BioAtla, Inc.

Good afternoon, ladies and gentlemen, and welcome to the BioAtla 3rd Quarter 2023 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. Please be advised that the day's call is being recorded on Tuesday, November 7, 2023. I would now like to turn the conference over to Bruce Michael of LifeSci Advisors. Please go ahead.

Thank you, Operator, and good afternoon, everyone. With me today on the phone from BioAlla are Dr. Jay Short, Chairman, CEO, and Co-Founder, and Rick Waldron, Chief Financial Officer. Following today's call, Dr. Eric Sievers, Chief Medical Officer, and Sherry Lydick, Chief Commercial Officer, will join Jay and Rick for a short Q&A. Earlier this afternoon, BioAtla released financial results and a business update for the third quarter ended September 30, 2023. A copy of the press release and corporate presentation are available on the company's website. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements, including but not limited to statements regarding BioAtlas business plans and prospects and whether its clinical trials will support registration, plans to form collaborations and other strategic partnerships for selected assets, results, conduct, progress, and timing of its research and development programs and clinical trials, Expectations with respect to enrollment and dosing in its clinical trials, plans and expectations regarding future data updates, clinical trials, regulatory meetings, and regulatory submissions. The potential regulatory approval path for its product candidates. Expectations about the deficiency of its cash and cash equivalents. Plans to prioritize and focus development on selected assets and indications. and expected R&D and G&A expenses. These statements are subject to various risks, assumptions, and uncertainties that can cause actual results to differ materially and are described in the filings made with the SEC, including the most recent quarterly report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, November 7th, 2023, and BioAtla disclaims any obligation to update such statements to reflect future information, events, or circumstances, except as required by law. With that, I'd like to turn the call over to Jay Short. Jay?

