CUE - NASDAQ

Greetings, and welcome to the Cue Biopharma Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dr. George

Thanks, Paul, and good afternoon, everyone. Thank you for joining us. On today's call are Dan Passeri, Cue Biopharma's CEO; and Dr. Anish Suri, President and Chief Scientific Officer; Dr. Ken Pienta, Acting Chief Medical Officer; Dr. Matteo Levisetti, Senior Vice President of Clinical Development; and Kerri-Ann Millar, Chief Financial Officer. Before I begin, I would like to remind you that various remarks that the Company makes during this call about the Company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of the Company's annual report on Form 10-K filed with the SEC on March 9, 2021, as well as other filings made by the Company with the SEC from time to time, which can be accessed on the EDGAR database at www.sec.gov. In addition, any forward-looking statements represents the Company's views only as of today, August 17, 2021, and should not be relied upon as representing the Company's views as of any subsequent date. While the Company may elect to update these forward-looking statements at some future point, the Company specifically disclaims any obligation to do so even if the Company's views change. Please be advised that today's call is being recorded. Live and archived versions of the event can be accessed via the Company's website for the next 30 days. With that, I would now like to turn the call over to Dan Passeri, Cue Biopharma's CEO. Dan?

Yes. Thanks, George. Good afternoon, everyone, and thank you for joining us today for a review of our ongoing progress as well as second quarter 2021 financial results, which are available in more detail in our Form 10-Q filed with the SEC on August 9. Our agenda for today's call is shown on the next slide, Slide 3. I'll provide first a brief overview of ongoing progress since our last earnings call, highlighting recent developments with an emphasis upon our lead clinical program, CUE-101, and strategic implications for the CUE-100 series regarding our competitive positioning and potential value creation for our shareholders. After the introductory update, I'll turn the call over to Dr. Anish Suri, our President and Chief Scientific Officer; who will provide a synopsis of our approach for selective targeting of IL-2. After Anish provides an overview with background context, Dr. Ken Pienta, is our acting CMO; and Dr. Matteo Levisetti, our Senior Vice President of Clinical Development, will provide an overview of our ongoing CUE-101 clinical trial, our first and representative program from the IL-2-based CUE-100 series. Ken and Matteo will then turn the call back over to Anish, who will provide further details on the expansion of our pipeline with the premise that CUE-101's development progress has essentially derisked and enhance the value proposition of subsequent programs due to the platform's modularity. Kerri-Ann Millar, our Chief Financial Officer, will then provide a summary of our financial results for the past quarter, and I'll close with a summary prior to opening the call for questions. All right. To begin, I'd like to remind you of our foundational goal, and that's stated here on Slide number 4, which, in essence, is to design, develop and bring to patients in need rationally engineered biologics with the aim of restoring immune balance by harnessing nature's own cues, hence, our name, for selective and specific modulation of disease-relevant T cells directly in the patient's body. So we believe we're well underway to realizing our vision of leading the next wave of disruptive breakthrough immunotherapies, addressing the specificity and diversity of the human immune system to cue a complex human disease. I'd first like to begin with CUE-101, our lead development program, which is representative of the IL-2-based CUE-100 series. On the previous earnings call, we reported results pertaining to a refractory heavily pretreated patient that had a confirmed partial response, or PR, from the monotherapy Phase I dose escalation part of the CUE-101 trial. This patient remains on study. And as Ken and Matteo will discuss momentarily, has demonstrated a durable PR after multiple scans, with the latest scan evidencing additional tumor reduction. We view this durable and ongoing RECIST-confirmed partial response as an important de-risking event confirming the ability of CUE-101 to selectively engage and continually modulate T cells in a challenging patient population. While still early in development, we believe that the growing body of clinical data is encouraging and supports the promise and potential of CUE-101 having a registrational path forward as a monotherapy in third line and beyond HPV positive head and neck squamous cell carcinoma patients. Furthermore, as Anish will discuss, we also view the data as supporting the premise that our IL-2-based CUE-100 series represents a potential breakthrough development in the clinical application of IL-2 for cancer immunotherapy per se. As the drug candidate's mechanism of action is based upon activating cancer-specific T cells directly in the patient's body. In the case of CUE-101, that's HPV E7-specific T cells. We believe this growing body of data supports our position that not only could CUE-101 have a possible registration path as a single agent, but may also enhance patient reach and therapeutic benefit for frontline HPV-positive head and neck cancer patients in combination with pembrolizumab, which is currently a standard of care for these patients. The combination trial referred to as KEYNOTE-A78, is presently enrolling patients in the second dose cohort, as Ken and Matteo will momentarily discuss during the clinical update section. So in summary, we believe the ongoing data emerging from the monotherapy trial to be transformative for Cue Biopharma as it provides preliminary objective evidence of clinical activity as a single agent monotherapy in a late-stage prior treatment refractory patient population. And clearly differentiates our drug candidate, CUE-101, as well as our IL-2-based CUE-100 series from competing IL-2 modalities and vaccine programs. As we continue to observe supportive data in our ongoing Phase I dose escalation and expansion trial, it's important to recognize that these data could not only provide potential risk reduction and validation for CUE-101, but also by implication, the entire IL-2-based CUE-100 series. The underlying framework for the IL-2-based C100 series remains essentially the same across programs with the only primary difference, for example, between CUE-101 and CUE-102 being the 9th to 10 amino acid antigenic epitope in the MHC or HLA finding group. The key features underline our ability to target selected cancer-relevant T cells is based upon engineering a molecule that builds upon fundamental principles of T cell activation. Anish will now elaborate upon these characteristics and features of the CUE-100 series and the foundational importance of these observations as they relate to the selective delivery of IL-2 to tumor-specific T cells. Anish?

