Good afternoon, everyone. I'm Andy Berens, Senior Biotech Analyst at SVB Leerink. Thanks for joining us on day two of our healthcare conference. We're very happy to have with us today, Merus. We have Bill Lundberg, the CEO of the company. Thank you for joining us, Bill. Thank you. Um- Appreciate the opportunity to be here. Sure. Before we get started into the Q&A, why don't you give an overview of Merus for those on the webcast that may not know your company? Merus is an oncology-focused company developing multispecific antibody therapies. These are bispecific and trispecific therapeutic candidates based on the fully human IgG format. We have a robust clinical pipeline with multiple clinical- stage assets and early data we've reported on zenocutuzumab and on petosemtamab or MCLA-158 recently. We have a leading multispecific antibody platform based on the common light chain technology I'll speak to briefly in just a minute, and multiple near-term trial updates and a strong cash position beyond 2024. We leverage strategic collaborations to maximize our unlocked platform value. In terms of the platform technology, our bispecific and trispecific antibodies are based on the common light chain technology, which essentially allows us to make a monoclonal antibody, except that it binds to two different targets. Out of one single cell, we can make this monoclonal, but bispecific antibody, essentially a monoclonal antibody out of a single cell. It allows us to do large- scale screening. It allows us to use or leverage the fully human IgG format, gives us ease of manufacturing, low immunogenicity risk, predictable in vivo behavior, durable, consistent half-life, and all of the tricks and tools of antibody engineering that we can do. It's backed by a robust IP portfolio. That's the foundation on which the company was started, and it is the genesis of all of our preclinical and clinical- stage assets. Great. Well, thanks for that overview. Before we jump into the questions, just does anyone else use that similar technology in their construction of these bispecifics? There have been a number of ways to try to solve the problem of how do you make an antibody that has a left binding arm and a right binding arm, and I think you've seen a number of these. Whether you use a single heavy chain or camelid approach, or whether you go through the more laborious process of, say, like a DuoBody technology of taking two different antibodies, mixing them together, melting them, and re-annealing and pulling out the heterodimer. But this common light chain technology and our proprietary IP, our charge-based pairing, that combination is unique to Merus, and we leverage it for all of the strengths that I've just listed. Okay, great. Why don't we talk about Zeno since that's your lead program, and then we'll go to some of the other pipeline assets. You have an ongoing phase I/II trial. Can you give us an update on the state of enrollment? When's the next clinical update or the details of the one we're expecting in the first half of this year? Zenocutuzumab or Zeno is a bispecific that binds to HER2 and to HER3. It docks onto HER2, we like to say, and is in high local concentration to more effectively bind to and block HER3 interacting with ligand and prevents HER3 from dimerizing, partnering up with HER2, which is a critical step that's required in the process of signaling. It is being developed in these NRG1 fusion cancers. These cancers with the gene encoding the ligand for HER3, NRG1 is fused to a promoter. These cancers, although they're quite rare, they are clearly driven by this NRG1 fusion. We reported out early data at ASCO last year, as I think you're alluding to, with an overall 42% response rate in pancreatic cancer with these fusions and 31% response rate overall. The enrollment continues. We've been quite pleased with how enrollment is going. At the beginning of September, we reported that we had more than 80 patients enrolled, and we will be providing a clinical update at a medical conference in the first half of the year on the next set of data from the clinical program. We haven't benchmarked exactly how many patients, but it'll be a substantial number of patients with substantial follow-up in the program. Okay. What kind of follow-up and durability have you presented to date? We provided the follow-up on all the patients who were dosed, who were evaluable at the ASCO presentation in June of 2021, and that presentation is on our website for people to review. At the time, a lot of the patients had recently enrolled, so we didn't put a number on the durability or duration of response only because it was very early data. We had wide confidence intervals. There were a number of patients who'd been treated, had a response, and that response had continued to persist or maintain. We'd also seen responses relatively early in the course of treatment, which was quite encouraging as well. The CA 19-9 serum tumor marker for the pancreatic cancer patients was really quite telling in the data that was presented at the time. Okay. Would the strategy be a tumor-agnostic label, or would you think about carving out something like pancreatic cancer where 42% of it holds up is very impressive? We did share late last year