Iteos Therapeutics - Q3 2021

Transcript

Speaker 0

Good afternoon, and welcome to the Itchs Therapeutics Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in listen only mode. Following the formal remarks, we will open the call up for you for questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn it over to Ryan Baker, Head of Investor Relations at Itios.

Ryan, please proceed.

Speaker 1

Thank you, operator, and thank you, everyone, on the call for joining us today. Joining me from ICS with prepared remarks are Michel Dattu, President and Chief Executive Officer Joe Lager, Chief Medical Officer and Matthew Wall, Chief Financial Officer. Before we begin, 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 clinical trials, therapeutic potential thereof, expected milestones, our financial condition, including cash runway, our business operation, development efforts and the potential benefits of our collaboration 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 10 Q for the quarter ended September 30, 2021, which was filed 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 will start today's call by sharing with you the significant progress our team here at ITS has made in the past quarter. He'll recap our corporate strategy and provide an overview of our robust clinical development plans for our pipeline programs. And then our Chief Medical Officer, Joe Lager, will provide a more detailed update on our clinical programs.

We'll wrap up our comments with our CFO, Matthew Gall, who will provide an update on our financial status, followed by Michel's closing remarks. We'll then open the line for the Q and A session. With that, I will hand it over to Michel.

Speaker 2

Thank you, Ryan. Hello, everyone. Thanks for joining us for our Q3 2021 earnings call. At IPOS, our team is dedicated to understanding the biology of the tumor microenvironment. We use that deep understanding to design what we believe are best in class assets to harness the immune system to help patients with cancer live longer and better lives.

We are continuing to progress our preclinical programs, eWAS-four 48, an anti TIGIT antibody, which we partner with Glaxosmic line to jointly develop and commercialize and independent our ruby own selective 8 way inhibitor. Both of these therapies have demonstrated single agent efficacy and excellent safety profile. And those targets are simply derisked through our own data as well as external randomized data. We are really excited by these programs and their potential to significantly impact patients' lives. This is what drives us here at IQOS every day.

Let's start by discussing our strategic collaboration with GlaxoSmithKline on our anti digit antibody, US-four 48. This collaboration is an opportunity to accelerate and expand the development plan of US-four 48. In the Q3 of 2021, we closed the co development and co commercialization collaboration agreement, and we received a €625, 000, 000 upfront payment. Beyond the upfront payment, we are eligible to receive up to 1 point €45, 000, 000, 000 in additional development and commercial milestones payments should the program achieve certain milestones. This partnership validate our view that TIGIT is the most promising new target in the coming generation of new iota therapies and that ERAS-four 48 has real potential to be differentiated relative to the other assets in the class.

The GSK partnership has brought enormous value to ICLC in many ways. To highlight a couple, this partnership brings together the emerging class expertise, capabilities and portfolio of the 2 companies and enables us together to pursue novel combination, including combination in the CIGIT CV226 axis in a way no other company can. As an example, we will be evaluating the combination of GSK approved and GPT-one, gem parity or tafarlimab with both of our highly differentiated clinical stage candidates, US548 and imbedadimab. This is just 1 of the many unique combinations we are available to explore. Also, the structure of this partnership provides strategic flexibility as we aim to become an industry leader in the immuno oncology space through significant upfront cash, 60.4.2 shares of the domain cost and the fifty-fifty credit share and co commercialization rights in the U.

S. Now turning to EBITDA demand, our clinical stage program targeting adenosine driven immunosuppression. We note with interest the predictive data that has recently been reported within TCB73 therapeutic. This data continue to validate our anti zircon for this pathway and target. Based on our unique understanding of the specific condition within the tumor and microenvironment, ITO scientists sought for this design inhibitor domain to selectively and potentially inhibit the A2A receptor in the specific conditions of the tumor microenvironment.

These 2 programs are just the beginning of what we are working on at ITS. Our CMPs continue to innovate and with a range of diverse and exciting programs focused on further harnessing the power of the immune system to tackle cancer. As previously guided, we have nominated an additional therapeutic candidate targeting new mechanism in the adjunctive pathway for IND inhibinibing studies. This is a 1st in class program against a new target and then identified by our in house sensitive team demonstrating our capabilities in higher discovery. We will continue to capitalize on our demonstrated track record of success in building a differentiated immunology pipeline.

In summary, our progress through 2021 has led the ground floor to our robust clinical development plan. With expansion to our underway for both our launch and program, we have demonstrated our ability to translate scientific innovation into clinical programs with the potential to improve outcomes for people who have cancer. We have leveraged our deep understanding of cancer immunology and immunosuppressive pathway to build our pipeline and attract a partnership will provide us with additional opportunities. We are now focused on the execution of our working professionals, delivering on the comments we have made with patients with advanced cancer. With that, I will hand it over to Joe Leger, our Chief Medical Officer, to provide further details on the significant progress that we have made and where we are treated with this exciting concept.

