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spk04: Good afternoon, ladies and gentlemen, and thank you for standing by. And welcome to the second quarter 2021 Zencore conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that this call is being recorded at the company's request. Now I would like to turn the call over to your speaker for today, Charles Lyles, head of corporate communications and investor relations.
spk08: Thank you, and good afternoon. Earlier today, we issued a press release which outlines the topics we plan to discuss today. It's available at www.zencor.com. Today on our call, Basil Dahiat, President and Chief Executive Officer, will review recent business news and pipeline updates. John Desjardins, Chief Scientific Officer, will discuss our cytokine and CD28 programs, and John Cush, Chief Financial Officer, will review financial results. And then we'll open up the call for your questions, and Alan Yang, Chief Medical Officer, will join us then. Before we begin, I would like to remind you that during the course of this conference call, Zincor management may make forward-looking statements, including statements regarding the company's future financial and operating results, future market conditions, the plans and objectives of management, future operations, the company's partnering efforts, capital requirements, future product offerings, and research and development programs. These forward-looking statements are not historical facts, but rather are based on our current expectations and beliefs, and are based on information currently available to us. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including but not limited to those factors contained in the risk factors section of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. With that, let me pass the call over to Basil.
spk09: Thanks, Charles, and good afternoon, everyone. Zincor's approach to creating antibody and cytokine therapeutics uses our extensive protein engineering tools, centered on our plug-and-play XMAP FC domains to create novel molecular structures, improve natural protein and antibody functions, and create new mechanisms of therapeutic action. This approach enables us to rapidly explore different targets in biology so we can select the most promising programs to take forward. We've been focusing our work on the expansion and use of our XMAP bispecific platform to create antibodies that bind two or more different antigens simultaneously, and also to engineer cytokines with structures and binding affinities optimized for therapeutic use. These plug-and-play tools are highlighted in our partnerships. Currently, we have 16 ongoing partnerships for XMAP technology, which have resulted now in three marketed products, the most recent being Veer and Glasgow SmithKline's anti-SARS-CoV-2 antibody citrovimab. which recently received emergency use authorization for patients with mild to moderate COVID-19. Our Xtend FC technology was integrated into the antibody for the purpose of reducing the dose administered and potentially enhancing its lung tissue bioavailability. This partnership exemplifies our commitment to enabling the broad use of Xmeb FC technologies outside our core focus of oncology and autoimmune disease and demonstrates its applicability in vastly underserved areas like serious infectious diseases. In May, we also entered a similar licensing transaction with Bristol-Myers Squibb to incorporate extended anti-COVID antibodies that's currently in Phase II testing. Now, switching back to our internal programs, we're running nine Phase I or Phase II studies evaluating our own XMAP bispecific antibodies and cytokines. This way, we're taking multiple simultaneous shots on goal in the clinic. And the proof-of-concept data we're generating is guiding which programs we independently advance, which we partner, and which we will terminate. Further, we're continually feeding new molecules that we believe are differentiated into the clinic to keep our pipeline robust. So now I'll touch on the programs with recent updates. Very recently, we initiated a phase two study for XMAB717, our PD1 by CTLA4 dual checkpoint bispecific antibody. It's in patients with metastatic castration-resistant prostate cancer that we classify by molecular subtype. As a monotherapy or in combination, depending on the subtype, Now, we expect to present mature data from the ongoing Phase 1 studies expansion cohorts later this year, specifically in prostate cancer, renal cell carcinoma, and in a basket cohort of tumors without approved checkpoint therapies. We believe that metastatic prostate cancer is an indication with high unmet need and that currently is without much checkpoint inhibitor use. And we think it could benefit from a checkpoint