that we had met with the FDA last year and aligned on a tumor-agnostic approach. Previously, fast track designation was granted to zenocutuzumab for tumor-agnostic NRG1 fusion cancer indication. We aligned with the FDA that tumor-agnostic NRG1 fusion cancers could be an approvable indication or patient population. We aligned with them that the overall clinical programs ongoing, which was the eNRGy trial, primarily could support registration and that directionally, where we were in terms of levels of efficacy and safety could be sufficient with additional patients, potentially for a BLA filing. We haven't shared exactly what the numerical thresholds or benchmarks we have, landed on with the FDA are, both the number of patients or safety or efficacy thresholds, 'cause it's a bit of a competitive space, as you know, but we've aligned on numbers that we're quite comfortable with and confident about. I think you also have an early access program. What can you tell us about that? How many patients are getting access to the drug through that program? We do. We originally dosed the first handful of patients with NRG1 fusion cancers, not on a clinical trial, but on an early access program, which was essentially a named patient IND type of program at academic centers, a limited subset of academic centers. We've since expanded that effort. For any patient who is not able to enroll on a clinical trial of zenocutuzumab, we do try to make the medicine available to them at their clinical site and follow the patients as closely as we can along the context of the clinical trial to be able to gather data that we're hopeful could possibly be supportive in any regulatory filing. The EAP or early access program represents a real minority, a very small proportion of the patients who have received zenocutuzumab with NRG1 fusion cancers, so it's not a significant part of the program in any way. The vast majority of patients who have enrolled on the programs or have received Zeno over the past six to nine months have almost entirely been on the eNRGy trial. Okay. In terms of potentially filing a registrational package, how soon should we would think that could happen? Well, we believe we'll have sufficient enrollment and the required clinical follow-up by the middle of this year to represent the data package on which a BLA filing could be based. Now, we haven't guided exactly to a BLA timeline, but typically for companies of our size, it could take around six months or maybe a little longer, six to nine months from last patient, last visit for that cohort to collecting, cleaning the data, locking the database and putting together a BLA filing and submitting it. Okay. Then just to clarify, the way that the FDA will judge this will be the individual tumor types relative to, I guess, their standard of care, efficacy that you would expect to see with other drugs and you would have to show in four or five tumor types that have the biomarker enrichment that you can get to that level? My sense is that the FDA has a slightly different view from that because it's very difficult to have statistical significance in small cohorts of patients. Rather we've aligned with the FDA on where we need the efficacy to be in the overall population, and that the requirement is that efficacy is generally consistent across the patient subgroups or different tumor types. Okay. You can't have a stringent quantitative test if you only have three patients of a particular tumor type, say cholangiocarcinoma or something. The error bars are just too wide, but the response rates need to be consistent across different patient populations. Okay. What would be the minimum that they would consider reasonable? 30%? 20%? We haven't shared where we landed with the FDA. Obviously it's a competitive space. Generally, the FDA has approved certain response rate ranges of the 11 most recent accelerated approvals in oncology that are across a range for which our response rates are well within the middle of that range. That was our approach in our conversation with the FDA, and successful in aligning, and hopefully it'll be successful with the clinical data as well. Okay. In terms of the commercial opportunity, can you just give us a sense for how large the NRG1 population could be if you get a tumor-agnostic label? You know, how quickly do you expect NRG1 testing to be adopted once there is an available treatment? The patient population generally based on early epidemiology work that we supported but was done independently, is generally around 0.5%-1.5% of pancreatic cancer, 0.3%-3% of lung cancer, and 0.2% of all other tumor types. It's several thousand patients per year in the U.S. generally. There have been a number of models that have said that this was a peak sales, hundreds of millions of dollars, not north of a billion, peak sales opportunity. We think that's generally right. We're continuing to do work on the epidemiology and prevalence, incidence and prevalence of the disease. In terms of patient identification and access, we do have more than 10 relationships with diagnostic companies, molecular testing companies, patient consortia, academic sites, et cetera, to understand the market, understand the drivers of how patients are potentially