Speaker 3

Thanks, Michelle. I'll begin with key updates on our anti TIGIT antibody, EOS-four 48. EOS-four 48 has the potential to achieve significant antitumor immune response through a multifaceted mechanism. The antibody blocks the binding of TIGIT to its ligand, resulting in the immune mediated killing of tumor cells by T cells and NK cells. It also engages the Fc gamma receptor, further promoting anti tumor immune response through the release of pro inflammatory cytokines and chemokines and the activation of antigen presenting cells.

Also, the antibody causes depletion of the immunosuppressive Tregs and exhausted T cells, cells that are known to dampen the immune response. We are pursuing a clinical development plan based on this multifaceted mechanism of action of EOS-four 48, which is focused on the indications and combinations where we see the greatest potential to benefit patients. Given the encouraging monotherapy data we presented earlier this year, we are progressing the next set of trials for this program. We are pleased to share that we have initiated dosing in 2 combination cohorts in patients with solid tumors in our Phase III clinical trial of EOS-four 48. The first in combination with pembrolizumab and the second in combination with Inupatinib.

As a reminder, we had planned to initiate this combination study with pembrolizumab prior to entering into the collaboration with GSK, and both parties agreed that it made sense to generate data on this combination. This will inform our clinical strategy with dostarlimab. Over the next several months, we will initiate additional studies exploring the safety and efficacy of EOS-four 48. This will include the combination with GSK's approved anti PD-one dostarlimab. We will also evaluate EOS-four EOS-four 48 in monotherapy and in combination with Bristol Myers Squibb's ibertamide in multiple myeloma.

We look forward to providing updates on the clinical development plans for ES-four 48 as we progress. Turning to independent, we have a unique drug candidate in 3 ways. 1st, unlike the other adenosine receptor antagonist, imipadent was designed to inhibit the A2A receptor in the high concentrations of adenosine found within tumors. 2nd, Innepadent was designed to be highly selective for the A2A receptor, which plays a key role in regulating adenosine's immunosuppressive effects within the tumor. And third, inapadiment does not penetrate the central nervous system, reducing the potential for off target safety effects and improving its therapeutic index.

We continue to make significant progress in our clinical development and have several updates to share. We have completed enrollment in the initial evaluation of independent in combination with chemotherapy and with pembrolizumab and have found a profile that supports future development. We have also completed enrollment in the cohort exploring inipeptanin in monotherapy in castrate resistant prostate cancer and have initiated an expansion of the combination of inipeptanin with pembrolizumab in PD-one resistant melanoma. Finally, as we mentioned earlier, while discussing the updates on ES-four 48, we have initiated the evaluation of the combination of independent with EOS-four 48 and we'll also be evaluating the triple combination of EOS-four 48 with Inupatinib and GSK's dostarlimab. In addition, we are building on the identification of potential patient selection biomarkers identified in our monotherapy study and plan to open a new cohort in our ongoing Phase IIIa trial in patients with high biomarker expression.

Our initial trial is a rich source of translational data that we continue to use to optimize the interpenet clinical development program to evaluate independent in the patients and tumor types most likely to benefit from treatment. With the data we already have in hand and that we are generating in ongoing studies and validation from other approaches in the adenosine pathway, we are initiating the next phase of development. We will have data in several indications and combinations that we expect will provide many attractive options as we move into the randomized controlled setting. I will now hand the call over to Matthew Gull, our Chief Financial Officer.

Speaker 4

Thanks, Joe. I'd like to provide an update on our financial results for the Q3 of 2021. The company's cash and cash equivalent position was $899, 800, 000 as of September 30, 2021 as compared to 340, 000, 000 dollars as of September 30, 2020. IQOS is well capitalized to support the programs we just detailed. Following receipt of the upfront payment from GSK pursuant to our collaboration and license agreement in August of 2021, we believe that our existing cash and cash equivalents would enable us to fund our operating expenses and capital expenditure requirements into 2026.

Revenues, nearly all of which were associated with recognition of a portion of the upfront payment received from GSK, were $104, 300, 000 for the quarter, while we recorded no revenue in the Q3 of 2020. We expect to recognize the full upfront payment through revenue over the next few years. Additional information regarding revenue recognition related to the collaboration agreement will be included in our Form 10 Q for the quarter ended September 30, 2021. Research and development expenses were $16, 100, 000 for the quarter ended September 30, 2021 as compared to $8, 700, 000 for the Q3 of 2020. This increase was primarily due to an increase in activities related to clinical trials for EOS-four 48 and inupatinib, our preclinical pipeline and the expansion of our team.

