Xencor, Inc. (XNCR) Earnings Call Transcript & Summary

Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to Xencor XmAb819 Initial Phase I Dose Escalation Results Webcast. [Operator Instructions]. At this time, I would like to turn the call over to Charles Liles, Senior Director of Corporate Communications and Investor Relations.

Thank you, and good afternoon. Earlier today, we issued a press release announcing positive initial results from our ongoing Phase I dose escalation study of XmAb819 in advanced clear cell renal cell carcinoma. It is available at www.xencor.com. Providing comments on the call from Xencor are Bassil Dahiyat, President and Chief Executive Officer; John Desjarlais, Executive Vice President and Chief Scientific Officer; and Dane Leone, Executive Vice President and Chief Strategy Officer. We are also joined by Dr. Monty Pal, Professor in the Department of Medical Oncology and Therapeutics Research at City of Hope Comprehensive Cancer Center and Co-Director of its Kidney Cancer Program. After the prepared remarks and presentation, we will open up the call to address your questions. Slides that we are using today should be visible here on the webcast and will be made available for download on the Events and Presentations page of our website around the time our remarks are concluded. Before we begin, I would like to remind you that during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the plans and objectives of management, future product offerings and research and development programs as well as future financial and operating results, future market conditions, future operations, the company's partnering efforts and capital requirements. These forward-looking statements are not historical facts, but rather are based on current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements including, but not limited to, those factors contained in the Risk Factors section of our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. With that, I'll pass the call over to Bassil.

Thanks, Charles, and I'm delighted to welcome everybody. I'd like to start by putting today's XmAb819 program update into the context of our overall strategy and pipeline. Xencor's mission is to bring novel medicines that can advance the care of cancer -- advance the standard of care for patients living with cancer and serious autoimmune disease. Our novel medicines are powered by the XmAb protein engineering platform that's been clinically and commercially validated through numerous Xencor partnerships. Last September, we realigned our pipeline and focused on our lead first-in-class T-cell engagers, XmAbs 819 and 541. And we also used our bispecific expertise to launch multiple autoimmune disease programs. 2025 has been a very busy year for Xencor. While we're rapidly advancing our wholly owned oncology portfolio, we've also built momentum with our autoimmune programs, with the start of a global Phase II study of XmAb942 along with a Phase I study of plamotamab for the treatment of rheumatoid arthritis. Today, we're going to focus our discussion on 819 and 541, where we're positioned to have recommended Phase III doses established in 2026. And to build on this momentum, we expect our next first-in-class T-cell engager in the clinic in 2027. Now John Desjarlais, our Chief Scientific Officer, is going to walk us through our design rationale for XmAb819 and the setup for the Phase I study. Go ahead, John.

Thanks, Bassil. XmAb819 is a first-in-class XmAb 2+1 T-cell engager targeted to ENPP3. Importantly, there are 2 binding domains against the target antigen, a design that we found could promote greater selectivity for tumor cells versus normal cells and an Fc domain to promote antibody-like half-life. The ENPP3 target, as you can see here from tumor versus normal RNA levels, is selectively overexpressed in kidney cancer, where we focused our initial efforts. You can also see from these RNA patterns that there are multiple expansion opportunities in a number of other histologies, including lung and colorectal cancer. As shown on the right plot here, XmAb819 demonstrates strong T cell-mediated toxicity against tumor like cell lines with high ENPP3 expression. Now we found that the XmAb 2+1 format, which is now used in 4 clinical stage T-cell engagers gives us a platform where we can tune each molecule for selective engagement in killing of tumor cells versus normal cells. As you can see from this in vitro activity plot, each drug could be tuned to promote high cytotoxicity against tumor cells with low or minimal activity against low-density cells that look more like normal tissue. This is a well-known concept in the antibody world, whereby bivalent engagement of your target, coupled with affinity tuning, could promote preferential engagement of cells with higher target density. So this slide details our Phase I dose escalation scheme, very typical for a T-cell engager Phase I, beginning at low doses and ramping up as the standard for any immune agonist. The goal is to establish an effective prime step target dosing strategy that will ultimately support a reduced inpatient monitoring profile while maximizing efficacy. We initially prioritized intravenous weight-based dosing but with strong recruitment to the study, we've been able to accelerate the subcutaneous [ flat dosing ] cohorts and have recently started catching up to the IV drug exposure levels. Here, we've also bucketed the dosing cohorts into low-dose cohorts and then higher doses that achieve our target dose range as expected from our preclinical work. The actual dosing regimen, shown here on the bottom consists of a priming step, 1 or 2 step-up doses, followed by weekly target dose for the first cycle. Then as supported by our pharmacokinetic profile, we proceed with biweekly dosing for Cycle 2 onward. Our data cut on September 19 reflects preliminary results of 10 completed IV cohorts and 5 subcutaneous cohorts, which has now triggered the first IV dose expansion cohort. Importantly, we continue to dose escalate both IV and subcu. So as I mentioned earlier, our preclinical work, coupled with some mechanistic modeling had predicted where we might expect to achieve active concentrations of XmAb819. You can see here for our latest IV cohorts 8 through 10, our [indiscernible] predictions for these cohorts show we've been reaching those active dose ranges, first reaching those levels on a second step-up dose and then achieving consistent exposure in those ranges as we proceed through the first cycle. Our IV half-life is 8 to 9 days, which supports biweekly dosing in later cycles. We've also started characterizing our subcutaneous PK profile, seeing a Tmax of 5.5 days and promising bioavailability in the 55% to 70% range.

