Bioatla - Q2 2024
August 8, 2024
Executive Summary
- Q2 net loss improved to $21.1M from $35.8M YoY and from $23.2M in Q1; net loss per share improved to ($0.44) vs ($0.48) in Q1, reflecting lower R&D and G&A spend.
- Cash used in operations declined to $19.0M in Q2 vs $30.8M in Q1; cash and equivalents ended at $61.7M, with runway guided through Q3 2025.
- FDA granted Fast Track Designation for ozuriftamab vedotin (CAB‑ROR2‑ADC) in SCCHN; company anticipates an FDA meeting for a potential registrational trial in 2H 2024.
- Evalstotug (CAB‑CTLA‑4) demonstrated consistently low immune‑related adverse events across Phase 1/2; initial Phase 2 melanoma data readout targeted for 2H 2024.
- Bold catalyst: cash burn came in better than company guidance at $19.0M vs ~$20M guided for Q2, reducing financing overhang risk in the near term.
What Went Well and What Went Wrong
What Went Well
- Fast Track for ozuriftamab vedotin in SCCHN; management: “We are pleased to receive Fast Track Designation… and are on track to meet with the FDA this year”.
- Evalstotug safety profile: combined Phase 1/2 safety (n=40) showed low Grade 3 irAEs (4/40) with no Grade 4/5 events, enabling combination strategies; CEO: “potentially best‑in‑class CTLA‑4 antibody”.
- NSCLC program (mecbotamab vedotin) showed anti‑tumor activity across KRAS variants and a trend for improved OS vs wild‑type; a complete response maintained >2 years in combination with PD‑1.
What Went Wrong
- No product revenue; continued operating losses ($21.1M net loss in Q2), underscoring reliance on external capital/partnerships.
- Clinical programs still require FDA alignment on registrational trial design; UPS and SCCHN pathways subject to upcoming meetings and Project Optimus considerations.
- Business development not yet signed; while confidence is high, timelines and asset selection remain uncertain, a potential overhang.
Transcript
Bruce Mackle (Head of Investor Relations)
Thank you, operator, and good afternoon, everyone. With me today on the phone from BioAtla are Dr. Jay Short, Chairman, CEO, and Co-founder, and Richard Waldron, Chief Financial Officer. Following today's call, Dr. Eric Sievers, Chief Medical Officer, and Sheri Lydick, Chief Commercial Officer, will join Jay and Rick in a short Q&A. Earlier this afternoon, BioAtla released financial results and a business update for the second quarter ended June 30, 2024. A copy of the press release and corporate presentation are available on the company's website.
Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements, including, but not limited to, statements regarding BioAtla business plans and prospects and whether its clinical trials will support registration, plans to form collaborations and other strategic partnerships for selected assets, achievement of milestones, results, conduct, progress, and timing of its research and development programs and clinical trials, expectations with respect to enrollment and dosing in its clinical trials, plans and expectations regarding future data updates, clinical trials, regulatory meetings, and regulatory submissions, the potential regulatory approval path for its product candidates, expectations about the sufficiency of its cash and cash equivalents to fund operations, and expectations regarding R&D expense and cash burn.
These statements are subject to various risks, assumptions, and uncertainties that can cause actual results to differ materially and are described in the filings made with the SEC, including the most recent quarterly report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, August 8, 2024, and BioAtla disclaims any obligation to update such statements to reflect future information, events, or circumstances except as required by law. With that, I'd like to turn the call over to Dr. Jay Short. Jay?
Jay Short (CEO)
Thank you, Bruce, and thanks to everyone for joining us for our Q2 2024 BioAtla earnings call. Additional details related to what we will share today are available in today's press release and our updated company presentation, which are available on our website. Also, the presentation and webcast of our R&D Day, held 2 weeks ago, featuring 3 renowned KOLs, are also available on our website.
We continued to make considerable progress across all of our ongoing clinical programs. Beginning with our CAB-ROR2 ADC ozuriftamab vedotin being evaluated as a monotherapy in highly treatment-refractory head and neck cancer patients with a median of three prior lines of treatment. We shared last quarter that among the 29 evaluable patients, 11 responses were documented at the combined two Q3W and Q2W dose regimens, with six responses now confirmed.
