Alphabet Q4 2024 Earnings Call Transcript

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Provided by Quartr
March 6, 2025

There are 7 speakers on the call.

Operator

Good afternoon, everyone. Thank you for standing by. Welcome to the CytomX Therapeutics Fourth Quarter twenty twenty four Financial Results Call. Please be advised that today's call is being recorded. I would now like to hand the call over to your host for today, Chris Ogden, CytomX's Chief Financial Officer.

Operator

Please go ahead.

Speaker 1

Thank you. Good afternoon and thank you for joining us. Before we begin, I'd like to remind everyone that during this call, we will be making forward looking statements. Because forward looking statements relate to the future, they are 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.

Speaker 1

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 2024 full year 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, recorded 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 Doctor.

Speaker 1

Sean McCarthy, CytomX's Chief Executive Officer and Chairman. Sean will provide an update on our pipeline and company progress before I walk through the financials for 2024. We will then conclude with the Q and A session. With that, I'll now turn the call over to Sean. Thanks, Chris, and good afternoon, everyone.

Speaker 1

We're very pleased

Speaker 2

to be here with you today to provide updates on our continued progress at CytomX towards our mission of urgently advancing our Probody therapeutic pipeline for the maximum benefit of cancer patients. As a pioneer in the field of antibody masking and conditional activation, we continue to direct our powerful technology platform towards major unmet needs in oncology. We're seeing broad strategic interest in antibody masking and CytomX is uniquely positioned with expertise and capabilities to deliver novel mass therapeutics across multiple treatment modalities, including antibody drug conjugates, T cell engagers and cytokines. Our current clinical programs have been built on over a decade of scientific and clinical expertise and follow clear design principles aimed at optimally selecting the cancer type of interest, the tumor target and the relevant effect of function in order to deliver differentiated cancer therapies. Twenty twenty four was a very productive year for us, including the advancement of two new programs into the clinic, CX-two 51 and CX-eight zero one.

Speaker 2

In January 2025, we announced the prioritization of these programs and the streamlining of our organization, extending our cash runway to Q2 of twenty twenty six, supporting our ability to deliver upon key clinical milestones. We see our lead program CX-two 51 as a highly differentiated first in class ADC that is designed to address a large unmet need in colorectal cancer and build significant value for CytomX. CX-eight zero one is a mass version of interferon alpha with, we believe, broad potential as a next generation targeted immunotherapy. Twenty twenty five promises to be an exciting year for CytomX where we expect to generate initial clinical data for both CX-two thousand and fifty one and CX-eight zero one that we believe could drive significant near term value creation. I'd like to cover recent progress in our pipeline before handing over to Chris, who will review our financials.

Speaker 2

I'll start with our lead program CX2051, our first in class masked ADC targeting epithelial cell adhesion molecule. We are the only organization to our knowledge addressing this target in this unique way. EpCAM has been viewed as a high potential opportunity for many years due to its pan tumor expression and its particularly high expression in colorectal cancer. However, EpCAM has also expressed at moderate to high levels in normal tissues, which has prohibited the successful development of systemic therapeutics against this target. There's strong evidence though that EpCAM targeting with locally delivered approaches can achieve clinical anticancer activity, including the multi specific antibody Korjuni that is currently being relaunched in The EU for the localized treatment of intraperitoneal malignant ascites.

Speaker 2

Despite success with localized therapies, however, prior systemic EpCAM targeting strategies have not been able to reach therapeutically active drug levels in patients. And these include the T cell engager, salitumab and other antibody approaches, which showed early promise, but were unable to deliver a viable therapeutic window due to dose limiting toxicities in the pancreas, liver and gastrointestinal tract. CX-two thousand and fifty one is a pro body ADC comprising a high affinity EpCAM antibody with a peptide mask and a protease cleavable mask linker that has been validated in prior clinical work by CytomX. In designing CX-two 51, our goal is to mitigate potential on target EpCAM toxicities and to localize CX-two 51 preferentially to tumor tissue. Pre clinically, CX-two 51 has shown a wide potential therapeutic index and potent anticancer activity in multiple EpCAM expressing indications.

