Greeting and welcome to the Cue Biopharma Fourth Quarter and Fiscal Year 2019 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.

I'd now like to turn the conference over to our host Ashley Robinson of Investor Relations. Thank you. You may begin..

Thanks Diego and good afternoon, everyone. Thank you for joining us on today's investor and analyst update call. Joining me on the call today are Dan Passeri, Cue Biopharma's CEO; Dr. Anish Suri, President and Chief Scientific Officer; Dr.

Ken Pienta, Acting Chief Medical Officer and Kerri-Ann Millar, Vice President of Finance and Principal Accounting and Finance Officer. Before we begin, I'd like to remind you that during today's call the company will be making forward-looking statements.

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 vary materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the Risk Factor section of the company's annual form 10K report filed with the SEC on March 12, 2020 as well as other filings made by the company to 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, March 17, 2020 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. These forward-looking statements should not be relied upon as representing the company's views as of any date subsequent to today.

Please be advised today's call is being recorded and webcast. I'd now like to turn the call over to Cue Biopharma's CEO, Dan Passeri.

Dan?.

Thanks Ashley and are good afternoon, everyone and thanks for joining us for a review of our progress and recent accomplishments. We hope everyone joining us on the call today is safe and well during these challenging times with the coronavirus situation.

As a reminder there is a slide deck that accompanies this call which is directly controlled by those listening and we will remind you of which slide we're on as we proceed. The slides we're presenting today as well as recording of our call will be available on our website for the next 90 days.

Also the Cue senior management team will be available via email provided on our website for questions not addressed during today's call. Slide three shows our agenda for the call today. I'll first provide an overview and update of our key accomplishments and will be followed by Dr.

Ken Pienta, our Acting Chief Medical Officer who will provide additional details and status update on our ongoing Phase 1 CUE-101 monotherapy dose escalation and expansion study in advanced or metastatic human papillomavirus or HPV positive head and neck cancer. Following Dr. Pienta's update, Dr.

Anish Suri our President and Chief Scientific Officer will further describe the progress of our platform convey the competitive differentiation of our IL-2 based CUE-100 series and highlight our pipeline including CUE-102 KRAS neo stat as well as a CUE-200 and CUE-300 programs latter in a collaborative partnership with Merck.

Our progress with all these programs highlights focused execution towards platform validation especially for the ongoing Phase 1 trial with CUE-101.

Following Anish's update, Kerri-Ann Millar Cue Biopharma's Principal Accounting and Financial Officer will review our current financial status and I'll then provide concluding remarks followed by a Q&A session. On Slide Four we show the current state of our evolving pipeline.

Our lead CUE-100 series is designed to selectively dip the liver in engineered IL-2 directly to tumor-specific T cells thereby avoiding systemic activation in IL-2 related toxicities. The modularity of this series allows us to target diverse tumors by utilizing different epitopes as well as distinct HLA alleles to expand global patient reach.

Our lead program within the CUE-100 series is CUE-101. It addresses a significant unmet medical need in human papilloma virus or HPV driven epithelial cancers such as head and neck squamous cell carcinoma.

Despite recent gains made by adoptive cell therapies and checkpoint inhibitors, new approaches in this field are needed that are not constrained by the challenges and deficiencies presented by current modalities.

We believe our Immuno-STAT platform provides the key advantages of ready to use off-the-shelf biologics for selective and controlled modulation of targeted disease-relevant T cells directly in the patient's own body without the need for ex vivo expansion or manipulation.

As previously mentioned Ken will provide further details regarding the progress of clinical development for this promising program.

In addition to CUE-101 we're developing CUE-102 which incorporates the Wilms tumor 1 or WT1 T cell epitope to target WT1 expressing solid and hematological cancers in patients expressing HLA A02 or A24 the latter being highly represented in Asian populations. We will define the target of CUE-103 in the near future.

Besides the CUE-100 series we've also established a CUE-200 series focused on cell surface signaling module such as CDAD or 4-1BBL which is an early discovery stages for treating chronic infectious diseases.

The application of immuno stats and chronic infectious diseases is presently being evaluated by our collaborators at the Albert Einstein College of Medicine. In addition to these programs we've made promising progress with our CUE-300 series focused on modulation of CD4T cells in autoimmune diseases.

As a reminder this is the focus of our collaboration with Merck who recently presented data from this important program at the Antigen Specific Immune Tolerance Drug Development Summit in February of this year. This presentation may be found on our web under Presentations and Events located within the Investors and Media section of our website.

Anish will elaborate upon these various programs later during the call, but now I'd like to briefly highlight some of our important accomplishments. Core to our strategic execution was the initiation of dosing in September 2019 for our first clinical study in patients with our lead program CUE-101 which is exemplary of our IL-2 based CUE-100 series.

