CTI Biopharma Corp (CTIC) 2020 Q3 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to CTI BioPharma's Third Quarter 2020 Earnings Call. (Operator Instructions)

This conference is being recorded today, November 10, 2020.

I would now like to turn the conference over to Dr. Adam Craig, Chief Executive Officer. Please go ahead.

Thank you, and welcome to this afternoon's call. Joining me today are David Kirske, Chief Financial Officer; and Bruce Seeley, Chief Operating Officer. After I provide you an update on our recent progress, David will provide a summary of third quarter financials. Following our formal remarks, the conference call will be open for questions.

Before we begin, please note that during this call, we will be making forward-looking statements based on current expectations. Such forward-looking statements represent our views only as of the date of this call are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements.

Additional information concerning these risks and uncertainties are contained in today's press release. For a further description of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements as well as risks related to our business, please see our periodic reports filed with the SEC.

This past quarter was one of remarkable progress with CTI, and more importantly, for myelofibrosis patients with severe thrombocytopenia as we advanced our pacritinib development program.

Last month, we announced the initiation of our rolling NDA submission for pacritinib in myelofibrosis patients with severe thrombocytopenia, which is defined as platelet counts less than 50,000 per microliter. With the expectation that we will complete our submission in the first quarter of 2021 with a commercial launch subject to FDA priority review and approval later in 2021.

This development was a result of 3 years of constructive dialogue with the FDA on how pacritinib could address the unmet medical need of myelofibrosis patients with severe thrombocytopenia. A patient group that experiences poor treatment outcomes, primarily due to the significant limitations of approved therapies.

Our discussion with the agency focus on the safety outcomes from the PAC203 study and the available data from the completed PERSIST-1 and PERSIST-2 Phase III studies. At a pre-NDA meeting, our proposal for an NDA submission based on the available data from these studies is accepted. The NDA submission will focus on the severely thrombocytopenic patients enrolled in these studies, and will include data from both frontline treatment-naive patients and patients with prior exposure to JAK2 inhibitors.

Our ongoing Phase III PACIFICA trial is now expected to be completed as a post-approval confirmatory study. With regards to this trial, as we've previously announced, we continue to enroll patients but the enrollment rate is currently slower than planned due to the ongoing COVID-19 pandemic. And at present, we anticipate the primary analysis data in 2022. To ensure that we are prepared for the potential commercial launch of pacritinib in 2021, we've begun to execute on key pre commercial activities, including market access and medical affairs and have hired our Head of Marketing.

As previously announced, we are also investigating pacritinib in COVID-19 patients through PRE-VENT our randomized, double-blind, placebo-controlled multi-centered Phase III clinical study of pacritinib in hospital patients with severe COVID-19. PRE-VENT compares pacritinib plus standard-of-care versus placebo and standard-of-care in hospitalized patients with severe COVID-19.

The primary endpoint of the trial will assess the proportion of patients who progressed to invasive mechanical ventilation and extracorporeal membrane oxygenation or die by day 28. We look forward to providing an update on our Phase III PRE-VENT at the interim analysis of 200 patients with data expected in the first half of 2021.

With that, I'll let David provide a review of the quarterly financials. David?

Thank you, Adam. We ended the quarter with cash and cash equivalents totaling $57.4 million compared to $33.7 million as of December 31, 2019. We currently expect our cash position will enable us to fund our operations into the fourth quarter of 2021. And as we progress through the regulatory process and engage in additional pre-commercial activities, we anticipate our spending to increase and that's -- we will provide updated guidance as we move further into the prelaunch phase.

Operating loss was $11 million and $33 million for the 3 and 9 months ended September 30, 2020, respectively. Compared to an operating loss of $9.7 million and $31.2 million for the respective periods in 2019. Net loss for the 3 months ended September 30, 2020, was $11.3 million or $0.15 for basic and diluted loss per share compared to net loss of $10 million and -- or $0.17 per basic and diluted loss per share for the same period in 2019. Net loss for the 9 months ended September 30, 2020 was $37.4 million or $0.54 per share basic and diluted loss per share compared to a net loss of $31.8 million or $0.55 per basic and diluted loss per share for the same period in 2019.

As Adam mentioned, pre-commercialization activities for pacritinib are underway, and we're taking steps to build out our commercial team. With cash runway through the end of next year, we're in a strong financial position to focus our #1 Priority, and that is the completion of our rolling NDA submission for pacritinib, however, in tandem, progressing our PACIFICA and PRE-VENT clinical trials.

So with that, I will now hand it back to Adam.

Thank you, David. In summary, we are delighted to have begun the submission of an NDA that may lead to the approval of pacritinib for the treatment of myelofibrosis patients with severe thrombocytopenia. A very important area of unmet medical need. We look forward to completing the submission in the first quarter of next year with a potential commercial launch subject to regulatory approval thereafter in 2021.

This concludes our formal remarks. Operator, please open the call for questions.

(Operator Instructions)

Our first question comes from the line of Ren Benjamin with JMP Securities.