inhibitor, particularly one with XMAP717's dual targeting of PD-1 and CTLA-4 and potentially differentiated tolerability profile. We're also planning new studies of XMAV717 and additional tumor types that we'll guide on later. Now, shifting to plimodimab, our CD20 by CD3 bispecific antibody, under our strategic clinical collaboration with Morphosis and Insight, we'll be investigating the chemotherapy-free triple combination of plimodimab with tafacetamab and lenalidomide in patients with certain lymphomas. Plumonumab's T-cell redirection to tumors and taphacitumab's enhanced ADCC tumor killing combine distinct immune pathways for anti-tumor effect, and we think the combination is a differentiated approach for treating patients with lymphoma. Now, we plan to initiate the first of these studies in patients with relapsed or refractory diffuse large B-cell lymphoma, an aggressive type of NHL, in late 21 or early 2022, once we finalize our recommended dose in our ongoing Phase I study and complete operational preparation for the multinational trial. We plan to present updated data from the ongoing Phase I study later this year. Now, for Tidutimab, our CD3 biospecific antibody that targets SSTR2, we've initiated a Phase II clinical study in patients with Merkel cell carcinoma and small cell lung cancer, which are SSTR2-expressing tumor types known to be responsive to immunotherapies. Later this year, the company plans to present updated data from the Phase I expansion cohort in patients with neuroendocrine tumors, including longer clinical follow-up and updated biomarker data. Last, I'll touch on XMAP819. Later this year, we anticipate submitting an IND for 819, our ENPP3 by CD3 bispecific for renal cell cancer, and we're planning on initiating a phase one study in early 2022. XMAP819 is engineered with reduced potency CD3 binding, as well as a multivalent 2 plus 1 bispecific antibody format, which has two antigen binding domains to the tumor target, providing for more selective binding to the high ENPP3 density expression on tumor cells compared to the lower density on normal cells. This binding selectivity of the XMAP 2 plus 1 format extends the range of targets amenable to CD3 bispecifics, especially solid tumor targets. Recall our partner Amgen's AMG509 program targeting STEEP1 and prostate cancer also uses this format. Now I'll turn it over to John Desjarlais, our CSO, to discuss our rapidly expanding cytokine drug portfolio and CD28 programs.
spk11: Thanks, Basil. We've been very busy using the full range of our protein engineering tools to turn native cytokines into therapeutics. We currently have our first two cytokines in the clinic. Expect that two more will advance in the coming year, one internally and one at our partner, Genentech. There are, of course, several other interesting cytokines, so additional programs are likely to follow. Now, native cytokines have evolved to create powerful immune responses by acting potently, locally, and rapidly, but when used as systemic drugs, these properties make them short-acting and often toxic. Our cytokine engineering seeks to create longer-duration therapeutic activity remained under the threshold for toxicity that has limited their clinical use historically. First, we designed small changes in the cytokine to lower its potency, often by 100-fold or more, by reducing affinity to its receptors. This has created better-tolerated, slower-acting, and far more sustained immune-stimulating activity for multiple cytokines and preclinical models. We further enhance the stability in pharmacokinetics by fusing them to XMAD bispecific FC domains that incorporate our Xtend technology to further enhance persistence. Our first clinical program, XMAD 306, is our engineered IL-15 for oncology that is partnered with Genentech. We engineer it for these properties. One, NK cell and T cell activation for cancer therapy that potentially is a broad range of other cancer therapies. And two, unlike IL-2, IL-15 avoids the intrinsic bias for Treg activation, which is undesirable, of course, for cancer therapy. XMAP306 is currently in phase one dose escalation in advanced solid tumor patients, both in monotherapy and in combination with atezolizumab. And we are currently assessing additional combination studies for the future. Our first immune receptor target at IL-15 is currently an IND-enabling studies with our Parkinson in tech. Our second cytokine in the clinic is XMab564, our wholly-owned IL-2 FC fusion engineered to selectively activate regulatory T cells or Tregs for the treatment of autoimmune disease. We're conducting a phase one single ascending dose study to characterize the safety, tolerability, and pharmacokinetics of subcutaneously delivered XMab564 in healthy volunteers