Cue Biopharma, Inc. (NASDAQ:CUE) is 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. The company's proprietary Immuno-STAT™ (Selective Targeting and Alteration of T cells) platform and derivative molecules are designed to enhance the potential of the patient's own immune system to restore health while avoiding the deleterious side effects of broad immune activation in cancer and broad immune suppression in autoimmune disease.

Business Overview

Cue Biopharma's pipeline consists of oncology and autoimmune disease programs, with its lead oncology candidates CUE-101 and CUE-102 currently in clinical development.

Financials

For the full year 2023, the company reported collaboration revenue of $5.5 million, a significant increase from $1.2 million in the prior year. However, the company continues to incur net losses, reporting an annual net loss of $50.7 million in 2023. The company's annual operating cash flow and free cash flow were both negative $39.9 million in 2023.

In the first quarter of 2024, Cue Biopharma reported collaboration revenue of $1.7 million, up from $0.2 million in the same period of the prior year. Research and development expenses were $10.2 million, up from $9.4 million in Q1 2023, while general and administrative expenses were $4.2 million, flat compared to the prior year period. The company's net loss for Q1 2024 was $12.3 million.

CUE-101 for HPV-Positive Head and Neck Cancer

Cue Biopharma's lead oncology candidate, CUE-101, is being evaluated in a Phase 1 clinical trial for the treatment of human papillomavirus positive (HPV+) head and neck squamous cell carcinoma (HNSCC). The company recently received Fast Track Designation from the FDA for CUE-101 as both a monotherapy in second-line or later patients and in combination with the standard of care, pembrolizumab, in first-line patients.

Data from the ongoing CUE-101 trials have demonstrated encouraging signs of clinical activity. In the combination trial with pembrolizumab, the overall response rate was 46%, more than double the historical response rate of 19% with pembrolizumab alone. Importantly, responses were observed even in patients with low PD-L1 expression, a population typically less likely to respond to checkpoint inhibitors. Median progression-free survival in the combination trial was 8.3 months, compared to 3.2 months historically with pembrolizumab monotherapy.

Based on these positive results, Cue Biopharma plans to conduct a randomized Phase 2 trial evaluating CUE-101 in combination with pembrolizumab versus pembrolizumab alone as first-line treatment for patients with recurrent/metastatic HPV+ HNSCC. The trial is expected to provide a clear assessment of the treatment effect and confirm the optimal dose for a potential registrational trial.

CUE-102 for WT1-Expressing Cancers

Cue Biopharma's second oncology candidate, CUE-102, targets the Wilms' Tumor 1 (WT1) antigen, which is overexpressed in over 20 different cancer types, including solid tumors and hematological malignancies. The company is conducting a Phase 1 monotherapy trial of CUE-102 in patients with recurrent/metastatic WT1-positive colorectal, gastric, ovarian, and pancreatic cancers.

Preliminary data from the CUE-102 trial have shown selective and robust expansion of WT1-specific T cells in treated patients, as well as reductions in tumor burden in some patients. For example, a gastric cancer patient who had progressed on three prior lines of therapy, including a checkpoint inhibitor, experienced a 34% decrease in target lesions. An ovarian cancer patient also demonstrated a reduction in tumor burden. Additionally, a pancreatic cancer patient maintained stable disease for over 6 months, which is notable given the aggressive nature of this tumor type.

Encouraged by these early signs of clinical activity, Cue Biopharma has expanded the CUE-102 Phase 1 trial to enroll patients across all four indications (colorectal, gastric, ovarian, and pancreatic cancers). The company plans to provide further updates on the CUE-102 program at the upcoming American Society of Clinical Oncology (ASCO) meeting in June 2024.

Autoimmune Disease Programs: CUE-401 and CUE-500 Series

In addition to its oncology pipeline, Cue Biopharma is also developing novel therapeutics for autoimmune diseases. The company's lead autoimmune candidate, CUE-401, is a bispecific molecule designed to induce and expand regulatory T cells (Tregs) through the delivery of transforming growth factor beta (TGF-β) and interleukin 2 (IL-2). CUE-401 is being developed in collaboration with Ono Pharmaceutical, with Cue Biopharma retaining a 50% co-development and co-commercialization option in the United States.

