CytomX Therapeutics, Inc.
Q4 2020 Earnings Call Transcript

Published: 24 Feb 2021

[Operator:]

Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the CytomX Therapeutics Fourth Quarter and Full Year 2020 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’s Vice President, Investor Relations and Corporate Communications. Please go ahead.

[Chau Cheng:]

Thank you, Victor. Good afternoon, and thank you for joining us. With me today are Dr. Sean McCarthy; CytomX's President, Chief Executive Officer and Chairman; Dr. Amy Peterson; Chief Development Officer, and Carlos Campoy, Chief Financial Officer. Earlier today, we issued a press release that includes a summary of our fourth quarter and full year 2020 financial and highlights the important progress we made during the year. We encourage everyone to read today's press release and the associated materials, which have been filed with the SEC. Additionally, the press release and a recording of this call can be found under the Investors and News section of our website at cytomx.com.

[Sean McCarthy:]

Thank you, Chau, and good afternoon, everyone. Thanks for joining us today. 2020 was a highly productive year for CytomX’s in spite of the COVID pandemic as we continue to execute our strategic plan to deliver on the promise of our technology platform for transforming the lives of people with cancer and building and sustainable oncology focused commercial organization for the long-term. To that end we are well on our way as we continue to work diligently towards initial readouts in 2021, from ongoing Phase II to work on our lead conditionally activated antibody drug conjugates, CX-2009, or and CX-2029. Let me begin by reiterating that we are the leader in the emerging field of conditional activation of antibody therapeutics. Our approach the Probody platform, is designed to increase the exposure of therapeutic antibodies in cancerous tissue compared to normal tissue by leveraging the protease-rich tumor microenvironment. We believe that disease localization of therapeutic antibodies will be an important therapeutic concept for many years to come. And we're only at the beginning of what this approach will ultimately do. CytomX is blazing the trail of conditional activation and we believe - this can lead to important advances in oncology, perhaps in other therapeutic areas. CytomX has demonstrated versatility of conditional activation across multiple antibody modalities, including immune checkpoint inhibitors, antibody drug conjugates, and by specific antibodies. Our robust clinical pipeline now comprises five Probody therapeutic candidates, four of which are in Phase II evaluations across nine cancer types. We have purposefully applied our Probody technology to two different complimentary therapeutic strategies that we believe offer an appropriate balance of risk. Firstly, we've advanced Probody therapeutics directed against validated immuno oncology targets, such as CTLA-4, PD-L1 with the goal of developing best-in-class assets and expanding the reach of these foundational anti-cancer therapies.

[Amy Peterson:]

Thank you, Sean. Hi, everyone. I'm going to start with CX-2009 or praluzatamab ravtansine and lay out our strategy for demonstrating the value we believe is inherent in this asset. CX-2009 is a potentially first-in-class conditionally activated ADC, with the potential to address two major subsets of breast cancer. At the 2020, San Antonio Breast Cancer Symposium, we provided clinical updates from our Phase I work in patient with HER2 nonamplified breast cancer as well as translational data. The clinical update reinforced data previously reported at ASCO to confirm responses occurred in patients with hormone receptor positive disease, and compelling, but unconfirmed responses were observed in three patients with triple negative breast cancer, including one patient who had progressed on paclitaxel pembrolizumab and subsequently progress on sacituzumab govitecan. Encouragingly, our data to-date suggests that CX-2009 does not appear to show cross resistance to other approved breast cancer treatment in either hormone receptor positive or triple negative disease. The clinical benefit rate or CBR was 41% at 16 weeks, and 28% at 24 weeks. These data indicate that responses can occur early on, and can be durable. Furthermore, these data speak to the potential tolerability of this agent. And indeed, there are a handful of patients that remained on treatment for nearly a year. CX-2009 was generally well-tolerated with manageable adverse event profile at the recommended Phase II dose of 7 mg per kg every three weeks and ocular toxicity was the most frequently observed adverse event. Also at San Antonio, we provided data from exploratory translational studies. In circulation, CX-2009, was found to be predominantly intact, that is that remained masked. Conversely, unmasked antibody drug conjugate was measurable to an appreciable percent in tumors specimens biopsied four days following the first infusion. Furthermore, the concentration of activated intratumoral CX-2009 was found to be significantly correlated with CD166 expression. This further supports investigation as to whether CD166 selection could be used to enrich the patient population.

