Iteos Therapeutics - Q2 2021

Transcript

Speaker 0

Good morning, and welcome to the ITOS Therapeutics Second Quarter 2021 Financial Results Conference Call. My name is Emily, and I will be your moderator today. At this time, all participants are in a listen only mode. However, following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request.

I would now like to turn the call over to Ryan Baker, Head of Investor Relations at Itios. Please proceed.

Speaker 1

Thank you for joining us today. Joining me from Itos with prepared remarks are Michel Ditou, President and CEO and Matthew Gall, Chief Financial Officer. Doctor. Joanne Lager, Chief Medical Officer, will be available for Q and A. Before we begin, I would like to remind you all that the team will be making forward looking statements in the prepared remarks and during the Q and A session.

Any statements made during this call that are not statements of historical or current facts are intended to be forward looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that such forward looking statements reflect our current expectations and assumptions regarding timing, progress and success of our current ongoing clinical trials, therapeutic potential thereof, expected milestones, our financial condition, including cash runway, our business operation, development efforts and relationships with 3rd parties and collaborators and are neither predictions nor guarantees of future events or performance. Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with our business, including those under the heading entitled Risk Factors in our quarterly report on Form 10Q for the quarter ended June 30, 2021, which was filed yesterday with the SEC, as well as in subsequent reports, including our current reports on Form 8 ks. The company disclaims any obligation to update or revise any forward looking statements except as required by law. Michel?

Speaker 2

Thank you very much, Ryan. Good morning, good afternoon, everyone. I would like to begin today's call by reflecting on the substantial progress we have made at IQOS and the recent announcement of our strategic partnership with Lexus McLean for our potent high affinity anti digit antibody, EOS-four 48. This partnership brings enormous value to ITOs, not only giving this program best in class resources for clinical development now and as we look forward for growth commercialization, but also validating our scientific approach and rigor. It also provides a catalyst for our talented team to continue to grow our pipeline of highly differentiated immuno oncology therapeutics.

Our team is deeply committed to developing therapies that focus on mechanisms of immunosuppression. Our approach involves targeting the pathway to reduce immunosuppression and restore the immune response against cancer, meeting the high unmet need that remains for cancer patients. In the last 4 years, we have put 3 distinct and highly differentiated programs into clinical trials and with the stratification of significant value creation, we have shown that we can leverage our expertise in tumorigenology and continue to build a robust pipeline going forward. Before I go into more detail on U. S.

4 48 independent panel on our plan to further grow our pipeline, let me just take a moment to summarize our partnership with Glexosmic plant. We selected GSK as our partner for U. S. EOS-four 48 as they have a strategic focus on the TIGIT CD226 axis and they share our belief that combination of PD-one TIGIT, CD96 and CD112 receptor inhibitor can transform care for the newly patient who lacks effective treatment options. The deal recently closed and as a result, we received a EUR 625, 000, 000 upfront payment.

We will be eligible to receive up to an additional €1, 450, 000, 000 in Nylestone's payments should the EOS 4 48 program achieve certain development and commercial milestones. GSK and ITOs will share responsibility and cost with a 60:40 ratio, respectively, for the global development of EOS 4408, and we will jointly commercialize an equally split profit in the U. S. Outside of the U. S, GSK will receive an exclusive license for commercialization, and IQOS will receive tier royalty payments.

These attributes, both in the partner and in structure, will allow us to expand and accelerate the development of U. S. 4 48 and meaningfully participate in the development process, commercialization and in the value created. We could not be more happier to be working with a partner with the capabilities and portfolio of GSK, and we leverage its collaboration to generate significant value for all our stakeholders. EOS 448 has the potential to achieve significant immune stimulatory effects through 3 mechanisms: 1, blocking the binding of Tv2 with ligand presenting in ill mediated killing of tumor cells by T cells and NK cells 2, engaging the Fc gamma receptor to further promote antitumor immune response in dendritic cells and macrophage through the release of pro inflammatory cytokines and chemokines and the activation of antigen presenting cells and 3, activating MK cells and macrophage to repeat TIGIT positive cells that are known to dampen the worst part like immunosuppressive Tregs and exhausted T cells.

We have highly encouraging initial first in human data for EOS-four 48 and are pleased with the study in advanced solid tumor during our Phase I. Data presented at ACR in April show that out of 20 patients treated with single agent US448, half of the patient had stable disease or better, and there was a confirmed partial response in a patient with pembrolizumab resistant melanoma. Telesiran's biomarker data confirmed duplication of TIGIT positive Treg cells and reduction in existing TIGIT positive CDF T cells, whereas the other effect of T cells remain unchanged, demonstrating a multifaceted mechanism based on potent engagement of both TIGIT and the fc gamma receptor by US 448. Based on the robust biomarker data, preliminary signs of efficacy as monotherapy and data showing EYAL-four 48 was well tolerated with no dose limiting toxicities, the clinical development plan with GSK is geared towards advancing rapidly to registration directed trials in indication and combination where we see the most potential to benefit patients. Having a partner with an approved PD-one and a portfolio of potentially complementary programs gives us the ability to move too rapidly towards approval and to work with GSK on novel regimen.

