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

[Presentation]

Today on Tech Nation, a company that put its work on hepatitis B aside and focused its virus scientists on treatments for COVID. I speak with Dr. Lawrence Blatt, the CEO of Aligos Therapeutics. And then Dr. Daniel Kraft, the Chief Correspondent for Tech Nation Health breaks down the current COVID vaccines being tested. They're not all the same. And finally, we know that treatments for cancer are getting better and better. But why and how? We'll talk about one company's new technology, the progress it has made in ovarian cancer and the next cancers currently in planning. We'll hear from Bill Newell, the CEO of Sutro Biopharma. And now Lawrence Blatt. Well, Dr. Blatt, welcome to Tech Nation.

Thank you. Thanks for having me.

You said something very curious to me when we first spoke. You said -- and I'm paraphrasing, of course, "We have not been able to create a long-lasting vaccine if there was no natural state of immunity for someone who caught the virus and survived."

That's correct. And that's been seen over many, many decades. So we've been infected with many different viruses throughout our lives and throughout history. And some viruses, when we're infected, we create lifelong immunity and we can't be reinfected. And other viruses, we're infected many, many times in our lifetime. And there are many different reasons for why that's the case. With respect to the coronavirus or the SARS-CoV-2, which is the causative agent of COVID, we know that for seasonal coronavirus, people can be infected year after year.

That would be the flu?

Well, there's many forms of viruses that cause flu-like symptoms. Formerly, the flu is from a virus called influenza virus, which actually comes from an Italian word to influence. So people thought that when they had influenza, they were influenced by the phase of the moon. But later, we discovered -- people discovered that it was a virus. And there are many viruses such as coronaviruses, influenza virus, rhinovirus that cause flu-like symptoms. And for many of these viruses, we don't make lasting immunity, so we get reinfected year after year.

So we didn't draw any luck on COVID-19?

It appears that that's probably true that there isn't going to be lifelong immunity. There are now some documented cases of people being reinfected. I think there's one silver lining of that, and that is that in the second infections, the virus has been much more less lethal for sure, and causes less side effects. So many of the second infections have been asymptomatic or without any side effects. So I think that's a very good thing. So even though you're reinfected, you're better able to tolerate that infection.

Now let me ask you, does that give you a clue as to how to develop a vaccine? Because after all, your antibodies supposedly are gone, how did you get reinfected and yet it's milder?

So that brings us to the different types of immune responses that we have. We have 2 types. A lot of people know a lot about an antibody response, and that's where our cells make antibodies or proteins that bind to the virus and neutralize it, prevent it from infecting cells. But there's also something called cellular immunity. And that's where our cells are exposed to a virus and then they program themselves to eliminate those cells that are infected with the virus. And that's a very important type of immunity, cellular or innate immunity. And it's probably true that the innate immunity or cellular immunity is responsible for blocking the many symptoms in the reinfection. And that's how viruses can, what we call attenuate or become less lethal over years. So we have this ability to block the cells that are getting infected through the cellular-based immunity as well as the innate immunity.

So we're not talking about antibodies here?

Correct. We're talking about cells, white blood cells or T cells that circulate in our body, which specifically learn what the virus looks like and can seek out those cells that -- where the virus has infected and eliminate those cells.

I think it's really interesting for me at least that the Spanish flu is still with us.

Yes. That's -- it is very interesting. The 1918 flu, which probably started in Kansas and was mislabeled as Spanish flu.

Madrid, Kansas?

Yes, because of news reporting actually, was the main reason. The newspapers in Spain were more open to reporting to it. It may also have originated in Asia, people aren't exactly sure. But what is very interesting is that, elements of that 1918 flu, parts of the viral information or genetic material, are still present in flu that circulates today. And so it's possible that this SARS-CoV-2 will become what we call endemic, meaning it will always be there. But hopefully, over years, people will build up tolerance to it through this cell-based immunity and some antibody production, and it will be less lethal and cause less disease.

And in a nod to biotech, it's only been about 15, 20 years since we've been able to decode things, and you wouldn't be able to decode the DNA or the RNA or any of those pieces of information to know you were looking at an offspring of the Spanish flu.

