Earnings call: Cue Biopharma outlines progress in oncology and autoimmune therapies

Cue Biopharma (Ticker: NASDAQ:CUE) provided an update on its financial results and the advancement of its therapeutic platforms during a recent earnings call. The biopharmaceutical company, focusing on oncology and autoimmune diseases, shared promising clinical trial data for its drugs CUE-101 and CUE-102, which have shown potential in cancer treatment through selective T cell modulation.

The company also discussed its autoimmune programs, CUE-401 and the CUE-500 series, and their strategic plans for partnerships and transactions to further development.

Key Takeaways

• CUE-101 and CUE-102 show potential in modulating cancer-relevant T cells, with positive clinical trial data.
• Cue Biopharma met with the FDA to discuss the registration path for CUE-101.
• The company's autoimmune programs, CUE-401 and CUE-500 series, have demonstrated promising results in restoring immune balance.
• Strategic partnerships and a transformational transaction are part of Cue Biopharma's plans for further development.
• Collaboration revenue of $1.8 million for the quarter ended December 31, 2023, was primarily from the partnership with Ono Pharmaceuticals.
• As of December 31, 2023, Cue Biopharma reported having $48.5 million in cash and cash equivalents.

Company Outlook

• Cue Biopharma aims to expand the therapeutic benefits and market reach of its IL-2-based CUE-100 series, particularly CUE-102.
• CUE-101 is advancing to a randomized Phase 2 study with key analysis points at 14 months and between 22 and 24 months.
• The company is actively engaged in discussions with potential partners to enhance capacity and access to capital.

Bearish Highlights

• The company acknowledges the challenges and capital requirements of the oncology sector.
• Aligning with a company that can support a registrational path is crucial for Cue Biopharma's success.

Bullish Highlights

• CUE-101 has improved patient outcomes in HPV-positive head and neck cancer when combined with pembrolizumab.
• CUE-102 has shown early signs of clinical activity in indications where checkpoint inhibitors have been ineffective.
• Cue Biopharma's platform for autoimmune diseases, particularly with CUE-401, shows promise in generating regulatory T cells.

Misses

• The earnings call was cut short due to technical difficulties, leaving some investor questions unanswered.

Q&A Highlights

• Ren Benjamin inquired about B-cell depletion by T-cells, and Anish Suri explained the mechanism of Pan-B-cell depletion and the role of CMV-specific T-cells.
• Data presentations are scheduled for ASCO, including longer follow-up and data on approximately 35 patients for the CUE-101-01 and CUE-102 trials.

Cue Biopharma's recent earnings call highlighted the company's strategic advancements in developing innovative therapies for cancer and autoimmune diseases. With a solid financial foundation and promising clinical data, the company is poised for strategic collaborations that may transform its market position. Investors and stakeholders are closely watching the progress of CUE-101 and CUE-102, as these therapies may offer new hope for patients with challenging conditions. Cue Biopharma's commitment to enhancing treatment options through its therapeutic platforms remains a central focus as the company moves forward with its development plans.

InvestingPro Insights

Cue Biopharma's recent financial results and clinical advancements have captured the attention of investors, particularly as the company navigates the complexities of the oncology and autoimmune sectors. Here are some insights based on current data from InvestingPro that could be of interest to stakeholders monitoring the company's progress:

InvestingPro Data:

• The company's market capitalization stands at $92.42 million, reflecting the current market valuation of Cue Biopharma.

• A significant revenue growth of 340.96% over the last twelve months as of Q4 2023 showcases the company's expanding financial scale, despite a gross profit margin of -593.93% indicating challenges in profitability.

• Cue Biopharma's stock price has experienced a substantial 12.09% return over the last week, hinting at positive investor sentiment in the short term.

InvestingPro Tips:

• Analysts do not anticipate the company will be profitable this year, aligning with the reported gross profit margin challenges. This is a critical factor for investors to consider when evaluating the company's near-term financial health.

• The company's stock price movements are quite volatile, which may appeal to certain investors but also suggests a higher risk profile. This volatility is underscored by the recent price total return metrics, showing a 3.03% increase over the past month but a 33.98% decrease over the last three months.

For those interested in a more comprehensive analysis, InvestingPro offers additional tips on Cue Biopharma. To access these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 more InvestingPro Tips available at https://www.investing.com/pro/CUE, each designed to provide investors with a deeper understanding of the company's financial health and market potential.

Full transcript - Cue Biopharma (CUE) Q4 2023:

Operator: Greetings and welcome to the Cue Biopharma Investor Update call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn over the conference to Dan Passeri, Cue Biopharma’s Chief Executive Officer. You may begin now.

