Bioatla Inc

NASDAQ:BCAB

Earnings Call Transcript 2024-Q3

[Operator]

Good day, everyone, and welcome to today's BioAtla Third Quarter 2024 Earnings Call. [Operator Instructions] It is now my pleasure to turn the conference over to Bruce Mackle with 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 Sherry Ledek, 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 third quarter ended September 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 and whether it's clinical trials will support registration, plans to form collaborations and other strategic partnerships for selected assets achievement of milestones, results, conduct, progress and timing of its research and development programs and clinical trials; expectations with respect to enrollment and dosing in its clinical trials, plans and expectations regarding future data updates, 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 expenses 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, November 7, 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 Third 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 slides from the oral presentation given at the Society for Melanoma Research in September is available on our website and the upcoming poster, which will be presented tomorrow at the Society for Immunotherapy of Cancer, SITC, will also be available on our website at the conclusion of the poster session.

Now on to our ongoing clinical program updates. Beginning with our CAB-ROR2-ADC ozuriftamab vedotin, being evaluated as a monotherapy in treatment for refractory head and neck cancer patients who received a median of 3 prior lines of treatment. We shared last quarter that out of our 29 evaluable patients, we have observed a total of 11 responses, 6 of which were confirmed responses, including an ongoing complete response, which underscores our assets activity in this difficult-to-treat patient population. We also shared that given the strength of the data and the profound unmet medical need, the drug candidate was granted Fast Track designation by the FDA.

In September, we presented an earlier data cut at ESMO that demonstrated meaningful antitumor activity with manageable tolerability. As part of today's update, we have additional data from these heavily pretreated patients, showing that the median duration of response for all confirmed responders is now at 4.4 months with the median overall survival now at approximately 9 months, which is ongoing. These are meaningful results in view of this being one of the first reported studies in head and neck cancer to evaluate a patient population with a median of 3 prior lines of therapy. Based on cross-trial comparisons of current standard of care monotherapy agents, methotrexate docetaxel or cetuximab used to treat the second line plus head and neck cancer patients ORRs range from 6% to 13% and the median overall survival range is 5.1 to 6.9 months.

Notably, these results were in less heavily pretreated patients with only 1 to 2 median prior lines of therapy. We believe the clinical profile emerging for ozuriftamab vedotin monotherapy in head and neck cancer is very competitive and has the potential to position our CAB-ROR2-ADC as a standard of care in the second line plus population.

We recently received actionable feedback from the FDA regarding our proposed pivotal trial for ozuriftamab vedotin monotherapy versus investigator's choice among patients with recurrent or metastatic head and neck cancer with disease progression on or after platinum-based chemotherapy and PD-1 antibody therapy. We are pleased to report that the FDA is supportive of our proposed prospective randomized trial design investigator choice treatment options and endpoints that have the potential to support a possible accelerated marketing authorization followed by confirmation of clinical benefit in the same trial with additional follow-up.

At the current dose of 1.8 mg per kg of ozuriftamab vedotin, the FDA supported a limited randomized evaluation of the Q2W and 2Q 3W dosing schedules, which is underway. As part of the overall pivotal trial design, we believe we now have a seamless path to confirming the dose schedule leading into the Phase III trial in second line plus head and neck cancer.

Moving now to our CAP CTLA-4 antibody of evalstotug, which was generated from ipilimumab or IPI, for the important conditionally active binding activity. We recently presented preclinical and clinical data at the Society for Melanoma Research in September, showing that evalstotug is similar to IPI with respect to epitope, affinity and half-life. However, also differs from it with respect to the absence of binding in the normal tissue environment, and we believe this feature will continue to demonstrate considerable safety benefits enabling patients to receive higher and extended tumor-specific CTLA-4 exposure. We will also be presenting a poster at SITC annual meeting tomorrow, highlighting our Phase II study in first-line unresectable or metastatic melanoma. The poster will be available on our website following the conclusion of that presentation.

