Bio Path Holdings Inc (BPTH) 2020 Q2 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to the Bio-Path Holdings Second Quarter 2020 Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Mr. Will O'Connor of Stern Investor Relations. Please proceed.

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company's Second Quarter 2020 Earnings Results and to provide an update on recent pipeline and corporate developments.

Earlier, we issued a press release which outlines the topics that we plan to discuss on today's call. The release is available at biopathholdings.com.

With me today from Bio-Path are President and CEO, Peter Nielsen; and Senior Vice President of Finance, Accounting and Administration, Anthony Price.

Before we begin, I would like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call.

With that, I'll now turn the call over to Bio-Path's CEO, Peter Nielsen.

Thanks, Will. Good morning, everyone, and thank you for joining us today. I hope this finds you all staying safe and healthy. These past months have been a challenge for us all, and I am proud to say that Bio-Path team has rolled up its sleeves and continued making progress, advancing our key programs in our clinical development pipeline.

I'll begin with our lead product candidate, prexigebersen, where we have made a substantial progress in recent weeks. Yesterday, we were very excited to announce the dosing of our first patient in Stage 2 of our Phase II prexigebersen for the treatment of acute myeloid leukemia, or AML, in combination with frontline therapy, decitabine and venetoclax.

As we have previously reported, Phase II clinical development of prexigebersen and AML commenced with Stage 1 of the Phase II clinical trial which was open-label and treated de novo AML patients with a combination of prexigebersen and low-dose cytarabine, or LDAC.

The combination of prexigebersen and LDAC was shown to be safe and more efficacious to treat this class of patients than with LDAC alone. As many of you know, there has been an evolving landscape or standard care in AML.

We are delighted with the recent progress that has been made, but it's not enough. Despite these new therapies, there are still patients who are refractory or resistant and those are the patients we aim to help. A standard of care evolved, we adapted our trial design to reflect these changes. Feedback from treating physicians pointed to a preference for decitabine. The recent approval of frontline therapy, venetoclax, provided an opportunity for adding prexigebersen to the newly approved frontline 2-drug combination of venetoclax and decitabine for the treatment of AML patients.

Prior to finalizing our plans, we performed preclinical testing in AML cancer cell lines to assess prexigebersen's increased benefit to efficacy. Preclinical testing of prexigebersen with the frontline treatment of decitabine and venetoclax, demonstrated the potential to enhance efficacy of the frontline treatment combination.

In the studies, 4 AML cancer cell lines were treated with 3 different combinations of decitabine, venetoclax and prexigebersen.

Decrease in AML cell viability was a primary measure of efficacy. The triple combination of decitabine, venetoclax and prexigebersen showed significant improvement in efficacy in 3 of the 4 AML cell lines. Based on these results, we believe that adding prexigebersen to the treatment combination of decitabine and venetoclax could lead to improved efficacy in AML patients.

The amended Stage 2 of this Phase II trial in AML is an open-label Phase II, a 2-stage multi-center study of prexigebersen in combination with decitabine and venetoclax in 2 cohorts of patients with previously untreated AML and relapsed resistant AML.

A third cohort includes treating relapsed/refractory AML patients who are venetoclax resistant or intolerant with the 2-drug combination of prexigebersen and decitabine. The full trial design plans have approximately 54 patients for the cohort treating relapsed/refractory AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax, and the cohort treating AML patients who are venetoclax resistant and intolerant with the 2-drug combination of prexigebersen and decitabine with a review of both cohorts performed after 19 evaluable patients.

The full trial design plans have approximately 98 evaluable patients for the cohort treating -- treated AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax with a primary view -- review for the cohort performed after 19 evaluable patients, and a formal interim analysis after 38 evaluable patients.

The higher number of patients in the full trial design for the untreated AML patient's cohort is due to the higher baseline response of the frontline therapy. The primary endpoint for this study will be the number of patients who achieve complete remission, which includes complete remissions with incomplete hematologic recovery and complete remission with partial hematology recovery. An interim analysis will be performed on each cohort to assess safety and efficacy of the treatment. In the event these results exceed the primary endpoint in a number of patients that meets or exceeds statistically determine thresholds, we plan to seek to convert the trial into a registration trial for accelerated approval.

In May, we were delighted to have Dr. Maro Ohanian of the Department of Leukemia at University of Texas M.D. Anderson Cancer Center, present a virtual poster presentation, discussing this Phase II trial design to an audience of world-leading oncologists.

