BioAtla, Inc.

Greetings and welcome to the BioATLA fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Bruce Mackel with LifeSci Advisors. Thank you, Mr. Mackle. You may begin.

Thank you, Operator, and good afternoon, everyone. With me today on the phone from BioAtla are Dr. Jay Short, Chairman, CEO, and Co-Founder, and Richard Waldron, Chief Financial Officer. Following today's call, Dr. Eric Sievers, Chief Medical Officer, and Sherry Leidig, 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 fourth quarter and full year ended December 31, 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 sufficiency of its cash and cash equivalents to fund operations and expected R&D 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 annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, March 26, 2024, 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 fourth quarter full year 2023 BioAtla earnings call. BioAtma is the inventor and leader in the development of novel therapies using a proprietary, conditionally active biologics or CABs platform with improved selectivity for attacking tumor cells while avoiding healthy cells, thereby addressing critical and met needs in oncology to improve patients' lives. We made considerable progress in 2023 across all of our ongoing clinical programs, including the Phase II trials for our first-in-class CAB, ADC, product candidates BA3011 and BA3021, targeting multiple solid tumor types. Our CAB C24 IO antibody and our first dual-CAB bispecific EPCAM CD3 T-cell engager. We continue the positive trajectory into 2024, focused on further advancing our prioritized CAB programs generating datasets that potentially enable us to move into one or more registrational trials in the second half of the year. We believe that these near-term inflection points also support the formation of one or more strategic collaborations with major pharmaceutical partners this year, which can accelerate the development of selected assets and maximize their market opportunities. Additional details related to what I'm going to provide are available in today's press release and our updated company presentation, both of which are available on our website. I will now review our latest updates, beginning with our CAB-CTLA-4 antibody, DA-3071, which is applicable in areas of high unmet need across multiple solid tumor indications, both for refractory and for first-line patients, and represents a sizable commercial opportunity. We are pleased to report that our phase two data at 350 milligrams flat dose continues to mirror our phase one dose escalation data in terms of low incidence and severity of immune-related adverse events. In addition, I'm happy to report that we have cleared a higher dose of 700 milligrams with tocilizumab for the first two cycles and are now evaluating the unprecedented one gram dose level. This is important since previous studies demonstrated improved overall survival in metastatic cancers including melanoma with higher levels of CTLA-4 inhibition. As a result, we are now enrolling patients at 700 milligrams in first-line melanoma patients and in a significant targeted first-line non-small cell lung cancer population in combination with PD-1 for readouts later this year. These data are also anticipated to position the company for one or more potentially registrational trials and first-line indications in the second half of this year. In addition, as part of our evaluation of safety and tolerability of BA3071, we are completing the Phase II expansion in treatment refractory melanoma and carcinoma with an initial data readout of approximately 20 patients in second quarter. As already noted, the safety and efficacy data from the phase one study demonstrating both a confirmed partial response and a confirmed complete response for two out of six patients is encouraging using the 350 milligram dose. And now we are enrolling the remaining patients at the 700 milligram dose. With our evolving clinical data, we believe DA3071 has the potential to be best-in-class CTLA-4 that holds the promise to be used as often as a PD-1 inhibitor, and potentially expand the indications where combined immune checkpoint inhibition can be effective. In addition, the emerging safety profile suggests that BA3071 with PD-1 immune modulation may be suitable for further combining with CAB ADC therapies that target Axel and or War II to achieve synergistic durable tumor control. Now turning to our CAB War II ADC asset, BA3021. For our ongoing Phase II trials in treatment refractory Ward II agnostic patient populations, we previously reported encouraging responses in the Phase II melanoma and squamous cell carcinoma, the head and neck studies. As part of today's update, we now have both 28 melanoma patients and 12 head and neck patients dosed using the 1.8 milligram per kilogram Q2W regimen. and 20 head and neck patients dosed using the more intense 2Q3W regimen for a total of 32 head and neck patients. We anticipate having two plus scans in the melanoma cohort next month and two plus