Thank you, Bruce, and thanks to everyone for joining us for our third quarter 2023 BioAtla earnings call. BioAla is the inventor and leader in the development of novel therapies using a proprietary conditionally active biologic CABs platform with improved selectivity for attacking tumor cells while avoiding healthy cells, thereby addressing critical unmet needs in oncology to improve patients' lives. As we approach the end of 2023, we have obtained data to support several value inflection points across our CAB portfolio and continue to focus on further advancing the development of our prioritized CAB programs. We believe that forming one or more strategic collaborations with major pharmaceutical partners can accelerate development of selected assets and maximize their market opportunities. We also believe that our more focused and strategic approach better positions us to enhance value for shareholders. Additional details related to what I'm going to provide are available in today's press release and our revised company presentation, both of which are available on our website. I will now provide some new updates since our second quarter call in August, beginning with our CAB Axle ADC BA3011. Regarding our BA3011 Phase II study in non-small cell lung cancer, we have consistently observed multiple clinical responses in actual positive treatment refractory lung cancer populations. Among patients receiving BA3011 monotherapy who previously experienced BD1 treatment failure and were available for efficacy at 12 weeks, the observed objective response rate was 27.8%. In patients with EGFR wild-type non-squamous lung cancer who previously experienced PD-1 treatment failure, 33.3% of the patients had a partial response to VA3011 monotherapy. Of note, axial expression in lung cancer defines a particularly poor prognostic group. Also, these patients had experienced the failure of a median of three prior lines of therapy. So we believe that observing multiple responses in this treatment refractory poor prognostic group is clinically meaningful and relevant. In addition to the consistent differentiated safety profile, we continue to observe clinical benefit in patients including multiple PRs at a TMPS score of 1%. We are exploring the potential clinical benefits in actual TMPS negative patients, which is important for understanding the market potential of BA3011 in lung cancer. Earlier this quarter, we also received verbal FDA feedback that we believe is supportive of a registrational path forward for BA3011 in lung cancer. We anticipate receiving formal written feedback later this month and plan to share more details and interim Phase II data to be presented at the ISLAC conference and our KOL event in early December. Our Phase II Potentially Registrational Study for Undifferentiated Pneumorphic Sarcoma, or UPS, is ongoing and we continue to enroll the 2q3w dosing regimen for up to 20 patients. We have decided not to further advance the 3Q4W dosing regimen across any cohorts in either the BA3011 or the BA3021 studies due to suboptimal compliance with this dosing regimen, which is consistent with a lack of meaningful difference in efficacy observed with BA3011 and myeloma sarcoma. In regards to other bone and soft tissue sarcoma cohorts, we are pleased to have hit our internal GO criteria for several sarcoma subtypes, including synovial sarcoma, liposarcoma, and osteosarcoma. As a reminder, our internal GO criteria is defined as achieving greater than or equal to one complete response slash partial response or a progression-free survival rate of greater than or equal to 40% at 12 weeks. All cohorts are now completed and we plan to submit available data to a medical meeting in 2024. As previously communicated, our highest priority is to deliver innovative life-changing therapies to cancer patients with significant unmet medical needs. We have now observed multiple clinical responses in several treatment refractory solid tumor populations with our cab-axial ADC asset, BA3011. We have also recently received feedback from the FDA on the BA3011 lung cancer registrational study design. Taken together, we continue to believe that BA3011 is an active agent in treatment refractory tumors and has the potential to become a first-in-class treatment for a significant number of patients who experience the failure of at least one prior line of therapy. Now turning to our second CAB ADC asset, BA3021, a CAB or 280C. For our ongoing Phase II trials, we have completed enrollment of approximately 20 patients at the Q2W dosing regimen in both lung cancer and melanoma and anticipate to complete enrollment of up to 20 patients at the 2Q3W dosing regimen in head and neck cancer before year-end. In treatment refractory patient populations, there are encouraging early responses in the Phase II melanoma study at the Q2W dosing regimen that are consistent with our Phase I expansion study. In particular, among the eight available monotherapy patients to date with reported first scan across Phase I and Phase II clinical studies, we have observed four responses, two stable disease, one of which was a 17% tumor volume reduction in uveal melanoma, and two with progressive disease. Notably, we have now observed a PR in a ROR2 TMPS-negative patient which is likely to expand the applicable patient populations. We are continuing to collect data in the ongoing study, and the remainder of patients in the targeted melanoma cohort will have had the opportunity to have first scan by year-end. There are also encouraging early responses in head and neck cancer at 2Q3W. also with a new PR observed in a War II TMPS negative patient, which makes two out of two responses at the 2q3w dose across Phase I and Phase II. We are on track to complete all dosing regimens enrollment by year end and will continue to collect data in the ongoing study. The ROR2 melanoma indication recruitment has been assisted by enrolling target agnostic patients followed by a retrospective target expression analysis, both of which resulted in quicker enrollment and the opportunity to target a larger melanoma patient population. In the case of head and neck cancer, ROR2 is expressed in a significant portion of these patients and therefore is also not anticipated to benefit from a biomarker assay, particularly in view of the observed 2Q3WPR in a ROR2 TNPS negative patient, which maximizes the potential applicable patient population. For ROR2 positive lung cancer patients at Q2W, While we observed clinical benefit in terms of substantial stable disease and tumor volume reduction, there are no responses to date, and thus we did not meet our internal criteria for advancing at this dose. Further, in view of these results and our supportive axial lung cancer data, we currently do not plan to internally explore the more frequent 2q3w dose for this indication. Regarding the ovarian IIT, interim analysis of 10 patients in each of the BA3011 and BA3021 Q2W cohorts demonstrated modest disease control, but did not meet our internal criteria for advancing at this dose. We currently do not plan to internally explore additional dosing regimens at this time for this indication. Now onto our other promising CAB assets. Beginning with our CAB CTLA-4 antibody, BA3071, which is applicable in areas of high-end med need in treatment refractory patients, represents a sizable commercial opportunity. We have encouraging Phase I observations to date, and we continue to follow these patients' progress. In contrast to approved and earlier stage CTLA-4 blocking antibodies, BA3071 is designed to be conditionally and reversibly active in the tumor microenvironment. We believe this unique design enables our Capsule A4 antibody to have the potential to deliver efficacy with a manageable safety and tolerability profile. In particular, a safety profile with less immune-related adverse events across multiple tumor types may allow patients to stay on therapy for longer and achieve clinical benefit from this important immunotherapy. The Phase I-II trial was being conducted in tumors known to be responsive to C. pylori for treatment, and we are continuing to evaluate safety and tolerability of BA3071 in monotherapy and in combination with nivolumab. As part of today's brief update, I'm happy to report that we have initiated the Phase II expansion cohort enrollment and remain on track for the Phase I data readout, which will be highlighted at our upcoming R&D day on December 13th. Next onto our potentially first-in-class dual CAB bispecific T-cell engager antibody, CAB, EPCAM, CAB CD3, or BA3182. We previously announced FDA clearance of our IND for the treatment of advanced adenocarcinoma, and last quarter we announced that the Phase I study was actively enrolling patients. The study is progressing nicely through the dose escalation part of the Phase I study, and we anticipate completion of the Phase I study with a full data readout remaining on track for next year. We believe that our dual-cAB design has potential to address tremendous unmet need across multiple tumor types with the most common subtypes of adenocarcinoma, including colon, lung, breast, pancreas, and prostate. I'd like to round out today's talk with a corporate update. First, in addition to our leadership team. Recently, Dr. Ben Jung joined BioAtla as Senior Vice President, Head of Clinical Development and Operations. Ben brings over 20 years of experience in clinical practice, early and late stage drug development, and asset management with a focus on oncology drug development. Prior to joining BioAtla, he held leadership roles with increasing responsibilities, including at Bristol Myers Squibb, Ipsen Bioscience, and most recently a Senior Vice President, Head of Clinical Development at Pixis Oncology, where he oversaw clinical development activities of all oncology assets. His regulatory interaction experience coupled with his known track record of leading cross-functional teams will be instrumental as we advance clinical development efforts and strategic collaborations. We are thrilled to have Ben on board with BioLatina. And finally, I'm pleased to report our progress with the medical and scientific communities with an additional abstract on BA3011, alone or in combination with nivolumab in patients with lung cancer, which was accepted for presentation at the upcoming ISLAC conference this December. We also look forward to sharing these data and additional details around our Cabaxyl-80 CF set at our upcoming KOL event on December 4th. Moreover, we will present our Phase I CAV CTO A4 BA3071 study data at our upcoming R&D day on December 13th. With that, I would now like to turn the call over to Rick to review the third quarter of 2023 financials.