[Carlos Campoy:]

Thank you, Amy. We have continued to successfully finance CytomX’s operations. Just last month, we raised approximately $108 million in net proceeds from a follow-on public equity offering, which added to the $360 million in cash, cash equivalents and short-term investments we had as of December 31, 2020 puts us in a strong financial position. We believe our strengthened balance sheet will allow us to continue to advance our clinical pipeline of conditionally activated antibody to introduce new product candidates from our probody platform technology into human testing, and to meet projected operating requirements into 2023. Let me now highlight some of the financial results for the quarter and year ended December 31, 2020. Total revenues were $60 million and $100 million for the quarter and full year respectively, compared to $8 million and $57 million for the corresponding periods in 2019. Research and development expenses were $22 million and $113 million for the quarter and full year respectively, compared to $36 million and $132 million in 2019. General and administrative expenses were essentially flat for the quarter and full year compared to 2019 amounting to $9 million for the quarter and $36 million for the year. With that, I'll turn the call back to Sean.

[Sean McCarthy:]

Great, thanks, Carlos. So 2020 was a highly productive year for CytomX in which we saw our clinical stage pipeline advanced to now encompass Phase II evaluations of four probody therapeutics across nine cancer types. All while contending with the challenges posed by the COVID-19 pandemic. We have demonstrated that our probody technology has the potential to widen or create therapeutic window, first-in-class and validated oncology targets. But we continue to execute on our strategic plan to deliver on the promise of our technology for transforming the lives of people with cancer. Our leadership and the research discovery and development of conditionally activated antibody candidate’s positions us well for future growth as we now drive to important Phase II datasets for CX-2009 and CX-2029 and also advanced our pipeline broadly. We're pleased with the ongoing progress within our strategic partnerships, especially the recent commitments from BMS to expand their evaluation of BMS-986249 in three additional tumor types beyond melanoma. In addition to deepening, broadening and advancing our unique pipeline of probody therapeutics throughout 2020. We continue to build strength throughout the company, including the appointments of Ms Halley Gilbert, Dr. Mani Mohindru, to our Board of Directors. Their appointments exemplify our commitment to creating a stronger and more inclusive Board and also underscore our strong corporate culture of diversity, equity and inclusion across our entire organization and in the community at large. I'd like to take a brief moment here to sincerely thank CytomX’s Board Member Dr. Charles Fuchs for his valuable guidance of friendship over the years. Effective April 1, Charlie will step down from CytomX’s Board after taking a new role at Genentech, and we wish him the very best. In summary, 2020 was a year like no other, but I am proud to say CytomX came out stronger in every dimension. I'd like to convey my gratitude and appreciation to our entire CytomX’s team for their incredible efforts in 2020, also to our partners and our investors for their continued support. We look forward to speaking with you all again soon as this exciting year progresses. We plan to host a virtual analyst and investor briefing in April, with key opinion leaders, and to provide you with background on our probody technology, our conditional ADC strategies and the outlook for the year ahead. With that, let's open the call up for Q&A, so back to the operator.

[Operator:]

Our first question comes from the line of Terence Flynn from Goldman Sachs. You may begin.

[Terence Flynn:]

Hi, good afternoon and thanks for taking the questions. Maybe two from me, was just wondering if you can give us some perspective on the clinical trial environment right now and maybe kind of end of last year into this year are sites generally back open enrolling patients. And then how does this factor into your enrollment timelines over the course of the year? And then the second question, I have is relates to 2009. Obviously, the treatment paradigm for triple negative breast has been evolving here. There has been a second entry of a PD-1, as well as for Trodelvy. And just wondering how you expect 2009 to be positioned here if it's approved? Thank you.

[Sean McCarthy:]

Yes, hi Terrance thanks for the questions. Let me make a couple of general comments on our experience at sites and enrollment. Then I'll hand over to Amy, who may want to add, and then Amy will address the 2009 question as well. So, we certainly as you all know last year, in fact, gosh, almost a year ago. We were all wondering what was going to happen with COVID. We did in fact at that time with our 2009 Phase I expansion. We did slow that down, we paused enrollment and then we took advantage of that pause to rewrite the study as a formal Phase II study, which is what we've launched at the end of last year. We have I would say seen like others that enrollments across the pipeline has come back over the course of the - towards the back end of 2020, still not ideal in certain ways, mostly limited by one's ability to obviously get into sites. That said, we remain, we feel pretty good about our guidance on data for the 2009 and 2029 programs by the end of this year. So with that, let me hand over to Amy to comment, particularly on your question on 2009 and triple negative.

