Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Cullinan Oncology/Harbour BioMed Licensing conference call. At this time, all participants are on a listen only mode. After the speaker's presentation, there will be a question and answer session.
To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker host today, Chad Messer, Vice President, Investor Relations. Please go ahead.
Hello, everyone, and thank you all for joining us to discuss our license agreement with Harbour BioMed for exclusive U.S. development and commercial rights to CLN-418. My name is Chad Messer and I'm the Vice President, Investor Relations at Cullinan Oncology.
Joining me on today's call are Nadim Ahmed, Chief Executive Officer; Dr. Jeffrey Jones, our Chief Medical Officer; and Corinne Savill, our Chief Business Officer. Jeff Trigilio, Chief Financial Officer, and Dr. Patrick Baeuerle, our Chief Scientific Officer and Co-Founder, are also on the line and will be available during the Q&A session. Before we begin, I would like to remind you of the Safe Harbor provisions outlined on slide two.
During today's presentation, management will be making certain forward-looking statements which are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties, which may cause actual results to differ materially from those contained in such forward-looking statements.
These risks are described more fully in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K. You're cautioned not to place any undue reliance on these forward-looking statements.
We disclaim any obligation to update such statements. In addition, this call contains time-sensitive information, accurate only as of the date of this live broadcast, February 14, 2023. Cullinan undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. With that said, it's now my pleasure to turn the call over to Cullinan CEO, Nadim Ahmed. Nadim?
Thank you, Chad. Welcome everyone to our call today to provide an overview of our licensing agreement with Harbour BioMed for the U.S. rights to HBM7008, which we will now refer to as CLN-418. CLN-418 is a potentially first-in-class bispecific immune activator that has shown preclinical activity in multiple solid tumor models. It's currently being studied in a phase 1 monotherapy dose escalation expansion study in cancer patients with solid tumors.
I'd like to share some brief opening remarks before I turn the call over to Dr. Jeffrey Jones, our Chief Medical Officer, who will provide an overview of the molecule and the scientific rationale for the transaction. Corinne Savill, our Chief Business Officer, will review the terms of the deal and its financial context. After that, I'll provide some additional strategic perspective on the deal before opening up the Q&A.
Turning to slide four. Cullinan Oncology has a robust and diverse pipeline of assets in both clinical and pre-clinical development. We use a modality-agnostic targeted oncology approach that focuses on the target first and the modality second. CLN-418 represents a strong strategic fit for the Cullinan pipeline as an immune activator, as well as placing us at the forefront of bispecific antibody development for solid tumors, given its first-in-class potential.
The addition of CLN-418 to our pipeline harnesses Cullinan's core expertise in developing bispecific antibodies, as you've seen through our CLN-049 and CLN-978 programs in hematologic malignancies. With CLN-418, we believe that a B7H4, 4-1BB bispecific antibody is the best approach to targeting B7H4, a tumor-associated antigen that is highly expressed across multiple solid tumors.
Furthermore, B7H4 expression has minimal overlap with PD-L1-expressing tumors, suggesting an important role for CLN-418 in tumors not currently addressed by checkpoint inhibitors. CLN-418 is Cullinan's fourth clinical-stage program.
Zipalertinib, which is currently in a pivotal study in non-small cell lung cancer, as well as CLN-049 and CLN-619, which are in phase 1 studies for AML and solid tumors respectively, with initial clinical data expected for both of these programs in the middle of this year. We also have two additional programs approaching the clinic, CLN-978 and CLN-617. The IND for CLN-978 was recently cleared with the FDA. We remain on track to file the IND for CLN-617 in the first half of 2023.
We expect both of these programs to begin clinical studies this year, which means Cullinan Oncology will potentially have six programs in the clinic by the end of this year. In line with our evolution into a clinical stage oncology company. Now, to dive deeper into the scientific profile of CLN-418, I will turn the call over to Dr. Jeff Jones, our Chief Medical Officer. Jeff?
Thanks, Nadim. I'd like to begin by reviewing some of the unique properties of CLN-418, the first and only B7H4 x 4-1BB bispecific antibody currently in clinical testing. Slide five summarizes key features of B7H4. B7H4 is part of the B7 immune regulatory protein family that includes important and now familiar immune checkpoints like PD-1 and CTLA-4.
All of these receptors are master switches of T cell activation. B7H4 is highly expressed on the tumor cell surface and functionally plays an immunosuppressive role by binding to an inhibitory receptor on both T and NK cells. However, B7H4 acts not only as an immune checkpoint, but also as an antigen hijacked by cancer cells. Accumulated data support the potential of B7H4 as a target for cancer therapy. Until recently, drug development activity around this tumor-associated antigen has been limited.
