CNTB — Connect Biopharma Holdings Limited

Summary of Connect Biopharma Q2 2022 Earnings Call

1. Key Financial Results and Metrics:

• Cash Position: As of June 30, 2022, cash and investments totaled $212.9 million, down from RMB 1,706.9 million at year-end 2021. This decrease is attributed to increased R&D and administrative expenses.
• R&D Expenses: Increased to $50.8 million from RMB 217.8 million, driven by clinical trial costs for CBP-201 and CBP-307.
• Administrative Expenses: Rose to $10.7 million from RMB 48.0 million, primarily due to higher personnel costs and expenses related to public company infrastructure.
• Net Loss: Reported at $59.8 million, significantly lower than RMB 942.5 million in the same period last year, which included a large fair value adjustment on preferred stock.

2. Strategic Updates and Business Highlights:

• CBP-201 (Atopic Dermatitis): Phase 2b trial met primary and key secondary endpoints with favorable safety data. A pivotal trial in China is ongoing, with top-line data expected in October 2022, potentially accelerating the timeline for a BLA submission in 2024.
• CBP-307 (Ulcerative Colitis): Reported promising Phase 2 data, highlighting its potential as a Phase 3-ready candidate. The company is exploring partnership opportunities for CBP-307.
• CBP-174 (Chronic Pruritus): Phase 1 trial results were positive, showing safety and tolerability, with plans for future studies to optimize formulation and evaluate efficacy in patients.

3. Forward Guidance and Outlook:

• CBP-201: Plans to initiate a global Phase 3 study by the end of 2022. The company expects to report Phase 2 results for asthma in the second half of 2023.
• CBP-307: Completion of the Phase 2 maintenance phase is anticipated in the second half of 2022.
• Partnership Discussions: The company is open to regional and global partnerships, particularly for CBP-201, with expectations of securing a deal as new data becomes available.

4. Bad News, Challenges, or Points of Concern:

• Increased Expenses: Rising R&D and administrative costs may pressure cash reserves, although current funds are expected to last into 2024.
• Competitive Landscape: The atopic dermatitis market is crowded, with established players like dupilumab. The company must demonstrate clear differentiation for CBP-201 to capture market share.
• Operational Challenges: The termination of the nasal polyp trial was due to operational issues related to the pandemic and geopolitical conflicts, raising concerns about the company's ability to execute trials effectively in challenging environments.

5. Notable Q&A Insights:

• Differentiation in AD: Management emphasized the potential for CBP-201 to offer improved efficacy and dosing convenience compared to existing treatments.
• Partnership Timing: There is ongoing interest in CBP-307, but no specific updates on partnerships were provided. The company aims to have a reasonable deal in place before launching the Phase 3 study for CBP-201.
• Regulatory Interactions: Positive feedback from the China CDE regarding the pivotal trial design was noted, with expectations for a pre-BLA meeting following the upcoming data readout.
• Future Studies for CBP-174: Plans for future studies are still being deliberated, with considerations for optimizing drug formulation and exploring multiple ascending dose studies.

Overall, Connect Biopharma is making significant strides in its clinical programs while navigating the challenges of increased costs and competitive pressures in the biopharmaceutical landscape.