Daniel Passeri: All right, thank you, and good afternoon, everyone. As a reminder, this presentation and discussion is being recorded and will be available on our website for the next 30 days. Also, please be aware that the slides accompanying today's update may be advanced directly by those listening in on the call, and we'll notify you on what slide we're on throughout this presentation. Joining me on today's call are Dr. Anish Suri, our President and Chief Scientific Officer, Dr. Matteo Levisetti, our Chief Medical Officer, and Kerri-Ann Millar, our Chief Financial Officer. As shown on slide two, this presentation and overview may contain some forward-looking statements, and any forward-looking statement made during this call represents the company's views only as of today, April 8th, 2024. As shown on slide three, I'm going to begin with a summary overview of the broad reach of our therapeutic platform and review our competitive positioning and key corporate objectives going forward. Anish will then provide an overarching summary of our platform approach in support of developments, reinforcing our positioning as a leading solution provider, and the development of selective immunotherapeutic biologics to address pressing unmet medical needs in both oncology and autoimmune disease. Matteo is then going to review and update of our promising and evolving oncology clinical datasets, as well as provide a summary synopsis of our recent and productive type B meeting with the FDA to align on registration paths forward for CUE-101. Anish will then return to provide an overview of highly promising data from our preclinical autoimmune programs with the potential of having a profound impact on the treatment of autoimmune disease. Kerry will then join the call and provide a brief update on our financials, and I'll return for closing remarks prior to opening the call to questions. Okay, so to summarize, the data generated to date from our ongoing clinical trials with CUE-101and CUE-102, as well as our preclinical programs, continue to move us closer to achieving our core mission and vision of becoming a leading solution provider for realizing the tremendous therapeutic potential of selective modulation of the patient's immune system in the treatment of cancer and autoimmune disease. As shown here on slide number four, we aim to achieve this by engineering biologics that translate nature's CUE’s, that is signals from nature that are built into our biology, and to break through immunotherapies. We have continued to progress forward with positive and evident results in our on-going clinical trials, demonstrating and further bolstering the therapeutic potential of our Immuno-STAT platform for treating cancer. To date, the strengthening data from our ongoing clinical Phase I A and B trial with CUE-101 for HPV-positive head and neck cancer, and CUE-102 for treating the numerous types of WT1, Wilms’ Tumor 1 overexpressing cancers, strengthens our belief that we've developed a therapeutically effective and well-tolerated approach for the selective modulation of cancer-relevant T cells. Importantly, we recently received guidance in alignment with the FDA through an end of Phase 1 Type B meeting for the continued development of CUE-101 towards registrational trial. Mateo will provide further details on this prospect momentarily. We've also made significant prospect with our preclinical autoimmune programs, principally CUE-401 in collaboration with our partner Ono Pharmaceutical, and the CUE-500 series, with both programs demonstrating clear evidence of the desired mechanistic effect of these novel approaches. Anish is going to cover these in more detail momentarily. Through these ongoing developments, both in oncology as well as autoimmune disease, we're well-positioned for strategic alignment with third parties for further increasing and enhancing our capacity to develop our highly promising and potentially transformative therapeutics. We've made significant progress towards our goal of consummating a transformational transaction that would enable greater capacity and enhance productivity. I'm going to come back at the end of this call and further elaborate on this topic in the closing remarks. I'll now turn the call over to Anish, who will describe our core competitive positioning and the strategic implications of our approach for treating both oncology as well as autoimmune disease. Anish?

Anish Suri: Thanks, Dan. Good afternoon to all listening in on today's call. I'll provide a brief summary of our platform and the significant potential of our therapeutics for treating cancers and autoimmune diseases. As shown on slide five, immune balance is a key central pillar of human health, and deviation from this state underscores diseases such as cancer and autoimmunity. Hence, an effective therapeutic strategy for resetting immune balance should focus on selective modulation of disease-relevant immune cells while avoiding broad perturbations of the immune system. Most importantly, this approach allows us to maximize efficacy while preserving patient safety. Slide six provides an introduction to our Immuno-STAT platform for resetting immune balance via selective modulation of disease-relevant immune cells. The core framework of an Immuno-STAT builds upon nature's selectivity for T-cell engagement and activation. Disease-specific T-cells express singular T-cell receptors, or TCRs, that engage the stabilized Peptide-HLA, or PHLAs, in an Immuno-STAT. Only those engaged T-cells can then receive a disease-modifying secondary signal. This approach enables selective targeting and modification of disease-specific T-cells while sparing broad effects on other T-cells that are not relevant to the disease of interest. Importantly, the Immuno-STAT framework was engineered to be highly flexible and modular, enabling us to deploy the same or similar core functional elements for diverse therapeutic approaches. For example, in the case of oncology, Immuno-STATs can selectively engage and activate tumor-specific T-cells while avoiding systemic immune activation. In contrast, for autoimmune diseases, Immuno-STATs can selectively down modulate autoreactive T-cells while avoiding broad immunosuppression. The next slide, slide seven, highlights the pipeline of assets that we have developed for restoration of immune balance. In oncology, we have clinically validated the CUE-100 series that selectively delivers the potent cytokine IL-2, along with a TCR-activating signal, to preferentially activate tumor-specific T-cells while sparing all other irrelevant T-cells. This selective stimulation allows for the generation of a therapeutic index for IL-2, which has eluded many others trying to develop IL-2-based cancer therapies. In over 100 patients dosed, we have demonstrated a substantial increase in efficacy with favorable tolerability. For our lead clinical candidate, CUE-101, in recurrent metastatic head and neck cancer, we have recently concluded a meeting with the FDA aligning on a registration path, which will be further elaborated upon momentarily by Mateo. With our next clinical candidate, CUE-102, that targets Wilms Tumor 1, or WT1, we have completed the Phase 1 monotherapy dose escalation in patients with gastric, ovarian, colorectal, and pancreatic cancers, and have noted evidence of anti-tumor activity and disease control in multiple patients. Mateo will describe this efficacy data in detail, along with the plans for our registrational path forward with CUE-101. On the autoimmune front, as shown here, we have developed two novel and highly promising approaches for restoring immune balance. CUE-401 is a novel bispecific composed of an attenuated IL-2 and TGF-beta that together can stimulate the generation and expansion of regulatory T-cells. Regulatory T-cells, or Tregs, possess the ability to dampen and control autoreactive lymphocytes, which are responsible for inducing tissue damage in autoimmune disease. Hence, in this regard, Tregs are the master regulators of maintaining immune homeostasis in health. CUE-401 is currently partnered with Ono Pharmaceuticals, and this collaboration is moving forward at a strong pace with much productivity. In addition to CUE-401, we've also developed the CUE-500 series to enable T-cell mediated depletion of B-cells. We believe this biologic holds the promise for achieving CAR-T-like efficacy in autoimmune patients and is significantly differentiated from other competing approaches, such as ADCC, PAN-T-Cell Engagers, or CAR-T-cell therapies. We will expand on both autoimmune programs in the later part of this presentation. With that background, I'll now turn the call over to Matteo to provide a detailed clinical update on the data and future plans. Matteo?