identified when testing is chosen. That is work that we are continuing to ramp up as we begin to focus more and more on the post-approval commercial landscape. I will say one of the advantages of this particular molecular testing landscape is that patients generally or almost exclusively have cancers that don't have RAS mutations. When you think about the lung and pancreas landscape, which is where the majority of patients are, there will be or there already is and continues to be and will be more a push on RAS testing for the RAS drugs. Those that are RAS wild-type, there's a very high proportion of them who have NRG1 fusion cancers. We can already see the building of a diagnostic algorithm that includes, you know, re-testing for very common changes in the genome and then identifying the patient population where there's potentially a higher prevalence of the NRG1 fusion in the diagnostic algorithm. Would this be a standalone test or could it be included as part of a panel? NRG1 fusions already are on panel in most of the major diagnostic testing panels, molecular testing panels for cancer. You know, we're in conversations. We're actively working to have it included much more broadly, but we think that's an important component as well, that a patient who receives a molecular test for their cancer at the time of diagnosis has information also about NRG1 fusions. Okay. Why don't we switch gears to MCLA-158? I think that was kind of a hidden gem in your pipeline that surprised investors when you presented data. Can you just walk us through what that molecule is and what you showed at the Triple Meeting? MCLA-158 is a bispecific between the well-established cancer antigen EGFR and this new target antigen LGR5, which is a molecule in the WNT pathway. LGR5 is typically expressed in embryogenesis or in development in utero and not expressed post utero or after birth to any large extent. There is some expression on some tissue stem cells, but importantly, it's expressed on cancer stem cells, and there's a fair body of work describing it as a marker of cancer stem cells. It's also expressed on particular cancer types, including colorectal, head and neck, and gastric esophageal, the three areas where we're interested in developing or evaluating MCLA-158. What we observed, preclinically is that LGR5 has a surface marker, internalizes rapidly, and it appears that LGR5, when bound with an antibody that's also binding to EGFR, pulls that entire complex into the cell and leads to the degradation of EGFR. A novel mechanism in EGFR therapeutic landscape. Clinically, what we observed early data with the dose escalation studies, that we didn't see robust responses with the drug in colorectal cancer in a very limited number of patients in the dose escalation. However, those tumors did not express much EGFR at all. When we now turn to head and neck cancer, in early data we presented at the Triple Meeting last year, we saw robust EGFR expression on the tumors from an early number of patients. We saw out of seven evaluable patients, three of them have partial responses, one of which continued on to be a complete response. All seven patients had some degree of tumor shrinkage. Now, it's very early data, so wanna be careful about over-interpreting, but it is quite encouraging at this point in terms of a molecule that could potentially play an important role for patients with head and neck cancer. What would be the response you would expect to see from EGFR alone in a similar patient population? In this previously treated patient population, Cetuximab has a historical 13% response rate. It's significantly different from what we've observed in early numbers from this trial. Oh, okay. It sounds like you think that the lack of response that you saw in colorectal was because there was not a high degree of EGFR expression in those patients that you treated? That's certainly one possibility that we're evaluating very closely. That's right. Okay. Would this future development of this drug gonna include enriching using EGFR or LGR5 or a combination of both? Or how should we think about the target population? Well, I think we first want to ensure that we continue to see a strong efficacy and safety signal in this population in a larger number of patients to commit significant investment. Provided continued strong signal, then I think we have a number of development opportunities here. Clearly, if there's a very strong signal in head and neck cancer, previously treated head and neck cancer, there's an opportunity to develop the drug broadly in previously treated head and neck cancer. There is also the opportunity to look at a biomarker-directed strategy if we see the responses correlate very strongly with biomarker. The lead biomarker here to talk about is EGFR, but there are others as well, or a combination of EGFR and LGR5. That is clearly a potential development path approach as well. Ultimately, if we believe we have a strong signal in head and neck cancer in the previously treated setting, then exploring the frontline setting would make a lot of sense too. Those early results would also encourage us to go back and look again at the colorectal cancer dataset and try to understand if there's an opportunity for a biomarker-directed