Good day, and thank you for standing by. Welcome to the Xencor conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Question-and-Answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Charles Liles, Head of Communication and Investor Relations. Please go ahead. Thank you. Thank you, and good morning, everyone. Welcome to our call to review our newest collaboration with Janssen, which we announced earlier this morning in a press release. It's available at www.xencor.com. On the call today are Bassil Dahiyat, President and CEO, John Desjarlais, Senior Vice President and Chief Scientific Officer, Allen Yang, Senior Vice President and Chief Medical Officer, and Jeremy Grunstein, Vice President of Business Development. After some prepared remarks, we will open the call to your questions. Before we begin, we would like to remind you that during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the plans and objectives of management, the potential receipt of milestone payments and royalties, and research and development programs. These forward-looking statements are not historical facts, but rather are based on our current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause them to differ materially from what is anticipated by these forward-looking statements, including but not limited to those factors contained in the Risk Factors section of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. Please note that our new agreement with Janssen is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act. We anticipate closing to occur in the fourth quarter. With that, let me pass the call over to Bassil. Thanks, Charles, good morning, everyone. The drug candidates and technology we're discussing on the call today were all created with our array of modular protein engineering tools centered on our plug-and-play XmAb Fc domains for creating antibody and cytokine therapeutics that improve on natural functions and create new mechanisms of action. Currently, the internal development portfolio we've created includes six bispecific antibodies, either in phase I or phase II clinical studies, and now two phase I engineered cytokines, a reduced potency, long-acting IL-15 Fc fusion for oncology that we're co-developing with Genentech, as well as our reduced potency, long-acting IL-2 fusion for autoimmune disease. This portfolio approach allows us to take multiple simultaneous shots on goal in the clinic, and the proof-of-concept data we're generating guides which of our programs we advance independently, which we terminate, and finally, those which we partner, and importantly, how we partner them. Which brings us to today's agreement with Janssen, which expands the scope of the plamotamab program and its use in potential best-in-class antibody combinations to treat patients with B-cell cancers. It's a global collaboration and license agreement to advance both plamotamab and novel B-cell targeted CD28 bispecific antibodies, and we're delighted to expand our ongoing work with the Janssen team on joint plan for development. This is the second agreement involving our CD28 bispecific antibodies with Janssen, the first being our December agreement to collaborate on the discovery and development of a CD28 bispecific against a single prostate cancer target. By combining our efforts and resources with Janssen for plamotamab, we believe we can accelerate the progress of both it and our new CD28 bispecific platform in B-cell cancers. Our CD28 bispecific antibodies address our exciting new approach for improving T-cell therapies by driving CD28 co-stimulation of T-cells in a tumor-selective manner, and these can be harnessed in combination with plamotamab or other CD3 bispecific antibodies to potentially improve outcomes for patients with B-cell cancers. Plamotamab combinations with novel CD28 bispecifics complement our planned clinical trials combining plamotamab with MONJUVI, and both offer the same opportunity, the potential to create highly active chemotherapy-free regimens to treat lymphoma. Of course, strategy for plamotamab is focused on leading the creation of combination regimens that avoid the downsides of systemic chemotherapy. We believe that collaborating with Janssen is the best way to broaden and accelerate our efforts in lymphoma and to maximize the opportunity for plamotamab to bring benefit to patients in the very promising but crowded field of CD20 by CD3 bispecific antibodies. I'll pass it over to Jeremy Grunstein, our Vice President of Business Development, to discuss the terms and structure of the collaboration. Thanks, Bassil. Overall, the benefits of this collaboration center on long-term value capture, not only through cost-sharing, but also by leveraging Janssen's expertise in Heme/Onc. We structured the agreement to maximize the value of these B-cell cancer assets by both enabling the rapid discovery and development of novel CD28 bispecific antibodies targeting B-cells and broadening the development opportunities for plamotamab. The research portion of the collaboration is up to two years, during which we will work with Janssen to engineer B-cell targeted CD28 bispecific antibodies that amplify the activity of plamotamab and other B-cell targeted CD3 bispecific antibodies. Janssen has exclusive worldwide rights to develop and commercialize these CD28 antibodies, as well as plamotamab, subject to certain retained development and commercialization rights. We will receive a $100 million upfront payment, and J&J Innovation will purchase $25 million of Xencor stock. We are eligible to receive $517.5 million in milestones for plamotamab development, regulatory events, and sales, and we are also eligible to receive royalties in the low double-digit to low 20s% for sales of plamotamab or plamotamab CD28 bispecific combinations. We will initially conduct certain research and development activities, including the optimization of a subcutaneous formulation and the development of plamotamab in combination with tafasitamab. Xencor will pay 20% of plamotamab development costs and retain an option to co-detail plamotamab products