All right, excellent. Well, super excited to have Xencor Management join us. I'll let you introduce the company, and we'll jump right into it.
Sure, excellent. Thank you so much to you and the Evercore team for having us here. Dane Leone, SVP, Corporate Strategy at Xencor. We're a clinical stage biotech company with a really strong history and background in world-class protein engineering. The molecules we've made over the course of our history have been used in multiple drugs, now approved and in process of clinical development. The technology platform itself has enabled a lot of innovation that we're now bringing to bear, not only in bispecific drugs, but monospecific drugs as well. Really excited to be here and talk across our wholly owned pipeline, which includes oncology, autoimmune, and inflammatory disease.
Excellent, fantastic. I know historically the focus for you guys was very much focused on cancer specifically, and I know there are a lot of new parts of the story that are being explored now. So could you just sort of walk us through the shift along those lines? And I know you guys haven't necessarily abandoned oncology altogether. So could you remind us where the key programs are focused and the targets?
Yeah, yeah, no, great question and worthy of a short history lesson. So the company was founded by Bassil Dahiyat out of Caltech back in the day, focused on a lot of innovation with protein engineering. So a brilliant scientist has done a lot of things that are world-class and world-renowned in the field of protein engineering. And originally when the company started focusing on clinical development, there really wasn't a bias in terms of therapeutic area. So you'll probably remember there were studies run in lupus, there were studies run in allergy, there were studies run in oncology, there were studies run in IgG4-related disease. Years back though, there was kind of, I would say, a pivot in the portfolio strategy to look at oncology. So probably from the years of maybe 2017- 2019-ish, it was like really wholly focused on oncology.
I think what we've brought out this year with our corporate update, our strategic update in September, was kind of going back to the past in a certain sense of saying, "Okay, we can do really innovative things with bispecifics, with T-cell engagers, even with our extended technology and monospecifics. Let's look at where these are fit for purpose to solve clinical problems, right? Where we can advance the standard of care and do things that are really going to be impactful for patients and clinicians." And so that's what we did. So we brought out a number of assets that we've been working on for a period of time and some of the new assets that are kind of on the map to hit in the clinic in the years to come, such as our IL-23, TL1A bispecific, and said, "Yeah, this is it," right?
Before September, when we brought this out, we spent a lot of our time this year building the clinical infrastructure to execute on these programs. 2025 is going to be a great clinical inflection point for us across the entirety of the portfolio and heads down.
Okay, excellent. So let's start with maybe the IL-23, TL1A, since that's the one you mentioned you guys are getting interest. You enter clinic in 2026. Is it fair to assume you guys are incorporating some of the Fc mutations that make it a long half-life?
We're incorporating kind of all aspects of our technology, proprietary and what we think will make the best bispecific. In the case of a true bispecific like an IL-23, TL1A, right, you're immediately going towards the problem of fixed stoichiometry, right? And you got these two orthogonal targets, which are really critical to inflammatory axis and IBD and possibly a number of other really important inflammatory diseases. How do you solve for that, right? Because you're taking one of the binding arms away, right? You automatically miss some of the binding capabilities versus a monospecific antibody. You got to go through the process of affinity maturation, tuning these things back up, optimizing them, presenting these two different concepts and binding domains in a stable structure that's going to have really good pharmacology. And so there's no shortcut to that.
That's the charge we gave to our engineers of, "This is something that could have transformational capability in the clinic." We know that from the studies that are emerging in TL1A. We know from Risankizumab, Mirikizumab, what they've been doing for patients with IBD. You put these together and it's one plus one should equal something greater than two.
And that's off J&J's VEGA trial?
I think it's off the VEGA trial, but I think a little bit more complex than that. I was at UEGW and there's a lot of interesting work coming out of the IBD space now that really relates across whether these are orthogonal inflammatory axes, what does localized inflammation look like for IBD patients? What does drug exposure play into? Are patients having higher intrapatient drug exposure and variability that's affecting clinical outcomes? Even things as interesting as the Mirikizumab phase four study where reinduction works. Wow, you know, we didn't think that would work a couple of years ago, but it turns out it works. When you put all those components together, you start looking at that ceiling in terms of clinical remission that we've seen in IBD and say, "I think we can break through that." I think there's opportunities to break through that.
Yes, you know, VEGA can be a good proof of concept you could quote for a combination therapy. DUET probably will show something similar when that reads out probably next year. Yeah, no, it's really convincing the clinical community and drug developers that there is a lot of opportunity, that there's not a real fixed ceiling in terms of clinical remission that can be achieved not only in the induction period, but the maintenance period.
Got it. So I guess maybe focus on VEGA trial specifically. So that was TNF plus IL-23, but there was also a little bit of imbalance on the extent of some background meds used. I guess how do you guys think about the odds into the DUET trial, knowing what we saw on some of the immunosuppressant imbalances on the combo arm versus mono arm? Because presumably this is critical to some of the combination stuff you guys are structuring.
