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

Ladies and gentlemen, thank you for standing by. Welcome to the Sutro Biopharma Research Forum webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to Bill Newell, Chief Executive Officer of Sutro. Please go ahead.

Thank you, operator, and welcome to all. Thank you for joining us for today's Sutro Research Forum. As many of you know, we are presently conducting 2 pivotal trials for Luvelta tazevibulin, one in platinum-resistant ovarian cancer and the other in a pediatric leukemia. We look forward to sharing updates on Luvelta with you around year-end. For today's presentation, we are focusing solely on our emerging research pipeline. In the course of today's presentation, we will be making forward-looking statements, and we refer you to the text of this slide as it pertains to such statements. For over 20 years, Sutro has been innovating on our world-leading cell-free technology. Today, we want to showcase how we are using our technology to give cancer patients more and less. The next-generation antibody drug conjugates or ADCs that we will be discussing today are being designed to give more patients more efficacy with less toxicity or side effects. Sutro cell-free protein synthesis platform is an elegant solution for what has been a long-time challenge in the biotechnology industry, the production of complex biologics using cell-bound techniques. Our cell-free platform is highly flexible, allowing the modular design of complex biologics in a way no other company can and the ability to efficiently scale up the commercial scale under good manufacturing practices. In today's Research Forum, we are focusing on the application of our platform in the design and development of next-generation ADCs. We can mix and match different payloads in different locations on the antibody and in different ratios, using nonnatural amino acids in a way that is not possible with cell-bound approaches. The result is the ability to build a pipeline of ADC candidates, specifically designed to move beyond current standards of care and to treat a broader range of patients by improving safety and efficacy. We're really excited about the programs we will discuss today and also about the long-term potential of our platform to attract world-class partners like Astellas and Ipsen, and to continue bringing unique innovation to do more for patients. Cell-free design and manufacturing has come of age and we are now at the precipice of the most dynamic period of pipeline advancement and new INDs in the company's history. To that end, today, we are announcing goals for our proprietary pipeline. Three INDs over the next 3 years, with a significant number of programs coming after that, giving us the potential to be highly selective in the programs we pursue and the optionality for robust business development. We are confident in our ability to deliver this growth based on the proven ability of our cell-free platform and our research and development team. So let's get to it. The agenda for today is as follows: Dr. Hans-Peter Gerber, our Chief Scientific Officer, will provide an overview of Sutro's approach to design and develop next-generation ADCs. Dr. Gerber joined us just over a year ago and is a luminary in the field of ADCs. He brings over 25 years of drug discovery and development experience to Sutro with extensive scientific background and expertise in ADCs, targeted oncology and novel biotherapeutic platforms. Then for the first time, we will share details on new preclinical data on the 3 main approaches we are taking to improve ADC performance. Dr. Alice Yam, our Vice President of Drug Discovery, will introduce our tissue factor targeting ADC, STRO-004, which leverages our cell-free platform to increase the drug-to-antibody ratio and mitigate against toxicity seen with current ADCs. Next, Dr. Daniel Calarese, our Senior Director of Innovation and Strategy, will spotlight our dual payload ADCs, what we call ADC Squared. We will finish our early-stage pipeline update with a special guest from our partner, Astellas. Dr. Peter Sandor, Executive Vice President and Head of Corporate Strategy at Astellas Pharma. Dr. Sandor will highlight the rationale and opportunity for immunostimulatory ADCs or what we call iADCs. Jane Chung, our President and Chief Operating Officer, will conclude with brief closing remarks. And then Jane, Dr. Gerber and I will be available for Q&A. I will now turn the call over to Dr. Gerber.