up to 30% of details. For the CD28 bispecific antibodies, we are eligible to receive $670 million in milestones for the development, regulatory events, and sales, and we are eligible to receive royalties of high single-digit to low double-digit% for sales outside of plamotamab combinations. Further, we retain an option to fund 15% of CD28 bispecific development costs in exchange for increasing the royalties to a range between low double-digit to mid-teens percent and the option to co-detail resulting products up to 30% of details. With that, I'll turn it over to Allen Yang, our Chief Medical Officer, to discuss the development program for plamotamab. Thanks, Jeremy. While we begin the research collaboration on CD28 bispecific antibodies, we are continuing on our planned clinical studies for plamotamab alongside Janssen. First, we recently completed the identification of a recommended phase II dose regimen. This dose and schedule are much higher than what we presented at ASH 2019 and uses every other week dosing after initial weekly step-up dosing. Now, with the more intensive and more convenient dosing regimen, we are actively working to initiate plamotamab's next study. That is a randomized phase II chemotherapy-free combination study with tafasitamab and lenalidomide, a highly active regimen now approved in relapsed lymphoma with a label in second and later line. Our partners, MorphoSys and Incyte, market tafasitamab in the U.S. as MONJUVI and in Europe as Minjuvi. In addition to being chemo-free, the plamotamab-tafasitamab combo has two key features. Targeting CD20 and CD19 simultaneously can potentially avoid resistance by antigen loss that sometimes leads to relapse with highly active T-cell therapies. Second, by two distinct, highly active immune-mediated tumor killing mechanisms recruiting both T-cells and NK cells. We are initiating the first plamotamab- tafasitamab study in relapse or refractory diffuse large B-cell lymphoma in late 2021 or early 2022. We've previously disclosed this. In addition, we're continuing the ongoing phase I study with monotherapy expansion cohorts in follicular lymphoma and relapse refractory diffuse large B-cell lymphoma. We are also finalizing our plans for initiating a study with the subcutaneous formulation of plamotamab. We anticipate the study enrolling patients next year. All of this work complements the new combinations we are planning with CD28 bispecifics targeted to B-cell tumors, which provides many differentiated and potentially highly active chemotherapy-free approaches for treating patients with lymphoma. Next, we'll turn the call over to John Desjarlais, our CSO, to describe the CD28 bispecific technology. John? Yeah, thanks, Allen. We couldn't be more thrilled to expand our CD28 bispecific platform into the B-cell space, which complements our internal wholly-owned program so well and places us at the forefront of this new modality. Our targeted CD28 platform applies XmAb bispecific technology to enable a new class of T-cell engager designed to complement other mechanisms of T-cell activation, such as checkpoint inhibition or CD3 engagement. CD28 is a key immune costimulatory receptor on T-cells that in the past has been difficult to engage safely. Our designed approach to CD28 bispecific antibodies creates the potential to directly boost the activity of T-cells in a target selective way and enhance the activity of other T-cell-directed therapies in the local tumor environment. To achieve this control over CD28 activation, we created proprietary CD28 binding domains and balanced the affinities of the bispecific formatting of the CD28 and tumor-binding domains to suit the antigen distribution and density. Our most advanced CD28 candidate is XmAb808, a wholly- owned B7-H3 by CD28 bispecific for potentially broad solid tumor use, including in prostate cancer, where B7-H3 is highly expressed. We have previously guided to filing an IND in 2022. At SITC next month, we will present additional preclinical data from a second internal CD28 program, this one targeting PD-L1, again, a broadly expressed tumor antigen that can also be engaged for intrinsic checkpoint inhibition activity. We're delighted to be further exploring CD28 with Janssen's team. We will be applying our XmAb bispecific technology to create CD28 bispecific antibodies against certain B-cell targets during the two-year research collaboration. Of course, we have our ongoing prostate cancer CD28 bispecific collaboration with Janssen and look forward to continuing the highly productive teamwork with our Janssen colleagues. We believe targeting CD28 has very broad potential. It's a challenging target, but one where we have an engineered bispecific antibody to truly have selective activation instead of broad T-cell activation or s uperagonist. We've demonstrated this preclinically, and you can find those posters on our website. In the molecules we've built to date, we believe we have found the right structures, epitopes, and affinities to make this axis work therapeutically. Like we always do, the platform is built to be plug and play. Bassil? Thanks, John. In this B-cell focused collaboration with Janssen, we're opening the door to novel immune mechanisms, which when combined with plamotamab, could enhance efficacy across many types of B-cell malignancies. Of course, it holds potential long-term value to Xencor with significant economic upside provided to us throughout the agreement. This agreement is part of our disciplined approach to clinical development, running the right phase II studies for our programs where we see the internal development pathways leading us toward potential registration studies like for XmAb717, which as of a week ago is officially called vudalimab, as well as tidutamab, and finding the right collaboration structure for plamotamab and our B-cell discovery programs. We're also being stringent with all the programs we have in phase I. We've said this many times, we fully anticipate that not all of them are going to advance internally at Xencor or potentially at all, and this is by design. We