And the study will include an analysis of key biomarkers, including measures of Treg expansion. The goal of an IL-2 therapy for autoimmune disease is to provide sustained low-intensity activation of Tregs while avoiding the pro-inflammatory systemic activation of effector T cells. So a Treg-selective IL-2 therapy with an expanded therapeutic window compared to historic IL-2 approaches would have broad potential across many different autoimmune diseases. In preclinical studies, this may be the case for XMAP564. As with our other engineered cytokines, we reduced its potency to improve tolerability and duration of action and used our XMAB heterodimeric FC domain and Xtend technology to enhance its half-life. Our newest cytokine program is a preclinical IL-12 program. Our IL-12 cytokine program builds on our prior work with XMAB-306 and XMAB-564. Now, IL-12 is a potent pro-inflammatory cytokine that promotes high levels of infrared gamma secretion thereby increasing the immunogenicity of the tumor microenvironment and making tumor antigens more visible to the immune system. It can also promote proliferation of T cells and NK cells and increase cytotoxicity of both those cell types. Now, IL-12 can have strong anti-tumor activity, but, you know, as seen in prior clinical studies with IL-12 and other cytokines, it was demonstrated to have a narrow therapeutic window, limiting its utility. So we applied our cytokine engineering methods to IL-12 to generate, again, potency-reduced, longer-acting, and more tolerable drug candidates. And we anticipate submitting an IND for the lead in 2022. Now I'd like to take a moment to review our targeted CD28 platform, which is a new class of T-cell engager designed to complement other mechanisms of T-cell activation, such as checkpoint inhibition or CD3 engagements. CD28 is a key immune co-stimulatory receptor on T cells that has been difficult in the past to safely and effectively engage therapeutically. But by targeting a CD28 binding domain to a tumor by using a bispecific antibody, we can boost the activity of T cells in a tumor-selective way to enhance T cell-directed therapies. Our most advanced, wholly-owned lead CD28 candidate is XMAP808, a B7H3 by CD28 bispecific antibody for potentially broad cell or tumor use. including in prostate cancer, where B783 is highly expressed. That molecule is advancing through preclinical development, and we plan to file an IND in 2022. The second CD28 program is the focus of our research collaboration well underway with Janssen, where we have partnered to discover a CD28 myocytic antibody against a prostate tumor target. Finally, we remain interested in PD-L1 as another target for this platform. All these programs show the power of ZenCorp's platform to create candidates that access new biologies and to continually supply our clinical pipeline with differentiating molecules. Now, with that, I'll hand the call over to John Cush, our Chief Financial Officer, who will review key highlights from our second quarter financials. John?
spk00: Thank you, John. As we have previously discussed, a critical part of Zencore's business is leveraging its protein engineering capabilities through partnerships and collaborations for its XMAP technologies and drug candidates to generate non-dilutive sources of revenue. We receive upfront payments, milestones, royalties, and also equity interests in connection with certain partnerships. Proceeds from these partnerships and collaborations allow Zencore to maintain a strong financial position as we continue to advance our portfolio of clinical stage and research stage bipacific antibody and cytokine programs. Cash, cash equivalents, and marketable investment securities totaled $603.7 million as of June 30, 2021, compared to $604 million at December 31, 2020. Total proceeds from royalties, milestones, sale of an investment equity security, and a net increase in the value of marketable equity securities offset net spending of approximately $90.5 million on operations for the first six months of 2021. Based on current operating plans, we expect to have cash to fund research and development programs and operations into 2024. An estimate we will end 2021 with between $475 to $500 million in cash, cash equivalents, and marketable securities. Now I'll review our three and six month financials. Total revenue for the second quarter end in June 30, 2021 is 67.4 million compared to 13.1 million for the same period in 2020. Revenues in the second quarter include revenue from our Janssen Novartis Genentech collaborations and royalty revenue from Alexion, FEAR, and Morphosis, while revenue for the second quarter in 2020 is primarily licensing revenue from Gilead and royalty revenue from Alexion. Total revenue for the six-month