Hey, everybody. Really quickly on disclosures, for important disclosures, please see the Morgan Stanley Research Disclosure website. If you have any questions, please reach out to a Morgan Stanley sales representative. Thank you all for joining. Welcome to the Morgan Stanley Health Care Conference. I'm delighted to be sitting with Sean A. McCarthy, the CEO of CytomX. Thank you for joining us, Sean. Thank you. I'm Ross Cohen, and I'm an Executive Director within the Health Care Investment Banking team. Maybe just kicking off, Sean, why don't you give us a quick overview in terms of history around CytomX for those of us who maybe are more or less familiar with the story? Yeah, thanks, Ross, and thanks for having us at the conference today. Real pleasure to be here. CytomX is an oncology-focused biologics company developing a platform technology and a pipeline around that platform called the Probody Therapeutic Platform. This is a unique antibody masking strategy that we've pioneered. In fact, I refer to CytomX as the original masking company. We got this whole field going, really going back as long as 15 years. The concept of antibody masking is to improve therapeutic window for highly potent anti-cancer agents like antibody-drug conjugates or T-cell engagers, for example. We are currently in the clinic with two very exciting programs: EPCAM-targeted masked ADC, we call CX-2051, and a masked version of interferon alpha 2B, we call CX-801. Just making a ton of progress. Happy to be here today and talking about our platform and pipeline. Great to have you in a super exciting time. Maybe just double-clicking on the masking technology for a minute, can you maybe just walk into a little bit more detail around that? Also, how do you think about ADCs as being one of the better applications of that technology? Yeah, absolutely. The way the technology works and was originally conceived of is to take an antibody or indeed other biologics, for example, cytokines, and engineer them such that they are masked with short, highly specific peptides. The mask is designed to block the ability of the biologic to bind to its target until the mask is removed. Mask removal is achieved specifically and selectively in diseased tissue, and in our case, specifically in cancer tissue by tumor-associated proteases. We've known for a long time that protease biology is dysregulated in tumors. Proteases are involved in tumor cell migration, invasion, and metastasis. We take advantage of that difference in protease levels in tumor tissue compared to normal tissue, where proteases are very tightly controlled, to allow us to activate the drug locally. This is useful because it allows us to go after really innovative, novel targets, tumor targets that are very abundant in tumor tissue but have been difficult to drug historically because they may also be in normal tissue. For these targets, and EPCAM is a great example of this, we're able to open a therapeutic window by using the masking strategy to bias towards tumor tissue and away from normal tissues. ADCs are absolutely one of the pillar applications for the technology. There are a number of proteins, including EPCAM, that are very abundantly expressed in tumor tissue that would be great targets for anti-cancer therapy, except for the fact there are many normal tissues. Enter CytomX, and that's why ADCs have become such an important focus for us. That makes a ton of sense. Maybe on the lead ADC program, the EPCAM ADC, can you describe the design of that molecule specifically and then the unmet need within colorectal cancer that it's looking to address and maybe beyond? Absolutely. EPCAM is a target that's been around for a long time. It was actually first described, believe it or not, in 1979 as a highly expressed protein on the surface of colorectal cancer cells. It's very, very abundant in CRC. It's expressed at essentially HER2-like levels, so there are millions of copies per cell. It's expressed consistently and homogeneously, as far as we can tell, in just about every CRC patient. However, as the name suggests, EPCAM is an epithelial cell adhesion molecule, and it's present on all epithelial structures in the body. It's present on many normal tissues throughout the body. Many have tried to target EPCAM over the years but have not succeeded because of that expression in normal tissues. Toxicities have been observed at low doses with different strategies, including pancreatitis, liver toxicity, certain GI toxicities. That has limited the ability of anyone to bring a systemically administered anti-EPCAM drug into the clinic successfully. There are clues from other locally administered EPCAM strategies that if you can get an empowered, potent antibody to EPCAM with local delivery, it can actually be very effective. There are two examples of this. One, a drug, a toxin fusion, that has been shown to be quite effective in non-muscle invasive bladder cancer, but that drug had to be given intravesically into the bladder. The second example is actually a T-cell engager, a CD3 EPCAM bispecific, which has just been reapproved in Europe for the treatment of a condition called malignant ascites. These are epithelial structures that form in the peritoneal cavity of patients with certain GI and gynecologic tumors. This EPCAM CD3, when given into the peritoneal cavity, is quite effective at shrinking these tumors and