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

Hello, and welcome to the Xencor 2026 Webcast. [Operator Instructions] Also as a reminder, this conference call is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to Charles Liles, Executive Director of Investor Relations and Corporate Communications.

Thank you, and good morning. Yesterday, we issued a press release introducing the topics we plan to discuss on this webcast, including results from dose expansion cohorts of the Phase I study of XmAb819 in advanced clear cell renal cell carcinoma. The press release is available at www.emcore.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; Dane Leone, Executive Vice President and Chief Strategy Officer; and Jeff Chou, Senior Vice President and Head of Clinical Development for Xencor's oncology programs. We are also joined by Dr. Sumanta Pal, Professor and Vice Chair of Academic Affairs, City of Hope Comprehensive Cancer Center, who will join us to review his presentation at the ESMO conference yesterday. After the prepared remarks and the presentation, we will open up the call for management 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 projectives 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 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 subsequently filed quarterly reports on Form 10-Q. These statements speak only as of today, and we undertake no obligation to update them, except as required by law. Now I'll pass the call over to Bassil.

Thanks, Charles, and thank you for joining us today. We're absolutely delighted to share the data presented at ESMO yesterday on XmAb819 Phase I expansion cohort in clear cell renal cell carcinoma and to give an update on our plans for the program. I think this data cements Xencor's position of forefront in targeting solid tumors with T cell engagers, an emerging modality that we think delivers precision immunotherapy against solid tumors by bringing the immune system to bear against just the right cells. Currently, there's 2 ongoing Phase III programs, both with exciting data created by Xencor using our xMAP platform in 21 format for selective tumor targeting. ASP 2138 at Astellas zalarydamic and Amgen. Do we expect XmAb819 to be the third pivotal studies when we started our planned trial in 2027. We're not aware of any other TCE platform or company that has made this progress against the enormous unmet need in solving tumor oncology. In addition to this, we're awaiting update from our partner, J&J for the combination of pacridomig with JMJ9401 and XmAb-CD28 bispecific. Now it's important to put this update into another context. We've spent the last 3 years focused on excellence in clinical trial execution strategy, trying to have Xencor realize the value from the incredibly promising XmAb molecules we create. You could see the accelerating pace of trials, and most critically, we expect the result in multiple data readouts will continue through 2027, starting with initial Phase Ib data from plamotamab in RA in 2 weeks at ACR. Then Phase I data from XMAb-412, our bispecific TL1A by IL-23, then the primary endpoint of our global Phase IIb study of XmAb 942 in ulcerative colitis, plus further data updates from the ongoing studies of XmAb819. So now back to 819. The central problem in targeting RCC or any solid tumor is a near universal issue of expression of tumor-associated antigen targets in normal very often in vital organs. The best target distribution situation is where there's a high level in tumor cells, higher level of tumor cells and healthy cells. But these cases still have target in those healthy cells. So drug in solid tumor targets has been compromised between high anti-tumor potency and hence impact and high selectivity, which avoids toxicity. This 2 x 2 schematic illustrates the point with highly active but toxic chemotherapy at the lower right and at the top left, highly selective traditional monoclonals lacking potent billing mechanisms. ADCs and first-gen TCEs added very active cytotoxic function states, chemo molecules and T cell recruitment, respectively, but they compromise selectivity which you can see from ADCC killing of low or even 0 target tumor cells and tox profiles reflecting their chemo ligand, than for gen TCEs having tax challenges achieving and sustaining effective doses in solid tumor indications. With our 2 plus 1 platform, we've been attempting to move TCEs up in selectivity without compromising antitumor activity, so we can broaden both therapeutic windows and use cases. Now I'm going to turn it over to John Desjarlais, our long-time CFO and co-invent of our XmAb platform so he can describe how we did this to create 819 and the other 2 plus 1.