scans in the head and neck cohort in May, with anticipated top-line data readouts for both during our Q1 earnings call in May. Given the encouraging emerging data sets, we believe BA3021 is well-positioned for a global strategic collaboration to maximize the potential of this CAB-ADC across multiple solid tumor indications. On to our CAB-AXL-ADC BA3011. Our Phase II Potentially Registrational Study for Undifferentiated Pneumorphic Sarcoma, or UPS, is on track to complete enrollment of approximately 20 actual agnostic patients at the 1.8 mg per kg 2q3w regimen next month with encouraging compliance and manageable safety. We anticipate having multiple scans across the patient group potentially enabling a meeting with the FDA to discuss the remaining portion of the potentially registrational study in the second half of this year. We also reported clinically meaningful anti-tumor activity among patients with treatment refractory bone and soft tissue sarcomas, which remain a profound and tractable unmet need for new treatment options. We presented these data from Phase II Part I cohort enrollment as an oral presentation at the Asthma, Sarcoma, and Rare Cancers meeting earlier this month and showed disease control at 12 weeks for 43% of the 87 patients treated with BA3011. monotherapy using the less intense regimen of 1.8 mg per kg Q2W. We believe this represents a promising disease control rate for patients with treatment refractory sarcomas. In the osteosarcoma cohort, we observed two partial responses out of 11 efficacy-available patients. The treatment was well-tolerated and associated with a manageable safety profile with no new safety signals to report. Now regarding our phase two study in non-small cell lung cancer, last quarter we reported multiple durable clinical responses with a differentiated safety profile among a challenging axopositive treatment refractory lung cancer population. Specifically among 15 patients with EGFR wild type tumors who had received prior PD-1 treatment, we observed five partial responses with a medium duration of response of approximately five months using 1.8 milligrams per kilogram, Q2W, every other week dosing. Toxicity was manageable, and few high-grade related treatment emergent AEs were reported. We believe multiple responses in a treatment refractory, axial positive, poor prognostic group such as this one is clinically meaningful and relevant, particularly since these patients have experienced failure of a median of three prior lines of therapy. As part of today's update, we have enrolled 33 target agnostic patients using the more intense 1.8 mg per kg 2Q3W regimen across both squamous and non-squamous patients. We are on track to evaluate clinical benefit in the target agnostic non-small cell lung cancer non-squamous population in the second quarter of this year. Next, onto our potentially first-in-class dual-CAB bispecific T-cell engager antibody, CAB-EPCAM, CAB-CD3, or DA3182. EPCAM is a ubiquitous target expressed from the surface of cancer cells, which requires the use of our CAB technology to achieve optimal selectivity and safety. Our Phase I-II dose escalation study continues to progress and is on track. We anticipate completion of the Phase 1 study with a full data readout anticipated in the second half of this year, with potential initiation of a Phase 2 study also in the second half of this year. If shown to be safe and effective among cancer patients enrolled, our CAB-enabled T-cell engager has the potential to treat patients with a wide range of metastatic tumors, including cancers of colon, lung, breast, pancreas, and prostate, among others. As we have previously discussed, ADCs are a promising treatment modality with broad applicability across multiple tumor types. To further reduce the potential risk associated with neutropenia from off-target toxicity, we developed a novel next-gen carbohydrate linker system with superior serum stability, solubility, and tumor-specific payload release, yielding our first glycoconjugate CAD-Nectin-4 ADC, BA-3361. At the upcoming AACR meeting in April, efficacy data will be presented demonstrating complete tumor regression in xenograft models, including superior efficacy compared to infortimab, the dotin analog, and the patient-derived pancreatic cancer model. We will also present both PK and toxicology data in non-human primates, as well as the influence of our linker technology in specific cancer models. These data indicate that our next-gen CAB Nectin-4 ADC petition is a more effective treatment with reduced toxicity. We plan to submit the IND in April. And finally, I'm pleased to report our progress with the medical and scientific communities and important ongoing communications with numerous publications and presentations, including at conferences such as Asthma, Sarcoma, and Rare Cancers, SITC Spring, and the AACR Annual Meeting in April, which can be found on our website. With that, I would now like to turn the call over to Rick to review the fourth quarter and full year 2023 financials. Rick?

