Xencor, Inc. (NASDAQ:XNCR) Q4 2023 Earnings Call Transcript
Xencor, Inc. (NASDAQ:XNCR) Q4 2023 Earnings Call Transcript February 28, 2024
Xencor, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, and thank you for standing by. Welcome to Xencor's Fourth Quarter and Year End 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded at the company's request. Now, I would like to turn the call over to your speaker today, Charles Liles, Head of Corporate Communications and Investor Relations. The floor is yours.
Charles Liles: 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.xencor.com. Providing comments on the call are Bassil Dahiyat, President and Chief Executive Officer; Nancy Valente, Chief Development Officer; and Dane Leone, Senior Vice President, Corporate Strategy. After the prepared remarks and presentation, we will then open up the call for your questions, and we will then be joined by John Desjarlais, Chief Scientific Officer, and John Kuch, Chief Financial Officer. Slides that we are using today should be visible here on the webcast and we've made available for download on the Events & Presentations page of our website. Before we begin, I would like to remind you that during the course of the conference call, Xencor 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. With that, I'll pass the call over to Bassil.
Bassil Dahiyat: Thanks, Charles, and welcome, everyone. Today, we'll cover a few business highlights from 2023, briefly review our clinical pipeline, and provide a data update on vudalimab in prostate cancer. You can refer to our press release for more information about the last quarter and full year. We focused our pipeline and discovery work on our T-cell engagers because of growing validation for their potential in solid tumors. Supporting this is the continued advance of vudalimab in prostate cancer, where we'll provide an update today, and the start of a trial in front-line lung cancer for vudalimab. And we've decided to reduce our investment in our cytokine drug candidates as part of this focusing. Our partnerships and licenses played a significant role for us last year: first, with validating data for our XmAb 2+1 CD3 platform from our partner Amgen with their Xaluritamig data in prostate cancer; and two, Phase 1 programs started in our CD28 bispecific collaboration with J&J.
And we significantly strengthened our balance sheet with a partial monetization of our Ultomiris and Monjuvi royalties. As a result of that and robust milestone in royalty revenues, we ended 2023 with $697 million and expect runway into 2027. Now, onto our pipeline. The focus of our clinical pipeline is bispecific T-cell engagers for solid tumors, an area with rapidly growing promise. Solid tumors have been challenging for antibody and cell therapies. But recent data, some of which we'll review momentarily, suggests that CD3 and CD28 bispecifics could play a role as therapies in a range of solid tumors. Key programs for us addressing this opportunity are XmAb819, an ENPP3 x CD3 XmAb bispecific for renal cell carcinoma, an XmAb808, a B7-H3 x CD28 XmAb bispecific in prostate and other cancers.
Both are advancing in dose escalation in Phase 1 and right behind them is XmAb541, a CLDN6 x CD3 bispecific that we expect to start Phase 1 the first half of this year. For vudalimab, we initiated a new study, its first front-line study, in non-small cell lung cancer, based both on our Phase 1 data in lung cancer and external data, suggesting potential advantages against standard checkpoint therapy in this setting. And we've made progress with our metastatic castration-resistant prostate cancer studies, both in combination with chemo and monotherapy and with encouraging monotherapy data we're going to present in a moment. Finally, we're wrapping up our Phase 1 work next quarter for both XmAbs 564 and 662, taking the PK, PD, and safety data in hand to establish initial product profiles and monitoring the field for further validation of these cytokines before we do any additional development work.
Underpinning our T-cell engagers is our XmAb bispecific technology. It lets us address the solid tumor opportunity by engineering our antibodies with a format and affinities designed to give tumor selectivity in the context of each tumor targets particular expression levels and tissue distributions. Solid tumor targets, in particular, need a customized approach because they're distributed more broadly than heme tumor targets, which have already been successfully addressed by CD3 bispecifics in lymphoma and myeloma. Our plug-and-play antibody modules let us do this work rapidly, and as a result, we've got a growing pipeline of molecules with our 2+1 design, which is particularly helpful with selectivity for solid tumors. And here is the first clinical proof of concept for our XmAb 2+1 CD3 format Xaluritamig, which targets STEAP1.
