Greetings. And welcome to the BioAtla First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I’ll now turn the conference over to your host, Bruce Mackle from LifeSci Advisors. Thank you, Bruce. You may begin.

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, Philippe Martin, Chief of Clinical Development and Operations; Dr. Eric Sievers, Chief Medical Officer; and Sheri Lydick, Senior Vice President, Commercial Strategy, will join Jay and Rick for a short Q&A. Earlier this afternoon, BioAtla released financial results and a business update for the first quarter ended March 31st, 2023. A copy of the press release is 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, potential selective licensing, collaborations, and other strategic partnerships, whether our clinical trials will be potentially registrational, results, conduct, progress and timing of our research and development programs, and clinical trials, expectations with respect to enrollment and dosing in our clinical trials, plans regarding future data updates, clinical trials, regulatory meetings, and regulatory submissions, the potential regulatory approval path for our product candidates; expectations about the sufficiency of our cash and cash equivalents and expected R&D and G&A expenses. 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, May 11th, 2023, 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 Jay Short. Jay?

Thank you, Bruce and thanks to everyone for joining us for our first quarter 2023 BioAtla's earnings call. Before I provide an update on our first quarter progress, I would like to reiterate a few key points made on our last quarter call in March. As a reminder, BioAtla is the inventor and leader in the development of novel therapies using a proprietary conditionally active biologics, CAB, platform with improved selectivity for attacking tumor cells, while avoiding healthy cells to address urgent unmet needs in oncology in order to improve patients' lives. We made significant progress last year across our multiple ongoing Phase 2 trials for our two latest-stage first-in-class CAB-ADC product candidates, BA3011and BA3021, targeting solid tumor types with high unmet medical needs. As we are now a little over one full quarter into 2023, we continue our positive trajectory and are on track to achieve our recently guided milestones. We remain focused on further advancing the development of our innovative clinical programs, leveraging the broad applicability of our CAB technology across several clinical stage antibody types, including CAB, AXL and CAB-ROR2-ADCs, targeted CAB-CTLA-4, and immuno-oncology naked antibody and our first dual CAB bispecific EpCAM CD3 T cell engager. Additional details related to what I'm going to provide are available on our website as part of our updated company presentation that may be helpful to you. We have shared promising clinical responses to date that are so far meeting and in several cases, exceeding our interim study targeted responses. Last quarter, I shared our strategic shift from providing incremental data updates on small sample sizes to releasing more mature data sets across our programs. As a reminder, our goal is to provide sufficient data to allow us to set study parameters that maximize the company's likelihood of successful for…

Thank you, Jay. As of March 31, 2023, we had $192.7 million in cash and cash equivalents compared to $215.5 million as of December 31, 2022. We expect current cash and cash equivalents will be sufficient to fund planned operations, including all ongoing CAB product development programs into 2025. As a reminder, we control all CAB product market rights in the US, Europe and Japan. Our business strategy includes advancing commercial preparations in key global markets while exploring opportunities to extend our cash runway by generating upfront cash through the selective licensing of product rights in certain territories or collaborations with other biopharmaceutical companies that could also provide to us development milestones and royalties upon regulatory approval and commercialization and create additional value for stockholders. For the first quarter ended March 31, 2023, we reported a net loss of $27.5 million compared to a net loss of $24.3 million in the same period of 2022. Research and development expenses were $21.7 million for the first quarter ended March 31, 2023 compared to $16.9 million for the same period in 2022. The increase of $4.8 million was primarily driven by our preclinical and clinical product development efforts. We expect our R&D expenses to remain variable from quarter-to-quarter and generally increase as we continue to invest in R&D activities to advance our product candidates and our clinical programs. General and administrative expenses were $7.2 million for the first quarter ended March 31, 2023 compared to $7.4 million for the same period in 2022. The $0.2 million change was attributable to a decrease in various expenses for the 2023 period. We expect our G&A expenses to moderately increase to support development of our product candidates, advance our intellectual property portfolio, support focused pre-commercialization activities for our product candidate BA3011, and satisfy requirements as a public company. Net cash used in operating activities for the three months ended March 31, 2023, was $22.7 million compared to net cash used in operating activities of $25.1 million for the same period in 2022. The decrease in net cash used in operating activities for the first three months of 2023 is primarily due to an increase in accounts payable and accrued expenses in the 2023 period compared to a decrease in accounts payable in the same period in 2022. And now back to Jay.