[Amy Peterson:]

Yes, got it thanks. So, regarding the recent entry - entrance of PD-1 yes, we are aware of that in the front line. And what we actually are excited about is that CX-072, when we looked at the data in the Phase I study. We actually enrolled the cohort of triple negative breast cancer and saw some very compelling signs of activity in this disease, specifically. So we know checkpoint inhibition works. We know our checkpoint inhibitor works. We know that right now the best partner with checkpoint inhibitor happens to be chemotherapy. ADCs are a sort of modified version of chemotherapy and we certainly have observed single-agent activity with 2009. So, we're looking forward to that combination in Part C. Now, how we position 2009, what we have shown in our corporate presentation. As we do have a patient and I mentioned her in our earnings call we do have a patient with triple negative breast cancer had very large volume disease alternating through the skin. She received pembrolizumab with paclitaxel, as her frontline therapy, and her best response to that was disease progression. She then got sacituzumab and her best response to that was disease progression. On our study, she had an early and marked response. Unfortunately, she developed keratitis needed to come off treatment to have that treated by the time she resolved, her disease had to be re-measured. She progressed, and we couldn't reinitiate treatment per resist, but she still had a dramatic response. Even at that time after two cycles really, I want to say 16 weeks on treatment. So as we think about positioning 2009 in triple negative breast cancer sacituzumab we're well aware has accelerated approval. We understand what you know accelerated approval looks like for them. We also are aware that as of this date, we have no reason to believe that there's cross resistance to either checkpoint inhibitor or sacituzumab with monotherapy 2009. And that's exemplified in the response that we saw on the patient I just described. So for accelerated approval, we would have to go after approved therapies, which would be a checkpoint based therapy in the frontline and sacituzumab, potentially thereafter. And we'll be looking to see how we position it further as we get data. I hope that answers your question.

[Operator:]

And our next question will come from the line of Peter Lawson from Barclays. You may begin.

[Unidentified Analyst:]

Hi, everyone, this is Mitchell on Peter. Thank you for taking our questions. The first question I had is what is the bar for efficacy for CD71 therapies? And what would be considered positive results from the Phase II expansion to support moving forward with the program? And then kind of along those lines, what is the scope of data we can expect from CX-2029 Q 21? And how many patients have data about can we expect?

[Sean McCarthy:]

Yes, thanks for the question, Mitchell. Let me give a couple general comments. Obviously given the scope of the work that we're doing with CD71 in multiple indications, and also the novelty of the target, we're not in a position to really comment on specific bars or expectations at this point. We're super excited about these studies and in terms of - in terms of scope of data. So just to recap, those four indications are squamous non-small cell lung, squamous head and neck, esophageal GEJ and DLBCL. And we've guided in recent months that we're looking to data from the first couple cohorts by the end of this year. Our goal is to enroll up to 25 patients in each of these arms. So where will we be exactly by the end of the year? Not sure, but we're working towards as I said, disclosure of data across those first two cohorts by the end of this year. Does that help?

[Operator:]

Our next question comes from line of Boris Peaker from Cowen. You may begin.

[Boris Peaker:]

Great, thanks for taking my question. Maybe the first one, just a quick one, when you assess the CD166 level curious, is that a fresh biopsy or using archival tissue? And how does that impact the measurement?

[Sean McCarthy:]

Yes hey Boris thanks for the question.

[Amy Peterson:]

Sean I am going to answer what?

[Sean McCarthy:]

Yes, go ahead please.

[Amy Peterson:]

Okay, thanks, yes it is a mix. Yes, breast cancer patients tend to have archival tissue, of course, we enrolled more than just breast cancer patients. So it's a mix of some fresh, but for the most part it’s archival. And what we are doing now is really trying to better understand the role that CD166 plays in the biology of cancer. And how its expression may or may not change over time, I think it's important to remember it is an adhesion molecule. And so, there may not be specific pressures to upregulated or downregulated as the tumor progresses. But at this point in time, we're beginning to investigate and trying to understand expression levels. And then therefore, what's the best timing of tissue acquisition for our study, but for the studies that we have ongoing, we will allow archival tissue.

[Boris Peaker:]

Got you, that’s helpful. Also, I'm curious on BMS, you mentioned that they started enrollment of a second CTLA-4 probody. Just curious, can you comment, what's the difference between the first one and the second one?