Since the XmAb 2+1 platform has been critical ours and our partners' solid tumor T cell engager strategy, I'd like to review the general concept. First, the 2+1 format binds tumors like national antibodies do Specifically, we have bivalent targeting the tumor antigen. That provides us with a powerful engineering paradigm to create T cell engagers with improved tumor versus normal selectivity. The way that works is we tune the affinity of the tumor targeting arms, such as the antibody can retain high binding or affinity for high-density tumor cells expressing lots of the target, while sparing normal cells that express lower loans of our target. That's a well-validated biophysical phenomenon due to the heightened ability of the targeting arm to quickly find another target when there's lots of it around, like natural antibodies to. In contrast, when using a 1 plus 1 bispecific that single tumor targeting arm has to have sufficient affinity on its own to drive binding to tumor cells, meaning it's much harder to distinguish tumor from normal cells. Because this is a well-understood biophysical phenomenon, we can develop QSP models to help us tune the tumor neural selectivity for a given target and its density ranges. Here on the top right plot, you can see a QSP optimized XmAb 2+1 for a hypothetical target density of 30,000 and a normal density threefold lower. For this scenario, the model shows strong killing of the higher-density tumor cells with significantly lower activity on normal cells. On the bottom right, if we take the same density range for a 1 plus 1 biocivic, then you can see the model predicts very little discrimination between toman normal, which of course, means it will have higher potential for safety issues. In fact, the only way to recover more selectivity with a 1 plus 1 is to reduce its affinity, which then means we'd struggle to have sufficient killing of tumor cells. Now let's focus more specifically on XmAb819, encores XmAb 2+1 that we developed for the treatment of kidney cancer. From the antibody diagram, you can see that it has 2 arms that bind ENPP3 and a single CD3 targeting arm. And of course, it was affinity of it to optimize for tumor normal activity. The middle plot shows that nicely where we can see significantly more killing of a high-density tumor cell line versus lower ENPP3 expression. Finally, on the right plot, we were able to see strong antitumor activity of Xb819 in our preclinical mouse tumor models. Notably, the same model is completely refractory to PD-1 blockade. Now we initially developed X19 train of kidney cancer, specifically clear cell renal cell carcinoma. But we know that Target is also expressed to some extent across a wide range of histologies. As you can see from this large IHC data set we collected, ENPP3 is strongly and uniformly expressed in clear cell RCC. But we also see a good proportion of papillary RCC patients expressing strong levels and there's also a good number of microsatellite stable colon cancer patients and lung cancer patients that express significant levels. We've included some representative IHC images from some of these histologies on the right. Now that we've observed compelling activity in clear cell RCC, we recently opened cohorts for papillary RCC, colorectal cancer and lung cancer. While we don't need to prescreen ENPP3 expression in clear cell Enrollment in the other cohorts is contingent on seeing strong expression by IHC. Xencor has always prioritized the creation of modular antibody formats with high stability, developability and robust manufacturing using straightforward purification protocols. We believe this approach is borne out very well cleanly, and we've been excited to see such compelling progress with many of our and our partners' clinical stage molecules. With such a strong backbone format for XmAb819, we've been happy to see a good pharmacokinetic profile in our patients. The plot here shows our fitted population PK profile for XMB19and as we go through the priming and step-up basis of dosing up to 100, 200 and 400-microgram per kilogram target dose, and the model fits a terminal half-life of approximately 8 days. That profile lends itself to dosing every 2 weeks or we believe 3-week dosing, particularly when we reach the target test. The shaded areas of the plot show important regions for our QSP model of XmAb819 cytotoxicity with the EC50 to EC80 range shown in light gray and the ECAs range shown in dark gray. The model built with a combination of preclinical cytotoxicity and PK data predicts that at our highest IV dose of 400 micrograms per kilogram, we're approaching the maximum activity of the drug with trough levels at 2-week dosing remaining above a predictive cytotoxicity of 80%. As I emphasized earlier, Xencor's platforms are built for robust stability, developability in manufacturing. And you can see from the summary table that we have a high tighter cell bank for XmAb819 that scales well to 2,000 Leer. Our drug substance and product are both stable for at least 60 months in liquid formulation, and we're using commercially validated CDMOs for manufacturing in the U.S. Now I'd like to introduce one of our investigators and close collaborators, Dr. Sumanta Pal from the City of Hope Cancer Center where he was Vice Chair of Academic Affairs and Co-Director of the Kidney Cancer Program and overseas 1 of the largest clinical trial portfolios in the West Coast. I'll now turn things over to Dr. Pal to review the Phase I results for XmAb819 as presented yesterday at ESMA.

