Cue Biopharma Inc

Previous wording

We are a clinical-stage biopharmaceutical company developing a novel class of therapeutic biologics to selectively modulate disease-specific T cells directly within the patient’s body. Our vision is to translate nature's signals, or "cues", into protein therapeutics by generating a new class of T cell engagers for selective modulation of disease specific T cells.

Current wording

We are a clinical-stage biopharmaceutical company developing a novel class of therapeutic biologics to selectively modulate disease-specific T cells directly within the patient’s body. Our vision is to translate nature's signals, or "cues", into clinically active and well tolerated protein therapeutics by generating a new class of T cell engagers for selective modulation of disease specific T cells.

Previous wording

Our first two oncology drug product candidates, CUE-101 and CUE-102, are exemplary programs from the IL-2 based CUE-100 series, and are representative of the HLA-A02 allele, which is the predominant allele in the U.S. and western European territories, i.e., approximately 50% of the patient population, and also prevalent, albeit at lower frequencies, in other global populations. We have developed preclinically additional HLA alleles, which could enable broader expansion of patient coverage globally. CUE-101 HLA-A02 is engineered for the treatment of human papillomavirus positive, or HPV+, head and neck squamous cell carcinoma, or HNSCC, and by changing the epitope 9-amino acid sequence depicted as the yellow circle in the above illustration, we have CUE-102 HLA-A02, targeting Wilms’ Tumor 1 protein, or WT1, an oncofetal antigen known to be over-expressed in more than 20 different cancers. Based upon the clinical observations to date, we believe we have demonstrated that our Immuno-STAT platform can be deployed across a wide spectrum of cancers by selectively activating the patient’s own immune system to combat cancer. We have also developed drug product candidates designed to address a broad spectrum of autoimmune disease by dampening or turning down self-reactive T cells that attack a patient’s body. We have a strategic collaboration with Ono Pharmaceutical Co., Ltd., or Ono, focused on the development of CUE-401 for the potential treatment of a wide spectrum of autoimmune disease through the induction and expansion of regulatory T cells, or Tregs. Furthermore, we also have recently developed a drug product candidate for targeting B cell induced autoimmune diseases, such as lupus, with CUE-501, which would potentially enable B cell ablation to destroy autoreactive B cells followed by natural repopulation thus restoring immune balance.

Current wording

Our first two oncology drug product candidates, CUE-101 and CUE-102, are exemplary programs from the IL-2 based CUE-100 series, and are representative of the HLA-A02 allele, which is the predominant human leukocyte antigen, or HLA, allele in the U.S. and western European territories, i.e., approximately 50% of the patient population, and also prevalent, albeit at lower frequencies, in other global populations. We have preclinically validated the targeting of T cells with additional HLA alleles, which could enable expansion of patient coverage globally for future drug product candidates. CUE-101 is engineered for the treatment of human papillomavirus positive, or HPV+, head and neck squamous cell carcinoma, or HNSCC. By changing the epitope 9-amino acid sequence depicted as the yellow circle in the above illustration, we developed CUE-102, targeting Wilms’ Tumor 1 protein, or WT1, an oncofetal antigen known to be over-expressed in more than 20 different cancers. Based upon the clinical observations to date, we believe we have demonstrated that our Immuno-STAT platform can be deployed across a wide spectrum of cancers by selectively activating the patient’s own immune system to combat cancer. Furthermore, we believe that the data generated to date, and continuing to mature, underscores what appears to be a substantial extension of survival, evidenced by the median overall survival, or mOS, of multiple patient cohorts receiving CUE-101 as a monotherapy, as well as in combination with the standard of care for HPV+ HNSCC, which we discuss in greater detail below under the heading “CUE-101”.

Previous wording

We continue to progress forward in our strategic collaboration with Ono to develop CUE-401, a preclinical IL-2/transforming growth factor beta (TGF-beta) based drug product candidate for autoimmune disease. Based on its unique mechanism of action, we believe CUE-401 has the potential to be a highly differentiated molecule for the induction and expansion of Tregs, and is distinct from other IL-2 muteins that are being pursued in this space.

Current wording

We continue to progress forward in our strategic collaboration with Ono to develop CUE-401, a preclinical IL-2/transforming growth factor beta, or TGF -beta, based drug product candidate for autoimmune disease. Based on its unique mechanism of action, we believe CUE-401 has the potential to be a highly differentiated molecule for the induction and expansion of Tregs and is distinct from other IL-2 muteins that are being pursued in this space. In addition, we have advanced the CUE-500 series, which focuses on autoimmune diseases caused by autoreactive, or self-reactive B cells into pre-clinical development.

Previous wording

CUE-101 is our most advanced clinical stage asset and is being clinically investigated for the treatment of human papillomavirus positive, or HPV+, head and neck squamous cell carcinoma, or HNSCC, in patients compatible with the human leukocyte antigen, HLA-A02. Our first Phase 1 clinical trials are investigating CUE-101 in the treatment of R/M, HPV+ HNSCC as a monotherapy and in combination with KEYTRUDA. We received Fast Track Designation of CUE-101 for the treatment of recurrent metastatic, or R/M, HPV+ HNSCC, as both a monotherapy in 2L+ patients and in combination with KEYTRUDA, the current standard of care, or SoC, for 1L R/M HNSCC patients. We also have ongoing and planned investigator sponsored clinical trials in the neoadjuvant and adjuvant settings. This series of trials allows CUE-101 to be investigated in multiple patient populations with broad market opportunities.