We believe that this unique trial design provides us with several definable registration pathways. We believe that prexigebersen, with its promising efficacy and safety profile, has the potential to be an ideal combination candidate with frontline therapy.

Next, I'd like to briefly touch on our planned Phase I clinical trial of prexigebersen-A in patients with advanced solid tumors, including ovarian, uterine, pancreatic and hormone refractory breast cancer. Prexigebersen-A, a fourth Bio-Path drug candidate is a modified product from prexigebersen, sharing the same drug substance with enhanced nanoparticle properties. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen in solid tumor patients. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that prexigebersen may provide clinical benefit for such patients. We filed an investigational new drug application or an IND and expect to begin this study in 2020.

Turning now to plans for BP1002, our second therapeutic candidate, which targets the Bcl-2 protein. Last year, we filed an IND application for our second pipeline candidate, BP1002. Venetoclax has also shown activity against the antiapoptotic protein Bcl-2 and works by neutralizing the protein's BH3 domain.

It is an approved treatment for chronic lymphocytic leukemia, or CLL patients, and untreated AML patients. However, with the exception of some patients treated with stem cell transplantation, disease relapse invariably occurs, oftentimes due to BH3 domain mutation over time. BP1002 also targets the Bcl-2 protein. However, BP1002 activity is based on blocking the Bcl-2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatments.

In November of 2019, the FDA granted us IND clearance to study BP1002 as a potential treatment for CLL, including venetoclax, relapses and lymphoma.

We intend to file a new IND to include AML relapses. The planned modification of our Phase II clinical program in AML to include venetoclax combination treatment with prexigebersen will give us early experience with treating Bcl-2 driven antiapoptosis in these patients. We expect to begin our first-in-human study of BP1002 in 2020. In April, we presented a poster at the American Association for Cancer Research, or AACR annual meeting, highlighting the planned clinical trial design for our first-in-human Phase I study of BP1002 in patients with advanced lymphoid malignancies.

The Phase I clinical trial is expected to be conducted at several leading cancer centers, including the University of Texas M.D. Anderson Cancer Center, the Georgia Cancer Center and the Sarah Cannon Research Institute.

Finally, let me review our progress with our third drug candidate, BP1003, which targets the STAT3 protein. This program has shown promising preclinical data, and we are very excited for the future of this program. We are studying BP1003 for the treatment of pancreatic cancer in a patient-derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments. The potential for our STAT3 program is compelling for a number of reasons.

Signal transduction and activator transcription 3, or STAT3, though typically inactive in normal cells is aberrantly active in cancer cells. The abilities of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induce vascular formation and invade distant organs are well-recognized hallmarks of cancer. STAT3 is a regulator of the genes involved in these cancer processes. More recently, the capability of tumors to invade immune surveillance and avoids destruction by the immune system has also gained significant acceptance in the cancer research field.

STAT3, which is a point of convergence for many oncogenic pathways has emerged as a critical mediator of tumor immune evasion at multiple levels. Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic cancer. Activation of STAT3 correlates with poor clinical outcome, high-grade disease and metastases and has been linked with resistance to chemotherapy, including gemcitabine, considered a standard of care agent for advanced pancreatic cancer.

Therefore, inhibition of STAT3 in combination with chemotherapy is expected to produce enhanced clinical benefit. Our preclinical data for this program highlighted 4 antisense oligo sequences directed against STAT3 messenger RNA, identified by Bio-Path and manufactured using DNAbilize antisense RNAi nanoparticle technology. Cell viability tests and western blocks -- blots were conducted to determine the inhibitory effects of liposome-incorporated STAT3 antisense oligo on non-small cell lung cancer in AML cells. And ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic patient-derived xenografts to study the overall activity of BP1003 alone and in combination with gemcitabine.

Using previously defined criteria, tissue slice viability inhibition greater than 30% with a p-value of less than 0.05 counted as a response. For validation of ex vivo results, pancreatic cancer patient-derived xenografts of tumor-bearing mice were administered BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days.

In the live assay -- in the live tissue assay, BP1003 at a dose of 10 micromolar significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer patient-derived xenografts by more than 30% with a p-value less than 0.05.

The combination of BP1003 in gemcitabine further enhanced ex vivo efficacy in BP1003 in a subset of patient-derived xenografts. In the in vivo study with pancreatic cancer patient-derived xenographic models, a combination of BP1003 and gemcitabine caused tumor regression during the 28-day drug treatment period. This anticancer activity was maintained for another 21 days even when drug treatment had ceased.

