NovaBridge Biosciences

This is Tyler Ehler here. I'm a Senior Director of Investor Relations. At this time, all participants are in a listen-only mode. At the end of this call, we'll conduct a Q&A session, and instructions will follow at that time. Earlier today, we issued a press release providing a review of our financial results for the six months ended June 30th, 2022, as well as an overview of our recent corporate highlights and upcoming milestones. The press release can be accessed on the investor relations portion of our website at ir-mabbiopharma.com. Joining me today on the call from my MAB senior management team are Dr. Jingwun Zhang, our founder, chairman, and acting CEO, Dr. Andrew Zhu, our president, Mr. Zhang Long, our CFO, and Mr. Richard Ye, our chief operating officer. Dr. Zhang will provide a high-level overview of our recent achievements and upcoming milestones, while Dr. Andrew Zhu will provide an update on our R&D progress. And finally, Mr. Zhang Long will then provide a summary of our financial results for the six months ended June 30th, 2022, before we turn the call over to the operator to take your questions. Please note that today's discussion will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect IMAS business and financial results is included in certain filings of the company of the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. We'll also discuss specific non-GAAP financial measures for comparison purposes only during today's call. Please see the financial results news release issued earlier today for a definition of non-GAAP financial measures. and a reconciliation of gap to non-gap financial results. With that, I'll now turn the call over to Dr. Zheng Zeng, our Founder Chairman and Acting CEO. Dr. Zheng, please go ahead.