Our partner, Amgen, presented very promising efficacy and tolerability data at ESMO last October in late-line prostate cancer, usually considered a cold tumor for immunotherapy. This target was challenging due to the limited accessible binding regions outside the cell membrane and non-tumor expression. So, we're very encouraged to see this early data for the molecule in the 2+1 format. Amgen has announced they are nearing completion of the Phase 1 study and are planning additional studies in earlier lines of therapy, so we'll be eagerly awaiting their updates. Now, our own lead XmAb 2+1 CD3 bispecific is XmAb819, targeting ENPP3 in renal cell carcinoma. We chose ENPP3 as a target because it has exactly the kind of expression and profile we want for a CD3 solid tumor target, much higher expression on tumor than normal tissues and nearly uniformly high expression on clear cell renal cell carcinoma.
Plus, it has potential for use in select patients in range of other tumors. Also, we think renal cell carcinoma has a need for new mechanisms beyond checkpoint inhibitors and TKIs, and directly cytotoxic antibody could be well positioned. 819's design gives us the selectivity we wanted in vitro and we're continuing to advance in dose escalation with both IV and subcutaneous dosing and expect to make significant progress this year toward target dose levels. I'll shift now to XmAb808, our new T-cell engager mechanism, CD28 targeting. The goal here is to activate T-cells via the Signal 2 pathway, which powerfully amplifies and sustains T-cell responses. We designed 808's bispecific format and affinities to try to drive this activation in a tumor-specific way by requiring sufficient binding to its tumor antigen, B7-H3 to turn on CD28 signaling.
A key part of our approach is a lower potency CD28 binding domain that we think could give us control of CD28 signaling and improved tolerability. We picked B7-H3 because it offers high expression across a range of tumor types, creating an opportunity to potentially treat multiple cancers in combination with either checkpoint inhibitors or CD3 bispecifics. CD28 targeting has generated a lot of interest among clinicians and across the industry in the current Phase 1 study in combination with pembrolizumab is progressing well in escalation. Now, our latest CD3 bispecific is set to enter the clinic imminently. XmAb541 targets CLDN6, which is highly expressed on the majority of ovarian cancers and also on several other tumor types. Though it has a very promising expression profile, it is a selectivity design challenge because there are multiple closely homologous CLDNs. We think we addressed it with careful binding domain engineering and our 2+1 format.
XmAb541 binding is open and we expect to be in patients the first half of this year. We're planning to apply lessons learned for solid tumor CD3 dosing from both internal and external programs to move the study quickly. Now, I'm going to turn it over to Nancy for the vudalimab update.
Nancy Valente: Thanks, Bassil. I'm excited about the encouraging new data we have to share from the prostate cancer monotherapy cohort. If we could go to the next slide? This cohort is part of the overall vudalimab program, which consists of four studies. Based on the outcome of the Phase 1 study, we moved into two tumor-specific expansions initially. The study 717-04 in metastatic castrate-resistant prostate cancer in combination with standard-of-care chemo and other agents, and study 717-05 that included patients with gynecologic malignancies and a monotherapy metastatic castrate-resistant prostate cancer cohort, which I'm going to further describe. The next slide? The prostate monotherapy cohort required patients [who have] (ph) RECIST measurable disease, including visceral sites or lymph nodes, and the patients had to have progressed after all other appropriate therapy.
Vudalimab was given every three weeks based as a flat dose based on our PK analysis of earlier studies. You can see that this study enrolled a heavily pretreated patient population that had exhausted available standard-of-care therapies. With a median of four prior therapies, 100% received prior antiandrogen therapy, all but one received prior chemotherapy, and 86% were ECOG-1 performance status. As noted, the study protocol required patients with measurable disease at baseline, which is why we see a high rate of visceral metastases and high median baseline PSA. Reduction in target lesions and disease control are encouraging for such a heavily pretreated patient population, as you can see on the right, with a RECIST response rate of 35% and a disease control rate of 50% and the spider plot shows we have several lasting responses and one patient with stable disease past 48 weeks.
