Greetings and welcome to the Cue Biopharma Investor Update call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn over the conference to Dan Passeri, Cue Biopharma’s Chief Executive Officer. You may begin now.

All right, thank you, and good afternoon, everyone. As a reminder, this presentation and discussion is being recorded and will be available on our website for the next 30 days. Also, please be aware that the slides accompanying today's update may be advanced directly by those listening in on the call, and we'll notify you on what slide we're on throughout this presentation. Joining me on today's call are Dr. Anish Suri, our President and Chief Scientific Officer, Dr. Matteo Levisetti, our Chief Medical Officer, and Kerri-Ann Millar, our Chief Financial Officer. As shown on slide two, this presentation and overview may contain some forward-looking statements, and any forward-looking statement made during this call represents the company's views only as of today, April 8th, 2024. As shown on slide three, I'm going to begin with a summary overview of the broad reach of our therapeutic platform and review our competitive positioning and key corporate objectives going forward. Anish will then provide an overarching summary of our platform approach in support of developments, reinforcing our positioning as a leading solution provider, and the development of selective immunotherapeutic biologics to address pressing unmet medical needs in both oncology and autoimmune disease. Matteo is then going to review and update of our promising and evolving oncology clinical datasets, as well as provide a summary synopsis of our recent and productive type B meeting with the FDA to align on registration paths forward for CUE-101. Anish will then return to provide an overview of highly promising data from our preclinical autoimmune programs with the potential of having a profound impact on the treatment of autoimmune disease. Kerry will then join the call and provide a brief update on our financials, and I'll return for closing remarks prior to opening the call to questions. Okay,…

Thanks, Dan. Good afternoon to all listening in on today's call. I'll provide a brief summary of our platform and the significant potential of our therapeutics for treating cancers and autoimmune diseases. As shown on slide five, immune balance is a key central pillar of human health, and deviation from this state underscores diseases such as cancer and autoimmunity. Hence, an effective therapeutic strategy for resetting immune balance should focus on selective modulation of disease-relevant immune cells while avoiding broad perturbations of the immune system. Most importantly, this approach allows us to maximize efficacy while preserving patient safety. Slide six provides an introduction to our Immuno-STAT platform for resetting immune balance via selective modulation of disease-relevant immune cells. The core framework of an Immuno-STAT builds upon nature's selectivity for T-cell engagement and activation. Disease-specific T-cells express singular T-cell receptors, or TCRs, that engage the stabilized Peptide-HLA, or PHLAs, in an Immuno-STAT. Only those engaged T-cells can then receive a disease-modifying secondary signal. This approach enables selective targeting and modification of disease-specific T-cells while sparing broad effects on other T-cells that are not relevant to the disease of interest. Importantly, the Immuno-STAT framework was engineered to be highly flexible and modular, enabling us to deploy the same or similar core functional elements for diverse therapeutic approaches. For example, in the case of oncology, Immuno-STATs can selectively engage and activate tumor-specific T-cells while avoiding systemic immune activation. In contrast, for autoimmune diseases, Immuno-STATs can selectively down modulate autoreactive T-cells while avoiding broad immunosuppression. The next slide, slide seven, highlights the pipeline of assets that we have developed for restoration of immune balance. In oncology, we have clinically validated the CUE-100 series that selectively delivers the potent cytokine IL-2, along with a TCR-activating signal, to preferentially activate tumor-specific T-cells while sparing all other…

