Good morning. Welcome to the final day of the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the senior biotech analysts at the firm. It's our pleasure to have with us our next presenting company, Merus. Presenting from Merus this morning is CEO Bill Lundberg. Bill, good morning. Thanks for flying to Las Vegas for us. Happy to be here. Let me also extend a great deal of thanks to you, Tazeen, and the entire Bank of America team for all your continued support. We really appreciate the partnership. Maybe let's go straight into a couple of macro questions. We've been asking all of our companies, just given updates that are happening. For a company in your position, which is interacting a lot with the FDA, can you talk to us about what your interactions have been like, let's say, over the last couple of months? If there's been any noticeable differences in who you're interacting with, the types of questions you might be getting, or anything that's a little bit different from before? Yeah, let me get into that. Let me first just remind everyone, in case any of you are unfamiliar with Merus, that we're an oncology-focused company with multiple assets. We have an approved drug by Zenocutuzumab. We have several clinical stage assets. We've been innovators in the field of multispecific antibodies for a number of years. We have a particular platform and approach that allows us to make these bispecific antibodies, essentially like monoclonal antibodies, which we think gives us significant advantages in a number of areas that I've described previously. We do believe that relying on well-established approaches, making essentially these antibodies essentially like monoclonal antibodies, gives us significant technical advantages and improves the chance of success across the board. We think that's very important that allows us to have the success that we've had to date in the clinic. These are across a wide range of applications, not only the bispecific antibodies we will be talking about today, but also the opportunity for T-cell engagers, which we have with a number of our partners and collaborators, and the potential for bispecific and multispecific ADCs. We think this is a powerful technology platform. It, of course, does not guarantee success in the clinic, but we think it gives us a better chance at being successful, as we are seeing across a number of molecules. We have had a whole series of interactions with the FDA over time. We have been quite successful in our interactions with Zenocutuzumab, our drug we had approved last year, with multiple breakthrough therapy designations, and now Petosemtamab with multiple breakthrough therapy designations. We're in a phase where our phase III registration trials, we're busy executing them, so we're not in the midst of very active interactions with the FDA. We've already established our project optimist phase III dose. We've already aligned around phase III clinical trial design. Let me say that all of those interactions seem to have gone on in a relatively straightforward manner, and we haven't seen a substantial difference. I do think it's helpful that we're not a cell and gene therapy company or a vaccine company. I do think it's helpful that we have breakthrough therapy designations, two of them for Petosemtamab, which I do believe helps us in our interactions with the agency. Nonetheless, this is something we're all paying attention to and keeping an eye on. Okay, perfect. Thanks for all that color. Let's talk about some catalysts that are upcoming for the company. You mentioned Petosemtamab. I think the investment community has been razor-focused on your program to treat frontline head and neck cancer in combination with Keytruda. You have a call upcoming on May 23rd. Can you just frame for us sort of what to expect on that call ahead of the actual ASCO presentation? Yes. Let me walk through that for everyone. We've guided that we have a presentation at ASCO this year in June, and the meeting is in Chicago. The abstracts for that presentation drop at 5:00 P.M. East Coast time on May 22. We've also announced an investor call 30 minutes after that at 5:30 on May 22. The information on this call is available on our website, where we have the opportunity to talk about the clinical data. We are able to talk about not only the abstract, but also the clinical data in the presentation itself. We think this is important because it allows us to be able to provide information broadly and to the broad investor community all at the same time. I think it's a very important component of being able to work both within the rules of ASCO and with our clinical investigators and KOLs, but also with the investor community. In terms of the presentation itself, we try to be very consistent from presentation to presentation in terms of what is being presented. Let me just take a few minutes to remind everyone. Last year at ASCO 2024, we provided the information on this cohort of patients with recurrent metastatic head and neck cancer, who we've treated with pembrolizumab or Keytruda in addition to our drug, petosemtamab. We added petosemtamab to standard pembro treatment. The overall population is 45 patients, and that was described last year. This year, it's the same 45 patients. Last year, it was a very early look at that data, so we only had efficacy information, largely response rate information on the first cohort. We had 24 patients who were efficacy available. This presentation is going to be the full cohort of patients, not only response rate information, but time to event information as well, PFS and OS, and then safety data as well. Okay. I think I had said May 23rd. It's May 22nd, your call. Yes. Let's talk a little bit more detail about how to think about some of these metrics. One heavily debated metric is the 12-month landmark OS number. For those who may not be as familiar, explain to us why that's an important measurement and give us a sense of what we might be pegging to in order to get an understanding of what would be a good result. Yeah. When we talk about our cohort of patients with head and neck cancer being treated with this combination of our drug, Petosemtamab, added to Pembro, there are a number of efficacy endpoints: response rate, progression-free