Thanks, John. Now we've only enrolled clear cell renal cell cancer patients in our study, and they were very heavily pretreated. This is the first RCC trial that we're aware of with a median of 4 prior systemic therapies with over 1/3 of patients with 5 or more. And also the first trial with a large proportion, 36% of patients with prior HIF-2 alpha inhibitor therapy. Our goal is to show that our first-in-class T-cell engager can create exciting antitumor activity in a population like this, who received the most current standard of care and we were rechallenged with earlier line therapy, whether it's a checkpoint inhibitor or TKI is ineffective. Also, we've not preselected for ENPP3 expression, but we are testing patient samples retrospectively throughout the study. We expect nearly all the clear cell renal cell cancer patients to have high ENPP3, but do expect some outliers with lower absent expression based on our earlier work. Now of the 69 patients we've treated, 25% remain on study as of the data cut and the drug has been well tolerated, as you can see, with a low rate of only 4% of patients discontinued for adverse events, specifically 3 individuals, 2 of which were liver enzyme elevations and 1 case of nonfatal myocardial infarct in the presence of CRS and hypotension. Now AEs overall, were manageable, and we're glad that over 90% of our patients reached their target dose, a key goal in a Phase I study for CD3 T-cell engagers. The low rate of dose reductions and discontinuations supports our view that 819 is well tolerated in patients with very advanced disease. Now we are happy with the primarily low grade and rate of CRS observed with 819. We think this will be very important as we advance further into development and explore reduced inpatient monitoring. As you can see on this slide, the study was impacted by dose prep dilution errors for the initial priming dose, which we discovered in the early part of 2025. These dose errors correlated to elevated drug levels in serum and a significantly elevated rate and severity of CRS, 28% Grade 3 for these patients across the study. And while the great majority of patients were correctly dosed, the errors had a meaningful impact on CRS rates. Now when we look at the target dose range for the 18 patients with the intended priming dose, Grade 3 CRS has only occurred in 6% of them or one patient specifically. This is consistent with the overall study Grade 3 CRS rate of 4% for those 51 patients that received the intended priming dose of our study drug and is consistent with the Grade 3 CRS rates for marketed and late-stage CD3 bispecifics. Since discovering it, we've mitigated the problem by training sites to use only the correct materials and procedures for dose prep and we'll eliminate the root cause entirely in the first half of 2026 when we roll out a low concentration drug product. Thanks to our team's hard work of several months determining root cause, we put this problem behind us. Now for the full AE picture, we have our overall tornado plot on the left and on the right, the post day 29 AEs plotted, which is after all of the priming and step-up doses. These plots include all patients, whether the correct priming dose prep or not. Now treatment has been well tolerated with related adverse events, mostly consisting of CRS, rash and GI symptoms with low Grade 3 rates. We've had no reports of ICANS of any grade. Now importantly, related adverse events occur mostly within the first few weeks during the initial priming period and repeat dosing at the target dose level, which, of course, is the highest doses, incurs a few notable side effects as shown on the plot on the right. We're hopeful this profile can be advantageous as we explore combination therapies in the future. Now the maculopapular rash we've seen was transient and it responds quickly to supportive care. It happened shortly after initial exposure to 819, and we believe is due to the activity of T cells against basophils and mast cells, which express ENPP3. Now here's our efficacy data. Low dose cohorts on the left, target dose range cohorts on the right. We're excited by the antitumor activity of 819 we're seeing in recent cohorts, which are predicted target exposure range, and we see a clear dose response relative to these lower dose cohorts. There are marked and sustained reductions in target lesions in heavily pretreated patients, including those with prior progression on Belzutifan, like the rightmost patient in each of the 2 plots. Also, regarding ENPP3 expression, we looked at expression data retrospectively and a very high number were high expressers with just a few outliers. Also very interesting is the patient with a double dagger in the target dose waterfall plot, the fourth from the right. They had progressive disease at their first scan due to a new lesion emerging even though their target lesion shrank, but they continued treatment and experienced a marked reduction in target lesions of 47%. Per RECIST, they are characterized as progressive disease, but the patient remains on therapy at day 185 with this tumor reduction and full resolution of that non-target lesion. Now on an evaluable basis, our best overall response rate is 25% with a disease control rate of 70%, which is unprecedented for monotherapy treatment of clear cell renal cell carcinoma patients that have progressed on a median of 4 prior lines of systemic therapy, including having patients that have progressed on prior HIF-2 alpha inhibitor therapy. Now this exceeds our internal target for triggering our first dose expansion cohort, which was 20% or greater response rate. It's still only early follow-up for our responders. But note, all responders remain on treatment as of the data cut. Now this is a spider plot for all evaluable patients in the target dose range. You can see that there's consistent target lesion reduction, the majority of the lines going down. Now it's still early for our target dose range cohorts. We are also encouraged that patients can experience deepening responses with time. This swim plot is another way of looking at time on treatment, and it underscores that patients with an initial response to therapy tend to stay on treatment and have durable reductions in target lesions. Now we'll be continuing follow-up with these patients, of course, and we're optimistic that continued dose escalation can support further dose response and durability of disease control. And ultimately, of course, we hope that this translates into an improvement in progression-free survival over the current standard of care for these patients with very advanced disease. Now I'd like to introduce one of our investigators and close collaborators, Dr. Monty Pal from the City of Hope Cancer Center, where he's Co-Director of the Kidney Cancer Program and oversees one of the largest clinical trial portfolios on the West Coast. We're very happy to have Monty's insights and experience in both early and late-phase trials to guide us as we develop 819. Monty?

