Good day and thank you for standing by. Welcome to the CytomX Therapeutics Fourth Quarter 2022 Financial Results 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. I would now like to hand the conference call over to your speaker for today, Chris Ogden. Please go ahead.

Thank you. Good afternoon and thank you for joining us. Before we begin, I'd like to remind everyone that during this call, we will be making forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. We undertake no obligation to update any forward-looking statements whether as a result of new information, future developments or otherwise. Earlier this afternoon we issued a press release that includes a summary of our 2022 full year financial results and highlights recent developments at CytomX. We encourage everyone to read today's press release and the associated materials, which include the 2022 10-K and 2021 amended 10-K, which have been filed today with the SEC. Please also note, the comments made in this call regarding the company’s financials reflect restated financial statements as outlined in our most recent SEC filings today. The adjusted financial statements reflect changes in the timing of certain revenue recognition in the years from 2019 to 2022. Additionally, the press release, a recording of this call and our SEC filings can be found under the Investors and News section of our website. With me on the call today is Dr. Sean McCarthy, CytomX's Chief Executive Officer and Chairman. Sean will provide a business and pipeline update before I walk through the financials for 2022. With that, let me turn the call over to Sean.

Thanks, Chris, and good afternoon, everyone. Thanks for joining us for an update on recent progress at CytomX. On today's call, I'll provide an overview of the company's therapeutic pipeline, including status updates for our emerging programs, CX-904, CX-801 and CX-2051. I'll also cover recent developments within our CD71 targeting program and additional updates on our corporate partnerships. At CytomX, we believe that as biologic anticancer therapies become more and more potent, the need for localizing empowered modalities such as antibody-drug conjugates, T-cell engagers and cytokines into cancer tissue becomes increasingly important as a way to improve therapeutic window. Indeed, we believe that localization will be the future of biologics. CytomX vision is to transform lives with safer, more effective therapies. We aim to realize our vision for the benefit of patients by leveraging our Probody platform to create high impact therapeutics that are localized to diseased tissue, thereby reducing systemic toxicities and maximizing overall benefit. 2022 was an important year of transition for our company in which we restructured and repositioned CytomX for future success by prioritizing our earlier stage portfolio that incorporates learning from our experience with the first wave of Probody therapeutics that we pioneered and advanced into the clinic. Since our early years, CytomX has pursued a consistent strategy focused on long-term company build around the Probody platform and maximizing impact for patients. Our substantial investments to date have allowed for broad clinical evaluation of our platform, have resulted in a uniquely strong scientific foundation and a deep pipeline of therapeutic candidates positioned to deliver significant near and long-term value. We currently have more than 15 active Probody therapeutic programs, including three clinical stage molecules and we expect to file two new INDs for wholly owned programs later this year. Additionally, through our collaborations, we have…

Thank you, Sean. I'm pleased to be able to share an update on our 2022 financial results with you today. CytomX entered 2023 with a strong balance sheet with $194 million in cash, cash equivalents and investments as of December 31, 2022, which we project will fund the operations of the company into 2025. This amount includes the upfront payment received as part of the Regeneron collaboration but does not include the upfront payment of $35 million received in Q1 2023 from Moderna. We continue to operate from a position of financial strength, and our recent collaborations continue to highlight CytomX's ability to leverage its differentiated science to bring capital into the company and build long-term value. Moving to the financials for the full year 2022. I would like to note that my comments regarding the financial statements refer to our most recent SEC filings, which include restated financial information from 2019 to 2022 as a result of a change in our revenue recognition accounting method for certain collaboration agreements. The restatement impacts the timing of certain revenue recognition and does not impact total revenue that will be recognized for each collaboration. Also, the restatement has no impact on the company's current cash position or cash flows. Revenue in 2022 was $53.2 million compared to $37.3 million in 2021, driven by higher estimated percentages of completion for research and development programs in the company's collaborations with AbbVie and Bristol Myers Squibb. R&D expenses decreased by $2.5 million to $111.6 million in 2022. The decrease was primarily due to lower clinical trials and lab contract services, partially offset by $5.3 million of restructuring expenses. G&A expenses increased $3.6 million in 2022 to $42.8 million, driven primarily by $2.4 million of restructuring expenses. Overall, full year 2022 expenses related to the company's restructuring, which was announced in July of 2022 were $7.7 million. The restructuring is substantially complete as of the end of 2022. With that, I'll turn the call back to Sean.