Thank you, Rick. We are pleased with the progress we have made to-date and our cumulative results that continue to support both the preliminary efficacy and safety from our differentiated proprietary CAB platform. We are excited with the compelling clinical data that is emerging in treatment refractory UPS and non-small cell lung cancer and are eager to continue advancing the Phase 2 studies with the addition of the more frequent dose-intensive regimens and providing clinical updates anticipated in the second half of this year. We also remain encouraged by the continued execution of our other promising CAB assets and multiple cancer indications, and we are well poised to reach several value-creating milestones and key inflection points in the next several months. BioAtla remains confident about the future with the goal of pursuing indications of high unmet medical need that we feel will have significant impact for patients and our shareholders worldwide. With that, we will turn it back to the operator to take your questions.

Thank you sir. We will now be conducting a question-and-answer session. [Operator Instructions] And the first question comes from the line of Brian Cheng with JPMorgan. Please proceed with your question.

Good afternoon guys. Thanks for taking my question. A couple from me. Looking ahead into the data update in the second half of this year, it seems that you have multiple interim data across a number of programs in the second half. How should we think about the cadence of each of those data updates? And then I have a couple of follow-ups. Thank you.

Yes, this is Jay and thanks for your question, Brian. I think we'll expect to see the -- this is a best guess at this point, but I was expecting to see the ovarian readouts earlier than, let's say, the lung readouts would expect the AXL to be ahead of ROR2, and I think that -- those are some of the key ones. And then we'll, of course, be giving progress reports on -- general progress reports in terms of -- in the area of sarcoma in terms of UPS, leiomyosarcoma. And of course, CTLA-4 will also be somewhere in there as well. So, -- and there's kind of a couple of updates, right? One may be completing the Phase 1 like in CTLA-4 and then a follow-up a little later, saying kicking off the Phase 2 study. So, that's our intent. Same would happen with the AXL lung. Here's our data, hopefully tied in with a meeting or conference and then followed by kicking off the -- describing the FDA feedback and kicking off the Phase 2 portion of last part 2 Phase 2 portion of that. So, hopefully, that gives you a sense of it, Brian.

Great. That was helpful. And for your AXL program in non-small cell, what's your latest thoughts on the trial design for the potentially pivotal part Phase 2 part 2I? And I think to more extent, I guess, have you decided on whether to focus on non-squamous versus squamous, whether you value combo or single agents? And then the second part of that question is, is that if the part 1 data with the more frequent regimen looks better in the second half, will you have to revisit the trial protocol with the FDA?

So first off, I can just say that we're -- we've decided to focus on the non-squamous going forward, even though I think there's more to learn on the squamous side, but I think we're going to focus on the non-squamous. But I'm going to actually ask Philly to potentially answer this one now, Philly, the rest of the questions in this section.

Yes. Thank you, Jay. So in terms of the study design, I think, clearly, this will be the focus of the conversation with the FDA around the end of this quarter. We haven't landed -- based on their feedback, we'll decide which -- whether to go with a single arm or our primary endpoints or go with the readymade study against a comparator tolerable docetaxel and it might still be an ORR endpoint, but it could also be a PFS endpoint. So we'll make that decision post-meeting with FDA. Currently, we're focusing on the monotherapy, but we'll be getting more data for the combo later on in this year. So we'll be able to make a decision whether to go with combo as well, which will only focus on the monotherapy. And then with your last question about 3Q4W, should we -- would we have to be discussing it with FDA, no, that will not be required. The dose selection is let to the sponsor to decide which dose or doses to move forward with. So should we see a better benefit risk profile with the 3Q4W arm, which could just replace the Q2W level with the 3Q4W dosing regimen.

Okay. If I can squeeze one more in on CAB-CTLA-4, that would be great. How does the 350 dose that you're dosing now with the CAB-CTLA-4 correlate to the target engagement that you're seeing with the currently approved CTLA-4 agents that you're seeing out in the market space? Thank you.

Well, we've done a lot of work with ipilimumab, and so we do a lot of comparisons. So we believe that our antibody is most comparable to ipi when you start to think about these doses. Of course, there will be nuances and PK and so forth. But for the most part -- because they're different antibodies and a different sequence, but their origin was very similar in all of our comparison. So I think that's a nice general guideline with the caveat of some PK alignment at the end of the study.

Okay. Thanks for taking my question, today.

Yes.

And the next question comes from the line of Kelly Shi with Jefferies.

Hi, everyone. This is Dave from Jefferies. Kelly is traveling to Asia. So I'm here on behalf of her. Just one quick question for me. In last update in March, you mentioned there were six patients enrolled in LMS cohort. Just wondering how many new patients are added since then? And when do you expect to complete 10 to 15 patient enrollment? And any comment on pace of an --?

