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spk06: 2021, which was filed with the SEC as well as in subsequent reports, including our current reports on Form 8K. The company disclaims any obligation to update or revise any forward-looking statements, except as required by law. Michelle will start today's call by sharing with you the significant progress our team here at ITS has made the past quarter. They'll recap our corporate strategy and provide an overview of our robust clinical development plans for our pipeline programs. And then our Chief Medical Officer, Joe Lager, will provide a more detailed update on our clinical programs. We'll wrap up our comments with our CFO, Matthew Gall, who will provide an update on our financial status, followed by Michelle's closing remarks. We'll then open the line for the Q&A session. With that, I will hand it over to Michelle.
spk04: Thank you, Ryan. Hello, everyone. Thanks for joining us for our third quarter 2021 earnings call. At ITOS, our team is dedicated to understanding the biology of the tumor microenvironment. We use that deep understanding to design what we believe are best-in-class assets to harness the immune system to help patients with cancer live longer and better lives. We are continuing to progress our three clinical programs in West 448, an anti-digit antibody which we partner with GlaxoSmithKline to jointly develop and commercialize and our own selective A2A inhibitor. Both of these therapies have demonstrated single agent efficacy and excellent safety profile. And both targets are simply the risk to our own data as well as external randomized data. We are really excited by these programs and their potential to significantly impact patients' lives. This is what drives us here at ITOS every day. Let's start by discussing our strategic collaboration with GlaxoSmithKline on our anti-digit antibody EOS448. This collaboration is an opportunity to accelerate and expand the development plan of EOS448. In the third quarter of 2021, we closed the co-development and co-commercialization collaboration agreement and received $625 million upfront payment. Beyond the upfront payment, we are eligible to receive up to $1.45 billion in additional development and commercial milestones payments should the program achieve certain milestones. This partnership validates our view that TIGIT is the most promising new target in the coming generation of new IO therapies, and that EOS448 has real potential to be differentiated relative to the other assets in the class. The GSK partnership has brought enormous value to ITOS in many ways. To highlight a couple, This partnership brings together the best-in-class expertise, capabilities, and portfolio of the two companies and enables us together to pursue novel combinations, including combinations in the CIGIC CD226 axis, in ways no other company can. As an example, we will be evaluating the combination of GSK-Accour and GPD-1, Jan Parly, or Tostarima. with both of our highly differentiated clinical stage candidates, EOS448 and Inifadimelt. This is just one of the many unique combinations we have available to explore. the structure of this partnership provides strategic flexibility as we aim to become an industry leader in the immunology space through significant upfront cash, 60-40 shilling of the government cost, and the 50-50 profit share and co-commercialization rights in the U.S. Now, turning to Inipa Demand, our clinical stage program targeting adult and women immunosuppression. We note, with interest, the positive data that has recently been reported in the MTCD73 therapeutic. This data continues to validate our enthusiasm for this pathway and target. Based on our unique understanding of the specific conditions within the tumor microenvironment, ITS scientists thoughtfully designed imipalimum to selectively and potently inhibit the A2A receptor in the specific conditions of the tumor microenvironment. These two programs are just the beginning of what we are working on at ICS. Our scientists continue to innovate and we have a range of diverse and exciting programs focused on further harnessing the power of the immune system to tackle cancer. As previously guided, we nominated an additional therapeutic candidate targeting new mechanisms in the adenine pathway for IMD in adenine studies. This is a trust-in-class program against a new target identified by our in-house synthesis team demonstrating our capabilities in higher discovery. And we continue to capitalize on our demonstrated track record of success in building a differentiated in-ecology pipeline. In summary, our progress through 2021 has laid the groundwork for our robust clinical development plan. With expansion underway for both our clinical programs, we have demonstrated our ability to construct scientific innovation into clinical programs with the potential to improve outcomes for people who have cancer. We have leveraged our deep understanding of cancer immunology and immunosuppressive pathway to build our pipeline and, outside the partnership, we will provide us with additional opportunities. We are now focused on the execution of our clinical trials, delivering on the promise we have made to our patients with advanced cancer. With that, I will hand it over to Joe Leger, our Chief Medical Officer, to provide further details on the significant progress that we have made and where we are with these exciting contacts.
