Cue Biopharma, Inc. (NASDAQ:CUE) Q3 2023 Earnings Call Transcript

Cue Biopharma, Inc. (NASDAQ:CUE) Q3 2023 Earnings Call Transcript November 11, 2023

Operator: Good afternoon, ladies and gentlemen, and welcome to the Cue Biopharma Third Quarter 2023 Earnings Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded today, Thursday, November 9, 2023. I would now like to turn over the conference to Dan Passeri, Chief Executive Officer. Please go ahead.

Daniel Passeri: Yeah. 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 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 of what slide we’re on throughout the presentation. Joining me on today’s call is 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 number 2, the 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, November 9, 2023.

The next Slide, Slide number 3, outlines the agenda for today’s call, and I’ll begin with a brief summary overview of our therapeutic platform and core competitive positioning, which is bolstered and further validated by the recent data update presented this past weekend at SITC. I’ll then turn the call over to Matteo, who will provide a detailed synopsis of our clinical data from both the monotherapy and combination portions of the ongoing CUE-101 trial, as well as the highly encouraging early signs of clinical activity from the dose escalation portion of the CUE-102 monotherapy trial. As a reminder, these data are representative of our modular Immuno-STAT platform, which we believe has significant potential for broad market applications in cancer immunotherapy, autoimmune and inflammatory diseases, as well as chronic infectious diseases.

After Matteo, Anish will provide a further details of our platform developments, underscoring the far-reaching potential of our approach for selective modulation of disease-specific T-cells and the potential for superior differentiation. Following Anish, Kerri will provide an overview of our financials for Q3 and guidance going forward. I’ll then return for some concluding remarks and open the call for questions. All right. Let me first begin by emphasizing our strategic positioning and core competitive advantages. It’s self-evident that within the immuno-oncology sector, there have been significant and persistent challenges in realizing the fullest potential of immunotherapies. While many therapeutic modalities and combination approaches for immune modulation are being pursued, significant challenges exist with respect to suboptimal efficacy, the safety and tolerability experienced by patients, scalability and cost of goods to enable broad patient reach.

It’s important to note that despite the significant promise of checkpoint inhibition, such as anti-PD-1, PD-L1 antibodies, there remains a pressing unmet medical need within oncology for an effective and well-tolerated means of stimulating and activating relevant anti-cancer T-cells while sparing the vast majority of cancer-irrelevant T-cells. Solution providers to these challenges will likely emerge as best-in-class market leaders defining the paths forward for more effective therapeutics, both as standalone treatment options as well as combination approaches, for example, with checkpoint inhibitors. To that end, as shown in Slide 4, we believe our Immuno-STAT platform offers a potential breakthrough path forward for cancer immunotherapy. With data from over 100 cancer patients dosed with Immuno-STAT from our IL-2-based CUE-100 series, and namely that’s the experience with CUE-101 targeting HPV E7 and CUE-102 targeting Wilms Tumor 1.

We can summarize some key distinguishing features bolstering our competitive positioning in this crowded space. There are four predominant and core features to highlight. First, as noted in this slide, we have created a therapeutic index for IL-2 by selectively targeting tumor-specific T-cells through the T-cell receptor, or TCR, that provides the highest degree of specificity for the desired T-cells relevant to antitumor immunity. When we refer to a therapeutic index, this basically refers to the ability to dose patients at a range of doses whereby they experience demonstrable clinical benefit, example, an increase in overall response rate, and/or an increase in median overall survival, while also having an accepted tolerability profile for maintaining quality of life.

There have been high-profile field approaches attempting to develop IL-2 therapies for cancers. Notable among these recent failures are pegylated versions of IL-2 and non-alpha variants of IL-2. There have also been failures in combinations with pembrolizumab with, for instance, kinase inhibitors where they may have an ORR but a very poor tolerability profile. Our success with IL-2 may also be replicated for many other cytokines and immune-activating receptors where the generation of a therapeutic index would be of paramount importance to maximize efficacy, while preserving patient safety and tolerability. Second, our clinical candidates demonstrate antitumor efficacy in late-stage poor-prognosis refractory metastatic cancer patients, both as monotherapy and in combination with checkpoint inhibitors, namely pembrolizumab anti-PD-1 antibody.

While much of the maturing efficacy data is from our CUE-101 trial in HPV+ refractory and metastatic head and neck squamous cell carcinoma patients. We have also begun to observe antitumor activity with our second clinical candidate, CUE-102, that is currently in the dose escalation portion of a monotherapy trial in patients suffering from metastatic solid cancers, namely colorectal cancer, ovarian, pancreatic, and gastric cancer. These WT1 overexpressing cancers have historically not been responsive to checkpoint inhibitor therapy and have a poor prognosis. Hence, demonstrating disease control and antitumor activity may represent a breakthrough that can be further expanded with checkpoint inhibition and our other combinations to benefit these patients in need of new therapeutic options.