Thanks, Dan, and good afternoon, everyone. I'd like to begin by highlighting the objective of the immuno-oncology sector to activate a cancer-specific immune response while avoiding the unwanted deleterious effects due to nonspecific immune activation. To that end, we believe that our CUE-100 series Immuno-STAT platform enables the selective targeting of interleukin-2 or IL-2 to tumor-specific T cells. As shown here and evidenced by the number of pharmaceutical and biotech companies developing IL-2 centric approaches IL-2 is a well-validated target for cancer immunotherapy, albeit with associated liabilities and limitations. IL-2 is an approved biologic therapy for metastatic melanoma and renal cell carcinoma; however, the lack of selectivity and safety have hindered its broad application and wider clinical potential. Examples of associated toxicities include vascular leak syndrome, and cytokine release syndrome, along with undesired effect on many immune cells, including the activation of regulatory T cells, which may contract antitumor immune responses. As such, a significant opportunity exists for next-generation IL-2 approaches to address and circumvent these challenges. Through rational protein engineering, we appear to have met this challenge and have the prospects of a breakthrough solution, enabling the true potential of IL-2 for selective immune activation. The next slide, Slide 6 highlights the challenges with lack of cellular specificity of IL-2 or IL-2 variants. As shown here, only a miniscule fraction of the entire CD8 T cell repertoire, harvest specificity for tumor antigens. Note that the tumor-specific T cells here are shaded in red while the non-tumor-specific T cells are shaded yellow. The vast majority of the patient's T cells are likely greater than 99.9% are directed against other known tumor specificities. In this context, a wild-type IL-2 or a variant IL-2 molecule like a not-alpha IL-2 will be inclined to indiscriminately engage the vast majority of CD8 T cells with little relevance to the minor tumor-specific T cell fraction. The result of these nonselective interactions is a brazing activation of the broad immune compartment with no selective bias towards the tumor-specific T cells. This lack of specificity, coupled with safety considerations creates significant barriers for extracting the fullest potential of IL-2 treatment. We sought to find a protein engineering solution to this challenge, as shown in the next slide, Slide 7. The breakthrough here was that we exploited our Immuno-STAT platform to specifically select for an IL-2 variant in context of tumor-specific T cell activation. This is very different from what others have done or we believe are doing, which is to select for an IL-2 variant only in context of interactions with the IL-2 receptor subunits. We know from fundamental immunological principles that a key step in T cell activation is the engagement of the T cell receptor or TCR to specific peptide HLA complex molecules. Hence, we use this natural biological mode of T cell engagement to design the CUE-100 series of Immuno-STAT, which contain tumor peptide HLA molecules along with modified IL-2, as shown in the left panel of this slide. The modified IL-2 is designed to selectively act upon tumor-specific T cells whose TCR is engaged to the PHLA component of the CUE-100 series Immuno-STAT. If the TCR is not engaged, as would be the case with the vast majority of the non-tumor-specific T cells shown in yellow, then the signal from the IL-2 variant on its own is relatively weak. Hence, the CUE-100 series is in molecular scaffold that exploits both TCR and the IL-2 signals to set the optimal signal amplitude for selective activation of tumor-specific T cells. The ribbon structure in the right panel of the slide provides molecular details of the configuration of the IL-2-based CUE-100 series. Each molecule is built upon an antibody FC scaffold and consists of bivalent peptide HLA molecules shown in blue that engage tumor-specific T cells, along with two molecules of IL-2 on either side for a total of four IL-2 molecules. The IL-2 variant has two key changes: one, aggregates binding to IL-2 receptor alpha, which helps mitigate safety issues with systemic activation and minimizes the bias towards regulatory T cells; the second mutation reduces binding to the IL-2 receptor beta subunit, such that the composite signal strength for T cell activation is dependent upon additional signals from the TCRs engaged to the PHLA component. This tuning of signal amplitude ensures biased activity of IL-2 and TCR engage T cells. The next slide, Slide 8, highlights the preferential activity of the CUE-100 series Immuno-STATs on tumor-specific T cells over the majority of T cells that are not specific for the tumor. There are several advantages to our approach. One has mentioned the selective activity of IL-2 on TCR engage T cells, both insist and trace interactions. Since interactions, cis-interactions would be to specific T cells that engage the peptide HLA and IL-2 component of the Immuno-STAT. Trans interactions refer to the IL-2 variant's activity on other tumor-specific T cells whose TCRs may be engaged with either tumor cells or antigen-presenting cells in the tumor or lymph nodes. We believe this potential could further expand the antigenic diversity of the antitumor T cell response. Furthermore, we've demonstrated expansion of NK cells which could be an added benefit for cancer immunotherapy, while the effects on T regs or regulatory T cells have been transient. Matteo will discuss these findings in the clinical section of this presentation. Lastly, we have observed a generally favorable safety and tolerability profile. The lead candidate, CUE-101, has been dosed up to 8 mg per kg in patients with no MTD. The next slide, Slide 9, further exemplifies the differences between wild-type IL-2 or IL-2 variants and our 100 -- CUE-100 series. For the wild-type IL-2 artist variants, the lack of IL-2 selectivity and associated safety issues limit the clinical dose that can be administered to the patient. For example, the approved clinical dose for the wild-type IL-2 Aldesleukin is 37 micrograms per kilogram with a half-life of about 80 to 85 minutes. Similarly, for the various not alpha IL-2 variants, the chosen clinical doses have ranged between 6 to 24 micrograms per kilogram, as shown here. In contrast, we have successfully dosed CUE-101, our lead clinical candidate from the CUE-100 series, up to 8 milligrams per kilogram with no MTD having been identified. Hence, we believe that CUE-101 demonstrates a dosing range for IL to with an adequate therapeutic window. This will be discussed further by Ken and Matteo in the following sections focused on the clinical data. Okay. With that, I'd like to hand the call over to Ken. Ken?