However, since the embargo has lifted for SITC, I'd like to share the summary of our initial first-line Phase II melanoma patient data. All 8 patients treated with evalstotug plus PD-1 achieve tumor reduction. To briefly review ipi is typically dosed at either 1 milligram per kilogram or 3 milligrams per kilogram in routine clinical practice. With our approach, considerable CTLA-4 inhibition was safely achieved using relatively high evalstotug dosing. Five patients received a 350-milligram dosing level that represents 5 milligrams per kilogram ipi equivalent; and 3 received at least 700 milligrams representing 10 milligrams per kilogram ipi equivalent dosing.

We have now observed 4 responders, including 3 partial responses and 1 complete response with acceptable tolerability and no disease progression observed to date. The safety profile in our Phase II study continues to suggest a relatively low incidence and severity of immune-related AEs. Two patients treated with prior adjuvant immunotherapy experienced Grade 3 immune-related AEs that readily responded to standard treatments and continue to show tumor reduction without progression. Notably, several patients with decreasing tumor volume stable disease are early in their treatment courses and have the potential to also respond with additional follow-up.

In addition, intrapatient dose escalation to higher doses that have been shown to be acceptably tolerated is permissible based on an investigator's decision. We now report several instances where increasing evalstotug exposure has directly led to reattainment of disease control with acceptable tolerability. Specifically, a cutaneous melanoma patient who is dose escalator from 70 milligrams to 210 milligrams and eventually to 350 milligrams achieved a confirmed PR at the higher dose. And another cutaneous melanoma patient was dose escalated from 700 milligrams to 1,000 milligrams, experiencing decreasing tumor volume stable disease. Additionally, on recurrent metastatic melanoma patient whose dose was escalated from 210 to 350 milligrams also reattained disease control with stable disease.

Consistent with prior observations with ipi in randomized trials, we are observing a relationship between exposure and antitumor activity, which is made possible due to the tolerability of higher evalstotug doses relative to that of ipi. We recently received FDA guidance on ongoing dose optimization and control arm to enable a Phase III registrational trial in first-line patients with metastatic or unresectable melanoma with anticipated initiation next year. Based on our evolving data, we continue to believe that evalstotug has the potential to be the best-in-class CTLA-4 that holds the commerce to be used as often as the PD-1 antibody and potentially expand the indications where combined immune checkpoint inhibition can be effective.

Now on to our CAB-AXL-ADC, mecbotamab vedotin. Last quarter, we announced encouraging findings in non-small cell lung cancer patients expressing mutant KRAS or M-KRAS. Among the 18 evaluable patients with known KRAS mutations, we observed 5 responders including 1 responder whose tumor expressed the KRAS G12C variant and had experienced prior failure of [indiscernible]. In addition, we have a patient with a complete response that has been maintained now for over 2 years, demonstrating encouraging anti-tumor activity in patients with MK-RAS variants. Importantly, our initial finding support a trend for improved overall survival among treated patients with tumors expressing M-KRAS variants compared to the KRAS wild-type genotype.

With today's update, we continue to observe antitumor activity with multiple confirmed responses among 21 evaluable patients with tumors expressing MK-RAS, now across the 9 different MK-RAS variants. Additionally, we continue to see an overall survival benefit among treated patients with mutant KRAS variants compared to KRAS wild type with a median overall survival of 12.6 months compared to 8.7 months, respectively, and which is still ongoing.

Furthermore, a manageable safety profile continues with no new safety signals identified in this patient population. As an update on our evaluation of patients with mutant K-RAS non-small cell lung cancer, we continue to observe a high correlation of AXL and MK-RAS expression. We believe this, coupled with the improved overall survival that we are seeing across 9 different mutant KRAS variants supports a potential pan-KRAS strategy in non-small cell lung cancer. Currently, we are determining the most efficient path for a future pivotal trial. Details will be forthcoming as they are available.

Our Phase I/II dose escalation study for the CAB-EpCAM CAB-CD3 T cell engager is progressing well. The maximally tolerated dose has not yet been reached, and we are actively dose escalating. We have implemented a priming dose to modulate cytokine release syndrome that is commonly observed with T cell engagers and can also occur in patients with heavy tumor volume. To date, we have observed multiple patients with antitumor activity with tumor volume reduction, including a colorectal patient with ongoing stable disease for 1 year.

