Sutro Biopharma, Inc. (STRO) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Sutro Biopharma conference call to discuss the updated clinical data from its ongoing Phase I trial for STRO-002 that was released after market closed today. [Operator Instructions] Please be advised that this call is being recorded at the company's request. Now at this time, I would like to turn the call over to Ed Albini, Chief Financial Officer at Sutro Biopharma. Sir, please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me on the call from Sutro are Bill Newell, Chief Executive Officer; Dr. Arturo Molina, Chief Medical Officer; Dr. Trevor Hallam, Chief Scientific Officer; and Linda Fitzpatrick, Chief People and Communications Officer. Additionally, Dr. Wendel Naumann of the Levine Cancer Institute is also on the call. This afternoon, we issued a press release and 8-K that you can find on our website at sutrobio.com, which includes updated results on safety and antitumor activity from our ongoing Phase I dose escalation study of STRO-002 in ovarian and endometrial cancer, reflecting patient data cutoff as of August 31, 2020. Before we start, I would like to remind you that today's call will include forward-looking statements. These forward-looking statements are based on Sutro's expectations and assumptions as of the date of this call. Each of these forward-looking statements involve risks and uncertainties that could cause Sutro's clinical development programs, future results or performance to differ significantly from those expressed or implied by the forward-looking statements. Please refer to Sutro's filings with the SEC, including our 2019 Form 10-K for information concerning factors that could cause Sutro's actual results to differ from those expressed or implied in the forward-looking statements discussed on this call. Except as required by law, Sutro assumes no obligation to update any forward-looking statements discussed on this call to reflect any change in expectations, even as new information becomes available. With that, I would now like to turn the call over to Bill Newell for some opening remarks, followed by the data presentation by Dr. Arturo Molina and Dr. Wendel Naumann, and then close with a Q&A session.

Good afternoon. Today, we are pleased to share our promising updated safety and antitumor activity data for our ongoing Phase I study of STRO-002, our homogeneous folate receptor alpha antibody drug conjugate. As a reminder, STRO-002 consists of an antibody targeting folate receptor alpha to which Sutro has in an optimized site-specific manner attached to a cleavable linker and a novel proprietary hemiasterlin warhead. The drug day antibody ratio of STRO-002 is 4. There continues to be a high unmet need for new therapies to treat ovarian cancer. We believe that folate receptor alpha has been validated as a target while other targets remain exploratory. Folate receptor alpha is overexpressed in approximately 80% of ovarian cancer patients, and there is minimal expression in normal tissues. STRO-002 was discovered and developed using our proprietary XpressCF platform and the core manufacturing of STRO-002 is being conducted at our cGMP manufacturing facility in Northern California. We believe our cGMP manufacturing facility provides a strategic advantage for Sutro as we control a critical aspect of the CMC process for making STRO-002 and our other ADC product candidates. We designed STRO-002 with the goal of widening the therapeutic window with the potential to improve tumor control and to achieve better patient tolerability. The data we present today clearly suggests that optimally designed ADCs can achieve both of these objectives. As a reminder, in this Phase I dose escalation study of STRO-002, we are enrolling patients without knowing their level of folate receptor alpha expression at the time of enrollment. Importantly, the 39 ovarian cancer patients in this phase of our study are very heavily pretreated and had a median of 5 prior lines of therapy. Dr. Naumann will break down those prior lines of therapy momentarily. As you will hear, these patients entered our STRO-002 trial with very advanced disease. Prior studies suggest that patients who have had 5 prior lines of therapy should not expect much in the way of disease control and should not expect a long duration on study. They are also more likely to be susceptible to adverse events because of the toxicities associated with their numerous prior therapies. As you will see in the slides to be presented shortly by Dr. Naumann, at the more therapeutically relevant dose levels of 2.9 mg per kg level or higher, 33 patients were evaluable for RECIST response. 8 patients experienced a partial response, that's 7 more than we previously reported in April of this year. The overall response rate is now 24%, up from 5% in April. The disease control rate is now 60%, up from 40% in April. 13 patients, 38% remain on study with further potential to improve these outcomes. Dr. Naumann will share in more detail that STRO-002 is generally well tolerated. As a reminder, prophylactic treatment with corticosteroid eye drops has not been required to date, even at the higher doses. We report that 87% of adverse events observed are grade 1 or grade 2. We're encouraged by the overall safety profile and believe that patients and their physicians will value STRO-002's differentiated safety profile and anti-tumor activity in a heavily pretreated ovarian cancer patients in contrast to other available treatments. I will now ask Dr. Naumann to lead us through the data we released earlier today.