Current wording

CUE-101 is our most advanced clinical stage asset and is being investigated for the treatment of HPV+ HNSCC in patients with the HLA allele, HLA-A02. Our Phase 1 clinical trial is investigating CUE-101 in the treatment of recurrent metastatic, or R/M, HPV+ HNSCC as a monotherapy and in combination with KEYTRUDA. We received Fast Track Designation of CUE-101 for the treatment of R/M, HPV+ HNSCC, as both a monotherapy in second line or higher, or 2L+, patients and in combination with KEYTRUDA, the current standard of care, or SoC, for first line, or 1L, R/M HNSCC patients. We also have an ongoing investigator sponsored clinical trial in the neoadjuvant setting where tumor tissue is being analyzed before and after treatment with CUE-101. The preliminary data from pre- and post-CUE-101 treatment biopsies in this study demonstrates changes in the tumor microenvironment that are consistent with CUE-101’s proposed mechanism of action. This series of trials allows CUE-101 to be investigated in multiple patient populations with broad market opportunities.

Previous wording

Both the CUE-101 monotherapy trial in 2L+ R/M HNSCC and CUE-101 trial in 1L in combination with KEYTRUDA have completed enrollment and have demonstrated metrics of clinical activity. Most notably in our ongoing Phase 1b trial of CUE-101 in combination with current SoC, KEYTRUDA, as described in more detail in our 2023 Annual Report, we have observed one confirmed complete response and ten confirmed partial responses, as well as seven patients with durable stable disease resulting in an overall response rate, or ORR, for the 24 patients dosed in the Phase 1b trial of 46% and a disease control rate of 75%. This ORR represents a greater than doubling of the historical ORR of 19% that was observed with KEYTRUDA alone, as reported in the KEYNOTE 048 study. Importantly, these responses include multiple patients with low PD-L1 expression (combined positive score less than 20), a patient population known to be less likely to respond to KEYTRUDA.

Current wording

Both the CUE-101 monotherapy trial in 2L+ R/M HNSCC and CUE-101 trial in 1L in combination with KEYTRUDA have completed enrollment and have demonstrated evidence of meaningful clinical activity. Most notably in our ongoing Phase 1b trial of CUE-101 in combination with current SoC, KEYTRUDA, as described in more detail in our 2023 Annual Report, we have observed one confirmed complete response and ten confirmed partial responses, as well as seven patients with durable stable disease resulting in an overall response rate, or ORR, of 46% and a disease control rate of 75%. This ORR represents a greater than doubling of the historical ORR of 19% that was observed with KEYTRUDA alone, as reported in the KEYNOTE 048 study. Importantly, these responses include multiple patients with low PD-L1 expression (combined positive score, or CPS, of less than 20), a patient population known to be less likely to respond to KEYTRUDA. Importantly, low CPS has been documented to be present in approximately 50% of all HPV+ HNSCC patients. In addition, we have observed a mOS of 20.8 and 24.6 months in 2L+ patients treated with CUE-101 monotherapy at 4 mg/kg and 2 mg/kg, respectively, which compares favorably to historical data of 8.4 months with KEYTRUDA and 7.5 months with OPDIVO in the 2L setting.

Previous wording

Best Change from Baseline and Response in Patients Treated with 4 mg/kg of CUE-101 in Combination with KEYTRUDA

Current wording

Overall Response Rate in Patients Treated with 4 mg/kg of CUE-101 in Combination with KEYTRUDA and Median Overall Survival of CUE-101 Monotherapy vs. Historical Checkpoint Inhibitors

Previous wording

We continue to follow the patients treated in both the CUE-101 Phase 1 dose-escalation and expansion monotherapy and combination trials and anticipate providing a further update and substantive analysis at the upcoming American Society of Clinical Oncology meeting in June 2024.

Current wording

We continue to follow the patients treated in both the CUE-101 Phase 1 monotherapy and combination settings and anticipate providing further updates on the maturing monotherapy data in the fourth quarter of 2024 and combination data in the first half of 2025.

Previous wording

In January 2024, we met with the FDA in a Type B meeting to clarify potential paths to registrational trials in both the 2L+ monotherapy and 1L combination settings. An overview of the proposed CUE-101 Phase 2 trial is shown below. In the proposed trial, treatment naïve, front-line patients with R/M HPV+ HNSCC will be randomized to one of three treatment arms: two CUE-101 doses in combination with 200mg of pembrolizumab or 200mg of pembrolizumab alone, in each case, with dosing to occur every three weeks. Overall response rate, or ORR, will be the primary endpoint with progression free survival, or PFS, and overall survival, or OS, as secondary endpoints. The interim analysis of ORR is anticipated to occur approximately 14 months after the first patient is dosed in this proposed Phase 2 trial, and the primary analysis of ORR is anticipated to occur approximately 22-24 months after the first patient is dosed in this proposed Phase 2 trial.

Current wording

In January 2024, we met with the Food and Drug Administration, or FDA, in a Type B meeting, which provided clarification and alignment for potential paths forward to registrational trials in both the 2L+ monotherapy and 1L combination settings. An overview of the proposed CUE-101 Phase 2 trial is shown below. In the proposed trial, treatment naïve, front-line patients with R/M HPV+ HNSCC will be randomized to one of three treatment arms: two CUE-101 doses in combination with 200 mg of pembrolizumab or 200mg of pembrolizumab alone, in each case, with dosing to occur every three weeks. ORR will be the primary endpoint with progression free survival, or PFS, and overall survival, or OS, as secondary endpoints. The interim analysis of ORR is anticipated to occur approximately 14 months after the first patient is dosed in this proposed Phase 2 trial, and the primary analysis of ORR is anticipated to occur approximately 22-24 months after the first patient is dosed in this proposed Phase 2 trial.