Thank you, and hi. It's great to be here today. My name is Hans-Peter Gerber, and I'm the CSO at Sutro. And I look forward to sharing with you our highly differentiated ADC platform and the promising preclinical data in support of strong efficacy and safety profiles of our next-gen ADCs. I've been involved in ADC development for over 25 years now. From the early days at Seagen to the recent renaissance of ADCs that was enabled by the dramatic increase in the therapeutic index as shown graphically on this slide in the gray area. TI improvements can be achieved in 2 ways, either by making ADCs better outside the tumor resulting in an increased maximum tolerated dose or MTD. We will provide several examples of how we achieve this goal with our TOPO-1 platform today. The other way to improve the TI of ADC is to make ADCs better inside the tumor by lowering the minimum efficacious dose or MED. We have 4 speakers today that will explain to you how we achieved this goal using our proprietary ADC platform technologies. I'd like to point out that most of the data you will see today has not been previously disclosed. So you are in for a real treat today. Looking back, ADC development has primarily focused on developing payloads with increasingly higher potencies represented in the gray area of the graph. I personally spent most of my time developing ADCs at Genentech, Seattle Genetics, Pfizer and other biotechs with high potency payloads shown in the gray area. During this time, I was fortunate to advance more than 1,000 ADCs to IND filings and to support BLA of 5 of the 15 approved ADCs. The main reason for the initial focus on high potency payloads is that the very first generation of ADCs were conjugated to the low potency doxorubicin shown in the blue area of the graph, and failed in the clinic due to lack of efficacy. However, while the ADC field was heading towards higher potency payloads, the breakthrough data for HER2 in 2019 was achieved with a lower potency exatecan TOPO-1 payload shown in the green area of the graph and for many of us at the time, this came as a surprise. So how come that ADCs with lower potency payloads induce higher antitumor activity, that sounds somewhat counterintuitive. To explain this conundrum, I wanted to remind you of the fact that only 1% of injected ADC ultimately reach the tumor. The other 99% remain outside the tumor, where they can cause toxicity in normal tissues known as platform toxicity. And it is this platform toxicity that became the dose-limiting toxicity of almost all high potency payload ADCs in the clinic, and it prevents administration of higher doses. The key difference with TOPO-1 ADCs is that they do much better outside the tumor, making these 99% of ADCs less toxic to normal cells, so they can be dosed higher. So why does this matter? The simple rule of ADCs and perhaps most oncology drugs is that more is better and higher doses and exposure levels drive their antitumor activities. So why did it take 20 years to get to this breakthrough moment for ADCs? The main reason is that platform toxicities were less well understood and different for each individual linker and payload type. So it was more convenient to optimize ADCs for efficacy. Because these models were readily available, but unfortunately, they do not predict ADC toxicity. So the good news is, however, that almost all platform toxicity can be detected in nonhuman primates. However, these studies are late stage and resource intensive, and it is difficult to stop programs that late in their development cycle. Therefore, safety took a back seat in ADC development until recently. So the most impactful progress made in ADC research, during the past 5 years or so is the development of in vitro surrogate assays that are predictive for platform toxicities, as shown on the bottom of this slide, including interstitial lung disease, which is a type of lung inflammation known as ILD, skin, liver, kidney and eye tox. In the next couple of slides, I will give you examples how we used our tools successfully to reduce platform toxicity based on these surrogate assets. The first example here demonstrates how our proprietary click chemistry generates highly stable bonds between the antibody and the linker payload compared to conventional conjugation chemistries, leading to lower platform tox. The Sutro conjugates using click chemistry are shown in black, blue and green and all induced lower rates of neutrophil cell deaths compared to the competitor ADC, shown in orange, which is using standard maleimide chemistry known to induce neutropenia in the clinic. The second example highlights our ability to precisely position the linker payload at specific sites on the antibody which do not interfere with the natural recycling of antibodies in endothelia cells via the FcRn receptor. The site-specific Sutro ADC, shown in blue, did not induce endothelial cell death in contrast to conventional random conjugates represented by Mylotarg and Kadcyla which are both approved ADCs known to induce vascular damage and thrombocytopenia in the clinic. The third example here is how we take advantage of our cell-free manufacturing process to reduce Fc-gamma receptor-mediated toxicity. On the left side of the graph, we show that Sutro, HER2 DAR8 exatecan ADC in blue induces lower Fc-gamma receptor mediated cell deaths compared to the HER2 benchmark, which is the ADC that triggered the ADC renaissance back in 2019. So consistent with these preclinical findings, we have not detected ILD or eye tox in our safety studies in nonhuman primates with our exatecan and tubulin conjugates. To summarize this part, in vitro surrogate assets detect platform toxicity are now commonplace to guide ADC development. I provided 3 examples on how we use Sutro's platform technologies to minimize platform toxicity to make ADCs better outside the tumor. Additional examples can be found in the appendix of our slides today. Most importantly, we can measure success in making ADCs better outside the tumors in a very simple and reliable preclinical assay, the PK assay in nonhuman primates. So this here is my favorite slide. Because PK is so important for ADC development, I asked our PK scientists to compile all published PK data for ADCs in nonhuman primates. and they came back to me with the graph shown on the left side. On the Y-axis, the ADC exposure levels are shown in payload equivalents. And on the X-axis, the HNSTD, which is the highest non-severely toxic dose is shown also in payload equivalents. TOPO-1 ADCs are represented in blue dots. The ADCs with the best PK properties are in the upper right corner, circled here in a dotted line, and they turned out to be Sutro's ADCs. So by using our unique ADC design tools and selecting for ADCs that do better outside the tumor based on the surrogate in vitro asset, we were able to generate high DAR exatecan ADCs with industry-best PK properties. So why does this matter? As I pointed out previously, for ADCs, exposure drives efficacy and we cannot wait to see how our TOPO-1 ADCs will perform in the clinic. Dr. Yam will give you a more detailed information on the PK and efficacy properties of our first exatecan ADC STRO-004, which will enter the clinic next year, and the PK data of which is shown here in the upper right corner of the graph. So I shared with you how we utilize our platform technologies to make ADCs better outside the tumor. The following presentations will focus on the progress made to make ADCs better inside the tumor. For our next-generation ADCs, we identified 3 focus areas to make them better inside the tumor in the post-TOPO-1 area. First, we want to improve ADC potency by increasing the DAR to antibody ratio, known as DAR, with the goal to reach patients with lower copy number target expression, which can amount to over 50% of patients with uncertain indications. Second, in the middle of this slide, we want to combine payloads with different mechanism of action in 1 ADC known as dual payload ADC or ADC squares. This approach carries strong potential to not only deepen responses but also to overcome resistance to mono payload ADCs. And thirdly, we want to combine the most successful modalities in oncology, cytotoxic compounds and immune activators to activate both the innate and the adaptive immune system with the goal to induce antitumor immunity and preventing tumors from regrowing. Before I get to how we differentiate from other ADC platforms, I want to emphasize that our platform is not just incrementally different, but fundamentally. This is because we manufacture proteins in prokaryotic cells as opposed to eukaryotic cells, which are most commonly used for ADC manufacturing. And as you can see, we are not the only ones with this bold vision because Genentech when founded back in 1976, had the same goal to manufacture proteins in prokaryotic cells. So Genentech manufactured their first 3 products in prokaryotic cells by means of DNA vector engineering, which was state-of-the-art at the time. These products were all short peptide like somatostatin insulin growth hormone. So there is precedence for the success of prokaryotic cell manufacturing since more than 50 years. However, for more complex proteins like antibody, the technology was not ready at the time. Now in the meantime, with the advancement of genome sequencing and genome engineering, complex proteins could be manufactured. Sutro went even one step further and developed the proprietary cell-free extract manufacturing method known as cell-free. And we are happy to report to you today that a couple of months ago, we completed the largest ever reported cell-free manufacturing run of 4,000 liters for GMP manufacturing of our Phase III ADC Luvelta. And it is this unique, scalable manufacturing platform that enables us to engineer ADCs in ways conventional manufacturing approaches cannot. And this is shown on the next slide. In this differentiation slide, if you look across Sutro's engineering tools compared to other non-prokaryotic ADC platforms, you will see that Sutro checks every box. Our cell-free manufacturing platform puts us in a unique spot to tackle the challenges of current TOPO-1 ADCs, putting us in a leading position to develop next-gen ADCs with fewer safety events and to improve their antitumor activities such that more patients can ultimately benefit from them. So the entire ADC team at Sutro is extremely enthusiastic about the new previously unpublished data that we will present today. And we plan to share more data at upcoming meetings, including ADC World, [ PECS ] and AACR. So stay tuned for more progress updates in the near future. To summarize, we have developed a unique combination of Fc-gamma receptor-deficient ADCs containing exatecan payloads with a beta dual linker and conjugated via click chemistry that resulted in reduced platform toxicity and industry-best PK properties. We also made tremendous advancement in scaling up manufacturing and recently completed a 4,000-liter GMP run, the largest ever reported for prokaryotic cell manufacturing. Based on the promising preclinical data presented today, we plan to advance several ADCs towards clinical development at the frequency of one ADC per year. More details on our pipeline will be shared with you at the end of today's presentation. With that, I'd like to introduce Dr. Alice Yam as our next speaker.

