MRSN - Earnings call transcript Q4 2018 | Mersana Therapeutics, Inc.

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Operator

Good morning and welcome to Mersana Therapeutics’ Fourth Quarter and Full Year 2018 Conference Call. Currently, all participants are in listen-only mode. There will be a question-and-answer session at the end of this call. I would now like to turn the call over to Sarah Carmody, Director, Investor Relations and Corporate Communications. Please proceed.

Sarah Carmody

morning. Good fourth year Mersana’s conference and quarter to XXXX full call. Welcome which this a XXXX our updates, on press issued morning call. results be this release business year We full earlier reviewing covered and fourth and will quarter available replay and the Media A website. Investors our on will of today’s call of be section open prepared will for the our After we Q&A. call remarks,

facts longer early publicly, federal currently we could and the Mersana’s new I’ll plans call and becomes future and XMT-XXXX law, filings. on Officer. implementation our product company statements trials schedule, more XX-K results statements Report to future. on without including for Quarterly That on to within forward-looking candidate not the turn Annual on and materially, than the update forward-looking and/or planned XX-Q company’s obligation begin, Report Executive of will filed encouraging call contain are of clinical discussed the SEC that, not on not These XX, actual March platforms even management’s Anna and necessarily and information Form our on I’d over company’s Before if based or are with uncertainties as filed company’s the company’s are results meaning are programs be to like Except to the that securities completed assumes with risks Form all. and or of filings SEC pre-clinical beliefs cost the will at company’s our if of ongoing XX, by and that are and Protopapas, development take These required the the of our to identification and predictive will in November the in statements risks limitations Chief XXXX, results historical available. mention subsequent including of that the assumptions studies. subject available And on vary laws. no the clinical XXXX, these cause the discovery and that the They information new risks the

Anna Protopapas

XX morning With and Thank are and for drug Chief our today I’m in joined our financial Chief Huebner, Jack, Dirk you, in newest of development several of call XXXX. team. Dave Officer; quarter year-ended Lowinger, the Officer. Chief and executive and Officer; Eva Business executive late members including the everyone team, to us our by Sarah. and experience significant our development oncology member years Officer; me Medical Spellman, fourth corporate of of joined Chief leadership our with him and experience November welcome Good our brings Tim Dirk Financial ADCs. Scientific update approval our the

ADCETRIS execution ADC During European be as of Dirk’s advance at the and tenure of approval drug. of led we Dirk studies the the expansions to year candidates. for design and XXXX and development step expertise XMT in for will instrumental next the prepared the our label future Takeda, seven Dirk’s

business update; the We started in a strategy are to beyond. Dirk focused we XXXX for I’ll in position and excited are strong have year the to team. the growth on very and turn with a

of second in for poised is first, on very of readouts for emerging XX Dolaflexin a our early quarter in encouraging. to targeting the wholly-owned, based is forward in first the being year. the confidence dose The number important NaPiXb escalation profile the months first-in-class is with XX data Our path this factors; data our one ADC XXXX, program

year, range the our Secondly, first of an to on leverage targeting an platforms We we in track of ADC half disclose in even development needs. differentiated ADC expertise and medical expand next address our this pipeline broader IND. XXXX candidate continue in unmet our remain to proprietary the highly our and for second to half

to to the million in asset and clinic, proceeds, ahead rate promising balance successful our Thirdly, the us XXXX, next important experience balance clinical successful equity of offering first in milestones. we progression a of ADC extend the that for over with With our will clinic to year believe a we in move public gross have support through provided cash sheet us. of which targeted components strong and in an significantly sheet half a a we we the pipeline strengthened recently XX our expect will (inaudible)

for on Before specific make XXXX first-in-class aspects which meaningful for exciting XMT the the data clinically potential pre-clinical that I we’re a emerging demonstrated The important few well as a on have tolerated will moments. to tolerability. our has it data a by XMT differentiated are clinically and updates, validated details it doses. the clinically the would XXXX a Dirk to particularly cover to will a a believe that seeing with efficacy Tim the to and that rapidly efficacy move we And more enhanced study. molecule pass we and of again opportunity. Tim in target highlight differentiation we encouraged ADC Dirk highly work I supports call like at continues provide is program

patients patients adenocarcinoma and well poor lung line front Third, cell addresses progressed unmet the options. with cancer prognosis the significant cancer treatment as platinum-resistant patient needs, limited problem that on have as very therapy ovarian non-small

few the we next initiate cohorts. will Over expansion select a go-forward the and months, dose

