Sutro Biopharma, Inc. (STRO) Earnings Call Transcript

Thank you, everyone, for joining us here at the Wedbush PacGrow Healthcare Conference. We're going to have a panel discussion now on antibody drug technologies and maybe some more exotic chemistry and biochemistry here, too, given the flexibility of our panelists platforms. With us today from Mersana, Sutro and CytomX, we have Anna Protopapas, CEO of Mersana; Bill Newell, CEO of Sutro; and Sean McCarthy, CEO of CytomX. Maybe we can just start with a quick intro from each of you on the highlights of your platform, just the quick 30 seconds or so on what you think is the best part of your platform and then we can go into some Q&A. Speaking of Q&A, before we get into that, if you have a question, anybody in the audience has a question, please type it in the dialogue box that you should have beneath the screen upon which you're viewing this webcast. So without further ado, maybe, Anna, we can start with you just, again, a quick intro and highlights of Mersana's technology, and we'll go around to Bill and then Sean in the kind of order of Zoom boxes.

Yes. Thank you, David. So at Mersana since inception, we've been very focused on building the right innovative platforms that address limitations of first-generation technologies because we think that, that's the way one can innovate and really make a difference in patients. So at this point, we have 3 platforms, all with substantial validation, all with scaled up and two, with substantial clinical data and the third one about to go into the clinic. Two of the platforms carry our proprietary cytotoxic payload, we refer to as DolaLock. It is -- it has some unique pharmacology that provides for controlled bystander effect. Dolaflexin is our lead platform with a drug-to-antibody ratio of 10, while Dolasynthen allows us to control the drug-to-antibody ratio in a very precise manner anywhere from 2 to 24. And we have found that one size doesn't fit all and that for a given target, there's an optimal drug-to-antibody ratio. On Dolaflexin is our lead asset UpRi, which is in pivotal studies in platinum-resistant ovarian cancer and recently initiated a randomized trial in recurrent platinum-sensitive maintenance ovarian cancer. Dolasynthen, we are about to start dosing B7-H4 Dolasynthen ADC, and we're pretty excited about that. And then last, but not least is our immune stimulatory platform Immunosynthen that carries a proprietary STING agonist and that is about to also go into the clinic who just cleared the IND for our first Immunosynthen ADC and that is also the subject of a broad and meaningful partnership we announced on Monday with GSK. So 3 platforms that we've brought forward.

We'll get to that partnership in a second. Bill, you're up next.

It's a pleasure to be here, David. Thanks for inviting us. And Anna and Sean, congratulations on all the success you've had in terms of advancing antibody-drug conjugates and other modalities to treat patients. So Sutro could take a lot of the words that Anna just said, mimic them, but put a little twist because our technology is a little bit different. We were founded on the basis of some technology out of Stanford that allows us to engage in cell-free protein synthesis. In that case, we are not dependent on cells to make the actual antibody drug conjugate. We have a cell-free extract that we derive and then we use that extract to rapidly produce a large molecule like an antibody. We have the ability to insert anywhere on the antibody structure, a proprietary nonnatural amino acid that allows us to have exquisite control over both the drug-antibody ratio, as well as where the placement of the linker and the warhead are on the antibody structure. So we have molecules in the clinic that have a DAR of 2, 4 and our next molecule have a DAR of 8. We know that where you attach the linker and the warhead matters to the performance of the overall antibody drug conjugate. And so we optimize that preclinically before we take it into the clinic. Using our technology, there are now 6 molecules that are in clinical development. We have 2 proprietary assets STRO-002, which is our folate receptor alpha targeting ADC, that is our most advanced asset. That is in the final stages of the dose expansion phase and we look forward to initiating a pivotal trial, that's registration directed in the near future. We can talk more about that in another point in time. 001, STRO-001 is actually targeting hematologic malignancies, B-cell malignancies, in particular, and that is still in the dose escalation phase. We have partnered with Bristol-Myers Squibb, formerly with Celgene on a BCMA ADC that is in 2 trials. One is as a stand-alone agent to treat multiple myeloma. That trial started in 2019 and last year, they did a combo study with a gamma secretase inhibitor. Those are moving forward. A little over a year ago, our partner, EMD Serono, took forward our MUC1-EGFR bispecific antibody drug conjugate into Phase I clinical development. That's the first time a bispecific antibody drug conjugate has been tested clinically. And most recently, our partner Merck announced -- or we announced that our partner Merck had engaged on an IL-2 derivative, moving that forward, both as a single agent and in combination with Keytruda. We've also span out a public company called Vaxcyte, which has a lead program of a 24-valent pneumococcal conjugate vaccine for which we expect data in the October, November time frame on their Phase I/II. Last, but not least, like Anna we're interested in adding immunostimulatory agents into the mix with ADCs, and we recently announced a deal with Astellas, a 3 target deal for immunostimulatory antibody drug conjugates using our technology. We received $90 million upfront and have opportunities for $1.26 billion across those 3 programs. So happy to talk about that, too, in the future, David.

