with mucosal melanoma of the vulva that had partial regression of the target lesion, which was not confirmed on the second scan due to a new lesion in the brain. With continued 252 therapy post-progression, the target lesion [ regressed ] completely. We have not yet seen a plateauing of the pharmacodynamic effects of 252 to 6 milligrams per kilogram, and this is one of the primary reasons we are continuing to dose escalate. As another important point of reference, the 252 doses exposed, thus far, in dose escalation have been lower than the representative approved anti-PD-L1 inhibitors such as [ atezolizumab ]. In conclusion, 252 has been well tolerated in heavily pretreated patients with solid tumors. No dose-limiting toxicities have occurred and a maximum tolerated dose has not been reached. Antitumor activity and dose-dependent immune activation in the peripheral blood and tumor microenvironment has been observed and will be further evaluated at 12 milligrams per kilogram dose level. With that, I will now turn the call over to Andrew Neill, our Chief Financial Officer. Andrew?

Thank you, Lini. And good morning, everyone. Overall, we are very excited with the clinical progress made to date. To date, we have shown that both 154 and 252 are well tolerated and are both showing profound evidence of on-target immunological activation for CD40 and OX40, respectively. We believe that these data continue to validate the underlying hypothesis from which the ARC platform is derived. Now then, we are broadening our aperture and our focus will be to advance 154 as rapidly as possible into more appropriate patient settings and more appropriate combination settings where we can maximize the benefit of CD47 blockade and show that the addition of CD40 activation may provide meaningful clinical benefit. To that end, we plan on initiating our Phase Ib clinical trial of 154 in combination liposomal doxorubicin in platinum-resistant ovarian cancer in the first half of 2022. As previously noted, we now have an open IND for our Phase Ia/Ib clinical trial of 154, in combination with azacitidine, plus/minus venetoclax in AML and higher-risk MDS. And we anticipate reporting initial data from this trial in the second half of 2022. We believe that the totality of these data presented at SITC have not only fundamentally derisked the ARC platform, but have validated that the ARC platform is performing as designed. Given this, we are rapidly expanding our clinical development activities for 154, which will provide us with multiple shots on goal for proof of concept as a highly differentiated CD47 inhibitor. We will also look to increase the breadth of our clinical pipeline. We intend to nominate an additional ARC molecule for clinical development in the first half of 2022. Our current financial position is very strong, enabling us to progress as quickly as possible. As of the end of Q3 2021, we had cash and cash equivalents and short-term investments of approximately $290.2 million, which we believe will be sufficient to fund these planned operations into the second half of 2024. With that, I will now turn the call back over to Taylor for closing remarks. Taylor?