will pursue the programs with the best data so that we have room for new bispecific antibodies, those with novel targets like our ENPP3 by CD3 bispecific XmAb819, the CD28 bispecifics like XmAb808, and our cytokines like XmAb662, a reduced-potency, long-acting IL-12 Fc fusion. With that, I think we can now open up the call to your questions. Operator? Thank you. To ask a question, you'll need to press star one on your telephone. Our first question comes from Ed Tenthoff with Piper Sandler. Your line is open. Great. Thank you very much. Really exciting update and exciting collaboration expansion with J&J. I had a quick question I was going through. I didn't see if we saw what the price was for the share purchase from J&J. Also, how do you envision sort of managing development of these? Is there a committee that kind of discusses these, or how will you guys be working together with J&J? Thanks. Sure. Good questions, Ed. On the shares, it's a 30-day look-back, VWAP, that's at market, 30-day look-back, I believe it is just over 748,000 shares and $33.42. Of course, nothing happens until after we clear the HSR waiting period. With regard to the way we're running development. For plamotamab, there is a joint development committee that governs the development of the molecule. The tafasitamab combinations that we're doing, the MONJUVI combinations that we're doing, we drive the development decisions unless Janssen elects to bring that into the cost share as well and pay us an additional milestone payment. Before that happens, for example, as we initiate this upcoming phase II study with MONJUVI and lenalidomide, it's Xencor that's in control of that aspect of development of plamotamab. For as we move into combinations with CD28s and whatever else we might do, because it's not limited to that, of course, collaboration, it would be the JDC with Janssen having the lead there. And for the CD28s, that's a research collaboration that we share joint decision-making on, and then as product candidates move into development, Janssen leads the development, and if we elect to move into our 15% cost share for the CD28 bispecifics, then we would have a voice at the JDC on the CD28s as well. Though they would be the lead on those. So, it's a little complicated because there's multiple pieces. Yeah. That was actually really helpful additional color. Thanks so much, Bassil. Thanks, Ed. Thank you. Our next question comes from Mara Goldstein with Mizuho. Your line is open. Great. Thanks for taking my question. Firstly, I just wanted to ask, on the equity stake with J&J, what drove that decision to include an equity stake in this deal, number one? I'm just curious as to how the joint venture will be able to communicate information to us about sort of advancements in different clinical programs that you might enter to. Lastly, just on the work that you're doing in combination with tafasitamab. Should J&J decide to become involved in that process, is there anything sort of procedurally that needs to be done on the Incyte, MorphoSys side? Sure. I'll answer the last one first. It's easy. No, nothing need be done procedurally if J&J steps in. It's all baked into the collaboration and baked into how our collaboration and the legal agreements work with MorphoSys and Incyte. That's all settled. As for the equity, I think it was just a matter of looking at the long-term stake in the programs that we wanted to be assured of having in terms of the right kind of royalties and downstream milestones. It was just part of the give and take of the negotiations, and it made a lot of sense for the Janssen team, without speaking to their intentions, I think, to have a piece of equity that could potentially grow as we advance the programs and as we advance Xencor more broadly, to help make all the economics make sense. I think though it's relatively small in its size, it could have a potentially very meaningful impact over time. Okay. The last piece on communication of data, I think, is essentially what you're getting at, Mara- Yeah. is who can talk about what programs. With regard to the tafasitamab-lenalidomide combinations. Maybe Jeremy, I'm not sure if you have the details at your fingertips about how we communicate those. They're sort of pre and post if they elect to come into the 80% cost share they have on tafasitamab. Is there any difference in how we communicate in those instances, or do you not recall? I think that that's right. I think that until Janssen becomes part of that development program, as you mentioned, through the milestone and through the cost sharing, it's under Xencor's control to communicate. Okay. Yes, all other aspects of plamotamab development would be under Janssen control to communicate. Okay. Similar. The CD28s, of course. Yeah. Like with Roche in that respect. Yes. Correct. Yes. All right. Thanks, guys. I appreciate it. Thank you. Our next question comes from Jonathan Chang with SVB Leerink. Your line is open. Good morning. Congrats on the deal. Thanks for taking my questions. First question on plamotamab. How does the deal impact the development plans and timelines for the program? Can you give us a sense of next development steps beyond the tafasitamab and lenalidomide combination? Sure. How does it affect the development plans and steps? For the MONJUVI lenalidomide combination we have planned, it doesn't affect it at all in that we baked that into this initial part of the collaboration, and that's moving forward as we'd guided earlier, with a first patient into that phase II study, either late this year or very early next year. In addition, I think it accelerates other aspects of our development. For example, advancing our subcutaneous formulation into the clinic next year, which we've been working on planning. I think that's important and the collaboration is very committed to driving that forward as rapidly as possible. Note that that part of it is in the 80/20 cost share with Janssen. That's specifically the subQ initiation of work. Of course, we're expanding our phase I now that we have a recommended phase II dose, and doing