Thank you, Dr. Gerber, and good afternoon, everyone. Thank you for the opportunity to share with you exciting preclinical data we've generated for STRO-004 in the last year. I'm Alice Yam, Program Lead for STRO-004. I've been at Sutro for 12 years now and intimately involved in building this really innovative portfolio. So we're excited to share with you some of our results today. You've heard from Dr. Gerber about 3 focus areas that we've developed within our portfolio. The first is focused on pushing to higher potencies with high DAR. Now of course, this is only possible when you have technologies that allow you to do this safely. So today, I'm going to take you through a deep dive of how we've done this for STRO-004, a next-generation tissue factor targeted ADC, where we focus on 3 key areas to enhance therapeutic potential. The payload, the linker chemistry and bringing it all together with optimized site conjugation on an antibody to deliver a really well-behaved molecule with a better safety profile and greater efficacy. But first, let me introduce the target. Tissue factor is broadly expressed across multiple solid tumor indications. It's clinically validated with tissue factor-targeted ADCs now approved in metastatic cervical cancer, and showing promising early activity in areas of significant needs like head and neck cancers. However, some of these earlier therapies have been limited in their therapeutic potential by both systemic and on-target toxicities and have had to really thread the needle to achieve a therapeutic window. Tissue factor is also expressed in the skin and the eye. So on-target toxicity in these tissues is a concern. Additionally, its primary role is in the initiation of blood clotting. So any interference in that function can increase the risk of bleed. There's an opportunity here to develop a differentiated next-generation ADC with reduced susceptibility to systemic toxicities like neutropenia, reduced on-target toxicities like bleeding or ocular tox, all while maintaining the potency to achieve good antitumor response. Tissue factor is broadly expressed across multiple solid tumor indications. On the left, we see that it's expressed not just in cervical cancer, but in many other cancers generally at high prevalence and high copy number. On the right, we see that over expression is associated with poor prognosis, consistent with studies implicating it in pro-tumorigenic processes, such as proliferation, survival and metastasis. This suggests that tissue factor is an important driver in cancer progression and an excellent target for drug targeting. In this next slide, I'd like to introduce you to STRO-004, the backbone of the molecule is a high affinity, high internalizing tissue factor antibody, engineered to avoid interference with tissue factor-mediated blood clotting, reducing the potential for bleeding. In the upper left panel, we have exatecan, the payload that's delivered by the antibody. Exatecan is a potent TOPO-1 inhibitor with strong bystander activity and reduced susceptibility to drug efflux, which means STRO-004's activity will be less impacted by resistance mechanisms that allow the tumor to pump the drug out, rendering it inactive. Moving to the right, the payload is linked to the antibody with the beta Glucuronidase-cleavable linker. The beta Glu linker is a really important component that not only lends the molecule, the hydrophilicity that makes the ADC a really well-behaved molecule in circulation, but it also imparts a strong tumor selectivity for the payload release as the beta Glu enzyme is highly upregulated in tumors as seen in this rainbow-colored chart. Importantly, the linker payload is conjugated to the antibody using our site-specific technology at sites that are optimized for enhanced stability and performance. We can see in these lower panels that all of these components come together to enhance PK, which are the drivers of safety and tolerability and may help us push the boundaries of how much payload we are delivering in an ADC. So why go for high DAR in an ADC. Studies have shown that the more payload you can deliver to the tumor, the better the anti-tumor response. This is exemplified in this HER2 data set from their pan-tumor trial, where they're seeing enhanced activity and high HER2 expressing tissues across a broad range of indications. In essence, high levels of tumor antigen translates to more payload delivered to the tumor, which means better responses for longer periods of time. We also want to consider the lower target expressing tumors. In context of low target expression, we're limited in how much payload we can deliver by the target copy number, which is limiting how much payload we can internalize into the cell with each binding event. So in this scenario, a higher DAR may be favored because we're internalizing more payload with each antibody. To illustrate this, we focused on a colorectal model, HCT-116. On the right, we see that the tumors express low and heterogeneous levels of tissue factor. On the left is a study we ran, comparing DAR4 and DAR8 exatecan ADCs, evaluating their ability to suppress growth in this colorectal tumor model. Both exatecan ADCs outperformed in auristatin ADC in yellow. When we compare the DAR4 and ADC to each other in green and blue lines, we see that the DAR8 significantly outperformed the DAR4, even at half the ADC dose. So because we wanted to reach a broader patient population including even low tissue factor expressing tumors, we've decided to move forward with the DAR8 ADC in development. We've now evaluated STRO-004 in xenograft models of lung and head and neck cancers, most of which have medium to high levels of tissue factor expression. In these models, STRO-004 has potent dose-dependent activity with significant tumor growth inhibition at doses as low as 0.25 mg per kg. With only a single dose of 1 mg per kg, we achieved sustained tumor regressions that persist up to 3 to 4 weeks, as shown in the dark blue lines at the bottom. And we're in the process now of further evaluating STRO-004 in patient-derived xenograft models of head and neck and lung cancer. The data set includes hard-to-treat tumor models such as squamous cell carcinomas. Nevertheless, we're still observing quite good responses in this interim data set with more than 50% of the tumors responding to STRO-004, despite dosing quite conservatively with just a single 5 mg per kg dose. But how about safety? Based on the toxicities observed for other tissue factor-targeted ADCs, we were particularly concerned about the eye and the skin, both of which express tissue factor at significant levels. So we looked at STRO-004's impact on these tissues in vitro relative to a clinical benchmark with known levels of toxicity observed in the clinic. And we were excited to see that STRO-004 in blue showed more than a tenfold shift in cell viability compared to the clinical benchmark in yellow, suggesting we would have a significantly improved safety margin in the clinic. Given this promising result, we decided to take STRO-004 into a nonhuman primate safety study. And here, we wanted to understand if a DAR8 ADC had greater on-target toxicity risk than a DAR4 ADC, in particular for tissues like the skin and the eye. We have seen strong safety profiles with this linker payload platform in earlier studies. So here, we wanted to push to much higher doses to understand when toxicity would occur. We were pleasantly surprised to see the strong tolerability profile for both molecules at the highest doses tested, dosing 50 mg per kg for STRO-004, the DAR8 ADC. For the DAR4 ADC, we were able to achieve 100 mg per kg dosing, which, to our knowledge, are some of the highest doses achieved in the ADC space. Importantly, we saw no evidence of eye toxicity and only mild signs of skin toxicity in both the DAR4 and the DAR8 ADC despite these very high doses. Moreover, we saw no differences in the tolerability profile between the DAR4 and DAR8, which really cemented our decision to progress the DAR8 ADC to the clinic. I'd like to also draw your attention to the PK profiles on the right, which really highlight all the attributes of a well-behaved ADC. In the blue lines, we see we have ADCs that stay in circulation for long periods of time, which means we're able to minimize the ADC catabolism that drives payload release in toxicity. We can also see that our ADCs stay intact while in circulation with superimposable levels of antibody in ADC, shown in open and closed blue circles. All of this supports the very low levels of free drug in green that we find in circulation at [ 6 logs ], lower concentration than the ADC. So all of the properties, the payload, a stable and hydrophilic linker, optimized sites of conjugation. These all contribute to improved therapeutic performance, which in turn, allows us to drive towards higher tolerability, higher drug exposure and greater efficacy. Compared to a clinical benchmark, we're able to achieve 50x greater exposure with an HNSTD of 50 mg per kg as shown in the bar graph on the right. Combine this with the potent activity we observed even in low tissue factor expressing tumors. We believe we've widened the therapeutic window for tissue factor targeted therapies, and the patient population that will benefit from this medicine. We believe tissue factor presents a significant clinical opportunity for pan tumor targeting, with clinical validation in cervical cancer and signs of early activity in head and neck, pancreatic cancer and multiple other solid tumor indications. To access the full potential of this target, we've designed STRO-004 for broad therapeutic benefit with a novel linker payload chemistry that delivers potent tumor selective activity. What makes this molecule differentiated is not only the linker payload, but how we brought it all together with the conjugation chemistry and optimized sites of conjugation to make a really well-behaved molecule with enhanced safety profile. Based on these very exciting preclinical data, we will be submitting an IND in the second half of 2025. And we'll be updating you on our clinical development strategy in the near future. I'd like to now introduce our next speaker, Dr. Daniel Calarese, who will be introducing our platform.