Matteo Levisetti: Thanks, Anish. Good afternoon to everyone listening in on today's call. I'm particularly pleased to provide you with this summary update, as we have achieved important developmental milestones with the recent clinical data and believe we have not only defined the registration path forward, but also demonstrated the opportunity of the CUE-100 series as a potential breakthrough for improving patient outcomes across multiple cancers. The clinical data from the ongoing CUE-101 trial continues to demonstrate highly encouraging and robust metrics of clinical benefit for patients with newly diagnosed recurrent metastatic HPV positive head and neck cancer treated in combination with pembrolizumab and for heavily pretreated recurrent metastatic head and neck cancer patients treated with monotherapy. We recently had an end of Phase 1 type B meeting with the FDA where we received guidance and aligned on a path forward to a registration of trial for CUE-101. To that end, we plan to conduct a randomized Phase 2 study of CUE-101 in combination with pembrolizumab compared with pembrolizumab alone as first line treatment of patients with recurrent metastatic HPV positive head and neck cancer. This trial design and the resulting data will provide a clear assessment of treatment effect along with confirmation of optimal dose for the Phase 3 registrational trial will increase overall confidence and probability of succeeding with the registrational trial. We believe this approach is the optimal means of generating the highest probability of success in the most cost effective and direct manner. We intend to pursue this registrational approach with CUE-101 in the first line setting in combination with KEYTRUDA as this setting represents a significantly larger market and we believe due to the complementary mechanism of action between CUE-101 and KEYTRUDA the patient impact and durability would likely also further reduce the patient population available in the second line setting over time. It also represents a straight path forward to move upstream in the treatment paradigm extending market reach potential into the adjuvant setting which represents the largest market opportunity. As shown on slide 9, data from the ongoing clinical trials with CUE-101 as monotherapy and in combination with pembrolizumab have provided clinical proof-of-concept to validation and de-risking of our Immuno-STAT platform. The latest data generated to date in 2024 continues to bolster prior observations further enhancing our confidence in CUE-101 as a potential therapeutic to improve outcomes for patients battling HPV positive head and neck cancer. As previously and consistently stated we believe CUE-101's unique mechanism of action as evidenced by the data generated to date enables effective and tolerated dosing and selective expansion of the targeted tumor specific T cells. We continue to observe prolonged survival in patients with advanced recurrent metastatic head and neck cancer treated with CUE-101 monotherapy. Notably as previously presented the median overall survival of patients treated in the second line and beyond at the 4 milligram per kilogram monotherapy expansion dose is currently greater than 20 months which compares favorably to the historical median overall survival of approximately 8 months observed in the second line trials of nivolumab and pembrolizumab. We believe this enhanced survival is due to the repeated stimulation and expansion of tumor specific T cells given CUE-101's mechanism of action especially in the tumor microenvironment. As shown momentarily the overall response rate in median progression free survival observed in first line patients treated with CUE-101 in combination with pembrolizumab represents a greater than doubling of the overall response rate in progression free survival compared to historical rates with pembrolizumab monotherapy. Enrollment in the neoadjuvant trial is progressing well and preliminary observation support expansion of E7 specific anti-tumor T cells and increases in NK cells within the tumor microenvironment. These findings are consistent with the pharmacodynamic changes observed in the peripheral blood of patients treated with CUE-101 as previously reported. We believe these observations in addition to the clinical efficacy observed in the recurrent metastatic setting support a development strategy of moving further upstream into earlier lines of therapy such as the adjuvant setting where a larger number of patients may benefit. Pembrolizumab is approved as the standard of care treatment of first line patients with recurrent metastatic head and neck cancer that have tumors with CPS scores of greater than or equal to 1%. CPS is a measure of PD-L1 expression based on a response rate of 19% observed in the KEYNOTE-048 study. Following combination treatment with CUE-101, the overall response rate of 46% as shown on slide 10 observed in patients with CPS greater than or equal to 1 treated to date represents a greater than doubling compared to the historical overall response rate of 19% observed with Pembrolizumab monotherapy. As shown on the waterfall plot, we have observed significant tumor reductions across many patients including confirmed partial responses in 10 patients and a confirmed response in one patient. Importantly 11 patients remain on treatment including three with stable disease that exhibit reductions in their target lesions. Notably for patients with low CPS scores and overall response rate of 50% was observed with CUE-101 and pembrolizumab which represents a greater than tripling of the historical overall response rate of approximately 15% observed with pembrolizumab alone. In totality our data suggests that not only does CUE-101 appear to demonstrably enhance the response rate of PD-1 inhibition but also does so by substantially enhancing responses in patients that are traditionally less likely to respond. This is particularly important since patients with low CPS scores i.e. values of 1 to 19 represent approximately 50% of all patients that are CPS positive and eligible for treatment with checkpoint inhibitor in the frontline setting. The responses observed in these patients have been durable and observation that is reflected in the improved progression-free survival which is shown on the next slide, slide 11. Of note, the Kaplan-Meier estimate of median progression-free survival for patients treated with CUE-101 in combination with pembrolizumab as shown on the left is currently 8.3 months which compares very favorably to the historical median progression-free survival of 3.2 months observed with pembrolizumab monotherapy in the KEYNOTE 048 trial as shown on the right. Furthermore, 20 of the 25 patients treated to date, the 4 mg/per kg expansion dose in the ongoing CUE-101 combination trial remain alive as of the last follow-up for each patient. This portends well for the median overall survival as it matures throughout the year. As shown in the panel on the left of slide 12, we have observed robust expansion of tumor-specific HPV E7-specific T cells in the peripheral blood of patients treated with CUE-101. As shown on the graph on the right, we have observed an approximate 100% decrease in cell-free HPV DNA which is an increasingly recognized biomarker of disease burden in all patients that have experienced objective responses that were tested to date, further supporting the magnitude of their responses. Reductions in cell-free HPV DNA of this magnitude have also been observed in multiple patients with durable stable disease as defined by RECIST. The data from the CUE-101-01 trial provided the substrate for a productive Type B meeting with FDA which occurred earlier this year. In the course of this meeting, we aligned with FDA on a path to support a future CUE-101 plus pembrolizumab registrational trial, including guidance on the design of a small Phase 2 trial to confirm the CUE-101 dose used for a subsequent registrational trial consistent with a project optimist directive. An overview of the plan Phase 2 trial is displayed on slide 13. Treatment-naive first-line patients with recurrent metastatic HPV-positive head and neck cancer will be randomized to one of two CUE-101 doses in combination with pembrolizumab or pembrolizumab alone. Overall response rate will be the primary endpoint with others, including PFS and OS as secondary endpoints. The primary analysis of overall response is anticipated to occur approximately 24 months after the first patient is rolled. As outlined on slide 14, the clinical benefit observed with QUE-101 combination treatment in first-line patients with HPV-positive head and neck squamous cell carcinoma is compelling compared to historical published data. We believe this Phase 2 trial design and the resulting data will provide a clear estimation of treatment effect, confirmation of the dose to be tested in Phase 3, and increase the overall probability of success for the registrational trial. As demonstrated with the CUE-102 program, which I will now discuss, we believe the data from CUE-101 has provided a de-risking and mechanistic validation for additional biologics from the IL-2-based CUE-100 series. As a reminder, shown on slide 16, CUE-102 and CUE-101 share 99% amino acid sequence identity. This enabled us to significantly decrease the development time and cost of CUE-102 as we were not required by the FDA to repeat IMD-enabling toxicology studies for CUE-102, and we were also able to initiate the Phase 1 dose escalation study at 1 milligram per kilogram, a dose at which we observe clear signs of biologic activity with CUE-101 We have now completed the dose escalation portion of the 1-2 study without observing any dose-limiting toxicities and are currently enrolling patients in all four indications in the expansion phase of the trial. As shown on slide 17, gastric, ovarian, pancreatic, and colon cancer represent areas of high unmet need. Note that these numbers are greater than a collective of 200,000 patients with recurrent metastatic disease in need of therapeutic options. In addition, an almost equal number of patients with other WT1-positive cancers are eligible to benefit from CUE-102 therapy in the future. Emerging pharmacodynamic data from blood samples of patients treated with CUE-102 is shown on slide 18. As seen here on the left, and consistent with our preclinical data sets and our experience with CUE-101, selective and robust expansion of WT1-specific T cells has been noted among the patients treated with CUE-102, with two representative examples shown here. Expansion of these tumor-specific T cells is expected to enhance anti-tumor immunity with the potential to drive tumor reductions, as shown on the right. A patient with gastric cancer that progressed on three prior lines of therapy, including a checkpoint inhibitor, has experienced a decrease in the sum of three target lesions of minus 34% at week 36. Another example of reduction in tumor burden, this time in a patient with recurrent metastatic ovarian cancer, is shown on the right. Unfortunately, these two patients were found to have new lesions on subsequent scans and have now come off treatment. Also of note, a pancreatic cancer patient treated on the study has benefited through maintaining stable disease for greater than eight months, which is remarkable in the setting of this devastatingly aggressive tumor type. Given the encouraging signals of clinical activity, including multiple patients with stable disease observed across all four indications, and the enthusiasm of the investigators, the protocol was amended to expand into all four indications. The study is actively enrolling patients in all four of these indications. Patient screening and enrollment rate continue to go exceedingly well, underscoring investigator enthusiasm and the need for effective therapies in WT1-expressing cancers. As demonstrated on slide 19, it's important to note that while checkpoint inhibitors have had a major positive impact on changing the therapeutic options for patients, there remains a substantial need for improvement. There have been significant persistent challenges in realizing the fullest potential of immunotherapies. While many therapeutic modalities and combination approaches for immune modulation are being pursued, significant challenges exist with regards to suboptimal safety, tolerability, and efficacy to enable broad patient reach. We believe solution providers to these challenge will emerge as best-in-class market leaders defining the paths forward for more effective therapies, both as standalone treatment options as well as combination approaches, for example, with checkpoint inhibitors. As just conveyed, the ability of CUE-101 to selectively expand and activate targeted tumor-specific T cells complements the mechanism of checkpoint inhibition, thus expanding patient reach and enhancing therapeutic benefit, as demonstrated in this chart. We believe our platform has the potential to significantly expand patient reach by increasing the number of patients that benefit and enhancing the magnitude of that therapeutic benefit. In short, we believe our platform represents a major breakthrough towards realizing the full potential of immunotherapy. We're further encouraged by the early observations of CUE-102 monotherapy, anti-tumor activity across multiple indications where checkpoint inhibitors have been largely ineffective. We look forward to presenting additional data on both programs at ASCO in June. I will now turn the call over to Anish. Anish?