Matteo will present and discuss these clinical data in greater detail in a moment. Third point, we believe that maturing clinical data from the CUE-101 trial offers opportunities to pursue multiple registrational paths in HPV+ refractory metastatic head and neck patients. The prolonged survival signal we’ve seen in the CUE-101 monotherapy treatment arm and second line and beyond patients, in fact, the majority of the patients are beyond third line, and the enhanced overall response rate with maturing progression-free survival and overall survival in frontline patients treated with CUE-101 and standard-of-care pembrolizumab offer attractive development opportunities in these respective lines of treatment. To that end, we have submitted a request for discussions and feedback from the FDA to gain alignment and clarity on the next steps towards a registrational trial.

Importantly, CUE-101 serves as a clinical validation beachhead from which we can expand the application of the CUE-100 Series across many different cancers. A key strength of our platform is the modularity, wherein any given tumor antigen can be incorporated to selectively activate the relevant cancer-specific T-cells. This strategy has also significant regulatory advantages since the core IL-2 framework, which has been de-risked by CUE-101, remains essentially the same across therapeutic molecules of the CUE-100 Series, and this was clearly demonstrated with the IND approval of our second clinical candidate, CUE-102. In essence, the IND application for 102 was supported by the clinical data from CUE-101 as an analog molecule, where the FDA did not require us to perform additional IND-enabling preclinical toxicology studies, and we were allowed to initiate the CUE-102 clinical trial at an active dose of 1 mg per kg, which is essentially a situation that saved us about a year in dose escalation timelines and the associated costs.

Anish will provide additional details on our focus strategy of expanding our preclinical pipeline with validated Immuno-STAT targeting attractive tumor antigens, such as KRAS involving the G12 hotspot mutations and other tumor antigens. As conveyed in this slide, we believe we are positioned as a potential leading solution provider, realizing the promise of precision immune modulation for superior patient outcomes. As such, we believe our data places us in a potential position as not only first in class for selective modulation of disease-relevant T cells, but also best-in-class therapeutic platform for immunotherapy. With that background on the progress in differentiation and competitive positioning, I’m going to turn the call over to Matteo to review the clinical data, particularly what we just presented at SITC.

Matteo?

Matteo Levisetti: Thanks, Dan. Good afternoon to everyone listening in on today’s call. I am particularly pleased to provide you with this summary update as the clinical data from the ongoing CUE-101 trial continues to demonstrate highly encouraging and robust metrics of clinical benefit for heavily pretreated recurrent metastatic HPV+ head and neck cancer patients treated with monotherapy and for newly diagnosed patients with recurrent HPV+ head and neck squamous cell carcinoma treated in combination with pembrolizumab. As shown on Slide 5, data from the ongoing clinical trials with CUE-101 as monotherapy and in combination with pembrolizumab have provided clinical proof-of-concept and de-risking of our Immuno-STAT platform.

The latest data generated to date in 2023 continues to support prior observations and further enhances our confidence in CUE-101 as a potential therapeutic for patients battling HPV+ head and neck cancer. As previously and consistently stated, we believe CUE-101’s mechanism of action as evidenced by the ongoing data generated to date provides effective and tolerated dose levels enabling selective expansion of targeted tumor-specific T cells. Recurrent metastatic HPV+ head and neck cancer is a tough and curable disease. The data we have observed throughout the monotherapy trial bolsters our position and enhances our confidence that CUE-101 is in fact stimulating the targeted cancer-specific T cells within these patients, resulting in demonstrable anti-tumor effect.

Furthermore and importantly, we continue to observe an evolving pattern of disease control and enhanced survival in the monotherapy trial. We believe this enhanced survival is due to the superior qualitative features of tumor-specific T cells given CUE-101’s mechanism of action, especially in the tumor microenvironment and the recent description of the role of IL-2 in generating potent effectors CD8+ T cells. On this note, enrollment in the neoadjuvant trial is progressing well and preliminary observations demonstrate expansion of T cell clonality and increases in natural killer cells within the tumor microenvironment. These findings are consistent with the pharmacodynamic changes observed in the peripheral blood of patients treated with CUE-101 as previously reported.

We believe these observations in addition to the clinical efficacy observed in the second and first line recurrent metastatic setting support a development strategy of moving further upstream into earlier lines of therapy where a larger number of patients may benefit. We believe the selective perturbation of the relevant immune cells results in durable clinical benefit as seen in CUE-101 treated patients that have failed prior checkpoint inhibitor treatment. As shown on Slide 6, durable clinical responses are observed with CUE-101 monotherapy. Now, with new data demonstrating an unconfirmed partial response in a patient at 24 months after starting therapy. As shown before, patient A, experienced a durable partial response with an approximate 60% reduction in tumor burden evident at six weeks after the first two cycles of CUE-101, which lasted close to one year on therapy.