This study is the first - I'm sorry, this study is in post first-line patients with advanced metastatic HPV positive head and neck cancer. As of today we're proud to announce that we have fully enrolled cohorts one and two and have dosed the first two patients for cohort three with the third patient dosing anticipating in the coming week.

To date CUE-101 has been very well-tolerated with several patients having gone through multiple dosing cycles and again Ken will provide further details in a moment.

I'm also pleased to share that we recently published a manuscript in a peer-reviewed journal of clinical cancer research detailing our preclinical research data for CUE-101 underscoring the mechanistic biology along with supporting in vivo and in vitro analyses which provides confidence and support for progressing this molecule.

For those interested the article can be found on our website with the URL embedded within the press release announcing the publication, which was dated January 21, 2020. Before I hand the call to over to Ken, I would like to thank and congratulate our development research teams for reaching these important milestones.

In addition we also anticipate that our preclinical work with CUE-102 and partnership with LG Chem and our autoimmune collaboration with Merck with the CUE-300 series will begin to demonstrate the potential breath and scope of our platform technology across cancers and autoimmune diseases.

Ken will now provide further details regarding our ongoing CUE-101 clinical trial Ken?.

Thanks Dan and good afternoon, everyone. I would like to first begin with a commentary on Slide Five regarding the quality of the 13 participating clinical centers and associated oncologists.

We're very honored and humbled to have such a premier group of participating oncologists working with us to assess the potential of CUE-101 for addressing the pressing unmet need of patients suffering from HPV driven head and neck cancer.

Our investigator's enthusiasm for the CUE-101 concept is reflected in the fact that to date we've had over 80 patients participate in our prescreening process to determine their eligibility for the trial.

Recognizing that current therapies are not or are rarely curative, we put into place a system whereby patients on first line or second line therapy for HPV driven head and neck cancer are prescreened by HLA type and confirmatory HPV status to determine eligibility for future CUE-101 therapy.

To demonstrate demand of patients for prescreening underscores the significant unmet medical need in this indication. Next on Slide 6, is a high-level summary of the design of our ongoing Phase 1 trial of CUE-101. As Dan mentioned we are very pleased with our progress of dosing patients in this trial and are highly encouraged by observations to date.

As a reminder the current trial is a monotherapy dose escalation study with the translational precision medicine approach, designed to provide insights into safety, mechanistic activity and potential antitumor efficacy.

We're enrolling the post first-line patients with recurrent or metastatic head and neck squamous cell carcinoma driven by HPV, specifically HPV16. This represents approximately 70% of all head and neck cancers occurring in the oropharyngeal region accounting for an estimated 13,500 patients annually in the US alone.

This Phase 1 trial is defined molecular inclusion criteria to include head and neck cancer patients that are HLA-201 positive and whose tumors are confirmed to be driven by HPV16.

Through these specific inclusion criteria, we are ensuring that only patients with the potential for clinical benefit are enrolled and treated, really signifying the precision medicine approach whereby each of our immunostat drug candidate is intended for patients with a specific molecular fingerprint.

Patient receive CUE-101 once every three weeks via IV infusion unless there is disease progression as evidence via scan patient are scanned once every six weeks or every two cycles to evaluate tumors status. The trial is a standard two-part study with the first Part A designed as a standard 3x3 monotherapy dose escalation.

However, we've also provided the opportunity to dose up to nine patients in any given cohort where we see evidence of clinical activity or PD effect. This strategy allows us to further explore peak APD effect as well as build supporting data for determining the most appropriate dose for the Part B expansion.

Based on the escalation phase safety, PD and efficacy data we will accrue additional patients at that dose level during the Part B expansion phase to confirm the recommended Phase 2 dose in a total of 20 patients.

Therefore, in summary both Parts A and B of the trial will evaluate the safety and tolerability of CUE-101 with biologic activity and antitumor responses also being followed.

The expansion cohort is designed to confirm the safety, biologic activity and antitumor activity at the effective dose in additional patient to provide further support and confidence as we move into later phases with more patients.

To evaluate on target activity we're measuring several translational biomarkers including T-cell expansion in blood and cytokine production by measuring antigen specific T cells. For antitumor activity we're looking for objective responses by resist criteria at six week intervals or after every two cycles of CUE-101.

I am very pleased to report that after initiating dosing of cohort one in late September last year, we successfully moved forward and began dosing cohort two in December and have initiated enrollment of cohort three over the past week.

I would like to remind you that we started building cohort one in what we believe should be a low biologically active dose based on our preclinical modeling. Based on this modeling, we believe that a clinically active dose may be achieved starting in cohort three or four.

Notably to date the six patient in cohorts one and two have received a total of 14 infusions of CUE-101 three weeks apart with no evidence of cytokine release syndrome.

Also of note as a second cohort, the molar equivalent of IL-2 in 101 is calculated to be slightly higher than the molar equivalent of the improved dose of proleukin, which is the wild type IL-2 molecule.

