CytomX Therapeutics, Inc.
Q1 2021 Earnings Call Transcript

Published: 9 May 2021

[Operator:]

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the CytomX Therapeutics' First Quarter 2021 Financial Results Call. Please be advised that today's call is being recorded. I would now like to hand the conference over to your host for today, Chau Cheng, CytomX Vice President, Investor Relations and Corporate Communications. Please go ahead.

[Chau Cheng:]

Thank you, Susan. Good afternoon and thank you for joining us. With me today are Dr. Sean McCarthy, CytomX's President, Chief Executive Officer and Chairman and Carlos Campoy, Chief Financial Officer.

[Sean A. McCarthy:]

Thank you, Chau and good afternoon everyone. Thanks for joining us today for brief remarks on our progress during the first quarter of 2021. Q1 was marked by focused execution by the CytomX team as we continue to drive toward initial data readouts from ongoing Phase 2 studies of our lead programs, the conditionally activated antibody-drug conjugates, praluzatamab ravtansine, formerly CX-2009 and CX-2029. I hope all of you had the opportunity to attend last month's Investor event that we hosted, during which we took a deep dive into the science behind our Probody therapeutic platform and also the Phase 2 clinical strategies for our two lead assets. We were delighted to be joined at the event by key opinion leaders, Dr. Sara Tolaney, Melissa Johnson, and John Lambert. An archived webcast is available on the Events and Presentations section of our website, and I encourage everyone to review the presentations to learn more about our lead programs and our leadership in the field of conditional activation of biologic therapeutics. I'd like to start today with our program evaluating praluzatamab in patients with breast cancer. As a reminder, the Phase 2 study is enrolling patients with HER2 non-amplified breast cancer into three parallel arms. Arm A is evaluating monotherapy in patients with hormone receptor positive breast cancer. Arm B is evaluating monotherapy in patients with CD166 positive triple-negative breast cancer. Arm C is evaluating praluzatamab in combination with pacmilimab, our proprietary PD-L1 Probody, and this is in patients with both CD166 positive and PD-L1 positive triple-negative breast cancer. Our first patients were treated in this study during Q1 and we continue to work toward initial data from arms A and B by the end of this year. And we anticipate initial data from Arm C in 2022.

[Carlos Campoy:]

Thank you, Sean. CytomX continued to be in an excellent financial position to drive beyond the key value-creating data readouts in the fourth quarter of this year and well into 2023. As of March 31, 2021, we had $394 million in cash, cash equivalents and short-term investments. This balance included the $108 million in net proceeds we raised in January from a well-received follow-on public equity offering. Revenue was $16 million for the first quarter of 2021 compared to $50 million for the corresponding quarter in 2020. The decrease was due to research and development partnership payments that were recognized in 2020. R&D expenses were $22 million during the first three months of 2021 compared to $43 million in the first quarter of 2020. The decrease was largely attributed to one-time licensing expenses, decreased clinical trial spend and timing of manufacturing activities. G&A expenses were essentially flat for the first quarters of 2021 and 2020, amounting to $9.2 million and $9.6 million, respectively.

[Sean A. McCarthy:]

Great. Thanks, Carlos. So in CytomX, we continue to dedicate ourselves to working toward making a meaningful difference for cancer patients by being different and thinking differently. We pioneered an entirely new way to design therapeutic antibodies and other biologic modalities, and we've used our technology to purposefully go off to high potential targets that were previously considered undruggable like CD166 and CD71. Across our pipeline, we now have four assets in Phase 2 studies in nine different tumor types. Our move into the cytokine space where many opportunities exist to take high potential immune modulators and widen or open therapeutic window is also consistent with our broad guiding philosophy. We believe that by taking on big challenges like these, we increase our chances of really moving the needle for cancer patients and realizing our vision as an organization. So, thanks for your time and listening to that brief update. With that, let's open the call up for Q&A. Carlos and I will take your questions. Amy Peterson, who usually joins us on these calls, is currently performing her civic duty on jury service. So we will be happy to field your calls. Operator?

[Operator:]

Our first question comes from the line of Terence Flynn from Goldman Sachs. Your line is now open.