Thanks, Bill. So on behalf of my coinvestigators, it is my pleasure to present the data on the Phase I dose escalation study of STRO-002 from the 2020 International Gynecologic Cancer Society meeting. This is a Phase I first-in-human study as STRO-002, an anti-folate antibody drug conjugate in patients with advanced platinum-resistant or refractory epithelial ovarian cancer. The Phase I dose study was designed to determine drug safety, maximum tolerated dose, recommended Phase II dose, pharmacokinetic data and the preliminary efficacy of STRO-002. The trial employed an accelerated lead in for the first 2 dose levels of a single patient, followed by a standard 3 by 3 design for subsequent dose levels after the clinically active 2.9 milligram per kilogram dose. This trial is being conducted at 10 centers through the United States. The enrollment of the dose escalation part of this study is complete. A total of 39 patients with the current platinum-resistant and refractory ovarian cancer or patients who have been treated with at least 2 previous platinum regimens were enrolled. It is important to note that these patients were enrolled without regard to folate level expression in their tumors or the number of previous chemotherapy regimens. Dosing was given by IV infusion every 21 days. The cohort enrolled in this trial included heavily pretreated patients and also patients were included without regard to folate alpha expression. In addition, some of these patients were platinum refractory. A median age of the patients was 61, approximately 60% of patients had an ECOG score of 0 and 40% had an ECOG score of 1. Median number of lines of prior therapy was 5 with a range of 2 to 10. Almost all patients had had prior treatment with taxane. 80% had prior treatment with bevacizumab, 60% with a PARP inhibitor, 20% with an immune checkpoint inhibitor, and 1/3 of these patients had been enrolled in previous clinical trials. Dose escalation was complete through the 6 milligram per kilogram level. STRO-002 was generally well tolerated and mostly associated with mild adverse events. It is important to note that many patients enrolled in this trial had prior taxane-induced neuropathy and many have been treated with more than 1 line of taxane-based therapy. 80% -- 87% of all treatment-emergent adverse events reported are either grade 1 or 2. Observed grade 3 toxicities included fatigue in 10%, neutropenia in 26%, arthralgia in 13%, abdominal pain in 8%, elevated AST in 3%, diarrhea in 3% and peripheral neuropathy in 5%. The grade 4 toxicities noted were neutropenia, febrile neutropenia and GI bleeding in 1 patient each. The 2 DLTs noted were neuropathy at the 6 milligram per kilogram dose level and bone pain at 6.4 milligram per kilogram dose level. Of note, ocular toxicity was minimum. And prophylactic corticosteroid eye drops were not used in this study. Robust anti-tumor activity was noted in the Phase I population. 20 of 33 patients or 60% had some reduction in tumor volume with a RECIST-defined partial response in 8 of 33% or 24% of patients. This is significantly higher than expected in this patient population. Further, disease control rate was 60% at 12 weeks. As noted, 38% of patients remained on study at the time of data analysis. An example is shown of a dramatic response in a poly metastasis where the tumor shrink 74% over a 16-week period of time, and this patient remains on study. The tumor responded the entire cohort demonstrates the long disease control rate in this heavily pretreated population is unenriched for folate alpha expression. 44% of patients were maintained on treatment greater than 16 weeks and 12% for greater than 52 weeks. 8 partial responses have been observed. 2 are confirmed with the second scan and 6 are unconfirmed. Some of these partial responses had emerged after an initial period of ongoing disease regression that did not meet the criteria for partial response. Interestingly, 6 out of 8 or 75% of the partial responses were maintained for greater than 16 weeks, and 5 of these patients remain on study. It is important to remember that this is a heavily pre-treated patient population with platinum-resistant ovarian cancer. RECIST defined responses in patients with platinum-resistant ovarian cancer, even without including platinum refractory patients, are only expected in about 5% of this patient population. Further, it has been our experience that we have seen no responses in patients with 3 more lines of chemotherapy after the development of platinum resistance. High rates of CA-125 reduction have also been observed in the 25 patients with elevated CA-125s at baseline that could be evaluated by the GCIG criteria for response by CA-125. 18 or 72% were noted to decrease through CA-125 by 50% or more. Over half of these CA-125 responses were confirmed or maintained for over 28 days. Although CA-125 response criteria are not currently favored by the FDA, this does correspond with response and stable disease. For the patients, this translates to a clinically meaningful benefit. To summarize, the overall response rate is 24% in its heavily pretreated platinum-resistant and refractory population, disease control rate is 60% in 12 weeks and 44% in 16 weeks. This population was not enriched for folate alpha expression, and 38% of patients remain on study with the potential to improve these response data. Heterogenicity (sic) [ heterogeneity ] of tumor response has been noted with delayed partial responses and disease stabilization in this patient population. A high rate of CA-125 response has also been noted. The safety profile is encouraging. The neutropenia observed is short-lived and reversible. There's no need for prophylactic corticosteroid eye drops or other protective eye maneuvers. 87% of adverse events were grade 1 and 2. And peripheral neuropathy and arthralgias that have been observed at the higher dose levels were managed with dose reductions without apparent compromise of antitumor activity. Lastly, I'd like to thank my co investigators, our study coordinators, Sutro Biopharma and most of all the patients and their families for making this trial possible. Thank you.