Thank you, Dr. Yam. Good afternoon. My name is Daniel Calarese, and I've been at Sutro for 10 years working in protein engineering and research strategy. I'm excited today because for the first time, we are going to pull back the current on the dual payload ADCs we are working on at Sutro. By a dual-payload ADC, we mean an ADC that delivers 2 different payloads. Our goal is to make ADCs better inside the tumor and overcome the emerging trend of payload resistance being observed in clinic. There are many potential advantages to a dual payload approach, I have 4 listed here. First, many ADCs are being combined with small molecule therapeutics in clinic. These small molecule therapeutics have their own toxicities. However, by delivering these compounds via an antibody, we can reduce the systemic toxicity leading towards more effective targeted therapies. Second, using a dual-payload ADC can reduce clinical complexity. Instead of managing a combination of therapies, dual payload ADC allows for dose escalation like a traditional ADC simplifying treatment. Third, a dual-payload ADC ensures simultaneous delivery of both payloads to the same cancer cells. We believe this is crucial for overcoming resistance, the last point. So why is overcoming resistance so critically important? An emerging trend of payload resistance has been reported at major clinical meetings. This clinical data illustrated at the top of the slide, demonstrate that when patients relapse after receiving an ADC, they're less likely to respond to a second ADC with the same type of payload even if the target antigen is different. In contrast, as illustrated on the bottom, when patients are treated with a second ADC that uses a different payload, they may respond as if they had been treated with the prior ADC. This opens the door to delivering both payloads simultaneously on one ADC, achieving antitumor activity regardless of prior lines of therapy. Another possible dual payload approach is to use one payload that potentiates the effect of the other payloads with the aim of restoring sensitivity to cancers that have stopped responding. These dual-payload ADC approaches will not only have the potential to improve outcomes for relapsed patients, but we also believe they can benefit treatment-naive patients by proactively addressing the onset of resistance. It is harder for cancer cells to evade both therapies. We plan to advance multiple dual-payload ADCs, as we believe a dual-payload ADC approach can expand treatment options for both treatment-naive and relapsed patients. And our cell-free platform is ideal for making these dual-payload ADCs. By site specifically incorporating different nonnatural amino acids at selected sites and using different conjugation chemistries we can efficiently generate dual-payload ADCs. Here is a real experiment to demonstrate this. So on the right is an SDS page gel, and we can site specifically conjugate blue die to the light chain and see the blue band for the unreduced IgG. We can conjugate a red die to the heavy chain and how you see the red band. And then we can conjugate both the red and blue dies and see the un-induced IgG band is now purple. And the reduced gel, we see the blue light chain and the red heavy chain clearly. This demonstrates we have precise control over our ADC design. And this precise control is what is truly special about our cell-free platform as we can easily optimize the stoichiometry between payloads. When you consider different linker payloads and their dosing in clinic, combining those linker payloads in the strict 1:1 ratio would be impractical, different drugs have different potencies. With our cell-free platform, we can fine-tune this ratio, not just 1:1, but 2:1, 3:1, 3:2, 5:1. This is something very few others can do. Our cell-free platform enables us to design dual payload ADCs with optimized safety and efficacy. So far, this has all just been a demonstration of our capabilities. So let's take a look at some practical examples of dual-payload ADCs they're working on. So let's consider the combination of TOPO-1 inhibitors with microtubulin inhibitors. Most clinical ADCs use one of these two types of payloads. We now understand that these payloads do not have cross-resistance and there are many clinical indications that are sensitive to both. If you look at the purple column in the middle, you'll see non-small cell lung cancer, bladder, ovarian. There is a significant potential in these indications for dual payload TOPO-1 inhibitor plus a microtubulin inhibitor to enhance the clinical efficacy. The concept of combining these 2 payloads in the clinic has been validated through simultaneous delivery of 2 different ADCs in the clinical trial. And the double antibody drug or DAD trial they use TRODELVY, which delivers a TOPO-1 inhibitor payload, with Padcev, which delivers a microtubulin inhibitor payload to treat metastatic urothelial cancer. Both ADCs target antigens, which are highly expressed in this cancer type. The trial observed an additive effect and the response rate highlighted in green with no new toxicities reported. This confirms that targeting 2 different classes can enhance patient outcomes. By hitting the tumor with 2 different mechanisms of action, you allow fewer paths for the tumor to escape. For our own proof of concept designs, we selected MMAE a clinically validated microtubulin inhibitor payload attached to a pegylated beta-glucuronidase cleavable linker. Our technology enables us to make dual-payload ADCs that are 8 + 2 and 8 + 4. This means one ADC has 8 TOPO-1 inhibitor payloads illustrated in pink and either 2 or 4 microtubulin inhibitor payloads illustrated in blue. And this is all on the trastuzumab backbone. So it's important to note here that these ADCs are higher DAR, a DAR higher than you typically see on ADCs with overall DARs of 10 and 12. So now we're going to see results from a number of different experiments we haven't shown before. So we see that these dual payload ADCs demonstrate promising in vitro efficacy. We observed improved cell killing in certain cancer cell lines. In these cell killing plots, the black line represents a HER2 benchmark while the purple indicates our 8+2 dual-payload ADC, and we see greater cell killing stance at the dual-payload ADC approach. The dual-payload ADCs also exhibit desirable in vivo pharmacokinetics. Here are the results from a 21-day study in Black-6 mice. Both the 8 plus 2 and the 8 plus 4 dual-Payload ADCs demonstrated favorable PK profiles with low clearance and long half-lives. In the same study, we observed the dual payloads have rock-solid stability. Here, you can see the DAR10 and DAR12 are maintained throughout the 21-day study. This stability is important. It means that ADC remains intact while in circulation, increasing our potential to deliver more payload to the tumor. We are currently evaluating these dual payload ADCs for in vivo efficacy. Another dual-payload approach involves combining 2 payloads, where one can potentiate the other. In this case, PARP inhibition with TOPO-1 inhibition. There is a well-established synergy between these inhibitors as PARP is directly involved in the DNA damage repair pathways that address the DNA damage caused by TOPO-1 inhibition. So there's a strong biological rationale for their combination. We can see the synergy with our own in-house data on the right. And this in vivo efficacy, the systemically delivered PARP inhibitor Talazoparib, shown in purple, has no significant tumor growth inhibition. The DAR4 TOPO-1 inhibitor ADC, shown in blue, has some tumor growth inhibition. However, the combination of the TOPO1-inhibitor ADC with the systemic PARP inhibitor shown in orange, has greater tumor growth inhibition and even tumor regression. However, despite the synergy, the combination of PARP and TOPO-1 inhibitors delivered systemically at the same time, has not been realized in the clinic due to dose-limiting myelosuppression. There are now multiple ongoing clinical trials combining an ADC with the TOPO-1 inhibitor payload with a systemic PARP inhibitor. However, PARP inhibitors do have toxicities. There's a hematological toxicity and an increased risk for advanced malignancies such as AML. So we decided on a pioneering approach to develop a dual-payload ADC that specifically targets the PARP inhibitor with the TOPO-1 inhibitor. For this proof-of-concept ADC, we chose a potent pan-PARP inhibitor, again with a similar pegylated beta-glucuronidase cleavable linker. As it is less potent than the microtubular inhibitor we saw previously. We first started off with a 4 plus 2 dual-payload ADC approach on an anti-tissue factor backbone. That is there are 4 TOPO-1 inhibitor payloads illustrated in pink and 2 PARP inhibitor payloads illustrated in blue. This dual payload ADC has shown compelling results, both in vitro and in vivo. On the left is the in vitro cell killing, where the dual-payload ADC, shown in purple, has better cell killing than the single payload PARP and TOPO-1 inhibitor ADCs shown in blue and pink. On the right is the in vivo efficacy data, where we see the TOPO-1 inhibitor ADC alone in pink, does have some tumor growth inhibition, but the dual-payload ADC, shown in purple has greater efficacy, and we observed some complete responses. We are currently optimizing the linker payloads and the stoichiometry between them. So we are working on multiple different dual payload ADCs, and we believe we have a best-in-class platform for creating dual-payload ADCs, as we can optimize both the conjugation sites and the stoichiometry between the payloads. With these dual payload ADCs, our hope and intention is to overcome resistance mechanisms that are currently being observed in clinic. Another dual-payload ADC approach we are working on in collaboration with Astellas incorporates immune agonists as a combination partner. And it's my pleasure to introduce Dr. Peter Sandor from Astellas to share this data with you.