Given our continued dose escalation, we now anticipate data readout of the Phase I study around the middle of next year. We continue to be pleased with the progress of this program and the potential of our CAB-EpCAM TCE to treat patients with a wide range of metastatic tumors, including cancers of colon, lung, breast, pancreas, and prostate, among others.

Finally, we recently announced a worldwide license agreement for the preclinical [indiscernible] bispecific T cell engager. With the successful out-licensing of this preclinical asset to context therapeutics, we continue to focus on execution of our lead clinical care programs, while ensuring the potential advancement of the [indiscernible] bispecific TCE now referred to as CTO 202. In addition, we are engaged in multiple active discussions regarding collaboration with 1 or more of our Phase I assets. Given the continued progress in these discussions, we are maintaining our guidance for a potential near-term collaboration for at least one of our Phase II assets. We continue to prioritize increasing shareholder value through non-dilutive means, while advancing our assets through key value-creating inflection points.

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

[Richard Waldron, executive]

Thank you, Jay. Research and development expenses were $16.4 million for the quarter ended September 30, 2024, compared to $28.4 million for the same quarter in 2023. The decrease of $12 million was due to completion of preclinical development for our Nectin-4 ADC, which received IND clearance in May of this year and the impact of prioritization of our clinical programs in 2023, resulting in less expense for our preclinical programs in 2024.

The decrease in our clinical program expense was related to completion of targeted Phase II enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin. We expect to further reduce our operating expense as we complete certain of our Phase II clinical trials and meet with the FDA to finalize the path forward for the registrational trials.

General and administrative expenses were $5.9 million for the quarter ended September 30, 2024, compared to $6.6 million for the same quarter in 2023. The $0.7 million decrease was primarily due to lower stock-based compensation expense. We recognized revenue related to our exclusive worldwide license agreement with Context Therapeutics, which was announced in September. As part of the agreement, BioAtla receives up to $133.5 million in aggregate payments, including $15 million in upfront and near-term milestone payments.

The Nectin-4 T cell engaging bispecific CAB antibody was in preclinical development at the time of the agreement. Net loss for the quarter ended September 30, 2024, including $11 million in collaboration revenue was $10.6 million compared to a net loss of $33.3 million for the same quarter in 2023. Net cash used in operating activities for the 9 months ended September 30, 2024, was $55.2 million compared to net cash used in operating activities of $74.1 million for the same period in 2023. Our net cash used for the quarter ended September 30, 2024, was $5.1 million. Cash and cash equivalents as of September 30, 2024, were $56.5 million compared to $111.5 million as of December 31, 2023. We expect current cash and cash equivalents to fund planned operations into early 2026, which we believe is sufficient to complete any remaining dose optimization for CAB-ROR2 and CAB-CTLA4, position these 2 programs for registrational trials in head and neck cancer and melanoma, respectively, and maintain our near-term guidance for key strategic collaboration with at least one of our Phase II assets.

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 CAB pipeline targeting solid tumors. We continue to focus on moving our ROR2 and CTLA-4 assets forward toward pivotal registrational trials next year, along with a near-term strategic collaboration for at least 1 of our Phase II assets.

Thank you for your attention and continued support. With that, we will turn it back to the operator to take your questions.

[Operator]

[Operator Instructions] We'll go first to Kelly Shi with Jefferies.

[Unknown Analyst]

This is [indiscernible] for Kelly. Congrats on the program. I just have 2 quick questions. For [indiscernible], you previously guided that to focus on the first-line BRAF mutated melanoma based on the evidence of the survival benefit. Does that remain a focus for your pivotal trial? Or can you help us to get a more clear on the patient enrollment criteria in general? And I have a follow-up.

[Jay Short, executive]

Thank you, Kelly. Eric, do you want to start on that one? .

