Pieris Pharmaceuticals, Inc.

Good day and welcome to your Pierce Pharmaceuticals, Inc. first quarter earnings call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to Tom Burns, CFO. Sir, the floor is yours.

Thank you. And good morning, everyone, and thank you for joining us for our first quarter 2022 conference call and corporate update. On the call today, we have Steve Yoder, our president and CEO, who will provide a corporate overview and outline on our pipeline. Tim DeMuth, our chief medical officer, Hito Kauffman, our chief scientific officer, and Shane Olwell, our chief development officer, will also be available for Q&A. You can access the press release released this morning on the investor relations page of our website at www.PIRIS.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 PIRIS, 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 PEARS 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 first quarter 2022 earnings call. My update will address key developments within our pipeline and across our R&D alliances before I turn back to Tom, who will speak to our financial results in the context of the present capital markets, which we believe reflect the value of having significant support from our biopharma partners and access to alternative sources of capital funding, such as grant funding. We'll then open the call for your questions. In the first quarter, we focused our resources on our four most advanced assets, with two belonging to our inhaled biologics respiratory franchise and the other two within our immuno-oncology bispecifics franchise. The lead asset in our respiratory franchise is PRS060 or AZD1402, where a crucial Phase IIa study in moderate to severe asthma is being driven by AstraZeneca. Next is our fully proprietary pulmonary fibrosis program, PRS-220, which we continue to advance towards a first-in-human study later this year as a high priority. Our two IO bispecifics are both clinical stage, and in the first quarter, we initiated the Phase II study of our most advanced program, synribofusp-alpha, also known as SYNRA, which targets HER2-expressing gastric cancers. We continue building momentum for our second program, PRS-344 or S095012, having received IND acceptance to enroll patients in the U.S. alongside our co-development partner, Servier, who holds ex-U.S. rights for this program. So I'm now going to provide further details on our progress within these programs together with a snapshot of anticipated catalysts in the coming quarters beginning with our respiratory assets, followed by our IO assets. Our lead respiratory program, PRS060, is an inhaled IL-4 receptor alpha inhibitor that we are developing with AstraZeneca for the treatment of moderate to severe asthma. In the first quarter, AstraZeneca initiated the efficacy portion of the Phase 2A study with the dry powder inhaler formulation given twice a day on top of the standard of care regimen of medium dose inhaled corticosteroids and long acting beta agonists or ICS LABA in moderate uncontrolled asthmatic patients, which is randomized one to one to one across the one milligram and three milligram dose levels plus a placebo arm. We previously announced the successful completion of the safety portion of both the one milligram and the three milligram dose cohorts in part one of the study which consists of 31 moderate asthmatics controlled on standard of care asthma therapy. Having established the safety of the DPI formulation at the one milligram and three milligram dose levels, AstraZeneca is also enrolling the safety portion of the 10 milligram dose level, which is randomized two to one treatment to placebo. Our earlier guidance for this study readout included reporting top line efficacy data by the end of the year. Now, given the geopolitical situation, along with the broader challenges amidst the ongoing pandemic, there is a heightened risk that more time will be required to deliver the top-line study results by the end of the year. AstraZeneca is currently in the process of conducting a thorough timeline re-forecast and working on strategies to mitigate any potential delays. An announcement of top line results from this study along with receiving a formal development plan and budget from AstraZeneca would trigger an opt-in decision for this program by PIRIS. We will then have 30 days to make our opt-in decision for co-development 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 through regulatory approval with a predetermined cost cap. At this level, for the lifetime of this product, we would receive sales royalties from single digit up to the high teens, plus the potential for multibillion-dollar sales milestones. We would also stand to receive development milestones that would represent approximately half of the capped development costs, making this an attractive and affordable investment opportunity. The second opt-in level would be at a 50% cost share without a cost cap, but it would enhance our economics, allowing us to receive a gross margin share in the mid-20% range for the lifetime of product sales. And in addition to and independent of the co-development options I just mentioned, it's worth reminding everyone that we also have the option to co-commercialize this program in the United States. Looking to our earlier respiratory pipeline, we continue to jointly work with AstraZeneca on three discovery stage programs for which we retain co-development and co-commercialization options for two of those programs. And moving beyond our AstraZeneca alliance, we