Previous wording

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 a potential registrational trial and will also provide further risk reduction of the CUE-100 series. We are currently assessing the resource and funding requirements needed to conduct this proposed Phase 2 trial.

Current wording

We believe the data resulting from this Phase 2 trial design will provide a robust characterization of treatment effect, confirm the dose to be tested in Phase 3, and increase the overall probability of success for a potential registrational trial of CUE-101, while also providing further risk reduction of the CUE-100 series. Due to the resource requirements of the planned Phase 2 trial, combined with our near-term prioritization of our autoimmune programs, we are in the process of identifying potential alternative sources of capital to enable the potential initiation and completion of this planned Phase 2 trial.

Previous wording

CUE-102, the second HLA-A02 drug product candidate in our CUE-100 series, targets Wilms’ Tumor 1 protein, or WT1, an oncofetal antigen known to be over-expressed in more than 20 different cancers, including both solid tumors (such as colorectal, ovarian, pancreatic and lung) and hematologic malignancies (such as acute myeloid leukemia, multiple myeloma and myelodysplastic syndromes). We are conducting a Phase 1 monotherapy clinical trial of CUE-102 in second line R/M WT1+ colorectal, gastric, ovarian, and pancreatic cancer. Similar to CUE-101, CUE-102 may be investigated in multiple patient populations including, as a combination with current standard of care therapies, in first line R/M cancers, as well as, R/M locally advanced settings.

Current wording

CUE-102, the second HLA-A02 drug product candidate in our CUE-100 series, targets WT1, an oncofetal antigen known to be over-expressed in more than 20 different cancers, including both solid tumors (such as colorectal, ovarian, pancreatic and lung) and hematologic malignancies (such as acute myeloid leukemia, multiple myeloma and myelodysplastic syndromes). We are conducting a Phase 1 monotherapy clinical trial of CUE-102 in second line R/M WT1+ colorectal, gastric, ovarian, and pancreatic cancer. Similar to CUE-101, CUE-102 may be investigated in multiple patient populations, including as a combination with current standard of care therapies, in 1L R/M cancers, as well as, in locally advanced settings.

Previous wording

Consistent with our preclinical datasets, selective and robust expansion of WT1+ specific T cells has been observed in treated patients in our ongoing CUE-102 monotherapy trial. Expansion of these WT1 tumor specific T cells is expected to enhance anti-tumor immunity with the potential to drive tumor reductions. The graphs below show reductions in tumor burden that have been observed in patients treated in the dose-escalation portion of the Phase 1 CUE-102 monotherapy clinical trial. As shown in the graph on the left, a patient with gastric cancer that progressed on three prior lines of therapy, including a CPI, experienced a decrease in the sum of three target lesions of 34% at week 36, as depicted by the blue line crossing the -30% hash line in green. This gastric cancer patient remained on treatment as of the data cut-off date. The graph on the right shows a reduction in tumor burden observed in an ovarian cancer patient in the 2 mg/kg dose-escalation cohort as depicted by the blue line intersecting the -30% hash line in green. Both of these patients subsequently experienced progressive disease due to the emergence of new lesions. We have also observed disease control in patients with pancreatic cancer, including a pancreatic cancer patient who, as of the data cut-off date, remained on treatment and exhibited durable stable disease for greater than six months.

Current wording

Consistent with our preclinical datasets, selective and robust expansion of WT1+ specific T cells has been observed in treated patients in our ongoing CUE-102 monotherapy trial. Expansion of these WT1 tumor specific T cells is expected to enhance anti-tumor immunity with the potential to control disease, drive tumor reductions, and enhance patient survival. The graphs below show reductions in tumor burden that have been observed in two patients treated in the dose-escalation portion of the Phase 1 CUE-102 monotherapy clinical trial. As shown in the graph on the left, a patient with gastric cancer that progressed on three prior lines of therapy, including a checkpoint inhibitor, experienced a decrease in the sum of three target lesions of 34% at week 36, as depicted by the blue line crossing the -30% hash line in green. The graph on the right shows a reduction in tumor burden observed in an ovarian cancer patient as depicted by the blue line intersecting the -30% hash line in green. These patients subsequently experienced progressive disease due to the emergence of new lesions, but importantly, we believe to have provided evidence of the antitumor activity of CUE-102 in the dose escalation portion of the study.

Previous wording

In addition to the CUE-100 series, we have leveraged the modularity and versatility of the Immuno-STAT platform to develop additional biologic series outside of oncology, including CUE-400 and CUE-500, which are specifically designed through rational protein engineering to address distinct therapeutic approaches for treating autoimmune disease. The CUE-400 series represents a novel class of bispecific molecules designed to selectively induce and expand regulatory T cells, or Tregs, for chronic autoimmune diseases. The CUE-500 series represents a novel approach to develop a bispecific Immuno-STAT that can selectively direct memory T cells to deplete B cells, which has been demonstrated through the ablation of B cells with CAR T therapy and is now recognized as an important axis for treatment of autoimmune and inflammatory diseases. We believe preclinical data generated from our evaluation of CUE-401 and the CUE-500 series demonstrates evidence of the desired mechanistic effect of these novel approaches for the treatment of autoimmune disease.

