Pieris Pharmaceuticals, Inc.
Q1 2021 Earnings Call Transcript

Published: 17 May 2021

[Operator:]

Greetings, and welcome to Pieris Pharmaceuticals' Q1 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now turn the conference over to your host, Tom Bures, Vice President, Finance. You go ahead.

[Tom Bures:]

Thank you. Good morning, everyone, and thank you for joining us for our year-end 2020 conference call and corporate update. On the call today, we have Steve Yoder, our President and CEO, who will provide a corporate overview and outlook on our pipeline; Hitto Kaufmann, our Chief Scientific Officer; and Shane Olwill, our SVP and Head of Translational Science, who will be available for Q&A. You can access the press release released this morning on the Investor Relations page of our website at www.pieris.com.

[Steve Yoder:]

Thank you, Tom and thank you to everyone for joining us today for our 2021 first quarter earnings call. The last few months have been very productive and marked by significant accomplishments, as we advanced our proprietary and partner pipeline and leveraged existing and new alliances to materially bolster our balance sheet. Putting the past few weeks into perspective, we have generated $46 million in cash flow through milestone achievement, equity investments by partners AstraZeneca and Seagen and the addition of a new partner, while also securing drug supply for a key combination study for our most advanced IO asset. We can and will continue to use partnerships and the power of non-dilutive funding mechanisms to reach significant corporate inflection points. Pieris is the proprietor of a class of next generation therapeutic polypeptides called Anticalins and we are focusing the development of Anticalins in two areas; one, inhaled delivery for respiratory disease and two, bispecifics in immuno-oncology. I will first share some exciting updates for my respiratory pipeline, and I'm pleased to begin by announcing that patient dosing with PRS-060 has begun in the first part of a global Phase IIa study. PRS-060 is an IL-4 receptor alpha antagonist we are developing for moderate to severe asthma in collaboration with AstraZeneca and it's our lead respiratory program. The first part of this two part study is evaluating the safety and pharmacokinetics of the dry powder formulation of 060 in moderate asthmatics controlled on standard of care asthma therapy over four weeks. The second part of the study will then evaluate the efficacy, safety and pharmacokinetics of PRS-060 in moderate uncontrolled asthmatics over four weeks. The primary endpoint of the study will be FEV1 improvement compared to placebo.

[Tom Bures:]

Thanks, Steve and good morning again everyone. Cash and cash equivalents totaled 66.8 million for the quarter ended March 31, 2021 compared to our cash and cash equivalents balance of 70.4 million for the quarter ended December 31, 2020. The increase was due to the $13 million received from Seagen in March 2021 offset by our operating cash needs. The quarter ending cash balance excludes both $23 million received from AstraZeneca in April and $10 million to be received from Boston Pharmaceuticals. On a pro forma basis, quarter end cash and cash equivalents would have been approximately $100 million, which ensures that we are well positioned to execute on our strategic plans into 2023.

[Steve Yoder:]

Thanks, Tom. And as I trust you all would agree, these last few months have been a productive time at Pieris, particularly with respect to our leveraging of new and existing partnerships, and we look forward to building on our momentum. Thanks to our business development activities, we have added $46 million to our balance sheet through a mix of non-dilutive funding and focused strategic equity stakes from two existing partners. We remain committed to this business model. We look forward to keeping you updated on our progress, as we drive towards achieving key inflection points throughout the year. I want to thank you for joining us on the call today and we would now like to open the call to your questions. Thank you.

[Operator:]

Thank you. Our first question today is from Umer Raffat of Evercore. Please proceed with your question.

[Umer Raffat:]

Hi, guys, thanks for taking my question. I have a few today, if I may. One, for the asthma trial, would you have an internal readout of the part one. I know ClinTrials says there'll be unblinded review, so I'm just trying to understand can we talk to you about part one, perhaps even if it's not a press release? And also, would you be able to announce that you're now formally progressing to part two and that dose level three was included? Would that be a formal announcement? Should we expect that or not? And perhaps also, if you could spell out for us what is that bar that you have to clear to include that third dose and to move to Phase III. And finally, just quickly, if you could remind us the choice of site selection, I noticed its Australia and the Ukraine site and trying to understand if we should expect US sites to be up as well, when you get to part two. Thank you.