We have an abstract accepted as a poster presentation at the upcoming ESMO conference and look forward to sharing the updated data in September. Additionally, we continue to see a manageable safety profile with no new safety signals to date. Given the strength of the data, we recently received a Fast Track designation from the FDA, which represents an important recognition of the potential of ozuriftamab vedotin to potentially fill a significant unmet need in refractory head and neck cancer.
The encouraging clinical profile supports rapidly advancing into a potentially registrational trial, evaluating monotherapy treatment versus investigator's choice in the second line and beyond setting, and we are on track to meet with the FDA later this year to discuss further. Moving now to our CAB-CTLA-4 antibody, evalstotug.
As presented during our R&D Day, we have treated 40 patients across multiple doses of evalstotug, and we continue to observe low incidence and severity of immune-related adverse events in the combined safety from our phase I and phase II studies. Specifically, a relatively low rate of Grade 3 immune-related adverse events were observed in only 4 out of 40 patients, with no Grade 4 or 5 related treatment emergent adverse events. The incidence and severity of immune-related AEs were consistent across both phase I and phase II studies.
With regards to efficacy from our phase I study, we previously reported confirmed responses for 3 of 8 treatment-refractory patients using the 350 milligram dose in combination with a PD-1 antibody, including 1 complete response with 1 additional partial response that, according to the attending physician, showed no evidence of disease and may eventually be ruled as second complete response.
No dose interruptions occurred in patients treated with greater than or equal to 350 milligrams of evalstotug, and multiple patients have remained on therapy for more than 1 year without progression. These data are consistent with the anticipated benefits of our conditionally binding technology.
Initial data from our phase II monotherapy study across 14 different treatment-refractory solid tumor types at 350 milligrams or 700 milligrams showed 10 patients with stable disease, and multiple patients experienced prolonged progression-free survival for greater than 10 months.
We look forward to presenting the data at several upcoming medical conferences, including an oral presentation at the Society for Melanoma Research Congress in October, and a poster presentation at the Society for Immunotherapy of Cancer in November. We continue to enroll in the phase 2 first-line melanoma study, followed by mutated non-small cell lung cancer, using a combination of evalstotug and PD-1 antibody. We are on track for an initial data readout of melanoma later this year.
Based on our evolving data, we continue to believe evalstotug has the potential to be the best-in-class CTLA-4 antibody that holds the promise to be used as often as a PD-1 antibody and potentially expand the indications where combined immune checkpoint inhibition can be effective. We are now designing a blinded, randomized pivotal trial employing evalstotug plus PD-1 antibody for newly diagnosed metastatic or unresectable melanoma patients and anticipate FDA guidance in the second half of this year.
Now on to our CAB-AXL ADC asset, mecbotamab vedotin. As part of our phase 2 trial in patients with non-small cell lung cancer, we have completed an additional expansion cohort of 33 patients to evaluate AXL expression, dose, subtype, and safety.
In our subgroup analysis, we observed that AXL expression of greater than or equal to 1% is correlated with clinical benefit in heavily pretreated patients with a median of three prior lines of therapy. We further evaluated the genotype status in this heavily pretreated patient population with tumors expressing multiple KRAS mutation variants, including G12A, G12C, and G12V.
Among the 18 evaluable patients with known KRAS mutations, we observed five responders, including one responder whose tumor expressed a mutated KRAS G12C variant and has experienced prior failure of sotorasib. In addition, we have a patient with a complete response that has been maintained now for over two years, demonstrating encouraging clinical benefit in this emerging opportunity in patients with mutated KRAS variants. Importantly, our initial findings support a trend for improved overall survival among patients with tumors expressing mutated KRAS variants compared to the KRAS wild type genotype.
Furthermore, a manageable safety profile continues, with no new safety signals identified in this patient population. We continue to assess KRAS expression across the phase 2 data set and look forward to providing an update and additional details regarding a potential path forward later this year.