treating these patients who have a very difficult experience with these growths. We know that if you can get an EPCAM antibody with some kind of payload on it, if you can get it to the tumor, it can be effective. The question is, how do you do that with a systemic drug? That's what we've done with our masking strategy. Yeah, no, that's actually a very interesting point you make on the peritoneal piece of it as well, because those are not uncommon in colorectal mets, right? Those tend to be some of the more challenging tumor types. Correct, yeah, in many tumors, actually. Yeah, do you think that EPCAM could actually have a potentially differentiated role within that specific area as well? I think that certainly could be something else to look at with CX-2051 over time, for sure. Yeah, that's interesting. Maybe you guys have showed some super interesting data back in May. Can you walk us through what the data looked like on some of the early patients, and then what are the expectations going forward there? Yeah, we're just super excited about the progress we've made with CX-2051 so far. First of all, let me just recap the very intentional design of this drug. Obviously, EPCAM, as we've discussed, is the target, very abundant in CRC. The masking strategy is essential to localizing the drug into tumor tissue and mitigating the previously seen systemic toxicities with EPCAM therapies. Thirdly, and really importantly, the effector on CX-2051, of course, it's an ADC, and the effector mechanism is a topoisomerase-1 inhibitor payload. The reason that we selected topoisomerase-1 inhibitor is, of course, because topoisomerase-1 inhibition is a central component of standard of care in early line settings in the treatment of colorectal cancer, and specifically irinotecan. We designed this drug very intentionally, the right target, the right payload, the right tumor type, using our masking strategy to really deliver initially in late line colorectal, where the unmet need is just enormous. We can talk more about that later, but there's so much need in this field. The phase 1 study that we conducted, we focused entirely in CRC, which was, I think, a bold move. It's a tough patient population, for sure, but we decided to be, you know, we designed the drug to be evaluated first in CRC, so that's what we did. In May this year, we reported our first clinical experience from the first year in the clinic, but only a year. The program has actually moved really very quickly. We had 18 efficacy evaluable patients across five dose levels, beginning at 2.4 mg per kg, up to 10 mg per kg, the drug administered every three weeks. A late line patient population, median number of prior therapies of four, so this was essentially a fifth line CRC patient population, so very heavily pretreated. We were just delighted to see really robust clinical activity in this very difficult-to-treat patient population. First of all, confirmed objective responses in 28% of those 18 patients. To put that in perspective, the current standard of care in the fourth line has a response rate of between 1% to 2%. A huge step forward, we think, for the field, a very active drug. In addition to the objective responses, most patients, in fact, just about all patients benefited from the drug with a 94% disease control rate, which translated into an initial assessment of progression-free survival of 5.8 months. Again, to put that number in perspective, the current standard of care in the fourth line has a PFS of 3.5 months. A very competitive profile is emerging for the drug in this first dose escalation. The drug looks to be performing exactly as we designed it. It's translated very effectively from our preclinical studies into the clinic. On the safety side, we're very encouraged there as well in terms of what we've seen so far. This is the first in human evaluation of the payload. We call it CAMP59. It's a payload that we licensed from ImmunoGen. We are learning as we go with this particular TOPO-1 inhibitor, but we've seen an attractive safety profile with actually no dose-limiting toxicities during dose escalation, manageable hematologic toxicities with low rates of grade 3 anemia and neutropenia. In terms of other toxicities, generally well tolerated, with perhaps the AE to watch going forward being GI. Yeah. We've seen a little bit of GI tox, upper GI, in the form of nausea and vomiting, which is fairly typical for TOPO-1 inhibitors and particularly TOPO-1 ADCs. We saw a reasonable amount of grade 3 diarrhea in patients, about 20% across the 25 safety evaluable patients. That is something that we continue to learn about as we move forward, and we'll continue to understand and look to take steps to manage and mitigate. Overall, we're just so thrilled with this first look, with the first year of development, and just so excited now to push this drug forward as fast as we can. Yeah, really, really exciting data. It was great to see. You briefly touched on it in terms of what comparator data could look like per se. I guess when you think about what a comparator in late line CRC looks like, what are you really comparing to, and what are the typical results and the efficacy of that, and what are the things that they're also focused on from a safety perspective? Yeah, so in the fourth line, I mean, the field has evolved a little bit over the last few years. We've seen the approval of the