spk01: Thanks, Michel. I'll begin with key updates on our anti-tuget antibody, EOS-448. EOS-448 has the potential to achieve significant anti-tumor immune response through a multifaceted mechanism. The antibody blocks the binding of TIGET to its ligand, resulting in the immune-mediated killing of tumor cells by T cells and NK cells. It also engages the FC gamma receptor, further promoting anti-tumor immune response through the release of pro-inflammatory cytokines and chemokines and the activation of antigen-presenting cells. Also, the antibody causes depletion of immunosuppressive Tregs and exhausted T cells, cells that are known to dampen the immune response. We are pursuing a clinical development plan based on this multifaceted mechanism of action of EOS-448, which is focused on the indications and combinations where we see the greatest potential to benefit patients. Given the encouraging monotherapy data we presented earlier this year, we are progressing the next set of trials for this program. We are pleased to share that we have initiated dosing in two combination cohorts in patients with solid tumors in our Phase 1-2 clinical trial of ES-448. The first in combination with Pembrolizumab and the second in combination with Inupiatinib. As a reminder, We had planned to initiate this combination study with Pembrolizumab prior to entering into the collaboration with GSK, and both parties agreed that it made sense to generate data on this combination. This will inform our clinical strategy with Dostralumab. Over the next several months, we will initiate additional studies exploring the safety and efficacy of EOS-448. This will include the combination with GSK's approved anti-PD-1, Dostarlamab. We will also evaluate EOS-448 in monotherapy and in combination with Bristol-Myers Squibb's Ibergamide in multiple myeloma. We look forward to providing updates on the clinical development plan for EOS-448 as we progress. Turning to independence, we have a unique drug candidate in three ways. First, unlike the other adenosine receptor antagonists, Inipediment was designed to inhibit the A2A receptor in the high concentrations of adenosine found within tumors. Second, Inipediment was designed to be highly selective for the A2A receptor, which plays a key role in regulating adenosine's immunosuppressive effects within the tumor. And third, inattachment does not penetrate the central nervous system, reducing the potential for off-target safety effects and improving its therapeutic index. We continue to make significant progress in our clinical development and have several updates to share. We have completed enrollment in the initial evaluation of inipediment in combination with chemotherapy and with pembrolizumab and have found a profile that supports future development. We have also completed enrollment in the cohort exploring inipediment and monotherapy in castrate-resistant prostate cancer and have initiated an expansion of the combination of inipediment with pembrolizumab in PD-1-resistant melanoma. Finally, as we mentioned earlier, while discussing the updates on EOS448, we have initiated the evaluation of the combination of inopatinib with EOS448, and we'll also be evaluating the triple combination of EOS448 with inopatinib and GSK's dosterolimab. In addition, we are building on the identification of potential patient selection biomarkers identified in our monotherapy study. and plan to open a new cohort in our ongoing phase one to a trial in patients with high biomarker expression. Our initial trial is a rich source of translational data that we continue to use to optimize the independent clinical development program to evaluate independent in the patients and tumor types most likely to benefit from treatment. With the data we already have in hand, and that we are generating an ongoing study, and validation from other approaches in the adenosine pathway, we are initiating the next phase of development. We will have data in several indications and combinations that we expect will provide many attractive options as we move into the randomized controlled setting. I will now hand the call over to Matthew Gall, our Chief Financial Officer.
spk08: Matthew Gall Thanks, Jo. I'd like to provide an update on our financial results for the third quarter of 2021. The company's cash and cash equivalent position was $899.8 million as of September 30th, 2021, as compared to $340 million as of September 30th of 2020. IQIS is well capitalized to support the programs we just detailed. Following receipt of the upfront payment from GSK pursuant to our collaboration and license agreement in August of 2021, We believe that our existing cash and cash equivalents would enable us to fund our operating expenses and capital expenditure requirements into 2026. Revenues, nearly all of which were associated with recognition of a portion of the upfront payment received from GSK, were $104.3 million for the quarter, while we recorded no revenue in the third quarter of 2020. We expect to recognize the full upfront payment through revenue over the next few years. Additional information regarding revenue recognition related to the collaboration agreement will be included in our Form 10-Q for the quarter ended September 30, 2021. Research and development expenses were $16.1 million for the quarter ended September 30, 2021, as compared to $8.7 million for the third quarter of 2020. This increase was primarily due to an increase in activities related to clinical trials for EOS 448 and a new patent our preclinical pipeline, and the expansion of our team. General and administrative expenses were $8.8 million for the quarter ended September 30, 2021, as compared to $4.8 million for the third quarter of 2020. This increase was primarily due to more hires, professional fees, and other costs associated with becoming a public company. The net income attributable to common shareholders was $69.6 million, or a net income of $1.98 per basic share and $1.86 per diluted share for the quarter ended September 30th, 2021, as compared to a net loss of $11.6 million, or a net loss of $0.48 per basic and diluted share for the third quarter of 2020. I'll now turn the call back over to Michelle for closing remarks.