Importantly, this patient also demonstrated a significant reduction in HPV cell-free DNA that coincided with the initiation of the partial response and HPV cell-free DNA remained undetectable for the majority of time on treatment. Patient B, who just completed 24 months of treatment, has demonstrated an unconfirmed partial response on their cycle 35 scan. Notably, this patient has also had complete disappearance of HPV cell-free DNA in the blood since week six. The undetectable HPV cell-free DNA, which is an increasingly recognized biomarker of disease activity is suggestive of a pathologic complete response or cure in this patient who we expect may have surgical resection of the lesion for histopathological analysis. As shown on Slide 7, the current Kaplan-Meier estimate of median overall survival observed in the 20 patients treated that the recommended Phase II dose of 4 milligrams per kilogram is 20.8 months.

The observed median overall survival of greater than 20 months in patients treated in the third line and beyond is notable when compared to the historical median overall survival of approximately eight months observed in patients treated in the second line. In the CheckMate 141 in KEYNOTE-040 trials of nivolumab and pembrolizumab respectively. As any experienced oncologist understands that the survival with third line treatment is expected to be less as the disease has further developed and become more unstable. Our evolving data continues to support the premise that treatment with CUE-101 demonstrates single agent activity by durably expanding tumor specific T cells with anti-tumor activity, resulting in what appears to be a meaningful increase in survival for patients with advanced recurrent metastatic HPV+ head and neck cancer.

Based upon the strength of this data, we plan to meet with FDA to define a registration path for CUE-101. The demonstration of monotherapy activity in these patients bolsters our belief that we should observe complimentary mechanistic effects in combination with Pembrolizumab. As indicated on Slide 8, I will now provide an update on the ongoing trial of CUE-101 in combination with pembrolizumab in first line recurrent metastatic HPV+ head and neck cancer patients. Pembrolizumab is approved for the treatment of first line patients with recurrent metastatic head and neck cancer that have tumors with complete positivity scores greater than or equal to 1%, which is a measure of PDL-1 expression. The next slide, Slide 9, shows the current overall response rate of 47% observed in first line patients treated with CUE101 and pembrolizumab as presented at the SITC meeting earlier this month.

The overall response rate of 47% observed in patients with CPS scores greater than or equal to 1 treated with CUE-101 in combination with pembrolizumab to date represents a greater than doubling compared to the historical overall response rate of 19% observed with pembrolizumab monotherapy in the KEYNOTE-048 study. Notably, for patients with CPS scores of 1 to 19, an overall response rate of 56% was observed with CUE-101 and pembrolizumab, which represents a greater than tripling of the historical overall response rate of approximately 15% observed with pembrolizumab alone. Furthermore, CUE-101 also appears to increase the overall response rate in patients with CPS scores greater than 20 with an overall response rate of 38% for CUE-101 and Pembrolizumab and an overall response rate of 23% for Pembrolizumab alone.

In totality, our data suggests that not only does Q-101 appear to demonstrably enhance the response rate of anti-PD1 inhibition, but also does so by substantially expanding responses in patients that are traditionally less likely to respond. This is particularly important since patients with low CPS scores, range of 1 to 19, represent approximately 50% of all patients that are CPS+ and eligible for treatment with checkpoint inhibitor in the frontline setting. The swimmer plot shown on Slide 10 shows that 21 of the 22 patients treated to date at the RP2D and the ongoing combination trial of CUE-101 remain alive as of the last follow-up for each patient. Of note, the median progression pre-survival is still maturing and is currently at 5.8 months, which compares favorably to the historical median progression pre-survival of 3.2 months observed with pembrolizumab, monotherapy in the KEYNOTE-048 trial.

Eight patients have lived beyond 12 months, which was the median overall survival observed in patients treated with pembrolizumab alone in the KEYNOTE-048 study. A summary of the clinical validation and platform de-risking of Immuno-STATs via the CUE-101 clinical experience is shown on Slide 11. Key observations in patients treated with CUE-101 monotherapy in the third-line and beyond include demonstration of single-agent antitumor efficacy evidenced by resist-based partial response in durable stable disease in third line and beyond recurrent metastatic cancer patients and a median overall survival of greater than 20 months in the recommended Phase II dose cohort. In the first line setting, CUE-101 and pembrolizumab demonstrate an objective response rate of 47% and a current median PFS of close to six months, which is continuing to mature.

As previously announced, the robust data on CUE-101’s activity in monotherapy and in combination with pembrolizumab enabled the granting of Fast Track designation for the treatment of patients in both the first and third line setting. The Fast Track designation will facilitate planned interactions with the FDA to define a monotherapy registration path. The cumulative data from these ongoing trials with CUE-101 have provided us with clear evidence of targeted expansion of HPV-E7 specific T cells with antitumor activity as a single agent and as a complementary mechanism with checkpoint inhibition for what we believe will broaden patient reach and enhance efficacy of checkpoint blockade therapy. Furthermore, we believe the preliminary observations from the neoadjuvant study, in addition to the clinical efficacy observed in the second and first line recurrent metastatic setting, support a development strategy of moving further upstream to earlier lines of therapy where a larger number of patients may benefit.