tyrosine kinase inhibitor, fruquintinib, specifically in the fourth line. That is now one component of standard of care. It was one option for patients. As I mentioned, fruquintinib was approved based on two placebo-controlled studies with a PFS of 3.7 months and an ORR of low single digit, 1% to 2%. Fruquintinib doesn't really efficiently shrink tumors, but it does give a modest PFS benefit. Other options in the late line include Lonsurf, which is trifluridine and tipiracil monotherapy or in combination with bevacizumab, the anti-VEGF antibody. That's typically used in the third line. By the time patients get to the fourth line, fruquintinib or maybe the other TKI, regorafenib, are options for patients. Our initial data with CX-2051 really has the potential to transform this field because so far, our ORR and our PFS are so much better than current standard of care. We think that a potential fourth line study that would compare ourselves to the current options in the fourth line could be executed very quickly, could be enrolled very fast, and would have, we think, a very high degree of probability of technical success based on what we already know about CX-2051. We're going to know a lot more by Q1 of 2026. We've already completed enrollment into expansions of three dose levels: 7.2, 8.6, and 10 mg per kg. Each of those three dose levels showed activity in the dose escalation with confirmed PRs at each of those dose levels and impressive disease control. We've expanded. We now have about 20 patients at each of those dose levels enrolled into the study. We'll have that data moving into Q1. That's going to be really helpful to us and essential to understanding dose response, dose relationships as it pertains to adverse events, the degree to which adverse event management strategies that we've implemented in the expansion phase are helping us with the overall AE profile, and integrating all of that into selecting our doses for this go-forward study that we plan to initiate in 2026. Yeah, no, it makes a ton of sense. I guess just shifting back to maybe the EPCAM point, you mentioned kind of the rationale for why EPCAM makes so much sense in CRC and the expression. I guess as you look across the different lines of therapy within CRC, do you expect to see consistently high levels of EPCAM expression? Yeah, we do. We've done some work on this, actually. If you look in the public databases, there's a lot of information on EPCAM out there. It's been a target that's been worked on by so many people for so many years. You can see in the expression data that EPCAM is highly expressed in all stages of CRC, and it doesn't change as colorectal cancer advances. It's expressed in stage 1 through 4. It's expressed at similar levels in primary tumors and metastatic tumors. We've also begun to do some work within our phase 1 study looking at the kinetics, if you like, of how EPCAM expression looks over the course of treatment. Our data is still quite preliminary, but we're encouraged to see that so far EPCAM levels are maintained as patients are maintained on drugs. It's a very stable antigen, we believe, which I think makes it another reason why it's such an attractive target. One other thing that I should mention about why we think EPCAM is such a great target for CRC is that in our phase 1 study to date, we've confirmed that in every patient for whom we have an evaluable sample, EPCAM expression is indeed very high. We haven't selected patients coming into the study for EPCAM expression. We don't think any selection will be necessary. This really does have the potential to be an all-comer drug. We also observed in this first data set in May that the activity that we've seen is across all clinical characteristics. It's independent of some of the typical clinical characteristics that can be used to segment the CRC population. For example, whether patients have left or right-sided tumors, or whether they have liver mets or not, or whether they have KRAS mutations or wild-type KRAS, we see activity across the spectrum. This has the potential to be an enormous advantage for this drug candidate because, and this is how our investigators are seeing it, they can bring any patient onto the study without having to spend time subcategorizing them into specific clinical subsets. We think that ultimately, commercially, this would be a great advantage, and it's one of the great hallmarks of EPCAM as a target for CRC. Yeah, no, it makes a lot of sense. On 2051, on safety specifically, maybe you walked through a bit of the initial safety profile, but if you can touch on that again and also focus more so on how are those indicators that the masking technology might be working on your EPCAM ADC versus what you've seen in other situations? Anytime you take a new ADC into the clinic, you hold your breath a little bit. I think in particular with this one, given how broadly and widely EPCAM is expressed and what's been seen before with serious toxicities with previous approaches. What were we on the lookout for? We were on the lookout in particular for pancreatic toxicity because, as I mentioned, that was the roadblock that the first EPCAM strategies ran into. I'm very pleased to say that not only have we not seen any pancreatitis to date, we haven't seen any modulation of pancreatic enzyme levels either. That, I think, is strong evidence that masking is delivering