Pieris Pharmaceuticals, Inc.

Greetings and welcome to the Paris Pharmaceuticals year-end earnings 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 call over to Tom Burrows, Chief Financial Officer. Thank you. You may begin.

Thank you. Good morning, everyone, and thank you for joining us for our year-end 2021 conference call and corporate update. On the call today, we have Steve Yoder, our president and CEO, who will provide a corporate overview and outlook on our pipeline, Tim DeMuth, our chief medical officer, Hito Kauffman, our chief scientific officer, and Shane Olwell, our chief development officer, who will be available for Q&A. You can access the press release released this morning on the Investor Relations page of our website at www.pieris.com. Before we begin, I'd like to caution that comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding the operations and future results of operations of PIERIS, including statements relating to the timing and progress of our clinical trials and preclinical programs, our partnerships, and our financial position And actual results or events may differ materially from those expressed or implied by such forward-looking statements. Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly, and current reports. The information being presented is only accurate as of today, and Pierce undertakes no obligation to update any statements to reflect future events or circumstances. I will now turn the call over to Steve.

Thank you, Tom, and thank you to everyone for joining us today for our 2021 year-end earnings call. Last year was a busy year of execution for us. We entered into several collaborations, including a respiratory and ophthalmology collaboration with R&D leader Genentech, and a collaboration to further expand our partnered 4-1-BB bispecific pipeline. We also initiated multiple clinical trials, including first in human studies for our 4-1-BB PD-L1 bispecific, and we unveiled a new proprietary program in our respiratory franchise. All of these have set the stage for an exciting 2022. I would like to now take you through some of these highlights from last year and to discuss what to expect for this year. As many of you are aware, our lead respiratory program is PRS060AZD1402, an inhaled IL-4 receptor alpha inhibitor that we are developing alongside AstraZeneca for the treatment of moderate to severe asthma. The program is currently in a multi-center, placebo-controlled Phase IIa study as a DPI formulation. Earlier this year, we announced the successful completion of Part 1A, or the safety portion of the 1-mig and the 3-mig dose cohorts in that study. In that portion of the study, 31 moderate asthmatics controlled on standard-of-care asthma therapy, which consists of medium-dose ICS with LABA, were dosed twice daily over four weeks, randomized one-to-one-to-one across the two dose levels in a placebo arm. The safety review AstraZeneca conducted included measures such as incidence of adverse events, changes in laboratory markers, FEV1, and pharmacokinetics. Following a positive safety review, AstraZeneca is now enrolling the efficacy part of the study for the one milligram and three milligram dose levels. In this portion of the study, moderate uncontrolled asthmatics on ICS-LABA with a blood eosinophil count of greater than or equal to 150 cells per microliter and of fractional tail nitric oxide, or pheno, greater than or equal to 25 parts per billion at screening are then randomized one to one to one across the one milligram and three milligram dose cohorts in a placebo arm. We are looking at improvement of FEV1 at four weeks relative to placebo at the primary endpoint in this part of the study. In parallel, AstraZeneca is now enrolling the safety portion of the highest 10 milligram dose level, which is randomized two to one treatment to placebo. Although we have guided to top-line Phase IIa data results from the study this year, we are actively evaluating feasibility of our study timelines in the current geopolitical environment, and we will update our guidance in the orderly course of business if needed. Looking forward, a positive readout from this study would be a trigger for the possibility of opting into co-development of PRS-060 with AstraZeneca. Within 30 days of the top line data from the study being made available to us, alongside a development plan in a proposed budget, we can choose to opt into co-development of this program at one of two levels, neither of which includes an option exercise fee. At the first level, we would be responsible for 25% of the cost share with a predetermined cost cap. This presents one opportunity that when considering future development milestones, would still cover a meaningful portion of our cost share and enable us to increase our share of potential sales milestones and royalties. At the second level, we would be responsible for 50% of the cost share without a cost cap. Although this opportunity would require more investment, it would enable us to receive an attractive gross margin share. If we choose not to participate in the ongoing co-development of PRS 060, we would continue to receive development