CytomX Therapeutics, Inc. (CTMX) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call reveals a significant decline in total revenue, primarily due to the completion of obligations in a major collaboration. While operating expenses decreased, the revenue drop is concerning. The Q&A section highlights some optimism about CX-2051's potential, but uncertainties remain, particularly regarding regulatory strategies and data updates. No guidance was provided, and management's evasiveness on certain questions adds to the negative sentiment. Overall, the financial performance and lack of clear guidance suggest a negative outlook for the stock price in the short term.

Key Financial Performance

Cash, cash equivalents, and investments $143.6 million as of September 30, 2025, compared to $158.1 million at the end of the second quarter of 2025. The decrease is due to operational expenses.

Total revenue $6 million in Q3 2025, compared to $33.4 million in Q3 2024. The decrease is primarily attributed to the completion of performance obligations in the Bristol Myers Squibb collaboration.

Operating expenses $21.7 million in Q3 2025, compared to $29.3 million in Q3 2024. The decrease is due to reduced R&D and G&A expenses.

R&D expenses $15.3 million in Q3 2025, a decrease of $6.1 million compared to Q3 2024. The reduction is primarily due to lower CX-904 expenses and reduced research expenses.

G&A expenses $6.4 million in Q3 2025, a decrease of $1.5 million compared to Q3 2024. The reduction is driven by lower personnel costs and reduced patent and legal expenses.

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Operating Highlights

CX-2051: Focused on colorectal cancer (CRC), a major unmet need in oncology. Demonstrated robust clinical activity in Phase I trials with potential to become a new standard of care. Expansion phase of Phase I study ongoing, with a data update planned for Q1 2026. Plans to initiate a Phase Ib study with bevacizumab in Q1 2026. Potential for use in other cancers expressing EpCAM.

CX-801: Developed for advanced melanoma in combination with KEYTRUDA. Positive initial biomarker data presented, showing robust interferon signaling and immune activation. Initial data for the CX-801-KEYTRUDA combination expected by the end of 2026.

CX-908: A new preclinical program targeting CDH3 (P-cadherin) using a masked T-cell Engager. Highlights the potential of masking technology to widen the therapeutic window.

Colorectal Cancer (CRC) Market: CX-2051 targets a global multibillion-dollar market with unmet needs. Potential to become a pan-CRC drug and expand into other EpCAM-expressing cancers.

Advanced Melanoma Market: CX-801 addresses unmet needs in later-stage melanoma settings, with potential synergy in combination with KEYTRUDA.

Financial Position: Ended Q3 2025 with $143.6 million in cash, projected to fund operations until at least Q2 2027. Revenue decreased due to completion of obligations in a Bristol Myers Squibb collaboration. Operating expenses reduced compared to Q3 2024.

Strategic Hiring: Welcomed Rachael Lester as Chief Business Officer to enhance strategic planning and business development.

Pipeline Development: Focused on advancing CX-2051 and CX-801 towards later-stage development and commercialization. Exploring additional indications for CX-2051 and initiating combination strategies.

Technology Expansion: Continued development of PROBODY masking platform and T-cell Engager programs, including collaborations with Astellas and Regeneron.

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Risk or Challenges

Regulatory hurdles: The company is in dialogue with the FDA regarding Project Optimus for dose selection, which could pose regulatory challenges in advancing CX-2051 to a registrational study.

Adverse events in clinical trials: CX-2051 has shown gastrointestinal adverse events, particularly diarrhea, which the company is working to better characterize and manage. This could impact the drug's safety profile and acceptance.

Financial sustainability: The company reported a decrease in cash reserves from $158.1 million to $143.6 million in the last quarter, and while it projects funding through Q2 2027, this is contingent on no additional milestones or new business development.

Revenue decline: Total revenue decreased significantly from $33.4 million in Q3 2024 to $6 million in Q3 2025, primarily due to the completion of obligations in the Bristol Myers Squibb collaboration.

Competitive pressures: The company is entering a highly competitive oncology market, particularly in CRC and melanoma, where other innovative therapies are also being developed.

Strategic execution risks: The company is pursuing multiple ambitious projects, including CX-2051 and CX-801, which require significant resources and precise execution to meet milestones and commercialization goals.

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Guidance & Outlook

CX-2051 Phase I Study: The dose expansion cohorts at 7.2, 8.6, and 10 mg/kg doses have reached enrollment goals, with total enrollment expected to reach about 100 patients by Q1 2026. A potential registrational study for CX-2051 monotherapy in late-line CRC is planned, with expanded Phase I data informing dose selection and FDA dialogue. A Phase Ib study with bevacizumab is expected to begin in Q1 2026, aiming to unlock additional potential in CRC therapy. Non-CRC indications for CX-2051 are being assessed, with updates expected in 2026.

