Mersana Therapeutics(MRSN) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics - Collaboration revenue for Q4 2023 was $10.7 million, down from$14.7 million in Q4 2022, primarily due to the timing of research activities and the achievement of an early development milestone with Johnson & Johnson in Q4 2022 [10] - General and administrative expenses for Q4 2023 were $10.1 million, compared to$14.8 million in Q4 2022, with $1.9 million in non-cash stock-based compensation expenses included [11] - Research and development expenses for Q4 2023 were$21.5 million, down from $45.7 million in Q4 2022, driven by reduced manufacturing and clinical costs related to UpRi and XMT-2056, and lower employee compensation costs [99] - Net loss for Q4 2023 was$19.5 million, compared to a net loss of $44.9 million in Q4 2022 [100] - The company ended Q4 2023 with approximately$209 million in cash, cash equivalents, and marketable securities, with net cash used in operating activities at $32 million, down significantly from prior quarters due to restructuring and UpRi wind-down efforts [98] Business Line Data and Key Metrics - The company is advancing its Dolasynthen ADC platform, with XMT-1660 (B7-H4 targeting ADC) in Phase 1 trials, currently at a dose of 59 mg/m², the highest dose investigated clinically with Dolasynthen ADC [6][81] - XMT-2056, the lead Immunosynthen ADC targeting HER2, is in the process of restarting its Phase 1 trial after a clinical hold by the FDA in Q4 2023 [70] - The company has collaboration agreements with Johnson & Johnson, Merck KGaA, and GSK, focusing on maximizing the potential of its ADC platforms and product candidates [8] Market Data and Key Metrics - The company is targeting solid tumors, including triple-negative breast cancer, estrogen receptor-positive breast cancer, ovarian cancer, and endometrial cancer, with XMT-1660 [68] - For XMT-2056, the company plans to enroll patients with HER2-positive tumors, including breast, gastric, colorectal, and non-small cell lung cancer [70] Company Strategy and Industry Competition - The company aims to minimize dose-limiting platform toxicities, avoid resistance mechanisms, and extend ADC therapies beyond cytotoxics to include targeted innate immune responses [3][4] - The Dolasynthen platform is designed to avoid dose-limiting neutropenia and peripheral neuropathy associated with other ADC platforms, such as vcMMAE [57][66] - The company believes its Immunosynthen platform, which harnesses STING, could be the next significant frontier for ADCs, offering potential for combination therapies with other standard-of-care treatments [7][113] Management Commentary on Operating Environment and Future Outlook - The company is optimistic about its differentiated ADC platforms and upcoming data readouts, particularly for XMT-1660, and believes its cash runway will support operations into 2026 [97][72] - Management highlighted the urgent unmet need for new ADCs with alternative payloads, as resistance to TOPO1-ADC treatments is emerging in breast cancer patients [69] Other Important Information - The company will present clinical data for discontinued candidates UpRi and XMT-1592 at the European Society of Gynecological Oncology (ESGO) conference, with 31 patients in the XMT-1592 dataset [5][114] - The company is exploring alternative dosing schedules for XMT-1660, including Q3 and Q4 schedules, to optimize dosing [81] Q&A Session Summary Question: Decision-making process behind the second-gen NaPi2b program and lessons for B7-H4 program [15] - The decision to reprioritize XMT-1592 was driven by the lower prevalence of the NaPi2b biomarker in lung cancer compared to ovarian cancer, as well as cost considerations [79][16] - For B7-H4, the company has not observed pneumonitis, which was associated with NaPi2b, and is continuing to optimize dosing and enrollment [80][81] Question: Enrollment progress and dose optimization for B7-H4 study [15] - The company has escalated to a dose of 59 mg/m² for XMT-1660 and is continuing to enroll patients in backfill cohorts to optimize dosing [81] Question: Expectations for midyear 1660 update and takeaways from 1592 data [101] - The midyear update for XMT-1660 will include efficacy and safety data, with the company highlighting the absence of peripheral neuropathy, neutropenia, and ocular toxicity observed in XMT-1592 [13][14] Question: Cash runway and expense trajectory [54] - The company expects its cash runway to support operations into 2026, with reduced OpEx in Q4 2023 and the completion of UpRi wind-down efforts [34][72] Question: B7-H4 biomarker and potential biomarker data in midyear update [41] - The company is measuring B7-H4 at baseline but not preselecting patients based on it, and has not decided whether to share biomarker data in the midyear update [128] Question: Differentiation and positioning of XMT-1660 compared to peers [133] - The company believes its Dolasynthen platform offers advantages in terms of lower toxicity and potential for combination therapies, with a focus on triple-negative breast cancer and other solid tumors [123][135] Question: Restarting the XMT-2056 trial and GSK's involvement [111] - The company is in the process of restarting the XMT-2056 trial, with GSK engaged but not having exercised its option, leaving decision-making control with the company [86][109] Question: Duration of response and resistance mechanisms in breast cancer [30][52] - The company is cautious about interpreting duration of response in Phase 1 data but notes that patients who responded to UpRi had a duration of response over seven months [31][137] - The company is enrolling patients who have received prior TOPO ADCs to assess resistance mechanisms and the efficacy of XMT-1660 [60][52]