Good afternoon, ladies and gentlemen, and welcome to the BioAtla Third Quarter 2023 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please be advised that this call is being recorded on Tuesday, November 7, 2023. I would now like to turn the conference over to Bruce Waldron of LifeSci Advisors. Please go ahead.

Thank you, operator, and good afternoon, everyone. With me today on the phone from BioAtla are Dr. Jay Short, Chairman, CEO and Co-Founder; and Rick Waldron, Chief Financial Officer. Following today's call, Dr. Eric Sievers, Chief Medical Officer; and Sheri Lydick, Chief Commercial Officer, will join Jay and Rick for a short Q&A. Earlier this afternoon, BioAtla released financial results and a business update for the third quarter ended September 30th, 2023. A copy of the press release and corporate presentation are available on the company's website. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements, including, but not limited to, statements regarding BioAtla's business plans and prospects and whether it's clinical trials will support registration, plans to form collaborations and other strategic partnerships for selected assets; results, conduct, progress and timing of its research and development programs in clinical trials; expectations with respect to enrollment and dosing in its clinical trials, plans and expectations regarding future data updates, clinical trials, regulatory meetings and regulatory submissions. The potential regulatory approval path for its product candidates; expectations about the sufficiency of its cash and cash equivalents, plans to prioritize and focus development on selected assets and indications and expected R&D and G&A expenses. These statements are subject to various risks, assumptions and uncertainties that can cause actual results to differ materially and are described in the filings made with the SEC, including the most recent quarterly report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, November 7, 2023, and BioAtla disclaims any obligation to update such statements to reflect future information, events or circumstances, except as required by law. With that, I'd like to turn the call over to Jay Short. Jay?

Thank you, Bruce, and thanks to everyone for joining us for our third quarter 2023 BioAtla earnings call. BioAtla is the inventor and leader in the development of novel therapies using a proprietary conditionally active biologics CABS platform with improved selectivity for attacking tumor cells while avoiding healthy cells, thereby addressing critical unmet needs in oncology to improve patients' lives. As we approach the end of 2023, we have obtained data to support several value inflection points across our CAB portfolio and continue to focus on further advancing the development of our prioritized CAB programs. We believe that forming one or more strategic collaborations with major pharmaceutical partners can accelerate development of selected assets and maximize their market opportunities. We also believe that our more focused and strategic approach better positions us to enhance value for shareholders. Additional details related to what I'm going to provide are available in today's press release and our revised company presentation, both of which are available on our website. I will now provide some new updates since our second quarter call in August, beginning with our CAB-AXL-ADC, BA3011. Regarding our BA3011 Phase II study in non-small cell lung cancer, we have consistently observed multiple clinical responses in AXL-positive treatment refractory lung cancer populations. Among patients receiving BA3011 monotherapy who previously experienced PD-1 treatment failure and were evaluable for efficacy at 12 weeks. The observed objective response rate was 27.8%. In patients with EGFR wild-type, non-squamous lung cancer who previously experienced PD-1 treatment failure, 33.3% of the patients had a partial response to BA3011 monotherapy. Of note, AXL expression in lung cancer defines a particularly poor prognostic group. Also, these patients had experienced the failure of a median of three prior lines of therapy. So we believe that observing multiple responses in this treatment refractory…

Thank you, Jay. Cash and cash equivalents as of September 30, 2023 were $141.3 million compared to $215.5 million as of December 31st, 2022. We now expect current cash and cash equivalents will be sufficient to fund planned operations including prioritized CAB programs into the second half of 2025. Research and development expenses were $28.4 million for the quarter ended December 30, 2023 compared to $19.8 million for the same period in 2022. The increase of $8.6 million was primarily driven by a $6.3 million increase in our clinical product development expenses, primarily related to the launch of our AXL UPS potentially registrational trial, and a $1.8 million increase in additional product development expenses. We expect our R&D expenses to remain variable from quarter-to-quarter as we continue to advance our clinical programs, then decreasing after we complete enrollment and focus development on selected high potential indications. General and administrative expenses were $6.6 million for the quarter ended September 30, 2023 compared to $6.3 million for the same quarter in 2022. The $0.3 million change was attributable to an increase in professional services and consulting expenses for the 2023 period. We expect our G&A expenses to remain flat to moderately increasing to support development of our prioritized CAB programs. Net loss for the third quarter ended September 30, 2023 was $33.3 million compared to a net loss of $25.8 million for the same quarter in 2022. Net cash used in operating activities for the nine months ended September 30, 2023 was $74.1 million compared to net cash used in operating activities of $66.1 million for the same period in 2022. The increase in net cash used in operating activities for the first nine months of 2023 is primarily due to an increase in research and development expenses related to our program development efforts as compared to the first nine months of 2022. And now, back to Jay.