Thank you, Dr. Naumann for presenting these exciting results of the STRO-002-GM1 dose escalation study. This table summarizes the improved efficacy outcomes such as increased overall response rate and disease control response rate observed as the data has matured with longer follow-up. Overall response rate increased from 5% to 24%. We have observed PRs in 8 out of 33 evaluable patients treated at greater than or equal to 2.9 mg per kg. And unlike other sponsors, we have not excluded patients who progressed or came on study before their first post baseline imaging scan. Disease control rate has improved to 60% with 20 out of 33 patients achieving either a partial response or stable disease at 12 weeks. As Dr. Naumann mentioned, 44% of patients have been on study for greater than 16 weeks and 4 patients or 12%, have been on study for longer than a year. Also as Dr. Naumann discussed, CA-125 responses in patients treated with STRO-002 often produces clinically -- clinical responses and stable disease, which translates to a clinically meaningful benefit for the 7 pre-treated ovarian cancer patient population. Notably, 38% or 13 of the 34 patients treated at greater than or equal to 2.9 mg per kg remain on study with potential to further improve these outcomes. STRO-002 is clinically efficacious at multiple doses, starting at 2.9 mg per kg. The totality of efficacy observed to date compares favorably and is potentially superior to other ADCs in clinical development for ovarian cancer. Those reductions or delays did not appear to result in loss of antitumor activity. Further dose optimization will be explored during dose expansion, and we anticipate that the recommended Phase II dose will be in the 4.3 to 5.2 mg per kg range. Overall, STRO-002 is generally well tolerated and responding patients can stay on treatment for extended periods of time. A dose expansion phase of this trial is planned in patients with less heavily pretreated ovarian cancer in the latter half of 2020. Goals of this study are to better define the response rates, duration of response, PFS and provide enhanced PK and safety data. We're currently evaluating and comparing the performance and reproducibility of 2 folate receptor alpha immunohistochemistry assays. One of these assays will be selected to further characterize the relationship between folate receptor alpha expression levels and efficacy outcomes. An end of Phase I/II meeting with the FDA is planned for next year. Based on regulatory precedents and the encouraging efficacy and safety data reported today, we will explore accelerator approval clinical development strategies. Bill?

Thank you, Arturo, and thank you, Dr. Naumann, for sharing these encouraging updated interim Phase I data for STRO-002. We plan to initiate the dose expansion phase of the STRO-002 clinical study before the end of this year. That is our presentation for this afternoon, and we will now turn to questions. Operator, you may please proceed.

[Operator Instructions] Our first question comes from Boris Peaker with Cowen and Company.

Congratulations on an improving data set.