Thank you so much, Dr. Desjarlais. First and foremost, this is a really exciting opportunity. I'm really pleased to be here. This is a study near and dear to my heart. We enrolled the first patient on the study at City of Hope several years ago. We can jump to the next slide here. Dr. Desjarlais really gave you a great background on XmAb819 in terms of its biology. I'll emphasize the fact that the target ENPP3 is heavily expressed in clear cell renal cell carcinoma to a much lesser extent on adjacent normal tissues and we're also in on investigating the agent in the context of papillary kidney cancer, colon cancer and lung cancer as yet articulated on the basis of selative expression in these tissues we can jump to the next slide -- this is the schema for the study. And you can see that we're reporting today phases of dose escalation involving 100 micrograms per kilogram up to 400 micrograms per kilogram. We've completed a dose expansion at 100 and 200 micrograms per kilogram and continue to enroll at 400 micrograms per kilogram. I'll emphasize this during the course of my discussion today. This was a very heavily pretreated population of patients, a mandate in the studies that all patients must have received for clear cell renal cell carcinoma, at least a prior checkpoint inhibitor and a VEGF TKI, many patients received several lines of therapy beyond this. patients had to have measurable disease with no prior anti-ENPP3 therapy. And shown below is the schema for the study. This involved a priming dose followed by 2 step-up doses, followed by delivery of the target dose thereafter. On the next slide, you can see patient characteristics, and I'll emphasize that this was a fairly typical population of patients with metastatic renal cell carcinoma, except for the fact that if you look at the IMDC risk score amongst patients enrolled in the study, it was a very small proportion that actually had favorable risk. It amounted to 6% to 7% of the population overall. The vast majority of patients that we had bolt are intermediate or risk. And if we look to prior therapy, as I emphasized previously, this was a very heavily pretreated population of patients, about 1/4 of patients that received 3 prior lines of therapy. -- and in fact, 35% to 40% of patients that received 4 or more prior lines of treatment. In addition to this, beyond just receiving 1 VEGF TK and 1 checkpoint inhibitor, we had approximately 63% to 64% of patients that had received 2 more prior VEGF TKIs. And we also had about 35% of patients that have received a prior HIF2 inhibitor as well, and we'll dive a little bit deeper into these subsets as we explore the efficacy of 19. The next slide is a busy highlights adverse events. And I'll just summarize the table on the left by noting, there was a relatively low rate of dose reductions and treatment discontinuations on account of treatment emergent adverse events. On the right, 1 of the points that I'll make is that if we look across any incidence of toxicity versus those toxicities that had an onset beyond day 29, it was really that first month of therapy in which the majority of toxicities were incurred. We've highlighted in boxes on the next slide here, several toxicities, in particular, and I'll dive deeper into the management of these. These are adverse events I think of special interest, rash, cytokine release syndrome and transaminitis. The next slide highlights our experience with cytokine release syndrome. I'll highlight the fact that CRS was predominantly low grade, and it occurred principally during priming. You could really see that emphasized in the graphic on left. The incidence of CRS really diminishes substantially as we go through priming doses and dissipate almost completely as we get to target doses of therapy. We've come up with as an investigative team, a very, I think, reasonable regimen for premedication for XmAb819 to mitigate this with acetaminophen, diphenhydramine, IV normal saline. Dexamethasone is being given now prior to priming doses and we give 1 dose of tocilizumab prior to priming dose 1. Next slide, please. I've highlighted here 2 other cytokine-driven adverse events. The first is something we might anticipate, which is rash. This is an on-target effect, given the fact that ENPP3 is expressed on basophils and mast cells, we found this to be very easily managed in my opinion, with daily antihistamines and use of oral and topical steroids. We only incurred dose delays in about 4.5% of subjects and there are no treatment discontinuations. And just as we saw with cytokine syndrome, you can see that the incidents have rationally diminishes substantially as we go across priming doses. Most events, again, were low grade. Transaminase elevations are highlighted on the right, and these were asymptomatic. They were transient and largely self-limited. The median time to resolution was just 7 days, and there really appear to be no significant clinical sequela in the vast majority of patients. dose delays due to transaminase elevations occurred in about 15% of subjects, the Reno treatment discontinuations. As you can see in M&A levels, which is articulated in the graphic on the bottom right, really peaked after priming dose 3, but you can see that these are quick to resolve. And as we got to subsequent