survival, duration of response, overall survival. They're all important and important for different reasons. The clinical trial will win or lose on the efficacy endpoints of that trial. To be really clear, there's an interim look at overall response rate and a final look at overall survival. For our drug to gain approval, ORR and OS are the two really important endpoints. Now, we've already shown a 67% response rate for the initial 24 patients in this cohort. This is compared to the historical rates of response for Pembrolizumab alone of 19%-25%. Nobody's really worried about or even debating the ORR numbers. People feel good about that, and we'll have an update with larger numbers of patients. On the OS piece, the overall survival piece, which is the ultimate approval endpoint that all drugs in head and neck cancer have to win on, this is where, if our drug works, we may not have reached a median OS. So we won't be able to talk about a median OS. I believe the best indicator of how survival will unfold for your trial is an early look at survival, where 12 months is the 12-month time point is the first time you can really get a sense of this. It is called the 12-month landmark OS rate, or basically the proportion of patients who are alive in your study at 12 months, which is why it is so important. I can provide some benchmark comparisons as well for this. The control arm in our first line trial is Pembrolizumab alone. In two recent large randomized controlled trials, the rate of patients alive on the Pembrolizumab alone arm has been 50% in one study and 59% in the other. That's the number I think our data will be compared to. Okay. Thanks for framing that for us. There are a couple of other metrics that you can opine on in terms of importance. Last year, the important point that people were debating was response rate. You'll have a more mature number this year. Can you talk to us about the relative importance of that at this juncture? Is there a "bogey" that would be ideal for these patients? Again, for response rate and overall survival, those are really important from this cohort because it'll give us an indication of what's our conviction that our drug will prevail in the phase III registration trial. We feel really good about a response rate that's three times greater than the historical control rates. We showed a 67% response rate, and the historical control rates are 19% or 25%, depending on which trial you look at. We're not getting a lot of questions from investors around, is there a response rate threshold? People generally feel very good about that number and that delta and our likelihood to both reach stat-sig and clinically meaningful difference there. Okay. Is there a minimum number that you would think would be important to at least cross? I think people generally want to see how consistent our results are over time. Right. Last year, you were in the high 60s. Some number close to that probably is my guess of what people would be thinking about. As data matures, those numbers naturally tend to numerically trend a little bit lower. We're looking forward to sharing the data. Sure. And then on PFS. Since you have OS being presented, can you talk about whether or not PFS is going to be an important metric for this data set? Among the endpoints, all the efficacy endpoints we talked about, progression-free survival or PFS is an important endpoint as well. It is an important endpoint for different reasons. The first is that it is a metric that is kind of a surrogate for how long patients are on drug, which impacts the commercial models and how big this opportunity could be for Petosemtamab economically from a commercial standpoint. The second reason why it is an important endpoint is there is a competitor that has a median PFS number that has been widely cited, and we will be compared to that. Okay. In terms of the longer-term predictability of this data, I think you hinted at that already, but how should we be thinking about durability of this product after we see the latest update? I think hopefully both the PFS and the overall survival data will give a sense of the promise and opportunity of Petosemtamab in the first line setting. I mean, that's ultimately the big question, I think, that many investors currently are interested in. Again, I think people are really comfortable with an overall response rate that we've already shown, but the time to event endpoints we did not have at the last presentation at ASCO 2024. That's the big question, I think, many people are asking. Yeah. How do you think that Petosemtamab targeting EGFR and LGR5 makes it differentiated on the point of durability versus the competition? Let me just remind everyone, Petosemtamab is a bispecific antibody that on one arm binds to EGFR and with the other arm binds to this target LGR5. We originally discovered this antibody by running a large screen to ask the question, what could we combine with an EGFR binder to have outsized activity in these models? We used relatively sophisticated organoids derived either from colon cancer or adjacent normal tissue to look for a drug that had a differential effect on colon cancer derived as opposed to normal tissue derived organoids. We have been working hard to understand the mechanism of action. I'm pleased to say just this morning, we announced the publication of a review paper that described the mechanism of action of Petosemtamab. I'd refer you all to it if you're interested in reading more about it. It's available on our website in the publications page. In short, LGR5 is a protein that's expressed on adult tissue stem cells. All of us have the epithelial lining of our colon turn over every five days. That large number of cells that gets created in your colon derived from an LGR5 population of stem cells, adult tissue stem cells that give rise to the more differentiated lining of your colon. It's probably the case that the same thing happens in cancers. Cancers are a heterogeneous mix of cell types, only a few of which are responsible for tumor growth and metastases. These we believe are LGR5 positive, as you can read in this review paper. Having a bispecific antibody that directly targets not only EGFR, but in addition, this population of LGR5 positive cells, we