spk04: Thank you, Michael. As we have shared on this call, we are executing on our accelerated clinical development plans for both of our highly differentiated immunotherapies. Our potent high affinity antidepressant antibody, US448, and in-impediment, our A2 receptor antagonist that is being optimized for the tumor microenvironment. We remain focused on scientific innovation to improve clinical outcomes for patients. With our deep understanding of tumor immunology, we will continue to advance our current pipeline and accelerate our R&D efforts to discover new targets and strategies to advance cancer immunotherapies. With our current funds, resources, pipeline, and the team we have assembled, We are in a better position than ever to be among the frontrunners to develop this new generation of IO therapies, and we remain focused on our ambition to be a leader in bringing these therapies to patients. Thank you very much for joining today's call. I'd like to now turn to call back to the operator to open up the line for questions.
spk02: Thank you. If you'd like to ask a question, please press star, followed by 1, on your telephone keypad now. If for any reason you'd like to remove that question, please press star, followed by 2. And when preparing to ask a question, please ensure your phone is unmuted locally. We've got the first question from Diana. So it's Diana from . Please go ahead.
spk00: Thank you. Maybe two for Joe. Joe, you talked about completing enrollment for the intercadent combination of chemo and PEMBRO. Two questions on that. One, I think you said there's a profile supported of further development. Can you better fully characterize what you mean by profile supported? And then you also mentioned expansion in melanoma PD-1 pretreated. Have you made a go-no-go decision on expanding in prostate and TNBC yet?
spk01: Yeah, thanks, Dana. So in terms of the first question, yes, for interdependence, we've completed the safety evaluation or the dose evaluation for the combination with both pembrolizumab and with chemotherapy. For pembrolizumab, we have, you know, a dose where, you know, what are our criteria for saying that the profile is suitable for moving forward. We have a dose that is safe. We have PK as expected for the drug. And we have initial evidence of efficacy in that cohort that makes us interested in moving forward with. And as we said, we are moving forward with the pembrolizumab combo in melanoma. The same is true for chemotherapy that we have selected a dose where we have good safety and we have preliminary evidence of activity. And in terms of the other cohorts, for prostate cancer we've completed the monotherapy evaluation in prostate cancer and we have decided not at this time to open the cohort in prostate cancer in combination with pembrolizumab. We think that there are better options for development of the drug at this time. And in terms of the combination with chemotherapy, we are moving that forward. We have evaluated different indications, including triple negative breast cancer, and have chosen the indication to move forward, and we will be giving an update on that as that study begins ready to start. Great. Thank you very much. Thank you.
spk02: Chris, your line is open. Please ensure you're unmuted locally.
spk07: Oops. Sorry. Can you guys hear me? Hello?
spk02: Yes. Please go ahead.
spk07: Can you guys hear me? Oh, great. Thank you. Hey, thanks, guys, for taking the question. Just a, I'm sorry, a strategic question here on Inupiaq. Yeah, I know you're taking the first agent, the first generation agent here in the randomized trials and you talked about this next generation. I know you kind of, I think you've addressed this before, but maybe just remind us, how do these two agents coexist? What's the strategy there in terms of bringing both of them forward? And then I also, I don't think I heard you guys before talk about this triplet combo, 4-4-8, the GSK, PD-1, and Indy Padman. Can you maybe talk a little bit about the you know, what led you to begin that trial and, you know, what data sort of prompted that? Thanks.
spk01: Yeah, Chris. So on your first question about are drugs targeting the adenosine pathway, you know, independent is our lead there. It is an A2A receptor antagonist that we think is optimized for use in the tumor microenvironment to really optimize the anti-tumor response of the immune system. And as you mentioned, we have selected a candidate for a new mechanism of action that is also in the adenosine pathway. Our preclinical data has shown that these two targets are both effective. Effective ways to restore the immune system and also may well work well together. So that is why, you know, both they should work independently and should also work well together. So that's why we're progressing both of these drugs. So independent, which is in clinic and the new drug candidates that we've recently selected. in terms of your second question around the triplet of pd1 plus digit plus a2a this is something we've been interested in for a while as we've previously disclosed we were moving forward with the doublet of digits and independence and it makes sense to also evaluate the triplet uh a combination of pd1 plus digit plus in the pattern uh you know there also has been some recent data or or not data but uh uh, some information, uh, from the ongoing Arcus trial and non-small cell lung cancer, where they have suggested that they have interesting data on a triplet, including a PD-1 digit and, uh, adenosine receptor antagonist. And that also, uh, increased our interest in moving forward with that combination.