Current wording

In addition to the CUE-100 series, we have leveraged the modularity and versatility of the Immuno-STAT platform to develop additional biologic series outside of oncology, including the CUE-400 and CUE-500 series, which are specifically designed through rational protein engineering to address distinct therapeutic approaches for treating autoimmune disease. The CUE-400 series represents a novel class of bispecific molecules designed to selectively induce and expand regulatory T cells, or Tregs, for chronic autoimmune diseases. The CUE-500 series represents a novel approach to develop selective T cell engagers that can selectively redirect memory T cells to deplete B cells, which is recognized as an important axis for treatment of autoimmune and inflammatory diseases. We believe preclinical data generated from our evaluation of CUE-401 and the CUE-500 series demonstrates evidence of the desired mechanistic effect of these novel approaches for the treatment of autoimmune disease.

Previous wording

CUE-401 is a bispecific molecule which has the two key signals, IL-2 and transforming growth factor beta, or TGF beta, for selective induction of Tregs. The structure of CUE-401 is similar to that utilized in the CUE-100 series and incorporates the same IL-2 variant. The TGF beta variant was designed to improve the safety profile, enhance manufacturability, and mechanistically align with IL-2 signaling for effective Treg induction and expansion. Co-delivery of IL-2 and TGF beta signals in naïve CD4+ T cells results in the induction of Fox P3 which is the master gene transcription factor for Tregs. The panels below demonstrate Treg induction in human peripheral blood mononuclear cells and exemplify the need for both the IL-2 and TGF beta signals to induce Tregs. As shown below, neither IL-2 nor TGF beta alone can generate substantial numbers of new Tregs. In contrast, CUE-401, which has both IL-2 and TGF beta, demonstrated in preclinical studies the ability to generate a robust population of Fox P3+ Tregs by delivering both required signals.

Current wording

CUE-401 is a bispecific molecule which has the two key signals, IL-2 and TGF beta, for selective induction of Tregs. The structure of CUE-401 incorporates the same IL-2 variant that is present in CUE-101 and CUE-102. The TGF beta variant was designed to improve the safety profile, enhance manufacturability, and mechanistically align with IL-2 signaling for effective Treg induction and expansion. Co-delivery of IL-2 and TGF beta signals in naïve CD4+ T cells results in the induction of FOX P3 which is the master gene transcription factor for Tregs. The panels below demonstrate Treg induction in human peripheral blood mononuclear cells and exemplify the need for both the IL-2 and TGF beta signals to induce Tregs. As shown below, neither IL-2 nor TGF beta alone can generate substantial numbers of new Tregs. In contrast, CUE-401, which has both IL-2 and TGF beta, demonstrated in preclinical studies the ability to generate a robust population of FOX P3+ Tregs by delivering both required signals.

Previous wording

We have generated preclinical data in our labs and in collaboration with Dr. Richard DiPaolo of St. Louis University supporting the premise that CUE-401 may be able to expand and induce Tregs. The resulting Tregs are functionally suppressive and maintain a stable phenotype, whereby CUE-401 treatment suppressed the proliferation of self-reactive T cells in a mouse model of autoimmune gastritis. The therapeutic potential of CUE-401 has also been observed in a T cell transfer model of autoimmune gastritis, wherein treatment with CUE-401 led to a prolonged suppression of self-reactive T cells and significantly reduced pathological evidence of disease in the stomachs of treated mice. As shown in the figure below, short-term treatment with CUE-401 resulted in long-term protection from autoimmune gastritis and tissue destruction in a pre-clinical animal model. The histopathology, as shown on the left side, and the compiled gastritis scores, as shown on the right side, demonstrated significant protection from tissue destruction in animals treated with CUE-401.

Current wording

We have generated preclinical data in our labs and in collaboration with Dr. Richard DiPaolo of St. Louis University supporting the premise that CUE-401 can potentially expand and induce Tregs. The resulting Tregs are functionally suppressive and maintain a stable phenotype, whereby CUE-401 treatment suppressed the proliferation of self-reactive T cells in a mouse model of autoimmune gastritis. The therapeutic potential of CUE-401 has also been observed in a T cell transfer model of autoimmune gastritis, wherein treatment with CUE-401 led to a prolonged suppression of self-reactive T cells and significantly reduced pathological evidence of disease in the stomachs of treated mice. As shown in the figure below, short-term treatment with CUE-401 resulted in long-term protection from autoimmune gastritis and tissue destruction in a preclinical animal model. The representative histopathology, as shown on the left side, and the compiled gastritis scores, as shown on the right side, demonstrated significant protection from tissue destruction in animals treated with CUE-401.

Previous wording

CUE-401 is being developed in strategic collaboration with Ono Pharmaceuticals wherein Ono is supporting all of our ongoing preclinical work to identify a lead clinical candidate toward the clinic.

Current wording

CUE-401 is being developed in strategic collaboration with Ono wherein Ono is supporting all of our ongoing preclinical work to identify a lead clinical candidate. We anticipate selecting a clinical candidate and initiating IND-enabling studies for CUE-401 in the first half of 2025.

