Celldex Therapeutics, Inc.

Hello, and welcome to Celldex Therapeutics Mid-Year 2019 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this conference is being recorded. I would now like to introduce your host for today's call, Sarah Cavanaugh. You may begin.

Thank you. Good afternoon. With me on the call today are Anthony Marucci, co-founder, president, and CEO of Celldex Therapeutics, Dr. Tibor Keler, co-founder, executive vice president, and chief scientific officer, Dr. Margo Heath-Chiozzi, senior vice president of regulatory affairs, Sam Martin, senior vice president and chief financial officer, and new to our team, Dr. Diane Young, senior vice president and chief medical officer. Before we begin our discussion, I would like to mention that today's speakers will be making forward-looking statements. Such statements reflect on current views with respect to future events and are based on assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Certain of the factors that might cause CELDX's actual results to differ materially from those in the forward-looking statements include those set forth under the headings Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operation in CELDX's Annual Report on Form 10-K, quarterly reports on Form 10-Q and its current reports on Form 8-K, as well as those described in SELVEX's other filings with the SEC and its press releases. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You should carefully review all of these factors and be aware that there may be other factors that could cause these differences. These forward-looking statements are based on information, plans, and estimates as of this call, and SELDIS does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or other changes. Please be advised that the question and answer period will be held at the close of the call. I would now like to turn the call over to Anthony.