General and administrative expenses were $8, 800, 000 for the quarter ended September 30, 2021 as compared to $4, 800, 000 for the Q3 of 20 20. This increase was primarily due to more hires, professional fees and other costs associated with becoming a public company. The net income attributable to common shareholders was $69, 600, 000 or net income of $1.98 per basic share and $1.86 per diluted share for the quarter ended September 30, 2021, as compared to a net loss of $11, 600, 000 or a net loss of $0.48 per basic and diluted share for the Q3 of 2020. I'll now turn the call back over to Michel for closing remarks.

Speaker 2

Thank you, Matt. As we have shared on this call, we are executing on our accelerated clinical development plans for both of our highly differentiated immunotherapy. Our potent high affinity anti agent antibody, US44A and is impediment our A2O receptor antagonist that has been optimized for the tumor microenvironment. We remain focused on sensitive innovation to improve clinical outcomes for patients. With our deep understanding of tumor immunology, we will continue to advance our current pipeline and accelerate our R and D efforts to discover new targets and strategies to advance cancer in therapies.

With our current funds, resources, pipeline and the team we have assembled, we are in a better position than ever to be among the frontrunners to develop this new generation of IV therapies, and we remain focused on our ambition to be a leader in bringing this therapy to patients. Thank you very much for joining today's call. I'd like to now turn the call back to the operator to open up the line for questions.

Speaker 0

Thank We take our first question from Diana sorry, Dana Wash from SVB Leerink. Please go ahead.

Speaker 5

Thank you. Maybe 2 for Joe. Joe, you talked about completing enrollment for the endocadulant combination of chemo and pembro. 2 questions on that. 1, I think you said there is a profile supportive of further development.

Can you better necessarily characterize what you mean by profile supportive? And then you also mentioned expansion in melanoma PD-one pre treated. Have you made a gono go decision on expanding and CMBC yet?

Speaker 3

Yes. Thanks, Dana. So in terms of the first question, yes, for independent, we've completed the safety evaluation or the dose evaluation for the combination with both pembrolizumab and with chemotherapy. For pembrolizumab, we have a dose where what are our criteria for saying that the profile is suitable for moving forward. We have a dose that is safe.

We have PK as expected for the drug, and we have initial evidence of efficacy in that cohort that makes us interested in moving forward with. And as we said, we are moving forward with pembrolizumab combo in melanoma. The same is true for chemotherapy that we have selected a dose where we have good safety and we have preliminary evidence of activity. And in terms of the other cohorts, for prostate cancer, we have completed the monotherapy evaluation in prostate cancer, And we have decided not at this time to open the cohort in prostate cancer in combination with pembrolizumab, we think that there are better options for development of the drug at this time. And in terms of the combination with chemotherapy, we are moving that forward.

We have evaluated different indications, including triple negative breast cancer, and have chosen an indication to move forward, and we will be giving an update on that as that study begins ready to start.

Speaker 5

Great. Thank you very much.

Speaker 3

Thank you.

Speaker 0

Chris, your line is open. Please ensure you're unmuted locally.

Speaker 6

Oops, sorry. Can you guys hear me? Hello?

Speaker 0

Yes. Can you guys

Speaker 6

hear me? Great. Thank you. Hey, thanks guys for taking the question. Just I'm sorry, a strategic question here on Inupatinib.

I know you're taking the 1st agent, the 1st generation agent here in the randomized trials and you talked about this SNAC generation. I know you kind of have I think you've addressed this before, but maybe just remind us how do these 2 agents coexist? What's the strategy there in both of them forward? And then I also I don't think I heard you guys before talk about this triplet combo of 448, the GSK, PD-one and inupatinib. Can you maybe talk a little bit about the what led you to begin that trial and what data sort of prompted that?

Thanks.

Speaker 3

Yes, Chris. So on your first question about our drugs targeting the adenosine pathway, Independent is our lead there. It is an A2A receptor antagonist that we think is optimized for use in the tumor microenvironment to really optimize the anti tumor response of the immune system. And as you mentioned, we have selected a candidate for a new mechanism of action that is also in the adenosine pathway. Our preclinical data has shown that these 2 targets are both effective ways to restore the immune system and also may well work well together.

So that is why both they should work independently and should also work well together. So that's why we're progressing both of these drugs. So independent, which is in clinic and the new drug candidate that we've recently selected. In terms of your second question around the triplet of PD-one plus TIGIT plus A2A, this is something we've been interested in for a while. As we previously disclosed, we were moving forward with the doublets of TIGIT and interpagnant.

