CytomX Therapeutics, Inc.
Q3 2019 Earnings Call Transcript

Published: 7 Nov 2019

[Operator:]

Good day, ladies and gentlemen, and welcome to the CytomX Therapeutics Third Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Christopher Keenan, Vice President of Investor Relations. Chris, you may begin.

[Christopher Keenan:]

Thank you, Zia. Good afternoon and thank you for joining us. Earlier today we issued a press release that includes a summary of our recent progress and third quarter 2019 financial results. This 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, Chris, and good afternoon everyone and thanks very much for joining us. It’s a pleasure to be here to provide an update on our progress during the third quarter. I’ll begin with an overview and some recent highlights and then I’ll turn the call over to Amy to review our recent clinical advances in our CX-072 program, I’ll then review progress with our partner programs before turning the call over to Robin for the third quarter financial update. I’ll then come back and provide some closing comments and open up the call for questions. So let me start by first introducing a new voice on today's call. Recently we announced the appointment of Dr. Amy Peterson to the new role of Chief Development Officer at CytomX. Amy brings over 20 years of experience in oncology, clinical practice and drug development, having held multiple senior roles, including Chief Medical Officer of immuno-oncology at BeiGene where she created and led what is today recognized as a globally relevant oncology development organization. Prior to that, Amy was Vice President of Clinical Development at Medivation, where she was responsible for developing XTANDI and TALZENNA in breast cancer. Amy also held a variety of leadership roles at Genentech, where she worked primarily on early stage oncology assays, targeting multiple major pathways. Here's at CytomX, Amy is charged with oversight of a multidisciplinary team focused on advancing CytomX clinical development activities, and driving value creation and differentiated patient outcomes across the CytomX portfolio. We are delighted to have Amy joining our team at this important time in our evolution. Here at CytomX, we see a major opportunity to more effectively target therapeutic antibodies into disease tissue, generating new classes of differentiated anti-cancer therapies. Our innovative approach to antibody localization into disease tissue is called the Probody platform. Probodies are fully recombinant antibody Pro drugs comprised of a therapeutic antibody and the mask designs to block the binding of the antibody to its target until the mask is removed.

[Amy Peterson:]

Thank you, Sean. First, I just want to say how thrilled I am to be here as a member of the CytomX team, and very pleased to be joining all of you on the call today. Thank you for your participation. I want to start with a review of the dose escalation portion of the Phase 1 study, which evaluated the combination of varying doses of CX-072 plus ipilimumab and which underpins our recently announced Phase 2 study. PROCLAIM-CX-072-001 enrolled a heavily pretreated patient population, and one that is not typically thought to respond to Checkpoint inhibition. This trial evaluated CX-072 dosed at 0.3 to 10 mgs per kg in combination with ipilimumab dosed at three to 10 mgs per kg. Updated data as of in October 2019 snapshot showed that among 27 valuable patients who received ipilimumab combined with CX-072 the disease control rate defined a stable disease or better with 37%. Five patients achieved a confirmed objective response, including one patient with a complete response. This represents an overall response rate of 19%. The medium duration of response was 14.6 months. Importantly, four of the five responders are still on treatment as of this latest data snapshot. The combination was generally well tolerated, with no new safety signals observed of the 27 patients treated across all doses, grade three or four treatment related adverse events were reported in nine patients, or 33% and grade three or four immune related adverse events were reported in six patients, or 22%.

[Sean McCarthy:]