As of today one patient in cohort one and two patients in cohort two continue to be dosed as well as those that have recently been dosed in cohort three. We are highly encouraged by our early progress and observation including early evidence suggestive of biologic activity albeit anecdotal and highly preliminary.

We are presently on schedule to evaluate the first PKBD [ph] results for cohorts one and two in early Q2.

In addition to the ongoing monotherapy trial of CUE-101 in HPV positive head and neck cancer, we show in slide seven that we are planning to initiate a concurrent study to evaluate CUE-101 in combination with an anti-PD1 antibody as frontline therapy for the same indication in patients for HLA 0201 positive.

Our intention is to continue moving forward with the monotherapy trial for post first-line HPV positive refractory or metastatic head and neck cancer patient and enhance our patient reach by moving into first-line patients in combination with pembrolizumab or keytruda which is the current standard of care.

This combination study enables access to first-line metastatic HPV positive head and neck cancer patients to potentially enhance therapeutic benefits of anti-PD1 therapies. We intent to commence this trial in Q3 or Q4 once we've confirmed the safety of CUE-101 in the Phase 1 trial.

Furthermore on Slide 7 also shows that we have the option of evaluating CUE-101 in the setting [ph] in patients newly diagnosed with localized head and neck cancer.

And finally once we had established clinical proof of concept for CUE-101 in head and neck squamous cell carcinoma we may expand opportunistically into other HPV driving cancers for example cervical cancer. Before I hand the phone over to Anish I want to acknowledge that COVID-19 crisis is straining health systems across the country.

Cancer centers are actively prioritizing patients. As an active clinical investigator at Johns Hopkins myself, I'm taking part in these discussions as plans evolve dynamically. I'm also having discussions with our principal investigators across the country daily to determine how each academic center is reacting and evolving plans.

To date we remain on track and anticipate no negative impact. CUE-101 is currently classified as a tier 1 important treatment and our patients are being prioritized for therapy.

While this could change as the crisis unfolds, which could potentially slow our accrual, our investigators remain optimistic that CUE-101 patients will remain a priority for accrual and treatment.

In addition we're also working with our sites to allow more flexibility in seeing patients with some visits potentially being done by phone to minimize Covid-19 exposure. I'll now hand the call over to Anish to discuss other advances in our pipeline and platform..

Thanks Ken and thank you to everyone listening and I'd like to begin here with slide eight to reemphasize the molecular framework of the CUE-100 series.

The two key signals on the CUE-100 series consist of stabilized peptide HLA molecules to engage tumor-specific T cells and rationally engineered IL-2 molecules that selectively act upon those T cells.

The top-down view of the ribbon diagram of the CUE-100 series as shown here provide a good contextual perspective for the spatial engagement by T cells. Two notable modification to the IL-2 molecule are important for the specificity and selectivity.

The first abrogated binding to the IL-2 receptor alpha subunit to minimize effects on T Regs or regulatory T cells and the second reduced binding to the IL-2 receptor beta subunit such that the IL-2 activity is most evident only when the antigen specific T cells are docked to the specific peptide HLA complex.

We believe this framework has important ramifications on the ensuing biological T cell response in the patient. That is it maintains specificity and selectivity while avoiding the systemic toxicity associated with indiscriminate IL-2 dependent activation of many different cell types.

Slide nine exemplifies what we believe to be the superior differentiation between our IL-2 based CUE-100 series and other IL-2 modalities. Shown in the slide are different T-cell subsets in the broad expression of the IL-2 receptor subunits.

Tea regs constitutively express the highest affinity IL-2 receptor composed of the three subunits alpha, beta and gama. While most of the effective cells express the IL-2 receptor beta and gamma subunits. As shown in the left panel wild type IL-II which is an approved drug is important activator of all T cells.

This results in not only does limiting toxicities, but also enhances expansion of immunosuppressive T regs that are detrimental to the antitumor immune response. Moreover indiscriminate activation of the polyclonal effect of T cell repertoire is not desirable since the vast numbers of these T cells have no relevant or specificity for tumor antigens.

If and that is an assumption we have to make the patient have primed in antitumor T cell repertoire than they could perhaps gain some benefit from this systemic therapy. This is the likely case with a minority of patients that can tolerate IL-2 and exhibit clinical responses.

The middle panel here depicts the non-alpha IL-2 variants being developed by a number of pharmaceutical and biotech companies with the objective of only stimulating effect of T cells and T regs.

However, the challenge here again is that the non-alpha IL-2 variants would act indiscriminately upon all effect of T cells wherein the majority of these T cells are not directed towards the tumor. Moreover, we have to make the assumption that the patient must have a pre-primed and expanded antitumor T cell repertoire to gain meaningful benefit.

In contrast, the right panel highlights the CUE-100 series wherein the IL-2 is selectively focused on the tumor-specific T cells and because of the rational engineering the IL-2 component has little to no effect on T regs or irrelevant non-tumor effect of T cells.