Yes. I don't think we -- I don't have an update on additional patients, but we believe it's readily going to be available in the second half and will be completed there. So there's no indication that we have that it won't be timely in terms of being able to report on that in the fall. But I don't know, Philly, if you have any other nuance on it.

No, we're on schedule, 10 to 15 patients in the second half, I think, based on the pace of enrollment, it might be more closer to 15% than 10%. But we're on target.

Okay. Thank you for taking my question.

And the next question comes from the line of Kaveri Pohlman with BTIG. Please proceed with your question.

Yes. Good evening. Thanks for taking my questions. For non-small cell lung cancer, can you tell us what's the bar for durability here? What would be clinically meaningful to see in these late-line patients from the data you're collecting?

Yes. No, that's a good question. And Philippe, I think since we've discussed this before, you should grab that one.

Yes. I think what would be meaningful in patients that have failed, remember, the patients that will be dosing are patients that have failed not only PD-1 but they failed generally at first round of chemo and then docetaxel or gemcitabine after that. So they are highly refractory. Durability of response anywhere above four months would be positive. As we said before, we are targeting 6 months plus. And the latest data we had recorded led us to believe that we'll be able to achieve that.

Got it. That's helpful. And I believe you just mentioned that you're moving forward with non-squamous. I was just wondering, I believe squamous type is treated with taxane based regimen in the first line. Does that make it less susceptible to respond to MMA in late line?

I don't think that's the case. I think it's just -- we're not moving with squamous because we were not able to move new squamous patients. So we don't know how this patient will respond at this point. So we'll need to generate that data before we start warning squamous patient or decide to go further with squamous patient.

Yes. There's just a lot more non-squamous patients coming into the study.

Got it. And maybe one last one on the other sarcoma types that you have besides UPS and LMS. Do you plan to test more frequent regimen there just the way you're doing for UPS and LMS before you decide to move forward?

Well, I think we're going to wait on the LMS data because the strategies around that. Obviously, we're also want to drive UPS as it is, move that down the line, and we'll be doing -- I think we had mentioned this in our March -- end of March call that we'll be looking across -- I mean, we have an awful lot of indications, a lot of Phase 2 studies going on. So we'll be prioritizing at that time on which ones we will prioritize over others in the fall. And so -- but we do believe, ultimately, there will be several other sarcoma types to add. And a couple of them still getting data, LMS as well as some of the bone sarcomas, but others have already passed our criteria. But when we will actually load those other was, I think that's yet to be determined because we have some very large indications and great opportunities. I mean sarcomas also, but I think we have to balance which ones to go first, and we'll be looking at that carefully in the fall.

That's helpful. Thank you.

[Operator Instructions] And the next question comes from the line of Reni Benjamin with JMP Securities. Please proceed with your questions.

Thanks for taking the questions. Maybe just to start off, can you just take us through your latest thoughts on the liquid biopsy assay kind of its potential use across all the programs. I know right now, it appears to be confined to the word to, but is this something that could be further expanded? And as we think about this, how does this get, I guess, further fine-tuned and ready for commercialization as part of the development program?

Philippe or Eric, who just want to handle that one?

Yes, I'll start and then Eric wants to add more. So it's not confined to what we have developed a liquid biopsy for AXL non-small cell lung as well. And we are currently generating data. So every patient that we have only in the current study, we are testing them obviously for IHC because that's the intercriteria, but we're also testing them for the efficiency of the liquid biopsies. So we'll be able to correlate the IHC data to the CTC data once we enroll all the patients. But we have all the results from this first part of the study. So it's ongoing for ROR2 and AXL and we're just waiting to generate more data in melanoma because we had some difficulty in moving as we discussed before, we prioritize that and are now using this assay and we've been able to identify patients that were both positive within the CTC assays. So right now, in the future, our assumption is we're going with IHC, but should CTC continue to perform, we could switch to the liquid biopsy attachment.

Got it. Okay. And I think you have several readouts coming out in the second half. You mentioned about 10 patients worth for the ovarian, 10 to 15 patients worth for LMS. Can you give us a sense just based on current enrollment trends, how many patients worth of data we might see from the anticipated readout for non-small lung? And anything else I might be missing that's not coming to the top of my head right now.

Yes, Philippe, as you'll go ahead on the AXL lung, you want to give an update on that one estimate?