Thank you, Dan. It's a pleasure to be here. Thank you for having me at the Research Forum. My name is Peter Sandor, Head of Corporate Strategy at Astellas. In my previous role at the company, I oversaw the immunology efforts at Astellas, including the formation of the partnership between Astellas and Sutro Biopharma to develop the next-generation immunostimulatory ADCs or iADCs. I will talk very briefly about the technology, what made us excited about this and then talk a little bit about our partnership with the Sutro team. Astellas is a global specialty pharma company with significant presence and market-leading position in oncology, including an ADC in urothelial cancer treatment called Padcev. We are very much focused on developing emerging cutting-edge science and turn these into value for patients. Our R&D approach is based on the so-called focus area approach. What it means that we are exploring the unique combination of the disease biology link and the most relevant modality to create maximal impact on the disease hence improving the outcome for patients. Especially in immuno-oncology, we are exploring the so-called multifunctional modalities, which can address multiple cancer drivers or pathways at the same time, leading to improved clinical outcomes. This is exactly what the iADCs does. And that's why we got very much interested in the technology that Sutro has developed to allow precise conjugation of different payloads on the same antibody. This slide illustrates combining immunostimulatory payload with cytotoxic one. The primary tumor drive effects T-cell infiltration and it activates the innate immune response and of our bridging innate and adaptive immune responses to deliver better outcome. Beyond the strong strategic fit of the iADC, the combined dual payload, we have seen strong data supporting this hypothesis even at the time when we were forming our partnership. The experiment on the slide compares ISAC, the single payloads immune antibody conjugate, the immune stimulatory antibody conjugate, or iADC and ADC with a single simple chemo payload compares them to -- with vehicles. As you can see, very early at the application, the innate immune system dendritic cells get activated both by the iADC and the ISAC. But then longer term, by day 5, the T-cell infiltration as well as the CD8 T-regulatory ratio will start to increase driven by the iADC primarily. If you compare the same modalities, in the tissue or the effect of the same modalities in the tissue, the iADC has demonstrated superior increase of the CD8 T cell count in the tumor microenvironment when they compare it to ISACs and ADCs. The next slide, the in vivo experiment shows superior and durable antitumor response which has been demonstrated by the combination of a cytotoxin and TLR7 immune stimulatory agents on the iADC compared to ADC alone. On the right side, you can see how long -- prolonged the immune response or immune effect is preventing the tumor regrowth in the rechallenge model, after applying MC38 cells in this model. As you have seen in the previous presentations, and also in the summary, there is a strong advantage of using combined payloads on a single antibody. We believe that the Sutro platform, including the iADC programs have many advantages compared to other modalities. It can prevent Fc-gamma related toxicity, as you have seen before. And it combines direct tumor killing with the activation of antigen-presenting cells as well as T cell effect or T cell recruitment, and it does as a single modality with a single step delivery. In summary, the iADC offers a new highly promising treatment option as monotherapy given its dual mechanism of action. It can also synergize with other immune therapies. And it also has the potential to offer a treatment for patients who have hard-to-treat cancer. I would like to thank the Sutro team for the innovation, what they do, the hard work, which makes it possible to start to create these programs. It is a great privilege for us to work with this very talented innovative Sutro team. And our collaboration is progressing rapidly, and I really look forward to seeing these programs to move into the next phase of research or development in the future. With this, I hand it over to Jane for closing remarks. Thank you.