The co-molecular structure possesses the key signals needed to prime and expand the right T cells especially in patients where such populations were not optimally expanded. This allows us to address several key aspects of the desirable antitumor T cell response. One, the ability to focus IL-2 on the T cells that matter.

Two, enable priming and activation of the desirable T cells and three, accomplish all of the above while not compromising patient safety. Slide 10 highlights our immuno oncology development strategy to exploit the fullest potential of the CUE-100 framework.

CUE-101 provides us with the foundational proof of concept and an indication of unmet medical need. Furthermore, CUE-101 is positioned to potentially derisk the IL-2 based CUE-100 series.

As noted before a key strength of the immunostat platform is modularity and flexibility that allows us to target different tumor antigens along with distinct HLA alleles for global patient populations.

This is evident from our current ongoing work with CUE-102 and beyond where we have focused on tumor antigens like Wilms tumor 1 or WT1 and K-ras and have initiated programs with additional alleles besides HLA IL-2.

These into HLA A24 and A11 both being dominant in Asia which was the primary impetus for our LG Chem partnership for our first three programs. We've made strong progress with our CUE-102 programs and have generated pilot data demonstrating ex vivo expansion of human T cells.

These data was accepted for presentation at the Keystone Advances in Cancer Immunotherapy meeting in March and at AACR in April. Unfortunately, in light of the current coronavirus situation both these meetings have been canceled. We will look forward to other avenues and forms to disclose these promising datasets.

We've also evolved the platform called Immuno-STAT which greatly accelerates our scalability in generating new clinical candidate. The Immuno-STAT framework specifically increases our productivities and efficiencies both from a time and cost perspective.

Furthermore the Immuno-STAT platform enhances our versatility by allowing us to target multiple tumor antigens including post-translational modification and personalized neoantigens. Let me move on to slide 11 to talk a bit more about the Immuno-STAT platform.

The key advancement here is the fact that we can generate the entire CUE-100 series scaffold without any specific peptide attached to the HLA molecule.

This is in contrast to our current Immuno-STAT platform where the each T-cell epitope is an integral part of the Immuno-STAT meaning it is incorporated into the molecule as a fusion protein at the time of synthesis. Immuno-STATs and synthesized without a peptide epitope.

Instead the peptide epitope is attached subsequently using sophisticated attachment chemistry as shown in the current figure we have examples of three different peptides bound to the Immuno-STAT scaffold.

This advance allows us to generate the core genetic scaffold for any HLA allele via a single cell line and then use the same product to conjugate a different tumor antigens to expand our reach. The fact that only a single scaffold needs to be generated will save us significant resources in both time and cost but generation of clinical grade material.

We've generated early proof of concept supporting the biological activity of molecules generated via the Immuno-STAT platform and have disclosed these foundational data during a recent talk at the world vaccine and immunotherapy congress meeting in December 2019 in San Francisco.

Finally in my last few minutes, I'd like to share with you the early results of our collaboration with Merck in the development of Immuno-STATs for the treatment of autoimmune diseases. Slide 12 depicts the importance of immuno homeostasis and how selective modulation via the Immuno-STAT platform may help restore immune balance.

While much of the data we've discussed has been on selective enhancement of antitumor T cells for cancers the same principle essentially in reverse applies to autoimmune diseases wherein selective targeting of the pathogenic auto reactive T cells can be accomplished using immunoregulatory signals.

For this program as shown in Slide 13 we generated an Immuno-STATs using the human HLA class 2 molecule HLA DR 0401 or DR4 which is associated with type I diabetes.

The Immuno-STAT molecule as shown in the left panel was made with a known epitope of proinsulin and autoantigen in type I diabetes along with the native BD1 molecule for selective down regulation of proinsulin reactive T cells.

This Immuno-STAT was tested for its ability to reduce expansion of proinsulin specific T cells from two different type I diabetes donors. As shown in the graph on the right, the T cells can be expanded with the pathogenic peptide stimulation as represented by the yellow and blue bar graphs.

However, in the presence of the proinsulin Immuno-STAT, this robust expansion is significantly reduced. As a control and irrelevant GAD65 peptide Immuno-STAT had no effect of T cell expansion. GAD65 is another autoantigen in type I diabetes.

We then examined this relationship in vivo by using HLA DR4 transgenic mice which express the same human HLA DR4 molecule. As shown in the following Slide 14 DR4 transgenic mice can be immunized to generate T cells. In this experiment they were immunized with a proinsulin peptide and an epitope from hemagglutinin or HA which a flu virus protein.

The left panel shows the T cells to both antigens can be generated after immunization as measured by interferon gamma spot responses that are indicative of antigen specific T cell. Black lines show proinsulin specific T cells while dotted blue lines show hemagglutinin specific T cells or HA.