Thanks, Chris. In summary, CytomX has begun 2023 with strong execution across the pipeline and with considerable momentum. This will continue to be a year of focused execution by the company across our partnered and wholly-owned pipeline. Our progress with CX-904, taken together with our exciting collaborative efforts with Regeneron and Astellas positions the company with significant ongoing efforts in T cell engagers and an opportunity to make an important impact in one of the most promising areas of oncology R&D. We also continue to invest in cancer immunotherapy strategies through our work on CX-801, our conditionally active interferon alpha, which is on track for IND filing this year. As we assess potential next steps for the CX-2029 asset and our CD71 program more broadly, we're also excited to advance our latest ADC, CX-2051 targeting EpCAM towards IND filing. The translational cycle of bench to bedside to bench has continued to teach us where the highest impact applications of our technology lie for the benefit of people with cancer and we remain strongly committed to our patients. I would like to extend my sincere thanks to the CytomX team for their ongoing dedication and commitment to our vision and mission. Operator, let's now open the call up for Q&A.

Thank you. [Operator Instructions] The first question we have is coming from Roger Song, Jefferies. Your line is open.

Great. Thank you for taking the question. Many thanks for the update. A couple of questions from us, maybe start from the 904. Sean, you mentioned you potentially will go through the dose escalation by the end of this year and moving into the expansion next year. So, can you just give us some kind of comment around what should we expect to see in terms of the data update from that program and what are the key criteria for you to move into the tumor specific expansion? Thank you.

Yeah. Hi, Roger. Thanks for the question. So, as I mentioned, we're pleased with the progress in the early program for 904. And the goal is, the dose escalation that we're engaged in right now is really to assess safety of this very novel T cell engager. And we do believe we're on track to -- or our goal is to reach doses by the end of the year that should enable us to start backfilling cohorts as it's fairly common in early Phase 1. With an agent like this really, like, any T cell engager, the stepwise dose escalation, these are highly potent molecules and the selection of doses to move forward. I think these days, we need to be even more thoughtful about this, given FDA's guidance with Optimus and how to think about MTD, how to think about RP2D. So, we're going to be thoughtful here and not ready to guide to when we'll have data, but we are making good progress.

Okay. That's fair. And then so in terms of your upcoming R&D for 801 and 2051, can you just let us know what the status of the IND-enabling studies are, in terms of the EpCAM (ph) and paths that you are doing? And also, what are the initial indications for those two, the potential INDs? Thank you.

Yeah. Thanks for the question. So very excited about these two new INDs. As I've mentioned, they have broad potential across multiple tumor types. And as you mentioned, Roger, the team is very busy right now with IND-enabling activities for both of these programs. We're pleased with the progress. We're on track with manufacturing steps with toxicology programs, and everything remains on track for our guidance for these INDs being filed this year. In terms of tumor types, let's take EpCAM first. One of the things we love about this target is just how broadly expressed it is on epithelial tumors. I did call out CRC in my comments a few moments ago, as this is the tumor type where EpCAM is the most highly expressed, is very highly expressed in CRC. And that's one of the reasons that we've selected the camptothecin payload, which we think is well matched to that tumor type, given the high target expression as well. But there are many other tumor types that we could potentially move into, including pancreatic, ovarian, to name just two. So many, many different areas to go. We'll be guided by what we see in Phase 1, of course. With regards to 801, interferon has been approved in several tumor types in the past. We already know it's an active drug, it's an approved drug. Our strategy there with 801, given the potency of interferon alpha as an immunotherapy is to work in the area of increasing antitumor immunity, turning colder tumors into warmer tumors, turning warmer tumors into hot tumors and there will be several opportunities to pursue there. But again, we'll be guided by the Phase 1 dose escalation data once we get that up and running.

Great. Thanks for the comment. Maybe just one last question, and I will hop back on the queue, is for the CD71. Since you are regaining the rights for this target and potentially for the entire 2029, so you talk about the next generation for CD71, and that we know the anemia is on target kind of probability finding you have been observing. So, can you just let us know what are the key strategies for the next generation, and how you're going to apply from the learning, from the previous clinical data to the next generation? Thank you.

Yes. Thanks. Great question. And so, with regard to -- let's maybe start with the 2029 data. So just to give, I guess, our holistic view of the drug. We have an active drug. This is an ADC, a very novel ADC that has shown antitumor activity in several tumor types, and most recently, this really intriguing signal in squamous esophageal. We've learned more about anemia over the last year or so. We still have more work to do to further understand how to potentially manage and mitigate anemia. If we were to move 2029 forward ourselves, assuming that, that was something that we ultimately decide to do. So, I think we've learned a lot with 2029 over the last couple of years. There is a therapeutic window for the drug. I think it's fair to say that we believe with next-gen we could broaden that therapeutic window. And different ways to do that would be to increase the antitumor activity, find ways to decrease the incidence of anemia, and we have several ideas as how to do that. And I would anticipate we'll have more to say about this science as we go through the year.

Great. Thanks. That’s it for now (ph).

Thank you. One moment while we prepare for our next question. And our next question is coming from Mara Goldstein of Mizuho Group. Please go ahead. Your line is open.