In addition, BP1003 was selected as the most potent liposome-incorporated STAT3 antisense sequence in decreasing non-small cell cancer cell viability. Further, validation in AML cells demonstrated that BP1003 inhibited cell viability in STAT3 protein expression. These very encouraging data were well received by the scientific community. We are particularly excited to launch our first-in-human validation of these cutting-edge therapy in an especially challenging cancer indication that has limited treatment options.

Moving forward, we are undertaking IND-enabling studies for BP1003 this year, with a goal to file the IND application with this very promising product candidate later in the year. As you can see, despite the challenge we faced over the last several months, we have remained committed to driving forward our clinical development programs during this challenging time. We continue to make meaningful progress across our pipeline.

With that, I'll now turn the program over to Anthony Price, for a brief review of our second quarter 2020 financials, along with balance sheet highlights. Anthony?

Thanks, Peter. The company reported a net loss of $2.0 million or $0.55 per share for the 3 months ended June 30, 2020, compared to a net loss of $2.5 million or $0.87 per share for the 3 months ended June 30, 2019. Research and development expenses for the 3 months ended June 30, 2020, decreased to $1.0 million compared to $1.5 million for the 3 months ended June 30, 2019, primarily due to timing of activities related to our Phase II clinical trial of prexigebersen and AML.

General and administrative expenses for the 3 months ended June 30, 2020, were $1.0 million, consistent with the comparable period in 2019.

As of June 30, 2020, the company had cash of $14.4 million compared to $20.4 million at December 31, 2019. Net cash used in operating activities for the 6 months ended June 30, 2020, was $6.0 million compared to $4.2 million for the comparable period in 2019.

With that, I will now turn the call back over to Peter.

Thanks, Anthony. The months ahead should be exciting as we head into the balance of the year. We look forward to continuing to enroll Stage II of our Phase II clinical trial of prexigebersen to treat AML in combination with the now current standard of care and expect to show significant safety and efficacy. Moreover, we think the addition of prexigebersen to this regimen were particularly important to those patients who have relapsed or are recalcitrant to venetoclax and decitabine.

In tandem with advancing this important program, we look forward to initiating our first human Phase I program of BP1002 to treat advanced lymphoid malignancies, another oncologic indication that continues to allude current treatments.

So as you can see, we have a number of key drivers, as we advance our DNAbilize technology in both blood-borne cancers and solid tumors.

Thank you for your time this morning. And as always, we appreciate your continued support and encouragement.

With that, operator, we're ready to open the call to questions.

(Operator Instructions)

Your first question comes from Laura Engel with Stonegate Capital Partners.

So exciting news, especially about the dosing for AML. Good information as always. I wonder, you mentioned -- it was touched on the last call and then you mentioned in the press release, just the challenges with COVID and how that's affecting clinical trials. Wondered if you could just give us an update on that as far as enrollment, number of sites, how it's affecting the patients in the trials?

And then I know you have supply of the drugs for dosing, but how it might be affecting that going forward as well?

There are several things there. But we do have 8 sites signed up for the AML trial going to 10. There's just 2 more that are in the process. So we've reached our goal in that area to try to have more spots enrolling. I know that a key sight, Cornell has lined up several patients to start in the final stages of their IRB review. So that seems fine. But the fact of the matter is, and we've had enrollment in that third cohort, which is the intolerant venetoclax and whatnot, that's derivative of the previous amended gemcitabine, prexigebersen safety combination, which we continued and eligible to our patients that need enrollment criteria will roll into that.

So we've had patients and really have a head start on that cohort right now. So right now, I haven't heard that we're turned off. I think we're better than we were, back when people were concerned about these are immune-compromised people. People concerned about traveling to the institution. But I think, to be honest, the one thing we have to look forward -- not look forward to but be aware of is -- and I'm sure you heard the CDC come out yesterday and talk about the fact that we're going back-to-school, of course, concerns about uptick in cases. But the confluence of that with the flu season has made some pretty dire projections for fall. And I guess we'll just have to see what happens on that. And we're teed up. Our suppliers are performing and we have more drug batches being matter -- being delivered. So the hard part is just predicting the supply lines that you need based on patient enrollments.

So -- but the response has been pretty good. There's -- particularly in these relapsed patients, there's couple of those cohorts, I think, represent real opportunities for us.

So we'll have to see. But the biggest unknown to look for is what the world is going to look like, at least in the United States, in September, October, November.