Thanks very much, Amy. So I'd like to turn now to our two most advanced partner programs, our BMS Alliance first which stems from our foundational 2014 Worldwide Oncology Agreement continues to make excellent progress, the leading edge of this collaboration is our work on the discovery and development of a Probody version of ipilimumab which is aimed at increasing the therapeutic window for this important antibody and target. BMS is preparing to initiate a randomized Phase 2a expansion cohort of this ongoing first in-human trial with the mask version of ipilimumab that we have generated within the collaboration. This trial is designed to further evaluate the safety and efficacy of BMS-986249, the Ipi Probody and combination with nivolumab versus Ipi plus Nivo. Should this program ultimately reach the market, CytomX is eligible to receive additional milestone payments and royalties that reach the double-digits. This BMS study is of particular importance for two principal reasons. Firstly, the advancement of this program into a large randomized study obviously signals their satisfaction with the Phase 1 findings that we expect the BMS team to present at a future date. Secondly, this study has the potential to be a powerful proof-of-concept for our technology platform in demonstrating that Probody technology can favorably impact the therapeutic index towards a more effective version of ipilimumab. Improved tolerability of the Probody has the potential to allow higher or longer treatment exposure, increasing the chances of achieving or sustaining anti-tumor responses. I want to also emphasize here that our work at CytomX that you just heard about with our CX-072 Probody plus Ipi, that combination taken together with BMS’s advancement of the Ipi Probody plus Nivo in to Phase 2 offers broad potential to demonstrate the value of our platform and the value it can bring to this important and still most validated IOIO combination. We have to have more to say about the details of the BMS study initiation in the near future. Moving now to our partnership with AbbVie, during Q3, we continued to advance CX-2029, the clinical program for this first-in-class Probody drug conjugate targeting CD71, CD71 is widely expressed on normal tissues and therefore is considered to be an undruggable target for conventional antibody drug conjugates. CytomX has continued dose escalation in this initial phase of this study in the All-Comers setting, we at CytomX have the responsibility for advancing this program through initial clinical proof-of-concept, whereupon if successful, the program will transition to AbbVie for registrational studies and ultimate commercialization. CytomX retains co-development and certain profit split and co-commercialization rights for this asset and we look forward to sharing additional information on CX-2029 in due course. AbbVie also recently selected a second research target, under the company's 2016 discovery agreement, again reflecting continued endorsement of our platform and forward momentum in this alliance. This is the second of two research targets available to AbbVie under the discovery agreement and it triggered a $10 million payment to CytomX, a few months back. So let me now turn the call over to Robin for a brief review of financials.

[Robin Knifsend:]

Thank you, Sean. I would like to review selected financial highlights for the third quarter. We ended the third quarter with cash, cash equivalents and investments totaling $325.7 million, compared to $436.1 million as of December 31, 2018, and $349.1 million as of June 30, 2019. Our strong balance sheet allows us to comfortably fund operations into the second half of 2021 assuming no new collaborations in our financing. Research and development expenses were $28 million for the quarter compared to $27.5 million in the corresponding period in 2018. The slight increase was attributable to increases in personnel related expenses primarily due to an increase in headcount, consulting expenses resulting from increased clinical trial activities, and the allocation of IT and facilities related expenses driven partly from an increase in headcount offset by decreases in laboratory contracts, services and supplies as a result of manufacturing timeline. General and administrative expenses were $8.5 million compared to $8.1 million in the corresponding period in 2018. Revenue for the quarter were $10.7 million, compared to $12.5 million in the corresponding period in 2018. The decrease was primarily due to a $1.7 million decrease in revenue under the CD71 agreement with AbbVie due to ongoing dose escalation. With that, I will turn the call back over to Sean.

[Sean McCarthy:]

Thank you, Robin. So thank you again to everyone on the call for joining us today. This is a very exciting time for CytomX as we see our clinical pipeline advancing and as we continue to explore the full potential of our Probody platform. We’ll be providing additional pipeline guidance before year-end and we look forward to a potentially data rich 2020. With that, I would like to open the call up for Q&A and hand back over to Chris.

[Christopher Keenan:]

Please open the call for questions.

[Operator:]

Varun, your line is open.

[Varun Kumar:]

Hi, good afternoon, everyone, and thanks for taking the questions. First on 2009, if you can remind us on what's the gating factor here? Should we think it's more like managing safety for ocular and liver tox and a related question on that. Should we expect a press release sometime and before year-end for this program?

[Sean McCarthy:]

Yes, hi Varun, thanks for the questions. So, as you know, where we're at with 2009 is continuing to -- continuing with dose refinements with the objective of selecting dose and indications for potential expansions. And as we communicated previously, the work we've been doing over the last several months has been had particular focus on ocular prophylaxis, and looking to understand more about the relationship between dose ocular prophylaxis and the duration of time we can keep patients on drugs. So that work has been progressing well and we remain on track for a communication between now and the end of the year on our specific next steps with the programs. Not going to guide today on exactly what form that would come in, but we’re on track to provide additional guidance.

[Varun Kumar:]

Thank you, Sean. And another question on 072 the PDL1 program. So, if I understand correctly, the current Phase 2, the idea there is to have or maintain the Ipi dose of three mg per kg but if you can maybe tell us what’s the internal or what you guys are thinking in terms of response rate to expect in this refractory patient in melanoma, which can inform or potentially moving into other tumor types?

