Bioatla Inc

NASDAQ:BCAB

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good day, everyone, and welcome to today's BioAtla Second Quarter 2024 Earnings Call. [Operator instructions]. It is now my pleasure to turn the conference over to Bruce Makal of LifeSci Advisors.

[Bruce Mackle]

Thank you, operator, and good afternoon, everyone. With me today on the phone from BioAtla are Dr. Jay Short, Chairman, CEO and Co-Founder; and Richard Waldron, Chief Financial Officer.

Following today's call, Dr. Eric Sievers, Chief Medical Officer; and Sheri Lydick, Chief Commercial Officer, will join Jay and Rick in a short Q&A. Earlier this afternoon, BioAtla released financial results and a business update for the second quarter ended June 30, 2024. A copy of the press release and corporate presentation are available on the company's website.

Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements, including but not limited to statements regarding BioAtla's business plans and prospects, whether its clinical trials will support registration, plans to form collaborations and other strategic partnerships for selected assets, achievement of milestones, results, conduct, progress, timing of its research, development programs and clinical trials; expectations with respect to enrollment and dosing in its clinical trials, plans and expectations regarding future data updates on clinical trials, regulatory meetings and regulatory submissions, the potential regulatory approval path for its product candidates; expectations about the sufficiency of its cash and cash equivalents to fund operations and expectations regarding R&D expense and cash burn.

These statements are subject to various risks, assumptions and uncertainties that can cause actual results to differ materially and are described in the filings made with the SEC, including the most recent quarterly report on Form 10-Q.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, August 8, 2024, and BioAtla disclaims any obligation to update such statements to reflect future information, events or circumstances, except as required by law.

With that, I'd like to turn the call over to Dr. Jay Short. Jay?

[Jay Short, executive]

Thank you, Bruce, and thanks to everyone for joining us for our second quarter 2024 BioAtla earnings call. Additional details related to what we will share today are available in today's press release and our updated company presentation, which are available on our website.

Also, the presentation and webcast of our R&D Day held 2 weeks ago, featuring 3 renowned KOLs are also available on our website. We continue to make considerable progress across all of our ongoing clinical programs.

Beginning with our CAB or 2 ADCO tocilizumab vedotin being evaluated as a monotherapy and highly treatment refractory head neck cancer patients with a median of 3 prior lines of treatment. We shared last quarter that among the 29 evaluable patients, 11 responses were documented at the combined 2Q, 3W and Q2W dose regimens with 6 responses now confirmed.

We have an abstract accepted as a poster presentation at the upcoming ESMO conference and look forward to sharing the updated data in September.

Additionally, we continue to see a manageable safety profile with no new safety signals to date. Given the strength of the data, we recently received a Fast Track designation from the FDA, which represents an important recognition of the potential of ozuriftamab vedotin to potentially fill a significant unmet need in refractory head and neck cancer.

The encouraging clinical profile supports rapidly advancing into a potentially registrational trial evaluating monotherapy treatment versus investigator's choice in the second line and beyond setting and we are on track to meet with the FDA later this year to discuss further.

Moving now to our CAB-CTLA-4 antibody, evalstatug as presented during our R&D Day, we have treated 40 patients across multiple doses of evalstatug, and we continue to observe low incidence and severity of immune-related adverse events and the combined safety from our Phase I and Phase II studies.

Specifically, a relatively low rate of Grade 3 immune-related adverse events was observed in only 4 out of 40 patients with no grade 4 or 5 related treatment-emergent adverse events. The incidence and severity of immune-related AEs were consistent across both Phase I and Phase II studies.

With regards to efficacy from our Phase I study, we previously reported confirmed responses for 3 of treatment-refractory patients using the 350-milligram dose in combination with a PD-1 antibody, including, 1 complete response with one additional partial response that according to the attending physicians showed no evidence of disease and may eventually be ruled a second complete response.

No dose interruptions occurred in patients treated with greater than or equal to 350 milligrams of evalstatug. Multiple patients have remained on therapy for more than 1 year without progression. These data are consistent with the anticipated benefits of our conditionally binding technology.

Initial data from our Phase II monotherapy study across 14 different treatment refractory solid tumor types at 350 milligrams or 700 milligrams showed 10 patients with stable disease and multiple patients experienced prolonged progression-free survival for greater than 10 months.