We plan to start combination studies of EOS-four 48 with GSK's SMT approved anti PD-one drug, Jampirly or dostarumab later this year and plan to initiate trials in non small cell lung cancer and additional indication in 2022. We are currently initiating a trial of US4488 in combination with pembrolizumab and with our novel A2L receptor antagonist independent in patients with solid tumor. We are also moving forward with the trial to evaluate US448 as a monotherapy and in combination with the IMEIC molecule in patients with multiple myeloma. Turning to immunopadiran. Adenosine suppressed the immune response against tumor and inhibits responses to current cancer therapies.

The adenosine receptor, A2L receptor, is a risky receptor responsible for mediating adenosine immunosuppressive effect on immune cells within the tumor. Based on our understanding of the unique condition within the tumor microenvironment, we thoughtfully designed independent, a drug Inevaglenium is a next generation A2A receptor antagonist with differentiated pharmacologic properties. Unlike prior generation of adenosine receptor antagonist, indepalenone was designed to inhibit A2A receptor even at high concentration of adenosine. Idapalenone is highly selective for A2A receptor and has no brain penetration properties, which are expected to reduce off target safety effect and improve the therapeutic index. At ASCO in June, we reported updated results from our monotherapy dose exhalation Phase III study in 43 patients with advanced solid tumors treated with single agent inabulinum, we saw durable responses of stable disease greater than 6 months in 5 patients with advanced solid tumor, including the previously reported confirmed partial response in patients with checkpoint inhibitor resistant melanoma and easily pretreated castrate resistant prostate cancer.

Both of these responses have lasted rather than twice months. We also newly reported a patient with easily pretreated non small cell lung cancer with stable disease lasting for more than 10 months. We are pleased with the depth and durability of the anti tumor responses we have observed today and use the tolerability of inupatinib. Preliminary analysis of tumor biopsies indicated that the expression of A2L receptor in pre treatment tumor samples is associated with clinical outcome in patients with solid tumor treated with single agent independent. We will continue to integrate a biomarker driven approach into our A2O receptor clinical programs to choose optimal therapeutic combination and identify the patient most likely to benefit from treatment.

We are currently evaluating inpadelinol in combination with pembrolizumab and with tumor therapy, and we are planning expansion in selected select tumor, including PD-one resistant melanoma and another indication, and we will continue to evaluate potential biomarkers. More information about our complete development plan will be shared in the near future. We will also be initiating evaluation of a triple combination of independent U. S. For ForEx and PD-one.

Turning to our discovery enzyme. We have a robust discovery effort ongoing, and we continue to process research programs focused on additional targets that address pathway of immunosuppression. As we build our pipeline, we expect to nominate an additional product candidate for high IND enabling studies before the end of 2021. The team is very excited about this candidate, which targets an internally discovered mechanism of immunosuppression in the end of the pathway and which we believe would be a 13 class agent. We believe that we have assembled significant expertise in target identification, more directly selection and user engagement that we can leverage to build upon our demonstrated traffic lot of success to build a differentiated IO pipeline.

With our headquarters in Cambridge, Massachusetts and our R and D sensor in Belgium, IT Health Global Presence allow us to attack talent worldwide and remain at the forefront of innovation in the field of immuno oncology. I will now hand the call over to Matthew Hall, our Chief Financial Officer.

Speaker 3

Thanks, Michel. I'd like to provide a brief update on our financial results for the Q2 of 2021. The company's cash and cash equivalent position was $302, 900, 000 as of June 30, 2021, as compared to 100 and $36, 900, 000 as of June 30, 2020. Following receipt of the upfront payment from GSK pursuant to our collaboration and license agreement earlier in August 2021, we believe that our existing cash and cash equivalents would enable us to fund our operating expenses and capital expenditure requirements into 2026. Research and development expenses were $14, 200, 000 for the quarter ended June 30, 2021, as compared to $6, 100, 000 for the Q2 of 2020.

This increase was primarily due to an an increase in activities related to clinical trials for EOS-four 48 and inopadimab and increased headcount. General and administrative expenses were $15, 100, 000 for the quarter ended June 30, 2021 as compared to $2, 400, 000 for the Q2 of 2020. This increase was primarily due to increased headcount, professional fees and other costs associated with becoming a public company, along with advisory fees incurred by the company for the collaboration and license agreement with GSK. The net loss attributable to common shareholders was $26, 500, 000 or a net loss of $0.75 per basic and diluted share for the quarter ended June 30, 2021, as compared to $10, 300, 000 or a net loss of $29.49 per basic and diluted share for the Q2 of 2020. I'll now turn the call back over to Michel for closing remarks.