That's true and what you're referring to is called sequencing. And many of the techniques for sequencing were developed right here in the Bay Area, in a company -- in Foster City called Applied Biosystems. So yes, that information is now readily available to us. And within a matter of weeks of the first infections of coronavirus, we knew the sequence, the complete sequence of the viral genetic information. And that really aided in the production of vaccines, and that's why vaccines were able to start clinical trials so quickly because of that information.

Another thing that has surfaced recently is that some of the effects of this coronavirus has continued. The virus is gone, the antibodies are gone and yet some people are still getting some of the effects.

Yes. So what happens when a virus infects our cells, the virus wants to reprogram our cells to just make copies of the virus. That's all it wants to do. And in the process of that, our cells and our bodies fight back. And many of the symptoms we have from being infected with viruses are really the result of our own immune system trying to block that virus from replicating. So for example, when you have a fever, that body is heating up in response to the virus because the virus doesn't like the hot temperature. And now that may not be true for this coronavirus. This coronavirus might actually really like that hot temperature. And other things that happen involve the production of these protein hormones we call cytokines. And those are kinetic, they move cells. So cytokine comes from the word cell and kinetic put together. And these things move cells. And what happens is that can go haywire. And so what we think is happening in the coronavirus infection is that for some people, that immune response turns on, it's like the virus turns the light switch on. But then when the virus is gone, the light switch remains on. And the problem is getting those people to turn the light switch off. So there are various therapies. And one of the recent breakthroughs has been the use of actually steroids in late-stage cases, and it's shown to be benefiting in survival. So that's been recently approved by the FDA, because it's -- that's how you can turn off that light switch or turn off that immune response. In addition to that, some of the other things that seem to be happening with the virus is marked effects on the cells that lie in our blood vessels, so vascular effects. And many of the long-term effects that we see are really -- involved the damage to this vascular system. So we see long-term effects on cardiology and even effects on our cognitive or thinking ability, because of effects on the blood supply to the brain. So the virus is long gone, but the switch is still on and the damage, the recovering cells and the damage is done. Now in some cases, cells can repopulate but in many cases, they can't. So for example, if we do damage to our lungs and we get scar tissue in our lungs, we can't replace that scar tissue. So we have to live with that for the rest of our lives. So those are some of the reasons that there's longer-term effects of this virus well beyond the initial infection.

And you don't want to get this virus?

I think if you can avoid getting the virus, it's certainly well thought-out strategy. I don't support the idea of creating herd immunity through lack of precaution, because while it is true that certain segments of our population are more at risks for these deleterious effects or difficult effects, there are also people that have no preexisting conditions that can have these effects and these long-term effects. And right now, it's very hard to predict who might have these effects and who might not.

You're listening to Tech Nation. I'm Moira Gunn, and my guest today is Dr. Lawrence Blatt. Dr. Blatt is the CEO of Aligos Therapeutics. The former Global Infectious Diseases Therapeutic Area Head at Janssen, the Chief Scientific Officer of InterMune and Senior Director of Interferon Research at Amgen. He's been working on chronic viral infections in the biotech space for a number of decades. Now let me ask you a little more about herd immunity. It seems to me you might work out herd immunity if it was one of these diseases, one of these viruses that once you got it, you were permanently immune, so that you could be a member of a pretty large herd, and you wouldn't have it, and you wouldn't get it. But if you could get it again, the herd is never immune.

Right. And in this case, unlike viruses like polio or measles, where you can have lifelong immunity, in this case, there isn't lifelong immunity, at least with respect to the antibody response. We can't really generate herd immunity per se. So I think what we're going to have to see in the future is a combination of immunity. So I think vaccine strategies are very important. In addition to that, we need therapeutics, which treat people that are infected. So the difference between a vaccine and the therapeutic is that a vaccine prevents infection and a therapeutic treats people who are infected. So because we can't get herd immunity, we're going to need therapeutics. But we also have to practice good behavior. So we have to practice social distancing, wearing of masks so that we can get the numbers of patients down and really block the transmission in that way. So really, it's going to take all of those things together. I don't think you're going to have a vaccine where you can inoculate the whole population and eradicate this coronavirus.

Now your company, Aligos has been working in treating a different virus, different bad actor. And that would be hepatitis B. How different are these 2 viruses? And are they close enough so your treatment might work for COVID-19?