expansion cohorts in both follicular and DLBCL. I would say it's putting the foot on the gas for those studies, which the expansions, I'm not sure. Allen, do we have a timeline on when we're initiating the expansion cohorts? Yeah, Bassil, we've initiated the expansion cohorts and then we're currently enrolling them already. Right. Great. I would also say, to Jonathan's question, the collaboration doesn't slow down anything we were doing or planning to do, just allows us on the back end of when we get our initial data readouts to expand very quickly to broader phase III. Got it. Thank you. Second question, could we still see updated plamotamab clinical data later this year? If so, when, and could you help set expectations for the update? Yes, we still plan on having plamotamab updated clinical data later this year. It'll be this quarter, it's fourth quarter right now at a medical meeting. In terms of expectations, we expect to just give updated data from as we completed the intravenous recommended phase II dose regimen determination, updated efficacy and safety data from those cohorts, to show how we've been able to increase the dose and in particular, get what we feel is a dose that enables Q2 weekly dosing. That's guidance we've given and we're just reiterating that guidance for what it's going to be about and when. Understood. Just last question from me and on a different topic, with SITC titles out, can you help set expectations ahead of the SITC vudalimab update? Thank you. Thank you so much for using the new name, vudalimab. I will be forgetting. For vudalimab, our PD-1 CTLA-4 bispecific antibody, we previously guided that we were going to have the more mature data from expansion cohorts we didn't present at last year's SITC. That would be in our metastatic castration-resistant prostate cancer, our renal cell carcinoma, and then in a cohort of a basket of indications for PD-1 non-approved therapy tumors, which I think around half, roughly half, were gynecologic tumors. I don't think we can add additional guidance today on expectations other than the goal has been, and we've been saying that the data we see here, the kinds of efficacy and safety data we can present here, will give insight into our thinking for why we've initiated our phase II study in metastatic castration-resistant prostate cancer that we talked about and announced a few weeks ago, as well as we're starting an additional study in another defined slice of high-risk mCRPC patients, as well as in different gynecologic tumors, a second phase II that's starting, we hope later this year, though that might be early in next year. Reiterating that guidance about how it's guiding, it'll be more clear how our thinking has been guided. Got it. Thank you. Thanks. Thank you. Our next question comes from David Nierengarten with Wedbush Securities. Your line is open. Hey, thanks for taking the question. I have just maybe a strategy question here on the deal with Janssen. You're looking at CD28 or at the target in solid tumors also. Did that come up? Are you planning to retain as much solid tumor indications as possible, given you also have a deal on the prostate cancer side with the same target? I was just curious, how are you thinking and how this deal evolved on the liquid versus solid tumor side. Thanks. Yep, absolutely. We do plan on retaining as much rights as possible around the CD28 platform. In particular, we were very stringent on the first deal we did with Janssen now 10 months ago for prostate cancer to have it limited to absolutely one co-target, one tumor-associated target. For this deal, it was an additional consideration, not just, okay, let's retain all the rights we can on this early CD28 platform. It's very exciting. There's a lot of potential use. We also have our plamotamab program and seeking to find the optimal way to develop that asset in this crowded but very promising CD20, CD3 space. We do know that there's a lot of competition. I think our strategy for having multiple chemo-free regimens that we're moving now very soon to start in the clinic with our tafasitamab combination, and hopefully shortly thereafter as this collaboration advances CD28, having different options there because there's different indications and the different mechanisms within B-cell cancer might be sensitive to different mechanisms differently, better in one, worse than another, as well as having that potential even for complementarity. With the B-cell space being so crowded, but still enormous potential for patients and value for the company, we thought the best way to go forward with plamo was to combine forces with our CD28 and give it the best push possible. I think you need it in the crowded space, and I think our approach for chemo-free is pretty distinct in the industry to compare to the approaches for either combos or monotherapies that our competitors are doing. For, yes, for the solid tumor side, we're trying to keep it very much as much retained rights as possible. This deal evolved with Janssen, I think. You can see the prior deal 10 months ago, and this one obviously linked. It's the same team at Janssen that we're working with. I think as the teams got to know each other better, as their confidence and interest in the CD28 platform and its potential grew, it helped evolve things. They're familiar with plamo, and we've talked to them starting last year about how to engage in the B-cell space together to be better than we could be apart. Did they, and maybe it's a little bit difficult to read their minds, but did they see this as a necessary partner for a CD20, CD3 bispecific in order to differentiate from the activities seen in other programs? Did they kind of evaluate as a standalone combo? Do you have a sense on that? Yeah. I, of course, can't speak for them. Sure. I can speak for Xencor, which is that we believe that our molecule plamotamab stacks up really well against competition, and we also think that the way we use it, in particular, how you combine it, what regimens you use is going to be critical. In this B-cell malignancy space, we don't