Rick? Thank you, Jay. Cash and cash equivalents as of September 30, 2023, We're $141.3 million compared to $215.5 million as of December 31, 2022. We now expect current cash and cash equivalents will be sufficient to fund planned operations, including prioritized CAB programs, into the second half of 2025. Research and development expenses were $28.4 million for the quarter ended September 30, 2023, compared to $19.8 million for the same period in 2022. The increase of $8.6 million was primarily driven by a $6.3 million increase in our clinical product development expenses primarily related to the launch of our AXO-UPS potentially registrational trial and a $1.8 million increase in additional product development expenses. We expect our R&D expenses to remain variable from quarter to quarter as we continue to advance our clinical programs, then decreasing after we complete enrollment and focus development on selected high potential indications. General and administrative expenses were $6.6 million for the quarter ended September 30, 2023, compared to $6.3 million for the same quarter in 2022. The $.3 million change was attributable to an increase in professional services and consulting expenses for the 2023 period. We expect our G&A expenses to remain flat to moderately increasing to support development of our prioritized CAB programs. Net loss for the third quarter ended September 30, 2023 was $33.3 million compared to a net loss of $25.8 million for the same quarter in 2022. Net cash used in operating activities for the nine months end of September 30, 2023 was $74.1 million compared to net cash used in operating activities of $66.1 million for the same period in 2022. The increase in net cash used in operating activities for the first nine months of 2023 is primarily due to an increase in research and development expenses related to our program development efforts as compared to the first nine months of 2022. And now, back to Jay.

Thank you, Rick. Biolab is dedicated to delivering innovative, life-changing therapies to cancer patients. We observe that the CAB platform continues to demonstrate compelling clinical efficacy and safety across multiple therapeutic targets and formats, in the most challenging cancer cases. As a result, we believe that there are mutually compelling opportunities for forming one or more strategic collaborations with major pharmaceutical partners that both accelerate and maximize the therapeutics opportunity. In addition to advancing collaboration discussions, we will continue to advance selected CAB assets that can address significant unmet medical needs in order to maximize shareholder value. With that, we will turn it back to the operator to take your questions.

Thank you. And ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your telephone keypad. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press the star followed by the number two. If you're using a speakerphone, please keep the handset before pressing any keys.

One moment, please, for your first question. Your first question comes from the line of Brian Chang from JP Morgan.

Your line is open.

Hey, guys. Thanks for taking my question this afternoon. Given the responses that you saw here and now for Axel and EGFR wild type and the PD-1 treatment failure patients, To the extent that you can, can you give us a sense of the verbal feedback that you receive on the registration of PATH forward from the agency? And what are the expectations that we could get in terms of, you know, the PATH forward at the December event?