Thank you, Tyler. Thank you to everyone for joining us. It is a pleasure to welcome all of you to our call today to discuss our business updates and the financial results for the six months that ended on June 30th, 2022. Since the start of 2022 calendar year, we have been facing challenges similar to many of peers across the industry. The company has acted effectively to reposition itself to focus on our fundamentals. Today, we will report how the company is laser-focused on key business priorities and high-value milestones and catalysts as we continue to drive value for our shareholders. On the pipeline development front, we met seven key clinical milestones, including positive data readouts for three of our key assets, UnilaterallyMap, Lancer PolyMAP and TGA CD4B. Our goal is to prioritize our resources on the value driver assets in our pipeline. To this end, we'll focus on five clinical assets and 10 clinical trials. Some of them are ongoing and some of them are yet to start. For Lansopalimab and Ulilitalimab, we will present more data on Lansopalimab on our Phase 2 clinical trial in combination with AZA in MDS patients in China at the East Mall in early September and plan to initiate a Phase 3 clinical trial in China. With the rapid progress in the cohort expansion phase two lung cancer study of ulilipidemab, we expect to present more data later this year. On our new start project, TGA-CD4B, It is also progressing well in a phase one clinical study in the U.S. and China. Dr. Andrew Zhu will further highlight this asset later in today's discussion. Now, with the progress on ulilaglimab and TGA-CD4B, we expect to facilitate our BD deals as part of our business strategy and as one of our key priorities. As a result of the progress made in the first half of 2022 and a continued progress to be made in the second half of 2022, we expect to deliver two or three PLA submissions or approvals for Felsatomab, iftansomatropine alpha, along with four to five new drug molecules moving towards the R&D stage or into a phase one clinical trial in the next three years. Our pipeline has significantly advanced to a completely different stage from when we look back to our IPO two and a half years ago. It is not only globally competitive, with a potential first-in-class assets such as Lansopalimab and Ulilipilimab, but also advanced with two assets near BLA and a product launches within the next three years. Meanwhile, a portfolio of new molecules is moving towards the clinic. On the corporate development front, during the reporting period, we have seen a clear path to commercialize Felsatimab and Iftan Somatropin Alpha. We will partner with leading domestic big pharma companies with proven commercialization capabilities and established cell forces and channels for Iftan and Felsatimab. We have already established a commercial partnership with Jumpcan for Iftan. a market leader in a pediatric therapeutic area in China and have a working with them to prepare for the BLAA and a subsequent product launch. We're working on a similar commercial partnership for FairSatMap. Therefore, with the commercial partnership strategy, we'll be able to avoid draining significant resources into building a large sales forces and establishing our own commercialization capability for these two near market products in this difficult time when our cash runway is essential. We must focus on our competitive advantages to prioritize our resources in the development of our high-value assets. Additionally, I'm pleased to report that our state-of-the-art GMP manufacturing facility, owned by IMAP Hangzhou, is operational and has successfully manufactured batches of clinical-grade material, including Lansel polymer. Our phase two facility is on track to be completed by 2024 for commercial production. Now, I would like to emphasize that we maintain a strong cash position with $586 million cash on hand. On top of that, we will continue to receive potential milestone payments from the existing out-licensing deals, including the development milestones from the amended deal with AbbVie and the Jump King deal. As we continue to deliver the project milestones within the next several years, we expect to collect a significant amount of milestone payments as a week in the respective agreements. As a result, our cash is sufficient to fund business operations through 2025 for over three years. On the capital market fronts, during this reporting period, the company has completed the process by its previous commitments to engage in a U.S.-based public accounting firm that is subject to inspection by the Public Company Accounting Oversight Board, the PCAOB, for the preparation of its audit reports commencing from the fiscal year of 2022. Now, on August 26, 2022, the PCAOB of the U.S. signed a statement of protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People's Republic of China governing inspections and investigations of audit firms based in mainland China and Hong Kong. We have noted this is a significant step towards resolving the delisting issue. The company has now taken a stance to continue implementing the ongoing work to achieve audit switch as planned, while waiting to see how the agreement is evolving between the two governments. This development may ultimately mitigate delisting risks under HFCAA. However, our goal is to ensure the delisting risk is completely resolved for the fiscal year of 2022. Therefore, the company will either maintain the status quo after the agreement is executed within the next few months, or we switch to a U.S.-based auditing firm to meet PCAOB requirements as originally planned. Now here, I would like to emphasize IMAP's unique business model for value proposition. IMAP has a powerful improvement on the engine that is our competitive advantage. IMAP's innovation comes in three ways. Lansopalimap and Unilaterimap are the best examples of IMAP's first wave of innovation. They are now in phase two and are ready to move towards phase three, while we complete the global deal for Lansopalimap and are working on a potential deal for Unilaterimap. The second and third waves are comprised of novel bispecific antibodies or uniquely formatted therapeutic drug molecules. Some of them are already in clinical trials and others are in preclinical development. We expect to have four to five new molecules moving towards the clinic within the next three years. With the competitive advantage of our R&D and progress in pipeline development, IMAP's value proposition is really two-pronged. One is to license the global rights of our innovative assets after early clinical validation. Lenzo PolyMap is one prime example. As a result, the company has received accumulated cash amounts of $249 million so far from multiple deals and will continue to receive additional development milestone payments as we deliver upon those agreed project milestones. In addition, we continue to explore potential partnerships for ulilagrimab and a TGA-CD4B bispecific antibody. Next, we expect to create value through commercial partnership deals in China. More specifically, we develop the clinical assets towards a commercial stage in China and partner with pharmaceutical companies that have established sales forces and sales channels to rapidly gain market share. As exemplified in the commercial partnership with Jumpcan for Yiftan Growth Hormone, we typically receive upfront payments as well as milestone payments and a 50-50 profit split for our products to be marketed in China. We're now working on a potential commercial partnership for Faisal Satmar. This model of value proposition is unique. and relies on IMAP's R&D competitive advantages in immuno-oncology and business development capabilities. At IMAP, with multiple successful examples in the past few years, this value proposition model has been proven and it works well in our hands. We will continue to deliver the expected results. This model also helps prioritize and focus our resources on high-value business activities while it avoids spending resources to build our own commercialization capability. Now, since the beginning of this year, we have been facing the same challenges that many other companies have faced in this market. So how do we best position the company? to not only survive, but also thrive in this turbulent market as we continue to strengthen our fundamentals. For IMAP, this means being laser focused on delivering value drivers in the next three years. So we work to bring the most value to our shareholders. Now, the first aspect is to prioritize our resources on the value driver assets in our pipeline and create near-term value for our shareholders. As I have already mentioned, our pipeline is rich, but we must focus on assets that we believe have the most potential. So through our systemic science and business review, we have prioritized five high value assets associated with the 10 clinical trials. Some of these trials are ongoing, while others have yet to be initiated. For these key assets, we expect three potential BLAs in the next three years, more BD deals to reinforce our value creation model, and it extends our cash runway beyond three years. Now, this second aspect is our continued hunt for commercial partnerships. This includes partnership for the near-term commercialization of Valsatma for multiple myeloma and IFTEN long-acting growth hormone for PGHD. As discussed earlier, we will choose to partner with the leading domestic pig farmer companies with proven commercialization capabilities with established sales forces and channels. We have already established a commercial partnership with Jumping In, a market leader in the pediatric therapeutic area in China, for F10 long-acting growth hormone. We're now in the process of contemplating a potential commercial partnership deal for Felsacomab. The third aspect is to continue investing in our next generation pipeline assets. This area is one of our core strengths. This next generation assets includes novel bispecific antibodies and immune adjuvants, which we believe have the potential to lead global trends in immuno-oncology. We're on the way to generating a novel portfolio of next generation programs to bring 4 to 5 such new drug molecules to R&D and the clinic within the next three years. This also was mentioning again that our current cash runway with cash on hand plus the expected milestone payments is over three years and is sufficient to support our core business activities as I just laid out. With that overview, I'd like to ask Andrew to take a deep dive into our key pipeline assets and provide our expectations for the rest of 2022. Andrew, over to you.