Regarding our phase 2 potentially registrational trial in undifferentiated pleomorphic sarcoma, UPS, we are evaluating the initial 20-patient data set and will provide an update on the remaining portion of the registrational trial later this year. Now, in our phase 1/2 dose escalation study for CAB-EpCAM, CAB-CD3 T cell engager, the study is progressing and ongoing. We remain on track for a phase 1 data readout in the second half of this year.
The T cell engager space offers tremendous opportunity for more effective therapies, and in particular, our CAB-enabled EpCAM T cell engager has the potential to treat patients with a wide range of metastatic tumors, including cancers of colon, lung, breast, pancreas, prostate, among others.
Finally, we are in meaningful discussions regarding potential strategic partnerships with multiple companies evaluating selected preclinical and clinical assets. The current stage of these discussions support our belief that we remain on track for establishing one or more collaborations this year, including for one of our phase 2 clinical assets. With that, I would now like to turn the call over to Rick to review the second quarter 2024 financials. Rick?
Richard Waldron (CFO)
Thank you, Jay. Research and development expenses were $16.2 million for the quarter ended June 30, 2024, compared to $31 million for the same quarter in 2023. The decrease of $14.8 million was primarily due to completion of preclinical development for our Nectin-4 ADC, which received IND clearance in May 2024, and the impact of prioritization of our clinical program in 2023, resulting in less expense for our preclinical programs in 2024.
Our clinical program expense decreased due to completion of phase 2 enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin. We expect our R&D expenses to continue to decrease in the near term as we complete our planned phase 2 clinical trials and meet with the FDA to discuss potentially registrational trials for our phase 2 programs.
General and administrative expenses were $5.8 million for the quarter ended June 30, 2024, compared to $6.2 million for the same quarter in 2023. The $0.5 million decrease was primarily due to lower stock-based compensation expense. Net loss for the quarter ended June 30, 2024, was $21.1 million compared to a net loss of $35.8 million for the same quarter in 2023. Net cash used in operating activities for the six-month period ended June 30, 2024, was $50 million compared to net cash used in operating activities of $46.7 million for the same period in 2023.
Our cash use for the quarter ended June 30, 2024, was $19 million compared to $30.8 million during the quarter ended March 31, 2024. In line with our operating plan, we expect a further reduction in overall cash utilization in the third quarter of 2024. Cash and cash equivalents as of June 30, 2024, were $61.7 million compared to $111.5 million as of December 31, 2023.
We expect current cash and cash equivalents will be sufficient to fund planned operations, including our prioritized CAB programs, through the third quarter of 2025, which is sufficient to deliver clinical readouts in multiple indications, position our programs for one or more potentially registration trials, and enhance our position in advancing strategic collaboration discussions. And now, back to Jay.
Jay Short (CEO)
Thank you, Rick. We are pleased with the considerable progress we have made to date and our cumulative results across our CAB pipeline targeting solid tumors. We continue to focus on finalizing the data readouts and reports for our CAB-AXL, CAB-ROR2, and BA-3182 assets, and look forward to presenting ROR2 and 3182 data at upcoming medical meetings, as well as keeping you updated on our business activities. With that, we will turn it back to the operator to take your questions.
Operator (participant)
At this time, if you would like to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star one to ask a question. We will pause for a moment to allow questions to queue. Our first question comes from Brian Cheng with J.P. Morgan. Please go ahead.
Brian Cheng (Analyst)
Hey, guys. Good afternoon. Thanks for taking our questions. Maybe just first on AXL in UPS. Can you confirm if you have met with the FDA on the remaining portion for in the registrational study? If so, what is the initial feedback from the agency? And, furthermore, can you give us a bit more color on the patient compliance and safety profile that you saw in the initial presentation? And I have a quick follow-up. Thank you.
Jay Short (CEO)
Eric, this one sounds like it's for you.