Thank you, Andrew. As you have just heard from Lini, we have now discharged many of the fundamental risks that any new biologics platform faces before entering the clinic. Both 154 and 252 have been well tolerated, achieved near complete target occupancy [ on ] dose-dependent evidence of CD40 and OX40 activation but neither has yet reached a recommended Phase II dose. Two other highly encouraging platform learnings are also emerging from the current clinical data. In another poster being presented at SITC, we have described the development of a method to measure the total receptor engagement achieved following infusion of 154 and 252. This poster also shows that the leukocytes which migrate out of the circulation following infusion of an ARC, slowly returned to the circulation over several days, and that the ARC remains down to the surface of those cells when they return to the blood. These data indicate that ARCs can piggyback on the surface of target cells which provides a means of active transport for ARCs to infiltrate tissues. The second important observation is the likely consequence of this phenomenon, and that we have detected large changes in the immune contexture of the tumor microenvironment in on-treatment biopsies from patients treated with both 154 and 252. Over the past 20 years, a number of CD40 and OX40 targeted monoclonal antibodies have been tested in Phase I dose escalation trials. Across these data, many of the programs, which have shared clinical data, have shown evidence for a bell-shaped dose response curve. These data prompted a number of questions, including whether this sort of unusual dose response curve was a characteristic of OX40 or CD40 as targets, or whether this observation was a consequence of utilizing bivalent monoclonal antibodies to activate trimeric receptors like OX40 and CD40. These programs, in particular, the CD40 agonist monoclonals, also observed dose proportional increases in toxicity as the CD40-dependent pharmacodynamic effects waned. The data observed from the 154 and 252 clinical trials indicate a linear dose response relationship for the pharmacodynamic effects attributed to CD40 and OX40 against the safety backdrop where no dose-limiting toxicities have been encountered. Collectively, these data indicate that high avidity compounds like ARCs may enable, for the first time, a complete exploration of the ability of TNF receptors to amplify antitumor immune responses in cancer patients. Taken together, these data collectively illustrate that ARCs have achieved the goal of finding and blocking immune checkpoint receptors like CD47 while safely activating TNF receptors, like CD40 in humans. The clinical data now show clear translation of the main preclinical findings we reported previously into human cancer patients. CD40 ligand is emerging as a powerful stimulator of antigen-presenting cells and cytokines like IL-12, whereas OX40 stimulates lymphocyte activation in the absence of increasing serum cytokines. In non-human primates, light seems to be a potent inducer of IL-2 and other interferon gamma-related cytokines. And these data are included in another SITC presentation outlining the preclinical development of our TIGIT-Fc-LIGHT compound. We believe that these data are just the tip of the iceberg, and that over the next year, we will define the recommended Phase II doses for 154 and 252 and begin generating the combination data with 154 that will be the basis of our registrational strategy in both heme and solid tumors. Along the way, we will advance other compounds from our platform into the clinic. And over time, allow the field to finally realize the potential of stepping on the proverbial accelerator in the context of immune checkpoint blockade, which has long been believed to be the key to improving clinical response rates beyond what is achievable with checkpoint blockade alone. From all of the employees at Shattuck, we look forward to 2022 and the milestones it will bring. We appreciate your continued interest in Shattuck and look forward to keeping you apprised of our progress throughout the year. With that, operator, I would like to open the call for questions.

[Operator Instructions] Your first question comes from Marc Frahm with Cowen & Company.

Obviously, with the data on occupancy, it's showing that you risk sparing the red blood cells, imply that there's not much of an anemia signal and certainly haven't seen any [ Fe's ]. Can you just confirm if there were any lower-level anemia events that maybe just didn't quite rise to the level of making the AE cutoff in the table in the presentation.

Sure. Thanks for the question, Marc. I'll ask Lini to answer that for you.

Marc, there were no other anemia cases besides the one that we reported.

Okay. Great. That's helpful. And then just on the CD40 engagement of 154, you showed the increase or the lack of increase in TNF and IL-6, and that's much, much lower -- what is increasing the small amounts is much, much lower than what's been seen with prior CD40 antibodies. Maybe you can put the IL-12 and the other cytokines that are in the actual poster at the CCL2 and others, those increases kind of in the context of what else has been seen with CD40 antibodies or other macrophage engaging at the purchase?

Yes. Thanks, Marc. So a couple of comments. I mean, first of all, the magnitude of the increases in IL-12, CTL2, CCL3, CCL4,CCL22 are large. These go, in some cases, into the microgram range, and they occur following every single infusion of 154. And that's important to us for a couple of reasons. First of all, in the preclinical literature, this is a profile of cytokines and chemokines that have all been associated with CD40 biology and activation of antigen-presenting cells. Secondly, with some of the prior CD40 agonist agents in the clinic, they'd seen a waning or an apparent waning of pharmacodynamic activity with frequent dosing. And so in this case, we're able to see in humans that the pharmacodynamic activity is reproducible on a weekly schedule. And as Lini mentioned, we can explore less intense schedules once we get into combinations if we choose. Lini mentioned that the levels of IL-12 that are being achieved are near the Cmax for the levels of IL-12 that certain recombinant IL-12 therapies that have gone into human clinical trials have achieved, yet we have not seen the toxicities that have been seen in humans with some of those recombinant IL-12 therapies. And this is, at the moment, a very interesting finding that we don't yet understand the mechanism of from a toxicity perspective. It could be that within context of an overall immune response, including the cells and other cytokines and chemokines that we're seeing, that those levels of IL-12 can be better processed. And so let me stop there, but I think the cytokine response is certainly a standout result compared to other programs in the past. Actually, one final comment I'll make is, the one other CD40 program that has looked at a panel of cytokine similar to this was a JNJ CD40 agonist that they reported in ASCO in 2019. And in that case, it yet again, was an example of this bell-shaped dose response curve where they saw increases in some of the same cytokines and chemokines that we saw at 0.2 milligram per kilogram and then no increases when they took that dose higher to 0.1 and 1.2 milligram per kilogram. However, the magnitude of the increases was a fraction of what we're now seeing.