target doses, the incurrence of these was relatively low. I'm very excited to present to you the data related to antitumor activity. What we see at the lowest dose that we'll report here today, 100 micrograms per kilogram is a very, very reasonable and, I think, exciting response rate of 30%. You can see a disease control rate of 86.7% and with a median time to fill up with just 4.1 months, I'll still emphasize that there are some patients who actually had responses that were durable as you can see in the spider plot below extending to almost 2.5 years. What we'll see in the next slide here, as we get 200 micrograms per kilogram is a step-up in response rate to 4%. The disease control rate here was 64%. You can see that the vast majority of patients had tumor shrinkage, again, with a median follow-up time of about 4.5 months, you see patients that are really approaching the durable response with some patients extending their responses to 10 months and beyond? And finally, we report on the next slide, the 400-microgram per kilogram. Again, very exciting. We see a response rate here of 45.5%, the disease control rate of 81.8%. You can see that almost all patients had tumor shrinkage. And on the spider plot articulated below many ongoing responses. And I'm keen on updating this data in the months to come. I think it's salient to point out 2 specific subgroups. Again, as noted, all patients in the study had to receive a prior VEGF Tan checkpoint inhibitor and we have a cohort of triple treated patients who have also received a HIF2 inhibitor in addition. These patients have frankly exhausted all of the classical mechanisms of action that we utilize for therapy for metastatic renal cell carcinoma. What we see in the cohort is a response rate that approaches 35% and a disease control rate of 78%. In addition, we have a subset of patients that have received not just 1 but 2 prior VEGF TKIs. Again, these patients all received an additional checkpoint inhibitor beyond this. And what we see here is a response rate of 45.2%. These data, really, in my opinion, represent a high watermark for what we've seen in Phase I clinical trials in renal cell carcinoma to date. The disease control rate in that subset was 85.7%. On the next slide, as articulated the ongoing responses within this population, of which there are 19 and you can see that the median time to response is relatively quick, 2.7 months, median time on treatment within this cohort of 7 months. But as noted previously, -- we're starting to see very durable responses with some patients who have responses extending to almost 2.5 years, some approaching 2 years, and again, very keen on extending this data. And I have a very special example on the next slide to share with you. This is a patient very near and dear to my heart that I've been treating for a decade. This patient is 56 years old. He was diagnosed 10 years ago as noted with metastatic disease incurred about 5 years ago. This patient had 2 prior lines of therapy, the first being cabozantinib with nivolumab. The second being lenvatinib and everolimus. He was on the first therapy for a month, the second therapy for 3 years. And he was really mired by the toxicities of these regimens. You suffered from a great deal of gastrointestinal symptoms from the VEGF TKI. He began on protocol with 2 large mediastinal lymph nodes, both more than 2 centimeters long diameter can actually see the figures posted on the right of this baseline images there, so bulky mediastinal adenopathy. Now this patient also had multiple small lung and pancreatic lesions. Notably, his membrane expression of ENPP3 was actually less than 25% on tumor cells. Despite that, this patient actually had a partial response that was incurred very early on in just 6 weeks and has deepened to a complete response at week 42. He's had normalization of his lymph nodes. He's had disappearance of lung and pancreatic lesions, and his response is ongoing a complete response at 16 months. Not only that, but I'll note that his toxicity profile has just been exceptional and it's really had restoration of this quality of life. In conclusion, XmAb819 shows very meaningful antitumor activity in patients with advanced clear cell renal cell carcinoma. I'll emphasize that this in my mind represents a high watermark a most trials that I've seen in the Phase I space in this field. Antitumor activity was observed in a dose-dependent manner with an objective response rate of 30% of 100 micrograms per kilogram. That increases to 44% to 200 micrograms per kilogram and further to 45% of 400 micrograms per kilogram. The majority of these responses are still ongoing at our last data cut. Not only that, but if we think to the triple pretreated population of patients, those that have received a checkpoint inhibitor a TKI and a HIF2 inhibitor, we see a response rate of 35%. And in addition to those individuals that have received 2 or more VEGF-TKIs, again, very heavily pretreated, a very, very exciting response rate. In my opinion, these data firmly support continued development of XmAb819 as monotherapy for advanced clear cell kidney cancer. I think it makes sense to look at rational combinations and certainly explore this in earlier lines of treatment. I'll pass it back down to the team at Xencor.

