BioAtla, Inc.

Good day, everyone, and welcome to today's BioATLA third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Bruce Mackel with LifeSci Advisors.

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 Lydick, Chief Commercial Officer, will join Jay and Rick in a short Q&A. Earlier this afternoon, BioAtlas released financial results and a business update for the third quarter ended September 30, 2024. 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, achievement of milestones, 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 expectations regarding R&D expenses and cash burn. 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 10Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, November 7, 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 Dr. Jay Short. Jay?

Thank you, Bruce, and thanks to everyone for joining us for our third quarter 2024 Biolab earnings call. Additional details related to what we will share today are available in today's press release and our updated company presentation, which are available on our website. Also, the slides from the oral presentation given at the Society for Melanoma Research in September is available on our website. And the upcoming poster, which will be presented tomorrow at the Society for Immunotherapy of Cancer, CITSE, will also be available on our website at the conclusion of the poster session. Now, on to our ongoing clinical program updates. Beginning with our CAB War II ADC, Zuriftamab-Vidodin, being evaluated as a monotherapy in treatment for refractory head and neck cancer patients who received a median of three prior lines of treatment. We shared last quarter that out of our 29 available patients, we have observed a total of 11 responses, six of which were confirmed responses, including an ongoing complete response, which underscores our assets activity in this difficult to treat patient population. We also shared that given the strength of the data and the profound unmet medical need, the drug candidate was granted fast-track designation by the FDA. In September, we presented an earlier data cut at ESMO that demonstrated meaningful anti-tumor activity with manageable tolerability. As part of today's update, we have additional data from these heavily pretreated patients showing that the median duration of response for all confirmed responders is now at 4.4 months, with the median overall survival now at approximately 9 months, which is ongoing. These are meaningful results in view of this being one of the first reported studies in head and neck cancer to evaluate a patient population with a median of three prior lines of therapy. Based on cross-trial comparisons of current standard of care monotherapy agents, methotrexate docetaxel, or cetuximab used to treat the second-line plus head and neck cancer patients. ORRs range from 6% to 13%, and the median overall survival range is 5.1 to 6.9 months. Notably, these results were in less heavily pretreated patients with only one to two median prior lines of therapy. We believe the clinical profile emerging for azuristamab-vidotin monotherapy in head and neck cancer is very competitive and has the potential to position our CABOR2 ADC as a standard of care in the second-line plus population. We recently received actionable feedback from the FDA regarding our proposed pivotal trial for azuristamab-vidotin monotherapy versus investigator's choice among patients with recurrent or metastatic head and neck cancer with disease progression on or after platinum-based chemotherapy and PD-1 antibody therapy. We are pleased to report that the FDA is supportive of our proposed prospective randomized trial design, investigator choice treatment options, and endpoints that have the potential to support a possible accelerated marketing authorization followed by confirmation of clinical benefit in the same trial with additional follow-up. At the current dose of 1.8 mgs per kg of aziristamab-vidotin, the FDA supported a limited randomized evaluation of the Q2W and 2Q3W dosing schedules, which is underway. As part of the overall pivotal trial design, we believe we now have a seamless path to confirming the dose schedule leading into the phase three trial in second-line plus head and neck cancer. Moving now to our CAB-CTLA-4 antibody, Avalcitug, which was generated from ipilimumab, or IPI, for the important conditionally active binding activity. We recently presented preclinical and clinical data at the Society for Melanoma Research in September, showing that Avalcitug is similar to IPI with respect to epitope, affinity, and half-life. However, Valsatug differs from IPI with respect to the absence of binding in the normal tissue environment, and we believe this feature will continue to demonstrate considerable safety benefits, enabling patients to receive higher and extended tumor-specific CTOA4 exposure. We will also be presenting a poster at CITSE's annual meeting tomorrow, highlighting our Phase II study in first-line unresectable or metastatic melanoma. The poster will be available on our website following the conclusion of that presentation. However, since the embargo has lifted for CITSE, I'd like to share the summary of our initial first line phase two melanoma patient data. All eight patients treated with Avastatug plus PD-1 achieved tumor reduction. To briefly review, IPI is typically dosed at either one milligram per kilogram or three milligrams per kilogram in routine clinical practice. With our approach, considerable CTLA-4 inhibition was safely achieved using relatively high avocetone dosing. Five patients received a 350 milligram dosing level that represents five milligrams per kilogram IPI equivalent. and three received at least 700 milligrams, representing 10 milligrams per kilogram IPI-equivalent