Thanks so much. It's really been an honor to represent the study here at Target 25. And I enrolled the first patient on this trial several years ago. It's been a wonderful journey since then. I wanted to highlight a case of a 56-year-old gentleman, very near and dear to my heart. I've been following him for over a decade now. He developed metastatic disease about 5 years ago. And at that point in time, he was started on therapy with cabozantinib and nivolumab. Very quickly after starting, he developed new onset of hepatic metastases. So we transitioned his therapy on to lenvatinib and everolimus. He was on that treatment for a healthy amount of time for about 3 years, but he really sort of suffered from a multitude of toxicities, hand-foot syndrome, diarrhea, fatigue, et cetera. We enrolled him on the protocol. As you can see in the panel on the left-hand side, he had membrane staining for ENPP3 in less than 25% of tumor, fairly diffuse cytoplasmic staining of ENPP3. With that in mind, he had a really profound response. As you can see in the panels on the right, we've highlighted one of his mediastinal nodes decreasing in size from 28 centimeters and in maximal dimension to 11 millimeters. So with that in mind, with that sizable reduction, it amounts to about a 63% decrease in this target lesion. I would suggest that this is one representative example. And the RCC investigator community in broad terms has really been looking long and hard for novel targets. To date, we've had VEGF axis inhibition. We've had checkpoint inhibition, but really nothing else beyond that. There's a lot of redundancy in drug development for the most part. The strategy of ENPP3 targeting is very, very novel. And based on our data, I think it's worthy of much more extensive exploration. The toxicities that we're seeing here, for instance, CRS, were actually common to other bispecifics. And frankly speaking, I think myself, my colleagues are becoming increasingly familiar in how to manage these toxicities. I personally have been very, very pleased at how many patients have been able to maintain exceptional quality of life on this therapy, particularly after priming. And I think some of the data that you saw on the previous slides alludes to that. Some of these deep and protracted responses that we're seeing in patients who have been exposed to multiple prior therapies really makes me eager to move XmAb819 forward as both as monotherapy and potentially in combinations as well. Thank you.

Thank you, Monty, and thank you to all the investigators in this study and all the patients that have been willing to enter into this clinical study, and we're very excited to be providing this opportunity to do something truly novel and different. And with that, we want to move into how we think XmAb819 can be really truly differentiated and potentially effective treatment option for those patients, all the patients living with advanced clear cell renal cell carcinoma. We hope to trigger our second IV dose expansion cohort around year-end and are rapidly advancing our subcutaneous dose escalation in our target dose range. As we work toward establishing the target dose regimen to use for our pivotal studies, we're also evaluating broadening the renal cell program in combination testing along with additional ENPP3 expressing tumors. XmAb819 has a significant opportunity to become a blockbuster drug in clear cell renal cell carcinoma. Global drug sales for RCC are projected to reach $12 billion during 2030. Despite the size of the market, drug revenues are dominated by only 2 mechanisms of action currently, PD-1 inhibitors and VEGF-TKIs. We expect the adoption of Belzutifan, a HIF-2 alpha inhibitor, to continue to increase, but yet there remains a real need for additional treatment options for patients and clinicians. Patients with advanced clear cell renal cell carcinoma are increasingly treated with the doublet therapy of checkpoint inhibitor plus VEGF-TKI in the first-line setting. Unfortunately, 50% or more of those patients progress and need additional therapy, which as of today is most likely a rechallenge with VEGF TKI or increasingly Belzutifan. Once patients have progressed on to the third line of treatment, they are effectively out of therapeutic options beyond potentially another rechallenge with a VEGF-TKI, which has limited therapeutic benefit. We view the recent drug labels for approved therapies such as Belzutifan as promising for only requiring exposure to a prior checkpoint inhibitor in prior VEGF-TKI, indicating a similar pivotal design as LITESPARK-005 could provide clinicians with the ability to use XmAb819 in the second-line setting. We expect the use of Belzutifan will move into earlier lines of therapy as a doublet regimen with lenvatinib upon completion of LITESPARK-011 and potentially become part of a triplet regimen in the frontline with LITESPARK-012. We view XmAb819 monotherapy as a clear contender to be a drug of choice post progression on a checkpoint inhibitor and VEGF-TKI, helping to redefine standard of care for second and third line treatment of clear cell renal cell carcinoma. Now supporting our excitement around continued development of XmAb819 is the competitive response rate observed to date in our target dose range cohort of 25%. This stands impactful relative to the most recently approved monotherapy drugs for clear cell renal cell carcinoma, which are Belzutifan and tivozanib. XmAb819 is not only the first T-cell engager to demonstrate clinical response for patients that progress on prior therapy with a HIF-2 alpha inhibitor. But our study also overall enrolled a more heavily pretreated patient population that was enrolled for either the Belzutifan or tivozanib studies. With a median of 4 prior systemic therapies, over 1/3 of patients enrolled in our dose escalation study have been exposed to 5 or more prior regimens with over 60% of those patients having progressed on 2 or more VEGF-TKIs. Now based on the strength of the data in clear cell renal cell carcinoma, we're excited to be exploring additional development opportunities in other tumor types that exhibit ENPP3 positivity and remains significant unmet need for novel therapies. As highlighted by Dr. Pal, we have seen significant antitumor activity with XmAb819, even in patients that exhibit lower levels of ENPP3 positivity in their tumor biopsy. We have not decided on a positivity rate yet that we can use for expansion into papillary renal cell colorectal or lung cancer, but our addressable patient opportunity for the XmAb819 program is significant. With that, I will actually turn it back to Bassil for an exciting early look at XmAb541.