Your next question comes from Jonathan Miller with Evercore ISI.

And congrats on the progress. I think this is some very interesting PD and some very interesting biochemistry going on here. I guess, especially on 154 though, but given expectation for modest monotherapy activity, what are you looking for to give confidence that you're getting enough immune stimulation for your purposes? And I'm thinking about this as you look forward to picking doses in combo cohorts and you mentioned exploring more intense and less intense regimens as you get there. How do you look at monotherapy activity and get comfortable with what that level of immune simulation needs to be to show differentiation in those cells?

Sure. John, thanks for the question. I'll ask Lini to take this one as well.

Yes. As we are looking at this, John, we are looking at the pharmacodynamic activity. We are currently seeing -- where we are with the pharmacodynamic activity, it's still increasing. And so we expect to see a plateau in pharmacodynamic activity as we increase doses. And that would be 1 marker of where the dose selection that we would want to see as we go into the combination trials. We are starting these combination trials that's an immunologically active dose, and there is some dose escalation in combination as well. And the reason for that is that we may not -- even when we go into combinations, we may not also need to go as high if, with the combination partner, we are seeing immune activation as well.

Okay. That makes good sense. As we think about the PD, and this is for both programs really as well, margination isn't usually the headline PD signal for immuno stim programs traditionally, and granted that those programs have had some trouble. But it looks like margination is really what you're focused on as a key marker for cell activation and the immuno stim activity here. The data you have on, for instance, CD8 proliferation looks like a good start, but it's pretty noisy, and it seems like you're still early in that curve, but you're not going to seeing a sort of robust proliferation data that's direct-acting proliferative signals I have. So can you put that in context for us? And what you think the most important markers are for clinical efficacy downstream? Do we need to see really strong proliferation to see clinical efficacy from these mechanisms? Or is margination and activation enough?

Yes. Thanks, John. Good question. So with CD40 agonists, margination of CD40-positive cells was reported with the CP-870,893 antibody later now to selucrelumab in the late 2000s. And in that case, it was similarly a primary pharmacodynamic effect of that CD40 agonist. With OX40 antibodies, you're right, nobody has reported margination of OX40 positive cells with any of the OX40 agonists that have gone into these clinical trials. And in our opinion, if you look across the different OX40 agonist trials, it's difficult to really see convincing evidence of pharmacodynamic activity. You have to go to sub gates of highly selected effector populations to see any evidence of any dose-dependent immune effects with those agents. So we take this as an indicator that the OX40 agonism in this molecule is distinct from what's been seen with those prior OX40 agonists. And as you know, with some of the higher doses, we're now seeing that, that margination of CD4-positive, OX40-positive cells translate to proliferation of CD8-positive T cells. However, it's is variable between patients at those higher doses. And so one of the key things we're really looking at, at the next dose level is have we started to achieve a plateau in the proportion of cells that are marginating, number one. And does that lead to more consistent proliferation and activation of CD8-positive cells corresponding to that or not. I think we're in -- we're really learning some things about OX40 here for the first time in humans.

Awesome. Yes, that does make sense. One maybe simpler one then. It seems like you are getting to reasonable CD47 occupancy, mid-80s, it looks like, at the higher doses there. But you're not yet at the 90%, 95% plus level, which some others suggest is really important. Do you expect to have another leg up as you continue to escalate? Or do you think that's not a reasonable bar? And how are you thinking about that as we look through the combo data too?