Anish Suri: Thanks, Matteo. Let me take a few minutes to update on the notable progress with our platform for autoimmune diseases, starting with CUE-401 and regulatory T cells as indicated on slide 20. Slide 21 describes the design and rationale for CUE-401 as an attractive approach to generate a new and differentiated class of regulatory T cells, or Tregs. As mentioned previously, CUE-401 is a bispecific molecule containing attenuated forms of IL-2 and TGF-beta, which are the two known signals that can convert peripheral T cells into regulatory T cells, also known as induced Tregs or ITregs. In addition, CUE-401 also strongly expands existing natural Tregs. This program has been a very productive collaboration with Ono Pharmaceuticals, wherein Ono is supporting all of our ongoing preclinical work to identify an optimized clinical lead compound, which we are on track to accomplish in the second half of 2024. The next slide, slide 22, highlights the unique and differentiated mechanism of action of CUE-401 over other CD25-biased IL-2 muteins for expansion of existing Tregs. As shown here, CUE-401 can expand pre-existing regulatory T cells and convert naive CD4-positive T cells into new Tregs, thereby enhancing the quantitative population and the qualitative features of Tregs to control the pathogenic cellular reactions in autoimmune patients. Slide 23 provides examples of the potent activity of CUE-401 in the conversion and generation of stable Treg cells. As shown on the left panel, conversion and expansion of human CD4 T cells to Tregs only occurs when the IL-2 and TGF-beta signals are delivered via CUE-401. Either signal alone does not result in Treg conversion, and CUE-401 represents the first singular biologic capable of delivering both signals simultaneously. In the right panel is an in-vivo study demonstrating efficacy of CUE-401 in an animal model of autoimmune gastritis. This is a model developed by Dr. Rich DiPaolo at Saint Louis University, wherein a short treatment with CUE-401 results in a long-lasting protection from gastritis, as shown by the histopathological analysis and disease scores. We believe this mechanism of action of CUE-401, including the demonstration of long-lasting efficacy after just a short duration of treatment, will apply to many other autoimmune diseases. Let's move on to slide 24 that introduces a new series of Immuno-STATs, termed the CUE-500 series that we have developed with the goal of achieving deep B cell depletion via T cell mediated approach. As shown in the next slide, slide 25, recent data sets from small clinical studies have demonstrated remarkable efficacy in autoimmune patients treated with CAR-T cell directed against CE-19 to deplete B cells. In many cases, long-term ongoing clinical remissions have been noted in patients with lupus and myositis with no concurrent immunosuppressive regimens, which could be early signals of functional cures. This curative potential via immune reset is what propelled us to start working on the CUE-500 series, which enables T cell mediated B cell killing, akin to what CAR-Ts do, except with an off-the-shelf biologic. This concept is best shown on the next slide, slide 26. The CUE-500 series builds upon the clinical de-risking accomplished with the CUE-100 series. The constant is the presence of a bivalent peptide HLA molecule that selectively engages TCRs of selected T cells. In the case of the CUE-500 series, the peptide presented by the HLA is a well-characterized virus epitope recognized by virus-specific memory T cells present in high frequencies in all of us. Examples of such virus epitopes, which include CMV, EVV, SARS-CoV-2, etcetera. In addition, the CUE-500 molecule also contains SCFEs directed against B cell cell surface molecules such as CD-19. This configuration allows for CUE-500 molecules to bind target B cells and make them appear as virally infected cells that can be recognized and destroyed by a protective antiviral memory T cell repertoire. This novel mechanism of action is depicted in the left panel on the next slide, slide 27. This mechanism of natural target recognition via TCRs is of similar sensitivity, if not higher compared to how a CAR-T cell recognizes its target via the CAR domain. On the right side of the slide is an example of a CUE-500 molecule enabling cytomegalovirus-specific T cells CMV T cells, to kill primary human B cells. It is well known that CMV-specific T cells are a significant composition of the protective antiviral T cell repertoire and are present in large fraction of the population. As shown here, B cell killing is specific to the engagement of CMV-specific T cells. In other words, a CUE-500 molecule harboring an HIV peptide does not mediate B cell killing since the HIV-specific T cells are not present in circulation. The selective harnessing and redirection of the protective antiviral T cells to kill targets creates a very attractive opportunity for CUE-500 series Immuno-STATs. This is particularly exemplified in the next slide, slide 28, which highlights the market opportunity for a broad therapeutic pipeline with a single product. The therapeutic applications span from multiple autoimmune diseases where pathogenic B cells play a role to additional applications in transplantation and allergic inflammation. The CUE-500 series could also be effectively applied for the treatment of B cell malignancies in the oncology therapeutic area. The next slide, slide 29, briefly summarizes the superior differentiation of the mechanism of action of CUE-500 over other competing modalities for B cell depletion, including ADCC, CAR-T, cellular therapy, and Pan-T cell engagers. We now recognize that ADCC mechanisms result in incomplete depletion of B cells, primarily due to variable expression of the target antigen, such as CD-19. Low target expression allows for escape of B cells from ADCC, primarily mediated by NK cells. Furthermore, FC receptor polymorphisms dictate high versus low ADCC effector genotypes. In the case of CAR-T approaches, complex manufacturing and supply chains remain a challenge for broad access. In addition, patient conditioning regimens, inpatient administration, and safety risks, including CRS and neurotoxicity, continue to pose challenges for CAR-T therapies. Pan-T cell engages that activate T cells via anti-CD3 or anti-CD28 cross-linking are also not favorable for autoimmune applications. These modalities activate all T cells indiscriminately, resulting in CRS and other toxicities, hence are unsuitable for autoimmune patients. In addition, they pose the very real threat of further activating and propagating autoreactive T cells that may exacerbate the underlying autoimmune disease. In contrast to these modalities, the CUE-500 series offers an elegant potential solution for selectively exploiting the long-lasting antiviral memory T cells to drive B cell depletion. This off-the-shelf approach, therefore, offers the potential to achieve CAR-T-like efficacy while avoiding the pitfalls associated with cell therapy modalities. With that overview of both CUE-401 and CUE-500 and their applications in autoimmune disorders, I'll turn the call to Kerri to review the financial details. Kerri?