[Eric Sievers, executive]

Sure. I'd be happy. And I -- so we indeed identified the BRAF mutated patients with melanoma as being an opportunity because they appear to uniquely benefit from CTLA-4 blockade. So that remains an opportunity. But right now, we've acknowledged that we've expanded that opportunity to all first-line unresectable and metastatic melanoma to include the BRAF mutated tumor types as well. And as we just reviewed from the SITC presentation, all 8 of the patients that are in this population, including some that have the BRAF mutation have experienced tumor reductions, and we have multiple patients 4 that have responses and one of those is a CR. And so we're looking at the totality of the population for the pivotal trial and certainly anticipating that the BRAF mutated patients will experience considerable clinical benefit as evidenced from the CheckMate 067 trial.

[Jay Short, executive]

So Kelly, I think you can see we're following our data, and the data says we've got a big opportunity to go broader, and we're going to -- that's where we're headed.

[Unknown Analyst]

That's very helpful. My second question is about your cash position. As we think about your moving 2 programs into pivotal studies, how will you deploy the cash into each program?

[Jay Short, executive]

We're -- as we've guided, we're maintaining guidance on the near-term Phase 2 collaboration. So our goal has always been to take one of those programs ourselves in and one would be done through a partner. So I think that's where we're headed for now. As you know, there's some modest finalizing dose optimization under project optimis, more for really CTLA4 and so we have the capital to handle all of that. So we were able to keep everything moving forward efficiently as we complete these other activities.

[Operator]

We'll go next to Justin Zelin with BTIG. .

[Unknown Analyst]

Congrats on the progress. This is Jeet on for Justin. Maybe just to start off, regarding the feedback you've received for the ROR2 and the CTLA program. So on the ROR2 side, just any color there on the investigator treatment choice options as well as the time to a potential study start? And then at least on the frontline melanoma side, just any color there on potential dose to move forward as well as the control arm therapy.

[Jay Short, executive]

Yes. I'll start off and then maybe Eric can add to it. It's 2025 next year for both ROR2 and the CTLA4, but admittedly, ROR2 is ahead of CTLA4, we'll tighten the timing as we get a little further into next year. But Eric, maybe you could add some of the other information around the trial.

[Eric Sievers, executive]

Sure. Let's start with ozuriftamab vedotin, targeting ROR2 in previously treated head and neck cancer, for which we have the Fast Track designation. On slide 17 of our corporate deck shows the randomization that we intend to do, which is between ozuriftamab vedotin and the 3 investigator choice options are cetuximab docetaxel or methotrexate and what was your second question, Jee?

[Unknown Analyst]

Just on the frontline melanoma study, which you got some feedback on in terms of the dose you'd like to move forward as well as the potential control arm therapy?

[Eric Sievers, executive]

Sure. So the control arm therapy, we received really helpful, actionable feedback from the agency acknowledging that doublets are often used as well as PD-1 monotherapy. And so the control arm should include the opportunity for physicians to use a doublet checkpoint inhibitor. And the second question is about the dosing and the project Optimis. And I think it's important to emphasize that, as we're seeing in the CIT poster that we're presenting tomorrow, that when we expose patients to higher concentrations of CTLA4 blockade, we're seeing significant improvement in clinical benefit. And we have multiple instances where driving that exposure higher immediately in the next few scans are showing that patients are having tumor reduction by increased exposure. The reason I'm emphasizing that is that our hypothesis is that higher exposures will be important. And so we're in the process of looking at some of the doses that are in the SITC poster specifically the 700-milligram dose, which would be about a 10 per kilo ipi equivalent and the 350-milligram dose, which would be approximately $5 per kilo of ipilimumab. .

[Operator]

[Operator Instructions] We'll go next to Tony Butler with Rodman & Renshaw.

[Charles Anthony Butler, analyst]

Yes. Two brief questions. Back to the dose Eric, on CTLA4. You mentioned 350 and 700. But is there any reason to assume that any one patient gets up titrated from 350 to 700 or would it simply be the straight dose, at least as it relates to the dose optimization component? And then the second question is in the ROR2 frontline study. Can you give information as it relates to the total patient number that you would need. If you look back to, as you mentioned, to CheckMate 067, I mean I think there were 945 patients. Of course, that was against 3 arms, but substantially large trial, and I doubt that that's what you need to run in the frontline setting, but I just wanted to throw that back at you and get your views.