As such, we believe CUE-101, our first biologic therapeutic from our CUE-100 series, represents a potential therapeutic breakthrough for patients. Moreover, we believe the data from CUE-101 has provided a de-risking and mechanistic validation for additional biologics from the IL-2-based CUE-100 series, beginning with CUE-102. As a reminder, shown on Slide 12, CUE-102 and CUE-101 share 99% amino acid sequence identity. This enabled us to significantly decrease the development time and cost of CUE-102, as we’re not required by the FDA to repeat IND-enabled toxicology studies for CUE-102, and we are also able to initiate the Phase I dose escalation study at 1 milligram per kilogram, a dose at which we observe clear signs of biologic activity with CUE-101.

As shown on Slide 13, we are conducting the CUE-102 dose escalation study in colon, gastric, pancreatic, and ovarian cancers. This design offers us the ability to perform monotherapy expansion studies in any or all of the indications being evaluated in the dose escalation phase of the trial. The study is actively enrolling patients in all four indications. The patient screening enrollment rate continue to go exceedingly well, underscoring investigator enthusiasm and the need for effective therapies in WT1 positive cancers. We have observed substantial WT1 expression across the target indications, with 60% of colorectal, 53% of gastric, 100% of ovarian, and 60% of pancreatic cancers testing positive. We have completed enrollment of patients in cohort 4 at a dose of 8 milligrams per kilogram and are expanding the 2 and 4 milligram cohorts.

CUE-102 has been well tolerated to-date with no dose-limiting toxicity observed. The expansion of cohorts 2 and 3 will provide additional pharmacokinetic, pharmacodynamic, and antitumor activity data to help inform the selection of the recommended Phase II dose for the expansion cohorts. Data on the first 18 dose escalation patients treated with CUE-102 shown on Slide 14, demonstrates encouraging disease control with rates of 80% and 75% observed in cohorts 2 and 3 respectively in this heavily pretreated patient population. Seven of the 11 patients treated in cohorts 2 and 3 remained on treatment at the time of data cutoff. Reductions in tumor burden have been observed in patients treated in the dose escalation portion of the study. As shown on Slide 15, a patient with gastric cancer that progressed on three prior lines of therapy, including a checkpoint inhibitor, has experienced a decrease in the sum of three target lesions of minus 29% at week 24 and continues on treatment.

Reductions of approximately minus 50% in the tumor markers CEA and CA 19-9 coincide with the shrinkage of the patient’s cancer. Another example of reduction in tumor burden observed in the 2 milligram per kilogram dose escalation cohort, this time in a patient with ovarian cancer is shown on Slide 16. This 52-year-old patient that progressed on four prior lines of therapy has experienced an unconfirmed partial response with a reduction of minus 30% in their tumor burden. We are encouraged by these early observations of monotherapy antitumor activity and these indications where checkpoint inhibitors have been largely ineffective. We look forward to presenting additional data at an upcoming scientific meeting. I will now turn the call over to Anish.

Anish?

Anish Suri: Thanks, Matteo, and thank you all for joining this call today. As Matteo highlighted, the maturing clinical data with CUE-101 and 102 bolstered the validation for Immuno-STATs as a differentiated class of T cell engager therapeutics that can be deployed widely for immunotherapy of cancers. To that end, Slide 17 depicts the opportunity for expansion of the CUE-100 series to generate therapeutic molecules targeting numerous cancers. Note that the core IL-2 components remain the same among all therapeutic candidates, with the primary difference being the tumor antigen HLA complex that provides selectivity for the cancers being targeted. Following the success with our clinical assets, CUE-101 and CUE-102, we have designed and manufactured a rich pipeline of preclinical Immuno-STAT candidates that can be readily progressed towards the clinic.

Examples of some of these preclinical candidates include Immuno-STATs targeting mutated KRAS isoforms, especially the hotspot mutational variants at the G12 possession, including G12V and G12D, and additional Immuno-STATs targeting well-characterized tumor antigens such as MAGE A4, PRAME, and COL6A3, which is derived from a tumor-specific splicing variant of collagen type VI alpha-3 protein and appears to be shared across many solid cancers. Many of these preclinical Immuno-STATs have also been validated in functional T cell assays. It is important to highlight that the evolving Immuno-STAT pipeline encompasses multiple cancer targets and multiple HLA alleles, which together provide broad patient coverage for many cancers. In addition, we’ve also evolved the platform to accommodate multiple tumor antigens and personalized neoantigens.

This extension of our platform is known as Neo-STAT, as shown on the right side of this slide. In the Neo-STAT framework, the peptide binding pocket of the HLA is empty, which allows us to readily conjugate different tumor epitopes to generate off-the-shelf, therapeutic molecules. Neo-STATs are a potential solution for tumor heterogeneity and often an attractive opportunity for personalized cancer immunotherapy. Taken together, we believe the IL-2 based CUE-100 series can generate an infinite number of therapeutic molecules to address solid and hematological cancers. The next slide, Slide 18, highlights the important feature of TCR-selective targeting in generation of a therapeutic index for IL-2. The core structure of an Immuno-STAT, as shown in the example on the left, allows for selective engagement and activation of the tumor-specific T cells while avoiding the systemic activation of all T cells.