[Terence Flynn:]

Great. Thanks so much for taking the questions. Maybe two for me. I was just wondering, broadly, Sean, if you can comment on enrollment trends you're seeing in your trials, given the pace of vaccinations and the US has obviously been picking up and infections have been going down, but maybe just what are you seeing at the enrollment level at your sites? And then, maybe one for Carlos, just on pacing on spend for the rest of the year, is the first quarter a good baseline to think about, or is there going to be upward pressure on that over the course of the year here, as you continue to enroll these key Phase 2 studies? Thank you.

[Sean A. McCarthy:]

Great. Hi, Terence, thanks for the questions. First of all, with regard to enrollment, of course, we're seeing across the country a lot of great trends with vaccination and improving numbers across the board, and that's great. We're looking to open up a bit more. I would say that with regards to clinical execution, still predominantly remote monitoring and remote activities, but we are seeing things steadily continuing to improve and we remain on track with our guidance for initial data for these studies by the end of this year.

[Carlos Campoy:]

Terence, on the spent, Q1 is a pretty good proxy even though there will be fluctuations from quarter-to-quarter. And we haven't really guided for full year spend, but there shouldn't be anything super out of the ordinary.

[Operator:]

Our next question comes from the line of Peter Lawson from Barclays. Your line is now open.

[Mitchell Swaroop Kapoor:]

Hi, this is Mitchell on for Peter. Thank you for taking our questions today. The first question on 2009, could you comment on the size and scope of the data we might see for the Phase 2 datasets in 4Q?

[Sean A. McCarthy:]

Yes. Hi, thanks for the question. So the study design across the three arms, arms A, B and C is to enroll 40 patients in each of those arms and we are working hard toward that. As I mentioned, the goal is for initial data from arms A and B toward the end of this year, Arm C in 2022 and that remains. Our objective at this point is to drive enrollment as expeditiously as we can across those three arms.

[Mitchell Swaroop Kapoor:]

Great. And then, could you just talk about what would be the bar to be kind of like the - on efficacy for TNBC and HR positive HER2 negative breast cancer? It's kind of - how far above the bar would you need to show to be considered positive data?

[Sean A. McCarthy:]

Yeah, I think - this was covered in some level of detail by Dr. Tolaney at our Investor event on April 7. And I would say just high level to recap her remarks, you've obviously got two quite different diseases here with hormone receptor positive and triple-negative. In the hormone receptor positive setting, ORR tends to be less of a driver unless of an objective given the natural history of these patients over extended periods of time. It's really more about the duration of response as evidenced in our Phase 1 data actually where we showed a promising clinical benefit rate, about 16 and 24 weeks. So Dr. Tolaney said in this setting, an ORR, you're looking for greater than 10% and you're looking for something in the range of three to four months of PFS. Obviously, we'll be looking to do even better than that, but that would be, in her words and those of our other steering committee members, clinically significant in the hormone receptor positive setting. Triple-negative, different, much more aggressive disease, of course. These patients, they progress much more rapidly. So here, ORR is going to be more important and of course, likely in the post-sacituzumab setting. We saw in the ASCEND study for sacituzumab govitecan, an ORR of 35%, PFS five to six months, overall survival 12 months. So, really a terrific outcome for patients and that is what is underpinning the approval in the second- and third-line settings. In the post-sacituzumab setting, I think what we heard from Dr. Tolaney was an ORR of 20% or above will be clinically meaningful with the relatively short duration of PFS, two to three months, would be meaningful for these patients.

[Mitchell Swaroop Kapoor:]

Yeah. It helps a lot. Thank you very much.

[Operator:]

Our next question comes from the line of Joe Catanzaro from Piper Sandler. Your line is now open.

[Joseph M. Catanzaro:]

Hey, guys. Thanks so much for taking my question. Maybe one quick one for me. So Sean, you had mentioned IL-2 and I think many of us are familiar with the historical data that made a recombinant IL-2 has generated, and why there is so much interest for that target. But maybe you could just speak to the historical single agent profile of interferon-alpha. Are there specific tumor types that have shown some interesting activity? And why you see it as a great opportunity for a conditionally activated version? Thanks.