Great. Thanks for taking the question. So just maybe to clarify a little bit on CX-2029. You have rights to CD71, but you would then have to acquire the CX-2029 molecule if you chose to do that. Is that correct?

That's right, Mara. Yeah. So, the target -- the program broadly, as far as the target is concerned, reverts to CytomX. 2029 as a Phase 2 asset, we have an exclusive right to negotiate full rights back from AbbVie and those discussions have been initiated.

Okay. And – okay. Fair enough. And then under the AbbVie -- the original AbbVie agreement, they had chosen a second target a couple of years ago. Is that still ongoing or is that also no longer active?

Yeah. So, we had two separate collaborations that were initiated at the same time with AbbVie. One was the CD71 R&D agreement and the other was a research discovery agreement. And that's the collaboration under which a couple of additional targets for ADCs were selected. And that agreement is also coming to a conclusion as well.

Okay. Fair enough. And then I wanted to ask, on the Moderna collaboration, I certainly understand it's at an early stage, but can you talk to us a little bit about the sort of visibility from your perspective in terms of what you may or may not be able to speak to, particularly as it relates to where the benchmarks are for CytomX to, A, participate not just financially but also potentially clinically?

Well, the -- just again to reiterate just how excited we are about the science that we're doing with Moderna that we've just kicked off. So just to recap, the goal of the alliance is to leverage their mRNA platform to encode and express conditionally activated biologics in oncology and non-oncology. We're not ready to disclose additional details of the research program at this point. But the collaboration is structured such that we are responsible for certain discovery and lead authorization efforts, and Moderna will be responsible for development and commercialization with milestones and royalties coming to CytomX. And so, we do not expect to be involved in the development activities with Moderna, unlike, for example, the relationships with AbbVie or even Amgen on 904. This is, in some ways, a more traditional discovery relationship in which Moderna will be conducting the development of the programs as they mature and move forward.

Okay. All right. Thanks so much. I appreciate it.

You’re welcome.

Thank you. One moment while we prepare for the next question. Our next question will be coming from Peter Lawson of Barclays. Your line is open.

Hey. Good afternoon, guys. Thank you for taking our question. This is actually -- this is Alex on for Peter. I just had two quick questions on the BMS collaboration. The first one is, can you comment or remind us the key differences that you saw in Phase 1 for the 218 molecule compared to the data we've seen for the 249 molecule?

Yeah. Happy to comment on that. So, it does take a bit of time to sort of cover the various moving parts here, so just bear with me for a second, just overall on the same page. So 249 is the Probody version of ipi. The 218 is the non-fucosylated antibody, which is BMS' antibody. And then, there's 288 which is the Probody version of 218, the non-fucosylated. So the clinical data that BMS has presented previously relates to, as you rightly point out, to 249's Phase 1 study and also the 218 Phase 1 study. No data has yet been presented for 288, which is a non-fucosylated Probody. I would say that the key learnings from the Phase 1 work on 249 and 218 are as follows. With the Probody 249, the Probody version of ipi, the dose escalation was able to achieve really very high levels of the mass ipi. So, they achieved 30, 3-0 mg per kg of monotherapy and 15 mg per kg in combination with full [indiscernible]. And you can see how -- and I think this is pretty consistent with the work we've done over the years in the clinic that the masking shifts the dose response curve for toxicity, so they can get to higher levels and still have a well-tolerated drug. The other aspect of the Phase 1 data, and this was really the update last year at ESMO, clear evidence of clinical activity for 249 demonstrated in that poster presentation, including a response in MSS stable CRC, which was highlighted as a case study. The 218 poster was important, I think, for several reasons, demonstrated again that 218, the non-fucosylated ipi is clinically active. Again, a case study was put forward in MSS CRC, which is an area where we're seeing a lot of progress by others, including HNS with their [indiscernible]. The other noteworthy data from the 218 poster is that this drug, you can see how it's a lot more potent. It's designed to be more potent than ipi and non-fucosylation leads to a more potent drug. And that meant that the doses administered are substantially lower than for ipi alone. So, I think that's kind of an interesting take home. And the prioritization of 288, the masked version of that 218, I would think has the potential to evaluate higher doses of the non-fucosylated in mask form. So we don't have a lot of visibility at this point in what BMS' Phase 2 strategy will be for 288. But those are just a few thoughts from the data that's been presented thus far.

Okay. Great. That makes a lot of sense. And then, yeah, just I was also curious if you have any visibility in terms of -- or should we assume that the current ongoing studies with the 249 will sort of stop enrolling patients and going forward and that's it. Thank you.

You’re welcome.

Thank you. One moment while we prepare for the next question. Our next question will be coming from Mitchell Kapoor of H.C. Wainwright. Your line is open.