Kerri-Ann Millar: Thanks, Anish. Turning to slide 30, I'd like to provide a brief update on our financial results for the three months and full year ended December 31, 2023. For the three months ended December 31, 2023, the company reported collaboration revenue of approximately $1.8 million as compared to $150,000 for the same period in 2022. Revenue in the fourth quarter was primarily due to work related to the collaboration and option agreement with Ono Pharmaceuticals for CUE-401, which was executed in the first quarter of 2023. Research and development expenses were $10.9 million and $11.3 million for the three months ended December 31, 2023 and 2022, respectively. The decrease was primarily due to drug substance manufacturing projects for CUE-101 and CUE-102 that were completed in 2022. General administrative expenses were $4.6 million and $3.7 million for the three months ended December 31, 2023 and 2022, respectively. The increase was primarily due to an increase in professional and consulting fees during this time. For the years ended December 31, 2023 and 2022, the company reported collaboration revenue of approximately $5.5 million and $1.2 million, respectively. The increase was due to the revenue earned from our strategic collaboration agreement with Ono Pharmaceuticals. Research and development expenses were $40.8 million and $38.6 million for the years ended December 31, 2023 and 2022, respectively. The increase was due primarily to clinical development costs and research and laboratory expenses, which were partially offset by decreases in employee costs and rent expense. General administrative expenses remain relatively flat at $16.7 million and $16.2 million for the years ended December 31, 2023 and 2022, respectively. And as of December 31, 2023, the company had approximately $48.5 million in cash and cash equivalents, $34.4 million in working capital, and $47.2 million in common shares outstanding. We expect our current cash and cash equivalents to fund operations into the first quarter of 2025. I'll now turn the call back over to Dan for closing remarks. Dan?

