Achieve Life Sciences Inc (ACHV) 2014 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the OncoGenex First-Quarter 2014 Financial Results Conference Call. My name is [Seria].

At this time, I would like to turn the call over to Susan Specht, Senior Director, Investor Relations with OncoGenex Pharmaceuticals. Please go ahead, ma'am.

Thank you and thanks, everyone, for joining us. With me today from OncoGenex are Scott Cormack, Chief Executive Officer, and Susan Wyrick, VP of Finance. Also joining me on the call are Cindy Jacobs, Chief Medical Officer, and Jaime Welch, VP of Marketing and Corporate Communications.

Before we begin, I'd like to remind everyone that today's conference call contains forward-looking statements based on current expectations. These statements are only predictions and actual results may vary materially from those projected. Please refer to OncoGenex's documents filed with the SEC concerning factors that could affect the Company, copies of which are available on the website.

I'll now turn the call over to Scott.

Thank you, Susan. Good afternoon and thank you for joining us.

Earlier today, we announced our first-quarter 2014 financial results, and a copy of the press release can be found on our website.

Since most of you on today's call joined us earlier this week to discuss results from our Phase III SYNERGY trial, we will keep our prepared remarks brief to make sure we have an opportunity to address any additional questions you may have today.

As you know, on Monday we announced that top-line survival results in the Phase III SYNERGY trial to indicate the addition of custirsen to standard first-line docetaxel and prednisone therapy did not significantly improve overall survival. The adverse events observed were similar to custirsen's known adverse event profile.

The results of the SYNERGY trial are unexpected, given the large amount of preclinical and clinical evidence confirming custirsen's ability to suppress the cancer-protective protein, clusterin, and prolong overall survival in CRPC patients.

OncoGenex and Teva are performing a thorough analysis of the data to understand the potential factors that may have contributed to the results.

I want to reiterate that we remain strong in our belief that targeting mechanisms targeting mechanisms of treatment resistance is a critical path forward in the fight against cancer, and we continue to actively pursue this approach through the ongoing development of custirsen and our proprietary candidate targeting Hsp27, apatorsen.

Before I turn things over to Susan for a review of our financials, I would like to review our anticipated milestones for both custirsen and apatorsen.

Our custirsen Phase III AFFINITY trial is designed to evaluate the potential survival benefit of custirsen in combination with cabazitaxel as second-line chemotherapy in approximately 630 men with metastatic CRPC. Patient enrollment for the AFFINITY trial began in August 2012 and we currently expect to complete enrollment by the end of 2014.

We also recently announced that the FDA has granted fast-track designation for custirsen in the AFFINITY trial. As we stated in our SYNERGY results call on Monday, clusterin is more heavily-expressed as a reaction to treatment. Therefore, custirsen may have increased benefit in more heavily-treated patients, like patients in both the AFFINITY and ENSPIRIT trials that are designed to evaluate patients in a second-line treatment setting.

Therefore, we believe the AFFINITY trial is extremely important for patients for whom life-prolonging treatments are limited after they've developed resistance to docetaxel-based therapies.

Our custirsen Phase III ENSPIRIT trial is also in the second-line setting and is ongoing. This international Phase III trial is designed to evaluate the potential of custirsen to improve survival outcomes in patients with locally advanced or metastatic non-small cell lung cancer who have progressed after initial chemotherapy treatment. Patients are being randomized to receive second-line standard of care docetaxel treatment, with or without custirsen therapy. Importantly, we expect the first interim futility analysis for ENSPIRIT before the end of this year.

With regards to our proprietary program, apatorsen is currently being evaluated in a total of 7 Phase II clinical trials in bladder, lung, pancreatic and prostate cancers. We look forward to sharing with you results from our randomized Phase II Borealis-1 trial of apatorsen in the treatment of advanced bladder cancer in the second half of this year.

I would now like to turn the call over to Susan for a review of our first quarter 2014 financial results. Susan?