The answer is they're very different viruses. They're really not related to each other in any way. So therapies that were developed for hepatitis B virus such as the ones we're developing at Aligos or even on-the-market therapies for hepatitis C virus or HIV, really cannot treat COVID. And for that reason, when we first learned of the coronavirus pandemic, we made a choice at Aligos to divert resources to creating what we call purpose-built therapeutic drugs to treat COVID. And we're focusing on a number of key parts of the way that the virus makes copies of itself in order to make these therapeutics.

So you said, hey, guys, we could put the play on right here. We know enough about viruses and how to combat them. But -- we're just going to put the rest on the shelf for a bit, and we're going to come back and do this.

That's what we did. We have a great group of scientists at the company, many of whom have coinvented antiviral drugs that are in the market for hepatitis C and HIV and other viruses. So we put those people to work on COVID or SARS-CoV-2 is actually the virus itself. And we've made very good progress in the last few months. I think another thing is very important to mention, and that is that the SARS-CoV-2 is the seventh coronavirus to jump from animals to people. And the pace of that jump has been accelerated in recent years. So some people might have heard of SARS, some people might have heard of MERS. Now everyone's heard of COVID. And the thought is that it's very likely there'll be another coronavirus jump in the future. And part of our mission for therapeutics is to have therapeutics that act against all of these different types of coronavirus, so that if a new strain jumps, we have a purpose-built therapeutic for that strain.

Now remember, we have a mainstream audience, who's not a bunch of tech scientists in white coats sitting in rows waiting to hear this, "How does it work? What are you doing?"

Well, so remember, I said that when a virus infects a cell, it tells that cell to make a copy of the virus. And it has to tell the cell to make tools for that copy. And those tools are protein in nature. So the virus tells the cell, forget about making your own proteins, make my proteins. And in particular, the coronavirus, when it makes its proteins, it makes it in a long string. So imagine a long string of popcorn. Okay? And in order for the virus now to assemble itself into a three-dimensional structure, it has to cut up that string of popcorn and assemble itself.

Into a popcorn ball.

Into a popcorn ball. And you've seen pictures of that, if you've watched any newscast, you see that picture of that popcorn ball. And that comes from cutting up a very long string of proteins. And so we're stopping that stage. So we're stopping the -- with our drugs that we're making, we're stopping the virus from being able to cut up that long string of popcorn into the individual proteins.

So it's really just still all strung up.

Right, and that blocks the virus from making copies of itself. And what happens is when the virus makes copies of itself, those go on to infect other cells. And this just keeps happening and keeps happening until the immune system can't control the virus in the way that we've talked about earlier. And so by blocking the ability of the virus to make copies of itself, we're really stopping the infection in its tracks. And we're hoping to -- as a result, greatly shorten the course of therapy or the length of the infection, and also stimulate the immune system to be able to respond to the virus more efficiently, because there will be less virus that it has to deal with. So one of the problems is the coronavirus makes so many copies of itself, it just outruns the immune system.

So the immune system has a chance to say, to cells, "we don't want it around here."

We don't want the cell around and then the immune system and other signals say to the cell, "You're going to have to sacrifice yourself." And that's how it will die. And that will further eliminate and limit the infection.

Give the body a chance just to do what it does best.

Right. Exactly. So that's our approach at our company. And we're very fortunate we're actually working internationally. So we're fortunate to be partnered with a very prestigious university in Belgium, the KU Christian University Leuven in Belgium, where there's a very prominent virologist, Johan Neyts that we work with. And what's interesting is they built a facility where we can actually grow SARS-CoV-2. It's very controlled, called the space suit lab. So you literally go in there in full space suit and you work in glove boxes, because we can't grow this virus in a normal laboratory setting. So we're working closely with this group to make these drugs effective.

Now where are you in this? Is that understandable? Or are you just doing a lot of experimentation?

So we have lead molecules that are quite potent now. Just in a very short period of time, we've been able to find lead molecules that are very potent in cell culture. There's a long way between cell culture and giving an effective drug. So it's still early days. We've only been at it a few months. But we are accelerating, and we hope to be in patients as quickly as we can. But we have to guarantee that we're safe and make sure that we're not going to do harm to people. And so we're working in that arena.