Thanks, Anish. Good afternoon to everyone listening in on today's call. I'm particularly pleased to provide you with this summary update, as we have achieved important developmental milestones with the recent clinical data and believe we have not only defined the registration path forward, but also demonstrated the opportunity of the CUE-100 series as a potential breakthrough for improving patient outcomes across multiple cancers. The clinical data from the ongoing CUE-101 trial continues to demonstrate highly encouraging and robust metrics of clinical benefit for patients with newly diagnosed recurrent metastatic HPV positive head and neck cancer treated in combination with pembrolizumab and for heavily pretreated recurrent metastatic head and neck cancer patients treated with monotherapy. We recently had an end of Phase 1 type B meeting with the FDA where we received guidance and aligned on a path forward to a registration of trial for CUE-101. To that end, we plan to conduct a randomized Phase 2 study of CUE-101 in combination with pembrolizumab compared with pembrolizumab alone as first line treatment of patients with recurrent metastatic HPV positive head and neck cancer. This trial design and the resulting data will provide a clear assessment of treatment effect along with confirmation of optimal dose for the Phase 3 registrational trial will increase overall confidence and probability of succeeding with the registrational trial. We believe this approach is the optimal means of generating the highest probability of success in the most cost effective and direct manner. We intend to pursue this registrational approach with CUE-101 in the first line setting in combination with KEYTRUDA as this setting represents a significantly larger market and we believe due to the complementary mechanism of action between CUE-101 and KEYTRUDA the patient impact and durability would likely also further reduce the patient population available in…

Thanks, Matteo. Let me take a few minutes to update on the notable progress with our platform for autoimmune diseases, starting with CUE-401 and regulatory T cells as indicated on slide 20. Slide 21 describes the design and rationale for CUE-401 as an attractive approach to generate a new and differentiated class of regulatory T cells, or Tregs. As mentioned previously, CUE-401 is a bispecific molecule containing attenuated forms of IL-2 and TGF-beta, which are the two known signals that can convert peripheral T cells into regulatory T cells, also known as induced Tregs or ITregs. In addition, CUE-401 also strongly expands existing natural Tregs. This program has been a very productive collaboration with Ono Pharmaceuticals, wherein Ono is supporting all of our ongoing preclinical work to identify an optimized clinical lead compound, which we are on track to accomplish in the second half of 2024. The next slide, slide 22, highlights the unique and differentiated mechanism of action of CUE-401 over other CD25-biased IL-2 muteins for expansion of existing Tregs. As shown here, CUE-401 can expand pre-existing regulatory T cells and convert naive CD4-positive T cells into new Tregs, thereby enhancing the quantitative population and the qualitative features of Tregs to control the pathogenic cellular reactions in autoimmune patients. Slide 23 provides examples of the potent activity of CUE-401 in the conversion and generation of stable Treg cells. As shown on the left panel, conversion and expansion of human CD4 T cells to Tregs only occurs when the IL-2 and TGF-beta signals are delivered via CUE-401. Either signal alone does not result in Treg conversion, and CUE-401 represents the first singular biologic capable of delivering both signals simultaneously. In the right panel is an in-vivo study demonstrating efficacy of CUE-401 in an animal model of autoimmune gastritis. This is…

Thanks, Anish. Turning to slide 30, I'd like to provide a brief update on our financial results for the three months and full year ended December 31, 2023. For the three months ended December 31, 2023, the company reported collaboration revenue of approximately $1.8 million as compared to $150,000 for the same period in 2022. Revenue in the fourth quarter was primarily due to work related to the collaboration and option agreement with Ono Pharmaceuticals for CUE-401, which was executed in the first quarter of 2023. Research and development expenses were $10.9 million and $11.3 million for the three months ended December 31, 2023 and 2022, respectively. The decrease was primarily due to drug substance manufacturing projects for CUE-101 and CUE-102 that were completed in 2022. General administrative expenses were $4.6 million and $3.7 million for the three months ended December 31, 2023 and 2022, respectively. The increase was primarily due to an increase in professional and consulting fees during this time. For the years ended December 31, 2023 and 2022, the company reported collaboration revenue of approximately $5.5 million and $1.2 million, respectively. The increase was due to the revenue earned from our strategic collaboration agreement with Ono Pharmaceuticals. Research and development expenses were $40.8 million and $38.6 million for the years ended December 31, 2023 and 2022, respectively. The increase was due primarily to clinical development costs and research and laboratory expenses, which were partially offset by decreases in employee costs and rent expense. General administrative expenses remain relatively flat at $16.7 million and $16.2 million for the years ended December 31, 2023 and 2022, respectively. And as of December 31, 2023, the company had approximately $48.5 million in cash and cash equivalents, $34.4 million in working capital, and $47.2 million in common shares outstanding. We expect our current cash and cash equivalents to fund operations into the first quarter of 2025. I'll now turn the call back over to Dan for closing remarks. Dan?

