CytomX Therapeutics - Q3 2023

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the CytomX Therapeutics third quarter 2023 financial results. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I will now hand the conference over to speaker today, Chris Ogden, Senior Vice President, Finance and Accounting. Please go ahead.

Chris Ogden (SVP of Finance and Accounting)

Thank you. Good afternoon, and thank you for joining us. Before we begin, I would like to remind everyone that during this call, we'll be making forward-looking statements. Because forward-looking statements relate to the future, they're subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments, or otherwise. Earlier this afternoon, we issued a press release that includes a summary of our third quarter 2023 financial results and highlights recent progress at CytomX. We encourage everyone to read today's press release and the associated materials which have been filed with the SEC.

Additionally, the press release, a recording of this call, and our SEC filings can be found under the Investors and News section of our website. With me on the call today is Dr. Sean McCarthy, CytomX's Chief Executive Officer and Chairman. Sean will provide introductory comments on CytomX's progress and key milestones before we cover our pipeline progress and financials for the third quarter. With that, I'll now turn the call over to Sean.

Sean McCarthy (Chairman and CEO)

Thanks, Chris, and good afternoon, everyone. Thanks for joining us for an update on CytomX's continued progress in 2023. At CytomX, we are highly focused on the discovery and development of novel cancer medicines utilizing our PROBODY therapeutic platform to localize potent biologic modalities into disease tissue via conditional activation, increasing therapeutic index and offering new options for patients. Given the continued challenging external environment for biotech, I'd like to start with an overview of the strong fundamentals of CytomX today, with three areas of particular focus, outlining why we believe we are very well positioned as we move towards 2024 and beyond. Firstly, our pipeline. CytomX is active across our pipeline in key areas of current oncology R&D. Two of the biggest highlights recently at ESMO 2023 were new breakthroughs in the use of antibody drug conjugates and T-cell engagers.

ADCs and T-cell engagers are poised to be therapeutic platforms with potential to transform the treatment of solid tumors. I'm very pleased to say that for many years, CytomX has been building significant expertise across these important modalities, and we currently have differentiated lead programs in both areas. Our pipeline has never been more relevant or had more potential. 2023 has been a year of intense focus and exceptional execution for CytomX that has set the stage for key value-creating milestones in 2024 and 2025. Starting with CX-904, our PROBODY T-cell engager targeting EGFR and CD3. Coming out of ESMO last month, there's clear momentum and increasing clinical evidence that T-cell bispecifics can have a meaningful clinical impact in solid tumors.

However, a central challenge in this highly potent modality is that the majority of solid tumor targets are also expressed in normal cells, limiting therapeutic window. CX-904 is designed to address this challenge for EGFR, which is one of the most highly validated and broadly expressed solid tumor targets. CX-904 has continued to advance through phase I, and we're in the process of starting to backfill certain cohorts as we continue dose escalation. We remain on track for initial data in the first half of 2024. Our first-in-class EpCAM targeting PROBODY ADC, CX-2051, is on track for IND filing by the end of this year and phase I initiation in 2024. CX-2051 is an excellent example of CytomX's differentiated ability to pursue novel ADC targets.

We are particularly excited about EpCAM, given its high expression level across multiple tumors, including colorectal cancer, and its prior clinical validation as a target for cancer therapy. We presented the full preclinical profile of CX-2051 at World ADC in October, and the presentation can be found on our website. We plan to execute on phase Ia dose escalation through 2024 and, data permitting, to initiate phase Ib expansion cohorts in 2025. We have also continued to advance our first PROBODY cytokine, CX-801, towards the clinic. CX-801 is a masked version of interferon alpha-2b, for which we see enormous potential as a novel centerpiece of cancer immunotherapy in the future. Last weekend, we presented updated preclinical data at SITC. This presentation is also available on the CytomX website....

IND filing for this program is also anticipated by the end of the year. Continuing in the field of cancer immunotherapy, our partner, BMS, is advancing the masked non-fucosylated CTLA-4 program, BMS-986288, in phase 2, which includes proof-of-concept studies in microsatellite stable colorectal cancer and in non-small cell lung cancer. BMS anticipates data will be available from this program in 2024. Taken together, our pipeline is deep, strong, relevant, and poised to drive value inflection in the near term. The second area I'd like to highlight today is our partnerships. CytomX created the field of protease-based conditional activation more than a decade ago, and our substantial and consistent investments in our platform technology have allowed us to attract many high-quality partners.

We currently have alliances with Moderna, Regeneron, Astellas, Amgen, and BMS that each bring value to CytomX in the form of technical validation, increasing the reach of our platform, and providing non-dilutive financing. Together with our partners, CytomX today has more than 15 active R&D programs. In addition to upfront cash infusions from these partnerships and potential future product royalties, each partnered program has the potential for near and long-term cash milestone payments. CytomX has a strong track record of earning milestones under our alliances, including, most recently, a $5 million payment from Astellas for our first clinical candidate nominated in the collaboration. Thirdly, I would like to highlight our strong financial position. Chris will review shortly how we are continuing to manage the financial resources of the company in the context of the challenging external environment.