Thanks, Anish, and good afternoon, everyone. As shown here on Slide 10, CUE-101 shares the core scaffold of the CUE-100 series. It consists of a peptide from the E7 protein of HPV 16 or human papilomavirus, coupled to the HLA-A*02 molecules along with the IL-2 variant [Technical Difficulty] Any one is designed to selectively activate HPV E7 specific cells to target cancers driven by the human papalomaviruses, such as head and neck cancer and others. The molecular design of CUE-101 enables us to identify eligible patients based on HLA-A*02 positivity and HPV 16 positivity for the tumor. As always, I'd like to thank our principal investigators and the patients participating in our ongoing clinical trial. As we've noted on previous earnings calls, we have continued to successfully screen and enroll HPV-16 positive head and neck cancer patients to participate in our CUE-101 clinical trial throughout the COVID-19 pandemic. Furthermore, despite the challenges of the COVID pandemic, to date, we have successfully executed on our defined development plans and time lines and they have achieved our stated objectives on schedule. The next slide, Slide 11, shows our high-level summary of the clinical design and dosing cohorts for our ongoing Phase I trial of CUE-101, enrolling third line and beyond patients that our HLA-0201 positive with recurrent or metastatic head and neck quemouscell carcinoma driven by HPV-16. We completed enrollment in the Part A dose escalation portion of this trial and are now enrolling into the Part B dose expansion phase of the trial at the presumed recommended Phase II dose of 4 mgs per kg, representing the dose of cohort 6 of the Part A dose escalation. Our expectation and projection is that we will complete enrollment of 20 patients by early first quarter 2022. The next slide, Slide 12, provides a high-level summary of the observations made over the course of the dose escalation part of the study. 38 patients were treated across seven dose escalation cohorts without an MTD being identified. One confirmed PR and eight in patients with confirmed stable disease lasting for more than 12 weeks have been observed. Pharmacodynamic markers of therapeutic activity include the demonstration of expansion of these relevant CD8-positive T cells and NK cells and evidence of tumor invasion by tumor-infiltrating T cells or TILs. We will be providing a data at SITC as well as towards the end of the year on these trials. I will now pass the presentation to Matteo to discuss some of our current data. Matteo?