Chief that the between and express details. in treatment like I’ll study to understanding Our to NaPiXb more the the efficacy, over XXXX tolerability call turn Officer durational objective to Huebner, to response. while is early With and optimize as discuss background, correlation our Medical Dirk

Dirk Huebner

Thank you, Anna.

actual four once schedule evaluation per began three disclosed XX mg We we meter. every every subsequently week explored square in have the we regimen. doses of once previously, As of week

square square XXXX have a initiated per To dose tolerated XX meter We mg well XX at all doses. per dosing has cohort. and the date, cohorts mg completed XX and meter recently XMT been

and dose development. of To reporting began heavily salivary ovarian respectively square once dose XX week are we above. objective identifying NaPiXb you, at renal, broad to is patients meter cancer, escalate for for and although continue the the clinical on NaPiXb papillary expression tumors every The levels based cancer. pre-treated with observing at clinically not schedule NSCLC, We known dose at doses including selected escalation the further four mg papillary remind to be Patients archival with expression, relevant activity will with optimal adenocarcinoma, per duct, thyroid express endometrial, tissue. measures will of set

an encouraged and tolerability of duration very dose efficacy, balance a tolerability are of dose, we and signs treatment. by seen the for optimal of provides we goal seek have early the We selecting profile to-date. will In the efficacy that

the we selection initiate study in of the NSCLC plan and Following adenocarcinoma. this portion the of go-forward and cancer dose, to expansion cohort ovarian

process the expansion size eligibility the in cohorts. We finalizing criteria sample are for and of these

potential exciting selection studies. that’s patient Our XXXX of are Tim it objective our the expression. discovery as subsequent relationship my turn well will response to in the discuss prepare to for cohort Officer critical as that These expansion colleague, XMT over pivotal to ongoing. work the I determine Lowinger, to the to now the safety elements is characterize strategies for well is Chief profile Scientific who efficacy, NaPiXb us will

Tim Lowinger

Dirk. Thanks

pre-clinical more demonstrate XMT levels but In the lifastuzumab demonstrated a pre-clinical from emerging about of high based we’ve payload of XMT studies, XXXX clinical set expression. XMT head-to-head the also XMT provides of to robust superior excitement primate, data efficient a date the of differentiation including XXXX is improved in data, that this only HNSTD accumulated Our efficacy antigen published on agent. across tolerability. with of on for vedotin based XXXX to the Comparison lower also data not the vedotin of payload, non-human to experiments. DAR to tumors lifastuzumab supports XXXX Furthermore delivery multiple

that remains we’ve responses. not locked single highly which payload a the durable DolaLock providing the demonstrated in for substrate pre-clinically weeks is dose, after addition, In tumor a PGP

making are some Beyond and XMT discovery XXXX. disclosures our efforts exciting on have XXXX, progress significant in we

We are of Dolasynthen context in continuing to prioritized our target. the

the fully including have Dolasynthen chemical excellent in properties to now the that If as homogeneous PK site a auristatin allows matched ADCs. physical, for the retains optimization a antibody for as therapeutic provide DAR further favorable specific control bio-conjugation homogenous Dolasynthen to payload properties target and optimal scalpel with incorporate recall, a through you innovative our synthetic precise Dolaflexin given of completely also utilizes specific a well DolaLock of index developed. and of we

further data our X:XX PM session. presenting pre-clinical approaching at AACR Dolasynthen meeting therapeutic on a screening will upcoming X be April platform agents novel and the during We at on the