Now are you getting on a plane and taking a cup of these molecules all the way to Belgium, saying here you go? How does this work?

No. No. We make the chemicals here. We also have our own laboratory in Belgium. So we make some of those chemicals in Belgium, and then we ship them. They get into -- World Courier is a very specialized courier that will hand deliver things like this. And they're taken to Belgium where the samples are run. We also can do some things in our labs. So because we're trying to make these molecules active against all coronaviruses here in the Bay Area and our lab, we're growing the seasonal coronavirus. So the strain that circulates year after year, we can grow in our facility. So we're testing first against seasonal coronavirus and then the molecules that look really good, gets sent to Belgium.

Now this is a fairly new company, Aligos. And I know your former company, Alios?

Alios. Yes.

Alios, that one you sold, I know, to Johnson & Johnson.

Right.

You can't take a small company and suddenly you're distributing to every place you're handling it. Are you already engaging larger companies like Johnson & Johnson to talk about where to go?

Not yet. It's too early to do that. But I think the bottom line is -- and I used to work for a company called Amgen, you mentioned that. And I was fortunate to work with one of the founders, George Rathmann. And he always said, if you do what's right for patients, if you build the right medicine, the rest will fall into place. And that's what we're doing. We're making drugs that can effectively treat coronavirus. If those drugs are active and they work, there'll be many opportunities for partnerships with large pharmaceutical companies to distribute the drug. But right now, we're really focused on the science and producing the most efficacious and safe molecules that we can find.

Would you go into animals next?

So there are some animal models for coronavirus. We can infect hamsters with coronavirus, believe it or not. So that would be the next stage of testing.

But not all animals? What other animals aren't -- don't like coronavirus?

Well, that's an interesting question. I think the answer is it hasn't exhaustively been studied. So in many cases, for example, the human influenza virus, there are certain animals that influenza will replicate in or grow in, certainly birds and horses and pigs, they grow well in those. But other viruses don't -- human viruses actually don't grow well in animal species. Because the SARS-CoV-2 is so new, people haven't done exhaustive studies to see what animals this will grow in, and what animals it won't grow in. It turns out that hamster is a very useful small animal. They're small, and they can be infected with coronavirus. So that's what's used.

I've been speaking with Dr. Lawrence Blatt, the CEO of Aligos Therapeutics. We'll talk more after a break. [Presentation]

You're listening to Tech Nation. I'm speaking with Dr. Lawrence Blatt, the CEO of Aligos Therapeutics and the former Head of Global Infectious Diseases for Janssen.

So first of all, typically or historically, the development of a new vaccine can take a decade or more. And you might ask, why? What takes so long? So really, you have to know quite a number of things. The first and very easiest thing to find out is whether or not giving this vaccine will cause the production of antibodies. And generally, you can find that out pretty quickly, okay? But the next question is a little more difficult. And that is, okay, I know that you make antibodies, but does those antibodies -- or do those antibodies protect you from becoming infected? And the only way you know that is to do a very large population of patients, some getting placebo or not active injection, and some getting the vaccine and counting the number of people that get coronavirus or COVID, who got placebo versus the number who got it with the vaccine. And the issue is that if you have a population that you're studying that doesn't have a high rate of infection, which in spite the number of cases in the United States, the overall percentage of people becoming infected is still low, right? So it makes doing those studies hard and difficult. So the question will be, for the vaccine studies that we're running now, will there be enough cases in the placebo group to tell us without a doubt, that the virus protects you -- that the vaccine protects you from getting the virus. So that's an unknown question that we don't know. The other thing is safety. And the small studies that we do tell us, is the drug safe generally, right? So if you have a side effect that occurs in half the people who take the drug or the vaccine, then you'll learn that from a small study. But what if you have a very bad side effect that only incurs in less than 1% of the people that take it? And what if that side effect is so unusual that you wouldn't even expect it to happen? And so you have to do enough vaccination in a large enough number of people to see this. And then when you're studying that many people, people have things that happen to them, right? So if I was just monitoring 100 people for a month, they might get a headache, they might get a fever, they might get muscle aches, okay, without ever doing anything to them. So you have to know whether or not they were going to get that headache or fever or muscle ache because of whatever event is occurring in their life or because they got the vaccine. And so these things take a lot of time and large numbers of patients to understand whether or not you have side effects, whether or not the vaccines will be efficacious. And I think the caution is that if there was an emergency use authorization granted for a vaccine, then we have to see that as an intermediate step. That -- because this is such an emergent situation that the risk-benefit ratio favors allowing that vaccine to be available ahead of knowing all of this information. And people have to make an informed decision for themselves as based on what information is known as to whether they want to expose themselves to that vaccine.