and keeping the drug masked and quiet, if you like, in systemic normal tissues. I think additional evidence that masking is working comes from the liver toxicity profile. We've seen EPCAM agents in the past have significant liver toxicity in terms of elevating liver enzymes. We haven't seen a signal there either. I think the evidence that masking is working is really quite strong. Yeah, and I guess how does that GI toxicity compare to irinotecan and other TOPO-1 ADCs? When irinotecan was first studied many years ago, it was first being used. It had a very high incidence of high-grade diarrhea. It was a very difficult drug to use. That's been optimized with different dosing strategies and regimens over the years, as you know. There still is significant GI toxicity with irinotecan, but oncologists have learned a lot about how to use it and how to dose it over the years. It's a really important point that TOPO-1 inhibitors, in general, whether the chemotherapy itself or in the context of antibody-drug conjugates, do induce significant GI toxicity. We were on the lookout for this in our phase 1 study. The fact that we've seen some GI TOX is not a surprise at all. As I mentioned, this is the first human experience with this particular payload. One TOPO-1 inhibitor is not the same as the next. They all have their own unique profiles in terms of how the toxicity emerges. Some have significantly more heme TOX, for example, than ours does. Overall, I would say we've not been surprised by the TOX profile, and we continue to take steps to learn more about it. Yeah, what have been some of the learnings, maybe from more so the oncology community as well and clinicians, around mitigating some of those GI tox with other ways too? Yeah, this, of course, is not the first drug to have GI toxicity and specifically diarrhea as a signal. There is a lot of precedent of strategies being used to manage and mitigate, and in some cases, even use prophylaxis to treat patients early in their treatment cycle to minimize these types of adverse events. The types of strategies that have been used previously include antimotility agents like loperamide, steroid approaches like budesonide, and I'm thinking of drugs like neratinib, the HER2 inhibitor, which has a fairly high rate of grade 3 diarrhea. There's a strategy used there. There's a study called the PRIME study, which was performed on Trodelvy, looking specifically at the ability of prophylactic loperamide to reduce grade 3 diarrhea. That actually was quite successful. It reduced by about 40% to 50% the incidence of grade 3 diarrhea for that particular TOPO-1 ADC. In terms of what we're doing in April this year, as we initiated our expansion cohorts or the expansion phase of the study, we decided to implement loperamide prophylaxis. We asked our investigators, still with a level of discretion, because it's really up to them to manage every patient, to use loperamide where indicated upfront to try to, again, get ahead of this fairly predictable AE diarrhea. Yeah, final question on safety, I promise. I think last month there was the grade 5 event that you announced. Right. Maybe can you just walk us through some of the details that you can share? Yes, it was a complicated situation that we had seen a grade 5 treatment-related adverse event going back a couple of months. This was a patient who experienced some GI toxicity and unfortunately advanced to acute kidney injury. For various reasons, including other confounding clinical factors, including the fact the patient had donated a kidney earlier in their life, so had a solitary kidney, the patient ended up unfortunately not making it. In reviewing the patient's clinical history with our safety review committee, very quickly after learning of this event, the safety review committee felt that while this was likely an outlier event, the kidney injury most likely secondary to the GI toxicities that were seen, and this can happen, that patients with nausea, vomiting, diarrhea can become dehydrated. That can put pressure on the renal system. In this particular case, this patient had, having a solitary kidney, that pressure on the renal system ended up just being too much. Other confounding features unfortunately contributed to this patient's situation. Our investigators were of the view that, OK, this looks like an outlier case. Study continues, no changes except to more proactively monitor patients to ensure that we don't enroll patients that have donated kidneys previously, but no other significant changes to enrollment criteria. We felt that they were all fine. The challenging situation we found ourselves in was receiving or being notified by a few of our investors that there was a patient blog that they had come across that actually included some very specific details of this particular case at one of our clinical sites. Quite honestly, that shouldn't really have happened, and we don't need to get into the details there, but it put us in a tough situation where we were getting a lot of inbound questions from investors. There were a number of other comments made in this blog that, quite frankly, were inaccurate relating to study being paused, study being on hold, investigation with FDA. We quickly decided to issue a press release to lay out exactly what happened with this particular patient case and also set the record straight that the study was ongoing, that