Yes, thanks, Keri. As you have just heard, our growing body of data in both clinical oncology and with preclinical autoimmune disease continues to support and reinforce our central premise and firm belief that CUE's platform holds tremendous potential to transform immunotherapy for both cancer and autoimmune disease by selectively modulating the patient's immune system in a highly targeted and tolerated manner. We believe the data we've generated to date in oncology with CUE-101 and CUE-102 have clearly demonstrated the selective and targeted activation and expansion of cancer-relevant CD8 positive T cells in a qualitatively distinctive manner. Furthermore, these data demonstrate clear signs of durable anti-tumor activity and mechanistic complementarity with checkpoint inhibitors. Let me remind everyone listening in that the patients we're treating are refractory, that is, resistant to prior therapy, and metastatic, that is, their cancer has not only recurred but has also spread to multiple locations after primary treatment. As a result, these patients have a very poor overall prognosis. And importantly, both CUE-101 and CUE-102 have demonstrated the potential of stimulating the patient's immune system to recognize the tumors growing in their bodies as foreign, marshalling an attack. Furthermore, the clinical observations to date support the putative mechanism of action for CUE-101 and by implication, CUE-102, as well as the entire IL-2-based CUE-100 series, mechanistically complementing immune checkpoint inhibitors such as KEYTRUDA. We see this compilation of data as a key strategic advantage for expanding patient reach and therapeutic benefit of checkpoint inhibitors, positioning us well for strategic alignment with potential partners to enhance their competitive positioning. As conveyed in slide number 31, we are well-positioned for value inflection milestones over the coming year, namely with CUE-101 moving into a randomized Phase 2 study with the intention of providing confirmation of enhanced efficacy that we've seen…

Thank you, ladies and gentlemen. [Operator Instructions] Your first question comes from Marvin Rakaroff [ph] from Jefferies. Your line is now open.

Hi. Congrats on the progress, and thanks for taking my questions. I was going to ask about the randomized phase 2 combo study. Can you talk about how many patients you anticipate you'll need in each arm? And if you're successful on that first interim, on overall response rate, would that allow you to advance into a registrational phase 3?

Sure. Matteo, do you want to take that question? And thanks, Mark.

Yes, certainly. So the patient sample size for the entire trial is planned to be less than 100 patients, so approximately 25 patients per arm. And then regarding the first interim analysis, given that this is a randomized trial, we'll have a data safety monitoring board that will look at the results of that first interim and provide a recommendation to continue the trial per protocol if everything looks good. And it's really the final analysis at 24 months, 22 to 24 months that would serve as the substrate to proceed into a registrational trial, although a fair bit of trial startup could be done once the interim analysis, the first one, provides a positive recommendation to move forward.

Got it. That's helpful. And Dan, you talked about potential partnering. Can you clarify what stage you would look to potentially partner? Would it be as you're running the Phase 2 or before the Phase 3? And then what could potential partnership look like from a development and economic standpoint?

Sure. Very important question, and, Maureen [ph] it's a dynamic question, and there's no one answer to that. It's really looking at a number of factors that we will consider. So we're presently in discussions, let's just say, with multiple parties across the various asset classes we have. So pertaining to CUE-101, CUE-102, I think the key there is identifying an appropriate party with the sort of requisite insight on the disease indication that can sort of enhance our own capacity and provide the requisite support. We certainly don't want to be giving up on the economics too much of the promise of those assets. So it's really going to be based on our continued involvement, particularly in the randomized Phase 2, the type of support we would have in the economics downstream. So we're in discussions with various parties, and we'll be looking at different economic structures to make that decision. And ultimately, it's a board decision. So, we've been in dialogue with the board on an ongoing basis, and ultimately we will present various scenarios and make the decision accordingly. And regarding autoimmune, same type of sort of dynamic analysis. I would just use Ono as an example. The structure of that partnership was very favorable. They've actually been an outstanding partner with an early asset. They're basically subsidizing the development. We have a very interactive partnership, but we've retained a 50% upside option upon selection of the clinical candidate when we begin IND-enabling studies. And that allows us to preserve sort of optimal upside for our shareholders while the sort of risk capital, particularly in the early stages, is being subsidized. So I hope that answers your question, but we'll be looking at it, in a dynamic manner based on the various options we have in front of us.