Thank you, Dr. Sandor, for the important scientific update and very strong partnership with the Astellas team on the exciting iADC strategy. And thanks to all of you for your full attention today. I'm Jane Chung, Chief Operating Officer here at Sutro. And I'd like to share why we are frankly, bullish about our growing pipeline. We certainly have lots of love for Luvelta that's already in a late-stage Phase III trial and now more love for our early-stage pipeline. We are doubling down on innovation that's made possible by 2 things. First, you heard a lot about the power of Sutro's unique cell-free technology today; and second, our incredibly talented people. I want to give a big thanks to the Sutro team and the presenters on this call for the tremendous progress you're seeing here made on our science, innovation and technology. The team is working at pace to accelerate and move these important medicines into the clinic, and we are on track to deliver 3 INDs in the next 3 years. First, with our tissue factor DAR8 exatecan ADC in the second half of 2025, followed by the higher DAR exatecan and dual-payload ADCs in the next several years. And this doesn't even account for our partnered programs listed on the bottom of this slide. Now as a commercial leader at heart, this is my favorite slide. We've already done the commercial assessments based on the new target level expressions of our early pipeline, and I can tell you, these are very high-value targets. We look forward to confirming these results in patients and having these next-gen ADCs benefit exponentially more patients across many solid tumors, including lung, colorectal, breast cancers and many others. And one finer point I want to illuminate and make sure you take away is this. While many companies are seeking value in only new ADC targets to differentiate, we don't have to. With targets with our dual payload ADCs, what's old is new again. And as all ADC targets, whether validated or not, old and new, are back on the table to address as our dual-payload ADCs are intentionally designed to overcome resistance to single payload ADCs. This will be game changing for the field. So here's what you heard today. With significant advances of our science, technology and manufacturing, Sutro is on a mission to fundamentally change the way these medicines are made, not just to make a me-too or small incremental benefit, but to fundamentally transform what science can do and a treatment paradigm for cancer patients. And by translating our unique design advantage from cell-free to dramatically improve the therapeutic index of ADCs and avoid unwanted platform toxicities, we can safely dial up the potency with higher DAR and dual payloads to work better, both outside and inside the tumor, to overcome resistance to conventional ADCs and to deliver best-in-class targeted medicines that can benefit far more patients. There was so much great science presented today, much of it for the very first time. The team did a great job differentiating Sutro's design advantage of ADCs, enabling greater exposure, leading to greater safety and efficacy. Thanks again for tuning in, and we'll now open it up for Q&A. Thank you, Lisa.