Thank you, Dr. Zhang. It's my pleasure and privilege to speak with all of you today. The focus of my discussion will be on our pipeline development. I will highlight the recent progress and update, as well as the near-term prospect of this very exciting pipeline. At IMAP, we have 20 assets in development and 10 assets that are in clinical stage. Today, I would like to highlight five prioritized assets in our pipeline because they are value drivers. These assets are novel, highly differentiated, and are highly competitive either globally or in China. The five value driver assets include the two late-stage assets, Felsartimab and Eftenzometribin-ARFA, with their BLA to be delivered in 2023 and 2024. And the two phase two and phase three regular global assets, Lemzopranimab and Uli-Ledlimab, alongside with our new star, the best specific CD4B. I'll go through each asset in more details. First, let me start to highlight our two pre-BLA assets, Velzartimab and Aftenzometropin-ARFA. Velzartimab is our most advanced asset. We have successfully completed the registration trial in China for Velzartimab as a third-line treatment for multiple myeloma. Our study confirmed the efficacy of Velzartimab with additional benefits such as lower infusion-related reaction rate and shorter infusion time. This allows the use of Velzartimab in outpatient setting. In January 2022, these companies signed a partner agreement with Hangzhou Qingdao government in China to make the Hangzhou Qian Tang government in China to manufacture Felzartimab locally to accelerate its commercialization. The local manufacturing plant is expected to significantly reduce the cost of goods and allow Felzartimab to be commercially more competitive. In terms of the second line treatment for multiple myeloma, a randomized phase three registration trial of Velzartimab in combination with lenalidomide completed patient enrollment in September 2021. When the top line data is fully mature, we expect this data to support our BLA submission in 2023. In parallel, we are exploring a possible study of falzartimab in combination with LEMZO product map for multiple myeloma. We expect to publish the preclinical data of falzartimab in combination with LEMZO at ASH 2022. Multiple myeloma remains a significant unmet medical need in China. Considering the relevance of this therapeutic target, it is important to note there are approximately 20,000 new cases of multiple myeloma each year in Greater China, with approximately 100,000 second-line or third-line relapse or refractory multiple myeloma patients in China as of 2021. This represents an annual growth of approximately 2% to 3% per year. Filzartimab is uniquely positioned as the only locally manufactured CD38 antibody product with a distinct profile where it can be administered in an outpatient setting because of the short infusion time and lower infusion rate. We have also demonstrated compelling efficacy, including in elderly patients with multiple myeloma. Next is Aftenzometropin-RF-OTJ101, or differentiated long-acting growth hormone as the weekly treatment versus commonly used daily injections. Aftenzometropin-RF is the only natural long-acting growth hormone in its proprietary fusion protein format, i.e. a pure protein-based molecule. It's not chemically linked with PEG or other linkers. The safety, tolerability, and efficacy have been well demonstrated in a phase two clinical trial conducted in Europe. As shown in the figure in the middle panel, a weekly or biweekly treatment with F-tensile alpha showed comparable efficacy to daily genotropin injection. Our registration phase three cholera trial is ongoing, and we have completed patient enrollment in May of this year and are on track for BLA submission in 2023 or 2024. There are advantages using a weekly versus daily injection for treatment of pediatric growth hormone deficiency. This includes improved patient compliance, with patients more likely to consistently take their treatment in a weekly or biweekly schedule versus a daily setting. In 2021, we entered into a strategic commercial partnership with JumpCAN to leverage JumpCAN's vast commercial network as a commercial leader in pediatric therapeutic area. Our agreement include upfront and potential milestone payment of US dollar 315 million, as well as a 50-50 profit sharing or low double digit royalties on revenues. This partnership represents one of China's biopharma markets largest deals, which is a testament to the product's potential and to IMAP's development capabilities. Meanwhile, we expect F-tensile measurement alpha to be highly competitive on 3.4 million addressable patient populations. We believe the China growth hormone deficiency market is large enough to give JumpScan and IMAP a fighting chain. And we have a real chance to take a substantial share of the market. Furthermore, given the lack of a pack and of chemical linkers, F-tenzo is the only one acting growth hormone in the pure protein format, which offers potential safety benefits. Next, I would like to highlight our highly differentiated CD47 antibody, including lemzoproteinib and a new CD47 antibody therapy. I would like to remind you that LEMZO is differentiated by design to avoid binding to red blood cells while maintaining strong anti-tumor activity. This molecular differentiation has been validated preclinically and has translated into clinical advantages that are being validated. IMAS priority for LEMZO is to achieve the first registration of LEMZO in its class in China. This will allow Lenzo party map to be the first CD47 to the market in China and potentially the first globally approved CD47 therapy. Multiple clinical studies of Lenzo are ongoing in parallel in both the U.S. and China. As seen here, you can take a look at our global clinical development plan. Outside of China, we have partnered with APOVE, who is spearheading global efforts in the development of a new CD47 antibody. And I will discuss the amended partnership on the next slide. In China, MAP is leading the efforts in the 47 space. The most significant study is the phase two clinical trial in MDS-AML. This trial in combo with AZA. Our plan remains to initiate a registration trial for MDS patient by the end of 2022. We believe the differentiating feature of Lenzoprotein has gained preliminary clinical validation. The differentiation includes the expected favorable safety profile with no priming dose required, less RBC-mediated SYNC effects, and compelling anti-tumor activity across several trials, which is consistent with LEMZO-Primimab's differentiation. The unique glycosylation around the binding side of LEMZO serves as a natural barrier to prevent LEMZO from engaging RBC. This means that red blood cells are only minimally accessible by LEMZO. By contrast, the binding site on tumor cells does not have similar glycosylation and is fully exposed, which explains why LEMZO binds strongly to tumor cells. In a systemic safety review of approximately 200 patients up to date who were treated either with LEMZO alone as monotherapy or in various combinations, We have seen a compelling safety profile today. Overall, the safety data from both the US and China studies continue to be favorable when administered without a priming dosing regimen. MTD was not reached in any dose regimen, Mild TRAE in solid tumors at NHL, good safety profile in combination with azazitidine in AML-MDS. And no grade five hematological TRAEs have been reported. Here, I'd like to highlight some of the high-level data from our phase two trial of Lenzopartimab in combination with ACA in first-line higher-risk MDS patients in China that we shared at our R&D date in July. In this patient group, we have again seen good safety profile with Lenzopartimab well-tolerated in combination with ACA, despite the more severe baseline features related to underlying disease in this cohort. We have also observed comparable efficacy to Magrolimab with an overall ORR of 87% and a CR rate between 31 and 40%, depending upon the treatment duration. We plan to present this detailed data set in a proper presentation at ASMO on September 10th, 2022, for the organizers embargo policy. Additionally, as mentioned, we plan to initiate a phase three registration trial before the end of 2022. And we have already submitted the communication package to CDA to push this registration trial forward. Importantly, AbbVie and IMF have entered into an amendment to the original license and collaboration agreement. Both parties will continue to collaborate on the global development of anti-47 antibody therapy. For the new anti-CD47 antibody therapy, the company will be eligible to receive and AbbVie will pay up to US dollar 1.3 billion in development, regulatory and sales milestone payments, and the tier royalties will be at rates from mid to high single digit percentage on global net sale outside of Greater China. The company retains the exclusive right to develop and commercialize all licensed products under the agreement in Greater China. Globally, AbbVie will focus on the new therapy, which is currently under development, and discontinue the phase one study of lemzoprotein MAP. In parallel in China, MAP will continue advancing its leading position on lemzoprotein MAP with a focus on the initiation of a phase three clinical trial in