Thank you, Rick. BioAtla is dedicated to deliver innovative, life-changing therapies to cancer patients. We observed that the CAB platform continues to demonstrate compelling clinical efficacy and safety across multiple therapeutic targets and formats in the most challenging cancer cases. As a result, we believe that there are mutually compelling opportunities for forming one or more strategic collaborations with major pharmaceutical partners that both accelerate and maximize our therapeutics opportunity. In addition to advancing collaboration discussions, we will continue to advance selected CAB assets that can address significant unmet medical needs in order to maximize shareholder value. With that, we will turn it back to the operator to take your questions.

Thank you. And ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Brian Cheng from JPMorgan. Your line is open.

Hey, guys. Thanks for taking my question this afternoon. Given the responses that you saw here and now for AXL and EGFR wild-type and PD-1 treatment failure patients. To the extent that you can, can you give us a sense of the verbal feedback that you received on the registrational path forward from the agency? And what are the expectations that we could get in terms of the path forward at the December event?

I'll start, maybe Eric could add if he has anything to add. So they gave us some very clear and actionable items, both either in second and for third-line therapies. And so we're just waiting for the written confirmation of the verbal communication. As soon as we have that, we expect that a little later this month, and we'll be communicating that in far more detail in December. But hopefully, that's helpful, and we think it's very promising.

Okay. And then related to the IASLC conference presentation next month, can you talk about just what we should expect in terms of the level of details regarding to response? And can you also comment on the durability of the response that you've seen so far in non-small cell?

Eric, do you want to lead off on this one?

Sure. I think we'll be having a pretty standard poster presentation of the data sets, including spider plots, swimmers plots and so you can anticipate that. Jay?

Also I would add will also have -- while monotherapy, obviously, is our focus. We will provide the data on the combo, the updated data on the combination therapy and also our initial look on a more frequent dosing data up to 10 patients for that as well. And maybe more, and we'll see how that goes in the next few weeks. And we'll also -- remember the day after we have a KOL event with an expert in lung cancer and also has been treating patients in some of their direct experience.

Great. Thank you for taking my question.

And your next question comes from the line of Kaveri Pohlman from BTIG. Your line is open.

Thank you for taking my question. So for non-small cell lung cancer Trodelvy have a Phase III EVOKE-01 trial ongoing? And in their most recent press release, Seagen also announced that they will be initiating a Phase III trial for their integrin beta-6 targeting ADC. So I was just wondering if you could tell us how you're thinking about the competition here? And what level of target expression overlap do you expect to see between TROP-2, beta-6 and AXL?

I'll start off and then maybe Eric or Sheri can add to this. So first off, I think you can look at both pieces of data. We've seen now multiple responses at 1% TmPS level. We're not seeing a strong correlation in responses and stable disease to the level of AXL expression. And this is, I think, observed by a number of different ADC groups, at least in groups with ADCs studying lung cancer. We're also reporting responses in ROR2 as well from ROR2 negative patients. So we're in the process right now of evaluating the frequency and the AXL negative patients based on an IHC assay. And I think I'll just remind everyone that IHC assay has its own sensitivity just because you don't see AXL by that kind of assay doesn't mean you have no AXL expression. It's just at a much lower level. So we think that this has a chance of broadening the actual market opportunity here. It also, because of the AXL being a poor prognostic indicator, meaning the patients have a very difficult time, at least maybe some of the most difficult patients to treat, remembering that our entire study, all the patients had a median of three prior lines of treatment, and they were AXL positive. So there's a real -- there's some significant likelihood that we're going to see responses below the 1%, and we're going to find that out and add that to the data sets, which could have a substantial impact on the market opportunity of our drug. So we think a cross-trial comparison is a little difficult when you -- when the others haven't gone into an actual positive data set. And so we're going to look more broadly, and I think we'll have more data on that as we go forward. Sheri or Eric will add or clarify anything. If not that answers your question.

Yes, Jay, I think you characterized that very well. Thank you.

Okay. And just if you could provide any more details about the assay you're using for AXL expression assessment? And how are you thinking about its use -- sorry, how are you thinking about its use like when moving from early stage two pivotal trials?

So I think it's an immunohistochemical assay using an antibody against AXL is not that our therapeutic antibody, that's one that was specifically selected for detecting AXL expression on cancer cells. And of course, we've been looking -- a lot of people are used to the H score where you look at the level or the amount of expression on each cell versus the number -- the amount on the number of cells that have expression of the membrane. And so it has an inherent sensitivity. So the fact that we're seeing responses at such a low AXL expression level is hinting that AXL may well be behaving like we're seeing in ROR2 and that others are seeing with some of their ADCs. So it's quite possible that -- and we'll let the data speak for itself, but it's quite possible that we won't need a companion diagnostic going forward. And -- but -- but as of this moment, we believe we validated at the level of 1% or greater with the TmPS score in these patients, refractory patients with three prior lines of therapy and show that we have a path forward here with these. And that's in third line, so we think we'll do even better in second line. But for the moment, we're going to look to see if we can have a similar or even potentially greater impact and ones that are less than 1% given that poor prognostic indication of AXL expression -- with AXL expression. So, what's nice about that strategy is that the recruitment now is uncoupled from having to require at least to finish off this analysis, we can admit all patients to our study and do a retrospective analysis. This allows us to look at those patients with less than 1% as well as some -- a few additional ones with 1% or greater. I'm going to add that data very quickly to our current data sets and as we go forward with some of our partnering discussions.