Yes. If you look at the 1 mg per kg dose level, there's 1 out of the 3 patients had close to 100% occupancy. The other 2 -- I'm not looking at the numbers, but one was somewhere around 80, one was a little bit below that, I think. And then at the 3 mg per kg, all 3 patients clustered sort of somewhere in the 85% range. And so it seems as though as we're going up, we're getting closer to 100% and less distribution amongst the patients on the study. And so we do expect that to continue.

Your next question comes from Gil Blum of Needham & Company.

Can you hear me?

Yes, we can.

So maybe a question on 154. Does the form of sensitization that we're seeing kind of indicate a potential more in checkpoint progressing patients or do you think it's more suitable for patients that don't even express any significant levels of PD-1? So kind of turning a cold tumor hot, if you have any thoughts.

Okay. You cut out for 1 second in a minute -- in the beginning there. Let me just make sure I'm answering the question the right way, but this is with regard to the 252 program, Gil?

Actually it's the 154, but yes.

Okay. Sure. So with 252, I'll start there and then I see where you're going with 154, Gil. With 252, the clinical landscape has evolved such that this molecule needs to be tested and needs to show activity in PD-1 refractory patients before it would ever have an opportunity to move into the frontline setting. And that's really what drove the change in the clinical trial design there and why we're now selecting for PD-L1-expressing PDF PD-1-experienced patients. And with 154, yes, so the biopsies are interesting. We're seeing in, as Lini said, ovarian cancer, which is typically a myeloid-rich and T cell-void tumor environment, activation of myeloid cells and accumulation of lymphocytes within that tissue and, in some of these early biopsies, that does now seem to correspond to an increase in PD-L1. And so that mechanistically is very satisfying. If those CD8 cells are inducing the local interferon response, you would expect PD-L1 to be upregulated. And all of that does suggest induction of a de novo immune response. And this is something that folks have hoped CD47 inhibitors would do for a long time, and perhaps they have, and we're now just seeing the potential for CD40 ligands to further amplify that activity. And if increases in PD-L1 are -- begin to be seen with more uniformity as we enroll more patients, as we analyze additional biopsies, then yes, you may want to consider a maintenance regimen with a PD-1 blocker.

All right. Excellent. And maybe a second one on the impact of cytokines, may be kind of a broader question here. Do you think the potential impact would be of seeing these kind of increases in cytokines is potentially getting therapeutic-level cytokines without systemic administration? I mean this is kind of -- systemic administration of cytokines has kind of been the standard of care in the last 20 years.

Yes. Thanks for the question, Gil. Let me ask Lini to take that one.

Yes. So Gil, you're cutting in and out, unfortunately. But I think your question was about the cytokines that we are seeing with 154 that those are achieving -- I mean concentrations that have been reported with recombinant therapies, right?

Yes. That's correct.

It's interesting, actually. So it's really interesting that we are seeing these levels, which therapeutic and recombinant therapies are trying to achieve, and we are not seeing the safety issues. And so this is one way of -- in a way, getting that immune activation in a much more robust manner in the tumor microenvironment. I think with 154, we are seeing that in that biopsy. And I haven't seen anything with recombinant IL-12 and biopsies. But certainly, what we are seeing in the biopsy is reflecting more than 1 cytokines being increased, and both the innate and adaptive immunity being -- both innate and adaptive immunity is being shown in that biopsy very clearly.

Yes. And just one other comment that I'll make there is this is an area, again, where I think seeing the distinctions between OX40 ligand, CD40 ligand and LIGHT are really -- they provide insights as to what the ARC platform could do and what using different TNF ligands may be able to do. OX40 ligand, so far, isn't inducing significant cytokine responses in human, CD40 ligand clearly is, and we referred to this. But in another poster being presented at SITC, LIGHT in the TIGIT LIGHT molecule, is increasing large concentrations of IL-2 and IP-10 in both mice and nonhuman primates. And so these things -- these trends may expand as we test additional chain of ligands in this format in the future.