Thanks, Ken. The next slide, Slide 13, shows some of the details about our enrolled patients to date. The vast majority of our patients, more than 90% have been treated with CUE-101 as third line or beyond therapy after failing both platinum-based chemotherapy and a checkpoint inhibitor. Many patients also failed treatment with the epidermal growth factor inhibitor cetuximab. This is an important note, although our R&D was originally cleared by the FDA to test CUE-101 as a second-line agent after platinum failure in the first line. Pembrolizumab was approved in the first and second line settings as our trial was being initiated. Functionally, this has de facto shifted this trial into the third line setting and beyond. There is no approved therapy for recurrent HPV-positive head and neck cancers. While presenting the increased challenge of treating highly pretreated and refractory patients, we believe that this opens a potential registration path for CUE-101. Several ongoing observations give us confidence that our data is maturing in a manner that could allow us to define multiple potential registration strategies with the FDA. First, as shown in Slide 14, our data to date demonstrate the tolerability of CUE-101 in patients both as a monotherapy and in combination with pembrolizumab. Our presumed recommended Phase II dose of 4 mgs per kg appears to be well tolerated in the target population. Our first cohort of patients in the combination study at CUE-101 dosed at 1 mg per kg did not experience a DLT, and we are now enrolling the second cohort at 2 mg per kg of CUE-101 in combination with pembrolizumab. All of the SAEs and AEs observed to date are consistent with those that are observed with IL-2 administration or are typical of those observed with checkpoint inhibitors in the treatment of cancer patients. The most common AEs observed continued to be fatigue, anemia and decreased lymphocyte counts. Second, our pharmacokinetic data at the recommended Phase II dose, as shown in the next slide, Slide 15, reveals consistent exposure without any evidence or effect of antidrug antibodies on PK and exposure in patients that have received multiple doses of CUE-101 as shown in the bottom panels of this slide. Third, our PD data, as shown in Slide 16, demonstrates a consistent increase in natural killer cells or NK cells across all subjects in cohort 6. In contrast, we see a modest and transient increase in CD4 positive FOXP3 positive T cells, presumably regulatory T cells or T regs that returns to baseline levels shortly after dosing. We have also reported on evidence of increase in tumor-specific T cells, an example of which will be shown later. Importantly, we have observed what appears to be a dose proportional PD effect as well as corresponding clinical benefit, including eight patients with stable disease lasting greater than 12 weeks and the confirmed PR with the majority of these observations occurring in cohorts 5 and 6, i.e., at doses of 2 and 4 mg per kg, respectively. The data generated in the dose escalation part A of the trial demonstrated signs of clinical activity from observations and scans from cohorts 4, 5 and 6 that demonstrate durable stable disease. Furthermore, the dose escalation demonstrated what appears to be a relatively broad therapeutic window with the dose range between 1 and 4 mgs per kg, where PD activity as well as clinical activity and benefit have been observed, while appearing to be well tolerated. We also observed and continue to exert clinical benefit within the higher dose cohorts and have had two additional patients recently demonstrate confirmed stable disease on their early scans. We remain encouraged by this growing body of data. And as conveyed by Ken, believe we have a potential registration path going forward, including as monotherapy for third line and beyond. As an update from what was reported in the previous earning calls, as shown in the Slide 17, with histopathology evidencing clear signs of antitumor activity and T cell infiltration, this patient has been reported by the PI as evidencing no signs of active cancer up to six months post-recession. The next slide, Slide 18, also shown during our prior earnings call demonstrates supporting data for the mechanism of action of CUE-101. We clearly observe a significant increase in tumor-infiltrating lymphocytes within the tumor tissue. Post-treatment with CUE-101 demonstrate in granzyme B, a serine protease found in the granular of NK cells and cytotoxic T cells. It is a weapon utilized by these cells to kill target cancer cells. This slide demonstrates biopsies from a patient in Cohort 5, before and after administration of two doses of CUE-101. In the post-treatment picture on the right and quantified on the graph on the far right, you can see a marked increase in cytotoxic T cell secreting granzyme B, again, providing valuable validating data supporting the mechanism of action of CUE-101. And hence, mechanistically, the Immuno-STAT have the potential to directly engage tumor-infiltrating T cells. And NK cells, which may also alter the local tumor microenvironment to favor antitumor immunity. This mechanism of action of CUE-101 will be further explored in an investigator-sponsored new adjuvant trial at Wash U, Washington University in St. Louis, in which treatment-naive patients will be given CUE-101 prior to surgical resection and the resected tumor will be examined for evidence of tumor-infiltrating lymphocytes. Fourth, the clinical benefit rate as a single agent during the escalation phase of the protocol is encouraging. Slide 19 demonstrates a partial response in a patient treated at the recommended Phase II dose now out over 28 weeks on therapy. Increases in HPV E7-specific CD8 T cells and NK cells were observed in this patient as well. Slide 20 shows a reduction of approximately 57% in one of the patients' target lesions. We all recognize that PRs and CRs occur infrequently in third line and beyond HPV positive head and neck squamous cell carcinoma patients. Importantly, we are also following patients for clinical benefit, which is defined as patients with at least stable disease on study for more than 12 weeks. In the dose escalation phase of our study, to date, we have observed a preliminary clinical benefit rate of approximately 27% in these third line and beyond patients. As noted in previous earnings calls, we also continue to monitor progression-free survival and overall survival closely and continue to observe what appears to be an enhancement of survival of patients in the CUE-101 dose escalation trial. With all the caveats of a relatively small number of patients, we're intrigued and encouraged that the first nine patients on the study treated with the lowest doses of CUE-101, have a median overall survival of greater than 12 months. We continue to follow patients in our later cohorts. And of course, this will be an important metric to follow in our recommended Phase II dose cohort as we finish accrual and monitor these patients. Our clinical trial protocol amendment for the expansion phase now cleared by the FDA since the last earning call, allows for patients to remain on study an investigation investigator discretion if they demonstrate radiographic progression but are clinically stable. It furthermore adds measuring response by iRECIST to the exploratory endpoints and also allows the collection of data regarding follow-on anticancer treatments patients may receive to gain further insights into our survival observations. I will now hand the call over to Ken to summarize our registration strategy.