Speaker 2

The payload on CX-two thousand and fifty one KAM59 is a topoisomerase one inhibitor selected specifically to treat TOPO1 sensitive tumors and in particular colorectal cancer. The Topol1 inhibitor irinotecan is of course a key component in the treatment of metastatic CRC in the first and second line settings. And so it's well established that this cancer can respond well to this class of drug. The global unmet need in colorectal cancer is one of the most significant in oncology with more than one point nine million new cases annually and limited new treatments emerging for patients over the last two decades. Unfortunately, there's also an increasing percentage of new CRC cases diagnosed as metastatic and a concerning trend of growing incidence in younger patient populations.

Speaker 2

First and second line treatments for metastatic CRC are still primarily based on systemic chemotherapy regimens that include irinotecan or axalaplatin. In the later line setting, patient options remain highly inadequate. In patients that have generally had three or more prior lines of therapy, current standard of care only achieves low to mid single digit objective response rates and median progression pre survival of only two to four months. We advanced CX-two thousand and fifty one into the clinic in Q2 last year and we have been pleased with the execution and enrollment in the study to date. We are currently focused in late line CRC with enrolled patients generally having received at least three prior systemic therapies.

Speaker 2

Given the consistently high levels of EpCAM expression in CRC, we are not pre selecting patients for EpCAM expression in our Phase one study or for disease characteristics such as KRAS mutational status or liver metastases. In dose escalation thus far, we've been encouraged by the CX2051 safety profile having successfully dose escalated to levels that we predict based on preclinical modeling to be biologically active and that we're confident could not be achieved with an unmasked ADC. As we continue in dose escalation, our expectation is that the maximum tolerated dose of two thousand and fifty one will be largely driven by the cytotoxic payload. Specifically, we will be fully characterizing the anticipated GI toxicities and cytopenias such as neutropenia and anemia that are commonly associated with TOPO1 inhibitors. We're currently evaluating the seventh dose level in our dose escalation and we have also begun to selectively backfill at certain dose levels to gain additional experience with the drug.

Speaker 2

Overall, we believe our early clinical experience with CX-two thousand and fifty one is showing that this first in class ADC is performing as designed, underpinning its prioritization as the lead program for CytomX and our focus on bringing this therapy to patients as quickly as possible. We remain on track to provide initial Phase 1a data in CRC in the first half of twenty twenty five, and we expect to be in a position to define next steps for the program in the second half of the year. Now moving to CX-eight zero one, our masked pro body interferon alpha-2b, which is also making good early progress in Phase one. Interferon alpha is a well validated therapeutic and was one of the first immunotherapies to be approved for cancer treatment. Interferon has established single agent anticancer activity in multiple tumor types, including renal cancer, bladder cancer and melanoma.

Speaker 2

Over time, systemic interferon has fallen out of clinical use in oncology, primarily due to its poor tolerability arising from systemic toxicities. However, interferon alpha is a powerful driver of T cell activation and antigen presentation, making it an ideal combination agent with checkpoint inhibitors. Similarly to EpCAM, it's been shown recently that localized interferon alpha-2b can be very effective as an anticancer therapy. Specifically, the recently approved gene therapy, adstilidrine, encoding interferon alpha-2b achieved a 51 complete response rate in patients with bladder cancer, reaffirming that this potent cytokine can indeed achieve robust anti tumor responses in patients. It's also been shown that interferon can potentiate the clinical effects of PD-one inhibition, including a Merck sponsored study demonstrating a sixty percent response rate with KEYTRUDA in combination with KEYTRUDA in combination with interferon alpha2b in advanced PD-one naive melanoma.