Speaker 2

Thank you, Matt. As we move into this period of running our proof of concept trials in several immuno oncology combinations, we have also begun to prepare for pivotal trials, which we plan to initiate in the next 12 to 18 months. We will be focused on execution of our clinical programs and continuing to elucidate the mechanism of action of our drug to inform our development programs. We expect to generate data across multiple indications in different combination with both of our clinical stage asset, including the initiation of several clinical trials with our partners at GSK over the coming months. Thank you very much for your attention on today's call and your ongoing interest.

I'd like to now turn the call back over to the operator for questions.

Speaker 0

Thank you very much. First question today comes from Chris Raymond from Piper Sandler. Chris, please proceed.

Speaker 4

Hey, thanks, and congrats on the progress this quarter. Just a couple. Maybe first, a strategic question. I guess it's pretty remarkable you guys have funded you're funded now about 5 years or so. And I'd say that kind of runway is kind of at the high end of what we've seen for an earlier stage company like you guys.

Just as you think about maybe your, I guess, intertemporal maybe investment choices, can you talk about the assumptions that went into this cash runway guidance? And I guess, long and short of it is, is there any sort of business development embedded in this? Is there any other activities? Thanks.

Speaker 2

Hi, Craig. This is Michel speaking. Yes, indeed, this something which is commercial and that will allow to create multiple short term goals. And the brand that we have designed with GSK incorporates us moving as quickly as possible. This includes initiating several Phase III studies.

That said, with GSK being 60% of the remaining expenses, this program still only consumes about onethree of the cash balance. We believe that the data for independent will support advancement into the Phase III studies, and we have integrated that in our cash runway. The company has put 3 distinct programs in the trials over the past 4 years, as we said, and the integrated several programs that will be developed in house, and we believe we'll be able to address different mechanisms involved into modulating genome response against tumor cells. We have also integrated a few academic partnerships that should expand our expertise in tumorology and drug discovery. And we are also integrating, I would say, opportunities in external innovation.

I want to stress that we'll be really opportunistic and cash efficient there. We know what we are looking for, and we'll take the time to find the best opportunity to expand our pipeline within this cash runway. Okay.

Speaker 4

And then just a follow-up, maybe more detailed. Do you have an update on the A2A biomarker for Inupatinib? Just any progress there And any sort of guidance as to when we'll see additional data?

Speaker 2

Yes. I'm going to turn the question to Joe to give the most the most recent update. Joe, please.

Speaker 5

Thanks, Michelle, and thanks, Chris. So we have reported some initial data on our biomarker at ASCO this year showing that the expression of the H2A receptor itself is associated with clinical outcomes for the patients treated with monotherapy. We are continuing to investigate those biomarkers and using that data to understand what types of cells we're expressing AQAR within the tumor and are developing, I think, a more profound understanding of the mechanism of action of the drug, which is informing our indication selection and which we will be incorporating in our clinical development plan as we move forward. We anticipate reporting that data out sometime next year as we kind of put all the pieces of the story together.

Speaker 4

Okay. Thank you.

Speaker 0

Our next question comes from Dana Greywash from SVB Leerink. Please go ahead.

Speaker 6

Hi, good morning. Thank you for the question. I'd like to get into now that we're a little bit past the BSK deal, your guys' perspective on the broader TIGIT CD226 access, there's 4 members now that the collaboration has together. You mentioned the CD96 and of course there's also PVRIG and the potential to count PD-one as well. And I wonder of all those 3 questions.

Why just what gives you confidence to double or triple down on the CDQ26 access? Which of the various combinations are you guys most enthusiastic about? And then with CD96, I find it perhaps the most complex and controversial with some literature suggesting you should inhibit it and other literature suggesting you should stimulate it for anti tumor immunity. And I believe, even from the GSK approach is inhibition and what gives you confidence that's the right approach?

Speaker 2

Thanks, Dana. I want to mention that the primary goal of the collaboration is to move forward with the combination of dostarlimab, the PD-one from GSK and our digital antibody, US44. In some specific indication, we could look for TAP combination that will include different options. CD19 tick or CD112 receptor could be appropriate in some specific indication where you are high level of 1 of these 2 partners on top of TIGIT. We are also evaluating the triple combination of PD-one plus our TIGIT antibody and our A12 receptor antagonist in the patent.

We believe there's a strong rationale there with good clinical data. Coming to the specific question of CD96, GMK has been a strong data set showing that inhibiting CD96 will provide a silicon anti tumor assay and that the combination of CD96 plus digit plus PD-one in some setup could create an additional synergy that will allow us to be differentiated from the double combination of PD-one plus digit.