We will. And Sean, finally, last but not least.

Yes. Thanks, David, and great to see you, Bill and Anna. So at CytomX Therapeutics, we're doing things something a little bit different. And we've been the pioneer now for more than a decade in a new field of therapeutic antibodies that we call Probody or conditionally activated antibody therapeutics. We have a multimodality platform. We've applied our Probody masking technology across what we think are some of the biggest challenges in oncology R&D today. So we're applying our technology to improving the therapeutic window for antibodies and specifically checkpoint inhibitors in IO to expanding the target space for antibody drug conjugates, to bringing T cell engaging bispecific antibodies more prominently into the field of solid tumor therapy. And then last, but not least, a more recent field for us expanding therapeutic window for very, very potent immunomodulators, cytokines in a wide range of different cytokines. So we've built a broad pipeline over the years, multiple programs are now in Phase II. We have formed a significant number of major alliances with pharma with BMS, Amgen, AbbVie and also Astellas, friends of ours, as they are friends of Sutro now as well. And the clinical pipeline, as I mentioned include several Phase II programs. We recently reported data on our CD166 targeting, conditional ADC, praluzatamab ravtansine, showing that we met our primary endpoint in hormone receptor positive breast cancer, and we're now looking to partner that program to advance it further. We have reported data on -- another really big idea in ADCs, showing that we can drug CD71, the transferrin receptor. We reported data towards the end of last year, showing a 19% objective response rate in squamous non-small cell lung cancer with that ADC, and we look forward to additional data later this year. That program is partnered with AbbVie. We have a very exciting program with Bristol-Myers in the immunotherapy area where we're working to expand the therapeutic window for ipilimumab, Yervoy. They are in a randomized Phase II study comparing IPI/NIVO to Probody IPI/NIVO in the frontline metastatic melanoma setting. And then earlier in our pipeline, several exciting things are moving forward, including our first T cell engaging bispecific CX-904, which targets EGFR and CD3. That's in a global co-development relationship with Amgen. And then 2 earlier programs we're working to move into IND filing next year, a conditional dually masked version of interferon alpha 2b and another ADC targeting a protein called EpCAM, epithelial cell adhesion molecule, which we think has tremendous potential. So as of my colleagues here, a lot going on in the pipeline and plenty to talk about over the rest of this panel.

Sure. Maybe let's start with Anna, on a question you just signed a deal with GSK. And it was around immuno-oncology target or immuno-oncology program. So there's 2 questions in there. First off, there's also, of course, rumors of a certain ADC-focused company getting purchased at some point in the future. Our -- number one, are pharmas just generally more interested in developing ADCs. And then the second part of that question, are immuno-oncology targets or even pure immunology targets, kind of a next big thing for utilizing ADCs or ADC related, if you want to include modified cytokines or things like that as part of the field. So how do you feel about that? Are pharmas more interested? And are they just set the next wave here?

I have to say, we live in a ADC renaissance. I think there is a lot of interest in ADCs. And I think many of pharmaceutical companies who have a presence in oncology believe they have to have ADCs as part of their tool set. So yes, there is a lot of interest. We are -- we've done 2 partnerships this year. The one we announced on Monday with GSK. We did an earlier one with Janssen on the Dolasynthen platform. So -- and we continue to be engaged in multiple discussions given the interest and given the level of validation we have on our platforms. So yes, there is a lot of interest, and it's not, I believe, limited to just IO. I think its general interest in ADC as an important therapeutic modality. As for the interest of GSK, the data on 2056 is very comprehensive and very compelling. So I'm not sure if the -- I wouldn't say their interest is generally in ADC. So I think their interest, this is a single asset deal and their interest was around our approach with 2056 and the comprehensive data set that supported it. We've seen single-agent activity in HER2-high, HER2-low. We've seen combinations with standard of care, PD-1 and HER2 trastuzumab, and we saw a very wide therapeutic index. All of this, as it translates into the clinic, could lead to a very transformative molecule. And I think that's what drove our discussions with GSK.

That's fair. Bill, what are your opinions on it?