Thanks, Scott.

We ended the first quarter of 2014 with approximately $37.6 million in cash, cash equivalents and short-term investments. We continue to believe that we have sufficient operating capital to fund our currently-planned operations beyond the first quarter of 2015 and through the expected release of final results from the Borealis-1 trial and through the completion of enrollment in the AFFINITY and Spruce clinical trials in the second half of 2014.

Revenue for the first quarter of 2014 increased to $11.7 million, compared with $5.1 million in the same period in 2013. The increase in 2014 as compared to 2013 was due to an increase in revenue earned through our strategic collaboration with Teva, as a result of patient enrollment and treatment in the AFFINITY trial.

Total operating expenses for the first quarter of 2014 were $19.7 million, compared with $13.4 million in the same period in 2013. The increase in the first quarter of 2014 as compared to the first quarter of 2013 was predominantly a result of higher clinical trial expenses associated with patient enrollment and treatment in the AFFINITY trial and the apatorsen investigator-sponsored trial.

Net loss for the first quarter of 2014 was $8.6 million, or $0.59 per diluted common share. Comparatively, net loss for the first quarter of 2013 was $6.7 million, or $0.46 per diluted common share. The net loss for the first quarter of 2014 included a non-cash loss on revaluation of our warrant liability of $721,000, compared with a non-cash gain of $1.4 million in the first quarter of 2013.

I will now turn the call back over to Scott for closing remarks.

Thanks, Susan.

In conclusion, we continue to believe that our approach of targeting proteins that contribute to treatment resistance is critical in the fight against cancer. We have several exciting near-term milestones, and our focus throughout the coming months will be the following -- to announce Borealis-1 results in the second half of this year; to complete the first interim futility analysis for ENSPIRIT; to complete enrollment of the AFFINITY trial of custirsen in second-line prostate cancer; and to support enrollment efforts of the six ongoing Phase II trials of apatorsen in four tumor types, including the completion of enrollment in the apatorsen Spruce trial in non-small cell lung cancer.

We look forward to sharing more with you as these programs continue to advance.

Thank you again for joining us today, and at this time, I'd like to invite the operator to open the line for questions.

Certainly. (OPERATOR INSTRUCTIONS.) One moment for questions. And I'm showing our first question comes from the line of Katherine Xu of William Blair. Your line is now open.

Hi. Good afternoon. This is Phil calling in for Katherine. Thanks for taking our question. Just real quick, just wanted to get some additional thoughts on the collaboration agreement with Teva. Is there any type of provision at all in the agreement that would allow them to reassess the collaboration with custirsen following the results of the SYNERGY study?

Hi, Phil. Good afternoon. So with regards to the relationship with Teva, as you know, we've had a very strong relationship with Teva since 2009 as we initiated the Phase III trials. And with regards to the relationship and the interaction between the SYNERGY trial and the other two trials, as you may recall from previous discussions that we've had, there are a couple of provisions that would allow Teva to reconsider the other opportunities and they come down to basically safety and patent estate matters. Those obviously are not related to the SYNERGY results that we're seeing presently and so really don't affect the ongoing AFFINITY and ENSPIRIT collaborations.

That's great. Appreciate the color on that. And then real quick, turning to AFFINITY, I know you guys haven't built in an interim analysis there. Is there a thought maybe that you would reassess the protocol there and maybe incorporate one into the study or just leave as-is, waiting for the results to come out perhaps later next year?

Hi, Phil. I'm going to let Cindy Jacobs, our CMO, take that question.

Sure. Thank you.

There is one interim futility analysis that has been designed in the study, and so we would obviously have that interim. That has not occurred yet.

Okay. I appreciate that. And then lastly, just in terms of apatorsen here, I know you said you're going to continue looking for Borealis-1 results. Any discussions potentially with partners regarding the asset or is this kind of just waiting to see what the initial results come from the Phase II before discussing potential partnerships?