We look forward to presenting the data at several upcoming medical conferences, including an oral presentation at the Society for Melanoma Research Congress in October and a poster presentation at the Society for Immunotherapy of Cancer in November. We continue to enroll in the Phase II first-line melanoma study, followed by mutated non-small cell lung cancer using a combination of [avalstatug] in PD-1 antibody. We are on track for an initial data readout in melanoma later this year.

Based on our evolving data, we continue to believe [avalstatug] has the potential to be the best-in-class CTLA-4 antibody that holds the promise to be used as often as a PD-1 antibody and potentially expand the indications where combined immune checkpoint inhibition can be effective.

We are now designing a blinded, randomized pivotal trial employing [avalstatug] plus PD-1 antibody for newly diagnosed metastatic or unresectable melanoma patients and anticipate FDA guidance in the second half of this year.

Now, on to our CAB-AXL-ADCS, mecbotamab vedotin, as part of our Phase II trial in patients with non-small cell lung cancer, we have completed an additional expansion cohort of 33 patients to evaluate AXL expression, dose, subtype and safety. In our subgroup analysis, we observed that actual expression of greater than or equal to 1% is correlated with clinical benefit in heavily pretreated patients with a median of 3 prior lines of therapy.

We further evaluated the genotype status in this heavily pretreated patient population with tumors expressing multiple KRAS mutation variants, including G12A G12C and G12D.

Among the 18 evaluable patients with known KRAS mutations, we observed 5 responders, including, 1 responder whose tumor expressed a mutated KRAS G12C variant and had experienced prior failure of soda ratchets.

In addition, we have a patient with a complete response that has been maintained now for over 2 years, demonstrating encouraging clinical benefit in this emerging opportunity in patients with mutated KRAS variance.

Importantly, our initial findings support a trend for improved overall survival among patients with tumors expressing mutated KRAS variants compared to the KRAS wild-type genotype.

Furthermore, a manageable safety profile continues with no new safety signals identified in this patient population. We continue to assess KRAS expression across the Phase II data set and look forward to providing an update and additional details regarding a potential path forward later this year.

Regarding our Phase II potentially registrational trial in undifferentiated pleomorphic sarcoma, UPS, we are evaluating the initial 20 patient data set, and we'll provide an update on the remaining portion of the registrational trial later this year.

Now, in our Phase I/II dose escalation study for CAB EpCAM x CAB-CD3 T cell engager, the study is progressing and ongoing. We remain on track for a Phase I data readout in the second half of this year. The T cell engager space offers tremendous opportunity for more effective therapies, and in particular, our cab enabled EpCAM T cell engager has the potential to treat patients with a wide range of metastatic tumors, including cancers of colon, lung, breast, pancreas, prostate, among others.

Finally, we are in meaningful discussions regarding potential strategic partnerships with multiple companies evaluating selected preclinical and clinical assets. The current stage of these discussions supports our belief that we remain on track for establishing one or more collaborations this year, including for one of our Phase II clinical assets.

With that, I would now like to turn the call over to Rick to review the second quarter 2024 financials. Rick?

[Richard Waldron, executive]

Thank you, Jay. Research and development expenses were $16.2 million for the quarter ended June 30, 2024, compared to $31 million for the same quarter in 2023. The decrease of $14.8 million was primarily due to completion of preclinical development for our Nexton core ADC, which received IND clearance in May 2024 and the impact of prioritization of our clinical programs in 2023, resulting in less expense for our preclinical programs in 2024.

Our clinical program expense decreased due to completion of Phase II enrollment for our ongoing ADC trials for mecbotamab, vedotin and ozuriftamab vedotin. We expect our R&D expenses to continue to decrease in the near term as we complete our planned Phase II clinical trial and meet with the FDA to discuss potentially registrational trials for our Phase II programs.

General and administrative expenses were $5.8 million for the quarter ended June 30, 2024, compared to $6.2 million for the same quarter in 2023. The $0.5 million decrease was primarily due to lower stock-based compensation expense. Net loss for the quarter ended June 30, 2024, was $21.1 million compared to a net loss of $35.8 million for the same quarter in 2023.

Net cash used in operating activities for the 6 months ended June 30, 2024, was $50 million compared to net cash used in operating activities of $46.7 million for the same period in 2023.