Deep PSA reduction was also seen in three patients giving a PSA90 rate of 25% and a fourth patient with a nearly a 50% PSA who is still on study. To describe one especially poor prognostic patient who responded well to vudalimab, this patient had three liver mets, a total disease burden of 12 centimeters and PSA at baseline of 180 nanograms per mil, and achieved a confirmed PR, a PSA90, and was in response for over 22 weeks. The treatment-emergent adverse events highlight the tolerability has been generally well managed by dose modifications with only two treatment discontinuations. Unfortunately, there has been one case of Grade 5 immune-related mediated hepatitis. The patient's treatment course was complex and this is the only known Grade 5 immune-mediated hepatitis event in over 240 patients that we've treated with vudalimab to-date.
Reviewing specific immune-related adverse events, generally, the events are what we'd expect with checkpoint inhibitor therapy. The rate of Grade 3 events, that you can see on the right, were generally limited and specific to several patients. Overall, we are encouraged by the tolerability profile of the Q3 week flat dosing schedule with vudalimab. In summary, we have observed encouraging single-agent activity in heavily pretreated patient population. This is consistent with the data from the Phase 1 study in prostate cancer, where we had patients with six and 10-months duration of response. Vudalimab's safety profile is consistent with other checkpoint inhibitors and we observed limited treatment discontinuations. Now, I will turn this over to Dane to share comparative data to place these results in context.
Dane Leone: Thanks, Nancy. As you can see on the next slide, these emerging data support us enrolling more patients into the monotherapy cohort. When you put the data into the context of the broader novel therapeutic landscape under development, it really is clear why we and our investigators during our discussion at ASCO GU were so encouraged about continuing the study. When you compare the baseline characteristics of our patients versus our peer studies, vudalimab monotherapy cohort is among the most heavily pretreated and has the most advanced disease upon enrollment, as shown by nearly all having ECOG-1 and all having measurable disease. Comparatively, only the Xaluritamig dose escalation study has enrolled similar patients that are very late-line in poor performance status.
Despite the remarkably advanced patient population, patients treated with vudalimab have comparable RECIST response rate versus the peer studies in this table and experience deep PSA90 responses. Importantly, we think that RECIST response and deep PSA response are required for translating into effective durability of response and ultimately survival outcomes for these patients. Regarding tolerability, using the Q3 week flat dose schedule of vudalimab has supported a manageable safety profile compared to our peers. Overall, considering the early nature of the vudalimab monotherapy cohort, we are encouraged by the clinical benefit for these advanced prostate cancer patients that have been treated well beyond current standard of care, and we look forward to evaluating a larger cohort of patients by year-end.
Now, on the next slide, beyond prostate cancer, we are executing on the start of our frontline non-small cell lung cancer study of vudalimab plus chemotherapy, and we are excited that the study is underway with the first patient dose in the fourth quarter of last year. And with that, I'll turn back to Bassil for a review of our corporate goals for 2024.
Bassil Dahiyat: Thanks, Dane. Here's a look at our priorities for 2024. We're starting with a strong balance sheet and as you can see, we're looking forward to this year really bringing the focus to our solid tumor bispecifics pipeline, where we have a lot going on for our CD3 and CD28 T-cell engagers and for vudalimab. Of course, we're doing discovery work on additional CD3 and CD28 bispecifics and we'll select our next IND candidate later this year. Operator, we'll now open this call to questions.
Operator: Thank you. At this time, we will now conduct the question-and-answer session. [Operator Instructions] Our first question comes from Jonathan Chang of Leerink Partners. The floor is now yours.
See also 11 Countries with the Best Military Special Forces in the World and 20 Best Personal Injury Lawyers in NYC.
To continue reading the Q&A session, please click here.