end of June 30, 2021 was $101.4 million compared to $45.5 million for the same period 2020. Revenue for the six-month end of June 30, 2021 included revenue from our Janssen Novartis Genentech collaborations, milestone revenue from Morphosis, Veer, and Novartis, and royalty revenue from Alexion, Veer, and Morphosis compared to revenues from the same period 2020, which were primarily licensing revenue from Gilead and Amune, milestone revenue from Morphosis, and royalty revenue from Alexion. Research and development expenses for the second quarter were $49.5 million compared to $43.5 million at the same period in 2020. Total R&D expenses for the six months ended June 30, 2021 were $90.9 million compared to $77.4 million for the same period in 2020. Increased R&D expenses for the three and six months ended June 30, 2021 over the same periods in 2020 were due to additional spending on certain development programs, including XNAB 104, our PD1 by ICOS program, XNAB 819, our EMPP3 CD3, and other early-stage development programs. Additional spending on XNAB 306, our IL-15 program partnered with Genentech, also contributed to increased R&D expenses during the first six months of 2021. General administrative expenses for the second quarter ended June 30, 2021 were $8.9 million compared to $7.2 million in the same period 2020. STOLE G&A EXPENSES FOR THE SIX MONTHS ENDED JUNE 30, 2021 AT $17.1 MILLION, COMPARED TO $14.4 MILLION FOR THE SAME PERIOD OF 2020. INCREASED G&A EXPENSES FOR THE SECOND QUARTER AND THE FIRST SIX MONTHS, 2021, OVERMOUTHED FOR THE SAME PERIOD OF 2020 WERE PRIMARILY DUE TO INCREASED G&A STAFFING AND SPENDING ON PROFESSIONAL FEES. OTHER INCOME FOR THE SECOND QUARTER ENDED JUNE 30, 2021 WAS $43.2 MILLION, COMPARED TO $2.6 MILLION IN THE SAME PERIOD OF 2020. OTHER INCOME FOR THE SIX-MONTH ENDED JUNE 30, 2021 WITH $56.3 MILLION, COMPARED TO $3.3 MILLION IN THE SAME PERIOD OF 2020. OTHER INCOME FOR THE SECOND QUARTER IN THE FIRST SIX MONTHS OF 2021 INCLUDES A REALIZED GAIN OF $18.3 MILLION ON THE SALE OF AN INVESTMENT EQUITY SECURITY AND A NET INCREASE IN UNREALIZED GAINS ON THE COMPANY'S MARKED WORLD EQUITY SECURITIES. AN INCOME FOR THE SECOND QUARTER ENDED JUNE 30, 2021 WITH $52.2 MILLION, OR $0.87 ON A FULLY DRIVEN PER SHARE BASIS, compared to a net loss of $35 million, or $0.61 on a fully diluted share basis for the same period of 2020. For the six months ended June 30, 2021, net income was $49.8 million, or $0.82 on a fully diluted share basis, compared to a net loss of $43.1 million, or $0.76 on a fully diluted per share basis for the same period in 2020. Net income reported for the three and six months ended June 30, 2021, compared to the net loss reported for the comparable periods in 2020, WE'RE PRIMARILY DUE TO HIGHER COLLABORATION MILESTONE ROYALTY REVENUES AND AN INCREASE IN OTHER INCOME IN 2021. NON-CASH SHARE-BASED COMPENSATION EXPENSE FOR A SIX-MONTH PERIOD WAS $17.6 MILLION COMPARED TO $14.7 MILLION FOR THE SAME PERIOD OF 2020. AND TOTAL SHARES OUTSTANDING WERE $58.3 MILLION AS OF JUNE 30, 2021 COMPARED TO $57.2 MILLION AS OF JUNE 30, 2020. WITH THAT, WE NOW WOULD LIKE TO OPEN THE CALL FOR YOUR QUESTIONS. OPERATOR?
spk04: Ladies and gentlemen, just as a reminder, if you would like to ask a question, please press star and then the number one on your telephone keypad. Your first question comes from the line of Ted Pinchoff with Piper Sandler.
spk12: Great. Thanks, guys. Love the quick, concise, and meaty update. A lot going on here. A couple questions have been made. Just checking in on the Roche program, IL-15, any potential for updates there? And I think you said that you would file the IND for 819 this year and then potentially two INDs next year for IL-12 and 808. Is that all correct?
spk09: Thanks, Ted. Yes, on the IND timing, you're exactly right. 819 this year, the IL-12 and XMEB 808 are B7H3 by CD28. Those go into 22, those latter two. And with regard to the IL-15 program, XMAP-306, we're currently collaborating with Genentech on. You know, we're hopeful we can have some data to share with that program relatively soon. We're obviously still working with Genentech on the timing of that, but the program is advancing. We're, as you know, dose escalating both mono and combo, and we're exploring combination studies that we can start planning for both with Genentech and ourselves as well. So stay tuned.
spk12: Awesome. Really excited to hear more about that and also from 717 in the back half. Thanks, guys. Thank you.
spk04: Our next question comes from the line of Jonathan Chang with SVP Lear Inc.
spk01: Hi, guys. Thanks for taking my questions. First question on 717. How do you see this program positioned in the competitive landscape versus other PD1, CTLA-4 bispecifics and developments?