Thank you, Dr. Pal, for your collaboration and leadership. And thanks to the entire City of Hope team and patients that have supported XmAb819 as a potential breakthrough therapy for advanced renal cell carcinoma. We want to take the opportunity now to provide some slightly updated data with 1 additional month relative to our data cut for the ESMO presentation. which helps provide more details for our development decisions as we move into late phase development in 2027. Our pool Thermoplay here for the expanded target dose cohorts of 100, 200 and 400 micrograms per kilogram remains immature with a 7.9 months median time on treatment as of October 1. We're pleased with the high response rate, numbers of patients remaining on treatment and encouraging durable disease control as fall continues. We have 1 patient at the very top of the silo who elected to dose escalate to 100 micrograms per kilogram when that dose was cleared back in 2025. This patient experienced a deepening of response after the dose escalation and they'll have some progression with new lesions after 28 months continues on treatment today. Looking now at our spider plot of VI responder across expanded dose levels as well as a couple of lower doses. We provide some additional insights around deepening of responses over time, which can be seen with powerful immune-based therapies. And about 25% of patients, time to response is 4 months on treatment, but even in the majority of patients with more rapid time to response, we see those responses continue to deepen over time. Following the step-up dosing period of XmAb819, the tolerability has been very good, which limits interruptions and treatment over the long term and allows the drug to continue directing an immune attack against tumors. For the purposes of planning our next stage of clinical development, inclusive of a registration-enabling study expected to start during 2027. We have selected 400 micrograms per kilogram IV target dose as the putative IV recommended Phase III dose for XmAb819. Even though we've only recently finished enrolling the 400 micro per kilogram expansion group to give us a little over 20 patients total treated at this dose level, the follow-up for the full group is less mature than the full 100 or 200-microgram per kilogram target dose cohorts. They are clear to us that there could be an increasing response to the dose at 400 micrograms per kilogram and importantly, an increasing dose response for disease control, the shape of the waterfall plot tells most of the story here with a less shift of the inflection point compared to lower target doses. But the new unconfirmed PR at week 42 and the treatment durability itself also looks encouraging with over 70% of patients still receiving ongoing treatment with over 6 months median follow-up and 82% 6-month PFS Kaplan-Meier estimate. Importantly, the safety profile for the 400 micra per kilogram target dose looks largely consistent with the 100 or 200-microgram per kilogram target doses. So based on the strength of both the efficacy and safety profile for XmAb819 at our chosen target dose cohorts, we're optimistic we're in a favorable position to use an active standard of care control tivozanib for our registration-enabling study supporting full approval of XmAb819 monotherapy for use in advanced clear cell RCC following prior exposure to 1 PD1 or PD-L1 inhibitor and 1 VEGFR TKI. This label could support broad access to XmAb 819 largely as a second or third line monotherapy drug of choice. We plan the power for a clinically meaningful PFS hazard ratio of 0.7 based on our expectations of tibozumab in this treatment setting. We view the third-line subgroup analysis from a [indiscernible] 2 to be the most contemporary data set for our expectations of tivozanib in a post-IO VEGFR TKI patient population. By the numbers in the setting, treatment with tivozanib has achieved a 10.5% or our 6-month PFS Capital Mire estimate of 41% and a median PFS estimate of 5.4 months. While these numbers are an unfortunate representation of current therapeutic options in the third line for patients with advanced clear cell RCC, it's also why we think there's a compelling opportunity for XmAb819 to make an impact for patients and caregivers as our first indication for full approval. And now I'll turn it over to my colleague, Dane, to discuss the broader strategy with XmAb819 development.