All right. Please bear with me for my [indiscernible] connectivity.

Thanks, Gil.

Your final question comes from Zhiqiang Shu with Berenberg.

I apologize for the background noise. I'm actually at SITC today. So the first question I want to ask is also around dosing. I guess you -- at the current dose you have reached for both, you have reached the very high level of receptor occupancy. And I understand occupancy may not translate into saturation. I guess, can you comment on what level of saturation -- what level of saturation have you reached at this level? And what do you see as you continue to dose escalate? What do you expect to see? That's the first question.

Sure. Thanks, Zhi. So I'll take the first one. So occupancy is a readout that is based on flow cytometry. And if you have a cell that expresses, let's just say for the sake of argument, 100 CD40 molecules, that cell in a flow cytometry could be reported as positive for receptor occupancy if your drug only occupied 1 of the 100 receptors on the surface of that cell because the cell did bind your drug. And so then the difference between occupancy and saturation is now moving through that range where those individual cells become fully saturated, i.e., all 100 CD40 receptors now become bound with, in this example, 154. And so that's the reason why in studies like this, there can be a slight gap or additional doses that you have to go through between when you see full occupancy and when you see maximal pharmacodynamic effects and when you see the full terminal elimination phase of the pharmacokinetic curve. And what our data are suggesting with the CD40 is that by 1 mg per kg, we seem to be at full occupancy but then the additional increase in the pharmacodynamic effects that we're seeing at 3 mg per kg are showing the incremental immune activation that comes by moving through that saturation range. Does that answer your question, Zhi?

Yes, it did. And then on 154, I think you showed some T cell infiltration in the tumor microenvironment. For ovarian, you have alluded to the -- that the tumor is actually in an immune suppressive environment. Based on this data, are you interested in moving this molecule into other type of cold tumors to explore any other combinations?

Sure. Thanks, Zhi. Let me ask Lini to take that one.

Yes. So Zhi, we are certainly looking at what other tumor types we can evaluate with this molecule. And it is an interesting finding in ovarian cancer. Just as you said, it's a tumor where there is less T cells, not T cell rich. And so to be able to see this kind of gives us some hope that there may be an opportunity also in other tumors. So that's certainly under evaluation.

Got it. And just a final question on the platform development. So now you have 2 molecules in the clinic with preliminary data looking at CD40 and OX40. Have you seen any differences in terms of these class of TNF OX family receptors? Are they are ones that work back with your ARC platform? And then related to that, on the partner side, you have the -- on the partner of the molecule side, you have evaluated PD-1, PD-L1 axis and then CD47-SIRPa. Any thoughts around that in terms of where the other partners you are going to evaluate?

Sure. Thanks, Zhi. So a couple of aspects to your question. First of all, with each checkpoint, not all TNF ligands pair well with any given checkpoint. And we know that because when we select leads, we perform an exercise internally where we build many, many variants where we link different TNF ligands to the same checkpoint and compare their biology against one another. And it's not always predictable which combinations will work well and mechanistically are synergistic with one another. And so that's something that we'll continue to do. And now that we're at a point where we believe we are activating TNF ligands in humans in a way where other compounds simply have not been able to achieve the same level of safety and activity, it is the right time to now explore some other TNF ligands. Obviously, one that we've been talking a lot about is LIGHT. That's one that I think has very unique potential in the setting of TIGIT blockade. And for years, people have been putting a lot of emphasis on 4-1BB. And even this year at SITC, there's a number of monoclonal antibodies and bispecific antibodies going after that target. And that one is also high on our list to explore, now that we're seeing the sort of human biology we're seeing. Okay. Well, I think that does us for questions, and we're out time. And I want to thank all of the folks who called into the call for your interest in Shattuck, and we look forward to engaging with all of you over the coming days and weeks. Take care.

Again, this concludes today's conference call. Thank you for participating. You may now disconnect. Have a wonderful day.