Yeah, yeah, very interesting question. So.
You're familiar with the immunosuppressant imbalance I'm referring to, right?
Yes, there's a lot of debate in terms of not just the imbalances in the drug, the algorithms used for an induction period and then the maintenance period as well. I think that's very fair. Like that's not a perfect trial, right? That was at best like a 2A proof of concept, if not kind of like an academic trial to look at different dosing algorithms that work together. I think for the clinical community, which we always defer to, as you were an investigator on this, right? You were looking at this, you really think this is something conceptually different than what was done with all the caveats like you point out on background immunosuppressants. The answer is cautiously optimistic, right? And I do think there is optimism for DUET, but are those still perfect studies?
You know, at least in our view for the IL-23, TL1A concept, the data and not just coming from the J&J studies, but a lot of the work on TL1A, the good work that's coming out from the original Pfizer studies as well, there's a lot of interesting dynamics within the inflammatory axes that you're pretty sure that IL-23 and TL1A are not going to be redundant, right? Abrogating them is not going to be a redundancy and that there's something that takes from either. Is there upregulation that's really happening as you abrogate one? Maybe a little bit unclear, but they're also seemingly separate.
So in that vein, if you're not having a risk of dual immunosuppression with those two targets over an extended period of time, which we don't think you will, then you're going to want to see that not only in the induction period, but the maintenance period as well.
The idea of replacing TNF and going with TL1A instead, I realize they're on the same axis, but they're not identical. How do you guys think about the, I realize TL1A is independently active, but again, some of the prior combo data suggests this was the TNF IL-23 combo. How do you think about that?
Yeah, to be proven for sure. I think the debate that's been had recently is great. Part of the TNF superfamily, but what does that mean, right? There's really different mechanisms of actions here. Is TL1A different, more different than a TNF in the respect that it is targeting localized inflammation and upregulation, right? Or is there something different than just being kind of the concept of a localized TNF inhibitor? That's what's unclear. I mean, to date, the information that we have are from these phase two studies, Phase 2A, right? So there's a lot of caveats that go into the explicit characterization of what this drug class looks like.
But in the totality of the data, in the field, the clinical experience from these lead investigators, yeah, it really does feel like the localization is preventing a broader immunosuppressive effect and maybe some of the broader immunosuppressive risks to the patients that you get with the TNF class.
Got it. Can you speak to your competitor bispecifics in the IBD space? Who are they and what type of frameworks are they running with?
Probably would prefer not getting into competitors explicitly and finding them. But is there a specific question?
No, I guess what I was getting at is, are there other IL-23 bispecifics that you're aware of?
In the public domain, for example, Pfizer did explore an IL-23, not p19, p23, which is technically like an IL-12 in concept, plus a TL1A. So that's in the public domain. I'm not sure that that program has really gone forward, but it was disclosed that there's a high rate of immunogenicity. We would say a TNF.
That was a backup program in the Roivant deal as well.
Yeah, and there was like another program that hasn't really been disclosed publicly. We obviously think IL-23p 19, as we've disclosed, is the proper combination target with a TL1A and think there's a stronger rationale there. So yeah, I think if you want to look at that, yeah, that's a lot of the design work that goes in, right? If you're making a bispecific with these two targeted axes, yeah, immunogenicity is on your mind, right?
Got it. Got it. The TL-1A standalone that you have, which has data coming in first half 2025, does that have binding and binding affinity and potency characteristics, which are very similar to the TL-1A being used in the bispecific as well?
I think all options are on the table for the bispecific, right? Because again, there's many more variables you're solving for. What I would say is I think we've made a best-in-class molecule with the monospecific, and as we get the healthy volunteer data from the interim SAD that we'll have in the first half of next year, that will help inform us to really calibrate if we want to make tweaks or if we don't to what we're using the bispecific versus the monospecific.
Got it. As it relates to the mutations you guys used on the Fc, my understanding is you guys are going with LS and not YTE. Can you speak to some of those differences?
Yeah, so LS is technically called our Xtend technology, which is still IP protected. YTE went off of IP a while ago, which is why people generally use it and not LS. There's just a lot of.
Does it affect systemic distribution? That's my real question. Because there's some evidence that YTE routes it more to certain lung tissue and certain tissues like that.
Not to our knowledge.
Okay. There's no biodistribution pattern changes with LS versus YTE?
We don't think so. We think the differences between LS and YTE, and not just our own, but just the reams of even data from the NIH comparing the two mutational approaches for FcRn recycling. LS is generally more, has higher thermostability by at least 10 degrees. The head-to-head studies that happened.
But that's cold storage anyways, no?
What?