spk09: So I guess there's two aspects to how we answer that question. First is the details of the mechanism of action. Our molecule is designed to have binding preferentially to those cells that have both antigens, that is PD-1 and CHLA-4, because of the way we tune the affinity to each antigen. In particular, the CHLA-4 affinity is rather modest, so you need that cooperativity of binding to hook on to double positive cells. The goal was to have something that's more selective for the relevant T cells, and potentially has a differentiated tolerability profile. We think, you know, from around 100 patients or so in our safety database, so far we might be seeing a somewhat differentiated tolerability profile that doesn't have some of the very characteristic and profound IPI-related IRAEs along the colitis and immunitis line. Of course, more data will have to be gathered to really nail that down. The only other program we know of with that same MOA approach of a selective for double positive cells by specific would be a program that AstraZeneca has that we've not seen any data from yet, but I believe that's somewhere between phase one and two right now. The second way we want to position it is to see if, in particular, having a molecule that has the kind of profile that we've seen so far and is binding both antigens and offers that CTLA-4 bump up along with the PD-1, to try that in the indications where PD-1s are not already dominant. And that's why we're focusing our efforts initially in castration-resistant prostate cancer. And we'll be able to flesh out the details of that strategy very shortly now that we're up and running and the trial's initiated. The goal there is to go into indications where the MOA has some scientific basis as well as support from data in our phase one, but where there's not a swamped commercial landscape and a and an already dense thicket in development. And I think prostate cancer offers that kind of opportunity, and that's why we're aggressively pursuing it. We think we need to go where others haven't already heavily trodden the path.
spk01: Got it. Thank you. And second question for 819. Can you elaborate on the reduced potency CD3 binding and compare this to other similar efforts in the competitive landscape?
spk09: You know, I'll pass that one on to John Desjardins, our CSO, who can comment more specifically on the kind of affinity ranges and our logic on that.
spk11: Yeah, thanks, Basil. And thanks for the question, Jonathan. So, you know, basically, ZENCOR is not the only company actually moving in this direction. I think a lot of companies kind of simultaneously started exploring this idea of reducing CD3 potency as a way to mitigate CO2. you know, cytokine release syndrome and, you know, all the symptoms that go with that. We found, importantly, you know, we could show this either in vitro but also in various preclinical models that we can, by reducing the CD3 binding potency, we can actually preserve all the cytotoxicity conferred by the biocytic antibodies but greatly reduce the cytokines that are produced. We see You know, several orders of magnitude reduced IL-6 production in the monkeys when we put these molecules in. They're tolerated at higher doses, you know, so we're, you know, you can think about, you know, mg per kg versus microgram per kilogram, you know, something as widely different as that. And, of course, there are other benefits to being able to dose higher. You tend to get longer PK, less target-mediated drug disposition. So we think there's a lot of benefits to that.
spk01: Got it. Thank you.
spk04: Your next question comes from the line of Peter Lawson with Barclays.
spk10: Great. Thank you so much. Thanks for taking the questions. On the CD28 constructs, when can we see the initial data around those and kind of the reason for picking CD28 over, I guess, CD3 and even the reduced potency CD3 and other T-cell engages?
spk09: Yeah, so I'll take a stab at that. So in terms of data, well, we're just guiding that we're going to have the clinical trial started next year. And so for data, it'll be beyond that. You know, we can't speak specifically to something that's so far out. Now, just I'll make sure to emphasize that this CD28 as a T cell binding bispecific is not as an alternative to CD3 engagement or other kinds of T cell targets. It's a pathway called the signal 2 that is used to bump up T cell activity, whether that's activity that might be being driven by T cell receptor binding and signaling, which is really how PD-1s work. So think of this as an agent that could, in a tumor-selective way, boost potentially PD-1 checkpoint inhibitor activity. It's also a way to augment CD3 inhibitors. by specific activity, but again, in a tumor-selective way, right? So it's a way to bump up things for other agents, as well as potentially having its own monotherapy activity, but we don't view it as an alternative, really.
spk10: Thank you. And then do you think the B7H3 construct you have with CD28 could actually drive responses by itself, or do you think it has to be combined with other prostate antigens you have?
spk09: John, do you want to tackle that?
spk10: I think we've answered the question.