Before handing over to Chris and continuing on the theme of fiscal discipline, I would like to provide a brief update on CX-2029, our PROBODY ADC targeting CD71. We've been encouraged by the antitumor activity we've observed with CX-2029 to date. However, based on current priorities, we will not be directing significant additional investment in this program in the near term. Now let me turn the call over to Chris, who will walk you through our financials.

Chris Ogden (SVP of Finance and Accounting)

Thank you, Sean. I'm pleased to be able to share an update on our third quarter 2023 financial results with everyone today. As of September 30, 2023, we had $194 million in cash, cash equivalents, and investments, which includes $30 million received in July as a result of a successful and strategic private placement financing with BVF Partners. Overall, cash burn in the third quarter was $16.8 million, comparing to $33.9 million in the equivalent period of 2022. The reduction in cash burn versus the same period in 2022 reflects our continued focus on disciplined capital allocation and cash management, as well as increased R&D reimbursement under our collaborations.

I'd also note that our cash balance of $194 million for the third quarter of this year is flat to the third quarter of 2022, which also highlights the company's ability to balance cost prioritization, business development, milestones, and equity financing to maintain a strong financial position in a very challenging biotech environment. This balanced capital formation and allocation strategy has remained consistent over time and aligns well with our focus to build near and long-term stakeholder value. In terms of cash runway, we expect our current cash resources to fund operations into the second half of 2025. This guidance does not assume any additional milestones from partnerships or any additional progress in new business development. Now, moving to revenue and operating expenses for the quarter.

For the third quarter of 2023, revenue was $26.4 million, compared to $11.1 million for the corresponding period in 2022. Operating expense for Q3 2023 was $23.3 million. R&D expenses decreased $14 million from the corresponding period of 2022 to $16.4 million during the three months ended September 30, 2023. General and administrative expenses decreased by $3.7 million during the three months ended September 30, 2023, to $6.8 million, compared to $10.5 million for the corresponding period in 2022. You can see from these operating expense numbers how we have continued to thoughtfully manage the company. Now, I'll turn the call back to Sean for closing remarks.

Sean McCarthy (Chairman and CEO)

Thanks, Chris, and thanks to everyone for your time this afternoon and for your interest in CytomX. Looking ahead to 2024 and 2025, CytomX is very well positioned. This is an exciting time for us, and we remain highly focused on delivering in our pipeline. Our current pipeline encompasses highly relevant and diversified modalities, including T-cell engagers, ADCs, and cytokines, that each have their own unique contribution to make to the treatment of cancer. Let me briefly recap our key priorities and milestones for the remainder of 2023 and through 2024. CX-904 continues in phase I dose escalation. Initial phase Ia data is anticipated in the first half of 2024, with the potential for a decision to initiate phase Ib next year. CX-2051, CX-2051 IND filing is on track for this year.

We anticipate phase I dose escalation in solid tumors with known EpCAM expression to commence in 2024, with metastatic colorectal cancer as a priority indication. Similarly, CX-801 remains on track for IND filing by the end of 2023, with clinical initiation in 2024. Also, in 2024, we expect BMS to make continued clinical progress with the NF CTLA-4 PROBODY, including proof of concept studies in MSS CRC and non-small cell lung cancer, with data anticipated to be available in 2024. We also anticipate considerable progress across all of our collaborations as we continue drug discovery activities with Moderna, Regeneron, Astellas, Amgen, and BMS. I'll close by thanking our exceptional team members who remain highly focused on making the biggest difference in the treatment of cancer.

This is an exciting moment for CytomX, and we anticipate multiple inflection points over the next 12-18 months as we continue our work in such important and relevant areas of oncology R&D. With that, operator, let's go ahead and open up the call for Q&A.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for our first question. Our first question will come from the line of Roger Song from Jefferies. Your line is open.

Roger Song (Senior Equity Research Analyst)

Great. Thanks for the, the update and, taking our questions. So maybe let's focus on the now for as the near-term, pipeline. So, maybe, Sean, you can let us know what is the expectation for the upcoming data in first half next year, particularly maybe any thoughts around the number of patients, tumor types you will be able to share with us? And the second part is, what will be the key consideration to moving to the expansion cohort? My understanding is that, decision will made, will be made later part of 2024, with more follow-up, maybe a little bit another data update. Yeah, that's, that's the key question I have right now. Thank you.