The same experiment was performed in mice treated with a proinsulin Immuno-STAT as shown in the right panel. As you can see the proinsulin Immuno-STAT selectively inhibited the proinsulin specific T cells shown in red while having no effect on the HA specific T cells.

These results support two key conclusions; one, that the Immuno-STAT framework can be deployed to selectively dampen autoreactive T cells and two, that this can be accomplished without compromising protective immunity as evident with the surrogate HA specific T cells in this case.

Current therapeutic approaches deploy broader immune suppression for treatment of autoimmune diseases. This tact runs the risk of making the patient susceptible to infections and malignancies.

The world today unfortunately as evident from the current coronavirus infections is best served wherein individuals and patients are not broadly immune-compromised to address symptoms of chronic autoimmune and inflammatory diseases.

To that end selective modulation via innovative approaches such as the Immuno-STAT platform may provide superior benefit.

In conclusion and as I've stated in prior presentations the Immuno-STAT and by extension the neo-stat platform address a fundamental and important immunological problem which is how does one maintain selectivity and specificity of a desirable immune response without breaching patient safety or creating toxicities.

We believe our approach built upon rational protein engineering, which is bolstered by supporting datasets may offer a unique solution to patient suffering from cancers, autoimmune diseases and threat from chronic pathogenic infections. With that I'll now turn the call over to Kerri to review our financial results.

Kerry?.

Thank you, Anish. On Slide 15 I would like to provide our financial results for the fourth quarter and full year ending December 31, 2019. We finished the year with approximately $59.4 million in cash and cash equivalents $61 million in total assets and working capital of approximately $49.4 million.

During the fourth quarter of 2019 we extended our cash runway with $33.3 million from our aftermarket equity offerings to Stifel Nicolas and Company who acted as sales agent.

During 2019 we received approximately $49 million in total net of commissions paid to Stifel from these sales agreement which has positioned us well to progress our Immuno-STAT platform in 2020. Revenue generated from our collaborations with Merck and LG Chem in the fourth quarter of 2019 and 2018 was $1,331,000 respectively.

Research and development expenses were $6.9 million for the quarter ended December 31, 2019 as compared to $7.3 million for the same period in 2018.

This decrease in research and development expenses was due primarily to a decrease in drug substance manufacturing cost as our full clinical supply for the CUE-101 phase 1 monotherapy trial was manufactured during 2018. The decrease in manufacturing cost was offset in part by clinical trial expenses incurred during the fourth quarter of 2019.

General and administrative expenses were $3.1 million for the quarter ended December 31, 2019 as compared to $5.3 million for the same period in 2018. This decrease in general and administrative expenses was primarily due to a decrease in stock-based compensation expenses and legal and accounting fees incurred in the fourth quarter of 2019.

Revenue generated from our collaborations with Merck and LG Chem for the full year ending December 31, 2019 and 2018 was approximately $3.5 million and $1.1 million respectively. Research and development expenses were $27.5 million for the full year ending December 31, 2019 compared with $28.5 million for the full year in 2018.

This decrease in research and development expenses is due primarily to a reduction in headcount and operational efficiencies realized during 2019. General and administrative expenses were $12.7 million for the full year ending December 31, 2019 as compared to $11.3 million for the full year in 2018.

This increase in general and initiated expenses was primarily due to an increase in headcount and legal fees related to our patent filings in 2019. Cue Biopharma continues to be well positioned to support the development of our Immuno-STAT platform and associated pipeline including the clinical development of CUE-101.

Based upon our forecast which includes further buildout of our ongoing clinical studies, our current cash position is estimated to take us into the second quarter of 2021. I'll now turn the call back over to Dan for closing remarks.

Dan?.

Yeah thanks Kerri. Since our last call we've made significant progress across the platform and have achieved our stated priority goals and objectives for moving our platform and associated programs forward as shown in slide 16.

We are now strategically very well positioned with our lead program CUE-101 currently in a clinical phase 1 dose escalation trial.

This program is exemplary of the IL-2 based CUE-100 series and as such supporting data from these studies represent potential therapeutic validation for our patients as well as substantially derisking and value inflexion for our shareholders.

With CUE-101 now being dosed at what could be biologically active and clinically relevant levels, we believe we are very well positioned to establish Cue Biopharma as a differentiated leader in the immunotherapy space as a potentially disruptive breakthrough therapeutic platform.

Our key accomplishments as covered during this call are noted on Slide 16 and I'd now like to provide some guidance on the upcoming 2020 milestones. These include in the second quarter of this year we expect to obtain PKPD results from the early cohorts from the ongoing Phase 1 CUE-101 clinical trial.

Also in the second quarter of this year we're guiding to select and announce the target for CUE-103. In the second half we expect to evaluate clinical responses in our ongoing Phase 1 CUE-101 trial via resist criteria.