think is an important component of the mechanism. One other aspect of the mechanism is that the antibody, the constant domain of the antibody, is optimized for engaging the patient's own immune system. We believe that's a second mechanism that really can provide the substantial and outsized benefit that we've already seen to date. Okay. Can you also, I guess, briefly talk about HPV negative and HPV positive subtype patients? That's an area of differentiation that we've been talking about as it relates to your product for some time. You did, in your update last year at ASCO, show three out of four patients did have a positive response to treatment. You used that as the basis of deciding to include the overall population, regardless of HPV status, in your go-forward pivotal program. Can you just talk about the importance of that decision and whether you think that that's a big point of differentiation as well? Yeah. There are two ways in which head and neck cancer typically arises. In one set of patients, it arises commonly from smoking and drinking and carcinogen exposure, which is a head and neck cancer that's HPV negative or not associated with human papillomavirus. In another set of patients, the infection of human papillomavirus leads to cancer outgrowth. Each of these have somewhat different mechanisms of causing cancer in the head and neck area. It's important to note that when we talk about HPV positive head and neck cancer, what we're really talking about is a small subset of all the anatomic sites. Only in the oropharynx, a subset of those derive from human papillomavirus or HPV. The vast majority of head and neck cancer is typically HPV negative, with around 20%-21% in these first line trials of tumors or patients having HPV associated cancer. The past five registration trials in head and neck cancer have all pursued the overall population, not breaking out an HPV negative or an HPV positive subset. Our approach is to do that as well. In our discussions and interactions with the regulators, we have approached it from the overall population. The question of HPV negative versus positive hasn't come up. In our breakthrough therapy designations, both of them, it's for the overall population. The question of HPV negative or positive hasn't come up. We believe sticking with this tried and true approach and a well-established regulatory precedent for our strategy for head and neck cancer makes a lot of sense. We're also encouraged by the fact that we do see clinical activity of our drug, both as monotherapy and in combination with pembrolizumab in the HPV positive subset, which gives us further encouragement to approach the overall population. Okay. That's a really good explanation. Keeping on the point of differentiation, I also did want to ask you about the Keytruda plus Pembro approach versus Exelixis, which is doing Cabozantinib plus Pembro. I wanted to ask particularly about tolerability, given that Cabozantinib is a multikinase inhibitor, which could have a potentially higher potential for tox. One of the other phase 3 trials, again, in all comers, the overall head and neck cancer population is a trial being run by Exelixis, which is taking pembrolizumab, which is a standard therapy in the CPS one or greater recurrent metastatic head and neck cancers, and adding to it their multikinase inhibitor, zanzalitinib. There was a recent failed trial of a different multikinase inhibitor pill called lenvatinib. That trial had some very interesting response rates, but ultimately failed to show a survival benefit. It was very difficult for patients to take. I think with Zanza, we do not have as much data. There is a discontinuation rate. There is a set of side effects like hypertension, nausea, diarrhea. I think that those are characteristics of these multikinase inhibitors. There is a sort of safety and tolerability question with Zanza. Ultimately, we have to see how the phase II, three trial runs out. They are running a phase II/three trial, and they've guided, I believe they've guided that they would have a phase II to three gate to pass through, sometime second half or towards the end of the year. Okay. And then just as a reminder for everyone, can you talk about the safety profile of Petosemtamab so far? I think Petosemtamab has a very favorable safety profile. The one safety observation that we've commented on extensively is that with the very first infusion, about a third of patients, around 35%, can have infusion-related reactions, which can be a little bit of nausea or lightheadedness. It's something we've noted and we've worked very hard to mitigate and manage. We have a pre-medication regimen and a treatment algorithm for the very first dose because these are virtually all first dose phenomenon. It turns out that the most important thing is once a patient starts to experience anything like that, just slow down the rate of infusion or stop it and then restart once the patient feels better. It hasn't been an issue according to our investigators, so we feel quite comfortable with that. In terms of the rest of the profile, we're really quite encouraged by a very, very favorable safety profile across all of the other typical adverse you might see. We're encouraged that there could be a new standard of care in head and neck cancer that is chemo free and potentially better than pembrolizumab or Keytruda, which is a current standard of care. Okay. Great. On the last point of differentiation is on your, which we talked about a second ago, all-comers study. For example, another one of your competitors, Bicara, is choosing to do just HPV negative patients. Can you talk to us, give us a sense about how much bigger the population that would be addressable for your product would be if it includes all status patients? The HPV positive proportion, which are excluded from the other trial you cited, has been around 21%-22% globally in registration trials. That number is higher in the U.S., but has been pretty consistently 21%-22% globally in these registration trials. I think one of the difficulties is looking at the HPV negative subset does not have any regulatory precedent. It is hard to know what the control arm might do because we just do not have those data from prior large registration studies. I