believe that a monotherapy approach can really win the day for CD20, CD3s. There's too many other mechanisms of action at work that you can combine with and that you need to combine with to give the best shot for patients. Yeah, I wish I could speak for them. I think for us, having an additional MOA to combine with is a very powerful boost, we think, to the value we can bring in the B-cell space. Okay. Thank you. Thank you. Our next question comes from Alethia Young with Cantor Fitzgerald. Your line is open. Hi. Good morning, and congratulations on the collaboration expansion. This is Naina on for Alethia, and thanks for taking our question. Generally speaking, we were curious how you think about now commercializing your own products, versus doing exclusive deals like this. Just given in the past, there seemed like there was a focus on doing more of the commercialization internally. Yeah. The key here is it's got to be the right approach for each product. Our view on plamotamab has been that as we progress in phase I and get to our IV go-ahead dose, go-forward dose, that might be the time to look and see how can we accelerate the development of the molecule and position it best, ultimately, for commercialization in a pretty big indication with a lot of competing MOAs. Everything from very small molecules all the way to cell therapies approved. We think, obviously, there's potential to do better than the existing therapies with these molecules that we've got. We looked at it as on a compound-by-compound basis, what's the best way to deliver value for patients and for the company, and for plamo in this particular indication space with the need and potential opportunity with very broad development that you could do later and having the need for a broad commercial launch. This one made sense for us to do. We really thought it was the right partner at the right time in the stage of the program, in particular with Janssen's immense capabilities in hematologic oncology, their proven track record, for example, for the daratumumab of development and marketing, with their ibrutinib development and marketing. They've got the ability to scale development programs extremely rapidly and help commercialize them and deliver a lot of value. For other of our programs, our first and foremost goal is to see how do we develop them to keep them internally and ultimately, if everything goes well, get them approved by ourselves and launch them as drugs. It's just for this molecule in this particular crowded, dense space with a lot of complex development ahead, this deal made sense. Okay, that makes sense. Thank you. Our next question comes from Gregory Renza with RBC Capital Markets. Your line is open. Hey, good morning, Bassil and team. Congrats on the deal, thanks for holding the call and taking our questions. Bassil, just wanted to get some additional color on the subQ approach, and perhaps just providing some latest updates or at least the current development stage and thoughts about the subQ formulation for plamotamab and really how we think about any of that strategy in terms of differentiation when it comes to others out there in the space. Thanks. Sure. We started developing our subQ formulation a little while ago, and we went into it optimistic because we know the physical properties of this molecule, plamo, originally called XmAb13676, were very robust. The stability of the molecule and solution, when you manufacture it and put it in vials, the IV formulation is extremely long. We're out past four years on real-time stability in a refrigerator. In general, the molecule is very well behaved. We developed the formulation at a higher concentration to enable subQ. We matched it up as we zeroed in on our recommended phase II dose IV. That helped guide us how high did we need to want to get. Here we are. We're expecting to put that into the clinic next year. In terms of the development stage, we are going to be initiating a phase I study where we do dose escalation with the subQ formulation next year as a monotherapy initially to establish the safety of the new route. Also really to see how much higher we can go in dose. I think that could be an additional differentiator. There's some data to suggest from our competitors that the subQ approach, subQ route, makes it even easier to manage CRS than with IV step-up dosing, and therefore, you might be able to go even higher in dose, which could have efficacy advantages. I don't think that's clear yet. The numbers are too small from each of the different programs to really pin that down, but we'd love that opportunity. Then, of course, the real underlying initial driver is convenience for your patients. The goal is to get lymphoma to be a really, in all the different histologies, to be more chronically managed ultimately. That's a dream one day. We're well progressed with the formulation development, and we think it's about, we will be developing the dose and dose levels independently in a phase I, and it could have those advantages I mentioned. That's great. Thank you. As far as the $100 million upfront, any comments on how that affects your latest stated cash runway? Gosh, I don't think we are ready to guide specifically on that. We are going to be doing our third quarter call in a few weeks. I think we can give more specifics. Obviously, it's helpful. We'll give you any details on runway and end-of-year cash in a few weeks. Got it. Last question. Note, Oh, sorry. Go ahead, Greg. I was just going to reiterate our end-of-year cash we stated a few weeks ago, but I don't need to do that. Yep. Got it. Then last question for maybe just more qualitative. Certainly, you have a history of a variety of collaborations with partners. I'm just curious, with this one, how would we think about or how would you consider measuring success? Of course, short of the stated monetization and milestones, but as you look at plamotamab as well as perhaps other programs, what do you see as the critical factors for success when it's all said and done? Thank you very much, Bassil. In a collaboration, you mean, right, Greg? That's