patients with MDS in China. To date, phase one and phase two clinical studies of Lenzo in U.S. and China with nearly 200 patients have supported a good safety profile without the need of a priming dosing regimen. Lenzoprimab in combination with ACEA has shown to be efficacious in patients with higher-risk MDS in the phase two study. Next is the Uleleplumab, another global frontrunner that we are developing for solid tumors with a focus on non-small cell lung cancer and ovarian cancer. As previously reported, Uleleplumab is differentiated by design to avoid the hook effect. So the Hoechli effect is simply characterized by an abnormal phenomenon where a drug molecule paradoxically loses its effect at higher doses. UD-latinumab's differentiation comes from a unique binding epitope at the C-terminus. We believe the differentiation gives UD-latinumab a better therapeutic window and more flexibility when combined with other anti-tumor drugs. In addition, ulilipidimab has potential advantages over small molecules with a non-competitive inhibitory effect that is not blunted by the high level of CD73 enzyme substrate abnormally accumulated in the tumor microenvironment, which could be expected for small molecule competitive blockers. In the phase one study presented at ASCO in June 2021, where patients with solid tumors were treated with ULE in combination with the T-cell, among the 30 available patients, ORR was at 23% and DCR was at 46%. The results, although preliminary, are very encouraging. We are conducting two phase two clinical studies in both the US and China. I hope to share the data as soon as possible. I also want to mention alongside the planned data readout, we continue to explore global partnership opportunities. With the data cut off as of March 29th of this year, we recently shared this key patient cohort in the Ulelatimab trial, where we saw encouraging efficacy signals in advanced non-small cell lung cancer patients who were unsuitable for or did not decline standard chemotherapy treatment. In this cohort, most of the patients have stage four non-small cell lung cancer. Approximately 80% of the patients in this cohort had low PD-1 expression in baseline tumor samples. And that is tumor proportion score TPS one to 49% or negative at TPS less than 1%. These patients are generally considered less responsive to PD-1 therapy. For example, in the Keynote 042 study, Patients with low TPS, i.e. 1 to 49%, achieve a response rate of 16.9%, and patients with negative TPS appear to benefit even less likely. Of the 19 advocacy-evaluated patients in our study, the response rate is 26%, and DCR, 74%, with 5 PR and 9 stable disease observed, with a median follow-up of 3.3 months. Interestingly, in this study, 7 out of 19 patients, 37%, had a high expression of CD73, using 35% as a cutoff. When looking at patients with high CD73 expression, we noticed our disease control rate at 100%, and also our overall response rate at 57%. We have 4 out of 7 patients exhibited APR. In contrast, in 11 patients with low CD73 expression, only one PR was observed. We're very happy to share some update on our expanded Phase II clinical trial. At this moment, we have 47 non-small cell lung cancer patients enrolled, and we're targeting the enrollment of 60 patients by October. We continue to observe encouraging efficacy signals in these 47 patients and a correlation of CD73 expression with clinical efficacy. We expect to have a more complete data redial by the end of this year or early next year. We have reached an agreement with Wuxi Diagnostics to develop a CD73 in vitro diagnostic kit for the patient selection of ulilagimabs ongoing phase 2 and planned phase 3 clinical studies in non-small cell lung cancer. We are excited by this preliminary confirmation of a correlation between higher CD73 expression and an increased ORR. In parallel, we are exploiting a potential global partnership of Uli Lightly-Math. The last compound I'd like to touch on today is our TJCD4B, the novel clotting 18.2 C41BB bispecific antibody that has made significant clinical progress as well. Of note, TJCD4B is a novel clotting 18.2 and 4,1-BB bispecific antibody capable of binding to tumor cells expressing clotting 18.2 and stimulating intratumoral T cell by the 4,1-BB arm, which is designed to become active only upon tumor engagement to avoid systemic toxicity. Previous generation of 4,1-Bb agonist antibodies encounter significant challenges. For example, for urolumab, the hepatic toxicity was a major concern. And for utomelumab, less efficacy was observed. R-TJ-CD4B has several distinct advantages that it can draw upon. It binds to a distinct 4,1-Bb apto, that only triggers 4,1BB signaling upon clotting 18.2 binding. Our antibody is a unique conditionally acted 4,1BB antibody that could stimulate the 4,1BB signaling only when the bispecific antibody engages the clotting 18.2 positive tumor cells. And therefore, our bispecific antibody greatly reduced the systemic and liver toxicity, which are observed in other conventional 4,1-BB antibodies. The results from the GLP-TOX in Sinomonkey showed that this bispecific antibody was well-tolerated at the highest tested dose at 100 mg per kg. Conditional T cell activation upon TA engagement allows for localized immune activation in the tumor microenvironment and drastically reduces the peripheral T cell activation and hepatic as well as systemic immunotoxicity without compromising anti-tumor activity. Additionally, this allows for minimal systemic toxicity. We believe this platform has the potential to assess multiple targets for their therapeutic development. And one of the core assets in our highly innovative bispecific antibody pipeline, TGCD4B is currently undergoing phase one clinical evaluation in both the U.S. and China in parallel. Our ongoing dose escalation study is progressing very smoothly. Tdcd4b now at eight mc per kick in the US trial and five mc per kick in the China trial. So far, we have already observed one PR, a patient with esophageal gastric cancer who failed the standard three prior lines of therapy. In addition, we have observed three stable disease. And we currently have no unexpected safety signal encounter. This study is on track to generate more data by year end. I would like to reemphasize our goal of translating cutting edge science into innovative drugs to specifically address areas of unmet medical needs. To achieve this goal, we focus on three waves of discovery to generate potential first-in-class and best-in-class assets. The first wave is monoclonal antibody or fusion proteins with unique differentiation, including the unique programs such as LEMZO and ULEAM, all of which have been in phase two already for phase three. In addition, we're also developing novel monoclonal antibodies that targets the driver immune checkpoint pathways and are designed to synergize with the existing clinical assets as combo therapies. The second wave is bispecific antibodies, and these vary in phase one or in the IND enabling stage. These assets are designed to target specific cancers such as gastric, pancreatic, and ovarian, and to target PD-1 or PD-L1 resistant cancers by turning a cold tumor to a hot tumor. The third wave is super antibodies that were enabled by new technologies and formatted with novel modalities. Most programs are now in the preclinical stage. Among them, the immune adjuvants are an area of focus, which is designed to prime and amplify immune response in tumors by different cytokine adjuvants, such as epineptokine alpha and a few new assets. Here, I would like to cover the two newcomers to our innovative pipeline. On the left is our C6-4B, which is the third bispecific molecule developed leveraging our conditional 4-1-BB platform, which tests the advantage of minimizing liver toxicity with an increasing therapeutic window. It is specifically designed to simultaneously target clotting 6 expressed by tumor cells and 41BB expressed by T cells to mediate the T cell killing of clotting 6 expressing tumor cells. Clotting 6 is regarded as an attractive target due to its tumor-specific expression pattern shown on the middle lower panel. It is specifically expressed in ovarian cancer along with testicular cancer. We have now demonstrated TJCD-C6-4B can active T-cells through 4,1-BB stimulation only upon CD, only upon clotting six engagement, providing a more localized immune activation in tumors with good efficacy and reduced systemic toxicity. On the right is RTG-L1-IF, and this is a novel PD-L1 interferon alpha antibodies cytokine fusion protein, which is specifically designed for the treatment of PD-L1, PD-1 resistant tumors through the addition of a strong immune advent interferon alpha in an attempt to convert co-tumors to hot tumors on top of a PD-L1 antibody to achieve superior anti-tumor activity. TJL1-IF was developed using Affinity's TMEA technology and is now under preclinical development. TJL1-IF is a prodrug in that interferon alpha-2B moiety is masked by a PET group through a protease cleavable linker, rendering the drug inactive in the systemic circulation, thus strongly reducing the systemic toxicity. We hope that these preclinical assets will reach to the ID enabling stage very soon. With that, I would like to turn the call back to Dr. Zhang. Dr. Zhang, please.