spk07: Okay. And I'm sorry, I want to make sure that I understand the answer that you had to the first question. Did I hear you say that you're not taking 850 forward in prostate cancer? Is that correct, or did I mishear that?
spk01: That is correct. We're not moving forward in prostate cancer into the combination. We're not going to evaluate the combination with pembrolizumab or in prostate cancer at this time, we've decided to prioritize other development of that drug.
spk07: Okay.
spk04: Thank you.
spk02: The next question comes from . Please go ahead.
spk09: Hey, guys. Hope you're all well, and thanks so much for taking the question. on eos 448 so what do you along with lines of some of the prior questions but what are you trying to learn specifically from the pembroke combination study that you might be able to apply to your scholar mad combination study thanks so much thanks under palm so we had plans uh you know had had
spk01: started initiating that trial of EOS-448 with pembrolizumab prior to entering into the partnership with GSK. And when we looked at the timelines, we realized that we could initiate that study sooner than we could initiate the study with Dostarlumab. We think having the data from that study in combination with Pembrolizumab will help us as we are initiating the combination trial with Dostarlumab to select the dose and perhaps move a bit faster in that combination based on having data already with anti-PD-1. So it mainly was about speed. You know, I think as we move forward, we also think it could be valuable to have data on how the drug performs with different anti-PD-1 partners.
spk09: Thanks so much for taking our question.
spk01: Thanks, Anupam.
spk02: Our next question comes from David from WebBrush Securities. Please go ahead.
spk05: Hey, thanks for taking my questions. First, regarding the combination with PEMBRO and GSK's work with the Starlimab, I'm assuming, but correct me if I'm wrong, that there's no gating mechanism. So they're not going to wait for data from your PEMBRO study in order to begin the combination studies with the Starlimab. And then the second question that I had was, do you plan or is there a plan for incorporating the adenosine assay that you have been working on from the monotherapy study into the combination studies and maybe trying to look at having an arm or two where you stratify according to expression things.
spk01: Thanks, David. So yes, on the combination with Pembrolizumab and combination with Gostcharlamab that we are doing with US-448, we are going full speed ahead with initiating the combination with Gostcharlamab, and the initial data from the combination with Pembrolizumab will not be gating. And on the second question, on the assay that we've identified that may help to predict the patients that benefit from inopatinib, we are incorporating that in our future studies. So we are planning to do cohorts with monotherapy to enroll patients who are biomarker high to better define the benefit that we see in that population. And we are including those assays in our study in melanoma, and we'll also include it in the planned randomized trial for next year.
spk09: Okay, cool. Thank you.
spk02: As a reminder, if you'd like to ask a question, please press star followed by 1 on your keyboard now. The next question comes from Swayampakula Ramakant from HC. Please go ahead.
spk03: Thank you. Thanks for taking my questions. I'm just trying to understand the rationale behind combining 448 with Bristol's for multiple myeloma? If you could, please comment on that.
spk01: Yeah. So we are planning to do a study of ES448 as monotherapy and in combination with ibridamide and relapsed refractory multiple myeloma. We have had a collaboration with Jeff Hill at Fred Hutch in Seattle where we've demonstrated that there does seem to be a significant benefit of the combination of EOSC-448 or EPSI-engaging PIGIT antibody with an image. And, you know, iverdivide is a potent drug. It has data in refractory myeloma that serves as a useful historic control. And it's an attractive study to do because it's giving patients an image that they haven't already seen before in that late-line setting where regulatory agencies require to start development in myeloma.
spk03: Thank you. And then regarding the biomarkers that you're looking for, specifically in the independent study. What sort of biomarkers are you looking for?
spk01: So we disclosed at ASCO the data that we had from our initial study in monotherapy where we found that the adenosine receptor, A2A receptor itself, the levels of that, the number of cells expressing A2AR in the tumor was correlated with clinical benefit in the patients in that study. That is IHC markers. We have also looked at other markers, both by IHC and by Nanostring, looking at the mRNA markers. And so we have identified other markers that also potentially identify the patients that benefit using those methods as well. Thank you.
spk02: As a final reminder, to register a question, please press star followed by 1 on your telephone keypad now. I can confirm we have no further questions currently registered, so I'll hand it back to the speaker team for any closing remarks. Thank you.
spk04: Thank you very much, everyone. Have a good evening.
spk02: OK, this now concludes today's call. Thank you all for joining. You may now disconnect your lines.
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