right. Yeah, I would say it's got to start with having terrific teamwork and really excellent engagement at all levels between you and the partner. I think with Janssen, we've been discovering through our initial work with them starting last December, it's a tremendous team to engage with on the R&D side. Again, they have a great track record of success. They move nimbly for a big pharma. I think the success for us would be as we get our initial development milestones set up, how rapidly can we start trials? How rapidly can we interpret the data? And if these molecules and programs have legs, how quickly do we expand them and broaden them? I think the success is measured by how rapidly you can move through development. I think, we hope we're well-positioned with Janssen to do that. Thank you. Our next question comes with Dane Leone with Raymond James. Your line is open. Hi. Thank you for taking the questions, and congratulations on the expanded partnership with Janssen. Can you maybe just clarify what you expect the next steps in the plamotamab program to be? You signed a partnership with Incyte and MorphoSys last year to explore a combination with MONJUVI. To be specific about it, are you waiting for a subcutaneous formulation to start the next studies in the program? Is that the agreement with Janssen? Do you expect to start additional clinical studies with the IV formulation ahead of that? Thank you. We're starting the initial MONJUVI lenalidomide phase II with the IV formulation. Absolutely. We're not waiting on the subQ at all. That's why we're starting it late this year, early next year for that phase II. Our monotherapy expansion cohorts in follicular and DLBCL are going to be with the IV. We absolutely think the IV formulation has potential. The subcutaneous is potentially an additional driver of better features and benefits, like I mentioned earlier on the call, though potential only. We don't know. We didn't want to leave any stone unturned, and in particular, Janssen agrees we want to maximize the odds for success. Okay. Sorry, just to follow up on that. The difference in the Janssen program that you've now expanded is, one, they get the rights to plamotamab, but two, there's now additional targets on the CD28 side. Can you just maybe dig a little deeper into, are these two separate concepts here, or is there a specific initiative binding these together that you think CD28 bispecific agents should be combined with CD20 T-cell redirected antibodies? Absolutely, we think they should be combined. We specifically plan to, assuming the research phase with the CD28 bispecifics is successful, we're very optimistic, we're very hopeful on that these CD28 agents, there's a specific plan to combine them with plamotamab clinically. There's other CD3s that Janssen has in early development for B-cell malignancies that we're going to explore. Absolutely, there's a specific plan to combine plamo with the CD28s. Of course, we'll see where the science takes us if the CD28s have potential use with other molecules. Absolutely, we'd love that. We've structured the economics of the deal with our various ways to opt into development of the CD28 independently, just to account for that possibility. The driver here is the plamo CD28 combos and see where that can take us while we still have the potential, and likely will test with other CD3s. We being the collective Janssen Xencor. Right. Sorry, last question from me. What's the level of evidence that we have right now in terms of CD28 combination with a CD20 bispecific? We have data that we've, of course, looked at and shared with our now new partner, Janssen, our new partner after the HSR period, Janssen, in vitro data that shows ample evidence of activity of the CD28s and the kind of activity that we expect to see with them in vitro with our CD3s, like we've shown with our B7-H3, we've shown with our prostate cancer work, we've shown with other targets. I can't recall all the different ones that we publicly disclosed versus not. I would say we're still at the discovery phase, but quite optimistic that we can move fast. Got it. Thank you. Thank you. Our next question comes from Tom Shrader with BTIG. Your line is open. Good morning. Congratulations. My question's pretty related to the last one. I guess the rationale behind CD28s is you should have less non-specific cytokine release because you need Signal 1. Can you tell us how de-risked do you think that idea is? Can you remind us if you've seen any human data yet, and how de-risking that data will be on the basic therapeutic premise? Right. No, we have not seen any human data yet on that combination premise of a CD28 bispecific with a CD3 bispecific. We don't have it, we've not seen it public, or at least we're not aware of it published anywhere. That could potentially be an aspect of the benefit of the mechanism is a more specific engagement of the tumor-associated or tumor-binding T cells, so you control CRS more. That's honestly not really the primary driver. You're seeing a very powerful mechanism with, say, CD20, CD3s with the myriad of other different targets that CD3 bispecifics have worked against. You're not always seeing efficacy levels where you might hope and where you might expect. I think it's as much as anything about driving efficacy. You could imagine going after the same tumor-associated antigen target with your CD3 and CD20 or different ones and having that kind of and switch, you need to have both targets present on the tumor to kill it, giving you that focusing. That's as much as anything, so you can bring the heaviest hammer to bear locally for efficacy, as well as maybe reducing potential CRS and tolerability issues. It isn't something that we have a clear handle on yet. It is going to amount to looking and seeing what happens when we get into humans. John, do you want to add anything there? I don't think we have enough evidence to speak more definitively than that, right? Yeah, no, I think you kind of covered it, Bassil. Great. Just quick follow-up. Do you think CD28s will always be used with