This principle of generation of a therapeutic index via focusing on disease-specific T cells can be applied to many other relevant immune signals. And as noted here, our platform is well-positioned to exploit the full breadth of the therapeutic potential of other cytokines, such as IL-7, IL-12, IL-15, et cetera, and cell surface receptors, like CD28, 41BB, among others, for immunotherapy of cancers. I will point out that numerous other approaches have tried to harness the signals I just mentioned for cancer immunotherapy. However, these attempts have been largely unsuccessful due to the lack of a therapeutic index, resulting in poor drug tolerability and suboptimal efficacy. We believe our approach with Immuno-STATs should circumvent many of these challenges as already demonstrated with the IL-2-based CUE-100 series.

Let’s move on to Slide 19 that describes notable features of superior differentiation that Immuno-STATs offer over the current categories of Pan T cell engager molecules. As mentioned earlier, by design Immuno-STATs are TCR-selective engagers of only the tumor-specific T cells. In contrast, other T cell engagers are promiscuous and engage every T cell via broadly expressed molecules, like CD3 or CD28. Due to their selectivity, Immuno-STATs avoid the broad systemic activation of the immune system to minimize toxicities. On the other hand, the Pan T cell engager molecules have had notable challenges with systemic immune activation and related toxicities, which have been significant hurdles in furthering clinical development. The tolerability and toxicity challenges of Pan T cell engagers have also hampered combination approaches with other agents, including standard-of-care therapies, such as checkpoint inhibitors.

Such combinations in patients have often resulted in a significant increase in toxicities, including fatalities. In contrast, the favorable tolerability profile of Immuno-STATs has enabled us to pursue combination therapies in our clinical trials with little to no evidence for synergistic toxicities. As Matteo shared, our clinical data with CUE-101 and pembrolizumab in frontline recurrent metastatic head and neck cancer patients demonstrates significantly greater efficacy while not compromising patient safety. CUE-102 seems to have a similar tolerability profile to CUE-101, wherein currently in the monotherapy dose escalation trial, we have completed dosing the highest cohort at 8 mgs per kg, with no evidence of dose-limiting toxicities. And finally, and very importantly, in contrast to the generic classes of Pan T cell engagers, the clinical de-risking of the Immuno-STAT platform offers significant regulatory advantages and clinical development efficiencies, as previously described by Matteo.

We believe these are significant wins for a first-in-class therapeutics platform that has convincingly demonstrated clinical efficacy and tolerability. I’ll now change gears slightly and give you a brief update on our platform applications in autoimmune and inflammatory diseases. As shown on Slide 20, we have developed two broad classes of therapeutics for addressing autoimmune disorders. For diseases with well-described and dominant antigens, we can deploy the CUE-300 series of Immuno-STATs for selective targeting and down-modulation of autoreactive T cells. In this case, we’ve used the natural signal of PD ligand, which we know is involved in maintaining peripheral tolerance. We have demonstrated feasibility and proof-of-concept in type 1 diabetes via selective dampening of proinsulin-specific T cells.

Another extension of this approach can be used for selective depletion of autoreactive pathogenic T cells, while sparing protective immunity. We are currently engaged in discussions with prospective partners to progress our work in antigen-specific targeting of autoreactive T cells. Our other program in autoimmunity is CUE-401, which is novel TGF-beta IL-2 bi-specific for selective induction and expansion of regulatory T cells, or Tregs, which are a key cellular component of maintaining immune balance by controlling and suppressing pathogenic inflammatory responses. 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.

CUE-401 offers a unique opportunity to not only expand preexisting regulatory T cells, but also possesses the ability to convert naive CD4 T cells into Tregs, thereby enhancing the quantitative and qualitative fraction of Tregs. Early data from this program has demonstrated potent activity in in-vitro assays, as well as generation of stable Treg cells, and early in-vivo studies have demonstrated efficacy in an animal model of gastritis, as shown on the right side of the slide. This is a disease model developed by Dr. Richard DiPaolo at Saint Louis University, wherein a short treatment with CUE-401 results in a long-lasting protection from gastritis, as demonstrated by the pathology scores shown here. Our teams are working diligently with our ONO colleagues to aggressively advance the CUE-401 program in order to enable the next stages towards IND filing.

We will provide more updates in the future as the current ongoing studies generate mature data sets. With that background on the platform applications in oncology and autoimmunity, I will now pass the call to Kerri to review the financial details. Following Kerri’s remarks, Dan will provide some additional context on our strategic positioning and continuing next steps of our corporate development. Kerri?

Kerri-Ann Millar: Thank you, Anish. Turning to Slide 21, I’d like to provide a brief update on our financial results for the three months ended September 30, 2023. During the third quarter, the company reported collaboration revenue of approximately $2.1 million, as compared to $68,000 for the same period in 2022. Revenue in the third quarter was primarily due to work related to our collaboration with ONO Pharmaceuticals for CUE-401, which Anish just described. Research and development expenses were $9.9 million and $7.6 million for the three months ended September 30, 2023 and 2022, respectively. The increase is due to higher clinical expenses, stock-based compensation, and research and laboratory expenses in the third quarter.