Sean McCarthy (Chairman and CEO)

Great. Yeah. Hi, Roger, thanks for the question. So, to take a little step back, on 904, let's just recap our major objectives with the program. So, as I mentioned, as we're coming towards the end of 2023, we are now beginning to backfill certain cohorts, in the dose escalation. The dose escalation is essentially being conducted in an EGFR all-comer setting. So, you know, we're enrolling patients who are expected to have EGFR expression. We're not actively selecting for EGFR expression, but their tumor sites are expected to be EGFR positive. And this is phase Ia, right?

As we saw at ESMO just a couple of weeks ago, phase Ia early dose escalation and dose exploration for T-cell engagers needs to be done thoughtfully, needs to be done methodically, with the principal objective of evaluating safety and dosing schedules for these potent agents. So that's, that's what we're doing. Our goal, as I said, next year, will be to analyze the phase Ia data with our partner, Amgen, and in collaboration with Amgen, make a decision on the go-forward plan for phase Ib. And of course, a go forward to phase Ib would involve expansions into select EGFR-positive tumor types to really gain additional experience with the drug candidate. So, so, you know, we're on track with the goals.

We're on track with our guidance of initial data from phase Ia in the first half of next year. You know, not ready at this stage to talk about, you know, number of patients or specific tumor types. That would be a little premature, but we are on track and making good progress.

Roger Song (Senior Equity Research Analyst)

Thank you. Maybe just quick clarification. When we see the initial data, is that the data set you will make the expansion cohort decision, or you will wait for later to make that decision? Thank you, Sean.

Sean McCarthy (Chairman and CEO)

Yes, another great question. You know, it's, it's a little hard to say at this point. I, you know, as we're, we're in the, you know, in, in the throes of this study. Again, pointing back to, the, the very important updates that we saw from several companies at ESMO in this modality, you know, the early phase Ia exploration of doses and schedules, you know, can take some time to get that to a place that you're ready to move into phase Ib. And of course, increasingly, we're, we're expecting, we're seeing that phase Ib involves more than one dose, more than one dose and schedule per Project Optimus. I think the, the Amgen data for tarlatamab, I think, illustrated that very, very clearly and very, very nicely. So, so I think the, the short answer is we'll see.

We'll continue to collect data to make the best decision we can as we look to transition from phase Ia to phase Ib next year.

Roger Song (Senior Equity Research Analyst)

Excellent. Thank you, Sean.

Operator (participant)

Thank you. One moment for our next question.... Our next question comes from the line of Jade Montgomery from H.C. Wainwright. Your line is open.

Jade Montgomery (Consultant Research Analyst)

Hi, this is Jade Montgomery from H.C. Wainwright, from Mitchell Kapoor. So, when it comes to CX-801, is there any particular tumor type there that's of particular interest, like with CX-2051? You mentioned, you know, there was the primary interest in, the one type of tumor. Is there one for CX-801?

Sean McCarthy (Chairman and CEO)

Yeah, thanks for the question. So, you know what? Maybe let's start with what we know about interferon, so CX-801 being a conditionally active interferon. So we know that interferon has shown clinical activity in several tumor types, in melanoma, in renal, in certain sarcomas, certain lymphomas. And the goal here with CX-801, actually, as I quite nicely demonstrated in our SITC poster, that the goal with CX-801 is to drive intratumoral immunity, antitumor immunity. So we're looking to... And as we showed in the poster, the preclinical data that we have shows that, you know, CX-801 is very capable of inducing an immunogenic phenotype intratumorally.

Those tumor types where interferon is active are generally speaking tumors that are immune competent. Those will be obvious places for us to consider going in early clinical development. Another thing to say here is that the strategy, another thing about the strategy of 801, and as also emphasized in our SITC poster, is that mechanistically we would absolutely expect, based on preclinical studies, interferon alpha-2b, localized interferon alpha-2b, to partner very well with checkpoint inhibition. And in fact, we showed some potent combination data in our poster last weekend.

And so in the clinical program, we would also be looking to, I would say, fairly quickly, move into the combination setting, which makes obvious sense to really drive, and leverage the full immunobiology of interferon, in checkpoint inhibitor combinations. Let me just make one other comment on EpCAM, since you, you made the reference to EpCAM as well in terms of tumor types. So the strategy there is to, bias our phase I enrollment into CRC. But of course, EpCAM is expressed... One of the things we love about this target is that EpCAM is expressed in many, many solid tumors at high levels.

In fact, you know, we believe that there are, across the, the five major expressing cancer types for EpCAM, there are, upwards of almost 300,000 potential treatable patients who are EpCAM positive across those tumor types. So we'll be focusing in CRC, but also enrolling additional tumor types as well, potentially looking for additional signals in the phase I, in the phase I setting. So I hope that, I hope that all helps.

Jade Montgomery (Consultant Research Analyst)

Yeah, that was great. Thanks. And I mean, just more on that, on both of those, with the phase I data, do you plan to try and have that by the end of next year, or is that more of a 2025 timeline? What factors as well may influence this, do you think?