everything had been reported appropriately to FDA in a timely manner. We had a lot of very constructive conversations and follow-up with our investors over the following 24 to 48 hours. I think everybody appreciated that transparency. It does, I think, highlight, in a way, kind of a new challenge that we all have to deal with as drug developers running public companies, which is that this public narrative that can appear in blog posts can be very, very difficult to deal with. We're, of course, not in the business of responding to these comments. Typically, in this case, we felt that it was important too because there were just some real specific details shared, and we were getting a lot of inbound inquiries. I think we made, I'm 100% confident we made the right decision to disclose at that time. In totality, though, as unfortunate as this case was with this particular patient, this adverse event is not completely out of scope in terms of what we've seen with the drug already in terms of it originating from some lower-grade GI toxicities. We know that's something that we need to learn more about and manage with CX-2051 moving forward. Yeah, it makes a lot of sense. Now that you've basically fully enrolled all three expansion doses, what do you view as the key criteria for selecting a dose and next steps? Yeah, so really very interested to see a number of things from this, what will be at least a 70-patient update. We've enrolled 73 patients as of the last update. That's consistent with guidance we've given since our May disclosure that we would have 70+ patients of data in Q1. We're absolutely on track because enrollment went so well in Q2. By the way, one of the other things you can see from these patient blogs is that people want to come on our study. These patients have very few options, and they want to be on CX-2051. Even the patient who put all these details out there was frustrated and disappointed that they hadn't been able to get on the study themselves. Enrollment went great. By Q1, we're going to have, I think, pretty significant follow-up on the majority of those patients in terms of follow-up on clinical activity. We'll have, obviously, an update on the response rate across the three dose levels of 7.2, 8.6, and 10. We'll have, I think, preliminary estimates at a dose by dose of PFS, which I think will be really important in helping guide us to the go-forward doses. We'll also have an analysis of exposure dose response and exposure dose AE relationships. I think that will all go into an analysis then of which dose or doses we're taking into our next study that, again, we hope to launch in 2026. Yeah, just a quick follow-up to that point is how many patients do you expect there, and maybe how much follow-up do you anticipate to have? Yeah, the expansions have all been enrolled to about 20 patients at each of the dose levels. Given that enrollment was complete as of August 13, our last update, we're going to have, I would think, six months of follow-up on the majority of patients, which I think will be great. We haven't decided exactly when in Q1 we'll disclose. We're keeping our options open at this point. I think we're of the view that communicating data that's more mature rather than less mature will be most helpful for everybody. We're still working through exactly when that communication will be. Yeah, in terms of the benchmarks that you're looking to hit as a driver for success there, how do you think about that when you're presenting? We think the numbers that we delivered in May were a great starting point. Obviously, we'll be very excited if those numbers remain in that ballpark. I think the 28% overall response rate across the first 18 efficacy evaluable patients is a terrific start. I think there's quite a lot of room on either side of that number, quite frankly, for this to be a very competitive drug. We'll see how it shapes up. I think the 5.8 months of PFS, again, if that is maintained, we'll be very happy. If it happened to improve a little bit, we'd be even happier. Yeah, do you expect the registrational pathway to require a randomized control study, or could a single arm study suffice? Maybe walk us through how you're thinking about the next set of studies. In the CRC space, we're not setting any expectation at this point for a single arm accelerated approval. That's been a really tough bar with FDA in colorectal for a multitude of reasons. We also feel that the timeline to execute a randomized study, unfortunately, given the speed with which patients advance in this late line setting, that study could be executed very, very swiftly. One way that we're thinking, no decisions made yet, is that the next study could be absolutely a randomized study against physician's choice or against fruquintinib, for example, in the fourth line. Maybe two doses initially of CX-2051 because we really don't want to rush dose selection. I think it's an ADC. We need to be thoughtful. Perhaps we take two doses forward. Depends what we learn from the expansions. If the expansions give us the answer, then we'll be taking one dose forward, but probably two, or leaving our options open for two. I think that study could very well have a basis for accelerated approval based on a PFS endpoint. That's how our current thinking has evolved. Again, all these decisions about the design and structure of our next study will be