[geometry] defined work Sunday, of XX, to inhibitor different March will presenting our which on ADC two tumor a DNA action focused a the ADCs at upholstered mechanisms efficient can with microtubule contains We enable dual of payload the on alkylator. the Dual both and payload cell. AECR precisely the be delivery payloads on also directly

next progress plan second a candidate disclose ADC half submitting in we of candidate. in clinical next with made initiating phase also this have our XXXX XXXX. and the Lastly, details an half study great We X of the of first goal to in IND of advancing the the

Officer. potential And the with Dave will very Financial so tuned. are turn Spellman, the that excited Chief about stay We candidate, this of I Mersana’s call please to over

Dave Spellman

and and our fourth full XXXX of financial now quarter recap Tim, results. a Thanks year

I due period development. for cost of expenses increase advancement of same for administrative revenue X.X compared The the in XXXX, quarter the same compared X.X XXXX fourth a clinical of collaboration were development of primarily the regulatory and portion the XMT we of to compared support In XX.X would a more for some XXXX XXXX, approximately Takeda deferred as to approximately provide decrease a General QX in was contract to revenue program’s with expect XXXX trailing and million Some are million fourth a winding (inaudible) the an for respectively. X.X to same were outstanding or with XXXX XX,XXX,XXX net for common quarter was Weighted years in the was a quarter in fees. in to headcount ended the compared programs. professional XX, million a result quarter is million XXXX. of loss shares XX.X include highlights million bit the XXXX period of with all the support result for associated following; our collaboration XXXX. XX December a to increase termination fourth program. for color what loss Research fully key XX,XXX,XXX revenue. (inaudible) million, in to million clinical and the the for the of to X.X $X.XX XXXX. to share XXXX $X.XX and come recognize average future of expenses on increase driven the the for of or fourth There accelerate still The also to collaboration approximately XMT The was XXXX. quarter period and Net of period partner costs of fourth like XXXX XXXX largely to the QX and Takeda. decrease expect increase share, the and same the expenses a in efforts XX, by December the down for was

our step-in expect to run Additionally, we program all go-forward activities, of cost with to the related rate increase.

well cash capitalized are position. strong with We a

cash XX.X equivalent XXXX million cash, December XXX.X compared of to marketable XX, were XX, and Our securities of as December XXXX. as million

to Additionally, expect operating cash as return on capital, milestones to fund pre-clinical I remarks. to gross the the you’re our for offering we with call several We’ve closed we now at approximately in provided least XX will public of concluding through able the X. mid-XXXX. with million, some proceeds March with us aware be Anna plan equity divisional

Anna Protopapas

of for I’ll XXXX key you, today’s and Thank review with our wrap beyond. a call Dave. goals

forward dose selection escalation the X the dose portion in of move clinic look the we our of readout study, phase go-forward an the expansion and study. active as the in we to the of initiation First, towards the year XXXX cohort

and to expect of IND candidate half in filing the in XXXX, second first also the our half of announce XXXX. our We next clinical the of next target

technologies meeting we’re technology Finally, a we execute believe drive in on ADC at will the discovery platforms. throughout to our and continue pre-clinical position these year, strong disclose forward data proprietary to We we scientific as novel extremely with treatment patients potential clinical a your to our support assets cancer to have Mersana. and the real continued of benefit and Thank you goals that remain confident provide for options. limited

to call opening Q&A. are We the now

Operator

[Operator from first Chang comes SVB Leerink. Instructions] Jonathan of question our

Your line is now open.