something else? Are they always going to be to sort of amplify an existing signal, or do they have a role by themselves? The base hypothesis is that they would be used to drive another T cell signal, whether that's a Signal 1 the T cell's got from its own T cell receptor and a checkpoint inhibitor like the PD-1 inhibitors being used to potentiate that. I think there's a lot of potential combining CD28s with checkpoint inhibitors or with CD3s. That said, because we have these tools to make multi-specific molecules, we're designing CD28s that hopefully have the Signal 1 baked into them from their other binding activity. John, do you want to talk about our PD-L1 CD28 that's in research right now? Yeah. The PD-L1 CD28 is a good example, even the B7-H3 CD28. They can work on their own because, recall in the tumor environment, you can get an intrinsic endogenous Signal 1 coming from Class I- Yeah. MHC peptide presentation of the T cell. If that signal's there, then the CD28 can come in and amplify off of that, right? The key thing with the bispecifics is you're causing that to happen at the tumor T cell interface instead of relying on the antigen-presenting cells to provide that co-stimulation. With respect to the CD3 combinations, another aspect that we're kind of digging into is the CD3s themselves can cause that interferon gamma response, which can then upregulate Class Is and therefore provide kind of a feedforward mechanism, a whole new Signal 1 or enhance that endogenous intrinsic Signal 1 coming from Class I MHC. I got it. Thanks for the color. We haven't thought that much about CD28, so I appreciate it. We hope to be talking about it a lot more in the future. Okay. Our next question comes from Zhiqiang Shu with Berenberg. Your line is open. Great, thank you. Good morning, everyone. Thanks for taking my question. My first question is around this collaboration. Can you talk about the potential combination with other agents? I think in your first CD28 collaboration with Janssen, you talked about combining with their prostate treatments for prostate. I guess in this new collaboration, is it possible to combine with Janssen's portfolio of heme drugs for B-cell cancers? I guess also related to that, in terms of B-cell cancers, can you provide any color on specificity on the B-cell cancers, CLL, DLBCL, follicular lymphoma, things like that? That's the first question. Thank you. Sure. For this question, can we provide more color on the indications? Right now, the only color we can provide is that our tafasitamab-lenalidomide combination study, which we hope to start very soon, is in DLBCL, and that we have plans after that for looking at follicular as well within the tafasitamab-lenalidomide combinations. For the collaboration with Janssen, I think we're hopeful that we can get early clinical data that suggests we can go after all of those different B-cell malignancies, the data will drive it, right? I think everything's on the table absolutely between us and Janssen. I think it would be silly to leave any of that possibility behind. With regard to the first half of your question, we do hope that we explore the CD28 bispecifics and plamo with multiple other combination agents as it makes sense. The focus is going to be plamo and CD28 combos within the collaboration initially as well as exploring CD28 against B-cell targets more broadly with other agents, but really plamo CD28 combos. As we progress the collaboration, I'm sure our Janssen partners will look to maximize the value of the program. It's a little different from our prostate cancer deal we did with Janssen under a different legal agreement 10 months ago. In that one, it's not just that within the collaboration you can combine, but Xencor had a sort of a distinct right, an independent element of the deal, where for other Xencor programs, not the CD28 we partner with, but for other Xencor programs that we just got totally internally controlled, like our XmAb717, maybe potentially our B7-H3, we could combine with different molecules in Janssen's prostate portfolio. That was important to us as we really establish our solid tumor strategy, where prostate cancer might be a very important part of it, and enable our molecules like our vudalimab molecule, 717, or our B7-H3 in the future, to really shine with the best combo agent. That was more like an element of consideration or benefit for Xencor that we negotiated for the right to reach into their portfolio and do the clinical experiments with our own agents. A little bit distinct from how this B-cell collaboration is working, though. Again, Janssen's scale and the number of different exciting programs they have internally is certainly part of why I think they're a great partner for the B-cell programs too. Got it. Great. The second question I want to ask is more of a biology question, I guess. For CD28 bispecific as it compared to CD3 bispecific, when we think about the target selection, are there any differences, any considerations, distinctions between these two classes you would highlight? Well, that's a deep question, and I think the right answer is you don't know anything a priori. You have to do the right kind of experimental work and look at all sorts of different factors, the distribution of the targets, their densities, and so you can design the right molecules. I think that there's nothing general that I could say. John, anything you can add? Yeah. I would say, we think there's a little more leeway with the CD28 for a more broadly expressed target because it has to build off of a Signal 1 coming from somewhere else, right? You're relying on, if you just have a CD28 bispecific by itself, single agent, you're relying on that endogenous Class I activity. We think you could use a more broad target, maybe even a dirtier target with the CD28 than you would with the CD3. Great. Thanks very much. Look forward to presentations from CD28 molecule. Thank you. Thank you. Our next question comes from Charles Zhu with Guggenheim Securities. Your line is open. Hey, guys. Congrats on the deal. Just looking a little bit more at CD28 