Hi, Sean and team. Thanks for taking the questions. Hope you are well. Just wanted to ask about CX-2029 and a little bit more on the discussions to reacquire the rights. What does that entail? And then secondly, what is the -- what do you think the ability to more effectively treat esophageal cancers versus other cancers suggests about the profile and the mechanism of the drug with respect to the target?

Yeah. Thanks for the questions, Mitch. I can't really comment on the 2029 negotiation for obvious reasons at this point other than to say that those discussions have been initiated, and there's a process laid out in the contract that we negotiated some years ago for how to go about that. So, we'll see where it all goes. With regards to esophageal, it is really interesting to us. The signal that we've seen there, one of the intriguing features of esophageal that relates to the target is published data from others showing or suggesting that CD71 is amplified in certain squamous esophageal tumors. So one could certainly imagine that there's a relationship between target level or more specifically target amplification and clinical activity. And that is something that we're aggressively pursuing, as to figure out whether there's a potential patient selection strategy there. So speaking in general terms, of course, given the high incidence of anemia that we have with this drug, but also given its clinical activity, if we elect to move the drug forward in esophageal, let’s say, obviously, we’d be wanting to do everything we can to select patients in our favor to increase the likelihood of response and also, of course, continue to work to find ways to manage and mitigate anemia to give the drug its best chance of future success. So that’s something that we’re actively looking at that relates directly to the target.

Okay. Great. Thank you very much for taking my questions.

You’re welcome.

Thank you. One moment while we prepare for the next question. Our next question will be coming from Anupam Rama of JPMorgan. Your line is open.

Hi. Thank you for taking the question. This is actually Malcolm Kuno on for Anupam. Just one quick question. So given that some of your collaborations involve cost sharing agreements, what should we assume as being baked into your cash runway?

I'll pass that one over to Chris.

Yeah. Hi, Malcolm. Just to reiterate what we've communicated on cash runway in the prepared remarks, so we reported $194 million of cash at the end of the year. As I mentioned, that does not include the Moderna upfront payment of $35 million received in Q1 of 2023 nor the Astellas milestone that we achieved of $5 million in January of this year. In terms of color on the guidance, we don't go into specifics on exactly what's assumed. From an overall capital allocation and resourcing perspective, we communicated in the summer of last year the focus on CX-904 and the next-generation pipeline. So of course, capital will be allocated to those programs as appropriate. But beyond that, we're not giving any additional color. [Multiple Speakers]

Yeah. Just one quick addition there in terms of the deal structures. Like, as we mentioned in the comments earlier, the -- both the AbbVie and Amgen alliances have been structured in a way that we -- without we had, I guess, now we're obviously concluding that relationship that we had with Amgen, we have the opportunity to invest in later-stage development. But that's quite a bit further down the road. So as Chris mentioned, current financials and guidance is really focused on advancing the earlier-stage programs to key near-term assets.

That makes sense. Thank you.

Thank you. One moment while we prepare for the next question. Next question is coming from Etzer Darout of BMO. Your line is open.

Great. Thanks for taking the question. Just wanted -- a clarifying question on the Probody program from BMS. Just sort of whether or not 249 is ongoing and advancing? Is this just sort of a leapfrog of 288 or is that the only program that BMS plans to move forward? I guess that's question one. And then if you could maybe speak to sort of maybe the safety tolerability differences potentially between 218, the antibody from Bristol and the ipi sort of AE profile, which we now know are fairly, notorious, if you could maybe talk a little bit about that as well. Thank you.

Yeah. Thanks, Etzer. Obviously, questions, I think, we probably more compressively answered by our partner, BMS. But let me just make a couple of brief comments. So first of all, with regard to the 288 leapfrog as you put it, they have been pretty clear that they have prioritized 288 over the other programs, and the advancement from Phase 1 to Phase 2 reflects that. I think if one looks at the broad landscape of CTLA-4 next-gens that are being pursued by various parties, there is a move towards more potent versions of anti-CTLA-4 antibodies using strategies like FC enhancement or in the case of BMS, non-fucosylation, which are functionally very similar. So, their decision, I think looking at it from the standpoint of the outside world and the way the field is evolving, makes sense to us. With regard to safety of 218, again, I think the question would be much better answered by our partner. I would just observe from the data that we've seen in their presentations that 218, as I mentioned earlier, is a more potent antibody when one thinks about engagement of the target, the target biology. It is less well-tolerated. I think the profile though of adverse events that are seen are similar. So, I don't -- I'm not aware of anything that's particularly unique with the FC enhanced but we'd have to study the data a bit more closely.

Got it. Thanks for the update.

Yeah. And the goal of the Probody, of course, is to open that therapeutic window, and that's why we're encouraged that they prioritized 288.

Got it. Yeah. Thank you.

You’re welcome.

Thank you. That concludes today's Q&A session as well as concludes today's conference call. Thank you all for joining. You may disconnect and have a good evening.