F-star Therapeutics, Inc.

Greetings, and welcome to FSTAR first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the conference over to your host, John Francis, Managing Director of Life Science Advisors. Please proceed, sir.

Good morning, everyone, and thank you for joining us. With me today is the Chief Executive Officer of FSTAR Therapeutics, Elliot Forster, and Chief Financial Officer, Darlene Deptula-Hicks. We announced financial results pre-market today for the quarter ended March 31st, 2022. You can access the press release on the investor relations page of our website at fstar.com. Before we get started, let's quickly run through the forward-looking statements. Please note, that is a part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them. Investors are also cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. These risks include risks that and uncertainties detailed in FSTAR's filings with the SEC. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. With that, I'll hand the call over to Elliot. Thank you, John.

And thank you and good morning, everyone. As ever, it's a pleasure to speak with you today and review FSTAR's first quarter of this year. It's only been eight weeks since we last met, but every new month brings increased confidence in our portfolio. We're pleased with progress across all four programs, and in particular, their performance in the clinic. Against the backdrop of a tough ongoing biotech market, we're getting on with the job at hand. Our mission is, of course, to transform the lives of patients and ultimately achieve a future that's free from cancer. Looking back over the first three months of the year, I'm pleased to report that we've continued to build momentum across each of our programs. All four are progressing well in the clinic. In the last quarter, for each of our three tetravalent bispecific assets, FS118, FS222, and FS120, we've increased the number of clinical research sites and added new countries. So, as well as the patients enrolled in the U.S., we've also dosed our first FS118 and FS120 patients in Europe. We're very excited about the full set of important clinical data coming this year. As you recall, our preference is to release data at scientific conferences where possible. We strengthened our drug development capabilities by welcoming James Sandy to our company as Chief Development Officer. With more than three decades of clinical development experience, James brings valuable additional expertise to the team in accelerating cancer treatment programs through early stage and late stage development and that will greatly benefit our clinical development strategy. We were pleased to present a poster on FS118's novel mechanism of action at the American Association for Cancer Research annual meeting in April. Our data reveals the unique tetravalent structure of FS118 plays a crucial role in driving LAG3 shedding and cell surface reduction on tumor infiltrating lymphocytes, enabling FS118 to overcome compensatory upregulation of LAG3 induced by PDL or PD1 blockade. And with the positive news from the field, including the recent approval of BMS's LAG3 antibody in combination with PD1, LAG3 has become the de facto third checkpoint inhibitor. Our partnerships continue to advance well. In this past quarter, Merck KGAA Darmstadt, Germany, exercised a fourth licensing option to develop another bispecific program under our ongoing immune oncology collaboration. I guess it's Just as a reminder, the potential revenue from this collaboration is up to approximately $765 million in milestone payments. This is just one of the more than 20 partner programs that are advancing this year based on the discovery capabilities of the FSTAR platform. Also this quarter, the U.S. Patent and Trademark Office granted a patent protecting the composition of matter for FS118. This new patent is expected to provide FSTAR with exclusivity for FS118 out to at least August 2038. We also held a two-day meeting of our scientific advisory board in the last quarter. It's always time well spent to discuss our programs and hear the views and gain support from these internationally-rounded experts for our future development plans. By the way, I was particularly struck by one of our advisors reminding us that five in every six patients with head and neck cancer continues to face the most difficult conversations about their futures. And despite the remarkable progress of the immune oncology treatment over the past decade, we are very mindful of the majority of patients who are running out of options. We also continued with a busy program of meetings with existing shareholders and potential new investors. We're greatly encouraged by the interest shown in our programs across the portfolio and grateful for the opportunity to share information with those investors. As ever, it was a pleasure to present our programs at several investor conferences, and thanks to our analysts for arranging those. So, bispecifics have huge potential to deliver different and better outcomes for patients with cancer. This is backed up by our own data and by that above us. Bispecifics really are now coming of age. They behave differently from monoclonal antibodies and even combinations of monoclonal antibodies. It's this difference that brings hope for improvement treatment options beyond first-generation checkpoint inhibitors, particularly for hard-to-treat cancers in patients with few other options. The promise of next-generation immune oncology is reflected by the extraordinary amount of capital being invested in bispecific drug development. Bispecifics now represent nearly 20% of the clinical antibody pipeline, and new collaborations account for more than $18 billion in deal value over the past two years. For example, the AstraZeneca-Harbour Biomed deal, worth $25 million up front, further reinforces the growing importance of biospecifics. Today, four biospecific drugs have already been approved, and without question, we expect the pace of investment and future approvals for biospecifics only to accelerate over time.