Thanks, Dane. So I'm really happy to present an early look at the progress we've made with XmAb541, which is our first-in-class Claudin-6 targeting CD3 built on the very same 2+1 platform as 819 that John described. Now we've worked really hard to make the Claudin-6 binder are highly selective for avoiding binding to the closely related Claudins 9, 3 and 4 that are expressed on healthy tissues. And the team has made really rapid progress in less than 18 months, enrolling 8 cohorts, both IV and subcu from our start in April of 2024 and meeting and exceeding our corporate goal to begin characterizing target dose range cohorts by the end of this year. Thanks very much to them. And our investigators are getting very excited about our first-in-class 2+1 T-cell engager as we've recently achieved active dose levels. At our most recent IV dose level, we have 3 responders out of 9, 2 patients with germ cell tumors and 1 patient with ovarian cancer with tumor reductions for 7 of 9, which is potentially the beginning of a response profile similar to the reports from Claudin-6 ADCs. Now we still have plenty of dose escalation and dose optimization work ahead of us. But given the progress to date, we're targeting a recommended Phase III dose for XmAb541 during 2026.

As Bassil said, while we still have dose escalation optimization ongoing for XmAb541, we are optimistic in reaching the recommended Phase III dose in 2026. With the emerging antitumor activity observed in this basket cohort of germ cell gynecologic tumors, we are hopeful that XmAb541 could ultimately offer a treatment paradigm free of toxicities associated with chemotherapy and antibody drug conjugates, such as febrile neutropenia and neuropathy. Each of the current indications represent significant development opportunity for this drug. And as we progress through dose escalation, we'll further define the strategy for our next stage of development. With that, I'll turn it back over to Bassil for concluding remarks.

Thanks. Now I'll wrap up today by looking at our oncology portfolio as a whole. We have 4 2+1 CD3 bispecifics advancing in solid tumors, each of them showing compelling clinical data. No other platform has that consistency or breadth. XmAb819 and 541 are internal, and our partner, Amgen's Xaluritamig is in Phase III in prostate cancer. And just last week, Astellas' ASP2138 showed very promising data in gastric and gastroesophageal junction cancers at ESMO, and they've said how excited they are for potential next development steps. Now behind those are Janssen with CD28 T-cell engager in prostate cancer and an undisclosed T-cell engager we hope to have in the clinic in 2027. This validation and more importantly, the opportunity it represents has us very excited for next year and beyond. We're ready to take questions.

[Operator Instructions]. Our first question will come from Steve Seedhouse.

Great data. I have a few questions, if that's okay. Bassil first, you mentioned you were testing for ENPP3 in the study and actually the case report did emphasize that staining in that particular patient. But across all patients, can you describe whether ENPP3 expression in those tumors correlates with the clinical outcomes that you're seeing?

I mean the vast majority of patients were positive and quite higher for ENPP3. So I don't know if I want to use the word correlation, but we do have a couple of anecdotes. So if you go back to our -- Charles, to our waterfall plot, the left most patients that is the ones with the highest tumor progression and growth in tumor change on the target dose cohort plot, those 2 left most patients were both the 2 that had ENPP3 null by IHC, so using our assay. So anecdotal because, again, the vast majority were high, but I think that's a really nice validation of the mechanism of the drug, and I think hopefully reads on the ability to set meaningful cutoffs as we go into other tumor types like in colorectal, like in lung that don't have uniformly high or nearly uniformly high expression like clear cell renal cell.

Thank you. The other thing, too, as you have this slide up and just as we're looking at it, despite how advanced this population is that you emphasized in the slides, relative to legacy studies, your deepest PRs you're seeing here are in like the triple refractory post HIF-2 alpha patients. And I'm wondering if you'll have an opportunity in the dose expansion cohorts or in any of the additional dose escalation cohorts to maybe enroll less refractory patients and see if the efficacy is even better than the already impressive 25% objective response rate.