spk11: Yeah, it's certainly a possibility. Obviously, we would hope to see single-agent activity. On the other hand, it's important to emphasize that PD-1, it's been shown by numerous publications over the last couple of years that PD-1's main mechanism of action is actually to interfere with CD28 signaling. And so, you know, a very obvious combination, therefore, would be combining the XMAP808 with PD-1 blockade just to make sure that that brand-new CD28 signal you started doesn't get shut off by the PD-1 signaling.
spk09: Yeah, and we're quite enthusiastic about attacking CD28 because it's a challenging target to make work in this context where you really truly have selective activation, not over-activation or super-agonism. And John's team has done an amazing job finding ways the right epitopes and building the right constructs with the right affinities. It's quite an engineering feat. And we're really only aware of one company that's ahead of us here, and that would be Regeneron, and they seem to be putting a lot of effort into this pathway as well. We think this could be an exciting access, and we're really happy to be exploring it next year. Perfect. Thank you so much. Thanks for taking the question.
spk04: Your next question comes from the line of Etzer Darrow with Guggenheim.
spk02: Great. Thanks for taking the question. This is Paul on for ETSER. Just wondering, do you have any guidance currently on initial dose escalation data for your two earlier stage tumor microenvironment programs, 841 and 104? I think you sort of mentioned being about a year behind 717, so just hoping to see if there's an update coming.
spk09: We don't have an update planned for this year. We'll guide more on that later.
spk02: Okay. Well, in that case, I was hoping to get maybe your updated views on opportunity for 841, especially coming out of ASCO this year with some data for a LAG3 map that sort of validated the mechanism in melanoma. So maybe your thoughts on expectations for initial readout, anything incremental we can learn about the mechanism, and overall thoughts there. Thanks.
spk09: Right. So remember, this is a CCHLA4 by LAG3, so we're trying to combine both activities. And we've explored it. We've been exploring it in dose escalation and plan expansion cohorts that are actually, I think, starting imminently. And I think the goal there is to see whether in either, and we've disclosed this before, either in monotherapy setting or in combination with a PD-1 inhibitor, and we're using pembrolizumab in a clinical collaboration with Merck, whether those settings of the post-PD-1 patient, because that's the monotherapy inhibitor, cohort, those patients are going to all be post-PD-1 in the indications we're going after for the most part, as well as we're looking there and we're looking in combo with PEMBRO because we think this could be hopefully the agent of choice giving you the most bang for the buck in one molecule of two checkpoints you can inhibit and hopefully in a way that again uses our selectivity design to hone to the right cell populations and reduce the IRAE profiles that people see a lot with IPI. You know, we don't know the setting we're going to let the data guide us, but that's how we've set up the phase one, and we're getting to the point where we're starting to really explore the efficacy and expansion cohorts.
spk02: Great. Thanks a lot.
spk04: Your next question comes from the line of Arlinda Lee with Canaccord.
spk06: Hi, guys. Thanks for taking my questions. I had one maybe for John. You talked about the CD28 strategy. Can you maybe talk a little bit about how you're maybe in the context of the competitive landscape, how you guys are addressing CD28 versus others? And then I guess more broadly, Basil, you alluded to complementary mechanisms. How do you kind of think about the collaboration with Janssen and then or J&J and how that might play into your other efforts in prostate cancer. Thank you.
spk09: Yeah, maybe I'll take the one on Janssen first and then, John, you can jump in on our strategy, how we fit and how we think we differentiate. So the Janssen collaboration is for a prostate cancer target that isn't disclosed to be used to target this CD28 moiety in a bispecific antibody that we're creating with them. And they'll develop them. We have attractive deal terms. We can take a 20% stake in the cost of the program after clinical proof of concept and get a substantially enhanced royalty into the double digits and teams. But the logic there for Janssen is they have a robust portfolio of prostate cancer agents, including CD3 bispecifics they've talked about, including checkpoint efforts. And they think a CD28 signal 2 could be a hugely important and consequential part of that. And so we're delighted to be working with somebody who shares our vision for the science. Note that is a tumor-specific antigen, this prostate-specific antigen, for prostate cancer. And I think, you know, maybe John can jump into how we're using both antigen selection as well as our platform's developments for the CD28 to separate ourselves from others.