At the same time, the FDA just can't go out and say, "We like what you're doing, we're going to approve you."

No, they can't because the pharmaceutical company has to submit the data. And as you may have heard, several of the large vaccine, most of them, companies that are working in the COVID area, have made or issued a statement saying that they're not going to file data ahead of having this vital information that I'm describing. And I think that's very important, because it's very important to have a vaccine, but it's maybe just as or not or more important to have one that we know is efficacious, and we know is safe. And those things only can be known over time. The other thing I think we need to have sort of a managed expectation about is it's not likely that 100%, everyone who takes the vaccine, will make antibodies and everyone will be protected. Some people will and some people won't. And we have to understand why. Who are the people that do get a good response? What can we say about them? And we have to think about that in the distribution of the vaccine because we have -- in the United States, we have never distributed any pharmaceutical to the vast population that we would like to distribute to for a vaccine. So there's approximately 330 million people in the United States. And the vaccine requires at least the ones that are in the clinic now, 2 doses. So you're talking about more than 500 million doses of something. And that's a lot to produce. And I think it's really good that we've gotten ahead of that and people are producing vaccines at risk. But these are a lot of things to think about. So knowing who the vaccine benefits is important and then knowing what the benefits are is very important.

I think what's so interesting about this is that at this recording, 6 biopharmas have signed on to this, saying until we believe it's really working, we're not going to submit to the FDA for a review. And I've got a feeling there are going to be other biopharmaceutical companies jumping on board as well. The real issue is, is it, in a sense, depoliticizes it? A government arm can't say, well, we have a -- we just want to do this, and so we're going to approve. A deep little [indiscernible].

As you know, the virus has no political affiliation. And it doesn't care what your race is, what your socioeconomic status is. You can be infected in any case. So I think it's very important that this is not a political issue. This is a public health issue. It is a world health issue. So it shouldn't be politicized.

Well, Lawrence, thank you so much for coming in. I hope you come back see us again.

Thank you. Thanks for having me.

My guest today is Dr. Lawrence Blatt, Dr. Blatt is the CEO of Aligos Therapeutics. More information is available at aligos.com, that's A-L-I-G-O-S, aligos.com. I'm Moira Gunn. You're listening to Tech Nation. [Presentation]

Dr. Daniel Kraft is the Chief Correspondent of Tech Nation Health. Hey Daniel.

Hey Moira.

I have to ask you, we keep hearing about the top 3 vaccines, the top 10 vaccines, the top this vaccines, all these vaccines. What kind of different kinds of vaccines? Are they each different? Are there groups of them? What are we looking at?

Well, for coronavirus, COVID-19, there's several different vaccines under development. Some of them are quite new, like genetic vaccines. These are vaccines that use the coronavirus' own genes to provoke an immune response, and some of the most exciting and far along companies like Moderna and Inovio are making vaccines that end up sort of generating the DNA that's tied to the RNA of this virus that makes those spike proteins. So when you take a vaccination from Moderna, it's not the actual protein itself, it's the messenger RNA. The mRNA then ends up producing the protein of which the immune system reacts again. So it's a very -- a more novel approach. The more common ones we're usually used to are more of the protein-based vaccines, where you'll take the bug, in this case the virus, separate it into its components, maybe kill it or radiate it or produce the protein itself and use those elements, again, often the spike protein, the ones people have seen in all the COVID pictures to generate that immune response. And a third would be viral vector vaccines, where vaccines that use the other forms of virus to deliver the coronavirus genes into cells, that's what's triggering the immune response. So those are kind of the 3 basic categories. Several companies and academic groups have been developing vaccines, including for coronavirus, different forms of coronavirus in the past. They had a bit of a head start. But things have moved very, very rapidly. And it's not just the combination of the technology, it's partnering with the regulators, let's say, the FDA to help these trials fast track. It's working past even the vaccine itself to think about the fact that we might need 4 billion vaccine doses, there's only less than 0.5 billion glass vials in the world today. How do we get ahead of thinking about distribution? The cold chain process of maybe work with companies like Coca-Cola that sort of nailed how we distribute anywhere in the world, a product. So it's beyond the vaccine. We've talked in other episodes about design thinking. How do you think about everything about not just having the physical vaccine, but how do you deliver it, how do you track it. And how do we look at the impact on the immune system of those who receive it. We still don't quite yet know whether even patients who had coronavirus, if their immune status is going to protect them from future COVID infections. And whether the vaccines, hopefully, safe and effective ones are going to require annual or every couple of year changes, particularly if the virus mutates.