Yes. So on lung, the target is to have approximately 20 patients Q2W, 20 patients combo with Q2W, and then 20 patients 3Q4W and 20 patients with a 2Q3W dosing regimen. So that's the target that we've set for ourselves. We've already involved the Q2W cohort. We are currently annulling the 3Q4 and the 2Q3W cohorts. So that's the -- that's our target for AXL non-small cell lung cater.

Yes. And whether we hit exactly 20 on the more frequent dose-intensive regimens? I think we'll get a good feeling where a few -- happen to be a few patients shy of that. But certainly, Philippe described what we're targeting.

And that was for BA3011, if I'm thinking about it right? What about BA3021?

Yes. I think we're going to be behind that a little bit. But in terms of the more frequent dose intensity, but hopefully enough to give us a nice sense of things. And certainly, how we at the end of the year would like to go in with our discussions -- future discussions with the FDA with regard to BA3021. Philippe, do you want to add to that?

Yes. So our target is 20 Q2W monotherapy 20 Q2W combo and 20 3Q4W. These are the number of patients we're looking to have by the end of the year. Obviously, it is approximately, and so it might be shy or a couple of patients there or maybe above in some other cohorts, the 20 patients target, but the current target is going.

Yes. Thanks guys.

And I would also add, depending when we read these out, with ROR2, it's more of an issue potentially than it is for AXL. To hit those -- the question is, if we're getting that data in December, we're just going to push that into early conference in January or do we try to give a sense at one of the upcoming meetings or also at our earnings for the third quarter. I mean all of those things have yet to be decided. It's just a little early in the year to have that kind of precision. So please, keep that in mind.

Got it. Thank you very much.

And the next question comes from the line of Arthur He with H.C. Wainwright. Please proceed with your question.

Hi. Good afternoon, Jay and Rick. This is Arthur from H.C. Wainwright. And thanks for taking my question. So I just wanted to follow-up on the BA3011 and BA3021 the data updating lung cancer. So when you look at those data, besides the safety and the presumably ORR, what other criteria you're looking to for you to make the decision choose the optimal dosing for the pivotal study potentially?

Well, I think, ultimately, you've got to have a duration of response, and we already -- and Philippe already mentioned what we're targeting there six months or greater. And I think that's something that we care about, and we'll be looking at. And I think that's the other key feature. Obviously, I think in these PD-1 failure groups and especially -- actually we got 35% of the patients are positive, we really could open up some efficacy for patients that really don't have any other choices. Even potentially with some of the new therapies that could be coming -- arriving in 2024, we think we're still in a very strong position to there with what we are looking for and what we've seen -- been encouraged with the data that we have already obtained to date.

Okay. Great. Thanks for that. And for the BA3071 program, when we're looking for the data from the initial dose escalation part. So how could we get the idea about for the RP2D for both monotherapy and the combo when we see the data? And another question is for the expansion study, are you planning to go straight for the combo study? Or are you going to including mono and combo together?

Yes. Philippe, go ahead.

Yes. So yes, I mean, our focus is mostly combination, okay, because that's how ipilimumab has been used or is generally used in combination with the PD-1. So that's our primary focus. That being said, we are looking at monotherapy data as well. In terms of dose selection, we are looking at efficacy and safety in the patients that we've treated, but we'll also be looking at certain markers or efficacy that -- as well as the PK characteristics at the dose we're looking at. So it's another assessment of the data that will lead us to choose one or two doses to go forward. We reserve the right, again, to go with mono and combo, but our primary focus will be combo for the expansion of data.

Got you. Thanks Philippe. And my last question is on the ovarian cancer study. Could you remind us the inclusion and the exclusion criteria for that study? And if you see a good data from the more intensive dosing regimen for the -- from the -- either the lung cancer and sarcoma. Is there a way to do the dose optimization as well for the ovarian cancer study? Thanks.

Yes. So these are platinum failure patients, and it's in combination with PD-1 inhibitor. We see that the dose -- the more intensive dosing regimen is well tolerated and generate more efficacy and the indication we're looking at currently, we'll be translating that to the other indications as well. So in the case of ovarian, we would be able to move forward with the study that would most likely be a registration study with the higher dosing regimen. We may decide to take two doses forward, but we wouldn't have a problem taking forward the more intensive dosing regimen.

Okay. Thanks. Thanks for taking my question and congrats on the progress this quarter.

Thank you.

Thank you.

And at this time, there are no further questions. Now, I'd like to turn the floor back over to Jay for any closing comments.

Well, I want to thank everyone for their time and attention today, and we're really looking forward to a lot of readouts coming up in the next couple of quarters. So thank you.

And thank you, everyone. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.