approach in colorectal cancer. What about lung cancer? Have you tested it there? We have not performed any clinical trials of MCLA-158 in lung cancer. Lung cancer is obviously a very big opportunity and with significant unmet need, particularly in patients who progressed on standard therapies. We are a little cautious about the landscape of the anti-EGFR antibodies alone have not been successful in lung cancer generally. We would wanna make sure we fully understand what our hypothesis is going in to make sure we're making the right investment in lung cancer. Right. Okay. Why don't we switch gears to MCLA-129? I think it's one a lot of people are looking forward to seeing data. Can you just give us an overview there, and then when we'll see the first data set. MCLA-129 is bispecific between EGFR and c-MET. We originally started developing this a number of years ago with the logic that the c-MET pathway has been well-established as a mechanism of resistance to EGFR inhibitors. That was the initial logic around this approach. As we've continued to develop MCLA-129, J&J have also been developing amivantamab, which is a bispecific antibody. It's really quite similar, targets the same two targets and demonstrated activity or strong efficacy in a number of different settings in lung cancer. We have started the phase I dose escalation in the second quarter of last year. It continues in dose escalation, and we'll be reporting out the recommended phase II dose when we reach that point at a medical conference. We were not gonna wait for enrollment of the expansion cohorts that are planned. Okay. You said it's not different from amivantamab. Is there any difference at all that you're aware of, or is it pretty much a clone? A clone would always be interesting. There are a couple of important differences. One is that we've developed our antibody through empirical selection of what appears to be the best out of a large number of candidate molecules through a set of screens. Because we make these essentially monoclonal-like antibodies, but they are bispecific, we can do large- scale screening to identify the ones that behave best in these assays. What we've pulled out is a molecule that is quite similar. It binds to the target molecules. It blocks ligand binding to target molecules, as does amivantamab. It appears to have much more similar affinities for the two targets as compared to amivantamab, which is something generally you want with your bispecifics. One other important point around MCLA-129 is it is fully ADCC-enhanced, where our understanding is that amivantamab may be only half ADCC-enhanced, phenomenon relating to the way in which the DuoBody technology makes the amivantamab antibody. Okay. Well, one of I think the difficulties with amivantamab is the administration. Would those differences translate into a more an easier drug to administer, or are you considering other formulations maybe like for a subcutaneous route? We have noted the data on infusion reactions that has been reported and the schedule of frequent weekly dosing for the first month, followed by bi-weekly or every two- week dosing afterwards as two areas that we could potentially improve upon with MCLA-129. It's probably unfair to comment on a safety profile of a molecule, of our molecule without having a collection of safety data from the full dose escalation portion yet, though. There are some potential advantages then. It is interesting. Okay. I guess in terms of how you would think about developing this drug, are you gonna try to navigate in areas that J&J is not going into, or do you think there's room to have a similar strategy and bring in a second molecule that potentially could have some advantages, it sounds like? Well, in every large area within oncology, there are multiple entrants. For example, the PD-1, PD-L1 drugs and other classes of medicines, there are multiple entrants. We think generally in larger areas of oncology, there is room for a second entrant. However, we do want to try to demonstrate efficacy or early activity as an initial step. Having a sense of where this target pair combination can have responses, which is based on the amivantamab data, is an important set of information that gives us guideposts where to go. We also have one additional indication we think is of interest that has not yet, to our knowledge, been explored that we're interested in pursuing, and we haven't shared that publicly yet. Okay. Interesting. I mean, one of the things I find interesting about the J&J program, besides the breadth of it, is just some of the combination strategies that they're doing and where they're going with that. I guess, what are your thoughts about this class of drugs? Is it gonna be really as a monotherapy, the biggest opportunities, or is it gonna be as a combination? The fact that it's not a small molecule does make it potentially easier to combine with some of the TKIs, I think. I think what we're seeing is really strong efficacy data, both as monotherapy and in addition in combination. That is quite encouraging to be able to combine this type of drug with other drugs. One of the important considerations, though, as you're alluding to, is the safety profile. I think we wanna look carefully