Thank you, Andrew. Now I would like to talk about what would be the next second half of 2022 look like in terms of key milestones. Now, the first area is to deliver on the key pipeline milestones or catalysts on the clinical development front for lansopalimab as a first-line MDS treatment. We have already submitted application package and are in the process of communicating with the CDE. In addition, we expect to achieve a few new data readout clinical trial at the in the . A additional, and also additional data readouts for face to non-small cell lung cancer trial. a preliminary clinical data readout for TGA-CD4B, as Andrew already mentioned. We also plan to initiate three new clinical trials in the U.S. and China. The second area is to deliver key BD milestones, including potential out-licensing BD deals for ulilatumab, alongside the possibility for bispecific antibodies to be out-licensed. Additionally, as I mentioned earlier, we are working on a potential commercial partnership for Valsatma in China. The BD deliverables, however, take time and are dependent on negotiations with our potential partners. We will do our best as it is critical to our business. Last but not least, as previously mentioned, we have completed the process to engage a US-based public accounting firm that is subject to inspection by the PCAOB for the preparation of its audit reports. The new development is that U.S. and China regulatory bodies signed a state of protocol relating to the inspection of audit firms based in mainland China and Hong Kong. This may ultimately remove the delisting risks in the event of a The state of protocol does not meet the deadline for the company to mitigate delisting risks from the audit of a 2022 financial report. We will finalize the change to a U.S.-based auditor as originally planned. Additionally, our manufacturing facility of IMAP Hanzhou has already successfully manufacturing batches of clinical trial material. And our R&D center has been operational in San Diego with a focus on translational medicine. So we are determined with the refocused strategy to deliver this critical milestones to drive pipeline value for shareholders. Now, I would also like to highlight IMAP's current value proposition. Firstly, we have two late-stage assets near BLA and commercialization in China with very significant market value. For FairSatMap, we're exploring a potential commercial partnership for this asset. If then, Sumitropin Alpha is expected to become a major player in China's growth hormone market, with BLA expected by 2023, 2024. And we are working with our commercial partner, Jumpcan, on the product launch preparation. Secondly, our leading global assets, including the polymap and unilateral map, have a significant value to be realized as they advance towards phase three development. For Lansopalimab, we're on track to initiate a phase three clinical trial in China for first-line MDS treatment by the end of 2022, depending upon the regulatory process and the preparation of the clinical sites around the country. We have amended our agreements with AbbVie for a new CD47 antibody therapy with $1.3 billion in milestones plus royalties. For ulilactamimab, We're expanding our lung cancer phase two clinical trial with encouraging clinical results. We expect to provide another phase two data readouts of 60 lung cancer patients very soon and continue exploring a potential global partnership. We have not talked about other clinical stage assets and multiple preclinical assets under development in our pipeline. One of our priorities is to bring some of those assets to clinical validation. The potential value of this portfolio is not being considered in our market capitalization today. Fourthly, Although delayed due to various reasons, we continue pushing hard with additional BD deals for DeLiLa, DeLiMap, TGA, CD4B, and additional new assets from our pipeline, along with a commercial partnership for PhilSachman. It's worth mentioning as of June 30th, 2022, our cash position is $586 million, which will be sufficient to support our business operations for over the next three years. Plus, we will receive additional milestone payments from the completed partnerships. With that, I would turn it over to John to briefly review our financials. John.