Right. Thanks for that question. What we've done with the apatorsen program in partnering is typical to what we've done historically with our assets, and that is to continuously keep up to date potential partners as we advance the programs through clinical strategies. And the intent of that is to obviously ensure that they remain aware of all the date as it matures. And that's kind of been (inaudible) for the last couple of years with respect to apatorsen. At this point, I think the focus continues to be on generating data and, more specifically, with the Borealis-1 data in regards to future collaborations. And I think in the past we've discussed a lot of the partnering strategy will be determined off of what we do with custirsen and how it shapes out, and then also with regards to the independent Phase II trials that are being run with that program. You can imagine that if you decide to advance into a single Phase III trial and a single indication, that's something that's reasonably (inaudible) to bite off as a company, but if you see success and you decide you want to advance in all seven of these randomized Phase II pursuits, that's a pretty big bite at the apple. So if the drug demonstrates that kind of activity, then I think we'd have to be looking at partnering just because of the magnitude of the opportunity that apatorsen presents. I'll also go on to say that the apatorsen program is quite unique in that, although we're doing seven randomized Phase IIs in four indications, that could actually expand even further. So if you see positive indications off these first trials, the ability to further expand that is quite extensive, and we may even want to consider diversifying beyond what we've seen if you see early successes. And again, that may justify going down partnerships. But at this point, the focus is generating the randomized Phase II data set, at least in the Borealis-1, and then consider the options from there.

That's great. I appreciate the thoughts, Scott.

Thanks a lot, Phil.

Thank you. And our next question comes from the line of Chad Messer of Needham. Your line is now open.

Great. For ENSPIRIT, it's been a little while, I think, since I've looked at this. Can you remind me what the interim analyses are? I know this first one's a futility. Have you told us what kind of cutoffs you have for that in terms of statistics and what the other interims might look like?

Hi, Chad. Again, thanks a lot for the question this afternoon. Again, I'm going to turn that question over to Cindy Jacobs, our Chief Medical Officer, and she can take you through the details of the futility.

There are actually two analyses -- one early and one later. The early one involves a two-step kind of analysis -- one looking at PFF and showing a clinical benefit. And then if -- the second one would be if that didn't show a benefit, then it would be an early overall survival futility analysis. The second one is a lot lighter in the trial, which would be then just a survival futility analysis.

Great. Thanks.

Thanks a lot, Chad.

Thank you. (OPERATOR INSTRUCTIONS.) Our next question comes from the line of Stephen Willey of Stifel. Your line is now open.

Hi, guys. Just a quick question regarding meeting milestones (inaudible). Just wondering, I guess, how much of those back-ended milestones are now eligible based on the results of the next two studies? And I guess can you earn all that was part of the original collaboration now that SYNERGY has failed or has some of that -- have some of those now kind of gone away?

Right. So the -- so just I may paraphrase or restate your question because your line was a little bit scratchy so people may not have caught that. I believe (inaudible) your question was specifically in regards to milestone payments and, with the results of the SYNERGY trial, whether any of those may be in potential state of being forgone given the results. So with regards to that question, there are milestones that would be attached to the clinical strategies and the development plan. So some of those now would be going away, but there are specific milestones that do relate to the other clinical strategies as well as commercial potential, and that specifically relates to sales efforts and so on. So it's not, obviously, the entire totality of the milestone payments or, obviously, the royalty rates that would then flow from that. We may have lost Steve so we may not have a follow-up question from him.

Thank you. And at this time, I'm showing no further questions in the queue. I would like to turn the call back over to Scott, the CEO, for any further closing remarks.

Thank you. And again, just in closing, we would like to close out today's call by restating the milestones that we have in 2014. There remain some very strong activities as we go into the second half of the year, as we've gone through the conference call. And again, I wanted to thank everybody for participating on this call (inaudible) this afternoon and we do look forward to providing you with the next update. Thank you.

Thank you. Ladies and gentlemen, this concludes our program. You may now disconnect. Everyone have a great day.