Thank you, Boris.

My first question is when are we going to get the folate receptor alpha expression data? And also in that context, you've mentioned that there are 2 assays being explored to assess that folate receptor alpha levels. Can you comment on what those assays are?

Yes, Boris. We'll ask Arturo Molina to answer your question.

Yes, we were not permitted to require tissue from our study participants during dose escalations. Even so, we have been able to obtain tissue samples from about 60% of the study participants. This is a small number of samples from which to draw conclusions when compared to other assays that have been developed. We are assessing the reliability and consistency of 2 different folate receptor alpha expression IHC assays. Until we select the appropriate assay, we are not able to evaluate folate receptor of expression in the context of patient response in this small sample size.

Well, can you use the same assay that ImmunoGen is using?

That's under consideration.

Got you. And I guess my last question, for the dose expansion trial, just curious, are you also going to include all-comer patients? Or at that point, are you going to establish kind of a minimal threshold for folate alpha expressions, so you could just focus on those patients?

These specific questions are under discussion with the FDA as part of our proposed protocol amendment, and we will share this information after we have a final protocol and open the expansion cohorts.

Our next question comes from Ted Tenthoff with Piper Sandler.

Just remind us what the expansion cohorts could look like as you guys enter in on the final dose?

Arturo will update you on our current thinking to the extent we can, Ted, at this point. We want to make certain that we in sync with FDA, obviously.

Ted, based on clinical development precedents, the next step for expansion cohort is to go into a less heavily pretreated patient population. And once we have an agreement with the FDA, we will share the final protocol schema.

Excellent. And I'm sorry, I know you mentioned this but when is your plan to meet with the FDA?

Well, right now, the -- we are submitting a protocol amendment that describes the expansion cohort. Once we get that cleared, we will disclose the details of the protocol. But we want to make sure the FDA agrees with our plan first. And we're on target to get those -- the ovarian cancer expansion cohort started in the latter half of this year.

Our next question comes from Roger Song with Jefferies.

Congrats for the data. And a few questions related to the data. And then maybe the first one is the -- so how many patients have had the deepening response from the stable disease to the partial response? Have you analyzed the data?

So I'll ask Arturo to answer that for you.

Yes. Just about 3 of those were patients who were -- had regression of disease that had not made it to the 30% and some are newer patients who got a PR after 2 cycles. So one of the confirmed PRs got the initial PR of the 2 cycles, and the others are patients who had ongoing tumor regression, but had not quite made it to the PR yet. And this demonstrates some heterogeneity in the tumor responses, which can be observed. But if you look at the waterfall plot, many patients have regression of tumor, about 60% of them. And some of them are still ongoing. So the potential for some of these to convert into partial responses is still there.

Got it. Basically, you're seeing some kind of deepening response from those patients, they're not reaching the PR but they are kind of improving?

That is correct.

Got it. Okay. And the -- for the -- it seems you're considering like 4.3 to 5.2 kind of a mg per kg, any kind of dose response for your current kind of data set? And what is the response for those kind of dose range?

Well, we saw responses and robust evidence of antitumor activity starting at 2.9 mg per kg and higher dose levels. So we believe that this gives us a wide therapeutic window. And also when we look at the patients who have been on treatment for over a year, those are patients who either started at 2.9 or started at 4.3. So we are interested in exploring lower doses that are very efficacious, where we have seen robust anti-tumor activity and where we know that patients can stand treatment for over a year. That will be very important as part of our development program.

Yes, certainly. Got it. Okay. Maybe if I may, just a last question. So for those 3 unconfirmed PR, what is the reason for the drop-off?

So Roger, the question was for the ones who were unconfirmed PRs?

And out of the treatment, what are the reasons for the drop-off?

Oh, those that did not -- well, some patients got a PR, and then ultimately, they progress before confirmation. And some of these, again, show after the patients have been on treatment for quite a while. So 1 patient reached the PR after 10 cycles. And was -- just had a continuous low ongoing regression of disease.

Our next question comes from David Nierengarten with Wedbush Securities.

The -- is there -- I know it's early days, but the -- is there any correlation with the number of prior treatments and either duration of or actual response or duration of response?