dosing. We have now observed four responders, including three partial responses and one complete response, with acceptable tolerability and no disease progression observed to date. The safety profile in our Phase II study continues to suggest a relatively low incidence and severity of immune-related AEs. Two patients treated with prior adjuvant immunotherapy experienced grade three immune-related AEs that readily responded to standard treatments and continued to show tumor reduction without progression. Notably, several patients with decreasing tumor volume stable disease are early in their treatment courses and have the potential to also respond with additional follow-up. In addition, intrapatient dose escalation to higher doses that have been shown to be acceptably tolerated is permissible based on an investigator's decision. We now report several instances where increasing evals to tug exposure has directly led to reattainment of disease control with acceptable tolerability. Specifically, a cutaneous melanoma patient who was dose escalated from 70 milligrams to 210 milligrams and eventually to 350 milligrams achieved a confirmed PR at the higher dose And another cutaneous melanoma patient was dose escalated from 700 milligrams to 1,000 milligrams, experiencing decreasing tumor volume stable disease. Additionally, one recurrent metastatic melanoma patient whose dose was escalated from 210 to 350 milligrams also re-obtained disease control with stable disease. Consistent with prior observations with IPI in randomized trials, we are observing a relationship between exposure and anti-tumor activity, which is made possible due to the tolerability at higher evalsatug doses relative to that of IPI. We recently received FDA guidance on ongoing dose optimization and control arm to enable a Phase III registrational trial in first-line patients with metastatic or unresectable melanoma with anticipated initiation next year. Based on our evolving data, we continue to believe Avalsatug has the potential to be the best-in-class CTLA-4 that holds the promise to be used as often as a PD-1 antibody and potentially expand the indications where combined immune checkpoint inhibition can be effective. Now onto our Cab-Axyl-ADC asset, McBodumab-vidotin, Last quarter, we announced encouraging findings in non-small cell lung cancer patients expressing mutant KRAS or mKRAS. Among the 18 available patients with known KRAS mutations, we observed five responders, including one responder whose tumor expressed the mKRAS G12C variant and had experienced prior failure of sotoracib. In addition, we have a patient with a complete response that has been maintained now for over two years. demonstrating encouraging anti-tumor activity in patients with MK-RAS variants. Importantly, our initial findings support a trend for improved overall survival among treated patients with tumors expressing MK-RAS variants compared to the KRAS wild-type genotype. With today's update, we continue to observe anti-tumor activity with multiple confirmed responses among 21 available patients with tumors expressing MK-RAS now across nine different MK-RAS variants. Additionally, we continue to see an overall survival benefit among treated patients with mutant KRAS variants compared to KRAS wild type, with a median overall survival of 12.6 months compared to 8.7 months, respectively, and which is still ongoing. Furthermore, A manageable safety profile continues with no new safety signals identified in this patient population. As an update on our evaluation of patients with mutant KRAS non-small cell lung cancer, we continue to observe a high correlation of AXL and MKRAS expression. We believe this, coupled with the improved overall survival that we are seeing across nine different mutant KRAS variants, supports a potential pan-MK-LAS strategy in non-small cell lung cancer. Currently, we are determining the most efficient path for a future pivotal trial. Details will be forthcoming as they are available. Our Phase I-II dose escalation study for the CAB-EPChem CAB-CD3T cell engager is progressing well. The maximally tolerated dose has not yet been reached, and we are actively dose escalating. We have implemented a priming dose to modulate cytokine release syndrome that is commonly observed with T-cell engagers and can also occur in patients with heavy tumor volume. To date, we have observed multiple patients with anti-tumor activity with tumor volume reduction, including a colorectal patient with ongoing stable disease for one year. Given our continued dose escalation, We now anticipate data readout of the Phase I study around the middle of next year. We continue to be pleased with the progress of this program and the potential of our CAB-APTEM TCE to treat patients with a wide range of metastatic tumors, including cancers of colon, lung, breast, pancreas, and prostate, among others. Finally, we recently announced a worldwide license agreement for the preclinical CAB Nectin-4 bispecific T-cell engager. With a successful outlicensing of this preclinical asset to context therapeutics, we continue to focus on execution of our lead clinical CAB programs while ensuring the potential advancement of the Nectin-4 bispecific TCE, now referred to as CTO202. In addition, we are engaged in multiple active discussions regarding collaboration with one or more of our Phase II assets. Given the continued progress in these discussions, we are maintaining our guidance for a potential near-term collaboration for at least one of our Phase II assets. We continue to prioritize increasing shareholder value through non-diluted means while advancing our assets through key value-creating inflection points. With that, I would now like to turn the call over to Rick to review the third quarter 2024 financials.