Thank you, Dr. Zhang. And thanks to everyone for listening today. First, let me provide an overview of our financial results for the first six months ended June 30th, 2022. As of June 30th, our cash and cash equivalents and short-term investments amounted to 3.9 billion RMB or 586 million USD, compared with 4.8 billion RMB for the first six months in 2021. In the first six months, our total net revenues were 51.9 million RMB. It consisted of revenues from the current strategic collaborations and from the supply of investigational products under the collaboration agreements. Now, let me turn to IMD expenses. IMD expenses during this period were 453 million RMB or 67.6 million US dollar compared with 593 million RMB for the comparable period last year. The significant decrease was mainly driven by the reduced demand of investigational products as we have prepared sufficient stock and lower share-based compensation expenses in 2022. Administrative expenses for the first six months were 392 million RMB, or 58.6 million US dollar, compared with 452 million RMB for the comparable period in 2021. The decrease was mainly due to lower share-based compensation expenses and savings from our cost expenses initiatives implemented during this period. For the first six months, our total net loss was 1 billion 47 million RMB on a gap basis, inclusive of 181 million RMB equity losses in our Hangzhou affiliate. The net loss on a non-GAAP basis was 848 million RMB. The difference between GAAP and the non-GAAP was mainly driven by the non-cash share-based compensation expenses booked during this period. Next page, as mentioned by Dr. Zhang, we want to reiterate that the company maintains a strong cash balance with 586 million US dollar on hand. Our current cash position, combined with potential upcoming milestone payments from previous authorizing deals and collaborations, is expected to further strengthen our cash reserves. We are quite confident that our cash position remains sufficient to support key business activities beyond 2025. The cash runway does not factor in potential upsides from additional cash related to potential new business payouts or new financing arrangements. We believe that our cash position provides us with ample insurance and flexibility to support key R&D activities over the next three years and beyond. Last and importantly, I'm happy to report that with our prioritization strategy, we have implemented cost initiatives to save about 17% expenses compared to our original budget. This represents a positive cash impact of 32 million US dollar to the company. We will continue to implement expenses initiatives and further reduce the company's cash burn rate in the second half of 2022 and beyond. By the end of this year, we are on track to maintain our strong cash position and keep the balance at over 500 million target. This would allow us for an estimated runway of over three years with potential additions to our cash position along the way. With that, I just turn the call back to Tyler for Q&A sessions. Tyler, please.