[Sean A. McCarthy:]

Yeah. Hey, Joe. Great question. So it's the cytokines - cytokines are at a long time, right, Interferon; not really being pursued by - let me just say that we're kind of blazing a trail here. We think this is a terrific opportunity for our technology. The clinical activity - I point to two indications in particular where interferon alpha has shown particularly impressive clinical activity. One is in the non-invasive - non-muscle invasive bladder cancer area where interferon alpha-2b gene therapy approach given by installation into the bladder has shown robust clinical activity and actually, that product candidate is in registration at the moment. So it's pretty clear that in the right setting, locally delivered, Interferon can have a potent anticancer effects. And then, there is a study from BMS showing combination with PD1 in melanoma, which showed a very significant ORR of about 60%, but Grade 3, 4 adverse events of 49%. So, a wide-ranging toxicities of an immune nature from the administration of interferon in a systemic manner. So I think it's - and there are several other indications besides that where interferon has potential. So, it's still early days for our program. Some of this has been about just the basic protein engineering to take home a growth factor of cytokine where we know there is significant room for improvement, but we think there are lot of places we could potentially go with this, but at the moment, the program is serving initially as a proof of concept for some pretty sophisticated masking approaches that we've been doing, including dual masking that we reported at the Cytokine Summit, which we think is a particularly innovative approach that may be extendable to other cytokines as well.

[Joseph M. Catanzaro:]

Okay. Great. Thanks for taking my question.

[Sean A. McCarthy:]

My pleasure.

[Operator:]

Our next question comes from the line of Roger Song from Jefferies. Your line is now open.

[Roger Song:]

Great. Thank you. Sean, maybe a quick still one on your early pipeline. So given the versatility of the Probody platform and then, obviously it's thinking about the cytokine modality. Any other particular modality you seem - they seemed appropriate for the Probody, lack of immunostimulatory antibody conjugate and any kind of a modality you're thinking?

[Sean A. McCarthy:]

Yeah. Hi, Roger. Thanks for the question. As I commented during my remarks here, I do think one of the defining features of our company is really the breadth and depth of the science that we've been able to prosecute over the last several years, both ourselves and with our partners. We've really built a significant research capability. We are working across multiple modalities already, checkpoint inhibitor antibodies, ADCs, bispecifics, now moving into the cytokine space. We've also got a growing interest early, though it may be in applying the - directing the weapons, if you like to cell therapies such as CAR-Ts, even CAR-NKs where we did some work some years ago with MD Anderson. So really anything that looks like an antibody, we can apply our technology too we think and it's really in no small part. The depth of the protease biology expertise that we have developed over the years and the tunability of the systems, which is a little different in each case, right, because the devil is really in the details here across each of these different modalities. The tunability and the control, if you like of the systems that will allow us to move into these different modalities. And I would refer you to, again the work - the initial work that we've shown on interferon-alpha, you can see from that first preclinical data that we've shared that we have very nice control over the system in terms of being able to activate both singularly and a dual-masked version of interferon in a protease dependent manner. So, this type of tight control that we've been able to develop over this particular cytokine and I'm very confident others will be very important for the future. So we're super excited about the science and continuing to explore all of these modalities both ourselves and with our partners.

[Roger Song:]

That's great. Thanks for the all the color. That's all from me. Thank you.

[Operator:]

Our next question comes from the line of Anupam Rama from JP Morgan. Your line is now open.

[Anupam Rama:]

Hi guys, thanks so much for taking the question. I just had a really quick one on CX-2043 in terms of what are the ongoing preclinical activities here and the gating factors to an IND filing and getting that program into the clinic. Thanks so much.

[Sean A. McCarthy:]

Yeah. Hi, thanks for the question. So we're at that point where we're doing all the things you do to get something into the clinic in IND-enabling studies, including getting GLP tox - getting through GLP tox is a little bit of an unfortunate hiccup that I mentioned earlier on in terms of a delay in the supply chain. These things are happening all over the place at the moment with biologics manufacturing as you know, given the pressure on the system understandably brought by vaccine and another biologic capacity being utilized for COVID and other COVID-related delays that are kind of out of our control. But - so we're doing the usual things. And as I said, this manufacturing timeline change is just - we're just in the place right now where we're taking another look at the overall program timeline. So does that help?