Thanks, Matteo. We believe that these exciting clinical observations and the observed support of our PIs who continue to accrue patients to the study provide supporting evidence that CUE-101 is an active agent with promising potential for HPV-positive head and neck squamous cell carcinoma patients, and our emerging data opened several potential options for a registration path. First, we will be able to perform a registration study as a third line therapy for HPV-positive head and neck cancer as shown on Slide 21. There may also exist an option for second-line therapy in CPS score patients less than 1, who are not eligible for pembrolizumab. Second, also shown on Slide 21, we will continue to perform our study in first-line HPV-positive head and neck cancer in combination with pembro as a potential registration path. Third, we will be initiating our neoadjuvant study at Washington University, St. Louis, with the intention to demonstrate the value of CUE-101 treatment in patients prior to primary treatment. Fourth, we plan to initiate an adjuvant study at Johns Hopkins in 2022, with the goal of demonstrating the value of CUE-101 with pembro in patients at high risk of recurrence. At this juncture, I turn the call back over to Anish for a brief synopsis regarding the expansion of our drug candidate pipeline based upon the CUE-100 series framework. Anish?

Thanks, Ken. As conveyed throughout this call, the data emerging from our ongoing monotherapy trial of CUE-101 support the design of the IL-2-based CUE-100 series, which can selectively modulate tumor relevant immune cells to enhance therapeutic benefit and circumvent IL-2 toxicities. A key strength of the Immuno-STAT platform is its versatility and modularity with respect to swapping different tumor-derived T cell epitopes to change the indication of interest. As an example, CUE-101 targets HPV E7-specific T cells, while CUE-102, our next clinical candidate, targets Wilms' Tumor 1 or WT1 specific T cells. As shown in the next slide, Slide 22, WT1 has been widely recognized as an attractive tumor antigen and is upregulated in numerous solid tumors and hematological cancers, including colorectal, pancreatic and AML amongst many others. Most of the molecular framework including the IL-2 molecules are identical between CUE-101 and CUE-102 with the primary difference being the 9 to 10 amino acid T cell epitope that is tumor specific. The next slide, Slide 23, highlights the preclinical data for CUE-102's ability to prime and expand WT1 specific T cells from human blood ex vivo and in vivo in transgenic mice treated with CUE-102. Also shown in the bottom panels of the slide are the data demonstrating poly functionality of WT1 specific T cells that were activated by CUE-102 and their ability to kill WT1 expressing target cells, both in vitro and in vivo. As shown in the next slide, Slide 24, it is our belief that our Immuno-STAT pipeline assets, including CUE-102 and CUE-103, which targets a mutated KRAS G12V T cell epitope have a significantly reduced risk profile and enhanced value potential due to the clinical observations of CUE-101. We have been deliberate regarding our development strategy wherein CUE-101 establishes a beachhead or a foothold upon which we intend to expand our drug candidate pipeline and our market potential. We believe this strategic vision allows us to harness the maximum potential of IL-2 in cancer immunotherapy. I will now hand the call over to Kerri to discuss second quarter financial results, and Dan will then return for brief closing remarks. Kerri?

Thanks, Anish. Turning now to Slide 25. I'd like to provide a brief update on our financial results for the three months ended June 30, 2021. The Company reported collaboration revenue of approximately $2.7 million and $1.1 million for the three months ended June 30, 2021 and 2020, respectively. The increase of $1.6 million was primarily due to additional research and development and contract manufacturing activities in preparation of an investigational new drug filing for CUE-102, our second drug product candidate from the IL-2-based CUE-100 series, which is planned for the first quarter of 2022. Research and development expenses were $8.8 million and $8.1 million for the three months ended June 30, 2021 and 2020, respectively. The increase was primarily due to an increase in laboratory and drug substance manufacturing costs as well as clinical expenses. General and administrative expenses were $4.3 million and $3.9 million for the three months ended June 30, 2021 and 2020, respectively. The increase was due primarily to stock-based compensation and legal fees incurred during the second quarter of 2021 as compared to the same period in 2020. We ended the quarter with approximately $73.9 million in cash and cash equivalents and working capital of approximately $63 million. We believe our cash and cash equivalents as of June 30, 2021, will allow us to support the development of our Immuno-STAT platform, including the clinical development of CUE-101, well into the fourth quarter of 2022 I'll now turn the call back over to Dan for closing remarks. Dan?