Thank you, John, and thank you, Dr. Zhang, and thank you, Dr. Zhu, for that helpful overview of our interim earnings. With that, if there are any questions, please use the raise hand function. I see a couple hands raised. First question goes to Kelly Xue from Jefferies. Kelly, please go ahead.

Thanks. Thank you for taking my questions. Can you share more details about this new CD47 antibody therapy regarding molecular design and the developmental status? And how does it differentiate from Lenzo? And also what triggers the switch to this molecule from Lenzo? I also have follow-up. Thank you.

Thank you, Kelly. Well, under the partnership with AbbVie, we have now a new CD47 molecule. Both parties have decided to continue to collaborate on a global development of this new molecule, which is in active development. I also mentioned that the amended agreements around this new molecule is about $1.3 billion. IMAP owns the exclusive China rights of the new molecule. Now, in terms of the properties of this new molecule and the detailed information, We are under a confidentiality agreement with AbbVie. And both parties are quite strict about this confidentiality agreement to share data and everything. So at this point, we're not able to disclose more data. But we hope that as we move forward, as we generate more data, we'll be able to identify a proper time to discuss the data. Now, as discussed today, Lansoponema has a leading position in China. It's a very competitive position based on around 200 patient safety data and the recent phase two efficacy data, as Andrew talked about. So we are committed to initiating a phase three clinical trial very soon while working with AbbVie on the new molecule. So, you know, at this point, that's all we can talk about.

Thank you for the information. Also, just quickly for the phase three trial in MDS, where are you going to start enrolling and how many patients do you plan to enroll? And also at ASMO, do we expect more data beyond what has been released on the webcast? Thank you.

Yeah, thank you, Kelly. That question, maybe I can ask Andrew to address. Andrew.

Thank you, Dr. Zhang. Thanks, Kelly, for your interest in our phase three trial. As all of you are fully aware, MDS is a very challenging therapeutic space. At this moment, azitidine AZA remains to be the standard treatment. So as a result, our phase three clearly will use ACA as our comparator arm. And we are currently in active discussion with CDE regarding the proposed phase three optimal design. And we will definitely take into consideration of the optimal endpoints. We are considering a CRR, we are considering EFS and also OS as potential primary endpoints. And obviously the selection will definitely dictate the sample size. We are also taking a very close look at the potential stratification so that we can actually balance the prognostic variables in both arms. So all these details are actually currently ongoing with CDE. And also we hope we can share with you more details very soon. And also, we are confident that we can actually maintain our initial target initiation of our phase three, hopefully by the end of this year. Thank you.

Thank you, Kelly, for your question. And thank you, Dr. Zhang and Andrew for the detailed response. Next, we have Andres Maldonado from HC Wainwright. Andres, please go ahead.

Great. Thanks for taking my questions, and congrats on the progress. So, starting with Felsartumab, in your considerations on the use of the hybrid commercialization model, is it safe to assume this will be for multiple myeloma only, or what are your thoughts on how this extends to autoimmune diseases? And curious on what should be our expectations in terms of deal sizing there? Thank you very much.

Yeah, thank you. This is Jingwu. I can answer this question. We're in an active discussion with potential commercial partners for a commercial deal for Fels Automat. This potential partnership does include autoimmune disease indications. This is pretty much based on Morphosis' recent data on autoimmune nephritis. So the data published by Morphosis are quite exciting, indicating that treatments with Valsatamab does provide clinical benefit in that disease setting. So we believe that this commercial partnership will help to, you know, maximize the value of Valsatamab by leveraging our partners' strengths. So to put together this commercial partnership will include multiple myeloma and also autoimmune indications. At this point, we're not in a position to disclose the size of the commercial partnership as we are in confidentiality in negotiating with our potential partners. Thank you.

Thank you, Dr. Zhang, for taking that question, and thank you, Andres, for your question. Next, we have Wayne Wu from Cantor. Wayne, please go ahead.