Thank you, Jay. Research and development expenses were $22.7 million for the quarter ended December 31, 2023, compared to $21.9 million for the same quarter in 2022. The increase of $0.8 million was due to clinical development expenses primarily related to the launch of our BA3011 UPS potentially registrational trial in 2023 and overall accelerated enrollment across our clinical trials in 2023, offset by a decrease in expense for our preclinical programs in selected clinical indications due to our program prioritization in 2023. We expect our R&D expenses to decrease overall in the first half of 2024 due to recently completed enrollment in clinical trials for datasets expected to enable potentially registrational trials for our ADC programs BA3021, and VA 3011. General and administrative expenses were $5.9 million for the quarter ended December 31, 2023, compared to $6.7 million for the same quarter in 2022. The $0.8 million decrease was primarily due to lower stock-based compensation and D&O insurance premiums. Net loss for the quarter ended December 31, 2023, was $26.9 million, compared to a net loss of $27.6 million for the same quarter in 2022. Net cash used in operating activities for the full year ended December 31, 2023, was $104 million compared to net cash using operating activities of $90.4 million for the same period in 2022. Our cash use for the quarter ended December 31, 2023, was $29.8 million. Cash and cash equivalents as of December 31, 2023, were $111.5 million compared to $215.5 million as of December 31, 2022. We expect our cash utilization to decrease in the first half of 2024, allowing our current cash and cash equivalents to fund operations into the second half of 2025. And now, back to Jay.

Thank you, Rick. BioAVA made considerable progress in 2023 across our ongoing clinical trials targeting various tumor types, and we look forward to the multiple important milestones in the second quarter of this year, including initial data readout from our Phase II CTLA-4 IO antibody, Phase II in both melanoma and head and neck cancer, and evaluation of clinical benefit in axial agnostic patients in our Phase II non-small cell lung cancer study. We are encouraged by the compelling clinical efficacy and safety that continues to emerge, highlighting our differentiated CAB technology across multiple therapeutic targets.

With that, we will turn it back to the operator to take your questions.

Thank you. We will now be conducting a question and answer session.

If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Kelly Shee with Jefferies.

Please proceed with your question.

Hi, this is Dev on for Kalishi. I have a couple of question, one on 3011 in UPS. Maybe if you can talk about your expectation and what you anticipate from the meeting, from the FDA meeting that you plan in second half. Also, will you be discussing additional indication or will it be only for UPS?

Sherry, do you want to take that one to begin?

Sure. Thank you for the question, Dave. In terms of the second, I'll take the second part of your question. So the meeting would be focused on UPS. This is our potentially registrational trial. So we would look to discuss the data set that we had generated with the first 20 patients. in terms of efficacy and tolerability. And I think I would pass the first part of your question over to Eric for additional comments.

Sure. I'm happy to take that. Thank you, Sherry. So, our goals with the FDA meeting are really to plot out together an agreeable registration path. And I think we've guided previously that that would be based on an overall response rate with a certain durability. We'll also be talking with the agency about Project Optimus and whether the multiple different dosing regimens that we've explored in UPS are sufficient to achieve the Project Optimus guidelines. And we then hope to be able to provide guidance on our path forward after that meeting.

Great, thank you for taking our question. Thank you. Thank you.

Our next question comes from the line of Kaveri Pullman with BTIG.

Please proceed with your question.

Yeah, good evening. Congrats on the progress and thanks for taking my question. For CCLA-4, any additional color you can provide on the first line melanoma and non-small cell lung cancer trials Are these going to be single arm trials and how many patients do you plan to enroll?

Eric, do you want to start with that one? Sure.

Thank you, Kaveri. So, we would expect to enroll about 15 to 20 patients in each of our first line melanoma cohort and the first line targeted non-small cell lung cancer. by the end of the second half of 2024. We hope that this data set, both in melanoma and non-small cell lung cancer, will help guide next steps for us. And I also want to emphasize, as Jay did, that we've passed the 700 milligram dose, which is equivalent to a 10-per-kilo dosing, and are now evaluating one gram. So we're really of the belief that higher dose levels will be very important in extending survival as other studies have shown.

And I think that I'll just add I think our goal here is from these studies is to inform us and allow the positioning for registrational trials which in that case would be randomized studies.