Yes. Thanks, Kerri. In conclusion, the observation of clinical activity of CUE-101 as a monotherapy in this challenging and heavily pretreated patient population is, in fact, an important step forward. It supports the potential of not only our CUE-101 drug product candidate, but also for a follow-on drug product candidates as well, such as CUE-102, CUE-103, from the IL-2-based 100 series, providing valuable proof-of-concept of the Immuno-STAT platform to activate and expand cancer-specific T cells and NK cells directly in the patient's body, as a method to treat a myriad of cancers. We believe the data continuing to emerge from our ongoing CUE-101 trial supports the premise that our approach has, in essence, created the next-generation solution to utilizing IL-2 as a targeted and selective immune activator for treating cancer. Furthermore, we believe the data demonstrates clear competitive advantage over other modalities and provides Cue Biopharma and its shareholders with a strong foothold upon which to further demonstrate, expand and establish this competitive positioning. We continue to execute our corporate strategy in a focused and deliberate manner, with the aim of demonstrating clear competitive advantage and market positioning of the Immuno-STAT platform and associated programs. We have successfully executed our stated corporate objectives throughout the year, and believe the CUE-101 monotherapy trial provides a potential registration path forward as a single-agent therapeutic. And the combination trial with KEYTRUDA provides the prospects to enhance patient reach and market size by moving upstream to frontline patients, where we anticipate the potential for significant mechanistic synergies as demonstrated in our preclinical studies. We look forward to providing trial status updates on a going-forward basis. Finally, we'd like to thank our employees whose dedication to our mission through their commitment and professionalism allows us to continue executing our corporate development strategy, even through the past year with trying times with COVID. We would like to thank our Board of Directors for their support and guidance and want to thank our shareholders who provide us with the essential resources to continue our important work, developing promising therapeutic candidates for patients in need. We thank our principal investigators and staff at our clinical sites. We remain excited about CUE-101 and are enrolling patients in our studies. Most importantly, we want to thank the patients themselves and their families involved in the clinical trials. Their courage and willingness to be part of a clinical study allows us the opportunity to assess potential drug activity and assess the potential for therapeutic benefit of our promising drug candidates. Thank you very much for your attention and interest, and I'd like to now turn the call back to the operator for questions. Operator?

Thank you. We will now be conduction a question-and-answer session. [Operator Instructions] Our first question comes from Mark Breidenbach with Oppenheimer. Please proceed with your question.

Good afternoon guys and congrats on the progress. Just a few questions from me. First, with respect to the selection of your dose to take forward into the expansion cohort, I think I heard Ken mention that you saw a dose-dependent PD markers maxing out around the 4 mg per kg dose and then help you pick it. I'm just wondering, does that imply there was sort of a bell-shaped pharmacodynamic response? And did it actually get a little bit worse at 8 mg per kg? And if so, any speculation as to why that might be the case?

Yes. Mark, I'm going to let Anish take that question, but I just want to clarify. I mean, we went up to 7 cohort which was at 8 mg per kg. We didn't actually see a plateauing on PD, et cetera. It was the emergence of off-target activities that we felt since we had a therapeutic window emerging between 1 mg per kg and 4 mgs per kg. We would have better served to go with the cohort 6 dose, which was just much better tolerated. So I think that was the key metric. It wasn't that we saw the PD plateauing, but I'll turn it to Anish to elaborate.

Yes. I think that's right, Mark. Where we saw the signals clearly emerges around the cohort 4 dose, which have been subsequently continued to build on through 5 and 6 and have not -- we've not seen a bell curve. Certainly, when you look at, for example, broad changes in the NKs, which is a broad IL-2 sensitive population that tends to be very consistent at these high doses. And that, we thought, was very favorable for the choice of the RP2D. Similarly, as Matteo sort of mentioned in contrast, when you see the other end of a very IL-2 sensitive broad population vis-à-vis the regulatory T cells, T regs, we saw that transient uptick, but then return back to baseline. And we sort of made sense to us that there seems to be a really great window to be in.

Okay. That's helpful. And can you just remind us on the study if the patients were receiving prophylactic oral or IV fluids to prevent hypertension associated with vascular leak. Just asking because we've seen this approach used effectively in other IL-2 variant trials?

I'll turn it to Ken to answer that.

Very simply, they were not. There was no pre-medications, no prophylactic medications used.

Okay. Good. Good. And final question for me, just with respect to the other CUE-100 series Immuno-STAT. Do you see any risk that if there are higher baseline prevalence of, let's say, WT1 specific T cells, could that potentially translate to a narrower therapeutic window based on the different antigen specificity? And is there any preclinical evidence to suggest that you can safely dose different CUE-100 Immuno-STATs, targeting different tumors without seeing dramatic safety differences.

Yes. We don't anticipate that mark and that much of that is actually based upon some good preclinical data, including in, for example, with CUE-102 that targets WT1, we see the induction and expansion in HLA-A*02 transgenic mice as we showed in that slide, and we'll continue to expand upon this, as we release data towards for the rest of the year. That expansion is significantly higher when you compare it to, for example, what we could achieve with the E7 specific. I mean it could be E7 specific, but in this case, for whatever reason, the precursor frequencies and the baselines tend to favor WT1, and with no sort of observations, if any growth sort of safety or tolerability issues. So we think, again, coming back to how the IL-2 was selected, that it is quite relevant to the TCR-engaged population. And in this case, when you've got ranges where that population is skewed towards a higher abundance, again, that tends to be can be controlled quite safely, at least with the early evidence we have. So there's -- although we keep an eye out on that market, the data so far supports that we should be able to move in with a great degree of confidence.