continue to advance our wholly owned respiratory asset PRS220 towards the clinic, which remains on track to enter phase one this year. PRS220 is an inhaled anticalin protein targeting CTGF, or connective tissue growth factor, for the treatment of idiopathic pulmonary fibrosis, or IPF, for which we reported encouraging preclinical data last year. As a reminder, we received a $17 million government grant from the Bavarian government to support early stage development of PRS220 to also evaluate the program for the treatment of post-COVID pulmonary fibrosis. We also had the pleasure of hosting the president of the Bavarian state, Ms. Ilse Aigner, at our German facility this past quarter in association with this grant. IPF is a devastating pulmonary disease impacting between 3 and 5 million patients worldwide. with a mean survival time from diagnosis of just two to five years. Currently available treatments have achieved greater than $3 billion in sales, despite modest benefits and substantial side effects. We believe patients need more effective treatment options with better tolerability, which is why we are excited for PRS-220 to enter Phase I development in healthy subjects later this year. I would now like to give an update on our immuno-oncology pipeline. SINRA is a wholly owned 4-1-BB HER2 bispecific in Phase II development for the treatment of HER2 high and, separately, HER2 low gastric cancer. The Phase II study is a two-arm study evaluating SINRA in these different HER2 settings. The first arm is evaluating SINRA in combination with the standard of care regimen of ramiserumab and paclitaxel in 20 patients who have HER2 high gastric cancer. For this arm, we have a clear go-to-go criteria of an ORR objective response rate of at least 50%, 5-0, in addition to clinically meaningful duration of response and good safety and tolerability to continue further development of this program. We expect to report data from this arm of the trial in 2023. The second arm is evaluating SINRA in combination with the small molecule HER2 inhibitor to catinib in 20 HER2-low gastric cancer patients. For this arm, we would like to see an ORR of at least 40% paired with clinically minimal duration of response and good safety and tolerability to continue further development of this program. Although our initial projections for this arm included top line data this year, more time is needed for the enrollment of the HER2 low arm, and we have revised our guidance, now aiming to provide data on 20 patients in 2023 as we are guiding for the HER2 high arm. Because Synra would be the first targeted therapy to address HER2 low gastric cancer, education of the clinical community is required to properly engage this emerging subpopulation of what is classically HER2 negative patients. We are working closely with sites and investigators to interrogate the potential of this drug candidate in an area of truly great unmet medical need. Turning to our next I.O. program, enrollment is progressing in our global open-label Phase I-II dose escalation study of PRS344, also known as S095012, a 4,1-BB-PDL1 bispecific in patients with advanced solid tumors. As a reminder, PRS-344 uses the same 4-1-BB engager as in SINRA, which has shown single-agent activity in clinical studies. Thanks to the learnings from SINRA, as well as emerging data from the ongoing Phase I study outside the U.S. for PRS-344, we received FDA authorization to dose patients in our Phase I study at a higher dose than was originally permitted for SINRA, and in a manner that allows seamless enrollment across U.S. and ex-U.S. sites. As a reminder, we have exclusive commercialization rights for PRS 344 in the United States, and we stand to receive royalties on potential ex-U.S. sales through our partnership with Servier. Beyond 344, Servier continues the development of PRS 352, or S095025, which is an OX40 PD-L1 bispecific for which we jointly presented preclinical data at AACR last month. PRS352 has demonstrated superior potency to both mono-anti-PD-L1 and combination OX40 and PD-L1 therapy benchmarks in different in vitro assays. It also inhibits the PD-1, PD-L1 pathway with comparable potency to anti-PD-L1 antibodies stimulates human CD4 T cells, drives T cell stimulation in ex vivo cinnamogus monkey assays, and demonstrated an antibody like PK in vivo. As a reminder, we believe that the design of PRS352 may improve upon the limited OX40 pathway activation and anti-tumor effects shown by OX40 agonist antibodies currently in development, which rely on FC gamma receptor cross-linking for OX40 activation. Before turning the call over to Tom for a financial update, I would like to provide a brief update on some of our other collaborations. Boston Pharmaceuticals continues to advance PRS342 or BLS342, which is a 4-1-BB GPC3 specific towards the clinic, and we expect an IND to be filed within the next 12 months for this program. Additionally, we continue to execute well on our multi-program collaboration announced last year with Genentech for the discovery, development, and commercialization of locally delivered therapies for respiratory and ophthalmology diseases, further bolstering our respiratory pipeline while expanding the therapeutic applications for our anti-CALEN technology and platform. We have two active programs within our C-GEN collaboration, including one that has been successfully turned over to C-GEN and one that is ongoing in a joint collaboration phase. This concludes my prepared remarks, and I would now like to hand the call back over to Tom.