Slide six highlights further reasons why B7H4 represents such an attractive target for cancer immunotherapy. B7H4 expression is limited on normal tissues. However, as shown on the left panel, B7H4 is expressed at potentially clinically relevant levels across a wide range of solid tumors, including triple-negative breast cancer, non-small cell lung cancer, and ovarian cancer, each of which represents an indication of high unmet medical need.
On the other hand, as shown on the right panel, B7H4 expression demonstrates minimal overlap with expression of PD-L1, which we believe confers CLN-418 the potential to show activity in so-called cold tumors for which current immunotherapy approaches have demonstrated limited efficacy. Moving now to slide seven. 4-1BB is a key co-stimulatory molecule for both T and NK cells.
Monoclonal antibodies targeting 4-1BB have shown the ability to powerfully stimulate T cells, but not without challenging toxicity issues. We believe that CLN-418, a bispecific antibody whose immune cell agonism is dependent on binding to both B7H4 and 4-1BB, may avoid toxicities seen with non-conditional 4-1BB antibodies.
Finally, 4-1BB agonists have the potential to synergize with other cancer therapies, particularly other immune therapy approaches, and may be excellent candidates for combination therapy. Slide eight depicts the structure of CLN-418, a potentially first-in-class, fully human bispecific antibody whose structure has been optimized using Harbour's heavy chain antibody-based immune cell engager platform. CLN-418 has high binding affinity for B7H4, which we believe should promote both efficacy and safety by limiting T and NK cell activation to the tumor site.
The molecule is also designed to dial out unwanted interactions with Fc gamma receptor expressing immune cells, further enhancing its safety potential. Finally, as I mentioned previously, the molecule is designed for conditional immune cell activation upon simultaneous binding to both B7H4 and 4-1BB, which should likewise reduce the risk for safety issues.
Preclinical studies of CLN-418 in multiple tumor cell lines, summarized on slide nine, have demonstrated contingent 4-1BB T cell activation in the presence of B7H4. CLN-418 also demonstrated robust antitumor efficacy in a mouse syngeneic tumor model, and interestingly, the ability to trigger a memory response capable of inhibiting tumor cell growth upon re-challenge. Together, these preclinical findings support the potential for CLN-418 to have single agent activity. Slide 10 positions CLN-418 relative to alternative immunotherapy approaches.
We believe that by engaging both B7H4 and 4-1BB, CLN-418 potentially imparts additional benefits relative to constructs that engage either B7H4 or 4-1BB, but not both targets. Compared to PD-L1 by 4-1BB bispecific antibodies, which have also reached the clinic, we believe CLN-418 is likely to exhibit greater tumor specificity and potential for increased activity in PD-L1 low tumors less amenable to treatment with available immunotherapies.
Compared to B7H4 targeted CD3 bispecific T cell engagers or antibody-drug conjugates, we believe CLN-418 has a potentially broader therapeutic index, as well as the ability to target both T and NK cells. Taken together, we believe that the unique bispecific approach of CLN-418, driven by both B7H4 and 4-1BB, is optimally designed to harness the full potential of each target on its own, while overcoming the associated limitations.
Finally, on slide 11, I'll walk through the design of the ongoing first-in-human phase 1 study of CLN-418. The part 1 dose escalation will test up to seven dose levels of CLN-418 from 0.03 milligrams per kilogram to 20 milligrams per kilogram, dosed once every three weeks. Once a proposed phase 2 dose is determined, the part two dose expansion will evaluate up to 30 patients in each of three tumor-specific expansion cohorts.
One in non-small cell lung cancer, one in breast cancer, and a third to be determined by the efficacy signals observed in the part one dose escalation. Initial data from part one of this trial is expected in 2024. In parallel, we are exploring opportunities to expand the trial to include one or more combination arms. There are many different approaches we can take here.
Combinations with current standard of care treatments, including other immunotherapy agents, as well as emerging therapies. In the future, we will explore opportunities to combine CLN-418 with other assets in our pipeline to create novel combination regimens. Corinne Savill, our Chief Business Officer, will now provide additional information on the transaction and its financial implications. Corinne?
Thanks, Jeff. This transaction meets Cullinan's strategic criteria, which focus on programs directed towards high-impact oncology targets with first and or best-in-class potential to address a broad range of indications. Harbour BioMed has a deep clinical-stage pipeline and has leveraged its drug discovery platform to partner with multiple therapeutic companies such as AstraZeneca, AbbVie, and Moderna.