[Richard Waldron, executive]

So Tony, I want to clarify on the second question. Are we talking about evalstotug for both of these questions or for ROR2 did you move [indiscernible].

[Charles Anthony Butler, analyst]

I think it was ROR2 on the patient number, Eric, that's [indiscernible]. .

[Eric Sievers, executive]

Okay. We haven't guided the specific size of that randomized trial. I mean, we do in Slide 17, and I'm talking specifically about ozuriftamab vedotin in the head and neck cancer. And so on Slide 17, we illustrate that we anticipate about 570 patients that would address the full approval end point of overall survival and then a somewhat smaller earlier look for an accelerated approval based on response rate from the 3 to 350. And then moving to your second question, which was really the first that you posted, it was -- it was regarding the very interesting issue of intra-patient dose escalation. We have this characterized on Slide 38 of the corporate deck where we have several instances where a dose change that either from 700 to 1 gram from 210 to 350 or a patient that really started only 1 per kilo and 1 all the way [ 2 ] to 5 per kilo dose than had a confirmed partial response. So we're seeing very clear evidence that we have a dose response and that for patients that are receiving therapy and tolerating it well, that by increasing exposure where we're starting to drive these responses or reattain tumor control, which is really quite important as well. So we're navigating this in terms of project optimists and thinking that, first, we want to really evaluate at least 2 doses and understand the efficacy and the safety profile using a really integrated exposure response analysis. This exposure response analysis is supported by project optimists and it involves looking at PK and a variety of variables that are safety and efficacy.

Now to the second matter of whether we should invoke a plan of dose escalation for insufficient clinical benefit. This is under active discussion and specifically around how do we characterize those dose escalations. And we'll be able to elaborate more on this as we move forward and gain additional data.

[Operator]

We'll go next to ARTHUR He with H.C. Wainwright.

[Yu He, analyst]

Congrats on the progress. I just have 2 quick questions. So first, regarding the [indiscernible], for the limited randomized evaluation for the [ Q2 W ] and the 2Q 3W dosing schedule. Is this going to be integrated into the [indiscernible] study or you guys are kind of FDA recommended to finish that before you initiate the previous study.

[Eric Sievers, executive]

Jay, do you want me to take that? Or do you want to take that?

[Operator]

And part of the interruption, it appears that Mr. Short's line is disconnected.

[Eric Sievers, executive]

I'm happy to take that. And so Arthur, I think that this is almost a matter of semantics. The bottom line is that the agency would like to see the results of this limited randomized evaluation of the every other week dose compared with the days 1 and 8 of a 3-week dosing schedule approach. We're gratified that we have tentative agreement around the dose of 1.8 mg per kg. The question that remains is, which is the appropriate schedule to take forward. One is a little more time-intensive and driving a little higher exposures of the ADC. And of course, that's then balanced by safety. And so that's what we're looking at. And so the question you're asking is would it be part of the Phase III. I see it as part of the Phase III, but we do need to get the agency's formal agreement with that dose when we present them the data.

[Yu He, analyst]

Got you. And for -- I think 1 quick question for Eric. For the cash position of [ 56 ], does that including the upfront payment of $15 million from contact? Or it's not included in that?

[Richard Waldron, executive]

It does include. So the cash position is sufficient to carry us into 2026. And as Jay had mentioned, we are in discussions for collaboration with other parties on other programs. So that's part of the strategy. And typically, there will be upfront and of course, sharing of R&D expenses from that. So we could be looking at extending our runway beyond the first quarter of '25.

[Operator]

It appears we have no further questions at this time. I will now turn the program back over to our presenters for any additional or closing remarks.

[Jay Short, executive]

Thanks, everyone, for their attention today. I appreciate your time, and we look forward to some updates in the near term here. Thank you all. .

[Operator]

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