Thanks, Steve. Great question. I think we take patients as they come. And I think we're very happy with the work of our investigators, Dr. Pal and his colleagues that we have a wait list for this study. And we do not want to turn patients away that are in critical need of care after they progressed on standard of care. So as it turns out now, we're really not planning for any type of change in the study as we go into dose expansion. And to your point, are quite confident in the clinical profile that we have and the ability of that clinical profile to stand up as we contemplate pivotal studies and starting a pivotal study because these patients really have nothing that can afford them real clinical benefit, which is why there's so much excitement. Dr. Pal, would you like to make a comment?

If you don't mind, I think the data that we're seeing here really gives me the confidence as an investigator to actually enroll my patients into this experience much earlier. So I am keen on bringing patients on in earlier lines of therapy.

Fantastic. Last question from me. I just wanted to ask, the -- so there's 24 patients in the target dose range that were dosed, 4 are excluded from the efficacy analysis, as mentioned in the footnote. But of those 24, 6 received the incorrect dose prep and 18 the correct dose, priming dose prep. How did the 5 RECIST responses distribute between those 2 subgroups?

Yes. So good question. I kind of figured we would get that. There is a higher response rate in those that had the correct dose prep. And I think there's a good actually anecdote here that, that Bassil went over previously with the one patient that did have PDF first scan did receive into correct dose prep. Bassil, maybe you want to take them through that case?

Yes. So yes, majority of responses were for the correct dose prep and the rate was better for correct dose prep. And I think that patient, the fourth from the right on this waterfall with a double dagger, so they had initial progressive disease on their first scan and then they had -- because of a new lesion and then they had both that lesion resolved and the other lesions have a 50% reduction for a long time. That patient had the incorrect initial dose. They also had, quite consistent with that, a number of AEs like CRS during the priming and step-up that delayed their target -- getting to that top target dose, going up through the priming until day 50. Their first scale was on day 48, and that's when they got that progressive disease. So we think with resolving this issue, we're hopeful that improves patients' ability to stay on and hopefully has a benefit for them as a result of that.

And that's been the overall goal of the treatment algorithm evolution and getting into the target dose range is where by our preclinical prediction, we thought we would have enough drug exposure to be able to prevent progressive disease in this advanced patient population while getting to the target dose, which can then really elicit a profound clinical response and disease control at the end of the day.

Next question will come from Jonathan Chang with Leerink.

First question, can you provide any color on any clinical differences observed between the high-dose cohorts so far, if any? Or are the numbers too small to really highlight anything at this point?

Yes. I think the numbers are too small to highlight anything. We're -- in order to sort of build the numbers up, we clustered them together in the high dose range. And it's a relatively small span of drug exposures. So I think we feel confident that that's the right way to do it. It's just too small and frankly, too early in follow-up for the last couple of cohorts to say much about individual cohorts.

I think the important point here is we've seen RECIST response in all the target dose range cohorts, which gives us confidence that it matures and marries with our preclinical predicted exposure levels that we need to affect that clinical response. But when we talk about triggering the first dose expansion cohort, which is Cohort 10 IV. We looked internally debated it, and we do think there is a dose response on disease control and durability with that cohort versus, say, Cohort 10, which was the first cohort in the target dose range. And I don't know, Charles, so you want to go back to the PK slide, but that also matches that concentrated and steady-state AUC coverage that we see with Cohort 10 versus still dropping a little bit below on C trough in Cohort 8. So we're very happy with that. We feel confident that Cohort 10 will be good to have as the first dose expansion cohort in the study. And then again, we hope to trigger the second dose expansion cohort before year-end.

Yes. Understood. And second question, what do you see as the CRS benchmarks for 819? And can you provide any additional color on what happened in the pharmacy error side? And what's been done to ensure this won't happen moving forward?

I'll start with the benchmarks and then Bassil, you want to go into the mitigation on the dose preps. So the benchmarks, we're very happy with. Listen, when you see a 4% overall Grade 3 rate with a T-cell engager, that's eliciting this type of antitumor activity in this advance of a patient population, that's something. And I think that's still only half the story because, again, there's a 0% rate of ICANS. We've seen no ICANs in the study with this mechanism or this drug. So that compares to, say, IMDELLTRA, which is, I guess, the gold standard T-cell engager in solid tumor oncology right now, that has a single-digit rate of Grade 3 CRS or higher, but also carries a 10% Grade 3 or higher rate of ICANs. And as we know, neurotoxicity is something that is equally scary to the clinical community and hard to deal with patients. And despite that, tarlatamab is afforded per FDA label to be used in a reduced inpatient monitoring setting, which gives us the confidence in the consistency that we've seen with Grade 3 CRS with correct dose prep even in our target dose range to start exploring that as we continue to advance this program. Bassil?