I think, Anna is spot on. I think ADCs, as we all know, have been a modality that has had its ups and downs over the last 30 years or so. But now we have 12 approved antibody drug conjugates, and it is our view, much like Anna expressed, that pharma understands the importance of this modality both as a single agent, but also in combination with other modalities as well. And so we certainly experienced a lot of pharma interest in both the platform technology, as well as in particular product candidates. Certainly, when you have data that is exciting to a pharma partner, there are opportunities for dealmaking around that. But I think the Janssen deal that Anna did and what we've done with Astellas indicates that there are companies that are willing to take a different and broader platform-oriented approach to try to really generate next-generation therapeutics. In the iADC space, what we're really interested in doing and what we pioneered doing is, in a single molecule attaching both the cytotoxic payload. The example that we've given in the past uses a hemiasterlin, a tubulin inhibitor payload that causes a certain degree of immunogenic cell death, and then adding an immunomodulatory agent like a toll-like receptor agonist or a STING agonist in order to actually both kill the tumor cell, but also flag up to the immune system that there's something of interest here and get one-two punch. And the ability to put both of those moieties on a single molecule is a really significant protein engineering fee. We've done it in the past, and we look forward to working collaboratively with Astellas to move our programs with them forward. So it's an exciting opportunity. It's kind of a convergence about the immuno-oncology field, as well as the ADC field, but it is something that we think gives an opportunity for the immune system to remain constantly on surveillance for that tumor type that you've been disrupting. So stay tuned. Our field is evolving. And Anna and Sean's company are at the forefront of leading that evolution, and I think it's not just a renaissance, I think we're beginning a multi-decade realization of the promise of antibody drug conjugates at large.

And Sean, as you mentioned, particularly interesting perhaps IO programs like EGFR, CD3 and your IPI-Probody program. I mean, is that -- again, kind of the way forward for the best applications for your technologies? Or how are you thinking about that future?

Yes, it's a great question. And I think just to take a step back and reiterate some of the comments of my colleagues here, I think the ADC space, it's taken some time to mature. I think we would all agree that true innovation takes time, and we have to be patient. We have to persevere. But with now 12 approved drugs and many, many in the pipeline this field is having a huge impact for -- and on people with cancer. So that's what we're all here to do, and it's super exciting to see. It's I think worth noting that across that multimodality component of our platform, antibodies, ADCs, bispecifics, cytokines, we're still early in the field of bispecifics. We're still early in the field of really harnessing the power of cytokines, the ADC field, and of course, the antibody field before it, but the ADC field is now looking more mature. And one of the most exciting things about the ADC field, I think we would all agree, is that the level of clinical validation that has now been afforded by these approved products and the impact that these products are having on patients is opening up the demand from the industry as a whole for new ideas, new targets, new payloads, new strategies. And that's what -- that's our contribution to the ADC field is opening up new target space. So targets like CD166, CD71, EpCAM. And we've never been shy of taking on these kinds of challenges at the company because we think that in the long run, this is the way that will make the biggest difference. And again, happy to talk in more detail about those specific programs in a moment. But to answer your question about the -- in some ways, the programs that flank our ADC work, the masking checkpoint inhibitors on the one hand and masking bispecifics on the other, we do see these as really important applications of the technology, the expansion of therapeutic window for IPI. If you look at our preclinical work, very, very clear that masking the antibody can localize the intratumoral activity of CTLA-4 blockade by localizing the modulation of immunobiology. And that's what we're looking to translate into the clinic in the Phase II work we're doing with BMS. The Phase I data that was shared previously at ASCO 2020 showed that we were able to achieve very high doses of the masked version of IPI. We got 30 milligrams per kilogram monotherapy, 15 mcg/kgs in combination with full dose NIVO with a significantly improved safety profile when you look particularly at the immune-related adverse events. So that really set the stage for the Phase II work that BMS is doing now in real time. Now with the -- and we really look forward to seeing that data when it's ready. With regard to the bispecific, EGFR CD3 is a strategic interest to a number of companies, it's been of interest to Maverick, to Amunix, to Janux. We all have our different twists. I think it's a great target combination. Our partner, Amgen was the obvious partner to work with because, of course, they have both an anti-EGFR and anti-CD3 or CD319 both approved. So it made a lot of sense to try to bring these 2 technologies together in a masked bispecific, and we're really excited to be now in Phase I dose escalation. And we'll be taking it stepwise. I think that's important with these molecules to start low and go progressively through Phase I dose escalation where safety is the key goal in Phase I to get to that recommended Phase II dose. But we do see the potential of our technology to bring T cell engagers to solid tumors. And we heard a lot about this from Regeneron last week as to how important and what the opportunities are in making cold tumors hot with these types of constructs. We're excited about the prospects there, too.

Got you. So this is kind of again, a little bit of a field question, but when you think about your technologies and the targets that you've chosen. So Anna, with your lead product NaPi2b, and Bill with the folate targeted STRO-002, is it -- when you think about developing those programs, is it better to develop a novel target, maybe with NaPi2b relatively novel target and Genentech explored a little bit before. Or should you really be looking to that new target space as a best way to apply your technology? I know both have risks and you made your choices, but kind of -- maybe help us out on the ideas and thoughts that went behind those choices. And maybe we'll start with Anna since we're seem to be stuck in that circle.