Previous wording

The CUE-500 series focuses on autoimmne diseases caused by autoreactive, or self reactive B cells. CUE-500 series Immuno-STAT biologics are designed to selectively harness the protective anti-viral T cell repertoire (virus-specific T cells, or VSTs) and re-direct them to target and deplete B cells. We believe that our approach to deploy a biologic to selectively re-direct “killer” T cells, while avoiding the systemic engagement and activation of all T cells, to essentially accomplish T cell-mediated B cell depletion has similarities to what has been exemplified with CD19-CAR-T cell therapy approaches. We believe that addressing this important mechanism of autoimmune diseases with a biologic will offer significant advantages over cell therapy-based strategies. Our lead CUE-500 series candidate, CUE-501, is a bispecific engineered to direct selective memory T cells to deplete B cells to address autoimmune and inflammatory diseases. The CUE-500 series builds upon the de-risking accomplished with the CUE-100 series and leverages the same modified IL-2. This further supports our premise that each CUE-100 series Immuno-STAT molecule provides further de-risking and potential acceleration of subsequent drug product candidate. The figures below highlight the design and mechanism of action of the CUE-500 series.

Current wording

The CUE-500 series focuses on autoimmune diseases that are mediated by autoreactive or pathogenic immune cells. CUE-500 series Immuno-STATs are designed to selectively harness our existing protective anti-viral T cell repertoire (virus-specific T cells, or VSTs) and re-direct them to target and deplete pathogenic immune cells, such as B cells. We believe that our approach to deploy a biologic to selectively re-direct “killer” T cells, while avoiding the systemic activation of all T cells, will stimulate T cell-mediated B cell depletion with similarities to what has been exemplified with CD19-CAR-T cell therapy approaches in autoimmunity. We believe that addressing this important mechanism of autoimmune diseases with off-the-shelf biologics will offer significant advantages over cell therapy-based approaches, as well as non-selective pan T cell engagers.

Previous wording

Our technology is in the clinical development phase for oncology and preclinical development phase for autoimmune disease. We believe that our platforms have the potential for creating a diverse pipeline of promising drug product candidates addressing multiple medical indications. We intend to maximize the value and probability of commercialization of our Immuno-STAT drug product candidates by focusing on researching, testing, optimizing, conducting pilot studies, performing early-stage clinical development and potentially partnering, where appropriate, for more extensive, later stages of clinical development, as well as seeking extensive patent protection and intellectual property development.

Current wording

Our technology is in the clinical development phase for oncology and preclinical development phase for autoimmune disease. We believe that our platforms have the potential for creating a diverse pipeline of promising drug product candidates addressing multiple medical indications. We intend to maximize the value and probability of commercialization of our

Previous wording

A fundamental part of our corporate development strategy is to establish strategic partnerships with leading pharmaceutical or biotechnology organizations that will allow us to more fully exploit the potential of our technology platform in the areas of oncology and autoimmune disease and accelerate and expand our CUE-100 series pipeline, such as our collaborations described below under the headings “Collaboration Agreement with LG Chem" and "Collaboration and Option Agreement with Ono."

Current wording

A fundamental part of our corporate development strategy is to establish strategic partnerships with leading pharmaceutical or biotechnology organizations that will allow us to more fully exploit the potential of our technology platform in the areas of oncology and autoimmune disease such as our collaborations described below under the headings “Collaboration Agreement with LG Chem" and "Collaboration and Option Agreement with Ono."

Previous wording

While our significant accounting policies are more fully described in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, we believe that the estimates, assumptions and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our 2023 Annual Report have the greatest potential impact on our financial statements, so we consider those estimates, assumptions and judgments to be our critical accounting policies and estimates. There were no material changes to our critical accounting policies and estimates during the three months ended March 31, 2024.

Current wording

While our significant accounting policies are more fully described in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, we believe that the estimates, assumptions and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our 2023 Annual Report have the greatest potential impact on our financial statements, so we consider those estimates, assumptions and judgments to be our critical accounting policies and estimates. There were no material changes to our critical accounting policies and estimates during the six months ended June 30, 2024.

Previous wording

Make significant payments based upon the achievement of certain milestones, as defined in the Einstein License. As of March 31, 2024, two of these milestones had been achieved, as we had filed an IND in 2019, and initiated the investigator sponsored Phase 1b neoadjuvant clinical trial for CUE-101 in 2021.

Current wording

Make significant payments based upon the achievement of certain milestones, as defined in the Einstein License. As of June 30, 2024, two of these milestones had been achieved, as we had filed an investigational new drug application, or IND, in 2019, and initiated the investigator sponsored Phase 1b neoadjuvant clinical trial for CUE-101 in 2021.

Previous wording

We account for the costs incurred in connection with the Einstein License in accordance with Accounting Standards Codification, or ASC, 730, Research and Development. For the three months ended March 31, 2024 and 2023, we incurred $25,000 and $44,000, respectively, in fees payable to Einstein in relation to this license. Such costs, if any, are included in research and development costs in ourcondensed consolidated statements of operations and comprehensive loss.

Current wording

We account for the costs incurred in connection with the Einstein License in accordance with Accounting Standards Codification, or ASC, 730, Research and Development. For the three and six months ended June 30, 2024, we incurred $0.03 million and $0.05 million, respectively, in fees payable to Einstein in relation to this license. For the three and six months ended June 30, 2023, we incurred $0.03 million and $0.08 million, respectively, in fees payable to Einstein in relation to this license. Such costs are included in research and development costs in our condensed consolidated statements of operations and comprehensive loss.