Rick? Thank you, Jay.

Research and development expenses were $16.4 million for the quarter ended September 30, 2024, compared to $28.4 million for the same quarter in 2023. The decrease of $12 million was due to completion of preclinical development for our Nectin-4 ADC, which received IND clearance in May of this year, and the impact of prioritization of our clinical programs in 2023, resulting in less expense for our preclinical programs in 2024. The decrease in our clinical program expense was related to completion of targeted Phase II enrollment for our ongoing ADC trials for McBaudivad-Vidotin and Ozeriftimad-Vidotin. We expect to further reduce our operating expense as we complete certain of our Phase II clinical trials and meet with the FDA to finalize a path forward for the registrational trial. General and administrative expenses were $5.9 million for the quarter ended September 30, 2024, compared to $6.6 million for the same quarter in 2023. The $0.7 million decrease was primarily due to lower stock-based compensation expense. We recognized revenue related to our exclusive worldwide license agreement with Context Therapeutics, which was announced in September. As part of the agreement, BioAtla receives up to $133.5 million in aggregate payments, including $15 million in upfront and near-term milestone payments. The Nectin-4 T-cell engaging bispecific CAB antibodies was in preclinical development at the time of the agreement. Net loss for the quarter ended September 30, 2024, including $11 million in collaboration revenue was $10.6 million compared to a net loss of $33.3 million for the same quarter in 2023. Net cash used in operating activities for the nine months ended September 30, 2024 was $55.2 million compared to net cash used in operating activities of $74.1 million for the same period in 2023. Our net cash used for the quarter ended September 30, 2024 was $5.1 million. Cash and cash equivalents as of September 30, 2024 were $56.5 million compared to $111.5 million as of December 31, 2023. We expect current cash and cash equivalents to fund planned operations into early 2026, which we believe is sufficient to complete any remaining dose optimization for CAB World 2 and CAB CTLA-4, position these two programs for registrational trials in head and neck cancer and melanoma, respectively, and maintain our near-term guidance for key strategic collaboration with at least one of our Phase 2 assets. And now, back to Jay.

Thank you, Rick. We are pleased with the considerable progress we have made to date and our cumulative results across our CAB pipeline targeting solid tumors. We continue to focus on moving our ROR2 and CTLA4 assets forward toward pivotal registrational trials next year, along with a near-term strategic collaboration for at least one of our Phase II assets. Thank you for your attention and continued support.

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

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question.

We will pause for a moment to allow questions to queue. We'll go first to Kelly Shee with Jefferies.

Please go ahead.

Hi, this is for Kelly. Congrats on the progress. I just have two quick questions. For Ava's TOTOC, you previously guided the two folks on the first line, B, RAF, mutated melanoma, based on the evidence of the survival benefit. Does that remain a focus for your pivotal trial, or can you help us to get a more clear on the patient enrollment criteria in general? And I have a follow-up.