Speaker 2

This combination was not further developed, however, due to grade three or higher adverse events occurring in approximately fifty percent of patients. CX-eight zero one is designed to harness the proven power of interferon alpha 2b by reducing systemic activity and localizing therapeutic activity to the tumor microenvironment. We initiated our Phase one dose escalation study of CX-eight zero one in the third quarter of twenty twenty four focused in the advanced metastatic melanoma setting. We've made very good progress to date in the study and we're currently enrolling the fourth monotherapy dose escalation cohort. Importantly, as of the third dose level, we had already achieved doses that surpass the approved dose of unmasked interferon alpha-2b, Xylotron.

Speaker 2

Our translational science program for CJS-eight zero one is multifaceted and includes systemic and inter tumor analysis of PD biomarkers that will give us insight into molecular performance of the drug candidate and we hope the induction of an inflammatory tumor microenvironment conducive to PD-one combination therapy. Our goal is to present initial Phase 1a translational data for eight zero one in the second half of this year. Based on our progress to date, we also anticipate initiation of combination therapy with KEYTRUDA in 2025 under the collaboration and supply agreement we secured with Merck last year. Overall, we believe CX-eight zero one is well positioned to demonstrate clinical proof of concept in advanced melanoma where the unmet need remains very high. Longer term, we see CX-eight zero one as a foundational combination agent, which could potentially address the large population of cancer patients who do not respond to checkpoint inhibitors or who are refractory to immunotherapy.

Speaker 2

Turning now to our research collaborations. Our partnerships continue to be very important to us in 2024 and remain so in 2025. I'm very pleased to say that in February of this year, we achieved another $5,000,000 milestone payment in our Astellas T cell engager collaboration as a result of Astellas selecting a collaboration clinical candidate to advance into GLP toxicology studies. We look forward to continued progress with Astellas as well as strong execution in our discovery programs with Bristol Myers Squibb, Amgen, Moderna and Regeneron. Right now, the majority of our partner discovery programs are masked T cell engagers, an area in which CytomX and our partners continue to see significant potential.

Speaker 2

Regarding our first partner T cell engager program entered into the clinic, CX-nine zero four, we communicated earlier this year a reduction in capital allocation to this program given our overall pipeline priorities and pending ongoing dialogue with our partner Amgen regarding potential next steps. Based on CX-nine zero four clinical observations to date and our respective priorities, CytomX and Amgen have jointly decided not to continue CX-nine zero four development. We continue T cell engager discovery work with Amgen. We remain optimistic about the potential of future mast T cell engagers and really look forward to making additional progress on this modality within our partnerships. With that, let me turn the call over to Chris for updates on our finances.

Speaker 1

Thank you, Sean. Throughout 2024, we remain disciplined in our capital allocation with a focus on progressing our clinical pipeline for the initial Phase one data. Entering 2025, we are now positioned to achieve initial data readouts for 50 1 and 0 1. As Sean highlighted earlier, in January of this year, we made a focused set of trade offs that extend our cash runway and direct capital primarily to our lead programs, CX-two 51 and CX-eight zero one. Now, I'll turn to our 2024 financial results.

Speaker 1

As of 12/31/2024, we ended the year with $100,600,000 in cash, cash equivalents and investments compared to $174,500,000 in cash at the end of twenty twenty three. With our prioritization efforts, we expect that our cash balance will continue to fund CytomX operations into the second quarter of twenty twenty six. Consistent with our prior approach to cash runway guidance, our cash guidance does not assume any additional milestones from existing collaborations or any new business development, which we have a strong track record of achieving. As Sean mentioned earlier, we recently achieved a $5,000,000 milestone in our Astellas T cell engager collaboration and we are funded to continue to execute programs under our research alliances. Turning to revenue and operating expenses for the year, total revenue was $138,100,000 compared to $101,200,000 for the corresponding period in 2023.

Speaker 1

The increased revenue was attributed to our BMS collaboration as well as our collaborations with Moderna, Astellas and Regeneron. Total operating expenses for the full year were $113,100,000 compared to $107,700,000 in 2023. '20 '20 '4 operating expenses increased $5,400,000 primarily due to a $5,000,000 milestone payment to AbbVie for initiation of Phase I for CX2051. Excluding this milestone, operating expenses were essentially flat to 2023. R and D increased by $5,700,000 from last year to $83,400,000 in 2024, also driven by the milestone payment for CX2051 Phase I start.