Yes. So the issue with the dose prep is really one of, I would say, the ports and syringes used to transfer the solution. So you start out with our drug product in a vial at a relatively high concentration. For the priming dose, you have a very low concentration you need to infuse because it's a very small amount of drug for the priming dose. As you go to higher doses and the step-ups, things are much simpler. But for that when you have to do a couple of dilution steps, so you're moving solutions from this high drug product vial into a bag, an IV bag that you're using to dilute it, and you're taking some from that bag, putting it in another bag to dilute it further for that very low priming dose. If you're using ports for transfer between those bags and syringes that have unacceptably large dead volumes and not following the right procedures for using the right ports and syringes, you're going to have a little bit of extra of that high dose coming out of the vial sticking around and then it's going to contaminate that last bag, that low dilution bag, low concentration bag with high concentration products. So that's just something that, by the way, happens with these ports and syringes. And so that didn't become clear until this year as we got to higher priming doses. Earlier events were when our PK assay was a lot -- we were at the bottom end of the range. Now that we've gotten to higher priming doses. The PK issue became apparent we're able to connect the dots with Grade 3 CRS. And then we mitigated by training in the short term to make sure we don't have more of these or try to minimize them that the pharmacy technicians do the right thing. On the longer-term side, so next half, so it's the first half of 2026, we're introducing a low concentration drug vial formulation for that priming dose to eliminate the possibility altogether, eliminate the root cause of the multistep dilution. So that's long story short. We put it behind us, and we're really happy when we -- when things are done in the intended dosing regimen like it was for the vast majority of patients, we really get a nice clinical profile.

Understood. Maybe just one last question, if I may. And I'm just trying to map what you just said with the course of the study. Can you provide any color on how enrollment has progressed over time on the study? And do you think it will accelerate now that you're at higher dose levels and as you move into expansion cohorts?

So I will say we've seen it accelerate, I would say, greatly as we've reached these higher dose levels starting around mid of the year. And I know maybe Monty can comment on how he's seeing that as one of our lead investigators.

I have to tell you, seeing these response rates in the salvage population of patients with incredible amounts of previous therapy, I can tell you all of my colleagues are going to be really chomping at the bit to participate in this trial. We already have a cadre of the top centers around the country participating. So I'm very, very excited to see what's going to happen in enrollment trends. And we've already generated a pretty substantial wait list at this point.

Yes. We've not been limited by enrollment at all, and it's really accelerated in the last couple of quarters. So pedal to the metal.

Your next question will come from Sean McCutcheon with Raymond James.

First, maybe can you speak to the dynamics of T cell exhaustion that come into play in this very late line patient population? I think we've seen some preliminary data that less frequent dosing may be beneficial in certain tumor histologies for T-cell engagers. So how do you think about the T cell fitness in the context of late-line clear cell renal cell carcinoma and the immunophenotype of the tumor microenvironment and how that shifts -- could shift as you move into earlier lines potentially? And then secondarily, could you speak to the IV versus subcu administration on PK profile, tolerability and how you're thinking about a go-forward strategy to that end?

Sure, sure. So on the T cell exhaustion front, I mean, clearly, the activity we're seeing suggests that there's enough patients with active enough T cells to drive the kind of really exciting efficacy in a very late line that we're seeing. A general truism that we've observed and others have observed is the less heavily pretreated, the generally the healthier and earlier in their disease and in their cytotoxic regimens of therapy that they receive, the more immune competent patients are, right? And so we are hopeful that, that helps as we go into earlier lines. On the issue of exhaustion, I mean that's something that we definitely have on our mind as we look at patients going out into past, what is it, cycle 2, getting every other week dosing. I think some of the programs I'm aware of you're commenting on, as you extend out the dosing interval, the T cells seem to have a little bit of time to recover. There's a lot of unknowns here, but I think in general, we feel that earlier and giving T cells in chronic treatment, time to recover is going to benefit. But I think for starters, we're very happy with what we're seeing in this group. So that's a good starting point. I think it's probably too early for us to break out IV and subcu. The patient numbers, in particular on subcu are pretty low. But this is going to be essentially what we're looking at and comparing over the next year to choose our recommended Phase III dose and regimen. Hopefully, as we progress, we'll have a subcu expansion cohort as one of our expansion cohorts to compare to the IVs and see how that -- how they look when we can enroll a bigger number of patients. And again, with the demand for the study and the enrollment rates that we're seeing now, we're optimistic we can test multiple of these regimens in short order in 2026 and come up with the best one. Again, a little early to say and compare, but I will say that subcu, we have responses in subcu. And so that makes us definitely want to study it more.

Our next question will come from Matt Phipps with William Blair.

I appreciate all the data for both programs here. I was wondering if maybe you could just comment on what hospitalization requirements you're going to need as you take Cohort 10 into expansion. Is there already an ability to maybe reduce that as you figure out the correct priming dose? And then also, Dr. Pal, maybe you can just give us your view on the rash seen here and how to manage that?

Sure. I'll start and then hand it over to Dr. Pal. In terms of exploring reduced inpatient monitoring, we'll probably follow the same path that our peers have done of prosecuting expansion cohorts to get through maybe a recommended Phase III dose. And then as you're moving the totality of the program forward, start exploring in parallel a reduced inpatient monitoring cohort. I think we would want to see the data from dose expansion cohorts at that target dose range to then go back and make an argument with the clinical community and potentially regulators that this is a profile that should be explored in reduced inpatient modern setting.

I'll add one more point before you get to that. And note that we do see that attenuation of AEs, CRS, but as well as others as we go from the first priming dose to the next and the next. And then as we get to target dose, you saw really a very small and manageable set of AEs. So we're optimistic that we can trim that back, but it just takes data, right? It takes data, regulators don't take anything on faith. We're hopeful that we can get there as we build up the numbers like Dane said. Maybe on the rash, Monty?