That's helpful. For Epcam CD3 by specific trial, I understand it's for multiple solid tumors, but are you enriching or have you seen enrichment for patients with certain tumor types? And can you set some expectations for what we will be seeing in second half and what would good data look like?

I think, obviously, adenocarcinoma, but I think we're seeing some colorectal patients, and we would expect to see a continuation along those lines as we go through the different dose layers to the ultimate dose selection level. And our goal is to report out on those with multiple scans, very much similar to what we did with C24 in December with that readout as we positioned for

Eric, do you want to add anything to that? I think it covers it. More than 70% of tumors are adenocarcinomas, so we think we have plenty of coverage with this approach. And Kaveri, to your question, we're not needing to specifically pick patients based on target expression. EPCAM is so robustly expressed by tumors that we think that just using the adenocarcinoma approach will be getting patients likely to benefit.

Got it. Thanks for taking my question. Thank you.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from the line of Arthur He with HC Wainwright. Please proceed with your question.

Hey, good afternoon, J&M team. Thanks for taking my question. So I just want to get your – for the 3071 and the 3021 update, is that going to be all together at the first quarter earnings call?

No, our expectation is 30-21. We will be giving a top line update then. The key update for 30-71, well, there could be an update on the dose escalation. You know, we won't know for sure until we get a few weeks further down the road here since we're enrolling at the one gram level right now. But that is a possibility there, but we'll see as we get closer to time. I think for the readout of the monotherapy phase two study with approximately 20 patients where the majority have been recruited at 350 milligram flat dose and just a few remaining patients at the 700 milligram dose, that'll be... Sometime in June and the latter part of June, I'm estimating, because we want to get as much scan data. If you remember back on 3071, you definitely want to see two scans because you're initiating the immune system. So that one, we're going to give it just a little more time. But all pretty – not very far away, quite frankly, coming quickly. Gotcha, gotcha. Thanks for that.

And my second question is – So regarding the next candidate, I'm just curious to try to pick your brain is why another ADC, not a T-cell engager? That's one. And the second question is why Nectin-4 as a target? Thanks for that.

Well, I think... Two things. We have both. We have an ADC that just happened to be ready first, and then we also have a bispecific, which I believe we've reported on in previous conferences. But I think that there are a couple reasons why Nectin-4. Number one, there is an associated toxicity with the current marketed Nectin-4 that limits its applicability. Secondly, as we're going to report on in April at AACR, we're seeing efficacy in tumors that were not addressable with the current marketed drug. And so we see an opportunity to move, expand indications, and also improve on existing indications. And that's driven, of course, by our novel drug, NextGen carbohydrate linker, which reduces off-target levels of off-target toxicity that is a result of the payload coming off prior to entering the cancer cell. And so in general, we see both of these assets having an important opportunity for a validated target. And in general, philosophically, I mean, you could ask the same question of CTOA4. You know, here's a drug with incredible opportunity, but the toxicity has been very difficult to manage and has been used in very limited extent relative to what its potential is. And I think we can make that argument across several different targets when we apply our CAB technology, which improves that selectivity for the cancer cell population. and protects the normal cell.

I see. Thanks for that, Christian Carter. So if I may, can I squeeze one more? Just curious, I just quickly noticed the ACR presentation you're going to be doing in April. Could you tell us more on the tetravalent T7 engage, I believe the B7H3 target? What's the special of these designs? I'm just curious.

Well, I think it's what we refer to as kind of a butterfly design. In other words, we have two arms of the antibody that both can bind to the tumor cell. So that's the tumor cell engager. And then we also have two arms that come off the light chains that can bind to the CD3 Now, we've since, at least in terms of the Epcam drug, know that we're binding to a single CD3 arm at a time, whereas we can still bind to two different antigens on the tumor cell. But this increases your ability to, increases the potency of the drug to have this tetravalent structure, even in the case where one arm can bind at a time like in the CD3 arm. certainly you're going to get not only affinity but also affinity in the tumor targeting portion. So it's a very nice design from that perspective. But secondly, because there's only one form of this antibody that can be generated during manufacturing, it simplifies manufacturing and reduces cost of goods, which is also an advantage.

Gotcha. Thanks, Jay. I'll talk to you soon.

Thank you.

Our next question comes from the line of Ren Benjamin with Citizens JMP. Please proceed with your question.