Thank you. That's very helpful.

And your next question comes from the line of Kelly Shi from Jefferies. Your line is open.

Hello?

Kelly Shi, you might be on mute.

Hello? Can you hear me?

Now, we can.

Hi. This is Dev on for Kelly. And I have a question on 3021. Do you plan to share a non-small cell lung cancer data that you generated? And if you can share any insight that you can draw from the data, such as patient baseline or expression, which contributed to lower responses. Also for CTLA-4, can you set the expectation on data details, which a special number or dose level we should expect at R&D Day? Thank you.

Yes. We will definitely share the data on non-small cell lung cancer data. We're going to move that to a meeting. We may also include data from the more frequent dosing with some of the other indications like head and neck cancer and melanoma. So we'll be looking for an upcoming meeting on that. It's still quite possible that because we saw responses in line, I'll remind everyone in Phase I. But what we basically show that we're not driving responses with the Q2W level. We're also seeing responses with 2Q3W in head and back, but we -- so we think that potential to go to a higher dose. But as part of our prioritization process, which is -- has to factor in a very encouraging data out of the actual lung data. And we decided that it was best to prioritize AXL lung for that particular indication, while we continue to advance melanoma and head and neck, especially given the very high unmet need in those particular indications. So we will give it and we'll have quite a bit more data that we'll be putting together for that release. With respect to CTLA-4, we will -- we're on track to give quite a bit of detail on our Phase I dose escalation, and we'll be giving an update on the Phase II results that suffice it to say that the fact that we've already kicked off Phase II and that we have our first patient in and then Phase II that we think that it's heading in a very good direction. And I'll remind you that we've been studying patients that are known to be responsive to CTLA-4 was a basket of eight different indications that include things like melanoma and non-small cell lung cancer. So we'll be discussing all of that in December. And so I just invite everyone on December 13th for the R&D day. So we can give you a lot more detail around those studies.

Thank you taking our question.

[Operator Instructions] Your next question comes from the line of Arthur He from H.C. Wainwright. Your line is open.

Hey, good afternoon, Jay, Rick, Sheri and Eric. Thanks for taking my question. So I just wanted to push the envelope a little bit further on the 3011. These 33.3% ORR is that also including both the Q2W and the more intensive dose regimen or it's only for the Q2W?

Only Q2W, we haven't reported out on any more frequent dosing at.

Okay. Thanks for that. And then regarding to the [Technical Difficulty] program. For the ROR2 neck and melanoma patients, which showed a response, is that patient is in the Phase II study? Or it's from the Phase I study? Could you remind that?

For head and neck, you mean?

No, for the melanoma, I believe.

For melanoma, we have two -- excuse me we have one response from Phase I that's included, and we have three responses from Phase II.

Okay. And so far, so you said you completed enrollment. So how many total patients we could expect the next data update?

Well, I don't know -- I don't know what the evaluable patients will be, but we had targeted 20 patients. So we'll see where we go on that, and we've reported on eight evaluable patients today, where we saw four responses out of eight and two with a stable disease; and two with progressive disease. So quite encouraging at this stage.

Got you. So my last question is for the 3182 your bispecific candidate for the EpCAM. So could you give us more color about the enrollment status for that trial?

I think it's going well. I mean, it takes about a month, plus or minus a week to kind of get from patient to patient. So I think we're on track here and continue to dose escalate. And I think it's early, but all good so far. And this is a particularly interesting drug. And I get why -- I would be asking the same question Arthur that you are because this is one of those pan-cancer opportunities with very high selectivity with a very potent mechanism that is enabled by CABS with this T-cell recruiting capability. And so we're very eager to push it along. So it's going to move quickly, and we'll have a lot more to talk about it, and we have only seen positive things so far.

Awesome. Thanks for taking all my question and congrats on the program. Talk to you soon.

Thank you. Look forward to it.

Thank you. And there are no further questions at this time. I would like to turn it back to Jay Short for closing remarks.

Thank you, everyone, for your attendance. We're really looking forward to continuing our discussions, especially with medical experts in early December. It's only a few weeks away, and we're looking forward to speaking with many of you at that time. Take care now and all the best.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.