[Sean McCarthy:]

Yes, second one let me chip in on that one. So yes, that's been in the works for a while. The second one, what we call 288, is a probody version of a nonfucosylated version of Ipi. And so, the strategy there is that BMS has been taking, and of course, they can speak to it much more effectively than we can. The strategy is that the nonfucosylated version is intended to be a more potent version of Ipi, because it's a more effective deplete of intratumoral Tregs. And BMS presented data at ACR last year, actually on both the Ipi probody and the nonfucosylated probody, showing how the probody approach can enhance therapeutic window for both. So the goal of this second program is to even further broaden the reach of CTLA-4 therapy in the long run.

[Operator:]

Our next question will come from line of Mara Goldstein from Mizuho Securities. You may begin.

[Unidentified Analyst:]

This is Gabriel on behalf of Mara Goldstein, and thanks for taking our questions. Just a couple of questions here, how should we think about the data readout for 2029 in fourth quarter? Was there a particular reason as to why - tumor types are prioritized or is it just that they happen to enroll faster, probably the head and neck and then non-small cell lung group? And another question here on again, the BMS expansion into the three different tumor types, to the extent that you can comment, what do you think would have prompted BMS to choose those specific tumor types? And if they did any additional studies to leave them there, that's the thinking?

[Sean McCarthy:]

Yes, great.

[Amy Peterson:]

Sorry go ahead.

[Sean McCarthy:]

Thanks for your questions. Gabriel. So let me comment on the 2029. And then I'm sure Amy will be happy to comment on the BMS question. We're really very pleased about the additional work that BMS is doing in these additional tumor sites. So yes, with regard to the 2029, it’s a pretty straightforward answer really, which is that - the first two cohorts of one, head and neck where we saw such promising activity in the Phase I dose escalation, it has the kind of signal that you look for in Phase I. So we're just kind of making an assumption, I suppose that will carry the enrollment into those two cohorts with a little bit of additional of initial momentum. So that's really the thinking. It's not really based on anything else at this point in time. So Amy, any comments on BMS-249?

[Amy Peterson:]

Oh sure, I can't say exactly what led them and what this item speculate on this, which is certainly they know what a signal would like, would need to look like. They have the randomized study going on with melanoma, right that's a killer experiment in a way. And with hepatocellular they know what responses look like given - if the nivo combination that they have accelerated approval on. And so I think, they know what success would need to look like there. So I think it's a - these are two indications that will give a clear picture of what the combination can bring to the table. And I would imagine that castrate-resistant prostate cancer and triple negative breast cancer is yet other areas to expand into that have not yet reaped the benefits of IO/IO combos.

[Operator:]

Our next question comes from Robert Burns from H.C. Wainwright. You may begin.

[Robert Burns:]

Thanks for taking my questions. Just two if I may right now. So although I recognize the highly advanced nature of the patients in the HR positive HER2 negative breast cancer, metastatic breast cancer cohort in Phase I. Considering that the overwhelming majority were CD166 high at the monotherapy efficacy of 2009 and this population appeared that may demonstrate a lower response rate to that seen in TNBC?. Are you considering any potential combinatorial strategies to potentially enhance the response rate of 2009? For example, the combination with SERS and if not, how do you view the potential of SERS in that relapsed refractory sort of setting? And I've got one more after that?

[Sean McCarthy:]

Let me ask Amy to comment on that one, great question and hi, Robert, thanks.

[Amy Peterson:]

Happy to do so, so if I got it right, the questions were - potentially lower ORR in hormone receptor positive than in triple negative, I wanted to take a step back and just say having responses in hormone receptor positive disease has actually encouraging period, right? When you think about their disease, and where it's located their bone disease, and you don't actually always get resist - responses in these patients. So the other surrogates of activities that we look at are things like clinical benefit rate at 24 weeks. And those are the things that we will be looking at in the Phase II. When it comes to - so we're equally encouraged by the data that we've observed in both cohorts, or in each cohort, let me say it that way. When it comes to combinations, with SERS, as being hormonal based, typically what will happen is patients will exhaust hormonal therapy. However, it is delivered, and at the time that they've been refractory or progressed on two, three and with a GDK46 inhibitor, for example. And they're continuing to progress. Oftentimes, the physician will start to think about more traditional cytotoxic like chemotherapy. And so, they may not go back SERS or hormonal based therapy. With the other thing that drives the physician to think more towards chemotherapy is the disease in the patient. So while I said most of the time they have bone disease, that's usually how it will start. But once it gets aggressive or more aggressive, it will involve the lung and the liver. And so visceral involvement is something that physicians will often use as a guide to start more traditional cytotoxic-based chemotherapy. And that's what we would expect where CX-2009 would be positioned initially. In combination, I think right now we're in the beginning phases. I'd love to be able to figure out how to move this into earlier lines of therapy, be at hormonal, be it in combination with a hormonal agent or other but right now it's first things first and look for the monotherapy in the setting.