General and administrative expenses remained steady at $3.6 million and $3.5 million for the three months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the company had approximately $54.7 million in cash and cash equivalents, $40.3 million in working capital, and $45.1 million common shares outstanding. We expect our current cash and cash equivalents to fund operations through 2024. I’ll now turn the call back over to Dan for closing remarks. Dan?

Daniel Passeri: Yeah. Thanks, Kerri. As conveyed at SITC last weekend and now summarized on this call, the design of our Immuno-STAT molecules achieves selective modulation of disease-relevant T cells, while sparing the detrimental effects of the stimulation of the vast majority of irrelevant T cells. In essence, we believe we have achieved the biologic equivalence of precision targeting, thereby creating a therapeutic window for potent cytokines such as IL-2. This desired profile enables combinations with, for instance, checkpoint inhibitors, wherein the complementary mechanism of actions should provide enhanced efficacy while not compromising tolerability and patient safety, as shown on Slide 22 with our clinical data from CUE-101 plus pembrolizumab in frontline HPV-positive refractory and metastatic head and neck cancer patients.

Turning now to Slide 23, let’s review the modest overall response rates reported on checkpoint inhibitor monotherapy in various solid tumor cancer types. It’s important to note that while checkpoint inhibitors opened up the potential promise of immuno-oncology, their impact on antitumor efficacy is primarily dependent upon the presence of a robust anti-tumor T cell repertoire. As such, the rational combination of checkpoint inhibitors and Immuno-STATs increases the probability for patients to derive enhanced therapeutic benefit from immunotherapy. And that’s actually shown if you look at the head and neck cancer patient. We increased the overall response rate from 19% with pembrolizumab alone in frontline to 47% in the combination. Okay, finally, let’s move to Slide 24.

This shows the anticipated milestones and accomplishments we anticipated achieving over the next year, including the defined prospective registration path for CUE-101, as well as multiple clinical milestones with our two clinical candidates and several solid tumor types. It’s important to note that we’re very well positioned for strategic alignment with prospective partners, recognizing the potentially disruptive implications of our emerging data. We look forward to continuing our progress forward into a highly productive and transformative 2024. With that, I’m going to turn the call back over to the operator, and we’ll now open the call, open the questions. Operator?

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Q&A Session

Operator: Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. [Operator Instructions] Your first question comes from Stephen Willey from Stifel. Your line is now open.

Unidentified Participant: Hi, guys. This is Torian (ph) for Steve. Can you guys hear me, okay?

Daniel Passeri: Yes. Thank you.

Unidentified Participant: Thank you. Thank you for taking my questions and congrats on the data update. I have just two quick ones on my end. So the first one is starting with CUE-101. I understand that you guys submitted a request to FDA, and it looks like you guys are now planning on defining a registration path in the beginning of 2024. And I’m wondering what the format of that communication be. Would it be just a press release or do you think you will likely disclose that information during earnings call, et cetera.? And second is related to CUE-102, and very interesting data. And I guess my question would be, what gives you guys the confidence in pursuing colorectal and pancreatic cancers in expansion cohorts besides, high prevalence of WT1 expression in these tumor types? That would be it. Thank you very much.

Daniel Passeri: Okay. First question, I want to emphasize that these — and the request for discussions with the FDA are basically our initial discussions regarding registrational trial design. And the first foray is in the second line and beyond monotherapy. But we view this as a really important sort of foundational discussion to build support for our subsequent dialogue with the FDA for defining future registrational paths, et cetera. I also want to emphasize we’re in the — we are engaged in some partnerships and partnering discussions, and we want to be cognizant of the fact that defining registrational trials need to correspond with those partnering objectives as well. So this is an important initial interaction with the FDA to establish kind of foundational support for the mechanism of 101 as a monotherapy, which then builds on our subsequent discussions.

So that’s really the strategy there. With 102, again, we have done a basket study in the dose escalation. Initially, we were looking at focusing on colorectal, but based on the observations we’re seeing, we’re looking at several tumor types that we would likely do a patient expansion in. And I’m going to turn this over to Matteo, if he wants to elaborate on that.

Matteo Levisetti: Yeah. Thanks, Dan. Just to add at a couple points. We’re very happy with the tolerability profile that we’ve observed to-date. In addition to the signs of antitumor activity in multiple indications. And so just to sort of set the context for this late line of colorectal cancer, these patients are very advanced, very refractory. And if you actually look back to the approval of stivarga, regorafenib, in colorectal patients, there was about a 30% disease control rate at six weeks that ultimately was then associated with a 1.4 month increase in survival. And that led to the approval of that drug in late line colorectal cancers. So observing stable disease in a high proportion of patients, even at six weeks is significant.

And then furthermore, we have patients now across several indications with stable disease beyond 18 weeks, and that includes patients with pancreatic cancer. And then as we’ve shown, the patient with gastric cancer that has a very close to threshold partial response at 24 weeks continues on therapy. So we’re very encouraged, as are our investigators, by our observations. And in fact, our investigators are really keenly interested in pursuing all the indications. And we, going forward, will consider how doing so and the timing of that fits in our overall development strategy for CUE-102.