Previous wording

Pursuant to the LG Chem Collaboration Agreement, the parties will share research costs related to Collaboration Products, and LG Chem will provide CMC process development for selected Drug Product Candidates and potentially additional downstream manufacturing capabilities, including clinical and commercial supply for Collaboration Products. In return for performing CMC process development, LG Chem is eligible to receive low-single digit percentage royalty payments on the sales of Collaboration Products sold in all countries outside the LG Chem Territory. For the three months ended March 31, 2024 and 2023, we recognized revenue of $34,000 and $36,000, respectively, related to the LG Chem Collaboration Agreement. As of March 31, 2024, we had recorded $19.9 million in collaboration revenue related to this agreement since the agreement was entered into. The majority of the research phase of the LG Chem Collaboration Agreement was substantially complete on March 31, 2022.

Current wording

Pursuant to the LG Chem Collaboration Agreement, the parties will share research costs related to Collaboration Products, and LG Chem will provide CMC process development for selected Drug Product Candidates and potentially additional downstream manufacturing capabilities, including clinical and commercial supply for Collaboration Products. In return for performing CMC process development, LG Chem is eligible to receive low-single digit percentage royalty payments on the sales of Collaboration Products sold in all countries outside the LG Chem Territory. For the three and six months ended June 30, 2024, we recognized revenue of $0.03 million and $0.07 million, respectively, related to the LG Chem Collaboration Agreement. For the three and six months ended June 30, 2023 we recognized revenue of $0.03 million and $0.07 million, respectively. As of June 30, 2024, we had recorded $19.9 million in collaboration revenue related to this agreement since the agreement was entered into. The majority of the research phase of the LG Chem Collaboration Agreement was substantially completed by March 31, 2022.

Previous wording

Under the terms of the Ono Collaboration and Option Agreement, we will perform research activities related to CUE-401 through a specified option period of 24 months, or the Research Term. During this Research Term, we will be responsible for the execution of scientific investigation, nonclinical, preclinical, and clinical drug research and development activities designed to progress CUE-401 toward a potential IND and regulatory approval, collectively referred to as R&D. Ono is responsible for the funding of R&D activities performed by us. Per the Ono Collaboration and Option Agreement, as consideration for the R&D activities performed by us, Ono (i) has made a one-time, non-refundable, non-creditable upfront payment of $3.0 million to us in March 2023, and (ii) will reimburse us for all costs incurred in conducting research, including (a) pass through costs from third party contractors and (b) full time employee salaries capped at $2.1 million in the first 18 months of the Research Term. Subsequently, the Company and Ono agreed to increase this cap for full time employee salaries to $2.8 million. The term of the Ono Collaboration and Option Agreement extends until the expiration of the Research Term which cannot exceed a 24-month period. We have forecasted that we will be able to complete the R&D activities in the first 18 months of the Research Term based on the initial research and development plans we have established.

Current wording

R&D activities performed by us, Ono (i) has made a one-time, non-refundable, non-creditable upfront payment of $3.0 million to us in March 2023, and (ii) will reimburse us for all costs incurred in conducting research, including (a) pass through costs from third party contractors and (b) full time employee salaries capped at $2.1 million in the first 18 months of the Research Term. Subsequently, the Company and Ono agreed to increase this cap for full time employee salaries to $2.8 million. The term of the Ono Collaboration and Option Agreement extends until the expiration of the Research Term which cannot exceed a 24-month period. We have forecasted that we will be able to complete the R&D activities within this time period.

Previous wording

Aside from the $3.0 million upfront payment and funding related to pass through costs, we do not believe that any variable consideration should be included in the transaction price as of March 31, 2024. Such assessment considered the application of the constraint to ensure that estimates of variable consideration would be included in the transaction price only to the extent we have a high degree of confidence that revenue would not be reversed in a subsequent reporting period. We will re-evaluate the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as other changes in circumstances occur. For the three months ended March 31, 2024 and 2023, we recognized revenue of $1.7 million and $0.2 million, respectively, related to the Ono Collaboration and Option Agreement. We recorded short-term research and development liabilities on our balance sheet dated March 31, 2024, of $1.8 million. As of December 31, 2023, we recorded short-term research and development liabilities of $2.1 million on our consolidated balance sheet.

Current wording

Aside from the $3.0 million upfront payment and funding related to pass through costs, we do not believe that any variable consideration should be included in the transaction price as of June 30, 2024. Such assessment considered the application of the constraint to ensure that estimates of variable consideration would be included in the transaction price only to the extent we have a high degree of confidence that revenue would not be reversed in a subsequent reporting period. We will re-evaluate the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as other changes in circumstances occur. For the three months ended June 30, 2024 and 2023, we recognized revenue of $2.6 million and $1.4 million, respectively, related to the Ono Collaboration and Option Agreement. For the six months ended June 30, 2024 and 2023, we recognized revenue of $4.3 million and $1.5 million, respectively, related to the Ono Collaboration and Option Agreement. We recorded short-term research and development liabilities on our balance sheet dated June 30, 2024 of $1.0 million, offset by $0.5 million recorded within accounts receivable on its balance sheet. As of December 31, 2023, we recorded short-term research and development liabilities of $2.1 million on our consolidated balance sheet.

Previous wording

General and administrative expenses consist of salaries and related expenses for executive, legal, finance, human resources, information technology and administrative personnel, as well as professional fees, insurance costs, and other general corporate expenses. We expect general and administrative expenses to increase in future periods as we incur additional expenses related to our operation as a public company which requires our compliance with certain regulatory and legal procedures. We expect activities supporting our operations including legal, accounting, insurance, employee compensation and other expenses to increase.