Thank you, Jeff. Setting the background of what has been achieved is important context. As we presented earlier, XmAb819 has demonstrated a clear dose response relationship for our selected 100, 200 and 400-microgram per kilogram target dose cohorts with a still maturing response rate for our putative recommended Phase III target dose of 400 micrograms per kilogram. Shown this slide for illustration purposes as they were not ahead studies, -- the 45% confirmed overall response rate of the 19 putative RP 3D cohort in the fourth line treatment setting represents an unprecedented level of antitumor activity reported for monotherapy drugs, that are currently a part of the advanced clear cell renal cell carcinoma treatment armamentarium. Even cross comparing to monotherapy treatment-naive frontline studies of VEGFR TKIs currently within NCCN guidelines, the confirmed response rate of XmAb819 compares favorably. But response rate alone is not the defining feature of the strength of monotherapy outcomes for XmAb819 in our study. IMDC risk is highly prognostic for response to therapy. And as you can see, our 400-microgram per kilogram cohort enrolled a primarily intermediate core risk patient population where unmet clinical need remains high. For patients and caregivers, the choice to use treatment is often driven by the perceived balance between the patient opportunity for a meaningful clinical response versus the potential they do not respond to therapy at all and variance primary progressive disease. As you can see, once again for illustration purposes only, XmAb819 has reported a very favorable clinical balance of response to primary progressive disease relative to the most recent monotherapy approved agents, tivozanib and belzutifan, but also to the current dominant standard of care mono and combination therapy, cabozantinib in a post-VEGFR-TKI treatment line. Importantly, the safety profile of XmAb819 is well tolerated. With the rate of discontinuations due to treatment-emergent adverse events, lower than those reported in studies of the VEGFR TKI class of drugs or per label monotherapy nivolumab. Importantly, though, XmAb819 excellent tolerability profile post the priming period has allowed us to avoid the common dose reductions or interruptions required by the VEGFR-TKI class allowing XmAb819 to achieve long-term consistent target coverage above EC80, which is the biology behind the durable disease control and continued deepening of response we see over time. The strength of our data supports our enthusiasm to begin engaging with global health authorities. We aim to have our end of Phase I meeting with the U.S. FDA during the first half of 27 and which aligns with the maturing data for both our putative RP 3D IV dose of 400 micrograms per kilogram, along with our dose escalation data for the subcutaneous presentation of XmAb819. We plan to discuss an accelerated approval pathway with health authorities. Given the robust analysis we have around 2 groups, patients that have progressed on prior I/O in at least 2 prior VEGFR TKIs which represented over 60% of the patient population rolled into our Phase I study and/or patients that have progressed on all 3 current standard of care mechanisms, IO VEGFR TKI and HIF2 alpha inhibitors which represented 30% of our enrolled patient population. As you can see from the confirmed response rate confidence intervals, our lower bounds of response exceed what could be expected to be achieved with the current available treatments that we previously discussed. From a market perspective, we view the post IO and 2 prior VEGFR TKI market largely representative of the third line indication in advanced clear cell renal cell carcinoma. And in the U.S. alone, would represent more than 9,000 eligible patients annually based on a claims database analysis. The market for triple class-exposed patients is currently limited, but expected to grow substantially as a combination of belzutifan and lumvatinib has now been approved in the U.S. as a new treatment for patients who have progressed on prior PD-1 or PD-L1 therapy. Overall, we are very excited that XmAb819 has demonstrated breakthrough potential for patients with high unmet need, who have exhausted standard of care options and could benefit from accelerated access to treatment with the drug. Our comprehensive development plan for XmAb819 continues to accelerate with a focus on moving 819 as monotherapy drug into earlier lines of treatment, optimizing clinical convenience for commercial use, and also exploring rational combinations with current standard of care for future frontline studies. We expect the breadth of our development activities in renal cell carcinoma to continue expanding as we view the development pathway going forward as a parallel effort to ultimately maximize the number of regulatory approvals that can be rapidly achieved across the treatment landscape, which we hope to start by 2030. The commercial market opportunity in renal cell carcinoma is significant with the current addressable global market over $11 billion currently expected to continue growing through 2030. Our near-term focus for regulatory approval and commercial launch is to reduce clinical reliance on recycling of VEGFR TKI therapy across lines of treatment with the introduction of XmAb819 as a powerful novel first-in-class XmAb 2+1 T cell engager. We feel good that an initial approval in the later line setting, as a monotherapy can support XmAb819 exceeding potential blockbuster status ahead of approval in earlier-line settings. Longer term, we view the frontline therapy where PD-1 PD-L1 inhibitors are the anchor is the largest market. currently split between use of pembrolizumab and nivolumab depending on the specific frontline indication or combination. Our ongoing proof-of-concept basket study for ENPP3 positive tumors papillary renal cell carcinoma, microsatellite stable colorectal cancer and non-semis non-small cell lung cancer have the potential to greatly expand the scope and benefit of XmAb819. Each of these tumors have high unmet need for patients that have failed frontline therapy. Our ENPP3 positivity rate on screening for each of these tumor types support clinical development and we expect that our early promising results in clear cell renal cell carcinoma could energize engagement with oncologist specializing in thoracic and gastrointestinal cancers. Overall, we are thrilled with the momentum of the XmAb819 program building into 2027, a pivotal year of clinical milestones that we expect to support our confidence around XmAb819 as potentially the first commercial stage pram wholly owned by Xencor as we approach 2030. And with that, I will turn it over to Bassil for a look at our broader pipeline and concluding remarks. Bassil?