I'll start. Maybe Eric can add if he has anything to add. You know, they gave us some very clear and actionable items, both either in second- or third-line therapies. And so we're just waiting for the written confirmation of the verbal communication. And as soon as we have that, we expect that a little later this month, and we'll be communicating that in far more detail in December. But hopefully that's helpful, and we think it's very promising.

Okay. And then... related to the IASLC conference presentation next month. Can you talk about just, you know, what we should expect in terms of the level of details regarding to response? And can you also comment on the durability of the response that you've seen so far in non-small cell?

Eric, do you want to lead off on this one? Sure. I think we'll be having a pretty standard poster presentation of the data sets, including spider plots, swimmer's plots, and so you can anticipate that. Jay?

Also, I would add, we'll also have, while monotherapy obviously is our focus, we will provide the data on the combo, the updated data on the combination therapy, and also our initial look on a more frequent dosing up to 10 patients for that as well, maybe more. We'll see how that goes in the next few weeks. And we'll also remember the day after have a KOL event with an expert in lung cancer and also has been treating patients in some of their direct experience.

Great.

Thank you for taking my questions.

And your next question comes from the line of Kavir Polman from BTIG.

Your line is open.

Thank you for taking my question. So for non-small cell lung cancer, Tredelvi has a Phase III EVOCA-1 trial ongoing. And in their most recent press release, Segen also announced that they will be initiating a Phase III trial for their integrin beta-6 targeting ADC. I was just wondering if you could tell us how you're thinking about the competition here, and what level of target expression overlap do you expect to see between TRIP2, Beta 6, and Axel?

I'll start off, and then maybe Eric or Sherry can add to this. So, first off, I think you can look at both pieces of data. We've seen now multiple responses at 1% TMPS level. we're not seeing a strong correlation in responses and stable disease to the level of axial expression. And this is, I think, observed by a number of different ADC groups, at least in groups with ADCs studying lung cancer. We're also, you know, reporting responses in WAR II as well from WAR II negative patients. So we're in the process right now of evaluating the frequency in the axial negative patients based on an IHC assay. And I think I'll just remind everyone that an IHC assay has its own sensitivity. Just because you don't see axial by that kind of assay doesn't mean you have no axial expression. It's just at a much lower level. So we think that this has a chance of broadening the axial market opportunity here. It also, because of the Axel being a poor prognostic indicator, meaning the patients have a very difficult time, and these may be some of the most difficult patients to treat, remembering that our entire study, all the patients had a median of three prior lines of treatment, and they were Axel positive. So there's some significant likelihood that we're going to see responses below the 1%, and we're going to find that out and add that to the data sets, which could have a substantial impact on the market opportunity of our drug. So we think a cross-trial comparison is a little difficult when the others haven't gone into an actual positive data set, and so we're gonna look more broadly, and I think we'll have more data on that as we go forward. Sherry or Eric wanna add or clarify anything?

If not, Christian, I hope that answers your question. Yeah, Jay, I think you characterized that very well. Thank you.

Okay, thank you. And just if you could provide any more details about the assay you're using for axial expression assessment and how are you thinking about its use, sorry, how are you thinking about its use like when moving from early stage to pivotal trials?

Well, I think it's an immunohistochemical assay using an antibody against Axyl. It's not our therapeutic antibody, but it's one that was specifically selected for detecting Axyl expression on cancer cells. And, of course, we've been looking, you know, a lot of people are used to the H score where you look at the level or the amount of expression on each cell versus the amount on the number of cells that have expression on the membrane. And so it has an inherent sensitivity. So... The fact that we're seeing responses at such a low axial expression level is hinting that axial may well be behaving like we're seeing in ROR2 and that others are seeing with some of their ADCs. It's quite possible, and we'll let the data speak for itself, but it's quite possible that we won't need a companion diagnostic going forward. But as of this moment, we believe we validated at the level of 1% or greater with the TMPS score in these patients, refractory patients with three prior lines of therapy, and show that we have a path forward here with these. And that's in third line, so we think we'll do even better in second line. But for the moment, we're going to look to see if we can have similar even potentially greater impact in ones that are less than 1% given that poor prognostic indication of axle expression with axle expression. So what's nice about this strategy is that the recruitment now is uncoupled from having to require, at least to finish off this analysis, We can admit all patients to our study and do a retrospective analysis. This allows us to look at those patients with less than 1% as well as a few additional ones with 1% or greater. We're going to add that data very quickly to our current data sets and as we go forward with some of our partnering discussions.