Thank you, Sarah. Good afternoon, and thank you for joining us. We made excellent progress in the first half of the year and look forward to providing you a thorough update on our programs this afternoon. As you look at the business overall, our pipeline remains strong and well diversified. We have two programs advancing nicely in the clinic, a third poised to enter clinical development before the year end, and a fourth lined up for 2020. We also made an important hire this summer that we believe will further strengthen our clinical development efforts and support the continued progress of our product pipeline. Dr. Diane Young has joined the Celldex team as a Senior Vice President and Chief Medical Officer. Diane is a medical oncologist and has led clinical and cross-functional research and development teams responsible for the global development of numerous novel therapies from Phase I through successful product registrations. Most recently, Diane served as Chief Medical Officer of GTX, Inc., a public biopharmaceutical company focused on the development of drugs that target nuclear hormone receptors. Previously, Diane spent 13 years at Novartis Oncology and senior leadership roles in global clinical development and medical affairs. As the head of oncology clinical development, she directed the clinical programs leading to successful regulatory approvals for more than a dozen, half dozen important oncology drugs. Prior to Novartis, Diane held senior leadership positions in clinical development at the R.W. Johnson Pharmaceutical Research Institute of J&J, as well as Hoffman, LaRoche, and Sandoz. We are very pleased to have Diane on our team. She will join us at both medical and investor conferences this fall, and I'm sure our shareholders will enjoy meeting her at these venues. We continue to strengthen our balance sheet to extend and direct our financial resources to the advancement of the programs we believe can bring the most value to both patients and shareholders. In direct support of this, in June we decided to consolidate our Massachusetts laboratory and manufacturing facilities. The lease for the Needham, Massachusetts facility will not be renewed, and most functions and employees will be integrated into the company's Fall River manufacturing facilities. We estimate that this consolidation along with the reduction in the square footage of our Hampton, New Jersey facility executed earlier this year will decrease our facility footprint by over 35% and will save us over $3.5 million annually starting in the second half of 2020. With that, I'd like to turn to a review of our pipeline. I'm going to start with an update of the CVX1140 CDX 0159, and our preclinical programs. Then I'm going to ask Dr. Margo Heath-Chiozzi, our Senior VP of Regulatory Affairs, to provide an update on CDX 3379. Margo has served as the medical lead for this program to date. Sam Martin, our CFO, will then review the financials before we open the call to your questions. CDX1140 is a fully human antibody targeted to CD40, a key activator of immune response, which is found on dendritic cells, macrophages, B cells, and several cancer types. Potent CD40 agonist antibodies have shown encouraging results in early clinical studies. However, systemic toxicity associated with broad CD40 activation has limited their dosing. We selected CDX1140 based on its unique properties relative to other CD40 agonist antibodies. It binds to the CD40 receptor in a manner that results in a linear, non-dose-dependent agonist activity which may allow for higher systemic dosing and better tumor penetration at the optimal agonist levels. CDX1140 does not require cross-linking through FC receptor interactions for its agonist activity, allowing more consistent and controlled immune cell activation. Also, CDX1140 does not interfere with the natural activation of CD40 by its ligand, which may further potentiate local immune responses. Finally, CDX1140 had a strong safety profile all demonstrating potent immune activation in our preclinical studies. The ongoing phase one trial is a multi-dose dose escalation study of CDX1140 in patients with locally advanced recurrent or metastatic solid tumors and B-cell lymphomas. The study also includes a separate dose escalation arm of CDX1140 in combination with CDX301. CVX301 is a potent dendritic cell growth factor that increases the number of these important cells which are a key target for CVX1140. An important goal of this study is to achieve dosing levels of CVX1140 that will provide good systemic exposure without dose-limiting toxicity. To this end, we have made excellent progress completing all eight cohorts in the monotherapy dose escalation arm. Importantly, based on biomarker data, CVX1140 is demonstrating strong biological activity associated with CV40 activation. Currently, we are adding additional patients at the three highest dose levels to provide additional data in the selection of our recommended phase two dose as we await completion of the dose escalation in the combination arm of the study. With CDX1140 and 301 combination, we are nearing the close of the BLT window for the fourth of six potential cohorts at the 0.72 milligrams per kilogram, and assuming successful clearance, the 1.5 milligram per kilogram combination cohort should open shortly. Overall, we are pleased with the data to date, which have shown that CDX1140 can be safely administered at doses that Celldex believes will support good tissue and tumor penetration and at doses significantly higher than most other potent agonists targeting CD40. Our next step is to add an additional arm to the study that will include the combination of a PD-1 inhibitor with CDX1140. This cohort is important as we'll be both enhancing the immune system with CVX1140 and releasing the brake on the immune system with the introduction of the checkpoint inhibitor. We are also exploring future combination opportunities with chemotherapy, radiation therapy, and cell dexapodin CD27 agonist monoclonal antibody Morley-Lumab. We are excited about the 1140 program and its clinical potential. We presented data from this study at AACR in early April and hope to present an update at the CITSE meeting in November. Before year end, we will also initiate a phase one study of CVX0159, our kit antagonist antibody program in healthy subjects. CVX0159 is a reengineered variant of CVX0158. Kit is a key regulator of mast cells and preclinical and clinical data with CDX-0158 demonstrated robust inhibition of mast cell activity and decreased mast cell numbers, supporting the concept that targeting kit with an antagonist antibody can modulate mast cell activity and potentially provide clinical benefit in mast cell-related diseases. CDX0159 was redesigned to ablate FC receptor interactions and affect their functions and approve its safety profile while preserving full kit inhibitory activity. In addition, CDX0159 was modified to provide extended half-life following an administration. This Phase Ia study is designed to evaluate the safety profile, pharmacokinetics, and pharmacodynamics of single ascending doses of CDXO159 in healthy subjects. Following completion of this study, we plan to further study CDXO159 in chronic idiopathic urticaria, or CIU. CIU presents as itchy hives, angioedema, or both for at least six weeks without a specific trigger. Multiple episodes can play out over years or even decades. The prevalence of CIU is estimated to be 0.5% to 1% of the total population, or up to 3.2 million cases in the United States. About 50% of patients with CIU achieve symptomatic control with antihistamines and leukotrienes, receptor agonists such as Zolair. An IgE inhibitor provides relief for roughly half of the remaining antihistamine Luca Triang and refractory patients. Consequently, there is need for more effective later line therapies. We believe targeting KIT with CVX0159 represents a unique strategy in diseases involving mast cells such as CIU. We hope to present the scientific rationale and supportive data of our development strategy in CIU at a medical meeting this fall and we'll continue to keep you updated on this program. Before I hand the call over to Margo to discuss CDX3379, I want to touch on our preclinical pipeline which had a strong showing at AACR in the second quarter. CDX527, our first bispecific antibody program, combined CD27 mediated cell activation with PD1 blockade. We have developed CDX527 from our proprietary highly active anti-PDL1 and CD27 human antibodies and demonstrated the bispecific to be more potent than the combination of the individual antibodies in preclinical models. CDX527 provides Celldex with its own PD1 pathway inhibitor with potentially broader activity and sets us up for unique combinations within our own pipeline. We are currently initiating manufacturing activities for CDX 527 to support an IND targeted for 2020. We have also been making significant progress on developing lead candidates targeting the receptor tyrosine kinases, TYRO3, AXL, and MRTK, collectively known as the TAMs. These receptors have been gaining importance in the immunotherapy field due to their role as checkpoint molecules on macrophages, dendritic cells, and other immune cells where they can negatively regulate the anti-tumor immunity. We recently presented our progress on lead antibody characterizations for all three receptors at AACR. The antibodies targeting to Tyro3, Axyl, and MRTK all promote activation of human macrophages and dendritic cells and we look forward to moving these candidates towards development activities. With that overview, I will ask Margo to discuss the progress we've made with CDX3379. Margo?