Thanks, Dan. We're grateful everybody could join us today for a demonstration of what Xencor strives to do. engineered novel molecules to address really hard clinical problems like precisely directed T cell solid tumors and prosecute these molecules in the clinic so patients can benefit as quickly as possible. This 819 data release is just the beginning of a series of planned clinical updates across our portfolio over the next year, and hope you can join us for those too. Now I'd like to thank team at Xencor with their perseverance an incredibly broad range of talent spanning engineering, protein chemistry, pharmacology, manufacturing nonclinical and clinical development. And I want to thank our wonderful clinical study teams and investigators around the globe. Most important, I want to thank our patients and their families and caregivers for their courage and commitment and hope in bringing new medicines forward. We'd be happy to take questions now. Operator?

[Operator Instructions] Our first question comes from Steve Seedhouse with Cantor.

Congrats obviously on terrific data. I wanted to first just ask about what you think you'll need in terms of number of patients or additional study for that accelerated approval pathway in the late-line patients?

Yes. Thanks, Steve. And great question. So we'll obviously state, first and foremost, the go-forward path needs to be defined in proper discussions with global health authorities. We plan to have a meeting with FDA in an end of Phase I in the first half of 2027. Pending those discussions, I think our expectation going in is your normal rule of thumb, kind of primary analysis that you would want to have for a review of accelerated approval in any indication. And that's going to be somewhere around ballpark 100 patients for a safety analysis and then your primary analysis set for efficacy would really be powered to that lower bound of the confidence interval. So in those subgroups that we presented, based on the strong response rate we have observed in this group and across the 100, 200 and 400-microgram per kilogram target doses. We feel pretty good about that powering assumption being even less than 100 that we need for the safety pool. So I think we have a strong data set to really have a productive and hopefully, collaborative conversation with health authorities going into the early part of 2027. Bassil?

No, I think you said it all. I think as our data matures for the 400 mg per kg cohort, we've sorted out the enrollments essentially done. We're going to have about the same number of patients there as we did for our 100 and 200 cohorts to support our dose selection and as the cohort companies mature, we're excited to see what we can see. We know we just had a 1-month incremental data cut for our September data cut for the presentation yesterday at the conference, we added in our press release an extra month, and there was an additional person who responded, who was a stable disease and responded, I think, on their fourth scan much like we see in the rest of the study, this continuing deepening of antitumor activity as patients are on the agent longer. So I think we're going to have a robust package. It's going to be very well supported. And I think our analysis of the prior therapies is such that, at the end for an accelerated approval is something very achievable.

And I wanted to ask specifically on -- so as you think about the first line opportunity here. And first, just generating the data of combining 819 with a PD-1 inhibitor what gives you confidence that, that will be viable that there won't be any overlapping toxicity. Do you have any insights already from the study or just working with the molecule to suggest that, that's going to be okay from a safety tolerability standpoint?

Sure, Steve. So I guess there's 2 points. One is from our own study -- we've had a lot of patients come on study that have had recent prior PD-1 checkpoint exposure, and we don't have much of a washout period, right? These patients are progressing rapidly. So we start treating them very quickly. there's a number of folks who have significant exposure to anti-PD-1 and significant anti-PD-1 out on board when they come on to our study. And there have been nothing notable about that group and I think that gives us a lot of comfort that having significant P1 inhibitory activity from whether it's a nivo or pembro from a few weeks prior therapy didn't cause any drive in our AE profile. In fact, it seems the same as whether they hadn't had recent checkpoint. So that, I think, gives us a lot of confidence going into our quick safety cohorts to combine with PD-1 that ought to be something quite feasible. I think there's another line of evidence just in the class of CD3 T cell engagers 1 of which Stemcor design that have been combined with PD-1 inhibitors. So for example, XmAb819 -- sorry, ASP 2138 is no longer called the XmAb our partnership with Astellas for the cloud 123 same 2 plus 1 format as X19. That had quite a big data set of Phase I data combined with pembro plus chemo in frontline gastric GEJ, and they -- that data was quite positive very well tolerated. It didn't really exacerbate or change the AE profile to chemo or PD-1 or 2138 the CD3 bispecific, and that's in Phase III right now. And then you see additional evidence tarlatimab, beautiful data presented a couple of days ago here at ESMO in Delta 305 combined with [indiscernible] and we also have the experience CenTrak. So I think both our experience with patients with lots of anti-PD-1 on board, not having anything different in their AE profile as well as the growing experience now with T cell and gators being combined with checkpoints, really, to great positive effects, it really encourages to want to explore the opportunity for 819 combined with PD-1 inhibitor in as we think about how to get to that frontline setting.

I'll make a quick point in terms of combinations more broadly. I think there's a unique aspect of what we've seen from a safety perspective of XmAb819, where the drug does not have cumulative toxicity, right? You see the priming period has a tolerization of a couple of weeks and then a target dose, there's no -- the drug is very clean. Every other drug, PD-1 VEGFR TKIs alpha inhibitors that would be combinable standard of cares, all have cumulative toxicity that actually emerges in the later cycles of treatment, kind of cycle 1, cyle 2, cycle 3, which makes our unique ability to have truly orthogonal toxicity to these other agents. So I think we have a bright future ahead of maximizing the potential of the drug in some of these different settings and indications with current standard of care. So we're very excited about that.

Your next question comes from Matthew Phipps with Blair.