Indeed, yes, absolutely. With respect to the rash, my experience and that of other investigators has really been sort of that it sort of peaks and then subsides subsequent to the priming period. And this being sort of a mast cell basophil-related phenomenon, I don't think that these symptoms are necessarily durable. They're quite easily managed, and we've built some mitigation strategies with antihistamines to help address that.

And if I can ask one more? Awesome to already see some responses in the 541 program. Any initial insights on the safety profile there? Is there anything on target off tissue to worry about or still just maybe some CRS step-ups to work through?

Yes. I think -- I mean, we're -- it's early days. We're happy. Essentially, the data shows that we hit the corporate goal of starting to characterize the target dose ranges, which we had hoped to do by year-end. And I think the waterfall plot probably exceeds our expectations of where we've been able to get to and basically starting the study in April 2024. So this has been really proof of concept for the Xencor team that we can take the learnings of all of our programs we've worked through clinically with T-cell engagers and really accelerate this 541 program. So we're very excited at the clinical activity we've gotten to. We have a lot more optimization characterization work to get to now, but it's still premature to really comment on what the profile of the drug is.

Our next question will come from Tara Bancroft with TD Cowen.

So the first question is just a clarity question. So just to be extra clear on your response to, I think it was Steve's third question. Can you confirm what was the response rate among those 18 patients with the priming issue? And were those 5 responders in that group?

It is the PK aberration.

Yes, the PK aberration...

Yes. We've had a higher response rate in the patients with correct dose prep versus those with PK aberrations. As we walk through the one patient that had PDF first scan because they were not able to get to target dose on time due to dose prep errors ultimately did respond when they got to the target dose. So I'm not sure we're going to give a full qualification of what that is and [indiscernible]. But yes, the vast majority of the responders have been in the correct dose prep patient population.

Okay. And then on safety, can you separate out for us a little more the impact of that as well? Like I know you said the 4% Grade 3 CRS with the correct priming. But were there any other safety events that you found were disproportionately impacted as well?

I don't know that we could say specifically. It was just everything seemed a little bit -- patients just seemed a little bit harder to manage, right? Nothing characteristic necessarily that I want to point to or even disclaim necessarily that we had in the correctly dosed patients. But the CRS was just right in your face, 3 of 6 at the target dose range that were incorrectly dose prepped had grade 3, 1 of 18 had it that were correctly. So nothing else, I guess, was so stark and clear that we could characterize it. And the good thing is, of course, even with the dose prep errors averaged in, still our CRS was in the first few -- early on in the priming and it resolved and overall rates were quite manageable.

Our next question will come from Eva Fortea-Verdejo with Wells Fargo.

Congrats on the progress. Two from us. First, you mentioned combination potential for 819. We're wondering what mechanisms would make the most sense here? How are you thinking about the potential combination strategy moving forward? And the second question, is how should we be thinking about data disclosure in the next 12 months for 819 and 541?

I'll take that second one, and then we can -- maybe Dane can jump on the combo question. For the data, timing, we'll obviously guide as we move forward, and we're ready to have real clarity on when we're going to say what's next. But the next kind of data we're going to want to talk about is our expansion cohorts and how we -- what our determination is of recommended Phase III doses and the characteristics of those recommended Phase III doses for those 2 programs that justify us wanting to move forward, then we'll be able to have a really fulsome discussion of what the next step strategies are for mono and combos and why. We can talk generally now about that, but I think data is going to rule the day. And again, next year with recommended Phase III doses, we hope to determine, we should be able to have that be the next tranche of information.

Yes, I think we were very purposeful in putting a recommended Phase III dose being established for XmAb819 in 2026. And obviously, when any company gets to that point in development, they would share that data. So I think 2026 is a good placeholder for the next data update, and we'll get more granular as we see the data flow and see where we get and make certain data analysis decisions like looking at IV versus subcu presentation. In terms of combination therapy, I think the most obvious statement we could make is when you look at the evolving landscape of treatment within clear cell renal cell cancer, you have VEGF-TKIs, PD-1s, still the backbone of first- and second-line therapy, and there would be a great deal of interest of exploring a drug like XmAb819, which really has a limit and low rate of AEs that are seen post day 29 in our study, meaning that there's good combination potential here. And so that's something that will be discussed, and we'll make some decisions on in the coming year. We're very excited about that. Dr. Pal, do you want to make a comment on that?

Yes. If I may just add to that. I think that in the face of an agent with good activity as monotherapy with nonoverlapping toxicities largely with the classes that you've illustrated VEGF-directed therapies and checkpoint inhibition, I think there is a real pension from investigators to really explore all of these combinations as we move forward.

Our next question will come from Alec Stranahan with Bank of America.

Great to see the update. First, I appreciate you're taking cohorts 8 through 10 as the target dose range based on your preclinical work. Just curious how many of the 38 patients from the low-dose cohorts were in Cohort 7 and which cohort the single PR came from in that low-dose group?