Jonathan Chang

this data we dose can how data data second in more much expectations question, the ahead help the type could earlier versus of year investor the could XXXX see the terms we see? in data escalation you First of and initial disclosure quarter, net of

Anna Protopapas

you What see continued study. will a escalation dose

we mg mg – the drive XX escalate will is which completed where patients, continue We’re based us as continued go looking we we at data. currently dose to recruiting we’ve next. mentioned, to to on and data the escalate, move to XX will Obviously dose

will of For tolerability the evaluation have these patients profile. we

looking but tissue the study, at already on look for based our early will at We escalation of will PK, [thyroid] dose expression, the NaPiXb be evaluation this we’re the signs and has obviously of requested which efficacy.

So when that’s like will disclose in we package look the data what QX. it

Jonathan Chang

there, a in cancer. you just a be quarter are from and (inaudible) and resistant applied own ovarian (inaudible) bulk and development under readout could guessing in your be the benchmark it, any development follow-up. Got ovarian data do the second your likely What for the update see will to in of X there ADC efforts. lessons recent as cancer platinum research I’m that

Anna Protopapas

the response doxorubicin, have free patients and a through that XX%, the it very prognosis. further we acting saw data know care The is half validated X around survival poor months, has been to X the you pegylated these As standard on progression is of for recently another is patients for ADC. and these

to what be a patients study publicly the available have on our to prepared whatever so other a really it’s the the the be at that also expansion like obviously it’s when later that understanding later the looked when So, When critical response disappointing. potential that has data, help between drug looked for disappoints, work. won’t trial. can well we that, was think of selection we data study don’t in expression the we really the We it patient is ADC, reinforces for topline reinforces at always disclosed, in of doing that understand belief the options, a always antigen many and disappointing other and the cohort it the merely stage I correlation and

whether is long is The with drive by is that control what other patients increase control disease was even how or are pretends doesn’t survival. clinical correlate think is our an data overall I rate response always on and is to treatment, disease (inaudible) staple response be they directly that even benefit, its PFS is the extended disclosed an to the thing that topline a disease long really reinforced matters or be that that getting how going and improved and PFS what really important

So only can better at do target stay correlation for an the but of as drug. at dose how cohorts are can expression we expansion we selected of this time, we not on the how look the designing looking patient extended treatment the at time with from the also period and benefit

Operator

And our Baird. next question Ulz comes from Mike with

open. now is line Your

Mike Ulz

a with remind to hit of dose hen the XX you is it high Just and terms don’t mg. on at follow-up hit to XXXX XX if MTD you’re you there goal higher t eventually the currently can you you mg dose, so continue us And escalation, how and dosed at in the XXXX?

Anna Protopapas

reached meter So square away mg MTD. had XXXX per yet XX we not to dosed before program, the from moved for we we

regarding data question going us think data the takes is, take the let to we us XXXX, your we’re I said. answer where I think as the right

good looking per XX response, started with durational balance as good meter we efficacy seeing we We’re clinically disclosed and tolerability, at square. meaningful mg efficacy

Operator

our comes And with Fye next Jessica JP from question Morgan.

is line now open. Your

Jessica Fye

they Once you whether with identify be depending type just which tumor stage and manner? simultaneously more to different about staggered, expectation tumor can also you in expansion talk rate the X for to you of enrollment for you type? extent on recommended first, phase expect XXXX, talk start might talk And dose start would to the potentially your the cohorts or a can would about maybe

Anna Protopapas

finalizing is Dirk what question will and team the I’ll saying in expansion of good the be. this a cohorts middle that Jessica, still by and start really That’s

a any I our cohorts, ovarian because protocol, cancer expansion on will haven’t recruitment site. on cancer. ovarian continuation because expansion formal cell existing seamless guidance given are cancer simultaneously particularly We non-small we cohorts, have will can bring that thinking at are in, tell but you we but that this the be sites, the the one to sites in the forward current we additional one existing primarily The in be we’ll sites be and would to lung will were of at in lung start

mid cohorts, So study, designing new expansion of the we doing sites. are in the those identifying the feasibility

to in roll exact in, collection to to So going cohort a we’re the but seamless not guidance, from the position I’m expansion you doses we’re cohort a in give prominent sites the to way. in in a expansion