[Sean McCarthy:]

Yes, it’s an important question. We're not ready to guide on specific response rates at this point. But I would just point you back to the summary that Amy provided of the Phase 1 dose escalation data where we saw a 19% response rate in the All-Comers setting, which obviously is very encouraging. And by the way that was across multiple doses of Probody and Ipi. So we're optimistic about this study, but we're not providing specific guidance at this stage on exactly what we're looking for, in terms of target response rate, but obviously, we want to make a significant difference for these patients.

[Varun Kumar:]

Okay, thank you very much. And maybe just the last one if I may. On triple negative breast cancer certainly is one indication where we have seen activity from both 072 program as well as 2009. So I was curious how you guys are thinking currently for this indication, certainly, there's a lot of unmet need in this indication and I could see some large pharma being interested to partner potentially partner find the combination. So any color for triple negative, how you guys are thinking in near-term?

[Sean McCarthy:]

I think there are couple of different questions there. So let me answer both of them. As we commented, and we've consistently commented, our vision for CX-072 was for this differentiated Probody to become a centerpiece of combinations. The Ipi combination is the first one that we're moving into Phase 2. We have always said that we would consider it to be a potential combination partner for other molecules coming from our pipeline and it’s the concept of combining those 72 with 2009, we think is pretty interesting. To do that in TNBC, obviously, is a possibility, no specific guidance at this point. Regarding partnership, we do continue to believe that the 072 program would benefit from a partner at the right time. Again, as we like to say, we’ll do the right deals at the right time. And but we do think given that the program could become very broad, very quickly that a partnership in due course could make a lot of sense.

[Varun Kumar:]

Thank you very much, Sean, and welcome Amy. Thank you.

[Amy Peterson:]

Thank you, Varun.

[Sean McCarthy:]

Okay, operator. Let’s move onto the next question.

[Operator:]

The next question is from Mohit Bansal with Citi. Please go ahead.

[Mohit Bansal:]

Great, thanks for taking my question. And I will welcome Amy from my side as well. Maybe if you could start with talking a little bit about the status of your Amgen partnerships that that I don't recall if you have mentioned that on this call. And when can we see data from the AbbVie CD71 program? Thank you.

[Sean McCarthy:]

Great. Hi, Mohit. Thanks for the questions. So with regards to Amgen partnership, we focused our comments today on our clinical assets and the Amgen partnership continues to be preclinical it's doing some very, we’re doing some very foundational research and discovery work in T-cell bispecific Probodies in that alliance and that continues to be the case. So no specific update at this stage other than we're increasingly convinced that T-cell bispecifics are going to be a very important modality, particularly in the Probody setting. So we're very enthusiastic about that modality. Regarding AbbVie and 2029, no guidance yet on specific timing of a program update.

[Mohit Bansal:]

Great, helpful and then maybe a little bit just going back to the Brooklyn study and the expansion plan you're planning. So just trying to understand conceptually, when you add Ipi highest dose or maybe little bit higher dose, like three milligrams per kilogram, you’re talking about, what do you expect to see, would you expect to see more responses? Or do you think the best of the responses what would you see based on the trial if patient can be dosed higher?

[Sean McCarthy:]

So there have been studies in this patient population of, Ipi, Nivo in specifically in the relapsed refractory setting, it’s pretty clear that adding Ipi on top of PD1 inhibitor, PD inhibitor if you like can elicit pretty respectable response rates, I mean, the data sets are relatively small, but response rates in the 40% range, plus or minus, and so this is a patient population that has a very good chance of responding to our combination, particularly at the three mg per kg dose which has not been to our knowledge tested in this population yet. So we're breaking new ground with this particular dose and combination. Does that help answer the question?

[Mohit Bansal:]

Yes, it does. It does. Thank you very much.

[Operator:]

The next question is from Mara Goldstein with Mizuho.

[Mara Goldstein:]

Great. Thanks very much for taking my questions. So I understand you're limited as to what you might be able to say on the CX-072 program. But I'm curious as to even if you cannot give specific numbers sort of conceptually, what is considered clinical success for that program? And what would be the next steps assuming that you achieve that and then secondarily on the CX-2009 patient cohort that was previously treated, will you be able to provide updated data on those patients when you talk about next steps to that program?

[Sean McCarthy:]

Hi Mara, on the second question, was that 2009 or 2029?

[Mara Goldstein:]

Sorry on the Probody drug conjugate?

[Sean McCarthy:]

Yes, on 2009, right, thanks.

[Mara Goldstein:]

Right.