Thanks for the question. I mean I'm not sure I totally understand the gist of it. But yes, I mean, if you think about the low-dose cohorts, again, this is a 3 plus 3 design. We obviously filled in some of those cohorts with additional patients as we probably got to the mid-dose range. So I'm not sure there's a lot to read in there. But yes, as you mentioned, we did actually see a nice response even in the lower dose cohorts.

Yes. I'll say that responder in the low-dose cohorts, I would say, was at a -- not near the top end of the range. And so that happens in these studies with immune therapy. Sometimes there's a patient that's a little off the curve.

But we were, I think, excited that you even see as you get to the right-hand side of the low-dose cohort, there's a number of stable diseases, and that gave us confidence that we really see a dose response now that we're in the target dose range, and we're seeing the deepening of those antitumor responses.

Okay. That makes sense. And I guess in terms of the preclinical work or what you're seeing in terms of PK AUC, is it -- like how steep is the curve through the dose escalation? And I guess, how does that sort of relate to the cutoff at Cohort 8? Just trying to understand the difference between that threshold.

Yes. So look, you have to pick a line for where you -- when you're in the range and when you're not. If you look at that curve, Cohort 8 is just starting to climb up into that range. Cohort 7 is a little below that. There's small multiples that separate cohorts. I would say, though, that if you look at the theoretical basis and the preclinical data usually shows very steep dose responses for T-cell engagers to go from really not engaging to engaging. Then once you engage, it's not all 100% at once. But that turn on of engagement is because you have to form trimers between a T cell, a tumor cell and the third component being your bispecific. And the more components you have in a system that come together, the more cooperative that is and the steeper the curves. I don't want to make too much quantitatively on it. I don't want to make it sound like these preclinical models and quantitative systems pharmacology tools that we have are perfectly quantitative. But the concordance was pretty gratifying, I would say, that things really started to move, and you see that, in particular, disease control rate because you have so many bigger numbers, right, compared to OR. That DCR between the low and the high dose, it's really such a stark difference. That gives us confidence that our models were telling us the right sort of semiquantitative range for the immune activation.

I think what we could comment on qualitatively to perhaps help you is there's a concordance on the front end of the dosing regimen for the high dose range or the target dose range. And that's really to Bassil's point, these patients are rapidly progressing. Our job as a drug developer is to get them as much drug in that first month as possible, balanced against, obviously, toxicity and CRS. That allows you to then step up to the target dose, the effective target dose that really keeps your AUC up there and drives that T cell engagement against the tumor cells. And so that's where you see the consistency of the target dose range is not only at the target dose, but also on the front end of the priming regimen that allows us to deliver or maximize that amount of drug delivered in the first few weeks.

Yes, yes. It's not just week 3 that matters, week 2 can make a difference. And if you -- that's higher than it was in the prior cohort, you're right, there's sort of accumulating effect.

Okay. Okay. That's very clear. And maybe one super quick one. Just on the Claudin-6 study. Curious if a similar priming dose issue was observed here at all? Or if this was maybe just isolated to the 819 study?

Nothing like it whatsoever. There's no such high dilution factors, and we've had no issues of that kind.

Our next question will come from Brian Cheng with JPMorgan.

Brian, are you there?

Can you hear me now?

Yes.

Just one quick one from us. Just wanted to follow up on these PD excursions in those patients who had dose prep errors. Was the excursion higher than expected or lower than you expected than what you initially assumed? I'm just curious how we can reconcile the correlation of these excursions to the lack of response, even though that you are seeing the CRS event.

Oh, because -- I'll talk about that. Anytime you slow down or you create problems where the patient can't get to that second step-up dose, third and then their target dose, you're not getting enough drug in there to start really attacking tumor. When you have this bad dosing on day 1, which causes extra tox, extra CRS, you slow all that stuff down so the patient can't get benefit. I mean, you can't keep a patient giving them the exposure they need they're not going to benefit, right? So that makes perfect sense. I would say that the signal came to us really strongly when the PK excursions, that sort of 3- to 8-fold difference from what it ought to have been in that first day, that actually matched up beautifully with the effect of dead volume when we got retains from our clinical sites and said, please give us the bags you use that we asked you to save so we can analyze them. And then we've replicated the same sort of fold increases from the dead volume in the ultimate diluted drug concentration. So everything matched up quantitatively pretty nicely. But the key point is you're saying, oh, you got CRS, you got drug onboard, you should get efficacy. That priming dose is about tolerizing people to get the effective doses. And if that priming dose gets [indiscernible] somehow, you are going to hurt efficacy. So that makes perfect sense.

And Bassil, just to clarify for Brian, the PK excursions are always higher than what is expected.

Oh, yes, of course. I'm sorry, I should have said that. Yes.

There are no more questions at this time. I'd now like to turn the call over to Bassil Dahiyat for closing remarks.

Well, thank you, everyone, today for joining us to review these results and the plans across our oncology portfolio, which you can see we're very, very excited by. But really, the most important thing we can say today is really to thank our patients and their caregivers for their willingness to join this study and try a completely new agent and really walk with us on this journey. So thank you very much to them and of course, to our investigators and the care teams at the wonderful study sites that have been driving this study the whole time. We look forward to further updates on these in our autoimmune programs next year. And please have a wonderful rest of your afternoon. Thank you.