Operator

Nierengarten David from comes question next Securities. our And Wedbush with

is open. Your line

David Nierengarten

you I just I care chemotherapy what on question, had as curious look there there ADCs, platform you to for limits a at just dual say, should [toxin] science is I can the was are Dolasynthen thinking about dosing at, antibody. and for samples elaborate limits scientifically just are curious those the you’re you that on if looking chemistry, the for the that? limits are (inaudible) of challenges pairs Again there some can same to if use

Tim Lowinger

this David, is Tim.

synergistic things the payloads by of have up range that antibody established controlling we to with their You thinking as therapeutic grabbed one at every and And consider high for those one bio-distribution own we’re the to tumor two are achieve. each you the ratio combine. is how potential are of platforms drug again that taking look to if a are synergistic think dual they and a up can good that we But ability point our payloads very ratios levels, that ratio taking about payloads such dual also the have about combining we that them payload drug in of those. synergies excited properties as and in can of types there has index really

think innovate ADC we the we as an So offers of how further but space. it I is added in about complexity, potential lot it think do

David Nierengarten

other at agents it work, on like you derivative agent I’m and or science or inhibitor if possible on the but might look a there in that. DNA the not that or upon curious a that limits damaging a was Maybe balancing specific (inaudible) DNA a on, combinations a like platinum is follow-up arena, something of

Tim Lowinger

Sure.

I don’t of of interesting there those mechanisms more you’re for outline ongoing other is that really think what possibilities that combined we to than area is, gets an all lot think there say that is a in But it starting that, could to that’s some the do much and really work potential inhibition. here I are, this synergies. and very than when to be want

Operator

[Operator Instructions] Debjit H.C. Chattopadhyay Our next comes question with Wainwright. from

open. Your line is

Debjit Chattopadhyay

dose those optimal and now from from been the how program? the perspective discontinued And at up that two lower studies maximum the line engagement that does to the target pre-clinical have [PIs] max is plan confirmed? your growth to So you get get at an dose Roche the with what

Tim Lowinger

as when the can how topic JP want disclose the in meeting discuss been that’s pointed the confirmed, have and to second scientific so at a already the [PIs] we (inaudible) data at quarter data out we this disclose on that we year. more publicly conference, that Morgan we of

Anna Protopapas

So different square programs, per our ADCs. asked our these you per different mg XX obviously X meter Debjit But compares, mg is design about also are about dose how of kg.

You know mg Genentech at dosing kg. that the was X.X molecule per

translate per a but with above the at was [BCMA]. high dose, the in to have about we that dose payload mg that different you so to Obviously payload kg want these you to at X the at are we payload currently X payload; to times triple ADCs, If level. high the are if they a consideration dose, dosed level take X

We above are delivered program. was dose the the already [BCMA] that payload by

Debjit Chattopadhyay

on cohort. or I cell what the non-small be last the obviously one be to at. relapse then refractory trying question, I going guess the to is focus may That’s And was get

relevant targeting So a you in resulted to a mutation guys non-driver specific clinically outcome? any point has by could example

Tim Lowinger

grow to to out, you well to NSCLC, cancer. expansion respect in With as cohort we’re pointed adenocarcinoma as as ovarian the going

so our in However, work experts criteria the as in specifics in terms this progress, and discuss of that the with inclusion is field. we investigators

be patient forward. well for market population our a positioned compound where can working are we utilization We on as reasonable very move

Operator

Anna further showing any back call would questions this for not to the at I’m over like any I to closing Protopapas, turn CEO remarks. now time. And

Anna Protopapas

tuning to for in year update. full Thank our you all

steady and development the course the to our in and of We’re year. clinic and a forward progress Have preclinical great you making with over day. in we the look progress sharing work our

Operator

wonderful you does thank may all have gentlemen, day. and today’s for you This conclude disconnect. in conference. and today’s participating Ladies program Everyone a

Mersana Therapeutics (MRSN) 8 Mar 192018 Q4 Earnings call transcript