[Steve Yoder:]

Hi, Umer. Thanks for the questions all focused on a 60 clinical study design and that's great. I can try to take all those one at a time. So yeah, as you noted, Umer, there's two parts to this study. There's the part one efficacy phase, which is up to three safety phase, sorry, which is up to three doses, and then there is the part two efficacy phase, which would look at FEV1 as the primary endpoint. We have not disclosed specific communication planning for the progression from part one into part two but as I had mentioned before, it's my personal desire, and assuming AstraZeneca is fine with that, I assume that they will be, is that we intend to be able to announce when we have or that we have progressed from part one into part two, which I would anticipate pending enrollment as planned that that would be sometime later this year. So that's something that we hope to be able to talk about, even though I would not expect a formal press release around any data disclosures, but then we could talk about that for sure. As far as the doses that would be used in the part one as a progression of part two, there is a certain amount of staging that is allowed such that if one were to clear the first two doses, one could then move into the efficacy phase, rather than wait for all three. So that's some nuances in design that we still will consider but we don't necessarily have to clear all three doses before moving into the efficacy phase at the lower doses. And then as far as the sites, as you noted, we are currently leveraging efficiency and regulatory interactions and site readiness. We've been very, very accustomed to working in Australia with Phase I and Phase Ib with PRS-060, so we're focused there and also in the Ukraine. And we're looking at multiple additional geographies and several other sites. It's a global study. We haven't disclosed a specific strategy in the US yet, but certainly interactions with the FDA are certainly contemplated before too long.

[Umer Raffat:]

Thank you very much.

[Operator:]

The next question is from Matt Phipps of William Blair. Please proceed with your question.

[Matt Phipps:]

Good morning. Thanks for taking my questions and congrats on the business development activity in the quarter. I guess, given where you guys have gotten with CINRA and the data generated through this first 4-1BB bispecific and now it's becoming a pretty competitive space, just looking for a bigger picture on how you can leverage that info into the rest of your pipeline. And then specifically for kind of the PD-L1 group of these bispecifics, which had a couple other companies start to get some disclosures around their programs, wondering what you might have taken from that that can help with the development of 344 in combination with others, which you've learned from CINRA.

[Steve Yoder:]

Sure, Matt. Thanks so much. There's a lot of things we could talk through there. I mean, firstly, what did the data from CINRA speak to the opportunity with CINRA itself in the gastric cancer space in particular, and we can talk about that. Then you also mentioned the broader of learnings of CINRA throughout the rest of our pipeline and then specifically looking at the PD-L1 4-1BB bispecific approach where there are a number of other programs that have recently moved into clinical stage and some of them already reported some initial data. So I can just frame that at a high level and then I'd like for Shane to go through that in a little bit more detail. And when we first think about the CINRA for CINRA's sake, looking at the opportunity in HER2 expressing tumors, let's not forget that we have what I think is pretty compelling, impressive single agent activity, coupled with a very good safety and tolerability profile. And then I don't want to get lost on people because 4-1BB agonism can be a very sharp knife. And we've seen that coupled with a dose response and I think a great set of PD correlates that will help us to - that have helped us to zero in on what we think is a very thoughtful RP2D. And when we consider the single agent activity, the relevance of immunotherapies in gastric cancer and the ability to play in both the HER2 high space and the HER2 low space, the latter being far less dynamic than the HER2 positive space, we really like those nuances of bringing a 4-1BB bispecific into this field. And if you think about the biology at stake, this is the only - to our knowledge, the only HER2 engage in agent that leverages the adaptive immune space. It also brings innate immunity to it with NK cells. But compared to bispecifics, compared to novel payloads, compared with macrophage biology, this is different. And if we think about what 4-1BB does, which is driving improved metabolic fitness of T cells, and immune cells in general, this is something we think could lead to meaningful, differentiated opportunity. And there will be some learnings from this into how we think about positioning the 4-1BB PD-L1 based bispecific as well as I think helping Boston Pharmaceuticals on the positioning of the GPC3/4-1BB bispecific. So Shane can maybe go a little bit deeper on some of the nuances in HER2 high or HER2 low, including the bars that we announced today on ORR as well as why we feel really enthusiastic about our specific 4-1BB PD-L1 bispecific which we've really put a lot of thought into designing for potentially best in class opportunities there. So I'm going to hand it over to Shane to go a little bit deeper.