Daniel Passeri: Yes, thanks, Keri. As you have just heard, our growing body of data in both clinical oncology and with preclinical autoimmune disease continues to support and reinforce our central premise and firm belief that CUE's platform holds tremendous potential to transform immunotherapy for both cancer and autoimmune disease by selectively modulating the patient's immune system in a highly targeted and tolerated manner. We believe the data we've generated to date in oncology with CUE-101 and CUE-102 have clearly demonstrated the selective and targeted activation and expansion of cancer-relevant CD8 positive T cells in a qualitatively distinctive manner. Furthermore, these data demonstrate clear signs of durable anti-tumor activity and mechanistic complementarity with checkpoint inhibitors. Let me remind everyone listening in that the patients we're treating are refractory, that is, resistant to prior therapy, and metastatic, that is, their cancer has not only recurred but has also spread to multiple locations after primary treatment. As a result, these patients have a very poor overall prognosis. And importantly, both CUE-101 and CUE-102 have demonstrated the potential of stimulating the patient's immune system to recognize the tumors growing in their bodies as foreign, marshalling an attack. Furthermore, the clinical observations to date support the putative mechanism of action for CUE-101 and by implication, CUE-102, as well as the entire IL-2-based CUE-100 series, mechanistically complementing immune checkpoint inhibitors such as KEYTRUDA. We see this compilation of data as a key strategic advantage for expanding patient reach and therapeutic benefit of checkpoint inhibitors, positioning us well for strategic alignment with potential partners to enhance their competitive positioning. As conveyed in slide number 31, we are well-positioned for value inflection milestones over the coming year, namely with CUE-101 moving into a randomized Phase 2 study with the intention of providing confirmation of enhanced efficacy that we've seen in the prior studies that we've presented on in the 1A and 1B, which is our CUE-101 plus checkpoint inhibitor versus the checkpoint inhibitor standard of care alone. We expect interim analysis at 14 months and the overall response rate and medium progression free survival analysis between 22 and 24 months, both of which underscore breakthrough potential with CUE-101 plus checkpoint inhibitor to establish a new standard-of-care for these frontline refractory metastatic head and neck squamous cell carcinoma patients, but also has far reaching implications for our Immuno-STAT platform application in solid tumors per se by expanding patient reach and enhancing clinical benefits of checkpoint inhibitors and to a broad range of cancers. Successful readout in the randomized Phase 2 would place CUE in a position of leverage and strength as a partner of choice for checkpoint inhibitor franchises. Furthermore, CUE-102 patient expansion positions combinations with checkpoint inhibitors in large indication segments where checkpoint inhibitors have historically failed to achieve approval. We have also generated a body of data highly supportive of the mechanistic advantages and disruptive potential of our autoimmune programs, namely CUE-401 for Treg induction currently partnered with Ono of which we have retained an option for a 50% interest in the U.S. market with two near-term milestones potentially being realized and CUE-501 for B-cell ablation with the potential to displace CAR-T with a biologic for B-cell driven autoimmune disease such as lupus. As conveyed in the next slide, number 32, we have positioned CUE well for strategic and competitive positioning with the establishment of clinical proof-of-concept with our two lead oncology programs whereby our clinical data generated to date have the potential to shift the treatment paradigm and that we have demonstrated significant and meaningful increase in the overall response rate, median progression-free survival, and overall survival resulting in the promise that we have the potential to revitalize the checkpoint inhibitor sector and enhance market reach and have also demonstrated platform modularity and scalability. Through this modularity and scalability, we have multiple applications of our novel platform having the potential to address some of the largest pharmaceutical markets in the U.S. and global application for solid tumors and autoimmune disease indications. Through these ongoing developments, we have made significant progress over the past quarter with our corporate development and business development initiatives. We are presently engaging in ongoing strategic discourse with multiple prospective strategic partners. Based on continued development through these ongoing discussions, we are highly confident we will be successful consummating one or more of these transactions in a timely manner enabling strategic alignment, enhancing our capacity, and enabling access to requisite capital towards the realization of our corporate mission. On that, we would like to extend our sincere thanks and appreciation to our committed shareholders, passionate employees, board of directors, scientific advisory board, clinical investigators, and our collaboration partners for their continued support, guidance, and trust. Most importantly, we extend our profound appreciation and respect to the patients and their families who have participated in our clinical trials enabling us to gain insights and knowledge essential for continued progress in the fight against cancer and other debilitating diseases. With that, I would like to now turn the call back over to the operator to open up for questions. Operator?

Operator: Thank you, ladies and gentlemen. [Operator Instructions] Your first question comes from Marvin Rakaroff [ph] from Jefferies. Your line is now open.

Unidentified Analyst: Hi. Congrats on the progress, and thanks for taking my questions. I was going to ask about the randomized phase 2 combo study. Can you talk about how many patients you anticipate you'll need in each arm? And if you're successful on that first interim, on overall response rate, would that allow you to advance into a registrational phase 3?

Daniel Passeri: Sure. Matteo, do you want to take that question? And thanks, Mark.

Matteo Levisetti: Yes, certainly. So the patient sample size for the entire trial is planned to be less than 100 patients, so approximately 25 patients per arm. And then regarding the first interim analysis, given that this is a randomized trial, we'll have a data safety monitoring board that will look at the results of that first interim and provide a recommendation to continue the trial per protocol if everything looks good. And it's really the final analysis at 24 months, 22 to 24 months that would serve as the substrate to proceed into a registrational trial, although a fair bit of trial startup could be done once the interim analysis, the first one, provides a positive recommendation to move forward.

Unidentified Analyst: Got it. That's helpful. And Dan, you talked about potential partnering. Can you clarify what stage you would look to potentially partner? Would it be as you're running the Phase 2 or before the Phase 3? And then what could potential partnership look like from a development and economic standpoint?

Daniel Passeri: Sure. Very important question, and, Maureen [ph] it's a dynamic question, and there's no one answer to that. It's really looking at a number of factors that we will consider. So we're presently in discussions, let's just say, with multiple parties across the various asset classes we have. So pertaining to CUE-101, CUE-102, I think the key there is identifying an appropriate party with the sort of requisite insight on the disease indication that can sort of enhance our own capacity and provide the requisite support. We certainly don't want to be giving up on the economics too much of the promise of those assets. So it's really going to be based on our continued involvement, particularly in the randomized Phase 2, the type of support we would have in the economics downstream. So we're in discussions with various parties, and we'll be looking at different economic structures to make that decision. And ultimately, it's a board decision. So, we've been in dialogue with the board on an ongoing basis, and ultimately we will present various scenarios and make the decision accordingly. And regarding autoimmune, same type of sort of dynamic analysis. I would just use Ono as an example. The structure of that partnership was very favorable. They've actually been an outstanding partner with an early asset. They're basically subsidizing the development. We have a very interactive partnership, but we've retained a 50% upside option upon selection of the clinical candidate when we begin IND-enabling studies. And that allows us to preserve sort of optimal upside for our shareholders while the sort of risk capital, particularly in the early stages, is being subsidized. So I hope that answers your question, but we'll be looking at it, in a dynamic manner based on the various options we have in front of us.