CX-801 Development: Initial data for the CX-801-KEYTRUDA combination in advanced melanoma is expected by the end of 2026. The program has shown promising initial biomarker data, including robust interferon signaling and immune activation in the tumor microenvironment. Monotherapy dose escalation has reached the fourth dose level, exceeding the approved clinical dose of unmasked interferon alpha-2b, suggesting the masking strategy is effective.

CX-908 Preclinical Program: A new program, CX-908, a masked T-cell Engager targeting CDH3, is being introduced. Preclinical data highlights the potential of masking to widen the therapeutic window for this modality.

Financial Guidance: The company projects its cash balance will fund operations through at least Q2 2027. Investments will focus on advancing CX-2051 towards later-phase development, initiating a combination study with bevacizumab, and evaluating additional EpCAM-expressing indications for CX-2051.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What should we expect from an ORR for 2051, and is there a chance for it to deepen? What is considered a win for PFS in the late-line pieces?

A:The integrated confirmed response rate for 2051 is 28%, which substantially beats the current standard of care in the late-line setting (response rates in single digits). The preliminary progression-free survival (PFS) estimate is 5.8 months, compared to 2-3 months for the current standard of care. There is room for improvement as the data matures.

Q:Will you break out efficacy by dose in the next update, and will there be enough data to select the dose or doses?

A:Yes, the data will be broken out by dose in the next update. This will be important for efficacy and safety evaluation as the company works towards dose selection for future studies.

Q:What do you attribute the increased enrollment to, and what feedback have you received from trial partners?

A:The increased enrollment is attributed to high interest from investigators and patients following the May disclosure. Feedback from trial partners has been positive, and the company continues to focus on managing adverse events like diarrhea through prophylactic measures.

Q:What are your thoughts on the ESMO data from competitors that did not differentiate from the standard of care?

A:The company remains confident in 2051 as a highly differentiated molecule and approach, particularly as an antibody drug conjugate (ADC) in colorectal cancer (CRC). They did not see anything at ESMO that raised concerns.

Q:What is the strategy for the combination approach with bevacizumab (bev)?

A:The strategy involves exploring a few doses of 2051 in combination with bevacizumab starting in Q1. The goal is to broaden the 2051 strategy into earlier lines of therapy, with the ultimate aim of entering the second-line setting.

Q:What percentage of patients are expected to receive loperamide in the dose expansion phase, and how is it being used?

A:Loperamide is being used both proactively for prevention and reactively at the first onset of diarrhea. Investigators have discretion in its use, and the company is focused on refining adverse event management protocols over time.

Q:What is the current thinking on the regulatory strategy for 2051 as a monotherapy?

A:The company is considering both third-line and fourth-line trials. They are confident that 2051 can beat the standard of care in the fourth line and are waiting for data to mature to assess its competitiveness in the third line. Regulatory discussions are planned for 2026.

Q:What are your thoughts on expanding 2051 to other tumor types, and what is the timeline for proof-of-concept studies?

A:2051 has potential in multiple tumor types due to widespread EpCAM expression. The company plans to initiate additional cohorts and studies in other cancers like gastric, endometrial, uterine, pancreatic, and lung in 2026.

Q:Is the additional enrollment skewed towards any of the three doses being explored, and will there be a breakout of less pretreated patients?

A:Enrollment is consistent across the three dose levels being expanded. The patient population remains late-line CRC, and there is no significant shift towards less pretreated patients.

Q:What has the FDA indicated about what would be registrational or positive in the fourth-line setting?

A:The company has not yet had detailed discussions with the FDA about registrational plans but plans to engage with them in 2026.

Q:What are your thoughts on BioAtla's EpCAM bispecific and how it compares to your strategy?

A:The company finds BioAtla's EpCAM CD3 conditional activation approach interesting but believes that the ADC strategy is the right one for colorectal cancer.

Q:Review of Unclear Management Responses

A:The management avoided providing specific details about the FDA's views on what would be considered registrational or positive in the fourth-line setting. They also did not elaborate on the specific doses being added during the additional enrollment phase or provide a clear timeline for data updates on the combination approach with bevacizumab.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

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The earnings call presents mixed signals: strong financial metrics with record EBITDA, yet declining margins and cash reserves due to debt payments. Share repurchase plans and optimistic guidance for future growth are positive, but uncertainties in the Life Science business and Medicaid cuts pose risks. The Q&A revealed cautious management responses and uncertainties, particularly regarding future guidance and market challenges. Overall, these factors suggest a neutral stock price movement in the short term.

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