We expect to initiate a trial with PD1 inhibitor Pembrolizumab in frontline HPV positive head and neck squamous cell carcinoma and also in the second half we're planning to initiate and extend IND enabling activities for Q102 we expect to generate data supporting the premise of our neo-STAT platform for enhancing our productivities inefficiencies as well as support manufacturability and we expect to develop datasets to identify potential clinical candidates from our CUE-300 series as Anish just reviewed for treating autoimmune diseases in collaboration with Merck.

With that I'd like to thank our employees for their hard work and commitment to advancing our platform forward and bringing our first drug to patients in need. I'd also like to thank our shareholders and your continued support in helping us realize Cue Biopharma's potential.

We look forward to providing further updates as we continue to advance our programs and thank you for your continued support. I'd now like to open the line open to questions.

Operator?.

Thank you. [Operator instructions] Our first question comes from Stephen Willey with Stifel. Please state your question..

Good afternoon. Thanks for taking the question and congrats on all the progress on the products. Just a quick question regarding some of the PD data that we might be seeing next quarter.

I know that you talked about proportion of antigen specific CD8 positive T cells as being one of the key biomarkers and presumably you will be carrying those as a function of post treatment biopsies.

I guess with the understanding that the confidence intervals around these counts are obviously inherent heterogeneity sampling but just curious as to what proportion of the antigen specific CD8s you would like to see in these posttreatment biopsies and some of the preclinical data that was recently published that you mentioned.

I think there was an observation that you saw more than 50% of tumor infiltrated as being characterized as such.

So just curious if you can maybe give us maybe a lower bound of what you're hoping to see in the PD data?.

Yeah Steve thanks for your question this is a Anish and I'll take that all. As you well noted the fact that one can see expansion of antigen specific T cells is mechanistic proof that the platform and the molecule is doing what is intended to do. What has been not formally establish and set in stone are hard quantitative numbers.

However, what we do know from experience in immunotherapy both from cancer related and infectious immunity related is to look at the qualitative aspects, which is one is the phenotype of the tumor-specific T cell repertoire, they expressing effect of molecules and cytokines, of a positive or catalytic granules.

All of those in the preclinical setting which you referred to in the recent paper Steve is what we sought to confirm and demonstrate in that situation with the TC1 tumor model we did and didn't see a robust infiltrated in the tumor in high percentages as you noted, but I think more to us it would be to qualify the presence of these T cells in patient samples but importantly to make sure that they are qualitatively of the effect of phenotype that we would desire including these sorts of markers interferon gamma, TNF alpha, positive for some of the catalytic granule markers indicative that they have all the right bearings of a potent tumor T cell..

Okay. So it will the council of functionality..

Exactly, we'll take both into account exactly right..

Okay.

Maybe just a question for Dan, I know that you've been exclusive with Merck on the AI front for a while now and I think that curative activities and perhaps now over I guess just whether or not you expect AI to kind of become a focal point of BD activity here going forward and maybe you can kind of speak to some of perhaps initial conversations you had around the enthusiasm for being able to selectively dampen our reactive T cells without the broad-based immunosuppression that Anish referenced in his opening statements thanks..

Sure appreciate the question and it's an important question for our business model. We're focusing our resources principally in the immuno oncology space presently. So obviously having AI as a potential monetizable class of assets is important as we go forward. As you characterized it Merck had, let me be explicitly definitive here.

Merck has an exclusive license to do indications. They've disclosed in their recent presentation one of those indications as type I diabetes. We're not able to disclose the other indication presently.

They were early on when this was basically a thought experiment and their capital helped us establish the dataset that showed the potential of this platform for addressing autoimmune disease.

So we had agreed when we entered the relationship for a two-year forbearance that we would not communicate any of the datasets publicly or to potential additional partners. That forbearance period is now expired.

So we are free to talk to other companies and those discussions have recently been engaged upon and we're having quite a bit of interest looking at that platform as well as what we're doing in the immuno oncology space.

So it is important to our overall growth as a company to have a class of assets that we could view as a partnerable group while we focus on our core strength, which is protein engineering in the IO sector..

Our next question comes from with Boris Peaker with Cowen and Company. Please state your question..

My first question is on just the CUE-101 dose ranging studies. Now normally in oncology and traditional approach is to ramp up to maximum tolerated dose and then just those expanded that level further.

I am just curious in this particular scenario with IL-2 being the active component, what is the dose ranging strategy? How far do you want a good dose and the thoughts on the dose expansion..

Hi yeah this is Ken.

Thanks for the question what we believe is because of our delivery method of our attenuated IL-2 we don't necessarily expect to see IL-2 type toxicity and we are actually we may not see a dose limiting tox, which is why we've built using a Bayesian approach to be able to as we see PD effect at various dose levels expand those dose levels up to nine patients so that we can better understand if we're not seeing toxicity what is the dose that we should pick to move forward in the expansion phase.