Unidentified Analyst: Got it. That's, yes, that's helpful. And for the 501 program, just wondering if you'd talk more about where you're at with preclinical development for that program. And you talked a little bit about potentially partnering this one, too. Would this be from the 500 series, would it be one asset or would it be part of this 500 series platform? How would you think about that?

Anish Suri: Yes, Maury, so this is Anish. What we have so far is clear evidence that we've been able to make the scaffold and it's biologically active, as you can see. We've tested this across a number of different memory T cell specificities, so CMV being one which is highly present in a majority of us, but also SARS-CoV-2. At this point in time, there's a very conserved epitope from the spike protein that virtually all of us today in the world should have SARS-specific T cells, whether it's by vaccination or natural infection. So that provides a great substrate to essentially use this nature's pandemic to redirect it to something good, which is destroying these pathogenic B cells down the road. We started initially with CD-19, Maury, but you can think about the concept actually extending beyond just B cells to other pathogenic cell types. I also think, and we think very strongly, that this can also extend into very nicely into the oncology setting, particularly solid tumors where you just swap out the SCFE of the B cells to a cell surface tumor antigen. I mean, think about PSMA, think about TROP2, think about HER2, etcetera. So I think there's a vast potential for this. As we started talking, the additional interest has actually been an extraordinary amount of inbound interest from companies and parties that have been interested in really getting CAR-T-like efficacy in what was recently demonstrated in these small studies in autoimmunity. So that is the starting position and we've made good progress. The scaffold actually is de-risked very much by the 100 series, that's why I sort of stressed that. The core component remains the same, it's a bivalent peptide HLA and obviously has no IL-2. Instead of that, the mod is an anchoring SCFE. So again, there's a lot of good learnings from the 100 series, 101, 102, that sort of beneficially impact the 500 series.

Unidentified Analyst: Got it. That's really helpful. Thanks for taking my questions.

Anish Suri: Thank you, Maury.

Operator: Your next question comes from Stephen Willey from Stifel. Your line is now open.

Stephen Willey: Yes, good afternoon. Thanks for taking the questions and I apologize for the background noise. But maybe just a couple more Phase 2 questions. Can you just maybe speak to the second key one-on-one dose that you're contemplating including into the randomized Phase 2? And then can you also speak as to kind of what triggers the interim analysis? Is that just having a given number of patients beyond some specific duration of follow-up? And then I just have another question.

Daniel Passeri: Okay. Thank you, very good questions. And so the doses that we anticipate examining are certainly the four milligram per kilogram dose that we've really studied in 25 patients with now an objective response rate of close to 50%. We haven't finalized the selection of the other dose. However, we have quite a bit of experience with two milligrams per kilogram as monotherapy, where in that set of patients, of nine patients, we actually see a very pronounced extended survival. And then in the dose escalation at 2 mgs per kg with pembrolizumab, we also observed a very profound durable objective response. So I think the answer there will be two doses. Certainly, we believe at this point 4 mgs per kg and then very likely a 2 mg per kg dose where we've seen really very strong activity as well. With regards to the triggering of the first interim analysis, it really will be determined when approximately 70% to 80% of patients have gotten through the cycle five scan. Okay. So it's really a look to be sure that what we anticipate to observe or the DSMB would observe can make that assessment once, as I mentioned, 70% to 80% of patients have gotten to their cycle five scan. And we'd anticipate that, based on what we've observed to date in the 101-01 trial and the historical monotherapy rate, that that would progress then to ultimately the final analysis, which, again, that will be a complete analysis of the data set with all patients now having follow-up through cycle five to get to your primary overall response rate. That final analysis is very valuable because that yields data then that can be brought forward to start your Phase 3. And the way it's designed then allows also for follow-up with the supplemental analysis for PFS and OS, but we don't have to wait for that to hold up the initiation of the Phase 3 trial.

Stephen Willey: Okay. I guess that's helpful. And can you maybe just talk a little bit about kind of the pushes and pulls that were under consideration as you thought about carving out kind of an independent randomized Phase 2 versus trying to do something more Phase 2, 3, adaptive, seamless. And maybe in answering that, you can speak to, I guess, to what extent, if any, was this path forward kind of informed by some of these ongoing strategic discussions?

Daniel Passeri: So, very good question. And certainly an option to further develop the combination is to go with a Phase 2, 3 sort of seamless design. The first component of that, and this has become, I think, quite common since Project Optimus has sort of gone into effect as a directive or mandate, is to have a lead-in with the two doses to select your dose and then to go into the Phase 3 randomized portion. So, I think, there's multiple components to considerations. The initiation of that phase two, three is a larger endeavor and investment, I think, clearly. And the Phase 2, really offers the opportunity to generate data that confirms the dose to go into Phase 3. And therefore, the Phase 3 is simpler in design where there's no lead-in, which is actually takes quite a bit of time, at least a year to do. And then also gives the opportunity to have, if you will, a confirmatory analysis that would increase one's confidence in being successful in ultimately the Phase 3 trial.

Stephen Willey: Okay. And then maybe just one quick follow-up. Matteo, I was just wondering if you had any thoughts around the Pembro survival number that was recently presented from the LEAP-10 trial. And just, I know we're still a couple of years away from a registrational study, but even in the context of a Phase 2, how do you think that influences your expectation as to what that survival number might look like? Thanks.