[Anupam Rama:]

Thanks for taking my question.

[Sean A. McCarthy:]

My pleasure.

[Operator:]

Our next question comes from the line of Mara Goldstein from Mizuho. Your line is now open.

[Mara Goldstein:]

Great. Thanks so much. I apologize to say the proverbial, I missed at the beginning of the call, but busy earnings day. So I'm just wondering maybe if you could just give us a little bit of sort of a high-level understanding of the differences and the sort of engineering production aspect of creating Probodies for cytokine biology as opposed to four specific antigen targeted biologies, that would be awesome.

[Sean A. McCarthy:]

Yeah. Hi, Mara. It's really good question. And when we talk about the field of cytokines, it's easy to think of it as one bucket. It's obviously a bucket with a lot of very complicated things in it. There are so many different families, different three-dimensional structures, different multimeric structures. There are often multiple receptors, receptor complexes, receptor families that different cytokines interact with. So I really think here it's going to be cytokine-by-cytokine. The field really breaks down the challenges and that's why are we seeing so much effort in IL-2, well, because it's a complex system. So I would say that when we think about our technology, again I would reiterate that the experience that we've been able to gain over the years with the generation of wave upon wave of protease-cleavable linkers, a lot of which we haven't talked about yet and not available in the literature, still sort of know-how to CytomX give us a very unique opportunity to tune conditional cytokines in ways that we think could allow us to really control their activity. And the masking strategies, similarly, we typically when it comes to antibody-based masking, our approach has been and continues to be to use peptide masks, which we screen for on an antibody-by-anybody basis. But as you saw in the work that we presented on interferon-2 alpha, we've combined that with a static masking strategy as well. And it offers up some really interesting opportunities for that and potentially other cytokine classes as well. At the end of the day, success in the cytokine field is going to depend upon, as I've already mentioned, very sophisticated protein engineering. And I'm very proud of our team at CytomX and they continue to do some really interesting things.

[Mara Goldstein:]

Thanks. I appreciate the color.

[Sean A. McCarthy:]

My pleasure.

[Operator:]

Our next question comes from the line of Etzer Darout from Guggenheim. Your line is now open.

[Etzer Darout:]

Great. Thanks for taking the question. Just one quick one for me, just you know lot has been made about sort of the efficacy profile, right and sort of the CDK46 - post-CDK46 setting for hormone receptor-positive. I wonder if you could talk a little bit about sort of tolerability, safety for - potential for 2009 and the ability to kind of move up sort of the treatment paradigm. Thank you.

[Sean A. McCarthy:]

Yeah. Hi, it's a great question. And again, a fair amount of time spent on that during our Investor event, Dr. Tolaney talking about the principal adverse event that we are watching in the Phase 2 study, which is of course ocular toxicity that is a function of the DM4 payload. As she mentioned and we agree, I mean, we feel pretty good about our ability to manage that at the 7 mg/kg Q3 schedule. And we are requiring ocular prophylaxis mandating it in this study, a combination of steroidal and vaso-constricting eye drops called . And if we look at the experience of others, including ImmunoGen with mirvetuximab, which Dr. Tolaney also referred to, we feel reasonably good about being able to manage that toxicity. How that will help us move forward? Obviously, we're optimistic one step at a time, but we don't see the ocular toxicity being a really substantial barrier for 2009 in the long run.

[Etzer Darout:]

Great. Thank you.

[Sean A. McCarthy:]

You're welcome.

[Operator:]

At this time, I would now like to hand the conference back over to Chau Cheng for his closing remarks.

[Chau Cheng:]

Hi, on behalf of the executive team, I'd like to thank you all very much for joining us this afternoon. We look forward to updating you in the future on our ongoing progress.

[Sean A. McCarthy:]

Great. Thank you everybody. Thank you for your time.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect and have a great day.