Thank you, Kelly.

Eric, do you want to start on that one? Sure, I'd be happy. So, we indeed identified the BRAF-mutated patients with melanoma as being an opportunity because they appear to uniquely benefit from CTLA-4 blockade. So, that remains an opportunity. Right now, we've acknowledged that we've expanded that opportunity to all first-line unresectable and metastatic melanoma to include the BRAF-mutated tumor types as well. And as we just reviewed from the CITSE presentation, all eight of the patients that are in this population, including some that have the BRAF mutation, have experienced tumor reductions And we have multiple patients, four that have responses, and one of those is a CR. And so we're looking at the totality of the population for the pivotal trial and certainly anticipating that the BRAF mutated patients will experience considerable clinical benefit as evidenced from the Checkmate 067 trial.

So Kelly, I think you can see we're following our data, and the data says we've got a big opportunity to go broader, and that's where we're headed.

Thank you. That's very helpful. My second question is about your cash position. As we think about you moving two programs into Pivotal Studies, how will you deploy the cash into each program?

We're, as we've guided, we're maintaining guidance of a near-term phase two collaboration. So our goal has always been to take one of those programs ourselves in, and one would be done through a partner. So I think that's where we're headed for now. As you know, there's some modest finalizing of dose optimization under Project Optimus, more for really C2LA4 applications. And so we have the capital to handle all of that, so we're able to keep everything moving forward efficiently as we complete these other activities.

Great. Thanks for taking my question. We'll go next to Justin Zelen with BTIG. Please go ahead.

Hey, congrats on the progress. This is Jeet on for Justin. Maybe just to start off regarding the feedback you've received for the Roar 2 and the CTLA program. So, on the Roar 2 side, just any color there on the investigator treatment choice options, as well as the time to a potential study start. And then, at least on the frontline melanoma side, just any color there on potential dose to move forward, as well as the control arm therapy. Thanks.

Yeah, I'll start off and then maybe Eric can add to it. You know, it's 2025 next year for both the ROAR-2 and the CTIL-A4. But admittedly, ROAR-2 is ahead of CTIL-A4. And we'll tighten the timing as we get a little further into next year. But Eric, maybe you could add some of the other information around the trial.

Sure. Let's start with oziriftamab-vidotin targeting ROAR-2 in previously treated head and neck cancer. for which we have the FAST-TRACK designation. Slide 17 of our corporate deck shows the randomization that we intend to do, which is between ozerift and Mavidotin. And the three investigator choice options are cetuximab, docetaxel, or methotrexate. And what was your second question, G?

Just on the frontline melanoma study, which you got some feedback on in terms of the dose you'd like to move forward as well as the potential control arm therapy.

Sure. So, the control arm therapy, we received really helpful, actionable feedback from the agency acknowledging that doublets are often used as well as PD-1 monotherapy. And so, the control arm should include the opportunity for physicians to use a doublet checkpoint inhibitor. And the second question is about the dosing and the Project Optimus. And I think it's important to emphasize that, as we're seeing in the CITSE poster that we're presenting tomorrow, that when we expose patients to higher concentrations of CTLA-4 blockade we're seeing significant improvement in clinical benefit. And we have multiple instances where driving that exposure higher immediately in the next few scans are showing that patients are having tumor reduction by increased exposure. The reason I'm emphasizing that is that our hypothesis is that higher exposures will be important. And so we're in the process of looking at some of the doses that are in the CITC poster, specifically the 700 milligram dose, which would be about a 10 per kilo IPI equivalent, and the 350 milligram dose, which would be approximately five per kilo of ipilimumab.

Thank you for taking my question. Thank you.

And as a reminder, if you'd like to ask a question today, please press star one. We'll go next to Tony Butler with Rodman and Renshaw. Please go ahead.