Eric Sievers (CMO)
Great. Thanks, Brian. So, as we previously disclosed, we had a conversation with the FDA about mecbotamab vedotin in undifferentiated pleomorphic sarcoma, and we discussed Project Optimus requirements. We discussed treating at two different dose levels. We discussed the potential bar for accelerated approval with a single-arm trial dataset. We have not met with the agency yet, with regard to our recent enrollment of the additional patients, and we would plan to review our data and then update on this later in the second half of the year. And Brian, I think you had additional questions about overall safety. Is that right?
Brian Cheng (Analyst)
Yeah, and I guess just from the initial 20 patients, I think, you know, you can provide any color on the patient compliance and any initial read on efficacy and safety, that would be very, very helpful.
Eric Sievers (CMO)
Sure.
Jay Short (CEO)
But I think on the-
Eric Sievers (CMO)
So-
Jay Short (CEO)
On the efficacy-
Eric Sievers (CMO)
Go ahead, Jay.
Jay Short (CEO)
We're not able... I was just gonna say, on the efficacy, we're not, because it's part of the potentially registrational trial, we're not able to update publicly on that. But on the safety, I think in general, Eric, at a high level, you certainly can update that.
Eric Sievers (CMO)
Yeah, I'm happy to do so. Certainly, no new safety findings have been identified with the ADC. And, we did decide that giving the drug every on the 3 of 4 regimen was, we didn't see much patient compliance with that coming in so frequently to clinic, so we really focused on the days 1 and 8 regimen of a 3-week cycle.
Brian Cheng (Analyst)
Okay. Maybe just lastly, just on the partnership or BD funds, can you just talk about your, you know, your level of confidence, whether, you know, you'll be able to lock in a potential deal in the back half of this year? And, you know, as you think about, you know, the potential partnerships that are on the table, which potential assets do you think would make the most sense to partner off based on the current data? Thank you.
Jay Short (CEO)
So I'm fairly confident that we're going to be successful in establishing partnerships, one or more, in this remaining portion of the year. I think we, as I mentioned in the script, we also may see a partnership, you know, as part of that in the preclinical assets.... When it comes to the, I think the ADCs are certainly getting the most limelight in discussions. And so I think it's a little difficult to predict for sure which one would partner first, but I'd say both are potential candidates, so we like them both. So I think we feel we remain on track for that as best one can forecast. And the discussions are clearly at a meaningful level. And so we're very encouraged, Brad.
Brian Cheng (Analyst)
Okay, thanks.
Operator (participant)
We'll go next to Tony Butler with Rodman & Renshaw. Please go ahead.
Speaker 7
Hi, this is Toshi Rosan on for Tony. Question is about the AXL ADC. I seem to recall that the patient with the complete response received the combination. Now, as it pertains to the combination, I wonder if you can characterize what you see since the last data update, when it comes to, let's say, seeing a potential deepening of response or patients who are not quite there when it comes to having a response, getting close to that, -30% mark over time.
Jay Short (CEO)
Eric, do you wanna-
Eric Sievers (CMO)
So it's Eric Sievers again. And, so if I can clarify, I think you're asking about our relatively mature dataset now with mecbotamab vedotin in non-small cell lung cancer, and you commented on the CR patient that we've reported previously. And then I think the second part of your question was asking about whether we've seen deepening of some of these responses over time. I think I'd probably best to refer everyone to slide 45 in our updated corporate deck, where we are characterizing the confirmed responses across the KRAS mutation variants.
Interestingly, one of our responses is a CR patient, and then also direct folks to slide 46, which is a preliminary analysis suggesting a difference in outcome among patients expressing the mutated KRAS versus wild type KRAS genotype. So we are continuing to witness the data evolving over time. This is our current data set that we've made public and look forward to continuing to evolve to evaluate the evolving KRAS story. I wanna indicate that 21 of the patients still have a pending genotype, and we're categorizing them as either wild type or mutant, so we can further this preliminary finding.
Speaker 7
I understand, and thank you for that. Furthermore, now, how would you characterize responses and/or clinical activity, let's say, disease control, duration longer than and fewer than 16 weeks, with this, with the combination of mecbotamab vedotin and nivolumab in patients whose KRAS mutation status is either unknown or wild type?