Speaker 6

Got it. So no near term plans for the PBRIG in combination of your ticket that was licensed surfaced by GSA?

Speaker 2

Jo, do you want to comment on that question?

Speaker 5

So that is another combination that we're interested in, Dana. The TBRIG and CD112 antibody at GSK has not yet entered into clinical trials. So it will be a later step, but it is another combination that we're interested in.

Speaker 6

Thank you very much.

Speaker 0

Our next question comes from Shreyapakula Ramakanth from H. C. Wainwright.

Speaker 7

This is On the inhibitor end, in your press release, you said that you're going to be looking at several indications and also will be using different biomarkers to select patients. Could you highlight a couple of indications that you would be going after? And also what sort of biomarkers are you looking to work with? Good

Speaker 2

morning, Alka. Well, we've been very excited by the data we published at ASCO 2 months ago about the relationship between expression of additional receptor identified by immunosuppetry and the antitumor effect in patients. And we are currently expanding this biomarker validation in order to select a specific patient in different indication. Joe, can you give more detail on what you are planning to do for biomarker strategy, please?

Speaker 5

Yes. Hello, Arke. So as Michel said, A2AR is correlated with clinical outcome, not the data that we presented at ASCO. We are exploring using this data to really explore the mechanism of action of the drug. We think that this we're getting from our translational data from our clinical trials new insight into how the drug is working to restore anti tumor immunity.

And we are evaluating based on that data a number of indications. We are planning to proceed, as we've previously discussed, with the cohort in post PD-one melanoma, and we are evaluating other solid tumors based on the data that's coming in. So we anticipate giving an update on the clinical development plan later this year.

Speaker 7

Thank you both. And then with the good watch list for cash now, thanks to GSK collaboration. Michel, if you had the chance to bring in molecules or if you're looking for additional molecules to be brought into the pipeline, what sort of molecules will you be looking at? Would you be looking to add more to the A3AR franchise or to other tumor microenvironment molecules?

Speaker 2

Yes. Indeed. With the 5 plus years of cash runway, we have integrated our investment into the strategic clinical development plan, our A2A independent program also and expanding the pipeline. And as I said before, with our expenses in tumor immunology, we have shown that we have been able to select the right targets, the best possible modality and that we have also a new target into the application of our nimabulinum program, and we are going to nominate a clinical candidate before the end of the year for this program, and we'll give more information about the specificities of that program and why we are excited to have discovered this first in class program. We are also considering other, I would say, access in order to promote the antitumor response of the immune system.

So far, we have worked with independent on a mechanism which is targeting T cells but also additional new cells, and we will produce more data and new cells, and we will produce more data, as Joe mentioned, in the near future. We think we are targeting T cells, NK cells, dendritic cells and macrophage, and we believe there are other mechanisms that could be used either in standalone or in combination with standard healthcare or our pipeline to continue to boost the immune response against cancer cells in this random tumor type. Then if we look for external innovation, it will be with mechanism targeting additional type of immune cells, which are not covered by our current program at the clinical stage or in the preclinical pipeline.

Speaker 0

Our next question today comes from Anupam Rama from JPMorgan.

Speaker 3

Hey, guys. Thanks for taking the question and congrats on all the progress. Maybe just a quick 1 on 448 for me. Strategically, what's the rationale and value of studying in combination with pembro if the dostolomab combination, I think, Joe, you said was supposed

Speaker 1

to start later this year

Speaker 3

or maybe early next year?

Speaker 2

Hi, Andy, Pam. Well, we agreed that our work on the combination with darolizumab will help to inform our next steps and what work is getting started in order to generate data as quickly as possible on the safety of the combination and evaluate efficacy in adult male cancer in PD L1 high and low population. In parallel, we are also working to accelerate the evaluation of the combination of ERAS-four 48 with dostarivab, which will be evaluated in terms of trials in non small cell lung cancer to be initiated by GLK and we have additional indication that we'll be adding to the clinical development plan. Joao, do you want to add something?

Speaker 5

No. I'll just emphasize what you said, Michel, that the intent of moving forward with this study is really to continue to accelerate the program and to generate data in this time as we're getting started with the deceleronab combination.

Speaker 3

Thanks for taking our question.

Speaker 0

We currently have no further questions registered. So I will now hand back to Michel for any closing comments.

Speaker 2

Well, I would like to thank everyone for taking time to review our process. As we said, we are focused on the execution, both at the clinical stage and clinical pipeline, and we will continue to move forward with our clinical strategy to deliver strong data for our clinical assets and to build our pipeline. Have a nice day. Bye.

Speaker 0

Thank you, everyone, for joining us today. This now concludes today's conference call, and you may now disconnect your lines. Please have a lovely rest of your day.