[Shane Olwill:]

Thanks, Steve and thanks, Matt, for the question. So maybe just going back to your question in terms of what do we see in 4-1BB that excites us and how can we leverage what we see with CINRA to really help position those other programs we're bringing through. So with regard to what we see with CINRA, the power of 4-1BB is very evident in our clinical trial. As you know, it was a translation heavy trial where we mandated paired biopsies that allowed us to take a look into the tumor microenvironment and see what was happening and we see really nice dose dependent increase in CD8 T cells. As Steve said, this is, to our mind, the only HER2 targeted agent that has shown to be driving expansion of T cells in the tumor microenvironment. We also have developed a very useful biomarker in soluble 4-1BB which can be tracked in the blood of patients and that demonstrates target engagement and our 4-1BB mechanism of action. And what's very important is those PD correlates are also correlating with clinical benefit. So we're seeing patients that have that expansion of CD8 T cells and expansion of 4-1BB gaining clinical benefit from our agent. As Steve said, the monotherapy activity is, to our mind, very compelling. What's also compelling is that we're driving that 4-1BB organism in a HER2 low setting as well and that has really allowed us to go for this two armed gastric cancer study. So in terms of the first arm there, we will combine with Ramucirumab and Paclitaxel. We've set an ORR of 50% or greater and we believe that's achievable based on that very unique mechanism of action, which will complement the debulking of the chemotherapy and the vascular normalization that will come with Ramucirumab. In terms of what else have we learned from this study? Well, we've learned that we can combine with tucatinib in a meaningful way with a preclinical data set showing that we can drive strong 4-1BB agonism off of fairly low HER2 receptor density. And when we look forward into the other studies, we're certainly bringing all of that biomarker data with us, we know what to expect from a tumor microenvironment perspective. We know that we can drive the NK population, we can drive cytotoxic T cells and therefore, it has allowed us with regard to PRS-344 to set up a very, very nice biomarker strategy there as well. In terms of how are they - how are we feeling about what others are doing? Well, certainly, we failed 4-1BB is very relevant and the data coming out from competitor trials is also confirming that. So, we will use all of the data that we've generated, all the knowledge we have of 4-1BB to have a have a smart design there. But in terms of in terms of PD-L/ 4-1BB in particular, we certainly developed a molecule which we believe has a compelling activity profile based on what we shared at AACR this year and we look forward to taking that into the clinic later this year. As Steve said, we've also got the Boston Pharmaceuticals collaboration where we will bring the 4-1BB GPC3 molecule forwards, all of the biomarker assays we've set up for CINRA are certainly relevant there. And we will collaborate very closely with Boston Pharma to ensure that that clinical trial design takes full advantage of them.

[Matt Phipps:]

Thanks and just one follow up. We've had, I think, at least two competitors in the PD-L1 in 4-1BB space have to pick a recommended Phase II dose kind of below what you would expect to saturate the PD-L1 receptor or at least fully inhibit that that pathway. Do you think 344 will be able to overcome that or do you think it's okay to kind of fall in a middle dose range on the PD-L1 side?

[Shane Olwill:]

Yeah, so to your question on the forward - the recommended Phase II dose of the competitor molecules and the safety profiles that they have observed in the clinic, we certainly have to be aware of the fact that a PD-L1/4-1BB bispecific is going to be very potent. We see pre-clinically, it's drives T cells into a proliferative burst and also really changes their phenotype. So it's going to be a very powerful bispecific. In terms of our molecule, we certainly have gone with moderate affinity 4-1BB agonists, which we feel is appropriate for activating the pathway. We have to wait for the clinic to read out to see where what that plays out like from a safety perspective. In terms of do you need to saturate the checkpoint arm here? Well, preclinical data would suggest not, preclinical data would suggest that you can get very strong activation of the T cell compartment without saturating the checkpoint arm. So I would say that there are opportunities to go forward without saturating that arm in terms of therapeutic window. There may be small nuances between different people's approaches, but in essence, we have to let that read out in the clinic.

[Matt Phipps:]

Excellent.

[Operator:]

There are no additional questions at this time. I would like to turn the call back to Steve Yoder for closing remarks.

[Steve Yoder:]

Okay. Well, I just want to thank everyone again for your attention and for your continued support of Pieris. I wish you all a great day. Thank you for participating today.

[Operator:]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.