Unidentified Participant: Very helpful. Thank you.

Operator: Your next question comes from Reni Benjamin from JMP Securities. Your line is now open.

Reni Benjamin: Hey, guys. Thanks for taking the questions and congratulations on all the data that was released. It’s nice to see the continued improvement in overall survival. Several questions from us. Maybe just starting off with the CUE-101 series. When we talked about that patient who got a PR, quite late in the whole process, can you talk a little bit about how many doses that patient actually received? Do they continue to receive doses or has the dosing schedule been modified at all? And then sticking with CUE-101, the combination study, if we focus just on the low CPS patients, can you talk a little bit about the duration of response and maybe the PFS as well for those patients?

Daniel Passeri: Yes, Matteo, you want to take that?

Matteo Levisetti: Sure. So thank you for the question. Regarding the patient that had stable disease for 24 months, this is, again, the patient that at six weeks had undetectable cell-free DNA. So you asked regarding the length of their treatment. It was a complete 24 months. This patient did have their regimen reduced from Q3 to Q6 weeks. After approximately 12 months or 14 months of treatment, but they completed the whole two years of therapy. I’m sorry. Now, the second question was in terms of how…¦

Reni Benjamin: Durability, low CPS patients, and the duration, progression-free survival, like — is that durable?

Matteo Levisetti: Yeah. So the durability, really is, it’s evolving. So it’s maturing. So we have several patients with ongoing objective responses. So it’s really a bit premature, I think, to define the duration of response. It’s approximately 30 weeks now, but really maturing with several patients remaining on treatment. The median PFS is close to six months. And again, that compares favorably to the monotherapy data where it was approximately three months from KEYNOTE-048. But again, as the duration of response needs time to further mature, the PFS will be maturing as well in parallel.

Reni Benjamin: Got it. And then just you had mentioned — you had made some comments, Matteo, in the call regarding the neoadjuvant trial. I was wondering if you could provide a little bit additional color on those observations, maybe — I mean, anything you can provide. Is it just CD8 and CD4 cells that are moving up or are there NK cells involved as well? And kind of what are next steps and when might we see that data?

Matteo Levisetti: Certainly. So this is really an exciting trial and a wonderful opportunity to look at the effects of CUE-101 on the tumor microenvironment in a setting where one can obtain substantial amounts of tissue from biopsy. And so, again, just to point out that this is an investigator-sponsored trial at Washington University. However, we have been able to see some preliminary data, which is really very, very encouraging. And what we’ve seen is expansion of T cell clonality in the tumor microenvironment. And increases in natural killer cells in the tumor microenvironment after two doses of CUE-101. So this study continues to enroll. I think we anticipate enrollment may be complete by the end of next year. And we are respectful of the investigator’s desire to publish this work when the time is right. But it really, certainly, is very supportive of everything we’ve observed to-date in our clinical study.

Reni Benjamin: Got it. I’ll ask one more and then just hop back in the queue. As we think about WT1, and that program and the advancement of that program, I kind of look at CUE-101 as kind of the poster child. And so it begs the question, what potential combinations might you ultimately want to be exploring, as you move that program forward?

Matteo Levisetti: Yeah. So great question. Thank you. I think, clearly, as we learn more about the activity of CUE-102 and the different tumor types that the rational next step with regards to development would be to look at combinations. And potential combinations, I think, will likely depend on which tumor Type 1 is talking about. And so, we looked, for example, at gastric cancer, where we’ve seen this tumor reduction of 24 weeks duration. Considering a combination with anti-PD1 or checkpoint inhibitor, given the history of some, although limited activity in some subsets of gastric cancer, I think in other indications, like colorectal cancer, it would be very interesting to move up one or two lines of therapy and think of combinations, perhaps, even with chemotherapy or anti-VEGF therapy, for example.

But this is certainly an area of very active deliberation for us. And it, of course, dovetails, importantly, with our strategic ongoing activities with potential partners.

Reni Benjamin: That’s great.. Thanks for taking the questions. I’ll hop back in the queue.

Matteo Levisetti: Thanks, Reni.

Operator: Your next question comes from Ted Tenthoff from Piper Sandler. Your line is now open.

Ted Tenthoff: Great. Thank you very much. And, again, I appreciated all of the SITC and the update. Just kind of looking at now that you’ve really got Immuno-STAT proof-of-concept, what other are some of the antigens? I know that you’ve talked about KRAS in the past. Would potential partners be interested in looking at their own antigens on this active construct or are they more looking at kind of the existing products or maybe even kind of a mixture of both?

Daniel Passeri: Yeah. I’ll turn that over to Anish. Thanks, Ted.

Anish Suri: Yeah. Hi, Ted and thanks for the questions. So, Ted, as you well saw with some of what we’ve said in the expansion, going after primary cancer drivers is obviously a low-hanging fruit. So, mutated KRAS, you’re aware of the G12C small molecule covalent inhibitor from Mirati being approved and the Amgen compounds. We believe the valine and the aspartic acid, well appreciated, are much larger patient populations, particularly in the three major cancers of colorectal, lung, and pancreatic. And they do donate T cell epitopes. So, just in that space, for example, Ted, we’ve got four different KRAS molecules addressing G12B and G12D on a couple of different HLA alleles. We’ve also got strategies looking at other primary mutated cancer drivers.