Speaker 1

G and A expenses were essentially flat during 2024, decreasing by $300,000 to $29,700,000 for the year ended 12/31/2024. We remain committed to disciplined capital allocation and resource management, and we believe we are well positioned to progress our promising pipeline, deliver value to shareholders and ultimately renew treatment options to cancer patients. With that, I'll turn the call back to Sean for closing remarks.

Speaker 2

Thanks, Chris, and thanks everyone for joining us today. We look forward to sharing additional updates in the coming months, including the first look at how CX-two thousand and fifty one is performing in colorectal cancer. To close out, I want to recognize and sincerely thank the patients who joined our studies, their families, our clinical investigators and our dedicated team here at CytomX. We've never been more committed to our vision, mission and values at CytomX and we look forward to an exciting year ahead. With that operator, let's go ahead and open up the call for Q and A.

Operator

Our first question comes from Roger Song with Jefferies. Your line is open.

Speaker 3

Great. Thanks for taking the question. Maybe just one related to 02/1951. So given your enrolling patient progressing and then how should we think about the first half data update in terms of the patient number? And then what kind of data we're going to show?

Speaker 3

What's the expectation for the data readout for the first half?

Speaker 2

Yes. Hi, Roger. Thanks for the question. Well, we're expecting it to be a meaningful update. We do anticipate this initial look will include an initial characterization of the safety profile of the drug up to and including doses as we said that we are predicting based on our preclinical work are in the therapeutically active range.

Speaker 2

We've been pleased with the escalation so far given the prior history with other systemic EpCAM strategies having hit roadblocks very early in dose escalation. So from that standpoint, so far so good. Of course, this initial update will also or first update or first presentation of data will include an initial assessment of anti tumor activity across these first few cohorts. And that activity data could take the form of pharmacodynamic markers, tumor stabilization, of course, potentially tumor shrinkage and of course if we see anything approximating or equivalent to resist responses in this very late line CRC patient population, we would be absolutely thrilled.

Speaker 3

Yes, got it. And then in terms of the A01, you will give us some updates in second half and then also you will you say you will move into the Pembroke combination. So how should we think about the timing and the criteria moving to the Pembroke before or after you give us some data update? Thank you.

Speaker 2

Yes, great question. So as I mentioned, as with 02/1951, we've been pleased with the operational execution in the 08/2001 study so far, having really just started that Phase one study and already now being in the fourth dose level. And the starting dose was pretty decent and that's allowed us to go pretty quickly to now be treating patients with doses that are higher than the approved dose of unmasked interferon alpha. So that's encouraging. And because we've been able to quickly go through those initial cohorts, we do see the potential to those first few dose levels, we do see the potential to initiate the KEYTRUDA combo in second half.

Speaker 2

If I had to guess, I'd say that the sequencing would be the combo initiation would proceed any data presentation, but we do remain on track based on our ongoing translational work looking at tumor biopsies to be sharing some initial data by the end of the year.

Speaker 3

Got you. Thank you.

Speaker 2

You're welcome.

Operator

Thank you. Our next question comes from Joe Catanzaro with Piper Sandler. Your line is open.

Speaker 4

Great. Hey, everybody. Thanks for taking my question. Maybe a couple on 02/1951. So I think you've been saying for a little while now that you've entered therapeutically active doses based on preclinical data.

Speaker 4

Today, you're saying you're in the seven dose cohort. So wondering how many of those seven dose cohorts sort of fall into that category of predicted to be within therapeutic, the active doses? I guess I'm just trying to get a sense of sort of what percent in this initial disclosure will fall within that category? Thanks.