Current wording

General and administrative expenses consist of salaries and related expenses for executive, legal, finance, human resources, information technology and administrative personnel, as well as professional fees, insurance costs, and other general corporate expenses. We expect general and administrative expenses to remain consistent in future periods as we continue to incur expenses related to our operation as a public company which requires our compliance with certain regulatory and legal procedures.

Previous wording

Research and development expenses consist primarily of compensation expenses, fees paid to consultants, outside service providers and organizations (including research institutes at universities), facility expenses, and development and clinical trial expenses with respect to our drug product candidates. We charge research and development expenses to operations as they are incurred. We expect research and development expenses to increase in the future as we continue to advance the clinical development of CUE-101 and CUE-102, including our ongoing and planned clinical trials, and develop potential future drug product candidates based on our technology and research. We also believe that rising inflation, supply chain disruptions and labor shortages may also contribute to increased research and development costs.

Current wording

Research and development expenses consist primarily of compensation expenses, fees paid to consultants, outside service providers and organizations (including research institutes at universities), facility expenses, and development and clinical trial expenses with respect to our drug product candidates. We charge research and development expenses to operations as they are incurred. We expect that our research and development expenses will remain consistent in future periods based on our strategic re-prioritization of our autoimmune programs and organizational restructuring which was announced in July 2024.

Previous wording

Our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, as discussed herein, are presented below.

Current wording

Our condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, as discussed herein, are presented below in thousands.

Previous wording

Collaboration revenue increased by $1.5 million to $1.7 million for the three months ended March 31, 2024, from $0.2 million for the three months ended March 31, 2023. The increase was due to revenue earned from the Ono Collaboration and Option Agreement, which was executed in February 2023.

Current wording

Collaboration revenue increased by $1.3 million to $2.7 million for the three months ended June 30, 2024, from $1.4 million for the three months ended June 30, 2023. The increase was due to revenue earned from the Ono Collaboration and Option Agreement, which was executed in February 2023.

Previous wording

We have financed our working capital requirements primarily through private and public offerings of equity securities, cash received from Merck Sharp & Dohme Corp., LG Chem, and Ono under the respective collaboration agreements and borrowings under the Loan Agreement. At March 31, 2024, we had cash and cash equivalents totaling $41.0 million available to fund our ongoing business activities. Additional information concerning our financial condition and results of operations is provided in the financial statements included in this Quarterly Report on Form 10-Q.

Current wording

We have financed our working capital requirements primarily through private and public offerings of equity securities, cash received from Merck Sharp & Dohme Corp., LG Chem, and Ono under the respective collaboration agreements and borrowings under the Loan Agreement. At June 30, 2024, we had cash and cash equivalents totaling $30.0 million available to fund our ongoing business activities. Additional information concerning our financial condition and results of operations is provided in the financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

In October 2021, we entered into an open market sale agreement, or the October 2021 ATM Agreement, with Jefferies LLC, or Jefferies, as agent, to sell shares of our common stock for aggregate gross proceeds of up to $80 million, from time to time, through an at-the-market equity offering program. The October 2021 ATM Agreement will terminate upon the earliest of (a) the sale of $80 million of shares of our common stock pursuant to the October 2021 ATM Agreement or (b) the termination of the October 2021 ATM Agreement by us or Jefferies. During the three months ended March 31, 2024, we sold 1,428,200 shares of common stock under the October 2021 ATM Agreement for proceeds of $3.4 million, net of commission paid, but excluding transaction expense. There were no sales under the October 2021 ATM Agreement during the three months ended March 31, 2023. As of March 31, 2024, we sold an aggregate of 9,028,573 shares of common stock under the October 2021 ATM Agreement for proceeds of $40.4 million, net of commission paid, but excluding transaction expenses, since its inception.

Current wording

In October 2021, we entered into an open market sale agreement, or the October 2021 ATM Agreement, with Jefferies LLC, or Jefferies, as agent, to sell shares of our common stock for aggregate gross proceeds of up to $80 million, from time to time, through an at-the-market equity offering program. The October 2021 ATM Agreement will terminate upon the earliest of (a) the sale of $80 million of shares of our common stock pursuant to the October 2021 ATM Agreement or (b) the termination of the October 2021 ATM Agreement by us or Jefferies. During the six months ended June 30, 2024 and June 30, 2023, we sold 1,428,200 and 536,264 shares, respectively, of common stock under the October 2021 ATM Agreement, for proceeds of $3.4 million and $2.0 million, respectively, net of commission paid, but excluding transaction expenses. There were no sales under the October 2021 ATM Agreement during the three months ended June 30, 2024 and 2023. As of June 30, 2024, we sold an aggregate of 9,028,573 shares of common stock under the October 2021 ATM Agreement for proceeds of $40.4 million, net of commission paid, but excluding transaction expenses, since its inception.

Previous wording

The Loan Agreement permits voluntary prepayment of all, but not less than all, of the Term Loans, subject to a prepayment premium except if the facility is refinanced with another First Citizens Bank facility. Such prepayment premium would be 2.00% of the principal amount of the Term Loans if prepaid on or after the first anniversary of the date on which we entered the Loan Agreement but prior to the second anniversary of the date on which we entered the Loan Agreement, and 1.00% of the principal amount of the Term Loans if prepaid on or after the second anniversary of the date on which we entered the Loan Agreement. Upon prepayment or repayment in full of the Term Loans, we will be required to pay a one-time final payment fee equal to 5.00% of the original principal amount of any funded Term Loans being repaid. The Loan Agreement also requires us to maintain in our accounts at the Lender unrestricted and unencumbered cash equal to the lesser of all of our cash or $20,000,000.