Matteo Levisetti: Yes. So, I think, well, it's a bit of a mystery to me. I don't know that I've heard or that I'm aware of a clear, explanation. Also a surprise that the objective response rate was 27% as opposed to the historical rate of 19%. So, that arm in the trial did appear to do better than anticipated. I think, again, it then supports the value of doing a phase two trial before, you know, engaging into a registrational Phase 3 with, almost, 5 to 10 times the investment to really just gain confidence that we're on track with regards to what we believe the combination treatment effect is to the current monotherapy effect. So, I think, I hope that addresses the question. I don't, and again, when this was presented at the Head and Neck conference in Arizona, there was quite a bit of a discussion with the head and neck experts, and no one really seemed to have an explanation. But, again, with regards to lenvatinib, I think there's ideas or conceptions that the sort of broad array of kinase coverage may have some negative effects on the whole immunotherapy response to the checkpoint inhibitor. But that's conjecture on my part, but, again, I hope that addresses your question.

Stephen Willey: It does. Thanks for taking the questions.

Operator: Your next question comes from Ren Benjamin from JMP. Your line is now open.

Ren Benjamin: Hey, good afternoon, guys. Thanks for taking the questions, and congrats on the progress.

Daniel Passeri: Thanks, Ren.

Ren Benjamin: Matteo, I think you mentioned that there was some data coming out at ASCO for both 101 and 102. Can you just give us a sense as to, I mean, I think the 101 studies, it's largely just longer term follow-up. Correct me if I'm wrong there. And then for 102, about how many patients' worth of data and what kind of follow-up should we be expecting?

Matteo Levisetti: Yes, certainly. So I can share here that we're actually delighted to have been selected for an oral presentation on our CUE101-01 dataset at ASCO in June. It will be, as you alluded to a comprehensive, analysis of all the data with longer follow-up. With regards to the CUE-102, which was also selected for presentation as a poster at ASCO, we anticipate now having data on approximately 35 patients or more with some follow-up as long as, out to eight months.

Ren Benjamin: Terrific. And then, just going back to the strategic sort of partnerships and things that you're evaluating, as you think about, I guess, the way to move forward, how are you thinking about potentially just wrapping up 101 and 102 kind of in a nice typo and presenting that as a potential acquisition that provides a significant upfront that allows you to fund, let's say, the autoimmune, programs, which investors are paying a lot more attention to. You're clearly seeing that in the cell therapy space as well. They seem to be, very enamored by the autoimmune data. How do you take that kind of decision-making versus trying to find a strategic that can move with you, both 101 and 102 while spending your own money moving that forward?

Daniel Passeri: Yes, Ren, this is Dan. Probing question and a really important one, particularly, I think, in the headwinds in the current capital markets in oncology. I think it's clearly a prudent question with, I think, strategic insight into the challenges in the oncology sector. So, we are looking at sort of that dynamic. It hasn't evaded our thinking that the time frame and the capital requirement for increasing value for shareholders would probably be more in favor of autoimmune in the current capital markets, but we have much deeper, more mature data. So, I think the key for oncology is to align with a company that has the capacity and competencies to get through a registrational path, and the objective for us would be to be able to retain as much upside for our shareholders. So, the calculus that we're ultimately going to decide upon is how we address capital requirements, which are pretty deep in oncology for a registration path. By the way, it's part of the rationale that Matteo articulated as to the decision to do a randomized Phase 2 with a very defined, discrete number of patients. We can add a substantial amount of confidence and value, and I think that's also part of our analysis having to do with strategic alignment with parties. I think pharma companies are finding that structure to be very attractive, where the degree of confidence goes up dramatically if the randomized data repeats what we've seen in our Phase 1 A and B. So, it's a very important question, and it is part of our overall analysis, and ultimately the calculus that determines what path we choose.

Ren Benjamin: Got it. I guess one final question for me on the autoimmune side. I'm -- on the one hand, I'm a little bit confused as to how T-cells that are targeting, that are targeting CMV can, completely deplete kind of all the B-cells over there. I can imagine some proportion, but all of it. Maybe, Anish can help me understand this a little bit better, and when might we see some, preclinical data at any upcoming conferences this year?

Anish Suri: Yes, Ren. So, the T-cell mediated depletion is essentially Pan-B-cell depletion simply because of the CD-19 anchoring that's on every B-cell out at least in circulation. So, when the Immuno-STAT binds to the B-cell displaying the CMV peptide HLA, for the CMV T-cell that's simply presenting it as a surrogate for a virally infected cell, and the cell goes into the effector mechanism. One of the reasons we focus on the virus specific for this application, Ren, is because of the ability to rapidly respond the effector memory compartment, and one that is not dependent much on co-stimulation. So, you can actually rapidly recall these. They're present in high frequencies in a large majority of the population, and importantly, they're not exhausted. We know that from a body of literature that we've now had for decades in terms of the longer-lasting memory repertoire. So, that, those things together make for a really strong case for selective harnessing of what nature gave you as the nature's sort of long-lasting killer population. You could make it specific to a discrete B-cell subset if one chooses to, and achieve selective B-cell depletion, and that would just mean that you would swap the marker from a CD-19 targeting to something else, and so that optionality remains with us. But I think as a central early mechanistic proof-of-concept, CD-19 was attractive enough, particularly also since the CAR-T data is with CD-19 targeting, and that looks pretty robust, at least with the early metrics we've seen. So, we are in the midst of generating, actually, a body of data. There's a large part of the organization is looking at this with a significant amount of intensity, likely thinking to aim for either an autoimmune meeting or some translational autoimmunity meeting to be able to sort of bring out these concepts a bit more. So, hopefully, maybe try to find something either in the second half of the year or early next year to be able to talk more about this.

Ren Benjamin: Excellent. Thanks for taking the questions.

Kerri-Ann Millar: Hello Operator?

Daniel Passeri: This is Dan. I think we have lost the operator. Yes. I think we're having a technical difficulty. We're having a technical difficulty with the operator, so…

Matteo Levisetti: There's one more person waiting in the question queue that we'll try to get on.

Unidentified Company Representative: Okay. We seem to not be able to resolve the technical issue with the operator, so, Dan, with that, I think we will end the call. I want to thank everyone for listening in, and we look forward to providing everyone with substantive updates as they become available over the coming quarter. And as Mateo stated, we have two presentations at ASCO. Looking forward to presenting that data and autoimmune data at the appropriate conferences coming up over the coming year. I want to thank everyone for your attention, and have a pleasant afternoon and evening. Thank you very much. Take care.

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