Our cash used for the quarter ended June 30, 2024, was $19 million compared to $30.8 million during the quarter ended March 31, 2024. In line with our operating plan, we expect a further reduction in overall cash utilization in the third quarter of 2024.

Cash and cash equivalents as of June 30, 2024, were $61.7 million compared to $111.5 million as of December 31, 2023. We expect current cash and cash equivalents will be sufficient to fund planned operations, including our prioritized CAB programs through the third quarter of 2025, which is sufficient to deliver clinical readouts in multiple indications, position our programs for one or more potentially registration trials and enhance our position in advancing strategic collaboration discussions.

And now, back to Jay.

[Jay Short, executive]

Thank you, Rick. We are pleased with the considerable progress we have made to date and our cumulative results across our CAP pipeline targeting solid tumors. We continue to focus on finalizing the data readouts and reports for our CAB Axle, CAB12 and CAB C24 assets and look forward to presenting [indiscernible] and CTLA-4 data at upcoming medical meetings as well as keeping you updated on our business activities.

With that, we will turn it back to the operator to take your questions.

[Operator]

[Operator instructions]. Our first question comes from Brian Cheng with JPMorgan.

[Lut Ming Cheng, analyst]

Maybe just first on actual in UPS. Can you confirm if you have met with the FDA on the remaining portion for in the registrational study? If so, what is the initial feedback on the agency? And just furthermore, can you give us a bit more color on the patient compliance and safety profile that you saw in the initial qualifications? And a quick follow-up.

[Eric Sievers, executive]

Thanks, Brian. So, as we previously disclosed, we had a conversation with the FDA about mecbotumab vedotin in undifferentiated pre-amorphic sarcoma and we discussed Project Optimus requirements, treating at 2 different dose levels, the potential bar for accelerated approval with a single-arm trial data set.

We have not met with the agency yet with regard to our recent enrollment of the additional patients, and we would plan to review our data and then update on this later in the second half of the year. And, Brian, I think you had additional questions about overall safety. Is that right?

[Lut Ming Cheng, analyst]

Yes. And I guess just from the initial 20 patients, I think you provide color on effication compliance and any initial read on efficacy and safety that will be very helpful.

[Jay Short, executive]

Sure. I was just going to say on the efficacy, we're not because it's part of the potential registrational trial. We're not able to update publicly on that. But on the safety, I think in general, Eric, at a high level, you certainly could update that.

[Eric Sievers, executive]

Yes, I'm happy to do so. Certainly, no new safety findings have been identified with the ADC. And we did decide that giving the drug every on the 3Q4 regimen was, we didn't see much patient compliance with that coming in so frequently to clinic. So, we really focused on the days 1 and 8 regimen of a 3-week cycle.

[Lut Ming Cheng, analyst]

Maybe, just lastly, just on the partnership or BD front. Can you just talk about your level of confidence, whether you'll be able to lock in a potential deal in the back half of this year? And, as you think about the potential partnerships there on table, which potential assets do you think will make the most sense to partner off based on the current data?

[Jay Short, executive]

So I'm fairly confident that we're going to be successful in establishing partnerships one or more in this remaining portion of the year. I think, as I mentioned in the script, also may see a partnership as part of that in the preclinical assets.

When it comes to the ADCs are certainly getting the most limelight in discussions. And so, I think it's a little difficult to predict for sure which one would partner first, but I'd say both are potential candidates. So, we like them both. So, we feel we'll remain on track for that as best one can forecast. And the discussions are clearly at a meaningful level, and so, we're very encouraged, Brian.

[Operator]

We'll go next to Tony Butler with Rodman and Renshaw.

[Unknown Analyst]

Question is about the AXL ADC. I seem to recall that the patient with the complete response received the combination. Now, as it pertains to the combination, I wonder if you can characterize what you've seen since the last data update when it comes to, let's say, seeing a potential deepening of response of patients who are not quite there when it comes to having a response, getting close to that negative 30% mark over time.

[Eric Sievers, executive]

So, if I can clarify, I think you're asking about our relatively mature data set now with mecbotumab vedotin in non-small cell lung cancer, and you commented on the CR patients that we've reported previously. And then I think the second part of your question was asking about whether we've seen deepening of some of these responses over time.