And that is still early in the pipeline, but we have confidence they’ll be validated. We’ve got primary tumor drivers like MAGE-A4 and Cancer-Testes Antigens that offer very attractive opportunities and perhaps some level of validation through the ongoing work of others looking at TCR T cell therapy approaches. Of course, ours is with the biologic, so a very different application and perhaps a bit more easy to sort of think about from the commercial and patient accessibility viewpoint. We’ve got interest on these sets of antigens from certain sort of parties to what you referred to going after some of these primary drivers. But then, as you well know, there is a significant community out there that has been focused on discovering and doing their own work on bespoke antigens, which the platform can easily be deployed to drug those moieties.

To that end, Neo-STAT becomes a fantastic opportunity, and that’s one of the reasons we sort of highlighted that modality, even though that is an extension of the Immuno-STAT. The opportunity there is the fact that you can go after multiple antigens, Ted, and it’s the same core IL-2 framework. So, we do believe the efficiencies and the advantages that we’ve demonstrated, the CUE-101 and CUE-102, should apply to Neo-STAT as well. So, there’s, again, we look at this in three sort of broad buckets. We look at driver antigens, where single dominant antigens should have benefit. And CUE-101 is a great example because E7 is a viral proto-oncogene in the case of HPV-driven cancers. And by the way, that data is in head and neck cancer. That same molecule can go to other indications like cervical, penile, anal, vulva cancers as well.

CUE-102, with what Matteo just described, follows up a beautiful example of a onco-fetal antigen that is selectively expressed and has activity. And then KRAS, for obvious reasons, including the MAGE A4, PRAME follows suit. And then we’ve got this opportunity to go after multiple different antigens, where one can simply deploy the platform. And that’s the reason I highlighted the plug-and-play approach virtually has a potential to generate therapeutics.

Ted Tenthoff: Thanks. Super helpful. Really exciting time for the company. Thanks, guys.

Daniel Passeri: Thank you, Ted.

Operator: Your next question comes from Reni Benjamin from JMP Securities. Your line is now open.

Reni Benjamin: Hey, guys. Thanks for taking the follow-up. Yeah. You mentioned on the call partners and partnerships. And I guess, I’d like to just, if you can, provide a little bit additional color as to maybe how those discussions are going. Should we be thinking about, I don’t know, sort of the who’s who of checkpoint inhibitors are who you’re kind of talking to or are there other types of potential partners for one-on-one that you’re talking with? And I guess just as a follow-up to that does a partnership — is that necessary to move into a pivotal study or is that something that you believe after the FDA discussion is complete you might need to and want to take on your own? Thanks very much.

Daniel Passeri: You’re welcome. So, important question, Ren, and it’s a complex question, right? It doesn’t have a simple answer. So, let’s start-off with the last part of the question. It’s not necessary for going forward with a pivotal study, but I would say with the current market dynamics that the biotech sector, particularly oncology, is confronting with the headwinds in the capital markets, we have limited resources. And we’re trying to look at dynamically how do we continue to evolve the platform for maximizing patient reach and demonstrating the value of our platform for addressing serious disease, cancer, autoimmune, et cetera. So, we’re looking at partnering strategies that give us flexibility but still engaged in involvement in the drugs development.

We don’t want to become a licensing company. We want to become a strategic collaboration partner. And I would say Ono was a great example. We have a co-development option with them in that collaboration. In terms of the characterization of the companies we’re talking to, it’s the full spectrum. We’re certainly talking to the who’s who. I’d say what’s intriguing is, first of all, we very deliberately did not go out with a BD emphasis early on in our development. We wanted to build a sound, substantive data package based on rigor and solid data that we could stand on. We’re also getting sort of inbound inquiries, and that’s actually very encouraging. So, we’re talking to a spectrum of potential partners, and I would say a sort of spectrum of opportunities and different sort of structures that we’re assessing.

So, I appreciate the question. I can’t answer it with any more detail for obvious reasons, but I’m doing the best I can to address your question.

Reni Benjamin: Yeah, enough. Thanks. I appreciate that. Good luck going forward.

Daniel Passeri: Thank you.

Operator: [Operator Instructions] There are no further questions at this time. Daniel Passeri, please proceed with your closing remarks.

Daniel Passeri: Yeah, great. Thank you. First, we want to thank those of you listening in to this call and recognizing the importance of our mission towards developing these important novel therapeutics for enhancing patient treatment outcomes for debilitating disease. We want to thank our employees for their consummate dedication and professionalism helping us achieve our mission. And obviously, we want to thank our shareholders and Board of Directors for their support. Most importantly, we want to thank the patients and their families participating in these ongoing and important trials. So, thank you again for listening in and take care. Thank you.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for joining. You may now disconnect.