and taking a half a step back, perhaps. Obviously, it's been several years since some of the historical issues observed with this target. Since then, obviously Xencor and a few others have been, I guess, coming out with a potential reemergence of therapies directed against this target. Could you help us understand how this field has evolved since the TeGenero experience, how your platform enables a potentially differentiated activity from your competitors who are also in this area? Thanks. Yeah. I think the key there is having it be tumor antigen binding selective for turning on that CD28 activity. That combines an old trick that Xencor's been using for a while, which is reduced affinity and reduced potency of that antigen engagement, so particular to the CD28, then building a CD28 binding molecule, so that antibody binding domain core that has the right epitope engagement. I know John's team did a lot of optimization there. There's a balance. John, do you want to add anything about how to get that balance, the experimental approach that you guys take? Yeah. Well, there's three factors to not having that kind of superagonism that you get with the TeGenero antibody. The first is epitope selection, as Bassil alluded to. We carefully screen for epitopes that are not superagonistic, like the TeGenero epitope. The second factor is we have monovalent engagement with CD28. We think that's pretty critical instead of bivalent, like with a classic antibody. The third factor, as Bassil mentioned earlier, is also the affinity, right? A monovalent kind of low affinity engagement, so you rely on that tumor antigen binding and clustering to provide the cross-linking of CD28 so that you're not going to get that when there's no tumor or tumor antigen present. Got it. Thanks. Thank you. We have a question from Peter Lawson with Barclays. Your line is open. Hey, thanks for taking the question, Bassil. Just your thoughts on kind of the J&J, how they want to use the CD28. Is that more of a kind of a broad antigen approach, kind of super antigen, or is it kind of more narrowly antigens you're thinking through? I'm sorry, your connection got a little choppy there, Peter. Would you mind repeating the question? Yeah, certainly. Just J&J's approach, is that more on the lines of kind of a super antigen approach, a broad antigen, or is it more narrowly focused heme antigens that we should be thinking about for the CD28 pathway? The J&J approach. Within this deal we just announced, it's very specifically narrowly focused, not just heme antigens, but actually to B-cell targeting, B-cell antigens, and there's quite a limited number of those that could even emerge from the collaboration so that there's a limited number of slots that they could license for B-cell targets using the CD28. Only those things that are created during this two-year research collaboration period can qualify. It's not an open-ended in time opportunity for them to look at heme targets. It's a very limited in time opportunity for the two of us to co-create CD28s against B-cell targets and a limited number of those. Gotcha. We will be able to have circular, localized antigens. It's going to be across B-cell heme malignancies. Yeah. I think that's fair to say, without giving away anything, that in general, there's really well restricted to B-cell targets that play a role across a broad range of B-cell malignancies, not looking for some specific indication by a specific target. I think that's fair. Got you. Then should we expect to see more partnerships around the CD28, or is this kind of the final one? Yeah. You asked, do you think we're going to see more partnerships around CD28, and then it got choppy. Was that the substance of your question? Yes, exactly. Yeah. I would say that's not a goal for Xencor. I would say that this partnership was really driven by plamotamab and the opportunity to maximize its potential, and the CD28s really provided this sort of X factor for both Janssen and us for, wow, we could really maybe do something unique and have a potential tool for leapfrogging and creating completely new chemotherapy-free regimens. I think that for us, the goal was not to partner around this platform anymore. This was an opportunity that emerged. Similarly, with our first deal with Janssen, it was an opportunity where we had prioritized our B7-H3 program for our initial solid tumor program, and in particular, because we thought it was very well suited to prostate cancer as well as some others. Again, prostate cancer being an important part of our solid tumor strategy. That made sense, and we got the opportunity to combine our own independent programs with their rather rich prostate cancer clinical pipeline. That one made sense. I think that just says Janssen's flexibility and engagement with Xencor made us create some things that we might normally not have wanted to do deals around. Not a goal for us to partner further on the CD28. Never say never, but that's not something we're looking for, and I think we're going to be heads down now, really focused on developing our own molecules and working within this collaboration with Janssen right now. Got you. Just a final question around the sub Q plamotamab. Does that drive an outsized portion of the milestones? Is that kind of a key driver for subsequent milestones to get that right? Gosh, we're not supposed to answer about granularity, but this is just an easy one, so I'm just going to go ahead and answer. No, it doesn't. Got you. Okay. Thank you so much. Yep. Thank you. There are no further questions in the queue. I'd like to turn the call back to management for any closing remarks. Well, thanks very much, everyone, for joining us this morning. We do look forward to updating you in a few weeks during our third quarter earnings call. We're really glad you joined us as we got to speak for the first time about this exciting and important collaboration for Xencor, and hopefully for B- cell malignancy patients. Thank you very much, and we look forward to talking with you soon. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.