at the safety profile of MCLA-129 to ensure that we have the latitude to combine with TKI or small molecule tyrosine kinase inhibitors or other medicines or even cytotoxic chemotherapy. Okay. What are the properties of this drug and amivantamab? Is it mainly the EGFR? Is it a stronger EGFR inhibitor or a stronger MET inhibitor? Our understanding of the amivantamab molecule is that it's a stronger c-MET binder. One of the characteristics of lung cancer is there's soluble c-MET that can stick to your antibody that has to clear out before you can effectively dose patients. That's a consideration in thinking about dose and schedule. I think we have certain hypotheses about this. We need more data from our ongoing clinical trial to understand where the real opportunity is here with respect to c-MET affinity. Okay. Well, I know a lot of people are very excited about the first data coming, so we'll stay tuned. Then maybe lastly, I know we're towards the end, but MCLA-145, can you give us an overview of that program and then where. You know, I know that Incyte was involved, and then they decided not to continue the collaboration. MCLA-145 is our bispecific. It engages T cells, activated T cells on the 4-1BB or CD137 antigen and brings them to tumors that express PD-L1. That's the bispecific and how it's designed to act. It was originally designed to fully block PD-L1, PD-1 access as well. What we've learned about this medicine and this class of drugs, indeed, 'cause there are others in clinical development as well, is that the clinical development is not as straightforward as simply other antibody therapies, that there appears to be a bell-shaped curve or a window or hook effect or window of optimal dose and exposure to have a maximum effect. Generally, it's taking a little bit more time to find where that is for each molecule, and then to fully test the efficacy in that range and the right patient population. In addition, that range is not a range which fully blocks the PD-1, PD-L1 axis, so we and others have been talking about the importance of combining with an anti-PD-1 drug to fully test the original hypothesis. Those are the two questions that continue to need to be tested. Optimal dose and the right patient population is one, and potentially in combination with the PD-1 drug is the second. You alluded to Incyte having given the commercial rights back to Merus, which they did. We announced and they announced a couple of weeks ago, and our understanding was that was part of a portfolio review that also included an additional medicine that they chose not to move forward with in the clinic. They chose not to move forward with the BLA filing. It's really a portfolio review when they look at their investments, and only having ex-U.S. commercial rights for this opportunity was the basis of the decision they made. We continue to develop it. We're committed to these two questions and answering these two questions. The rest of our Incyte collaboration remains strong, and we're developing up to 10 bispecific antibodies with Incyte. Okay. You mentioned something that I'd heard, that maybe combining the drugs with PD-1, a class of drugs with PD-1 would actually decrease the hepatotoxicity. I think there was a data set presented recently at one of the meetings. What can you just go through that again? I think you touched on it a bit in your comments. Well, we know that very high doses of these drugs do cause hepatotoxicity. One of the interesting data sets, not from us, but from a competitor, showed that there appears to be greater potency in a preclinical model when you add greater potency at a lower dose level of the drug when you add an anti-PD-1 antibody, suggesting that we can steer even further away from potential hepatotoxicity of the particular PD-1, PD-L1, CD137 binder by combining with a PD-1 drug. It's a preclinical model. We have to test it in the clinic, but at least it's an interesting hypothesis of, you know, how to create a greater window of opportunity for the medicines. Okay. You essentially would be able to dose down on the PD-L1, CD137, but add the PD-1 separately. Okay. Interesting. With the last minute or so we've got left, what's next for the company? Obviously, drug discovery company. What other areas are interesting? Well, the most important thing for us, we clearly have a head down, focus on execution, the lead molecules, enrollment, and delivering the clinical data. Then in terms of our platform and pipeline, you know, we have a number of collaborations, not only Incyte, but with Loxo Oncology and CD3 T-cell engagers. We have a number of areas of research we've been pursuing preclinically that we think are quite interesting. We haven't yet talked extensively about it publicly, but we have provided some presentations at PEGS and some of the research meetings. We're encouraged by the progress of our clinical- stage molecules that suggest this platform can make meaningful medicines potentially, and we continue to push forward on all fronts. Great. Well, thank you, Bill. Appreciate the time with us and the insights about the company, and we look forward to continuing to see the progress. Thank you. Thank you everyone for joining us. This concludes the webcast. You can sign off.