I think I'd probably best to refer everyone to Slide 45 in our updated corporate deck, where we are characterizing the confirmed responses across the KRAS mutation variants. Interestingly, one of our responses is a CR patient. And then also direct folks to Slide 46, which is a preliminary analysis suggesting a difference in outcome amongst patients expressing the mutated KRAS versus wild-type KRAS genotype.

So, we are continuing to witness the data evolving over time. This is our current data set that we've made public and look forward to continuing to evolve to evaluate the evolving KRAS story. I want to indicate that 21 of the patients still have a pending genotype and we're categorizing them as either wild type or mutant so we can further this preliminary finding.

[Unknown Analyst]

Furthermore, how would you characterize responses and/or clinical activity with the disease control duration longer than and fewer than 16 weeks with the combination of mecbotumab vedotin and nivolumab in patients whose PFS mutation status is either unknown or[indiscernible].

[Eric Sievers, executive]

Looking at Slide 45, we're seeing a duration of response of 4.8 months for those with the mutated KRAS. I think that the survival curves give a suggestion of a somewhat lower PFS amongst the patients with wild-type KRAS. And we've not performed a formal analysis of the 21 individuals that are unknown. So, I look forward to a future data presentation at a medical congress where that will be disclosed.

I do think it's a fairly competitive profile given the fact this is effectively a fourth line media and fourth line set of patients.

[Operator]

[Operator instructions]. We'll go next to Arthur He with H.C. Wainright.

[Yu He, analyst]

So, I had a couple of quick ones. So, for the Axle program, regarding the UPS study, if I understand correct, you have the additional 20 patient data, and as we're now, we just going to take waiting for the data to take to the FDA. In meantime, are you still enrolling patients in the program?

[Jay Short, executive]

We are not enrolling patients at the moment. We're waiting for the 3 total scans and evaluating the data as it comes in, and then we'll proceed from there.

[Yu He, analyst]

And for the non-small cell lung cancer study in the future, my take is you're probably going to taking the KRAS status as well as the Axle standards together to select the patient or you might go for either one?

[Jay Short, executive]

I think it could be either one that I think right now, we see a nice correlation on KRAS. It just happens to be that actual highly correlated with that. So, it's not necessarily required that you have that axle expression. We clearly see benefit with our drug with axle expression. So, when we finish the next 21 patient's analysis, obviously, we'll be comparing that and coming forward with how we think it best be carried out.

[Eric Sievers, executive]

And I add to that, to because, Arthur, I think that it's a great question. And, as Jay said, these are evolving data. We're looking at the 21 patients to see how they sort out between mutated and wild type.

But it's conceivable that if the KRAS findings are further supported with additional data that given that, that's a standard assessment, the genotype of lung cancer patients is very standard for defining the appropriate treatment options that this would enable a pretty straightforward approach for defining a population experiencing pronounced clinical benefit, again, illustrated on Slide 46 with the difference of survival that we're seeing.

Now, that could be biologic differences between those 2 subgroups of patients. It also could be due to the drug.

[Yu He, analyst]

And I had another one for the CTLA-4 study. Just curious, do you guys still plan to enroll more patients for the monotherapy at the 700-milligram dose level? Or that's pretty much the 19 patients are every patient that you plan for the monotherapy study?

[Eric Sievers, executive]

I'm happy to take that. So, we do not plan to further characterize monotherapy safety. I want to emphasize that the Phase II monotherapy approach was a way to very efficiently and rapidly confirm our hypothesis that we were seeing a lower rate of immune-related adverse events compared with marketed CTLA-4 antibodies.

We believe that we are indeed seeing a substantially lower rate of mediated adverse events. And so, our focus is now combining with PD-1 antibody approaches and further evaluating drug activity and safety in newly diagnosed metastatic or unresectable melanoma as well as patients with lung cancer with specified mutations.

[Operator]

[Operator instructions]. I'm showing no further questions at this time. I will now turn the program back over to Jay Short for closing remarks.

[Jay Short, executive]

Thanks, everyone, for attending today, and we look forward to seeing everyone at ESMO in September as well as in our additional conferences coming up in the near future. Thank you. And we'll also intend to report out on our business developments as they occur. Thank you.

[Operator]

This does conclude today's program. Thank you for your participation. You may disconnect at any time.