Hey, good afternoon, guys. Thanks for taking the questions. As I think about 3071, I guess one question is, now you're looking at the one gram dose level. At what point do you kind of stop dosing higher, or can you just continue to go higher until you reach a DLT. And then I guess the second question is when I'm thinking about the melanoma non-small cell combination with PEMBRO cohorts, for which we'll have a data readout in the second half of this year, can you talk roughly kind of metrics that you might need to meet? Like, for example, in melanoma, should I be thinking about you guys beating or trying to beat Nevo plus Yervoy from both an efficacy and safety perspective? Or are you more concerned about the safety aspect and the same kind of question for non-small cell lung cancer?

Eric, do you want to start on this one?

Sure. I think I'll take a start and then hand to Sherry. You had a really interesting question about really how high to go. with CTLA-4 inhibition. It's really striking to look back at earlier randomized trials of ipilimumab 10 per kilo versus 3 per kilo, and the survival benefits are really quite striking at multiple years of follow-up. However, ipi 10 per kilo was associated with considerable toxicity. So most sponsors that are pursuing CTLA-4 antibody really want to push the dose to achieve high exposures. And then we also want a good high concentration trough in our pharmacokinetics so that CTLA-4 blockade lingers for the full three weeks between doses. So our current plan is to treat the patients at one gram every three weeks and We don't plan to go higher. We felt that that represents 14.2 milligrams per kilogram if you compared it to the IPI dosing. And I think we can use that and just have a broad goal of giving as much CTLA-4 blockade as early in a cancer patient's treatment as possible and make this something that based on tolerability and its efficacy would be reached for as often as a PD-1 inhibitor. Sherry, do you want to address the questions regarding what we would see in the context of melanoma and non-small cell lung cancer?

Sure, sure. Thank you, Eric, and thank you, Ren, for your question. I think basically what we would like is to be meaningfully better than the current marketed standard of care. So what that means is meaningfully better not only in terms of efficacy, but also tolerability. So providing a regimen that will allow a patient to really experience the full benefit of the therapy. So in the context of melanoma, you know, whether that means being meaningfully better than Updoolag in terms of efficacy or meaningfully better than, you know, Updivo Uruguay, we aim to be meaningfully better than what those regimens currently provide.

Got it. And what about for non-small cell?

I'll just add in, jump in here for a second. As you notice, we mentioned that we're doing a targeted population, which is significant, a large population, but it's a subset of all non-small cell lung cancer patients. And we're going to talk a bit more about that in a future conference, but at the moment we're just simply keeping that at a high level at this point.

Got it. Okay. And maybe just going back to Eric's answer, just in regards to the 14.2 mix per keg, significantly higher than what's been evaluated prior, do we have a sense as to kind of the PKPD at this point and how much sort of receptor occupancy or blocking we're already getting?

Any sort of color there would be helpful. Eric, I'll just jump in for a moment.

You know, I think that a lot of the studies that were done prior with ipilimumab have shown that you do continue to get an advantage up to 10 mg per kg. we don't have the data of 14.2 mg per kg, but we'll definitely be comparing the 10 to the 14.2. And our belief is we may not quite have saturated it yet at the 10, but the data is pretty clear when you compare one going 1, 3, and up to 10 mg per kg that you continue to get benefits. So I think, though, your point is reasonable. It's a reasonable question, though. At what point does that efforts start to become saturated. And I think certainly there's plenty of incentive to check out this one gram level.

And we'll hope to report out on that in the future. And Ren, maybe I'll jump in here with your question about the PK. So, as these are conditionally binding antibodies, we would need to do tumor biopsies to explore receptor occupancy. because the antibody was designed to explicitly not bind in the periphery. So it turns out to be a more challenging question to answer and one that we haven't done those biopsies in humans to characterize receptor occupancy. And then your question about PK is that it is really behaving in a pretty standard manner. There are really no PK surprises to date.

Excellent. Thanks guys for taking the questions. Thank you.

Thank you.

There are no further questions at this time. I would like to turn the floor back over to Jay Short for any closing comments.

Thanks everyone for your attention and we're looking forward to a very exciting second quarter.

We'll be talking to you soon. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.