spk11: Yeah, thanks for the question, Arlinda. And by others, mostly I'm assuming you mean our colleagues at Regeneron, who, as Basil mentioned, are a little bit ahead of us. I'd say one key aspect is we've, again, built, like we always do, a plug-and-play platform. So we have a highly stable anti-CD28 single-chain FB that came out of our phage libraries. It's been heavily vetted. We have a whole affinity suite for those, and that's something that we can plug in the whole affinity suite with any particular tumor antigen. And I think the other key distinction, you know, is just looking at the targets that we've selected. So, you know, from the outset, you know, I always wanted something that would be sort of a one-size-fits-all across a lot of histologies, and that led us pretty quickly to B783, You know, knowing its properties of broad and very bright, you know, expression across a lot of different histologies. Turns out it's also very bright on almost every epithelial tumor cell line that we work with. So it was very convenient in terms of proof of concept. You know, so I think it comes down to that. And, you know, other targets we're looking at include, you know, like PD-L1 that I mentioned. Again, another broadly expressed tumor antigen. So it comes down to that. I think the plug-and-play platform and the selection of broad targets versus very indication-specific targets like some of our competitors are exploring.
spk04: Okay, great. Thank you. Your next question comes from the line of Tom Schrader with BTIG.
spk05: Hi, this is Kaveri for Tom. Thanks for the updates, and thanks for taking our questions. Maybe one on the IL-12 and IL-15 programs. Is the biology different for these two molecules? They both seem to activate NK and CD8 T cells. And does any recent data change the way you think about the opportunity? Like I guess you mentioned it previously, we've also seen direct delivery of IL-12 is powerful in melanoma, but you can't deliver it systemically. Does that intrigue you?
spk09: I'll let John take that one. Those issues are the ones that literally drove his entire design philosophy.
spk11: Yeah, so let me start in terms of the different biologies. You know, it could certainly be confusing because, you know, they all activate NK cells and T cells. But the way I think of it is cytokines like IL-2 and IL-15 are You know, sort of their day job is to lead to expansion of those cell populations. So you're making more T cells, making more NK cells. At the same time, they can actually promote, you know, higher cytotoxicity levels. In contrast, IL-12's day job is basically to make those cells not so much proliferate them as much, I mean, although we've seen that, but really to make them more cytotoxic. and in particular, you know, make them secrete a lot of interferon gamma, which of course pays, you know, all kinds of dividends in terms of, you know, oncology, including direct anti-tumor effects that interferon gamma is famous for, but also famously for upregulating class 1 MHC and increasing the overall immunogenicity in the tumor setting. And then with respect to the opportunity, You know, one of the holy grails of IO is to actually have a systemic IL-12, right? I mean, it's, you know, doing intratumoral injection, you know, always has its limitations. As one of my colleagues has pointed out to me, intratumoral injection is basically a subcutaneous injection near the tumor. And, you know, so you can still, when you're putting a highly potent IL-12 into a tumor, you're still getting systemic exposure ultimately. And so we've taken the approach, you know, which seems to have worked out well preclinically and with our IL-15 program of reducing the potency. And that allows you to have a much more, you know, slower onset of these activities that you want to promote, like the interferon gamma and the other aspects of IL-12. So we believe we can actually get away with systemic administration. At least that seems to be the case preclinically. But obviously, you know, humans could be a different story, and we have to develop a very careful dose escalation plan in humans.
spk05: Got it. Yeah, that makes sense. And for the IL-2 program, can you tell us how differentiated it is from the other approaches those are being evaluated in the clinic, either suppression of CD8 T cells, specific CD8 T cells, or differentiation of induced Tregs through TGF-beta in IL-2? Thank you.
spk11: Do you want me to take that one?
spk09: Yeah, you can go ahead. I think, yeah, sure, you're the expert.
spk11: Yeah, I mean, the key differentiation is a lot of it comes in the design of the molecule. You know, our format is a monovalent IL-2 versus, you know, several of our competitors have bivalent IL-2. We avoided the bivalent IL-2 because that would almost interfere with our whole potency reduction concept. One of the main reasons to reduce potency is to reduce internalization, and that can actually be increased when you have a bivalent modality. And technology. Yeah, that's right. It has the Xtend technology, and I think we're a little more careful, at least, you know, looking at our own in vitro selectivity data, we're more careful on the selectivity, and we think we have one of the best Treg selectivity profiles.
spk04: Your next question comes from the line of Gregory Renza with RBC Capital Markets.