If I look at the Baby Boomers say like, boy, the polio vaccine, that really worked great for me when I was a kid, and it's protected me my entire life. Now are these vaccines going to work for the elderly?

We've talked about the fact that your underlying genome may affect who is most at risk, your blood type, which is tied to your genes, but also how you might respond to vaccinations. Not everyone has the same wiring of their immune system. There have been, by the way, many of us, particularly born in the '50s or '60s had what's called the BCG vaccine. It was actually developed in early 1900s as a protection against tuberculosis. There's trials now looking to see whether individuals who got the BCG vaccine have an immune system that is more resilient against COVID. So we're going to be continuing to learn about the overlap of our antibodies, how we measure them, our T cells or B cells in the context of COVID and other infections.

Everyone is reading again and again about these vaccines. How do they know when something's new, everyday people?

Well, in May, Moderna, one of the leading companies developing this RNA-based vaccine came out with a press release, showing promise in their Phase I trials and the stock market jumped dramatically. And it was sort of science by press release. There's so much pressure around this that we need to be careful about all the sort of information coming out, whether it's around vaccines or around hydroxychloroquine. We need to be careful about how the science rolls out. But I think one of the silver linings of the COVID-19 pandemic is the collaborations that have been for them, the science that is accelerating that's being applied to COVID-19, but also is going to help in the future collaborations around other diseases, public health, maybe helping us collaborate around global warming and the interconnections between scientists, startups, big pharma companies, health insurance companies, individuals and all of us kind of rolling together is going to hopefully lead to a healthier, safer world going forward.

All hands on deck.

Go forward.

Great. See you next time.

See you.

Tech Nation Health Chief Correspondent, Dr. Daniel Kraft is a physician scientist and innovator. More information is available at danielkraftmd.net. I think we all know that treatments for cancer and autoimmune diseases are getting better and better. What we don't usually know is why or how. Today, we're talking about a next-generation approach with Bill Newell, the CEO of Sutro Biopharma. Well, Bill, welcome back to Tech Nation.

Thanks, Moira. It's my pleasure to be back with you again.

Well, you've been on before, but let's remind everyone what Sutro Biopharma does?

Well, Sutro Biopharma is a company that employs a novel technology that isn't widely used in the industry. And we're employing that technology to make next-generation cancer therapeutics. Now cancer therapeutics have been evolving over the last 40 years. We start with chemotherapy and many patients who suffer from cancer are treated with chemotherapy. The next generation beyond chemotherapy was antibody therapy. And that has been very effective for many women, but -- and men, but there are breakthroughs in therapy that occur. And so the next generation beyond that is to actually combine the two, take the best of what the antibody does and the best of what the chemotherapy does and be more impactful on the tumor microenvironment, and sparing the patient some of the side effect profile that you get from chemotherapy.

Now people understand, boy, this chemotherapy, it kills cells. So we want to kill the cancer cells. A lot of people aren't totally clear about what the antibodies do that had to do with the cancer cells.