We -- ultimately, it's about bringing products to the market that make a difference in patients. So what's important is can you come up with a target product profile that you believe is actually truly differentiated and delivers a benefit. In the case of NaPi2b, we were very fortunate in that there was validation of the target by Genentech, but we had a platform that when we tested it head-to-head with genetic molecule, we could convince ourselves it was superior, both from an efficacy and a tolerability standpoint. So we were very fortunate there, and we continue to be not only first-in-class, but only in class there. But we try in each case to really convince ourselves that this is something differentiated and not a me too. And I think as we move forward, we're going to see increasing pricing pressure in our industry. And I think bringing meaningful therapies forward is going to be incredibly important. On the HER2 Immunosynthen, we know it's differentiated, even though it's in a space and on a target that's well validated because we are delivering a differentiated payload, an immunostimulatory payload, and we have a unique antibody that binds to a different epitope. It's a proprietary antibody, and it's not competitive with trastuzumab or pertuzumab or in HER2. So that gives us a very differentiated product profile. So I think that's what's important. We have not pursued completely novel targets that requires a set of capabilities and resources that we don't have at this point, but we definitely look for targets that are well characterized biologically and where we can convince ourselves that our ADCs will be differentiated in a way that's really meaningful for patients.

And Bill, maybe thoughts on why -- why folate and again, kind of how the regulatory pathway plays out when you choose a known target and now with an approved ADC in particular, but others, as Anna alluded to, there are other HER2 approved targeted antibodies and things like that. So how do you think about those choices and regulatory pathways and going forward?

Yes, I think Anna made number of important points. I want to really build on what she has said. I think we're all building companies that started much smaller. And in my case, I was the 19th employee in this company, and we were a long way from being able to make a drug that could be of a benefit to patients. And Sean's has been on a journey and Anna with Mersana as well. And so as you think about the approaches that each of us have taken, we're really trying to find the right fit for the platforms that we have to make a differentiated product for a patient. So if you're going to go after an established target, a validated target, as Anna said, you really do need to have conviction that you are making a molecule that is meaningfully more impactful than a competitor's molecule may be. And so in our case, we are primarily biased at the outset of our clinical development journey towards validated targets because there was a lot of question as there are for emerging companies about the platform technology, the scalability, the risk associated with it. It's not an antibody that's -- people know how to make and know how to make for 25 years. We're pioneering in our own technology spaces new ground. And so it's important to be able to give investors confidence that not only do you see the target opportunity and the commercial opportunity, clearly, but you also know how to execute on it in a differentiated way. When we looked at ovarian cancer space, and we're really focused on another company that is not on this panel today that is also known for their ADCs. We thought, let's look and see if we can make a better molecule, not just incrementally better, but meaningfully better than the one that they have been developing and are pursuing to treat ovarian cancer patients. And so what we wanted to do was design something that was homogeneous, not a heterogeneous mixture. I think the 3 of us can agree that homogeneity is preferred, not by a little bit, but by a lot. And we wanted to find something that was really in the main, minimizing of the bystander effect because we didn't think that was going to be helpful from a toxicity standpoint as well. So we went after the folate receptor alpha target. We had a different approach from a linker and a payload standpoint. And preclinically, which was some of the data that we shared when we went public, we felt like we had a better molecule, more potent and probably with less off-target toxicity. Importantly, we wanted to avoid the ocular toxicities that many ADCs seem to have. And so far, we've been successful in our clinical development of our 2 programs, and we'll let our partners speak to theirs in terms of avoiding the ocular toxicity signals that are a problem for other antibody drug conjugates. So for us, it was really, can we do something that's more impactful, and as our interim data and our dose expansion demonstrates, we're able to have a broader patient segment that is amenable to our therapy than the competitor's therapy is. They're going to be limited by their own account to about 35% or 40% of the platinum-resistant ovarian cancer patient population. We think, based on the interim data that we've seen, and we'll talk more about this at the end of the year when we have our full complete data set, a patient opportunity that is approximately 2x that is a much more meaningful therapeutic for patients who have platinum-resistant ovarian cancer. Now we want to have a strong response profile, and we've certainly seen that as the interim data demonstrates where if we go at our highest starting dose, and we look at those patients who have a tumor proportion score above 25%, that they have a 53.8% response rate. And that's a great response rate. We'd love to see good durability of that. And stay tuned for later in the year in terms of what that is. So as we've gone through, we wanted to differentiate the molecule. We wanted to broaden out the patient opportunity because the more patients who have access to therapy, the more benefit you can derive. And so we've thought about that. Now we love novel targets, too. It's just cutting our teeth initially on targets that are more validated, made better strategic opportunity for our company and our technology platform. Sean, I know has a different view, but he's also got a different technology.