Got it. That's, yes, that's helpful. And for the 501 program, just wondering if you'd talk more about where you're at with preclinical development for that program. And you talked a little bit about potentially partnering this one, too. Would this be from the 500 series, would it be one asset or would it be part of this 500 series platform? How would you think about that?

Yes, Maury, so this is Anish. What we have so far is clear evidence that we've been able to make the scaffold and it's biologically active, as you can see. We've tested this across a number of different memory T cell specificities, so CMV being one which is highly present in a majority of us, but also SARS-CoV-2. At this point in time, there's a very conserved epitope from the spike protein that virtually all of us today in the world should have SARS-specific T cells, whether it's by vaccination or natural infection. So that provides a great substrate to essentially use this nature's pandemic to redirect it to something good, which is destroying these pathogenic B cells down the road. We started initially with CD-19, Maury, but you can think about the concept actually extending beyond just B cells to other pathogenic cell types. I also think, and we think very strongly, that this can also extend into very nicely into the oncology setting, particularly solid tumors where you just swap out the SCFE of the B cells to a cell surface tumor antigen. I mean, think about PSMA, think about TROP2, think about HER2, etcetera. So I think there's a vast potential for this. As we started talking, the additional interest has actually been an extraordinary amount of inbound interest from companies and parties that have been interested in really getting CAR-T-like efficacy in what was recently demonstrated in these small studies in autoimmunity. So that is the starting position and we've made good progress. The scaffold actually is de-risked very much by the 100 series, that's why I sort of stressed that. The core component remains the same, it's a bivalent peptide HLA and obviously has no IL-2. Instead of that, the mod is an anchoring SCFE. So again, there's a lot of good learnings from the 100 series, 101, 102, that sort of beneficially impact the 500 series.

Got it. That's really helpful. Thanks for taking my questions.

Thank you, Maury.

Your next question comes from Stephen Willey from Stifel. Your line is now open.

Yes, good afternoon. Thanks for taking the questions and I apologize for the background noise. But maybe just a couple more Phase 2 questions. Can you just maybe speak to the second key one-on-one dose that you're contemplating including into the randomized Phase 2? And then can you also speak as to kind of what triggers the interim analysis? Is that just having a given number of patients beyond some specific duration of follow-up? And then I just have another question.

Okay. Thank you, very good questions. And so the doses that we anticipate examining are certainly the four milligram per kilogram dose that we've really studied in 25 patients with now an objective response rate of close to 50%. We haven't finalized the selection of the other dose. However, we have quite a bit of experience with two milligrams per kilogram as monotherapy, where in that set of patients, of nine patients, we actually see a very pronounced extended survival. And then in the dose escalation at 2 mgs per kg with pembrolizumab, we also observed a very profound durable objective response. So I think the answer there will be two doses. Certainly, we believe at this point 4 mgs per kg and then very likely a 2 mg per kg dose where we've seen really very strong activity as well. With regards to the triggering of the first interim analysis, it really will be determined when approximately 70% to 80% of patients have gotten through the cycle five scan. Okay. So it's really a look to be sure that what we anticipate to observe or the DSMB would observe can make that assessment once, as I mentioned, 70% to 80% of patients have gotten to their cycle five scan. And we'd anticipate that, based on what we've observed to date in the 101-01 trial and the historical monotherapy rate, that that would progress then to ultimately the final analysis, which, again, that will be a complete analysis of the data set with all patients now having follow-up through cycle five to get to your primary overall response rate. That final analysis is very valuable because that yields data then that can be brought forward to start your Phase 3. And the way it's designed then allows also for follow-up with the supplemental analysis for PFS and OS, but we don't have to wait for that to hold up the initiation of the Phase 3 trial.