Sean McCarthy (Chairman and CEO)

Yeah. So, the goal right now, where we're super focused as a company, is to file the two INDs for CX-2051 and CX-801, initiate clinical studies in 2024. I think, as we said for CX-2051, our goal is to get as far through phase Ia in 2024 as we can. We're not ready at this point to give any guidance on data. That could take a little longer.

Jade Montgomery (Consultant Research Analyst)

Okay. Thanks for letting me know. Great talking to you.

Sean McCarthy (Chairman and CEO)

You're welcome.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Etzer DeRout from BMO Capital Markets. Your line is open.

Speaker 6

Hi, this is Luke [Shamoyon] for Etzer Darout. Thanks for taking my question. You have ongoing collaborations with Astellas and Regeneron. Can you give us an update as to how those are progressing, maybe where we'll see the biggest opportunities for the bispecifics from those, and what types of programs we might see from those collaborations?

Sean McCarthy (Chairman and CEO)

Yeah, thanks for the question. And as we emphasized on the call, you know, we're really thrilled to have such a large number of high-quality partners to work with. It's allowing us to expand the reach of the technology and also it's been an important means of financing for the company, and I think will continue to be in the future. Both Astellas and Regeneron are focused in the field of bispecific immunotherapies. Our work with Astellas, you know, began a little earlier. That deal is a few years old now. And Regeneron is a more recent deal, about a year old. We did earn our first milestone in the Astellas relationship this year, which is very significant. That's for one of the T-cell engagers that's moving forward into IND-enabling studies.

The work with Regeneron is still relatively early, but is also focused in a number of bispecific strategies. We haven't disclosed any specifics there about the kinds of bispecifics, but of course, they're a very strong player in that field, and we're absolutely delighted to be partnering with them, to be working with them, and we expect really great things to come.

Speaker 6

Okay, thank you.

Operator (participant)

... Thank you. One moment for our next question. Our next question will come from the line of Anupam Rama from JPMorgan. Your line is open.

Malcolm Kuno (Analyst)

Hi, thank you for taking the question. This is actually, Malcolm Kuno on for Anupam. Just one quick one from us. Do you have a sense yet for, types of solid tumors you will be prioritizing for, CX-904?

Sean McCarthy (Chairman and CEO)

Malcolm, could you repeat the first part of the question? We didn't hear it clearly.

Malcolm Kuno (Analyst)

Oh, yeah. Do you have a sense yet for which solid tumors you will be prioritizing for CX-904?

Sean McCarthy (Chairman and CEO)

Got it. Yeah, thanks for the question. Well, as I mentioned, in the early stages of the program, as we're in right now, in phase Ia, we're escalating and, you know, exploring dose and schedule in the context of, broadly speaking, EGFR-positive tumor types. So, as I put it, essentially a kind of a EGFR-positive all-comer strategy to gain initial experience with this drug candidate. As we move forward into, you know, phase Ib next year, once we analyze the phase Ia data, once we sit down with our partner Amgen, there are, of course, a multitude of EGFR-positive tumors that we could move into, depending upon what we've seen in the early part of the clinical studies.

So, you know, I think some of the, some of them are the obvious ones like, you know, lung and head and neck, to name but two. There could be others, and that will be a decision that we'll take into consideration the commercial drivers of our partner, Amgen. So, you know, TBD.

Malcolm Kuno (Analyst)

Great. Thank you. Appreciate it.

Operator (participant)

Thank you. One moment for our next question. Our next question will come from the line of Peter Lawson from Barclays. Your line is open.

Speaker 7

Hi, this is Courtney on for Peter. Thank you for taking our question. I have a quick question on the CTLA program with BMS. What should we expect in the 2024 data update, and how many patients? Thank you.

Sean McCarthy (Chairman and CEO)

Yeah, thanks for the question. So, BMS most recently updated at their R&D day about a month ago. And the update was that they are with this is with the non-fucosylated anti-CTLA-4 PROBODY that we call 288, that they are conducting proof of concept trials in non-small cell lung and MSS CRC. The studies are ongoing. The data are anticipated in 2024, but no additional details beyond that. So, we are keenly anticipating their data, and they are of course in the driver's seat for data disclosure and timing of any disclosures, which at this point has not been clarified.

Speaker 7

Thank you.

Sean McCarthy (Chairman and CEO)

You're welcome.

Operator (participant)

Thank you. I'm not showing any further questions at this time. I'd like to turn the conference back to Dr. Sean McCarthy for closing remarks.

Sean McCarthy (Chairman and CEO)

Great. Thanks very much, and thanks everyone for your time today and for your interest in CytomX. I hope this update on our broad company progress has been helpful. Please feel free to reach out to our investor relations team should you have any questions, and have a great rest of the day.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.