[Operator Instructions] And our first question for the day will be coming from Roger Song of Jefferies.

Great. Thanks for sharing all the very promising data from your research programs. Maybe 2 questions from us. One is more scientific. The other one is more strategic. On the scientific side, just curious, given you're adding more payload in terms of DAR and also potentially using different payload, dual payload to the ADC. How should we think about the impact to the internalization given it is still ADC, the internalization matters a lot for the in vivo efficacy?

Thanks, Roger. Hans-Peter, why don't you take that, please?

Yes, happy to do that. Thank you for the question. And so we've been looking at internalization of low versus high DAR ADCs and consistent with earlier reports that unless you really have a massive load of ADCs, which we don't have of ADC linker payload, internalization is not affected by the numbers of DAR. So we don't see any issues and we haven't seen any issues going to as high as DAR16 on that aspect. So I don't think that's going to be rate limiting. In contrast with that, what usually is the problem when you do too many linker payloads on an ADC that you have less exposure. And there, we had a very pleasant surprise that the more payloads we added the PK stayed rock solid, in some cases, even got better than the naked antibody. And this doesn't always happen. But when it happens, we took that, we were very happy to see that. We don't have a problem with that. And we continue to look for best PK in the industry to have less off target and on target toxicity.

Yes. Roger, and I think the strategic piece is that it's a very unique and differentiated modality. Very few companies can have the precise protein engineering design to enable dual payload structures. And so I think this will be very, very game-changing for the field.

Yes, we do see some PK data, but just curious how consistent the PK is, but it seems you don't see the rate limiting for the PK. And then another thing is related to -- you will have this R&D filing every year, come up with those earlier pipelines. So how should we think about your cash and what is the funded through your current cash? And then also, how should we think about you will allocate your capital, balancing your pivotal program versus the early pipeline?

Thanks, Roger. That's a very important question. And we continually assess what our available resources are today and what we project them to be in the future. So right now, we've got a lot of capital going towards our REFRaME-O1 and REFRaME-P1 trials as well as the non-small cell lung cancer. We're confident of our ability to put STRO-004 into the clinic with the capital that we have available. And as you know, we continue to work on adding capital into the company. So our projection of being able to do 3 INDs over the course of the next 3 years, really takes into consideration the amounts that we're going to be spending on our pivotal trials as well as our ability to add capital to our bank accounts over the course of that same time period. As you know, we've been pretty good at raising capital through strong collaborative partnerships like our deal with Astellas, like our deal with Ipsen, and we project that we will have more deals on an ongoing basis in the future. So we do take seriously the requirement to make certain that we're adequately balancing risk and capital. And I want to make certain that I assure everyone we plan to have sufficient capital to move forward with these very exciting programs that we've given you a preview of today.

And our next question will be coming from Tazeen Ahmad of Bank of America.

My first question to you is about safety profile as it relates to how you're thinking about combining different modalities. So for example, you talked about combining ADCs with PARP class. The PARP class in general is known to have safety observations to be slightly different depending on the PARP. But based on the data that you've collected so far, what do you think will be something to look for in terms of tolerability for patients as you think about what indications to pursue? And then I have a follow-up.

Great. Thanks, Tazeen. Hans-Peter, would you please answer that?

Yes, happy to do that. Yes, so for the PARP inhibitors, the toxicity is well explored in the clinic. We know what to look for. For the safety, we do have a linker in place and a chemistry in place that we have the best stability in the industry. So we lose less payloads in the circulation. So we shouldn't run into this systemic toxicity problem that you see with PARP. And so the -- actually to get the right PARP inhibitor in the right ratio to an exatecan is going to be the main focus from the efficacy point of view. And as you could see, we can dial-in PARP versus exatecan all the way from 1:4 to higher, and that ratio will determine how we can maximize the efficacy and how we then also can balance that with the safety. But again, that linker that we have you could see that a $1 million full difference between how many molecules are on the ADC and in the circulation should really drive that safety profile for us. So I'm pretty confident on the safety side. The efficacy side is what we're doing best. So I'm looking forward to finding that sweet spot.

Okay. And then related to that, because of what's likely to be a more tolerable profile, does that open up more indications for you to pursue that other companies have not been able to do? And can you share what potential indications those could be?