highly informed by our data and will be data-driven. As you think about combinations such as Bev, how do you fold those in over time? Obviously, the late line is just a place to start with CX-2051 and represents, by the way, a major commercial opportunity. Even in the fourth line, we can see this being a multi-billion dollar drug. There are 12,000 patients at least in the U.S. treated every year in the fourth line setting. Fruquintinib actually has done quite well in its first couple of years on the market with those numbers that I mentioned with 3.7 months of PFS. We see the late line as a terrific opportunity, but we're highly motivated to bring CX-2051 into earlier lines of therapy where the numbers get very big very quickly. Yeah. Third line, we will want to do some initial combination work with bevacizumab, bringing the drug into the second line. We'll want to do some combination work with chemotherapy because the vision of the drug ultimately is to use CX-2051 in place of irinotecan to make a superior second line therapy to currently the irinotecan-containing chemo strategies. It will be a progressive build over time with combinations really being very, very important. As we learn more about the safety profile, I think we'll learn more and more about the combinability of the drug in the earlier lines. More broadly, what other indications do you think CX-2051 could work in beyond colorectal cancer? EPCAM's got so much potential. It's present in just about every solid tumor at some level, including many tumors that are known to be TOPO-1 sensitive. Multiple places to go, including other GI tumors, certain gynecologic tumors, lung cancer. Really, the ultimate vision for the drug is for CX-2051 to become a pan-tumor treatment. We look at the way that Enhertu gained its pan-tumor label in HER2-positive solid tumors. In our mind, there's no reason why we couldn't go there with CX-2051 over time. Yeah, and maybe shifting gears a little bit to CX-801 or interferon alpha 2B. What should investors expect to see in the preliminary mono data update in the fourth quarter? Yeah, so we're really excited about 801. It's obviously a different concept altogether. It's an immunotherapy, and it's designed to turn cold tumors hot and to restore responsiveness to checkpoint inhibition. We're conducting a very focused phase 1 study in melanoma with 801. Again, just to remind everyone, it's a masked version of interferon alpha 2B, which we know has some monotherapy activity in melanoma. We're making good progress. We've advanced through several monotherapy escalation cohorts. The drug's been well tolerated. That's all gone fine. That allowed us to open up the combination arm with Keytruda. We dosed our first patient with Keytruda in Q2. Our goal for this year is to share some translational biomarker data on paired biopsies in the monotherapy arm, looking at regulation of interferon-responsive genes and modulation of different cell populations in the tumor microenvironment by the masked interferon. Our goal is to demonstrate that the drug is mechanistically doing what it should be doing, getting unmasked, activating the right cell types, inducing interferon-responsive genes, really setting the stage for the combination to be effective. Combination data, clinical data, we'll plan to present sometime in 2026. This update this year will be very translational biomarker. Not planning any response data or safety data from the study. It will be very, if you like, sort of molecular evidence of performance of the drug in the early stages of dose escalation. Yeah, it makes a ton of sense, and that's super exciting. Maybe we'll probably have time for one more question. Maybe just taking a very quick step back, how are you kind of thinking about the next 12 to 18 months? You obviously have a number of catalysts coming up. As you kind of think about your financing strategy around that, as you think about non-dilutive options around that, maybe just walk us through a little bit your thinking. We've got a lot of work to do, that's for sure. We've got a really, really exciting drug on our hands in CX-2051. Top priority is now to get this expansion data and use it to formulate our next steps in clinical development in colorectal cancer, to begin combination work to get the drug ready to come earlier in the treatment paradigm for colorectal cancer, to evaluate which tumor types to potentially initiate additional work in other tumor types in the not-too-distant future. All the way along, carefully consider our financing strategy. We were very, very pleased to be able to finance in May this year in conjunction with our data disclosure. We've got a big program here that's going to have significant capital requirements, so we're thinking carefully about what that future capital formation strategy will be. Of course, also thinking about when might the right time be to consider a partnership for CX-2051 because it does have the potential to become a very broad program very quickly. I do feel confident that there will be a lot of interest from strategic parties in potentially collaborating with us. A lot of work ahead of us. It's been an exciting year so far. Again, thanks for having us today. No, of course, and thank you for joining, Sean. Congratulations on all the success. We're looking forward to the next several months here. As are we. Thanks a lot, Ross. Thank you.