Speaker 2

Yes. Hi, Joe. So the first couple of cohorts as we've disclosed previously were single patient doses single patient cohorts, excuse me, at doses that we would predict to be outside of the therapeutic active range. But entering dose level three, we would predict, again, based on the animal modeling that and based on what's generally known about TOPA1 ADCs that we will be starting to get into that range and of course that would increase as we've continued the escalation. So I think a significant number of patients by the time we're ready to share data will have been treated with doses in that range.

Speaker 2

Of course, I want to emphasize again that this is a late line patient population. We're enrolling predominantly patients who have had at least three prior lines of systemic therapy. And so we think the bar is very low here for for actual clinical activity.

Speaker 4

Okay, great. And maybe a follow-up. So you noted not enrolling based on KRAS status or Liberumet. So I'm wondering if any expectations whatsoever potentially seeing differential activity as it relates to some of those features like KRAS status or presence, absence of Livermets or maybe even anything else that you're thinking of? Thanks.

Speaker 2

Yes. There's no obvious biology that would suggest that EpCAM well, let me start by saying EpCAM expression or just reiterating that EpCAM expression is high in more than ninety percent of CRC patients. And we've validated that with our own work and we're measuring EpCAM levels, of course, in every patient that we treat. So we'll have that data for this study. There's no reason to suggest that there's a connection between KRAS mutational status in EpCAM or Libermets and Netcam.

Speaker 2

The point we're making is that we're enrolling the full patient population at this time to characterize the drug across the full CRC population and we'll see what we get. I mean, if it turns out that we get data that suggests that the drug is more suited to a particular subset, then we may investigate that. But at this point, we're enrolling a broad patient population.

Speaker 4

Okay, got it. That's helpful. Thanks for taking my questions.

Speaker 2

You're welcome.

Operator

Thank you. Our next question comes from Anupam Rama with JPMorgan. Your line is open.

Speaker 5

Hi, guys. This is Priyanka on for Anupam. Just kind of following up on the previous line of questions. Since the enrolled patients in the CX-two Thousand And 51 Phase one trial is not being pre selected for AvKAM expression, is there published literature, for example, to help guide what level of expression would be beneficial?

Speaker 2

Yes. There's a broad literature on EpCAM expression across most tumors, including colorectal. And I think it's well established that EpCAM is highly expressed in this tumor type. In fact, EpCAM was first described as a colorectal cancer marker a very long time ago actually. So yes, I think it's pretty well established that CRC is a high at plant expression in most patients.

Speaker 2

And I anticipate that our clinical results will validate that.

Speaker 5

Thank you so much for taking my question.

Speaker 2

You're welcome.

Operator

Thank you. Our next question comes from Peter Lawson with Barclays. Your line is open.

Speaker 6

Great. Thank you so much. Thanks for taking the questions. Just on the prioritization of CRC for your EpCAM ADC, is that driven by the expression levels you kind of talked about and it's kind of well known within the space or you're already seeing signals there? And have you also seen any signals outside CRC today?

Speaker 2

Yes. Hi, Peter. That's helpful to help me clarify and reiterate that this Phase one study of 02/1951 is being conducted entirely in the CRC setting. So we're only enrolling metastatic CRC patients. And as I mentioned, patients who have been treated the patient population that we're seeing, that we're treating are for the most part have for the most part been treated with three at least three prior lines of systemic therapy.

Speaker 2

So the question is, okay, why focus in CRC? There are several answers to that. First of all, when you just look at EpCAM biology and the target itself, CRC is really the indication that jumps out with the highest, broadest, most consistent, most homogeneous expression from patient to patient. And as I said, it's actually where EpCAM was first described as a tumor marker. That said, EpCAM is highly expressed in most other solid tumors.

Speaker 2

So this is a pipeline in a product opportunity in the long run if we see a signal in CRC. There's no question about that. The other reason to select CRC is the unmet need is just huge. And so it's an area where patients need new treatments, they've been waiting for them for decades and we're trying to make a difference here. And then the third is that this drug, this drug candidate with a TOPO1 inhibitor was really always designed with colorectal cancer in mind as the first place to go because there's not much that's been it's kind of a wide open field, the ADCs in colorectal cancer And we know that CRC responds to TOPO1 inhibition.