Yes. That is exactly the case. So we're looking now at targets where we can apply the dual-payload concept that have these BRCA type [indiscernible] that is breast and that is prostate. We select our targets right now according to where we're going to go with the dual payload that we have 3 to choose from. So really this is re-opening the book again to looking at validated targets. And where in this combination, we can go where others couldn't go. That's a pretty interesting and exciting activity that we're conducting here as a team...

Jane, would you like to refresh on Slide 64.

Yes. So on Slide 64, Tazeen, we basically look at a whole list of opportunities here for the early pipeline. Some of them do overlap and we'll let the preclinical data really guide us in terms of which tumors to go after for each target. And -- but it does show exponentially more patients that could benefit from the early pipeline.

And last question for me is when do you think you'd start to have color on those indications?

We already are deliberating internally about which are the most important tumors to go after, but we also recognize that it is a competitive field. And so we will be disclosing that information as we move forward. We want to make sure that we maintain our lead in some of these areas as well.

And our next question will be coming from Asthika Goonewardene of Truist.

I appreciate the color provided today. So I want to focus a little bit on -- first question on STRO-004. A neighbor of yours in San Francisco looking across the bay aims to develop the tissue factor targeting ADC that contains MMAE payload. But found to your point about payload and chemotherapy resistance that the efficacy didn't pan out, they have since brought forward a new asset that uses a TOPO-1 payload with a precise on site-specific conjugation, et cetera. So it sounds like the field is appreciating the aspects of what is also in STRO-004, but I wanted to ask what else does 004 have to differentiate itself from these emerging other ADCs for [indiscernible] ?

Thanks, Asthika. Hans-Peter, you want to take that, please?

Yes, happy to do that. Yes, so of course, we are familiar with the activity of our next door neighbor in the space. We looked at them very carefully. So as the design as it relates to design of the tissue factor ADC, they do have a different derivative of exatecan known as belotecan. So there may be a difference there in the pharmacology, but most importantly, they're using cathepsin B linker and this is the link that has been used for 20 years now, the liability is very clear, and that is going to be cleft in the bone marrow. We learned that all in this field over the last 20 years. And when you do have these VC linkers, when you lose your payload in the bone marrow, you likely to induce neutropenia and cytopenia. So we monitor that in our top studies, and that's why we have our link, which is the beta-Glu which does not have the bone marrow liability. So we will have expectedly based on we have seen preclinically less of that bone marrow toxicity. So there's differentiation on the linker payload level. And in addition, we mentioned that the way we manufacture the antibody in E. Coli, we do not glycosylate the antibody, and that's basically Fc-gamma receptors silence. And that means much less uptick in normal tissue, including the eye, the bone marrow again and also the lung, ILD. And the ILD for conventional topotecan ADCs that are Fc-gamma active is reported across the field, whether it's belotecan, exatecan DXd, we haven't seen ILD with any of our conjugates [ in vitro ]. And we think this has to do, and that's reported by Daiichi. Fc-gamma receptor immediate uptake into lung alveolar cells. And we do not have that because we do not engage in Fc-gamma receptors. So that's on the antibody design side. And then of course, we selectively choose our sites to conjugate the linker payload, 2 sites that do not interfere with normal recycling of ADCs. This is a conventional ADC that is conjugated to the cysteine. That is not selected. That's basically stochastic random conjugation. So there may be liabilities on that end that we don't have because we carefully over the last year, selected these sites where we have minimal impact on PK properties. Ultimately, that reflects embedded PK, as I just walked you through that collection. So we have reason to believe we are differentiated on the ADC linker payloads, on the antibody manufacturing site and linker chemistry and conjugation chemistry. How much that will translate into differences in the clinic will remain to be seen. But again, our PK properties are making us very, very positive and bullish about seeing how far we can go in the clinic in terms of those.

All right. So shots fired across the bay there. Maybe if you can dig a little bit into the dual-payload assays that you have in plan here. You highlighted using TOPO-1 and MMAE in one of the slides that you covered, but the TOPO-1 being linked with a beta-Glu linker and from what we understand MMAE typically is with a Val-Cit linker. We know Val-Cit also has some of this cleavage by elastases outside -- in bone marrow. So I guess my question is when you think about repurposing payloads like MMAE, will you be taking on additional steps to maybe engineer the linker as well that's normally traditionally associated with them?

Yes. Good question. And yes, we started from the get-go not to use the DC linker. We went with the beta-Glu right away for that liability of VC linker that I explained already. So working with beta-glu MMAE and beta-glu exatecan and any other payload later on beta-Glu. And just to remind everybody, not just the standard off the shelf beta-Glu that's proprietary engineered beta-Glu that has better release kinetics in the tumor. So that's just the update there. But you're right, one shouldn't go in the VC MMAE ADC when you can dose up at 100 mg per kg [ in a signal ] because if you virtually do that with a VC MMAE, you have to stop at 6 mg per kg, when you pull below of where you can be with a different linker. So we wouldn't do that.

Last question, guys. I'm just going to build on Roger's previous question on capital allocation here. Bill, you mentioned that you're open to doing more deals to fund the -- your targets of an IND for Europe in the next 3 years. Just want to clarify, is a deal for Luvelta also on the table? Or should we think about these as deals with more than these early pipeline assets?

Thanks, Asthika. We're very bullish on Luvelta and continue to think about the prospect of meeting the needs of 8 in 10 women who have platinum-resistant ovarian cancer as well as potentially non-small cell lung cancer patients. Our ideal deals, as we've discussed in the past, really are the platform deal opportunities. But as you can imagine, we have conversations on all sorts of deals from time to time. We don't comment on them, but I feel confident in our ability as we have done over the last 5 to 7 years. Our ability to do a robust amount of dealmaking that continues to fuel the continued development of our proprietary pipeline. So stay tuned for further developments, and we'll keep everybody posted as they occur.

Our next question will be coming from Jay Olson of Oppenheimer.