Eric Sievers (CMO)
So, looking at slide 45, we're seeing a duration of response of 4.8 months for those with the mutated KRAS. I think that the survival curves give a suggestion of a somewhat lower PFS among the patients with a wild type KRAS, and we've not performed a formal analysis of the 21 individuals that are unknown. So I look forward to a future data presentation in medical congress where that will be disclosed.
Jay Short (CEO)
I do think it's a fairly competitive profile, given the fact this is effectively a fourth line, median fourth line set of patients.
Speaker 7
Thank you.
Operator (participant)
As a reminder, if you'd like to ask a question today, please press star one. We'll go next to Arthur He with H.C. Wainwright.
Arthur He (Equity Research VP)
Hey, good afternoon, guys. Thanks for taking my question. So I had a couple quick ones. So for the AXL program, regarding the UPS study, if I understand correct, so you have the additional 20 patient data, and as of now, you're just waiting for the data to take to the FDA. Meantime, are you still enrolling patients in the program?
Jay Short (CEO)
We are not enrolling patients at the moment. We're waiting for the three total scans and evaluating the data as comes in, and then we'll proceed from there.
Arthur He (Equity Research VP)
I see. Thanks, Jay. And, for the non-small cell lung cancer study in the future, my take is you probably gonna taking the KRAS status as well as the AXL status together to select the patient, or you might go for either one?
Jay Short (CEO)
I think, you know, I think it could be either one, but I think right now we see, we see a nice correlation on mKRAS. It just happens to be that AXL is highly correlated with that. So it's not necessarily required that you have that AXL expression. We clearly see benefit with our drug with AXL expression. So when we finish the next 21 patients analysis, obviously, we'll be comparing that and coming forward with how we think it best be carried out.
Arthur He (Equity Research VP)
Gotcha.
Eric Sievers (CMO)
Can I add to that, too? Because, Arthur, I think that it's a great question. And as Jay said, these are evolving data. We're looking at the 21 patients to see how they sort out between mutated and wild type. But it's conceivable that if the KRAS findings are further supported with additional data, that, given that that's a standard assessment, the genotype of lung cancer patients is very standard, for defining the appropriate treatment options, that this would enable a pretty straightforward approach, for defining a population experiencing pronounced clinical benefit. Again, illustrated in slide 46 with the difference of survival that we're seeing. Now, that could be biologic differences between those two subgroups of patients. It also could be due to the drug.
Arthur He (Equity Research VP)
Thanks. Thanks for the color, Eric. I had another one for the CTLA-4 study. Just curious, do you guys still plan to enroll more patients for the monotherapy at the 700 mg dose level? Or that's pretty much the 19, I guess, the 19th patient is every patient that you plan for the monotherapy study.
Eric Sievers (CMO)
I'm happy to take that. So we do not plan to further characterize monotherapy safety. I want to emphasize that the phase 2 monotherapy approach was a way to very efficiently and rapidly confirm our hypothesis that we were seeing a lower rate of immune-related adverse events compared with marketed CTLA-4 antibodies.
We believe that we are indeed seeing a substantially lower rate of immune-mediated adverse events. And so, our focus is now combining with PD-1 antibody approaches and further evaluating drug activity and safety in newly diagnosed metastatic or unresectable melanoma, as well as patients with lung cancer with specified mutations.
Arthur He (Equity Research VP)
Gotcha. Thanks for taking my question. Talk soon.
Eric Sievers (CMO)
Thank you.
Operator (participant)
As a reminder, if you'd like to ask a question today, please press star one. I'm showing no further questions at this time. I will now turn the program back over to Jay Short for closing remarks.
Jay Short (CEO)
Thanks, everyone, for attending today, and we look forward to seeing everyone at ESMO in September, as well as in our additional conferences coming up in the near future. Thank you, and we'll also intend to report out on our business developments, as they occur. Thank you.
Operator (participant)
This does conclude today's program. Thank you for your participation. You may disconnect at any time.