[Sean McCarthy:]

Yes, again we need to get this study launched and we don't have any specific guidance on our target response rate but as I said, we have effectively a 20% response rate in our Phase 1 study in the All-Comers setting, we know that Ipi, Nivo lower doses can be effective in this patient population. So we're optimistic that we're going to see something here. So but we're not setting specific goals from the Simon One-stage design. Regarding 2009, again not to restate our goal between now and the end of the year is to communicate on dose and indications from moving into the expansion phase and that's really as much is we’re able to say at this point.

[Mara Goldstein:]

Okay. And if I could just follow-up on the 072 program, I know it's a small number of patients but will you be able to glean out of that any differences in responses between let's say those patients who did not have any initial response Checkpoint inhibitors to those who lost response, have any initial response Checkpoint inhibitors to those who lost response?

[Sean McCarthy:]

I think you're right that the numbers are going to be small, so we'll be looking at that but I don't know that we would be guiding to being able to draw any conclusions from this Simon One-stage.

[Mara Goldstein:]

All right, thank you very much.

[Operator:]

The next question is from Boris Peaker with Cowen. Please go ahead.

[Boris Peaker:]

Good evening. My first question is on 72 and I guess maybe addressed to Amy, just from the regulatory perspective, if you decide to advance the 072 into pivotal combo studies with Ipi, will you have to include monotherapy on 072 or monotherapy of Ipi or some kind for combinatorial reasons?

[Sean McCarthy:]

Hey Boris, it’s Sean, let me kick that one-off and hand over to Amy. So regulatory strategy, I would say is in the early stage of being developed for the program, we're highly focused on this first 40 patients to see what this combination could do for us in this area of high unmet medical needs. At the end of the day, the regulatory path that we follow is going to be very much a function of the activity that we see if the combination. So little hard to comment at this stage. Let me ask Amy to add to that.

[Amy Peterson:]

Yes, I think the only thing that I would add is given the nature in which the regulatory environment has evolved in the last couple of years, I think everybody's hopeful that we don't have to conduct as rigorous evaluation of what monotherapy might be or what standard of care therapy might be. There's certainly a lot of studies that are attempting to look at real world data as they file for registration approval. So sufficed to say that we’re going to be as creative as we can and we will do whatever we do in collaboration with the health authorities globally.

[Boris Peaker:]

Great, and then further on the PROCLAIM 072 study. When will we monotherapy data, and how important is monotherapy activity?

[Sean McCarthy:]

So we continue to as I mentioned in the prepared comments, the enrollment in the Part D expansion cohorts is now complete, we continue to collect and analyze that data. And we will give an update on monotherapy strategy again between now and the end of the year.

[Boris Peaker:]

Great. And lastly, on CD166 as a target, is there any competitive development that you’re aware of?

[Sean McCarthy:]

No, pleased to say that we continue to blaze the trial with that first clinical stage novel target of ours, so nothing that we're aware of at this point.

[Boris Peaker:]

Great, thank you very much for taking my questions.

[Sean McCarthy:]

Thanks Boris.

[Operator:]

The next question is from Biren Amin with Jefferies. Please go ahead.

[Biren Amin:]

Yes, hi guys. Thanks for taking my questions. Sean, maybe can you talk a little bit about the big picture on 072, the compound has been in the clinic since end of 2016? However I think what we've seen with other companies is that they've been somewhat creative in terms of pivotal single arm studies and other tumor types. And they've just been I think more aggressive. So, at what point can we expect that from CytomX and 072?

[Sean McCarthy:]

Well it’s hey Biren, good to hear from you. As you know, we've taken the approach over the last several years of casting a fairly wide net to really characterize what we described as the efficacy fingerprint of CX-072 because as a Probody not an antibody and the first Probody to go into patients. It was always intended to teach us a lot about how the platform works and also how this product candidate works. I believe we have learned a lot. We presented a reasonable amount of data over the last couple of years showing that the drug clearly is active as a pro-drug antibody, it’s effective, it's effective in combination with Ipi and we've now announced a very clear next step in an area of significant unmet medical needs taking the Ipi combination into relapsed refractory melanoma. As we said on the call, we do believe that there's going to be potential for the Ipi 072 combination in a range of different tumor types where we already know that Ipi, Nivo is effective, has not been advanced due to toxicity issues or not being able to dose high enough. And last comment I would make is that Dr. Peterson here is rather well known, I think, for her broad and aggressive clinical development strategies, and we will be looking for her to develop those for us as we move forward.