The antibodies, weren't they being cold storage? Or are you referring to stability once it's in the body?
Yeah, like proxying what the thermal stability on a MEL curve would be for the two mutations in the same antibody format.
Got it.
In NHP direct studies, LS is slightly longer on half-life for what that means in NHPs versus YTE, and I think it's pretty well accepted that there's less disruption with the Fc gamma receptor with LS versus YTE.
Got it. Okay, excellent, so maybe moving past immunology, and by the way, maybe just one last one on immunology. Anything on the CD3 engager side from an immunology perspective? I think you guys are going back on the CD19 side using a CD3 engager again.
Yeah, yeah. So we're really excited about the T-cell engager portfolio that we outlined in September. So we have a CD20, CD3 that's going to start a rheumatoid arthritis study in the first half of 2025. And that is an interesting program, had been partnered with Janssen in lymphoma. So there were IV and subcutaneous studies that were run in that partnership, but the decision was not to really move forward in lymphoma given the commercial CD20s that are on the market and where the development point was. So we regained rights in the early part of this year, kind of worked through the funnel of, okay, what do we do with this, right? And it seemed really fit for purpose for a CD20, CD3 in rheumatoid arthritis.
So the first part of next year, we're going to start our dose optimization study, which draws on all the drug exposure data that we have coming out of the lymphoma studies, and then we'll expand into more traditional studies and scale up from there. The CD19 that you referred to is actually designed fit for purpose, rationally designed for autoimmune. So it uses our extended half-life, has about 15-day half-life in non-human primates, highly potent. We'd shared that there was deep B-cell depletion even within the tissue compartments out beyond 28 days on a single dose. And that will be first in human and the second half of next year.
Do you guys expect, I guess, what's your expectation on CRS in general on the CD19? I guess maybe let's focus on CD19 because that's fit for purpose and we can talk about the CD20 as well. In autoimmune where the dose is a lot lower, obviously.
Yeah, so I think there's a lot of misconceptions in terms of translating from oncology to autoimmune, right? And there's things that we know and that we don't know. Probably the easiest thing to go over in the time remaining here is in oncology, right? Your dose intensity is limiting progression of disease, right? These patients are going to die.
You're maxing it.
You're maxing out. You're trying to hit them as hard as possible. In many cases, the effective dose level that you would try in dose escalation in oncology, the lower end of that range is going to be effective in depleting the B cells, right? And so what you're trying to do in autoimmune is create a nice, a gentler glide path for those patients. They're not going to die. There's not that mortality concern that's imminent. And we think with a lot of the data we've generated from our programs, you're going to be able to affect that glide path and get to a point where, yeah, you can reduce inpatient monitoring. I mean, you've seen that with Epcoritamab already in follicular lymphoma, right? They've been able to get to that in oncology. Seems very reasonable to be able to replicate that in autoimmune.
Got it.
But that's the work we have to do.
For some of your competitor programs who have also taken the dose way down for autoimmune, they're still seeing some hints of Grade 1, Grade 2 CRS. And I guess I wonder how relevant is that as a data point as we think about what the base case? Like should the base case expectation be zero CRS on you, on your CD19, CD3?
Yeah, interesting question. I mean, the data out there in T-cell engagers in autoimmune is from academics.
No, there's some company-generated data too.
Mostly from academics that have real data sets, right? And a lot of that's been drawn from Blinatumomab, and there's a therapeutic index aspect of it. There's a dose intensity aspect, as you correctly point out, but the expectation of what inpatient monitoring is required, Grade 1 to a degree, right, is likely acceptable, right? Grade 2, that's going to be more of a question with the autoimmune community. Grade 3, I think we can all agree you can't see that.
Got it. Infusion frequency, you think this would have to be at least quarterly?
We've not gotten into what the dosing algorithm's going to get, but I think we have in our framework something that's going to be really optimal for the patients and the clinicians to.
I was thinking more of the disease bounce back.
Oh, disease bounce back. Yeah, no, I mean, the whole goal here is to get to a clinical algorithm that effectively matches what we think would be the B-cell aplasia window for that phenotypic change upon B-cell repletion back to a naive subset, right? And so we have that clear in our heads of what we need to solve for. And that dosing frequency is going to be driven by that.
Okay, excellent. So remind us, can we get some Phase I data on your CD19 next year?
That's going to be first-in-human in the back half. So that seems less likely. I think it's fair.
Second half. But on RA for the CD20?
That's an interesting question. So we'll start that in the first half of next year, depending on how the dose optimization goes, which is kind of hard to predict. We're more than happy to share that data as we get it. So that's TBD, but.
Outstanding. So do tell Bassil, we missed him, but also we did not ask a single cancer question.
It's okay. Appreciate your time in this interview.
Thank you so much for making time.
Yeah, thank you so much.