think it gets really complicated very quickly once you start deviating from well-established precedent in terms of regulatory or clinical development strategy. Okay. I wanted to ask about the phase 3 trial. How is enrollment going in that for first line? We have two registration trials ongoing. The first thing you can tell from registration trials is rate of site activation and country activation, which is really the best early metric. Only once you establish a mass of clinical trial sites do you then see enrollment really take off dramatically. We're very pleased to have around 120 sites active in the first line trial and around 120 sites active in the second line trial. You can see these numbers yourself on clinicaltrials.gov and follow different clinical studies. We do not update it particularly often, but we aim to update it once a month or a little bit more frequently than that. We're really encouraged by the progress we've made. It encourages us further to continue to reiterate our guidance of being substantially enrolled in both trials by the end of this year. I guess the next question from that would be, how should we interpret timelines potentially for submission? We haven't guided specifically top-line readout or any BLA submission. But what I have pointed to is the opportunity in both first line and second line for a potential accelerated approval based on an early endpoint such as ORR. We've had discussions with the FDA. The FDA has made public comments about this. This is project front-runner. We've seen the first project front-runner approval based on ORR with the breakwater trial in December. We had another company comment that they were submitting under a project front-runner format and framework. So we're really encouraged that this is a thing that the FDA is now really, really doing. Importantly, when the FDA says an early endpoint such as ORR, they actually mean two additional things. The first is not just tumor shrinkage, but confirmed response rate. So a second scan shows that those responses are holding up. And then with some duration. They've never said exactly what that duration is, but you look at other approvals, other accelerated approvals, and typically it's been around six months of follow-up information. I've also shared that Project Front-Runner precedent, the Breakwater trial, actually got accelerated approval on the first 110 patients per arm response rate data. They didn't need the entire population to get approval. Okay. So I guess how are you thinking about accelerated approval in the new FDA regime? Has your thought process changed at all? It's interesting. We're paying close attention, as I said earlier, to the FDA, the evolution of the FDA. I do believe that we continue to have strong leadership at the Oncology Center of Excellence, which is the primary group that we interact with. That group does not report up through CBER, but rather independently reports up to the Commissioner of the FDA. We are encouraged by the fact that accelerated approval at the FDA has several decades of established precedent. Project Front-Runner appears to continue to be a really robust thing within the oncology division. We're continuing to see accelerated approvals. Verastem had an accelerated approval recently. I think the T-DXd ADC was recently approved. We're really encouraged by this continued opportunity for accelerated approval. Again, we're paying very close attention. Okay. We'll follow up with you again as things develop. Let's switch gears in the couple of minutes we have left. I did want to touch upon metastatic colorectal cancer. Can you elaborate on this phase II update that we're expecting in the second half of this year? In a separate indication, metastatic colorectal cancer, we do have three cohorts enrolling. This is our drug, Petosemtamab in combination with chemotherapy in the first line setting, a cohort in combination with chemotherapy in the second line setting, and monotherapy in the third line setting. Now, these are genetically wild-type tumors. In the first and second line setting, those patients will have not seen prior Cetuximab or Panitumumab EGFR antibodies. We are enrolling as quickly as we can. We have guided an initial look at the clinical data in the second half of this year. We are looking forward to providing the data because the biological rationale and our preclinical experiments are really strongly showing that there is potential opportunity in colorectal cancer. If our drug should work anywhere, it should work in colorectal cancer. I will remind everyone, we did do dose escalation with colorectal cancer patients. We did not see a response. In retrospect, we think that was probably naive of us. Median fifth line therapy, heavily pretreated patients, genetically mutant tumors. It was just a tough population. We are really keen to see how we might be able to do in this cohort of colorectal cancer. How many patients' worth of data should we expect? We haven't guided a specific expectation around patient numbers. We're trying to enroll as quickly as we can. We'll share the data we have. Ultimately, do you think of this as a monotherapy or a combo? I mean, standard of care is chemotherapy in the first line setting with a biologic in second line setting. You'd have to develop your drug in that setting along with chemotherapy in the first and second line setting. Okay. If you make a go decision on this, what would be the next step involved in moving this program forward? I mean, if the clinical data are outstanding, the next step would be a phase 3 registration trial. Obviously, that would require a substantial amount of resource and attention and focus from the company. Just to be really clear, we are very focused on execution of our current phase 3 head and neck cancer trials. Okay. Last question is on your cash balance. Can you just remind us what that is and how far it'll take you? Yeah. I think we're $638 million as of the last quarter close. That takes us into 2028. Importantly, through top-line readout of our phase 3 registration trials in head and neck cancer. Okay. Perfect. With that, we're out of time. Thanks so much for sitting with me for the last 30 minutes. And thanks, everybody, for joining. We'll talk to you soon. Thanks, Tazeen.