Thank you. That's very helpful.

And your next question comes from the line of Kelly Shee from Jefferies. Your line is open.

Hello?

Kelly Shee, you might be on mute.

Hello?

Can you hear me?

Now we can.

Hi, this is Dave on for Kelly. And I have a question on 3021. Do you plan to share a non-small cell lung cancer data that you generated? And if you can share any insight that you can draw from the data, such as patient baseline or expression, which contributed to low responses. Also for CTLA-4, Can you set the expectation on data details such as patient number or dose level we should expect at R&D day? Thank you.

Yeah. We will definitely share the data on non-small cell lung cancer data. We're going to link that to a meeting. We may also include data from the more frequent dosing with some of the other indications like head and neck cancer and melanomas. We'll be looking for an upcoming meeting on that. You know, it's still quite possible that, you know, because we saw responses in lung, I'll remind everyone in phase one, but what we've basically shown that we're not driving responses at the Q2W level. We're also, you know, seeing responses with 2Q3W in head and back, but we, so we think that there's potential to go to a higher dose, but as part of our privatization process, which is you know, has to factor in a very encouraging data out of the axial lung data, and we decided that it was best to prioritize axial lung for that particular indication while we continue to advance melanoma in head and neck, especially given the very high unmet need in those particular indications. So we will get it, and we'll have quite a bit more data that we'll be putting together for that release. With respect to CTLA-4, we're on track to give quite a bit of detail on our Phase I dense oscillation, and we'll be giving an update on the Phase II results, but suffice it to say that the fact that we've already kicked off Phase II and that we have our first patient in on Phase II, that we're We think that it's heading in a very good direction. And I'll remind you that we've been studying patients that are known to be responsive to CTLA-4. It was a basket of eight different indications that include things like melanoma and non-small cell lung cancer. So we'll be discussing all of that in December. And so I would just invite everyone on December 13th for that R&D day so we can give you a lot more detail around those studies.

Thank you for taking our question.

And once again, if you would like to ask a question, simply press the star followed by the number one on your telephone keypad. Your next question comes from the line of Arthur He from HC Wingright. Your line is open.

Hey, good afternoon, Jay, Rick, Sherry, and Eric. Thanks for taking my question. So I just wanted to push the envelope a little bit further on the 3011, these 33.3% ORR, is that also including both the Q2W and the more intensive dose regimen, or it's only for the Q2W?

Only Q2W. We haven't reported out on any more frequent dosing yet. Okay. Thanks for that.

And then regarding to the... For the RR2 negative melanoma patient, which shows response, is that patient is in the Phase II study or it's from the Phase I study? Could you remind us? For head and neck, you mean? No, for the melanoma, I believe. For melanoma, we have

We have two, excuse me, we have one response from phase one that's included, and we have three responses from phase two.

Okay. And so far, so you said you completed enrollment. So how many total patients we could expect the next data update?

Well, I don't know what the valuable patients will be, but we had targeted 20 patients. So we'll see where we go on that. And we've reported on eight valuable patients today where we saw four responses out of eight, two with stable disease, and two with progressive disease. So quite encouraging at this stage. Gotcha.

So my last question is for the 3182, your bispecific candidate for the Epcan, So could you give us more color about the enrollment status for that trial?

I think it's going well. I mean, it takes, you know, about a month, plus or minus a week, you know, to kind of get from patient to patient. So I think we're on track here and continue to dose escalate and, you know, You know, I think it's early, but all good so far. And, you know, this is a particularly interesting drug, and I get why. I would be asking the same question, Arthur, that you are, because this is one of those pan-cancer opportunities with very high selectivity, with a very potent mechanism that is enabled by CABs with this T-cell recruiting capability. And so, We're very eager to push it along, so it's going to move quickly, and we'll have a lot more to talk about it, and we have only seen positive things so far.

Awesome. Thanks for taking all my questions, and congrats on the program. Thank you. Thank you. Look forward to it.

Thank you, and there are no further questions at this time. I would like to turn it back to Jay Shore for closing remarks.

Thank you, everyone, for your attendance. We're really looking forward to continuing our discussions, especially with medical experts in early December. It's only a few weeks away, and we're looking forward to speaking with many of you at that time. Take care now, and all the best.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.