Well, that's an interesting point. Antibodies can also actually affect a killing of a cancer cell independently as well. And so for example, if you have the right antibody that it is specifically guided like a laser to the tumor that you want to get to, it can disrupt the way the tumor grows and spreads. And that is great as long as the tumor is expressing the target that the antibody is seeking. If the tumor stops expressing that target because it is mutated away from what it was at the time that you first introduced the antibody, then the antibody is no longer effective. And so our concept is to take that exquisite targeting and give an extra umph by adding the super potent chemotherapy directly into the tumor microenvironment. We don't want it sloshing around the body and killing healthy cells. We want it going preferentially to the tumor, doing its job and then leaving the body to minimize the side effect profile for the patient.

And that sloshing around, killing any cell, is what has caused all the losing of the hair and many number of things, because it's killing healthy cells.

That's exactly right. It is nonspecific toxicity that the body just has to work its way through. And so it causes fatigue, it causes nausea, it causes other physiological issues when you have a chemotherapy. But if you can take one that is even more potent than the body could normally tolerate, put it in a very small dose, almost microscopic and then use the antibody to guide that right to the tumor microenvironment, and then find a way once it's done its job killing the tumor cell to be removed from the body without killing healthy cells. Now you've got the next-generation cancer therapy, and that's one of the things that we've been working on at Sutro Biopharma.

So your technology joins those two, the antibody and the drug?

That's exactly right. And we do it in a very smart way. We have a lot of engineering prowess, and we use our technology to identify the exact right spot to attach that chemotherapy to the antibody. Other people's technologies are not as specific. And so they don't have the ability to precisely place the chemotherapy onto the antibody in a way that maximizes its killing potential on tumor targets and tumor cells, but minimizes the way that the body's healthy cells are affected. And that's what we uniquely are able to do.

So we're talking about antibodies that will only attach to a cancer cell?

That is the thought -- that is the ideal antibody, that it only attaches to a cancer cell. There are some instances, however, where healthy cells may also be attracted to that antibody. And so...

We don't want that.

We don't want that. So what you have to do in that instance is actually find a way to find two points of attachment on the cancer cell, and do it in such a way that on a healthy cell, those two points of attachment do not exist. And so for one of the programs that we are working on with our partner, EMD Serono, we are doing this bispecific antibody drug conjugate. And by bispecific, I mean, in order for it to be effective and attach and kill cells, both of those points of attachment need to be on the tumor cell. And because we're not finding both of those points of attachment on a healthy cell, the antibody drug conjugate just ignores those, and it hones in specifically on the tumor cells.

So your technology then is taking two antibodies and a drug?

Yes. It's very complex. This will be the first molecule like this that has been in clinical development in human history. And so we're excited that molecule will start a trial in the first quarter of next year in non-small cell lung cancer and in esophageal squamous cell carcinoma, 2 very difficult cancers to treat. And so by using this revolutionary approach, we're going to be actually taking the first opportunity to prove that, in fact, you can get the specificity from the dual binding that allows you to obviate a lot of the toxicity to the healthy cells. And that's a very exciting proposition for patients.

Quite a lot of technology there. So simple when you talk about it, we'll just glue these 2 antibodies and the drug. Really, that's...

That's a simple technology that we've been working on for over 16 years. So there's a lot of science, a lot of high science and a lot of manufacturing prowess that goes into all of those too. These are not easy molecules to design, and they're not easy molecules to manufacture. So we've had to build our own manufacturing facility in order to really control the process so that the molecules that we put into clinical development are exactly what we want them to do.

Now you've already been in clinical trials with your single antibody, single cancer drug combination. And I believe there is a recent one in ovarian cancer. Has that read out yet?

Yes. That's a very important drug for us in a very tragic disease. So we're working on a drug that is probably the next line of therapy for ovarian cancer patients who've been through the usual chemotherapy regimens. And the women who've been enrolled in our study have had on average 5 prior lines of therapy. They are -- they've been exposed to every conceivable therapeutic option for them. And frankly, if our trial wasn't available to them, they would likely be headed to hospice or other palliative care for the very short duration of their lives. We were excited to announce last week that in a study that is still ongoing, where still we have 40% of the women being treated, we were able to achieve 8 partial responses out of the 33 women who have participated in our study at the doses that we think are the more active ones and the ones that are going to be more relevant to our future drug development activities. That's a 24% response rate, in a category of patients who admittedly, would probably only see responses in less than 10% of their population. We also had a number of women, about 17 of the 33, who exhibited continued pattern of stable disease, meaning their disease had been progressing before they came on to our study and on the course of treatment that we gave them, their disease did not progress. It stayed stable. And what does that mean? That means they're able to enjoy their life for that much longer because the cancer is not growing in them, and we're able to really offer them a good quality of life during that time frame. I think what was most exciting for me, Moira, about the data was that all of those women, 4 of them have been on our study for over 12 months, and those 4 are still continuing on study today. And we had another 7 who have been in our study for 6 months, and they are continuing today. So the prospect of being at the very end of your hope for therapy and to be able to participate in our clinical trial and live another 6, 12 or more months is something that we know is very meaningful for them.