Thank you. Our next question comes from Stephen Wiley with Stifel. Please proceed with your question.

Yes, good afternoon. Thanks for taking the question. Maybe just one on the update that you guys had mentioned was planned for SITC. Should we expect to also get some preliminary dose escalation data from the pembro combo cohort at that at that time as well?

Yes, Steve. Ken, do you want to take that?

Yes. Thanks for the question. I think we'll have some data to see about that as well as certainly later in the year. We've finished cohort 1. We're dosing cohort 2. So we're -- and we're following those patients. So we expect news, yes.

Okay. And then maybe if you could just expand a little bit on additional strategy that you're, I guess, now speaking to. And I guess, when you think about the path forward for monotherapy, how do you, I guess, juxtapose that approach, i.e., single-arm response rate-based endpoint versus something whereby you're looking at a comparator arm of maybe best supportive care or physician's choice of palliative chemo? And in addition to generating that response rate data, maybe having a backstop that is event-driven data of either PFS or OS, which seems to be encouraging at this point. And how do you think about the execution of something like that relative to just kind of the traditional monotherapy response rate based approach?

Well, a fantastic question and really perceptive. And we're clearly going to have to go to the FDA to get a sign-off on any trial we do. As you know, there is certainly no approved third-line therapy. So it would be our preference to certainly do a single-arm study based on clinical benefit rate as well as overall survival and just power it with enough patients, for example, just continuing on the expansion phase study and just power it that way. If the FDA requires us to do a comparator arm, I think it's going to be difficult because you'd be asking to randomize to sort of best supportive care or best palliative care, which is never very exciting for patients. And I think the FDA, as you know, struggling with what to do with single-arm studies right now, but there's also a general consensus that if patients don't deserve to be randomized to care, that is not going to extend their life. So I think we have a really good chance of doing a single-arm study, and we're going to go to the FDA with that idea.

Okay. And so when you speak to, I guess, powering a single-arm study for something like survival is -- would that be compared against a natural history arm? I'm just trying to understand what you would be powering against in the confines of it being a single arm.

Well, so again, a really good question. And I think if you look at the data from -- the survival data from single-agent pembro second line or any of the checkpoints second line in head and neck cancer. I think we'll be able to use those as a comparator, as a traditional comparator. And I believe that if we say that we're going to increase that survival by a significant percent that we will that will be compelling to the FDA.

This is Matteo. If I can also just add that a component of the regulatory strategy that's gaining further traction maybe to present to FDA, if there's pushback on just a single arm expansion, the use of real-world data or a synthetic control arm or at least a fractional synthetic control arm. So there are opportunities in this setting where it's really close to unfeasible to do a good randomized trial, where FDA will work with the sponsor to come up with powering of a sample size to esthetic control arm that's acceptable.

Thank you. Our next question comes from Tom Shrader with BTIG. Please proceed with your question.

Good afternoon and congratulations. I had one question on this interesting OS study or OS signal you're seeing in early patients. And if you want to -- if you're saving this for SITC, you just tell me. But is there any structure to that? Because didn't some of the earliest cohorts, patients got very little drug. So is there any correlation with this effect with patients that actually got significant amounts of treatment?

So thanks for the question. And what I can say is that, it's too early for us to talk about the later cohorts. We just don't have enough depth yet to know. So I think that is as good as the answer as I can give you. We were able to look at the first nine patients, even who got a whiff of drug, and we were able to sort of look very preliminarily at a median overall survival. We just don't have enough data on the later cohorts to talk about it.

Okay. And then a question on Slide 19, where you have this very long response where the patient has, I don't know, three months of stable disease. How literally can we take that line? How noisy is that? Is this really a patient that at 4.5 months, the tumor starts to dissolve further? And maybe for Anish, is there any mechanism you can think of that would do that? Would you ever see that with something like PD-1?

So firstly, I'll let Ken and Matteo answer to the clinical question, Tom, because these are all hard metrics. Ken and Matteo, if you want to just comment on the tumor measurements on Slide 19.

Yes. So thanks. Those are RECIST criteria. Those are measured at the site. So we have nothing to do with those measurements. And what we've seen is that with the latest measurements that the tumor shrank even more than previously. This is a patient that we're following two lesions in, and we're seeing a response in both lesions. And certainly, Anish can talk about the biology of that, but it -- again, with immunotherapy as it has time to work. You have a balance of necrosis, fibrosis as well as killing of tumor cells going on. So I'm very encouraged, and this is one of the reasons why we really wanted to keep patients on study who were having some clinical benefit to give them time to have potentially these kinds of results come in. So, I feel really justified in putting that amendment in to allow our investigators to keep patients on even though their tumors are equivocal, but if they're clinically benefiting. Matteo, do you want to add anything before Anish talks?