[Robert Burns:]

Okay, that's completely fair. Thank you, Amy. My last question for now, so have you done any additional correlative studies regarding CD71 expressions in the antitumor efficacy with 2029? And if so, what does that shown to date?

[Sean McCarthy:]

Yes, really early on that still Robert, great question. There's certainly an important question, from the data we presented so far. Yes, really a little early to tell, but we're highly interested in understanding more about that. It's an abundant target in many different tumors - it’s also a rapidly internalizing target. And so, the properties of this target, we just need to study more. So there's not really a whole lot we can say right there.

[Operator:]

And our next question will come from line of Etzer Darout from Guggenheim. You may begin.

[Unidentified Analyst:]

This is Paul on for Etzer. Thanks for taking our questions. Hoping to get a little more color on what we can expect from the Analyst Day in April? Is there potential to see any sort of clinical updates for 2009 or 2029 at that time or at any other conferences ahead of the plan for fourth quarter disclosures?

[Sean McCarthy:]

Yes hi Paul, thanks for the question. No, so the goal yes the Analyst Day that we're planning for April will be pretty more the outlook for the year ahead. So, we'll be talking more about the platform, our approach to conditional activation, which I think is of increasing interest to a lot of people, given the broad emerging interest in these types of approaches to localize antibody activity. We'll be talking about our strategies for conditional ADCs, and how to really think about these novel agents. And we'll talk about in more detail, the design of our ongoing studies, and - insofar as, so I wouldn't expect any new data. This update, it's pretty more the outlook for the year ahead. We have not yet communicated on specific timing or venue for our Q4 data updates that will be coming a bit later in the year.

[Unidentified Analyst:]

Great thanks, that's really helpful. And then just one more with your recent raise, I’m wondering if you could provide some comments on how you're currently thinking about capital allocation versus pipeline priorities?

[Sean McCarthy:]

Great, question for Carlos.

[Carlos Campoy:]

Sure, so as we stay and before, this additional raise position us really well to continue to fund our clinical stage pipeline, but also allows us to introduce new programs that are currently in preclinical stage into human testing. And that takes us into 2023. So that's about the extent of the guidance of where we're investing our money.

[Operator:]

And our last question will come from Mohit Bansal from Citigroup. You may begin.

[Mohit Bansal:]

Thank you for squeezing me in and congrats on all the progress. I'm just wondering so, Amy, you mentioned that and Sean you also mentioned but basically, CD166 is a novel target. So expectations probably it is hard to understand at this point, but just looking across the board for ADCs as a monotherapy treatment have come a long way and the kind of responses we are seeing in the lack of and other ADC out there? They aren't getting in materially late lines of therapy. They're getting in 30% plus kind of responses. So to that extent, do you think that could be an expectation that immunotherapy, you kind of have to get to that kind of mark to make a mark in these kind of tumors? And - to that extent, you may have to get that, can you enrich the patients - in some way to make sure that you select the patients who benefit the most from these drugs? Thank you.

[Sean McCarthy:]

Yes, thanks for the question Mohit. You're dead, right. ADCs have come a long way. And we and others of course, continue to see an enormous amount of potential. If we can continue to unlock novel targets, such as we've been doing at CytomX. Again, just to reiterate some of our earlier comments. We're not in a position to comment on specific expectations for these ongoing studies. We are in this business to make a difference of course. And so you know, that is our objective. We want to make the biggest difference we can in the tumor signs we're looking at. And we, of course, will be continuing to look at enrichment strategies over time, because we all want to make sure we get the right drugs to the right patients. And as Amy mentioned, we have ongoing strategies, particularly in the triple negative setting to be prospectively selecting patients for target for CD166. We think that's going to help. And we don't think that's necessary at this stage in the hormone receptor positive setting because we just how high the target is expressed in that patient population, but enrichment across the board is something that we continue to think about a lot.

[Operator:]

And at this time, I'd like to hand the conference back over to Chau Cheng for his closing remarks.

[Chau Cheng:]

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 and our ongoing progress.

[Operator:]

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