Hi, this is Wayne for Luis. Congrats on all the progress, and thanks for taking our questions. So our first question is, could you share more details about the TJ-CD4B and the 4MDB platform? How does it compare to CD3 bispecifics? and then secondly with the cost saving initiatives what is their cash earn rate for 2022 and 23. thank you thank you um what may be the first question i will ask uh andrew to to address

Sure, Dr. Zhang. Thank you, Wayne, for that interesting question. You know, as we all aware, by specific TCL Engager platform has attracted more attention lately, particularly, you know, with the approval of the recent CD3 base, you know, buys, you know, from Roche and also J&J recently. You know, I think if you compare the advantage of the CD3-based T cell engager versus the 4MBB, clearly, you know, the 4MBB platform has the advantage in that, you know, the T cell engagement is only related to the mature T cells. In addition, our platform has the added advantage of engaging T cell only upon the the tumor antigen binding, you know, for example, in our clotting 18.241BB molecule is only upon, you know, the binding of CD, clotting 18.2 positive tumor cells will allow the T cells to be active at the tumor site. So definitely this will allow for more favorable safety profile. We can spare the systemic toxicity that actually has been reported in the CD3 platform, including cytokine release syndrome. And also, we do actually maintain the anti-tumor activity. So, we feel very strongly our platform strikes the balance of actually improving the safety profile, but also maintaining the anti-tumor activity. You know, our trial definitely right now is progressing very smoothly. You know, we have, you know, escalated those up to 8-meg-per-kid dose level without encountering DLT. So we hope our clinical experience will validate the utility of this platform. And also more importantly, if we can really validate this platform with our ongoing phase one trial, this really opens the doors of targeting additional, more relevant tumor-specific antigen using the similar platform. Thank you.

Thank you, Andrew. Maybe for... For the second question, I would ask John to address. John.

Thank you, John. Well, let me give you a brief answer to your question about the cash band. The actual cash burn in the first half was around 85 million and we expect to reduce the cash burn in the second half with the implementation of our cost and expenses initiatives just discussed. The annual cash burn rate we expect to manage that in the range of 150 million to 160 million for 2022. For next year, 2023, we will continue to execute on our prioritization strategy and expense initiatives, including facility consolidation, R&D projects, prioritization, and headcount review. We plan to further reduce the operating cash flow to around $120 million going forward. Thank you.

Thank you, Wayne, for that thoughtful question. And thank you, John and Andrew, for those detailed responses. In the interest of time, we'll ask one more question. Albert Lowe from Piper. Albert, please go ahead.

Hi, this is Albert on for Joe Canzaro. Thanks for taking our questions today. I had a question on the Ledlumab cohort expansion. Where are you in the enrollment stages and when will you provide future updates? And maybe a follow-up after that.

Yeah, thank you. Thank you, Albert. Andrew, could you address that question?

Sure. Thank you, Albert, for that question. So indeed, our CD73 antibody is continuing with the current phase two trial. Since the initial report that we share with you on 19 patients in the treatment naive non-small cell lung cancer cohort, You know, definitely we have demonstrated the encouraging efficacy signal with an ORR approaching 26%. And also, interestingly, we have demonstrated the potential correlation of baseline CD73 expression with the overall response in the initial cohort. Since then, we have continued the efforts of trying to rapidly expand this cohort to gain additional confidence of the clinical efficacy, but also giving additional gauge on the utility of baseline CD73 expression in terms of predicting the overall response. So, you know, I think I'm very happy to share with you at this moment, we have definitely continued the enrollment up to 47 patients. We are targeting to finish the enrollment of this cohort up to 60 patients by October. So with adequate follow up, we hope we can share the data with you by the end of this year or early next year. But at this moment, even with the 47 patients at this stage, I think I'm very happy to share with you with a high level data that the trend of the ORR still holds. And also interestingly that the baseline expression of CD73 continues to show the trend of correlating with the overall response rate. So obviously we like to see this data to be more mature.

Okay, great. Thank you. And I was also wondering if you would be sharing more details on the potential phase three design?

Yeah, Albert, you know, our goal is definitely trying to move forward based on the existing data so that we can actually design the critical registration trial. It is very clear. We will target non-small cell lung cancer as a tumor type, and we will also target in the advanced non-small cell lung cancer. I think with regard to the specific phase three design, as you know, this is a very competitive space as well with multiple agents available. So we are taking a very close look at the adequate space that we can leverage the phase three design. Currently we are in close discussion with the KOL both in China and also in the US. So we hope that we can share with you with the final phase three design relatively soon. But of note, We are currently developing a diagnostic kit in collaboration with Wuxi Diagnostic so that we can have a CD73 expression diagnostic kit that hopefully will be implemented timely with our phase three trial upon its activation. Thank you, Albert.

Thank you, Albert, for your question, and thank you, Andrew, for that detailed response. With that, I'd like to conclude IMA Biopharma's financial results and business update conference call for the six months and the June 30th, 2022. Thank you to Dr. Zhang, thank you to Dr. Zhu, and thank you to John for your discussion today, and thank you, everyone, for the questions, and thank you for all our stakeholders for dialing in. If there are any questions, please contact your local IR representative. Thank you. Thank you. Thank you all.