Okay. I guess that's helpful. And can you maybe just talk a little bit about kind of the pushes and pulls that were under consideration as you thought about carving out kind of an independent randomized Phase 2 versus trying to do something more Phase 2, 3, adaptive, seamless. And maybe in answering that, you can speak to, I guess, to what extent, if any, was this path forward kind of informed by some of these ongoing strategic discussions?

So, very good question. And certainly an option to further develop the combination is to go with a Phase 2, 3 sort of seamless design. The first component of that, and this has become, I think, quite common since Project Optimus has sort of gone into effect as a directive or mandate, is to have a lead-in with the two doses to select your dose and then to go into the Phase 3 randomized portion. So, I think, there's multiple components to considerations. The initiation of that phase two, three is a larger endeavor and investment, I think, clearly. And the Phase 2, really offers the opportunity to generate data that confirms the dose to go into Phase 3. And therefore, the Phase 3 is simpler in design where there's no lead-in, which is actually takes quite a bit of time, at least a year to do. And then also gives the opportunity to have, if you will, a confirmatory analysis that would increase one's confidence in being successful in ultimately the Phase 3 trial.

Okay. And then maybe just one quick follow-up. Matteo, I was just wondering if you had any thoughts around the Pembro survival number that was recently presented from the LEAP-10 trial. And just, I know we're still a couple of years away from a registrational study, but even in the context of a Phase 2, how do you think that influences your expectation as to what that survival number might look like? Thanks.

Yes. So, I think, well, it's a bit of a mystery to me. I don't know that I've heard or that I'm aware of a clear, explanation. Also a surprise that the objective response rate was 27% as opposed to the historical rate of 19%. So, that arm in the trial did appear to do better than anticipated. I think, again, it then supports the value of doing a phase two trial before, you know, engaging into a registrational Phase 3 with, almost, 5 to 10 times the investment to really just gain confidence that we're on track with regards to what we believe the combination treatment effect is to the current monotherapy effect. So, I think, I hope that addresses the question. I don't, and again, when this was presented at the Head and Neck conference in Arizona, there was quite a bit of a discussion with the head and neck experts, and no one really seemed to have an explanation. But, again, with regards to lenvatinib, I think there's ideas or conceptions that the sort of broad array of kinase coverage may have some negative effects on the whole immunotherapy response to the checkpoint inhibitor. But that's conjecture on my part, but, again, I hope that addresses your question.

It does. Thanks for taking the questions.

Your next question comes from Ren Benjamin from JMP. Your line is now open.

Hey, good afternoon, guys. Thanks for taking the questions, and congrats on the progress.

Thanks, Ren.

Matteo, I think you mentioned that there was some data coming out at ASCO for both 101 and 102. Can you just give us a sense as to, I mean, I think the 101 studies, it's largely just longer term follow-up. Correct me if I'm wrong there. And then for 102, about how many patients' worth of data and what kind of follow-up should we be expecting?

Yes, certainly. So I can share here that we're actually delighted to have been selected for an oral presentation on our CUE101-01 dataset at ASCO in June. It will be, as you alluded to a comprehensive, analysis of all the data with longer follow-up. With regards to the CUE-102, which was also selected for presentation as a poster at ASCO, we anticipate now having data on approximately 35 patients or more with some follow-up as long as, out to eight months.

Terrific. And then, just going back to the strategic sort of partnerships and things that you're evaluating, as you think about, I guess, the way to move forward, how are you thinking about potentially just wrapping up 101 and 102 kind of in a nice typo and presenting that as a potential acquisition that provides a significant upfront that allows you to fund, let's say, the autoimmune, programs, which investors are paying a lot more attention to. You're clearly seeing that in the cell therapy space as well. They seem to be, very enamored by the autoimmune data. How do you take that kind of decision-making versus trying to find a strategic that can move with you, both 101 and 102 while spending your own money moving that forward?