So we've sort of built in two approaches. One is the standard 3x3, can we see it as a dose limiting toxicity and we're prepared to go up to eight or nine cohorts if we need to, but we also are thinking we might not see that and we don't want to sort of dose indefinitely.

So that's why we've built in these extra patients that we can use to study at various lower dose levels.

Does that make sense?.

Got you. Okay.

I guess an extension of that question maybe my second and the last question is for the data update that we anticipate for CUE-101 the dose ranging study later this year, what should we be expecting in terms of efficacy?.

Well this is Ken. Thanks again for that question that's obviously the big question and we're hoping that we're going to see clinical activity in the form that meets resist criteria as well as when we see that activity to see matching PD effects..

Our next question comes from Mark Breidenbach with Oppenheimer & Co.. Please state your question..

Hey. Good afternoon, guys and I hope everyone is staying healthy.

Dan maybe I'll start with a quick one for you possibly for Ken as well, first of all is it safe to assume that the initial PKPD and biomarker data will be delivered via a press release and conference call given the absence of medical meetings and I'm curious if within that biomarker data you'll be specifically looking for any signs of T cell energy and/or exhaustion that we might get ahead of weather not that's going on in that initial readout..

Sure so I'll take the first shot at this and welcome Anish or Ken if they want to add anything to it.

So regarding the form means by which we'll communicate you are correct in lieu of the conferences being postponed or are canceled we would likely communicate that via our own internal mechanisms which would be potentially a press release, conference call, we will certainly put it on our web.

So we'll be prudent on when we gather that data and how best to disseminate the information. Regarding the issue of looking at the phenotype of the T cell I think that's part and parcel of what we're going to be evaluating.

As Anish stated we'll be looking at various markers outside [ph] capability but also their characteristic as to whether they're in energy or not..

And maybe a quick follow-up for Anish looking at the architecture of CUE-301 I am wondering if you can just walk us through the challenges unique to building a Class 2 NHC into an Immuno-STAT is manufacturing very different from one of your CUE-100 products and just the neostat platform extend the NHC class two products.

Is there the compatibility there. Thank you..

Thanks Mark. Great question actually on the very basic mechanistic and platform centric activities.

So just so everybody is on the same page and Mark I just want to make sure people appreciate the CUE-100 series is based on HLA class one, which mostly focuses on CDH and while as Mark referred to the work that we've done with Merck focuses on HLA class two which allows us to now target and drug selectively CD4T cells in autoimmune diseases.

As we've known from historically Class one has been easier to work with compared to class two HLA and last year when we had made the announcement that we had some early proof of concept molecules using HLA class two this was a significant leap forward in the field.

So the class two design follows a very similar concept Mark in terms of protein engineering and expression which is again built off in this iteration of again a two class system in mammalian cell expression.

We continue to refine the core framework and looking at other optionality there and that's an active part of our collaboration with Merck in terms of the way the peptide is latched in there is no beta to them. This is directly to the HVA Class 2 beta chain. The peptide lends a different thank HLA class one.

So we spent a lot of time looking at the engineering components as well as the spatial organization to come up with this first prototype in which you are seeing the activity.

Moving on to the neostat side of things, we again made a lot of progress with the neo-stat scaffold with HLA class I using the core CUE-100 base CDs which deploys IL-2 as well as the class 1 HLA and the future thinking as we continue to learn more about the neo-stat is to deploy that and understand the applications with Class 2.

That experiment so far has been a thought experiment but the intentions in the future are again to build off our protein engineering expertise to explore that in the future at some point as well that allows us than to modulate both the level of CD4 across autoimmune diseases but also bringing back some of those nuances for cancer immunotherapy and infectious disease as well..

Our next question comes from Reni Benjamin with JMP Securities. Please state your question..

Thanks for taking the questions and congrats on all the progress.

I guess just to maybe start off with the combination setting frontline can you talk, can you give us some thoughts on how that trial will be designed, how many patients are you thinking about just a straight combo or are there other various sequences of the administration of the drugs that you're thinking about and on top of that have you thought about a potential combination with chemoradiation especially in a setting like head and neck..

Yeah hey thanks for that question. Obviously this is Ken. So the trial as we've initially designed it is a three by -- starting out as a 3x3 dose escalation. We intend to likely start with our third dose level and then ramp up to make sure we have safety and then we'll do a classic expansion.

So we're really actually looking only looking for a total of 20 patients in the initial 20 patients at a given dose level once we reach it as we start -- as we do that first trial. And then we are thinking yet about changing sequencing.

We're giving the two drugs together and then basically we have thought about and have talked about of course adding -- doing a further trial down the way with chemo as more data is learned about pembro with chemo and but we haven’t put that on our list yet because we want to see what we're going to get from the combo study, but we're clearly thinking about it..