Congrats. Let me offer my congrats as well. Two quick questions. One, just curious how the prior HIF to alpha exposure compared across those target dose levels. I was wondering if there's any differences in the number of page 22 there. And I know subcu is ongoing, and you've set a data update the first half, but any kind of early read on how the CRS profile compares IV to subcu? Obviously, you have seen some other TCEs a little bit easier on subcu as you move to subcu?

Can you hear me? You're a little in and out. So on the subcu points, so we did have some subcu data in our data cut last year. It was in a blended cohort that we disclosed -- and we're still dose escalating, and we'll present that data in the first half of next year. But Historically, subcu dosing of CD3 bispecifics has reduced for blunted the side effect profile, the CRS-related side effects because you do have a slower onset of drug action and you do have a lower Cmax. So that's something that we're certainly looking for. We really can't comment yet on our specific data. And then there was a little bit of a stutter in the audio feed, but I thought I heard you say the private 2 alpha exposures Were you asking about differences across our dose levels?

Yes. Any differences in prior...

I don't like I mean you can actually look at the waterfall plot in the presentation we just gave, and we actually provide the dot to prior therapy there for both of the subpopulations. And very consistent, very strong signal, especially at 400 micrograms per kilogram.

Your next question comes from Sean McCutcheon with Raymond James.

Maybe kind of building off Steve's question earlier. Dr. Pal noted some mechanistic data indicating that ENPP3 is associated with an angiogenic phenotype. -- which is intuitive biologically. But how are you thinking about rational combinations in earlier lines? You already disclosed that you'll be combining a PD-1. But does a VEGF or TKI combo makes sense in this setting? Or does it make more sense to avoid multi-kinase related cardiotox and other adverse expense?

Yes. I think we think of 819 is a drug that activates the immune system in a way that kind of short circuits the usual considerations of existing angiogenic phenotype? Is this an immune phenotype like is typically done when you're only profiling the tumor cells. So CD3 engagement works around the standard way a T cell would normally engage with the target cell and turn on. That would be through MAT TCR complex formation. We did just short-circuit that entirely. So we're less concerned about that point we certainly do follow Dr. Pal's work very closely in that area. I think you hit the nail on the head though, about combination with VEGFR-TKI I think we'd like to start exploring ways to avoid that kind of the inherent toxicities that come with that class to open up the door to potentially an entirely immunotherapy-based treatment regimen, which could have completely different AE profile, potentially more beneficial. And so the mechanistic rationale for a PD-1 inhibitor with 819 is excellent. We have plenty of preclinical data that shows that PD-1 inhibition only amplifies the activity of XmAb819, I think the selectivity of 819 for tumor cells and the really good long-term tolerability profile post priming period gives us a good rationale for why a PD-1 combination would be top of the list.

I think from a clinical utility perspective, One, obviously, avoiding VEGFR TKIs would improve quality of life and health related activities of the patients as they're maintained on therapy, but in the case of 819 specifically, going back to where we talked about time to response, 75% of patients have a VEGFR TKI like time to response with this therapy. We're very encouraged that we're able to blunt primary progressive disease, even in imperial intermediate poor risk heavily pretreated patient population as we enrolled into the study, yet also retain some of the features of IO-based mechanism where 25% of the patients have deepening responses over time. And as I said in the prepared remarks, that deepening response over time is because we have such good tolerability at the target dose. It allows consistent EC80 plus coverage as we're not dose interrupting. We're not dose reducing. As you get with many standard of care therapies, especially in combination.

The next question comes from Gregory Renza with Truist Securities.

Congrats to the team again, really good data. Maybe let's start with a quick clarifying question. Do you intend to use that Phase III study to for accelerated approval? Or is there a possibility to expand the current Phase I and use a single-arm cohort to support accelerated approval?

Thanks. So the global RCT with the proposed control on that would be a full approval study. Obviously, when you go excelerated approval, it's considered a conditional approval that would be a first or a current plan that we'd like to propose to health authorities. We think using an active control of a VEGFR-TKI that is currently standard of care monotherapy in the later lines or post VEGF-TKI is a really strong position to be in, and we obviously have the data, we think, to do very well in that garrisonin that study. That's where you see, I think, a lot of the strength of the labels. And -- it's been a while, I think, since there's been a monotherapy developed that, I think, has the potential to advance standard of care beyond these. So we're very confident in our design that we're going to propose against tivozanib. And yes, that would be a full approval. And hopefully, based on strength of data we could go in front of that with an accelerated approval pathway in a more select patient population.