[Biren Amin:]

Got it. And then I've got a follow-up, I guess just on new Phase 2 trial that you've announced, why not add a comparative Ipi, Nivo so we can actually delineate the differentiation of 072 and then I guess a second part of the question is given PD1 is frontline standard of care in melanoma, I’m going to assume that all of these patients will be retreated with PD1 in your study, so why not also evaluate the combo and the frontline setting?

[Sean McCarthy:]

Yes, great question. It's a stepwise thing, isn't it? So at this stage, we think this is the right experiment to do for the Probody. And given the unmet medical needs in this patient population, exposing these patients to running control arms, we didn't think would be the right thing to do. We also see potential in the long run to bring this combination forward in the treatment regimen. So it's a stepwise approach, Biren.

[Biren Amin:]

Got it, okay. And then I guess on you mentioned that at some point, you would evaluate a partnership for 072. Can you just talk about where your efforts are for CX-188, the PD1 Probody? I believe you're evaluating partnerships for that program as well?

[Sean McCarthy:]

Well, as you know, the PD1 Probody, we elected earlier this year to not move into clinical development. And we've always thought that a partnership around the program at the right time could make some sense whether the partnership on one of those assets and not the other would be doable, remains to be seen. But all I can really say is that we continue to be interested at the right time in partnering the PD program.

[Biren Amin:]

Got it. Thank you.

[Operator:]

The next question is from Terence Flynn with Goldman Sachs. Please go ahead.

[Terence Flynn:]

Hi, thanks for taking the question. Maybe again, just another big picture one. Sean, you referred to some of the recent personal data for Opdivo, Yervoy in frontline lung couple of studies that came out. Just wondering, your thoughts on the implication of these data, maybe for your programs and then not sure if you can comment on this, but what tumor types would you expect Bristol to focus on for the 249 plus Opdivo Phase 2 trial that you're expecting them to advance into? Thank you.

[Sean McCarthy:]

Yes, hi Terence second question.

[Operator:]

[Sean McCarthy:]

Hello.

[Operator:]

You’re reconnected sir.

[Sean McCarthy:]

Okay. Go ahead, hello.

[Operator:]

Okay, we will go with Robert Burns with H.C. Wainwright.

[Robert Burns:]

Hey, thanks for taking my question guys. So just two if I may, so as we saw from the press release last week across the 27 patients in the Phase 1 PROCLAIM CX-072 dose escalation from 33% of patients experiencing key related adverse event rate which appears have ticked up from the prior 25 that we saw. And I was just curious what was the rate in patients who are treated at the recommended Phase 2 dose? And then my second question was, could you give some color as to what percentage of first-line melanoma patients can really receive Opdivo plus Yervoy or just an anti-PD1 monotherapy regimen? Thank you.

[Sean McCarthy:]

Hey, Robert, good to hear from you. So we have 20 patients in the study treated at three mgs per kg of Ipi and I believe I'm right in saying that the response rate among those patients is 25%. And it's great for Yervoy is the same, it is 25%. So you're right, that 33% number is a slight uptick than what we presented previously, but the numbers broadly speaking in this study have held up really very well since the presentation. Does that help?

[Robert Burns:]

Yes, it helps, thank you. And then just some colors to overall treatment patterns and prescribing patterns within first-line melanoma would be helpful if you can?

[Sean McCarthy:]

Yes, let me hand over to Amy’s comment on that.

[Amy Peterson:]

Yes, so we obviously were very thoughtful in how we decided on this particular cohort. And although treatment or prescription patterns in first-line melanoma in U.S. and predominantly at academic centers focuses more on the combination, we found that that is not actually necessarily true when we go out into the community, where physicians are really more focused on minimizing the side effects profile and increasing tolerability. And often times, they will withhold the CLTA4 agents until the patient has progressed and or they've determined some additional agents as needed. So there are opportunities in the U.S. and as well, certainly in other regions of the world, where the doublet is not commonly that go to prescription. Those are areas where we've taken into consideration for our sites and have expanded into regions such as Korea and Australia and New Zealand, specifically for that. Does that answer your question?

[Robert Burns:]

Yes. Thank you so much.

[Amy Peterson:]

Sure.

[Operator:]

And there are no further questions.

[Christopher Keenan:]

All right, operator. Thank you very much and Sean?

[Sean McCarthy:]

Yes, great. Thanks, everybody for your time today. Again an exciting Q3 for CytomX, exciting year and we're looking forward to continuing through this novel pipeline forward. And as I said, as we come to the end of 2019, we're beginning to get line of sight to what has the potential to be a data rich and margin rich 2020. So, thank you again for your time.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference call. You may now disconnect.