Got it. Thanks Ken and then I guess just a broader question, just given your platform in combating and addressing T cell energy and I guess there have been recent articles as well suggesting that infectious diseases such as Corona may in fact impact T cell energy.

I wanted to get your thoughts on the potential to build out a pipeline beyond oncology and autoimmune either by yourselves or with potential partners. Have you guys looked into that at all and what your thoughts are regarding this platform and infectious disease..

Yeah thanks Reni. This is Anish it's a great question is something we have thought about that is there is a direct potential application for the platform for chronic infectious as you referred to.

In fact a lot of our early pilot experiments prototyping the molecules themselves utilize known virus epitopes including ones from CMV and some of this date is a part of the recent paper that we just published.

Dan mentioned earlier that we continue to work in chronic infectious diseases in collaboration with investigators of the Albert Einstein College of Medicine. As you specifically look at cases for T cell exhaustion or reversal of T cell antigen including possibly some early data that is evident from the current COVID-19 situation.

We think we have an opportunity here. We've focused and deliberate discussions internally.

We've had some early discussions with some external partners as well as core part of the strategy to make sure that a potential of a disruptive platform like this is just not limited to our current capacity but in future we're able to really deploy this in a meaningful manner for patients for benefit across diseases particularly on the infectious side..

Perfect. Thanks for taking the questions..

Our next question comes from Madhu Kumar with Baird. Please state your question..

I had a question for Ken. Maybe there are observation that were highly encouraging from the 101 dose escalation to date. Are there any specific observations you can kind of point to as being particularly encouraging..

Yeah. Thanks for the question.

At this point everything I'm observing of course is anecdotal and preliminary but what I can say is as I as an oncologist and what my investigators are also seeing is that we're really pleased that patients remain on trial and are being actively dosed even at some of these lower doses and that suggests us -- that very intriguing to say the least and that's all I'd like to say at this point but I really am and we all are encouraged by what we're seeing..

Okay. And also contractually what has been the first-line therapy for patients in the trial to date? Has it been PD1 blockades something else or mix of the two..

So thanks for the question. What I can tell you is that all the patients today have received both platinum-based chemotherapy as well and checkpoint, so they’ve received both..

Okay. Great and then one last question on the cash related to Q '21 what level of clinical development for 101 and other programs is that one way assume..

Yeah so I'll like a shot at it and ask Kerri to elaborate if it needs elaboration.

So Madhu the current forecast is based on our ongoing activities in terms of 101 monotherapy dose escalation as well as the potential for expansion cohorts up to the nine patients and it includes the combination study and it also incorporates the existing partnerships that we have in terms of both on immuno oncology with LG Chem which is our partner for Asia on 101 through 102 and 103 and it let's just say the base level of activity we have now in autoimmune if that's moving towards the potential of a candidate in proactive that would go internally within Merck.

So for autoimmune to expand that would either increase our burn radar would require an additional partnership..

Okay. And I'll squeeze in one last one in. Thinking of the 101 program ahead of other HLA alleles what single would it take for you to go to LG Chem to work on building a 101 molecule to use as a HLA allele type if non Q102..

Sure.

So that's a key focus of Q102 program where with WT1 we are prosecuting on AO2 as well as an A24 which is the dominant -- one of the dominant allele in Asia and the optimality and opportunity of going for targeting 101 which is the HPV specificity on other HLA alleles is still very much on the table and I think as the recent data starts to emerge from the clinic that's a discussion that is very much live and is an area of focus for our partnership..

Our next question comes from Tom Shrader with BTIG. Please state your question..

Hi this is Terry [ph] for Tom. Thanks for taking my question.

I just have a couple for Q301 what type of type one diabetes patient population you think your approach will be most relevant two?.

So as we think about the specificities, these are obviously in early stages where the raptors is relatively still narrow or even zero positive at-risk individuals where you can track these cells and selectively modulate.

This specificity in particular has been tracked in both at-risk and T1D patients and we believe that is a sweet window in terms of if you think about strategies for disease, intervention of disease, interception before frank late stages of hypoglycemia that may be a significant opportunity in the patient population..

And for Q101 curious to know what are the other indications where you could expand that program?.

Thanks for that question. The most obvious is cervical cancer but it's really any HPV driven cancer for example renal cancer and penis cancer are both tend to be HPV driven. So really we could have it should work in any HPV driven cancer and again the other three big ones are cervical, anal, penile..

Got it. Thanks for the color and congrats on the quarter..

Thank you. That concludes the question-and-answer session. I'll turn it back to Dan Passeri for closing remarks. Thank you..

Okay. Thank you, Diego. We want to thank everyone for your attention on the call today and particularly a little of all of the activity and focus on the coronavirus situation. So really appreciate your attention and please stay safe and look forward to providing you with additional updates during the quarter upcoming quarter. Thank you very much..

Thanks. This concludes today's conference. All participants may disconnect. Have a great evening..