The terms of our agreement with Harbour BioMed represent a modest cash outlay in exchange for U.S. rights to a very exciting development stage compound. As you can see on slide 12, we will pay Harbour an upfront license fee of $25 million for the exclusive right to develop and commercialize CLN-418 in the U.S., which is the most attractive commercial territory for novel oncology agents.
Harbour BioMed will then be eligible to receive up to $148 million in nearer term development and regulatory milestones, with a potential for up to an additional $415 million in sales-based milestones, as well as tiered royalties, which go from low single digits to teens on potential U.S. sales. With that, I will now turn the call back over to Nadim to provide some additional strategic perspective on the transaction. Nadim?
Thanks, Corinne. To wrap up, on slide 13, I'd like to highlight some of the ways this deal provides us an opportunity to maximize the potential value of CLN-418 for both patients and Cullinan Oncology shareholders, and how well the program fits within the framework of our broader business model and strategy.
Firstly, as I noted earlier, this program complements our pipeline and core expertise, placing us at the forefront of solid tumor bispecific antibody development while leveraging our extensive in-house expertise and knowledge in this area.
Secondly, CLN-418 represents another unique approach to addressing a high-impact oncology target. As Jeff discussed, B7H4 is highly expressed in multiple solid tumors of unmet need and has minimal overlap with PD-L1 in terms of tumor expression, suggesting that CLN-418 may have utility in indications where current immunotherapies are less effective.
This attractive expression profile is indicative of its broad therapeutic potential, which includes applications such as breast and ovarian cancers, as well as non-small cell lung and other cancers. We believe that B7H4 is the optimal target to harness the full potential of 4-1BB immune activation.
As Jeff discussed, 4-1BB is a key costimulatory receptor for both T and NK cell engagement. CLN-418 has the potential to overcome the challenges associated with other approaches targeting 4-1BB through its dependence on cross-linking with B7H4.
With a well-designed phase 1 trial already underway, the development risk associated with CLN-418 is significantly lower than an asset still in preclinical development. We look forward to sharing initial clinical data in 2024. Finally, the attractive financial terms of this deal leave our strong cash runway intact. Following this license transaction, we are updating our cash runway guidance.
We ended 2022 with an unaudited cash balance of $550 million, which included the impact of an approximately $33 million investment to increase our MICA subsidiary ownership from 54% to 95%. Inclusive of the upfront license fee to Harbour BioMed, our pro forma year-end cash balance is $525 million.
Based on our current operating plan, which now includes six programs in the clinic by year-end 2023, we expect our current cash resources to last into 2026. With that, I'd like to turn the call over to the operator to open up the Q&A session.
Thank you. Ladies and gentlemen, as a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Jeff Hung from Morgan Stanley. Your line is open.
Hi. Good morning. This is Catherine on for Jeff. Thank you for taking our question. We have two. First, we know it may still be a bit early, you mentioned planned combination development, but could you talk more on your current thinking on whether 418 is likely to use as a monotherapy or in combination, given that increased antitumor effect had been observed with Urelumab? Do you think that combination would be needed for 418, or might you be able to reach similar activity with monotherapy?
Okay. Thanks for your question. Let me turn it over to Jeff Jones. Jeff?
Sure. Thanks, Nadim, and thanks for that question. First, I think based on what we saw preclinically, we do believe that CLN-418 has potential for monotherapy activity. As I shared in summarizing the preclinical data, we did see data that demonstrated a pretty compelling evidence for monotherapy activity in the presence of B7H4, such that there was single-agent driven complete tumor regressions in the mice models, as well as induction of an immune cell memory effect. As you state, the other appealing aspect of this molecule is the potential for combination.
While we don't believe that development is solely dependent on combination, we are very interested to consider, what are really a large number of combinatorial options, including existing standards of care, emerging and existing immunotherapies, as well as potentially some agents in our own pipeline, which we think may present some interesting options for combination.
Maybe I'll add one comment. I think we firmly believe based on the preclinical data that we're seeing to date, that the 4-1BB agonism we see with this molecule doesn't require an additional B molecule as well, just to be additionally clear. Thanks for your question.
Okay. Thank you so much. For our second question, do you mind talking more about the changes in expression of B7H4 in tumor types over time that might influence when a patient's tumor is best treated with 418? Thank you.
Great. Thanks for your question. Let me turn that one over to Patrick Baeuerle , our CSO. Patrick? Patrick, are you on mute?
Go ahead, Patrick.
You hear me now?
Yes.