No, I think that covers it quite well. With regards to the mechanism, I think we're learning more and more that different immunotherapies have a kinetic monopost or treatment effect that's a bit more prolonged or unique. And again, we could hypothesize that there's amplifying loops of increases in T cells that are E7 specific that occur as the tissue as the tumor is being killed and as antigen goes into the antigen presenting compartment and then restimulates in the T cells. But again, it's just very reassuring to see a deepening confirmed objective response in this patient.

So Tom, just mechanistically, there's several axes, we believe could be operational, which is why I sort of tried to highlight. As you see in this patient in the first scan, which is six weeks after two doses, you see about a 45% to 48% reduction in that range, which is now reaching 60 -- close to 60%, patient is being dosed every three weeks. We see a nice uptick of E7-specific T cells. But one of the reasons we highlighted NKs as you have, the chronicity of the immune system and the response set in. And other elements could be operational, including T cells, including NK cells, including the fact that the IL-2 is active in tranche, which is one of the reasons I mentioned. There could be other antigenic determine and specificity that we may be influencing. And this is one of the reasons, Tom, because of this kind of observation and the histology that Matteo showed you with the granzyme B positivity, pre- and post biopsy. But the neoadjuvant study becomes really, really exciting for us, where we will have tumor tissue from every patient, pre and post blood pre-imposed to be able to make these kinds of hard assessments including TIL infiltrates, including their specificities, the diversity and the phenotype. So we think there are multinodal operational elements of the Immuno-STAT platform that must be appreciated, and we've got to look at this with a wide sort of set of eyes here.

Thank you. Our next question comes from Brian Skorney with Baird. Please proceed with your question.

Good afternoon everyone. Thanks for taking my question. I guess I just have some questions sort of on how you guys think about patient selection. I mean starting with 101, based on the early data that you have so far, is there any sort of biomarker that kind of defines a subgroup that has some level of predictive response? And if not, is there any subgroup that you kind of think in the registrational pathway looks particularly attractive to targeting that you think it would be generally a more challenging subgroup because of that maybe has a lower hurdle, but you would still expect 101 to work well? And then likewise, with when you think about the CUE-102 program, obviously, there's a broad range of CUE mark indications applicable here, but we'd be doing any baseline screening to select for WT1 expression when you get that study kicked off? Thanks.

Ken, do you want to take that?

Yes. So I think at this point, we don't have a biomarker to choose. What I think the power of this is that I'm not sure we need one. I think that the mechanism of action is such that in delivering attenuated IL-2 stimulation right to the appropriate T cells aggregates the need to worry about subgroups of patients. And in fact, we really don't want to parse out them if we don't need to. And at this point, I don't see a need do that. We, of course, as the trial matures, and we're looking at data, for example, we'll be following patients for circulating tumor HPV data, the DNA. That may give us a marker of who might benefit and as well as how folks are responding and clearing that. And we've got some other biomarkers we're looking at also. But my hope is that we don't need one.

And for 102, Ken, do you want to just comment on the WT1 expression?

So yes, sorry. So again, for WT1, we'll be doing, again, HLA-0201 patients. And then we are working right now with the FDA and our IND filing to choose a very specific assay where patients will have some level of WT1 expression. Different studies that have used WT1 as vaccines, et cetera, have used different criteria for enrollment. What I can say right now is that we intend to have a very liberal enrollment policy as far as WT1 expression on the tumor tissue goes.

Thank you. Our next question comes from

I'd like to ask about the registration path you guys laid out earlier on the slide, particular for the PD-L1 negative patients. Just wondering what are you thinking in terms of getting the trial run in terms of trial design? And also, as far as I know, physicians usually use chemo to treat these type of patients. I wonder have you considered maybe combining your drug with chemo to run a frontline trial? Thanks very much.

Yes. So in the third-line setting, the patients will have received a platinum-combination therapy often with or without cetuximab as a first-line therapy or second-line therapy. Many of those patients in the adjuvant setting or neoadjuvant setting will have also seen a platinum 5-FU-based regimen. As you know, pembro with chemo is quite effective in first-line patients. And so what we're expecting is that in the third line setting and the second-line patient with CPS score less than 1, patients will have already seen chemotherapy. And again, there is no approved chemotherapy for second and third-line patients beyond the platinum-combination therapy, platinum or platinum combination therapies. So we're not in the short term, expecting to -- is certainly in second and third line, combine CUE-101 with chemotherapy at this point. What where we will explore with the FDA is -- and we don't know what they'll feel about this yet. But again, patients who don't have a CPS score greater than 1 are not eligible for pembro, it simply doesn't work. We do believe, however, given the mechanism of action of CUE-101 that our drug will be just as effective in those patients. And so, we would like to include them as part of a third line study and we will present that idea to the FDA, and we think that there's a good possibility they will allow that given all of the data I just heard all the things I just said. So that's our strategy right now.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

All right. Thank you. Thanks again for your attention on today's call. And as always, we look forward to providing further updates as data continues to emerge and stay safe. Thank you.