(Operator Instructions)

Your next question comes from Yi Chen with H.C. Wainwright.

My first question is, so among the 4 AML cell lines tested in the preclinical study, the Kasumi-1 cell line, is there a particular -- a specific explanation on this?

Why is the cell line doesn't perform well with the triple combination? And what percentage of AML patients does this cell line represent in the real world?

I'm not sure the reason for the minimal response on that. And I don't know what percentage it is. We just want to take a spectrum of these AML cells and test them. And as we indicated, we had pretty good results in all, but that one. And the previous studies I've seen, it's not necessarily a circumstance that you go well across all cell lines. And I can investigate that with Ana. But I ask about and it's just a cell line, it doesn't respond.

Okay. Got it. So for the -- in the final trial design, the full trial design, the -- there will be 54 evaluable patients for the cohort of relapsed/refractory AML patients and the venetoclax-resistant patient group. Was a review of both cohorts performed after 19 evaluable patients? Does that mean about 50% of 19 patients have to come from each cohort? Or it doesn't really matter as long as the total reach 19?

No. No, no. That's for each cohort.

Oh, that's for each cohort, okay.

Yes. And that's...

So 54 patients for each cohort?

Except for the -- that's -- if you go the full trial. The idea is we want to make an interim assessment because I think back when we did -- when we first started this with LDAC combination. LDAC is like 7% to 13% response, complete remission. And when we did that 6 patient safety study, 2 dose level, if you recall, the start of the Phase II, we had a 50% response -- CR response. And then 2 more out of the 6 were partials that had over 50% bone marrow blast reduction. And so the point is, if you get that kind of early on indication, we wouldn't want to waste our time going through all 54. We -- that would give us enough of a statistical, just thinking about amount of improvement versus the baseline CR rate to have a p-value strong enough to go to the FDA to make the case to switch to an accelerated trial.

So in every one of those cohorts, we want to do that assessment and get to the endpoint as quickly as we can. Likewise, just -- and I mentioned it, with the untreated AML, that frontline baseline is 60%, the others are 20%. And so when you're at 60%, to get the kind of statistical power that you need, you would have to go a greater number of patients. And so that's why -- but we're still going to look at 19 and see what we look like. And if it looks well, we'll go to 38 to get the power we need. And if it's a meaningful increase, we'll go to the FDA, but we would need 38 on that one just because of, again, you're talking about the response relative to a 60% baseline. So presumably, you'll need more for that power.

Yes. So just to confirm, the total number of patients that will be enrolled for all 3 cohorts, if fully enrolled, would be 206 patients?

Whatever it adds, 54, 54 and 98 is...

98. Yes, yes. Okay. Got it. Got it. Okay. So this trial design really presents 3 pathways to potential approval, right?

Yes, it does.

Okay, okay. Got it. And my last question is on the financial side. So the second quarter operating expenses is meaningfully lower than the first quarter. But now since you have started dosing patients in this Phase II trial with 3 cohorts, should we expect the operating expenses to go higher, starting from the third quarter?

Well, a large part of our operating expenses were on putting the infrastructure in place, think about going from 6 to 8 and 10. Those are -- all those clinical documents that we have to facilitate our CRO does, facilitate review, negotiation and sign offs with all of those sites. So you have quite a bit of CRO expense in that respect. The other thing is, as I alluded to with Laura, we've got to build our pipeline on the drug. And with us, again, when we finish our GMP material, there's no market for that material. So we don't get a stick at an inventory. We put it in prepaid. And then once we get it released to us, it drops to the expense line. So a lot of the expenses that we've had in the first and second quarter have been as a result of gearing up for this. I would think when you have your drug in place and you have your clinical sites set up, the patient costs, yes, that's something, but you're consuming drug that's already been expensed. And so the incremental effects would be the cost, the patient cost that you have with a site when they enroll a patient and dose them and whatnot, and see continuing CRO expense for continuing to monitor and work. But it's not what you think it'd be a step-up from the plateau or level of expenses established in the first and second quarter because a lot of that startup won't be there. So I think in the cash consumed area, which is a driver of our earnings. We've averaged $3 million a quarter. And we should be in that $3 million to $3.5 million, maybe if we have another build drug expense quarter as high as $4 million. But $3 million to $3.5 million, I think, is what I think we'd be looking at.

I am showing no further questions at this time. I would now like to turn the conference back to Mr. Peter Nielsen.

Thank you, again, everyone, for joining us and for your continued support of Bio-Path. Have a great day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation. You may now disconnect.