And it makes sense to also evaluate the triplets, a combination of PD-one plus TIGIT plus immunopadins. There also has been some recent data or not data, but some information from the ongoing ARCUS trial in non small cell lung cancer where they have suggested that they have interesting data on a triplet, including a PD-one TIGIT and adenosine receptor antagonist, and that also increased our interest in moving forward with that combination.

Speaker 6

Okay. And I'm sorry, I want to make sure that I understand the answer that you had to the first question. Did I hear you say that you're not taking 850 forward in prostate cancer. Is that correct? Or did I mishear that?

Speaker 3

That is correct. We're not moving forward in prostate cancer into the we're not going to evaluate the combination with pembrolizumab in prostate cancer at this time. We've decided to prioritize other development of that drug.

Speaker 6

Okay. Thank you.

Speaker 0

The next question comes from Anupam Rama from JPMorgan. Please go ahead.

Speaker 7

Hey, guys. Hope you're all well and thanks so much for taking the question. On EOS-four 48, so what do you along those lines of some of the prior questions, what are you trying to learn specifically from the pembroke combination study that you might be able to apply to your durstolomab combination study? Thanks so much.

Speaker 3

Thanks, Anupam. So we had planned had started initiating that trial of EOS-four 48 with pembrolizumab prior to entering into the partnership with GSK. And when we looked at the timelines, we realized that we could initiate that study sooner than we could initiate the study with dasdarolimab. We think having the data from that study in combination with pembrolizumab will help us as we are initiating the combination trial with docetarlimab to select the dose and perhaps move a bit faster in that combination based on having data already with anti PD-one. So it mainly was about speed.

I think as we move forward, we also think it could be valuable to have data on how the drug performs with different anti PD-one partners.

Speaker 0

Our next question comes from David Nierengarten from Wedbush Securities. Please go ahead.

Speaker 8

Hey, thanks for taking my questions. First, regarding the combination with pembro and GSK's work with vosdalenib, I'm assuming, but correct me if I'm wrong, that there's no gating mechanism. So they're not going to wait for data from your pembro study in order to begin the combination studies with the starlomab. And then the second question that I had was, do you plan or is there a plan for incorporating the adenosine assay that you have been working on from the monotherapy study into the combination studies and maybe trying to look at having an arm or 2 where you stratify according to expression? Thanks.

Speaker 3

Thanks, David. So yes, on the combination with pembrolizumab and combination with dostarlimab that we are doing with the US548, we are going full speed ahead with initiating the combination with tostrelumab and the initial data from the combination with pembrolizumab will not be dating. And on the second question, on the assay that we've identified that may help to predict the patients that benefit from independent, We are incorporating that in our future studies. So we are planning to do cohorts with monotherapy to enroll patients who are biomarker high to better define the benefit that we see in that population. And we are including those assays in our study in melanoma and we'll also include it in the planned randomized trial for next year.

Speaker 8

Okay, cool. Thank you.

Speaker 0

The next question comes from Swayampakula Ramakanth from H. C. Please go ahead.

Speaker 9

Thank you. Thanks for taking my questions. Just trying to understand the rationale behind combining 448 with Bristol's iberdomide for multiple myeloma, if you could please comment on that?

Speaker 3

Yes. So we are planning to do a study of ES-four 48 as monotherapy and in combination with Igravimide in relapsedrefractory multiple myeloma. We have had a collaboration with Jeff Hill at Fred Hutch in Seattle, where we've demonstrated that there does seem to be a significant benefit of the combination of EOS-four 48 or Epti engaging TIGIT antibody with an image. And Ivertebide is a potent drug. It has data in relapsedrefractory myeloma that serves as a useful historic control.

And it's an attractive study to do because it's giving patients an image that they haven't already seen before in that late line setting where regulatory agencies require to start development in myeloma.

Speaker 9

Thank you. And then regarding the biomarkers that you're looking for, specifically in the epidermant study, what sort of biomarkers are you looking for?

Speaker 3

So we disclosed at ASCO the data that we had from our initial study in monotherapy where we found that the adenosine receptor, A2A receptor itself, levels of that, the number of cells expressing A2AR in the tumor was correlated with clinical benefit in the patients in that study. That is IHC marker. We have also looked at other markers both by IHC and by NanoString looking at mRNA markers. And so we have identified other markers that also potentially identify the patients that benefit using those methods as well. But at this point, we're not.

Thank you.

Speaker 0

I can confirm we have no further questions currently registered. So I'll hand it back to the Kirtin for any closing remarks. Thank you.

Speaker 2

Thank you very much, everyone. Have a good evening.

Speaker 0

Okay. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.