spk06: Hi, this is Yinglong for Greg. Thank you for taking my question. I was wondering, as you had multiple commercial success with your partner programs, at what point would you consider further monetizing pipeline success again, and how do you think about accessing royalty to further investing your pipeline? Thank you.
spk09: Yeah, so we're always assessing the markets that is the royalty market view on the value of our revenue streams and comparing that against how we look at it. And, you know, we think it's always an option and an opportunity. We think it's a great part of the flexibility we've built in our business plan. versus the steady income stream and that, you know, our assessment of how that income stream might grow might misalign at times with the royalty companies. And if it does one day, then maybe there's an opportunity that we see we can do better that way. I don't think of it as sort of an imperative. I think it's just a ready opportunity there.
spk06: Great. Thank you very much.
spk04: Your next question comes from the line of Zishu with Barenburg.
spk03: Hi. Thanks very much for taking my question. I have two. The first one I want to ask about Aplamodimab, the CD3, CD20, bispecific antibody. You mentioned about sharing more Phase I data later this year. Could you remind us what the phase one trial, the design of phase one trial, and I guess what we should be looking for in terms of de-risking the phase two trial you're going to start? And the second question is around the cytokines portfolio. I think now it seems that you are putting more resources in developing more modified cytokines. I guess what... What would you like to do in terms of developing more cytokines, particularly in the autoimmune medications, given cytokines are quite important in that area? Thanks very much.
spk09: Yeah, I'll answer the first question. Sorry, I'll answer the second question about our cytokine portfolio sort of strategy overall. Then I'll let Alan Yang, our chief medical officer, take the one about PLAMO. On the cytokine portfolio, we are applying more resources because we've seen from the data that we've gathered so far on our earliest programs there, our IL-15 and our IL-2 for Tregs, that this general strategy of reducing potency to the appropriate level, and you've got to really do the experiments to find out what that might be, to get that therapeutic profile that you want, the duration of action, the the increase in cell populations that you want, and the tolerability profile, that strategy seems to have general legs. And preclinically now we've seen it again and again and again with different programs like IL-12. We're exploring IL-18 now. We've looked at some other cytokines. So I think there's an enormous playground there. And I think for now we're going to focus on buttressing our portfolio in the oncology space we thought that the outlier there was the Treg hypothesis for IL-2 was just too good and clear and direct of an opportunity for our platform to pass up for now. And so I think we're going to continue focusing on oncology while we do scientific and research exploration all over the place and for now just have the IL-2 be the one that we're planning for now in the autoimmune side. So that's in the clinic now. We're excited about it. The next clinical program, probably the one after that, would be oncology. And then, Alan, do you want to address the question about the Phase I and how that plays into Phase II for PLAMA?
spk07: Sure, Basil. Thanks to you for the question. So the question was, you know, what to expect from our Phase I data. So, you know, I think the last time we publicly released data on our Phase I program was at ASH two years ago, actually, two previous ASHs. And we were still in dose escalation. And so the team has spent a lot of time really optimizing the dose and schedule. And so more recently, we've been sort of developing a more convenient dose and schedule for patients. At the time we released data, we released data on something like responses at over 80 micrograms per kilogram, and the response rate was roughly over 40%. We've now moved well beyond that in our dose escalation, and so we'll be looking at data at much higher doses, and that was in diffuse large B-cell lymphoma. So we'll have continued data in diffuse large B-cell lymphoma and probably some indolent lymphomas as well. So that will be the phase one data. I think the second question is, was what to expect in the Phase II study. So we've announced that we're committed to a Phase II study. We think it's very exciting. It's a chemo-free study where we'll be combining pomodimab with tafacitimab and lenalidomide. So we think that there's two complementary mechanisms, actions, and targets of CD19 with ADCC and CD20 with the T cell engagement. Excuse me. So we believe that that is actually a very exciting and novel mechanism of action and will differentiate us from the competitors.
spk03: Great. Thank you very much.
spk04: And, ladies and gentlemen, that concludes our Q&A session. I'd like to turn the call over to Basil Dyett for any closing remarks.
spk09: Thanks very much. And a big thank you to the team at Zencore that's been tireless in keeping our whole suite of programs moving forward. And finally, I'd like to thank everybody very much for joining us today. We look forward to updating you again over the coming months, and have a terrific evening.
spk04: Thank you for your participation in today's call. This does conclude today's conference call. You may now disconnect.
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