Yes, Ren, this is Dan. Probing question and a really important one, particularly, I think, in the headwinds in the current capital markets in oncology. I think it's clearly a prudent question with, I think, strategic insight into the challenges in the oncology sector. So, we are looking at sort of that dynamic. It hasn't evaded our thinking that the time frame and the capital requirement for increasing value for shareholders would probably be more in favor of autoimmune in the current capital markets, but we have much deeper, more mature data. So, I think the key for oncology is to align with a company that has the capacity and competencies to get through a registrational path, and the objective for us would be to be able to retain as much upside for our shareholders. So, the calculus that we're ultimately going to decide upon is how we address capital requirements, which are pretty deep in oncology for a registration path. By the way, it's part of the rationale that Matteo articulated as to the decision to do a randomized Phase 2 with a very defined, discrete number of patients. We can add a substantial amount of confidence and value, and I think that's also part of our analysis having to do with strategic alignment with parties. I think pharma companies are finding that structure to be very attractive, where the degree of confidence goes up dramatically if the randomized data repeats what we've seen in our Phase 1 A and B. So, it's a very important question, and it is part of our overall analysis, and ultimately the calculus that determines what path we choose.

Got it. I guess one final question for me on the autoimmune side. I'm -- on the one hand, I'm a little bit confused as to how T-cells that are targeting, that are targeting CMV can, completely deplete kind of all the B-cells over there. I can imagine some proportion, but all of it. Maybe, Anish can help me understand this a little bit better, and when might we see some, preclinical data at any upcoming conferences this year?

Yes, Ren. So, the T-cell mediated depletion is essentially Pan-B-cell depletion simply because of the CD-19 anchoring that's on every B-cell out at least in circulation. So, when the Immuno-STAT binds to the B-cell displaying the CMV peptide HLA, for the CMV T-cell that's simply presenting it as a surrogate for a virally infected cell, and the cell goes into the effector mechanism. One of the reasons we focus on the virus specific for this application, Ren, is because of the ability to rapidly respond the effector memory compartment, and one that is not dependent much on co-stimulation. So, you can actually rapidly recall these. They're present in high frequencies in a large majority of the population, and importantly, they're not exhausted. We know that from a body of literature that we've now had for decades in terms of the longer-lasting memory repertoire. So, that, those things together make for a really strong case for selective harnessing of what nature gave you as the nature's sort of long-lasting killer population. You could make it specific to a discrete B-cell subset if one chooses to, and achieve selective B-cell depletion, and that would just mean that you would swap the marker from a CD-19 targeting to something else, and so that optionality remains with us. But I think as a central early mechanistic proof-of-concept, CD-19 was attractive enough, particularly also since the CAR-T data is with CD-19 targeting, and that looks pretty robust, at least with the early metrics we've seen. So, we are in the midst of generating, actually, a body of data. There's a large part of the organization is looking at this with a significant amount of intensity, likely thinking to aim for either an autoimmune meeting or some translational autoimmunity meeting to be able to sort of bring out these concepts a bit more. So, hopefully, maybe try to find something either in the second half of the year or early next year to be able to talk more about this.

Excellent. Thanks for taking the questions.

Hello Operator?

This is Dan. I think we have lost the operator. Yes. I think we're having a technical difficulty. We're having a technical difficulty with the operator, so…

There's one more person waiting in the question queue that we'll try to get on.

Okay. We seem to not be able to resolve the technical issue with the operator, so, Dan, with that, I think we will end the call. I want to thank everyone for listening in, and we look forward to providing everyone with substantive updates as they become available over the coming quarter. And as Mateo stated, we have two presentations at ASCO. Looking forward to presenting that data and autoimmune data at the appropriate conferences coming up over the coming year. I want to thank everyone for your attention, and have a pleasant afternoon and evening. Thank you very much. Take care.