milestones commensurate to those if we had opted in at 25%, although the royalties and the sales milestones would be lower than this first opt-in tier. As a reminder, beyond the co-development options and whether we choose to opt into co-development at all, we will also have the option to co-commercialize this program in the United States. Beyond PRS 060, we are advancing three programs in collaboration with AstraZeneca. We jointly discontinued one of the four discovery stage programs in the collaboration for which AstraZeneca was not able to validate an exploratory target. We retained co-development and co-commercialization options for two of the three remaining active discovery programs in the collaboration. Now, moving on to our most advanced fully proprietary respiratory asset, I want to briefly discuss our plans for PRS220, which is an inhaled anticalin protein targeting CTGF or connective tissue growth factor for the treatment of idiopathic pulmonary fibrosis, IPF, that we unveiled last year. We reported encouraging preclinical data from the program last year. And this year, we anticipate initiating clinical development starting with a phase one study in healthy volunteers. When we announced the program last year, we also announced that we received a grant from the state of Bavaria in Germany for approximately 17 million U.S. dollars to evaluate this program for post-COVID pulmonary fibrosis. This grant has since supported clinical readiness activities such as GLP talks and GMP manufacturing and will also apply to phase one clinical development. making recent and near-term investments for this program very cost-effective. Given the clinical validation of CTGF, in addition to the potential benefits of an inhaled antagonist to this target, we are excited about the opportunity this program offers. And as a reminder, we also have an ongoing respiratory and ophthalmology collaboration ongoing with Genentech that we signed last year, and as part of which, we have initiated joint discovery activities for the two committed programs. We are enthusiastic about partnering with Genentech and hope to give more updates on that alliance as it progresses. Now I'd like to give an update on our clinical immuno-oncology pipeline. We currently have two I.O. programs in clinical development. Our lead I.O. program is SINRA Bafusp Alpha or PRS343 or SINRA for short. SINRA is a proprietary 4-1-B-B HER2 bispecific we are developing separately for HER2 high and HER2 low gastric cancer. In phase one studies, the drug showed single agent activity, biomarker data supportive of its mechanism of action, and an acceptable safety profile. SINRA also showed activity in patients with immunologically cold tumors as well as those with HER2 low expressing tumors, both of which represent high on that medical needs. Last month, we announced the dosing of the first patient in a Phase II study for this program. The study includes two 20-patient arms. In the first arm, we are evaluating SINRA in combination with ramiserumab and paclitaxel in HER2-high gastric cancer patients. In the second arm, we are evaluating SINRA in combination with tucatinib in HER2-low gastric cancer patients. In both arms, The SINRA dose includes an 18 mg per kg loading dose with a Q2 weekly 8 mg per kg maintenance dose. We expect to report data from the HER2 low arm later this year. And for the HER2 high arm, we expect to report data next year. As previously guided, we have set a high bar for our go-to-go criteria for both arms. And objective response rate, or ORR, of at least 50% in the HER2 high arm and of at least 40% in the HER2 low arm. Of course, we will also be looking at duration of response and safety for both arms. Now, in addition to the SINRA Phase II trial, we also initiated the global open-label Phase I-II dose escalation study to evaluate the safety, tolerability, and preliminary evidence of anti-tumor activity of PRS344, also known as S095012, a 401 PD-L1 bispecific. We are currently evaluating PRS-344 in patients with advanced solid tumors whose cancer progressed on standard of care treatment. We also recently published preclinical data for this program in the peer-reviewed journal Clinical Cancer Research. As a reminder, we have exclusive commercialization rights for PRS-344 in the United States and will receive royalties on ex-U.S. sales for this program. Servier is also within the alliance, continuing to develop PRS352, which is an undisclosed anti-Kalin-based bispecific beyond 4.1BB. I would like to end the I.O. update with a quick update on our other ongoing I.O. partnerships. Our collaboration with CGENT continues to progress, and we hope to have additional updates on those programs later this year. Additionally, Boston Pharmaceuticals continues the IND-enabling work necessary to progress PRS342, the GPC3-401BB bispecific they licensed last year, toward the clinic. It is rewarding to see the multitude of PRS-sourced 401BB bispecifics that are in, or soon have the potential to be in, clinical development with a great roster of partners. This concludes my prepared remarks, and I would now like to hand the call back over to Tom.