Speaker 2

As I mentioned in my prepared remarks, Arena Tecan is a component of standard of care therapy in the first and or second line on a global basis is quite effective in the earlier stage of treatment of CRC. So we know that CRC can response TOPO1 inhibition. So we think for this particular program, we think the combination of the tumor type of interest, the target selection and the effector mechanism, the payload has really been optimized and delivers, I think compared to some of our prior work with ADCs, a higher overall probability of technical success. Just again to be really clear that if we are fortunate enough to see a signal in CRC, then that would ungate many other tumor types that are known to be responsive to TOPO1 inhibition that also express APKAM at high levels.

Speaker 6

Got you. Okay. Thank you. And then just as we think about as you move forward, kind of what's the real bar for success? And are you thinking is it third line, fourth line, CRC?

Speaker 2

Well, in the fourth line, unfortunately, for patients, the bar is low. I mean, you've got response rates in the single digits to drugs like Lonserf, Lonserf, even in combination with bepacizumab, fruquintinib, regorafenib with just a few months of PFS. And so this is a very underserved, highly underserved patient population in the fourth line. It's also what we hear from our advisors and investigators and KOLs is that even in the third line setting, their current standard of care, which is

Speaker 3

for the

Speaker 2

most part Bevlon Surf is also highly inadequate and it's so inadequate that many, many patients in the third line setting go on to trials or being held on therapy there as a precursor to going on to trials. And so I think that really underscores, number one, how high the unmet need is and really how low the bar is. Obviously, we have high ambitions for this drug, but we think for this initial look in this late stage patient population, we think quite frankly any evidence of resist responses would be a real win.

Speaker 6

Got you. And so that initial look at that Phase 1a data, do do you want to see tumor shrinkage? What's the bar there you think for success in your mind?

Speaker 2

Yes. As I already mentioned, I think we're looking at a number of things. We're looking at evidence of pharmacodynamic activity in tumor biopsies, evidence of tumor stabilization because CRC approvals, those drugs I mentioned earlier on that have been approved in the third line setting, third and or fourth line, for the most part have been approved based on PFS type measures because it's very difficult to achieve objective responses in this patient population. So if you can keep patients from progressing that in and of itself is a success. So evidence of tumor stabilization, evidence of tumor shrinkage and then of course the Holy Grail for us in this study is if we can see in this early first look in this late line patient population is to see if we can deliver objective resist responses.

Speaker 6

Perfect. Thank you so much. Thanks for taking the questions.

Operator

Thank you. Our next question comes from Mitchell Kapoor with H. C. Wainwright. Your line is open.

Speaker 1

Good afternoon. This is Dan on for Mitchell. Thanks for taking our questions. We wanted to ask where you might present the Phase 1a CRC data. Would this likely be a press release event?

Speaker 1

Any lean towards first quarter or second quarter? And then jumping on the therapeutic active range kind of discussion, how many more dose levels do you plan to test and where does the seventh dose level compare to the non human primate preclinical tox? Thank you.

Speaker 2

Thanks for the questions. In terms of where to present, we're keeping our options open there. So we'll provide further guidance in due course. In terms of the escalation, the second and third questions are of course connected. The escalation into the seventh dose level, obviously if we clear that dose level, we'll continue to escalate.

Speaker 2

We'll have to see how that goes. So at this point, that's where we are and we'll have to see. I would say that the when we talk about predictive active range of the drug, that is based on modeling that is including our experience from mouse and cynomolgus monkey experiments together with understanding in general of other TOPA1 ADCs and what experience others have had in the clinic with this type of strategy.

Speaker 1

Thank you.

Speaker 2

You're welcome.

Operator

Thank you. I'm not showing any further questions in the queue. I would now like to turn it back over to Doctor. Sean McCarthy, Chairman and CEO for closing remarks.

Speaker 2

Well, thanks everyone for joining us today. We look forward to providing additional updates throughout the year and hope you all have a good rest of the day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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