Current wording

The Loan Agreement permits voluntary prepayment of all, but not less than all, of the Term Loans, subject to a prepayment premium except if the facility is refinanced with another First Citizens Bank facility. Such prepayment premium would be 1.00% of the principal amount of the Term Loans. Upon prepayment or repayment in full of the Term Loans, we will be required to pay a one-time final payment fee equal to 5.00% of the original principal amount of any funded Term Loans being repaid. The Loan Agreement also requires us to maintain in our accounts at the Lender unrestricted and unencumbered cash equal to at least $20,000,000, or the Threshold Amount. In addition to the foregoing, we are required to have at all times on deposit in our accounts maintained with SVB, unrestricted and unencumbered cash in an amount equal to the lesser of (i) 100% of the dollar value of our consolidated cash, in the aggregate, at all financial institutions and (ii) the Threshold Amount.

Previous wording

Based on our current plans and forecasted expenses, we believe that our existing cash and cash equivalents, as of March 31, 2024, will enable us to fund our operations into the first quarter of 2025. However, we will need to raise additional capital to fund our future operations and remain as a going concern. We expect to finance our future cash needs through a combination of equity offerings, collaborations, and other strategic alliances. Volatility in capital markets and general economic conditions in the United States may be a significant obstacle to raising the required funds and, as a result, we may be unable to secure the necessary funding on acceptable terms. This raises substantial doubt about our ability to continue as a going concern.

Current wording

Based on our current plans and forecasted expenses, we believe that our existing cash and cash equivalents, as of June 30, 2024, will enable us to fund our operations into the second quarter of 2025. However, we will need to raise additional capital to fund our future operations and remain as a going concern. We expect to finance our future cash needs through a combination of equity offerings, collaborations, and other strategic alliances. Volatility in capital markets and general economic conditions in the United States may be a significant obstacle to raising the required funds and, as a result, we may be unable to secure the necessary funding on acceptable terms. This raises substantial doubt about our ability to continue as a going concern.

Previous wording

The following table summarizes our changes in cash, cash equivalents, and restricted cash for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our changes in cash, cash equivalents, and restricted cash for the six months ended June 30, 2024 and 2023:

Previous wording

Net cash used in operating activities totaled $9.8 million for the three months ended March 31, 2024 compared to $10.8 million for the three months ended March 31, 2023. The change of $1.0 million was primarily due to a decrease in net loss of $0.8 million.

Current wording

Net cash used in operating activities totaled $19.8 million for the six months ended June 30, 2024 compared to $21.2 million for the six months ended June 30, 2023. The decrease of $1.4 million was primarily due to a decrease in research and development contract liabilities, partially offset by increases in accrued expenses and accounts receivable.

Previous wording

Net cash used in investing activities totaled $0.1 million for the three months ended March 31, 2024 compared to net cash provided by investing activities of $15.0 million during the three months ended March 31, 2023. The change of $15.1 million was primarily due to redemptions of marketable securities during the three months ended March 31, 2023.

Current wording

Net cash used in investing activities totaled less than $0.1 million for the six months ended June 30, 2024 compared to net cash provided by investing activities of $20.0 million during the six months ended June 30, 2023. The decrease of $20.1 million in cash provided was due to redemptions of marketable securities during the six months ended June 30, 2023.

Previous wording

Net cash provided by financing activities totaled $2.4 million for the three months ended March 31, 2024 compared to $0.4 million for the three months ended March 31, 2023. The change of $2.0 million was due to proceeds received from sales under our ATM offering of $3.4 million, offset by payments of our term loan totaling $1.0 million during the three months ended March 31, 2024, as well as proceeds from the exercise of stock options of $0.4 million during the three months ended March 31, 2023.

Current wording

Net cash provided by financing activities totaled $1.4 million for the six months ended June 30, 2024 compared to $2.5 million for the six months ended June 30, 2023. The decrease of $1.1 million was due to repayment of a portion of our term loans during the six months ended June 30, 2024 totaling $2.0 million, which repayment began in the third quarter of 2023, offset by an increase of proceeds received from sales under our ATM offering of $1.4 million during the six months ended June 30, 2024.

Previous wording

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of our Immuno-STAT platform, continue ongoing and initiate new clinical trials of and seek marketing approval for our drug product candidates. In addition, we expect to incur additional costs associated with operating as a public company. Our expenses will also increase if, and as, we:

Current wording

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of our Immuno-STAT platform and continue ongoing and initiate new clinical trials of, and seek marketing approval for, our drug product candidates. In addition, we expect to incur additional costs associated with operating as a public company. Our expenses will also increase if, and as, we:

Previous wording

continue the clinical development of our CUE-100 series, including CUE-101 and CUE-102;

Current wording

continue the clinical development of our CUE-100 series, including CUE-101 and CUE-102, which we have currently decided to deprioritize;

Previous wording

leverage our programs to advance our other drug product candidates into preclinical and clinical development;

Current wording

leverage our programs, including our autoimmune programs, to advance our other drug product candidates into preclinical and clinical development;

Previous wording

seek to discover and develop additional drug product candidates in the CUE-100 series, including Neo-STATs;

Current wording

seek to discover and develop additional drug product candidates;