Yes. That's fantastic. Now I'm kind of interested when you say response, what do you mean by response? We know that stable means it didn't progress and so 17 out of the 33 did not progress. But these 8 that there was a clear response, what are we -- how are we measuring that response?

We measure that response in the size of the tumor that is selected to be measured to see whether or not the patient is actually responding to the therapy. So if you think that you start the study and the size of your tumor is a certain volume, at regular intervals, we look and x-ray and use other techniques to remeasure the size of that tumor. And if you shrink the size of the tumor, by 30% or more, that is deemed to be a response. And so all of these 8 women, we have radiologic evidence that their tumors were shrinking by at least 30%. And in one case, one of the women who's been on the longest on our study, her tumor shrank 88%.

That's a shock.

Yes. It's -- I mean, she's thrilled to be able to participate in this study. It's really meant quite a lot for her and her family. And we're thrilled with the outcome and the benefit that she's received from our therapy.

These people have been through therapy after therapy after therapy, and there were none in the line simply to join a trial like this.

That's exactly right. They were at the end of their options. And so thankfully, we were both able to get this trial started before the COVID-19 pandemic began. And thankfully, we've been able to continue to provide therapy to these women, notwithstanding the pandemic. I want to thank the women who participated in our study. I want to thank the doctors and the staff who made it possible for these women to continue to be treated. It's a terrible situation that our country is in, that the world is in, but the industry and Sutro Biopharma, we've been able to find ways to continue to offer hope and therapy and treatment to patients with very serious diseases. We need to be able to deal with the pandemic, but we also need to be able to keep people moving forward with their lives, and we've been blessed to be able to do that.

I keep thinking about how when Apple first came out with the Macintosh. At that point in history, if you had a computer, a piece of hardware, you developed all the software for it and you controlled everything. And for the first time ever, you got out there with the Macintosh and Steve Jobs and Steve Wozniak, the two Steves said, "Hey, we're going to let anybody develop an application for this that wants to." And it completely blew open the laptop and the computer industry, the personal computer industry. And I think about a technology like this, the ability to blow open cancer treatment, that has to be a strategy in itself.

There is so little that we know even today about how cancer operates, how we get it, how it mutates, that no one company can actually develop all the drugs that might treat cancer by themselves. You really need to take an industry-wide approach in order to maximize the opportunity that you have to be disruptive to the cancer cells. So we're partnered with Bristol-Myers Squibb, working with our technology and their understanding of the biology behind multiple myeloma. That's in clinical development today. And I hope that in the next 6 to 12 months, they'll talk about how that drug is performing in their clinical trial. I've mentioned the molecule, we're working with EMD Serono that targets two parts of the tumor cell in order to deliver the chemotherapy there. And then the third program that we have is with Merck. And we are working with them on a therapy that can be very impactful to their great flagship drug, KEYTRUDA. And it works great in some people, but it doesn't work so well in others. And so we're working with them on a very different molecule that could be dosed in combination with KEYTRUDA to broaden the effect that KEYTRUDA has. For us, it's been finding the people who know the best and the most amount about biology and then integrating what we do well from an engineering and manufacturing standpoint together to give a great outcome for the patients. And we're just at the tip of the iceberg.

Well, I have to wish you good luck, Bill. Thanks for coming in. I hope you'll come back and see us again.

Thank you very much. I look forward to it. And it's been a pleasure to see you again.

My guest today is Bill Newell, the CEO of Sutro Biopharma. More information is available on the web at sutrobio.com. For Tech Nation, I'm Moira Gunn. [Presentation]