Preclinical data have shown that CUE-401 can effectively convert naive T cells into Tregs and expand the population of existing Tregs. In an animal model of autoimmune gastritis, a short course of CUE-401 treatment resulted in long-lasting protection from disease, suggesting the potential for CUE-401 to induce durable immune regulation.

Cue Biopharma has also developed its CUE-500 series of Immuno-STAT biologics, which are designed to selectively harness virus-specific memory T cells to deplete pathogenic B cells. This approach aims to achieve CAR-T-like efficacy in autoimmune diseases driven by autoreactive B cells, such as lupus, while avoiding the challenges associated with cell therapy modalities.

The company believes the CUE-500 series offers a differentiated mechanism of action compared to other B cell-depleting approaches, as it leverages the potent and long-lasting antiviral memory T cell repertoire to selectively target and kill B cells. Preclinical data have demonstrated the ability of CUE-500 molecules to direct virus-specific T cells to kill primary human B cells in a targeted manner.

Recent Developments

In July 2024, Cue Biopharma announced a strategic prioritization of its autoimmune programs and an organizational restructuring to strengthen operational efficiencies. The company plans to focus its resources on advancing CUE-401 and the CUE-500 series, while retaining the necessary clinical capabilities to enable the maturation of data from the ongoing CUE-101 and CUE-102 oncology trials.

Through this strategic realignment and associated workforce reduction, Cue Biopharma expects to reduce its fiscal year 2025 operating expenses by approximately 25%, to a projected annual cash burn of around $30 million. The company continues to pursue additional partnership support to further improve operational efficiencies and decrease capital requirements.

Liquidity

As of March 31, 2024, Cue Biopharma had $41.0 million in cash and cash equivalents, which the company believes will fund operations into the first quarter of 2025. The company's working capital as of the end of the first quarter of 2024 was $34.4 million.

Cue Biopharma's management has stated that the company's current cash and cash equivalents are expected to fund operations into the first quarter of 2025. However, the company will need to raise additional capital to fund its future operations and remain a going concern. The company is exploring various options, including equity offerings, collaborations, and other strategic alliances, to secure the necessary funding.

Risks and Challenges

Cue Biopharma faces several risks and challenges as a clinical-stage biopharmaceutical company, including:

Limited operating history and history of losses: The company has a limited operating history and has incurred net losses since its inception, including a net loss of $50.7 million in 2023.

Dependence on the success of drug candidates: The company's success is heavily dependent on the successful development and commercialization of its lead drug candidates, CUE-101 and CUE-102, as well as its autoimmune disease programs.

Uncertainty of clinical trial results: There is no guarantee that the company's drug candidates will demonstrate the desired safety and efficacy profiles in clinical trials, which could delay or prevent regulatory approval.

Competitive landscape: Cue Biopharma operates in highly competitive therapeutic areas, and its drug candidates may face competition from other approved or investigational therapies.

Reliance on third-party collaborations and partnerships: The company's ability to develop and commercialize its drug candidates is dependent on successful collaborations and partnerships, which may not materialize or may not be successful.

Need for additional financing: Cue Biopharma will require significant additional capital to fund its ongoing operations and future development activities, which may not be available on favorable terms or at all.

Conclusion

Cue Biopharma is a clinical-stage biopharmaceutical company with a promising pipeline of selective immune modulators for the treatment of cancer and autoimmune diseases. The company's lead oncology candidates, CUE-101 and CUE-102, have demonstrated encouraging signs of clinical activity in ongoing trials, with the potential to improve patient outcomes. Additionally, Cue Biopharma's autoimmune disease programs, CUE-401 and the CUE-500 series, hold promise for selectively modulating the immune system to address unmet needs in this therapeutic area.

While the company continues to incur net losses and negative cash flows, Cue Biopharma's strategic prioritization of its autoimmune programs and organizational realignment are aimed at strengthening its operational efficiency and extending its cash runway. The company's ability to secure additional funding and successfully advance its drug candidates through clinical development and regulatory approval will be critical to its long-term success. Investors should closely monitor Cue Biopharma's progress, particularly the upcoming data readouts and strategic partnerships, as the company works to realize the potential of its Immuno-STAT platform.