Yes, thanks very much. Two brief questions. Back to the dose, Eric, on CTLA-4, you mentioned 350 and 700, but is there any reason to assume that any one patient gets up-titrated from 350 to 700, or would it simply be the straight dose, at least as it relates to the dose optimization component? And then the second question is, in the ROAR II frontline study, can you give information as it relates to the total patient number that you would need? If you look back to, as you mentioned, to Checkmate 067, I mean, I think there were 945 patients. Of course, that was against three arms, but, you know, substantially large trial, and I doubt that that's what you need to run in the frontline setting. But I just wanted to throw that back at you and get your views. Thank you.

So, Tony, I want to clarify on the second question. Are we talking about evals to tug for both of these questions, or did you move to a different program?

I think there's word, too, on the patient number, Eric, and the dose. That's right. Okay.

We haven't guided the specific size of that randomized trial. I mean, we do in slide 17, and I'm talking specifically about ozeriftamab-vidotin in the head and neck cancer. And so, on slide 17, we illustrate that we anticipate about 570 patients. that would address the full approval endpoint of overall survival, and then a somewhat smaller earlier look for an accelerated approval based on response rate from the 3 to 350. And then moving to your second question, which was really the first that you posed, it was regarding the very interesting issue of intrapatient dose escalation. We have this characterized on slide 38 of the corporate deck where we have several instances where a dose change that either from 700 to a gram, from 210 to 350, or a patient that really started only one per kilo and went all the way to a five per kilo dose then had a confirmed partial response. So we're seeing very clear evidence that we have a dose response and that for patients that are receiving therapy and tolerating it well, that by increasing exposure, we're starting to drive these responses or reattain tumor control, which is really quite important as well. So we're navigating this in terms of Project Optimus and thinking about that first we want to really evaluate at least two doses and understand the efficacy and the safety profile using a really integrated exposure response analysis. This exposure response analysis is supported by Project Optimus, and it involves looking at PK and a variety of variables that are safety and efficacy. Now, to the second matter of whether we should invoke a plan of dose escalation for insufficient clinical benefit, this is under active discussion and specifically around how do we characterize those dose escalations. And we'll be able to elaborate more on this as we move forward and gain additional data.

Thank you. Thank you.

We'll go next to Arthur He with HC Waidwright. Please go ahead.

Hey, Joanne. Congrats on the progress. I just have two quick questions. So, first, regarding the RR2 program for the limited randomized evaluation for the Q2W and the 2Q3W dosing schedule. Is this going to be integrated into the Pivotal Study or you guys are kind of FDA recommended to finish that before you initiate the Pivotal Study?

Jay, do you want me to take that or do you want to take that?

Pardon the interruption. It appears that Mr. Short's line is disconnected.

Oh, I'm happy to take that. And so, Arthur, I think that this is almost a matter of semantics. The bottom line is that the agency would like to see the results of this limited randomized evaluation of the every-other-week dose compared with the days one and eight of a three-week dosing schedule approach. We're gratified that we have a tentative agreement around the dose of 1.8 mg per kg The question that remains is which is the appropriate schedule to take forward. One is a little more time intensive and driving a little higher exposures of the ADC. And, of course, that's then balanced by safety. And so that's what we're looking at. And so the question you're asking is would it be part of the Phase III I see it as part of the phase three, but we do need to get the agency's formal agreement with that dose when we present them the data.

Got you. Thanks, Eric. And I think one quick question for Rick. For the cash position of 56, is that including the upfront payment of $15 million from contacts, or it's not included in that?

It does include. So the cash position is sufficient to carry us into 2026. And as Jay had mentioned, we are in discussions for collaboration with other parties on other programs. So that's part of the strategy. And typically there will be upfronts and, of course, sharing of funds. R&D expenses from that. So, we could be looking at extending our runway beyond the first quarter of 2025. Okay, got you.

Thanks, Ray. Talk to you guys soon.

It appears we have no further questions at this time.

I will now turn the program back over to our presenters for any additional or closing remarks.

Thanks, everyone, for their attention today. I appreciate your time, and we look forward to some updates in the near term here. Thank you all.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.