Yeah. Thanks for the question and handing it over, Nadim. We have no clear vision right now how B7H4 changes over time in particular tumor indications. This is some kind of ongoing research. As what we can take from the literature and also data that Harbour BioMed put together is that there is a very high level expression in late-stage tumors of B7H4. I would not expect that there is eventually a loss of B7H4 expression when you go into metastatic stage, but it's rather remain very high there. Did I answer your question?
Yes, that's it. Thank you so much.
You're welcome.
Thank you. One moment, please, for our next question. Our next question coming from the line of Ed White with H.C. Wainwright. Your line is open.
Good morning. Thanks for taking my questions. If you could just give us a little bit more information on the phase 1 study that's currently ongoing. How many patients are currently enrolled? Were you privy to any of the clinical data while you were doing your due diligence, or did you only have access to the preclinical data?
Great. Thanks, Ed, for your question. Let me turn that over to Jeff Jones.
Sure. As we shared, the monotherapy dose escalation is ongoing. It is following a relatively standard design, three by three. The dose escalation is ongoing. We will be able to share additional information about the status of the trial and, you know, as we assume primary responsibility in coming weeks. I would reemphasize that we anticipate sharing initial clinical data in 2024.
Maybe, Jeff, you wanna speak to the preclinical data that you presented and the confidence that gives us.
Yeah. I think, you know, if we think about the primary rationale for us pursuing this molecule in particular, we start out primarily with the premise, the bispecific structure of B7H4 and 4-1BB was itself compelling just in terms of the approach to a highly specific tumor-associated antigen that allows contingent activation of 4-1BB.
And thereby T and NK cells restricted to the tumor microenvironment, where we believe the structure itself conveys a broader therapeutic index than other approaches, to 4-1BB agonism. In the preclinical data that I summarized, we saw, you know, really compelling monotherapy efficacy in the murine models, as well as a memory approach that we think, is unique with this way of addressing, B7H4.
That together, as well as a very favorable non-human primate preclinical toxicity profile, really drove our decision to be bringing to our portfolio. As we shared, again, the trial's ongoing, and we anticipate sharing clinical data in 2024. Thanks for the question.
Okay, great. Thanks for taking my question.
Thank you. One moment please for our next question. Our next question coming from the line of Gil Blum from Needham & Company.
Hey, good morning, everyone, thanks for taking our questions. Just a quick one. Just looking at the structure of this antibody. It's a dual-arm, which means that it's engaging two arms, a three-armed, complex, right, 4-1BB. What does the preclinical dose response curve look like? Is it a normal dose response or is it a bell curve?
Thanks for your question, Gil. Let me turn that over to Patrick. Patrick?
Yeah. We have not yet observed a bell-shaped curve in our dose response. It's just a very nice sigmoidal curve. It's a fairly potent induction of, let's say, IL-2, interferon gamma, et cetera, that we see with that molecule.
Okay. That's interesting. My next question is, it's an Fc inactive, suggesting it cannot drive ADCC by itself.
Correct.
Finding single agent activity with an agent like that is actually pretty interesting. All on in of its own, it means that, you know, there's some level of cytotoxicity. If you have any comments on this or stuff that you saw in the preclinical studies that support kind of this, driving mechanism? Thank you.
Yeah. I think it's very prudent to make this molecule Fc silenced. Otherwise, you may end up getting into that problem that you bind the molecule to Fc gamma receptor positive cells, which was the root cause for seeing hepatotoxicity, for instance, with the first generation of these molecules.
We have then a pure 4-1BB stimulation of T cells through neighboring cells that express B7H4 at a very high level. That is definitely safety relevant what we do here. Given our preclinical data described by Jeff, where we see a very robust tumor eradication by these molecules would suggest that we really do not need a functional Fc domain.
All right.
Thanks, Gil.
Excellent. Thanks for taking our questions.
Thank you. I see no further questions at this time. I will now turn the call back over to Mr. Nadim Ahmed for any closing remarks.
Great. Thank you. Look, I would say maybe two or three things. One, CLN-418 is an excellent strategic fit for our pipeline. It fits all our strategic criteria. It's a first in class potential molecule. It activates the immune system. We see preclinical monotherapy. That's number one. Secondly, it represents a first in class clinical stage opportunity, which of course is important for us and a pan-cancer potential acting molecule.
It allows us to go from five to six programs in the clinic by the end of this year. Most importantly, the transaction also leaves us with a multi-year cash runway that will allow us to deliver additional value-creating milestones. We're very excited about this deal and the opportunity for both patients and our shareholders. Thanks everyone for your attention.
Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.