Xencor, Inc.

Good afternoon and thank you for standing by. Welcome to CENCOR's third quarter 2023 conference call. Please be advised that this call is going to be recorded at the company's request. Now, I would like to turn the call over to your speaker today, Charles Lyles, Head of Corporate Communications and Investor Relations. Go ahead, Charles.

Thank you and good afternoon. Earlier today, we issued a press release which outlines the topics we plan to discuss today. It's available on www.cencor.com. Providing comments on the call is Basil Dahyad, President and Chief Executive Officer, and Nancy Valenti, Chief Development Officer. Afterwards, we will open up the call for your questions, and we'll be joined by John Desjarlais, Chief Scientific Officer, and John Cush, Chief Financial Officer. Before we begin, I would like to remind you that during the course of this conference call, Zencore Management may make forward-looking statements, including statements regarding the company's future financial and operating results, future market conditions, 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, I'll pass the call over to Basil.

Thanks, Charles. At CENCOR, we're advancing a broad internal development portfolio of engineered antibody-based therapeutics in oncology and autoimmune disease that we've built with our array of modular, continually advancing exMAP protein engineering tools. We're taking multiple simultaneous shots on goal in the clinic, and we use emerging data from clinical studies to guide which programs we advance, which we terminate, and which we partner. A stringent review of this data and the status for competitors allows us to prudently focus our resources and cash on programs with the greatest potential. We're now focusing on the tremendous opportunity for our targeted T-cell engager bispecifics in solid tumors. The class of CD3 T-cell engagers has recently shown great potential for bringing tumor-targeted T-cell therapy to bear against solid tumors, a long-standing challenge for both antibody and cell therapy modalities. At the recent ESMO conference, our partner Amgen presented highly encouraging interim results for a phase one study of xyloridamig in patients with advanced prostate cancer. Valoratomic is an XMAB 2 plus 1 CD3 T-cell engager targeting steep 1. We created a 2 plus 1 bispecific to address a challenging target with limited extracellular exposure. Amgen reported that during dose expansion and optimization, a 41% resist response rate has been seen in high-dose cohorts, and that preliminary durability, while early, is encouraging. We look forward to further updates and progress with Amgen's plans for additional studies and earlier lines of treatments. Enhanced customization afforded by the 2 plus 1 format enables antibodies to bind more avidly to and selectively kill those tumor cells with higher antigen density, potentially sparing normal cells. As a consequence, opens the door to a wider range of solid tumor targets than were previously accessible to T cell engagers. And leading our own internal pipeline for this modality in phase 1 is XMAB819, targeting EMPP3 and renal cell carcinoma. followed by eczema 541 targeting cloud and 6 and ovarian cancer and other tumors. Our second set of tumor-targeted T-cell engagers are co-stimulatory bispecifics that engage CD28 on T-cells for targeted immune activation. CD28 co-stimulation is some promise for enhancing anti-tumor immune activity, and Zencore's CD28 platform has been engineered to expand the therapeutic window of co-stem activation by using reduced-potency CD28 bindings. Our CD28 bispecific, XMAB808, which targets the broadly expressed tumor random B7H3, is in a phase one study in advanced solid tumors. In addition, this quarter, our partner Janssen, now J&J Innovative Medicine, has advanced both of our CD28 collaborative programs, submitting an IND for the prostate cancer candidate and a CTA in Europe for the B-cell malignancy one. We anticipate further expanding our pipeline of T-cell engaging bispecifics in the future. As part of our efforts to provide sufficient resources to advance these programs, today we're announcing that we have added $215 million in cash to our balance sheet from selling a portion of our royalty interests in Ultimaris and Mangevy to OMERS, a Canadian pension fund. These two products were created with Zencore's modular XMAB FC domains and technologies, which are the foundation that enables our diversified approach to building value. Our platform has been fundamental to the creation of three XMAB-based medicines marketed by partners, which have generated royalty income that further drives innovations in our protein engineering and supports the advancement of our internal pipeline. We believe that the strengthened financial position from this deal offers us additional flexibility to execute on our internal clinical development programs, the greatest potential for success. And the deal's structure lets us retain potential economic upside from the sales performance of Ultramarys and NonGD. We've also made changes to our pipeline. We're terminating development of our Phase I PD-1 by ICOS program, XMAB-104, and are closing the gynecologic tumor cohorts in our ongoing Vudalamab Phase II monotherapy study. For XMAB-104, efficacy data in expansion cohorts in MSS colorectal cancer did not meet pre-specified criteria. And for Vudalamab and GYN tumors, we see a rapidly changed competitive environment. We will keep supporting patients currently enrolled in the studies, including by continuing to provide study drugs. Now, on to F. balbur-pendicin alpha, formerly XMAB306. That's our co-development program with Genentech, where we have decided to opt out of our cost-sharing arrangement and P&L split, because as the clinical trial reach and cost of the program continues to expand, we've had to prioritize it against other highly promising programs. We're still very supportive of the program and Genentech's development plans. We elected, per the contract, to shift to a milestone royalty structure. We'll provide additional detail when the specifics are finalized, but we would anticipate terms commensurate with a license of an asset at this stage of development. As a result of the royalty deal, along with these program reductions and a continuing focus on reducing costs, we are guiding that we have cash runaway into 2027. Now for a review on our wholly owned clinical portfolio, I'll turn it over to Nancy Valenti, our Chief Development Officer.