I have a couple. Maybe just starting off with the commercialization prep. And I know that you've hired a Head of Marketing. Can you give us a sense how big is the sales force potentially going to be? And what kind of remains to be done between now and a potential loss -- launch in the second half of next year?

Yes, I'll answer the first containment. Our sales force, Ren. And by the way, thank you for your question. The first component is our sales force will be very much in keeping with the size of other companies that have launched U.K. small niche indications in hematology oncology, approximately somewhere between 60 and 80 reps.

I'll hand over the second part of the question to Bruce, who's working on this actively as we speak. Bruce?

Well, thanks for the question. We've been focused right now on a couple of things. One is bringing in the key leadership positions. So as you heard, we've hired an accomplished leader for our marketing effort, and we currently have openings for Medical Affairs. Market Access and some other marketing support roles that will be part of our first initial bolus of hires. We don't expect to get into the more significant hiring of the commercial organization until later next year as we approach launch. And as far as the activities that we've got underway, we are doing extensive market research right now. We have several market research efforts that are ongoing presently. And those are working on demand research to be able to firm up the forecast. We also have activities that are more landscaping to be able to help us understand the marketplace.

Today, the marketplace at time of launch and to be able to help us set our positioning.

Got it. And my next question has to do with maybe ex U.S. activities. I don't know if I've asked this before in the past, Adam, but how are you thinking about the ex U.S. opportunity? Is that something that you will pursue? Or really you're just going to focus in the U.S. other than (inaudible).

Our skill set, Ren, is within the U.S. That's the team that Bruce is leading and operationally, we're more debt to the U.S. for pacritinib to be approved in Europe, we would need to complete PACIFICA. We met with the EMA, I think, over a year ago, they made it clear, they wanted another trial. So once PACIFICA is complete, we then have the option of either going into yet loan or partnering in Europe. And given our skill set, I suspect partnering would be a better option for us.

Got it. And the final one for me is the upcoming ASH presentation. We have the potential for pacritinib in acute GvHD. Can you talk to us a little bit about what exactly you would have us focus on? And do you have a sense if already, if maybe you'll move this from the IST that it is to a more corporate feature program going forward?

Yes. Well, that's certainly an area of interest for us. We're very excited by the IST work that has come out of the Mayo Clinic and Moffitt. What it's shown is in the early parts of the study, very, very good response to the therapy, including pacritinib with tacrolimus and sirolimus and showing a significant reduction in the acute graft-versus-host rates in patients within the first 100 days of therapy compared to historical controls. So that's very encouraging to us, and we believe it's a proof of concept. That trial currently is expanding into a Phase II that's being conducted as an IST. And there, from that data, if the data continues to show promise, then we would consider taking it on as a company-sponsored activity and conducting a company-sponsored trial in graft-versus-host. So overall, we're very, very pleased with the data. I'm glad you brought it up today. And we're very encouraged, and we do see it as an opportunity to develop the drug in a new indication.

Our next question comes from the line of Giovanni Ovi with Needham & Company.

This is Gil on for Chad. Unfortunately, my GvHD question was taken. So just if you could remind us a little bit about the mechanism of action for pacritinib and COVID. I remember it has something to do with -- also having some interaction with IRAK. And how have shack inhibitors fared in COVID patients so far?

Yes. Thank you. It's an important question. I think the big answer here is the use of pacritinib in COVID makes sense, particularly in the cytokine storm setting because it has multi-kinase activity. It has potential down-regulation of Interleukin 1 and 6 through its activity on JAK2 and IRAK1. And it also through its activity on CSF1R has a potential to downregulate the macrophage activation that can become part of the cytokine storm. So that's why we thought it was an attractive proposition. And obviously, it was the right thing for us -- right thing for the company to do to respond to their public health crisis and conduct a trial in that setting.

We can -- we think preclinically, we compare favorably to the other JAK2 inhibitors because of the multi-kinase effect. We don't specifically have on kinase that we work on. For example, just JAK2, we have other kinases. And as you alluded to, obviously, the IRAK1 activity, we think is very important in this setting.

Right. And congratulations on all the progress, and we'll be keeping an eye on for our PDUFA date.

Our next question comes from the line of Thomas Flaten with Lake Street Capital Markets.

Great. Just a quick question on the COVID study. I have -- you said that you would be doing an interim analysis based on 200 patients. If the memory serves, there was a different preliminary endpoint, maybe 150 or so patients the futility look. Can you explain -- maybe I got that wrong, but could you just bring you up to speed on that?

Yes. The standard of -- yes, we changed the number from 150 to 200, which we're expecting to enroll the 200 patients in the first quarter of next year. In fact, we had a quite a significant increased enrollment over the last few weeks as the COVID pandemic in the U.S. has increased. We increased the sample size because the standard of care changed between when we desire first designed this study in April from when we started and now. So we felt to make good decision, a more precise decision about the interim, we needed the largest sample size. So that's the reason why and the main changes there to the care has been a change in practice in the use of ventilators. And so therefore, to be conservative as we always are with all our estimations to be more conservative, we increase the sample size.

Got it. And then if you complete the submission of NDA in the first quarter, what's the earliest you might expect to hear on a priority review decision by FDA?

We should hear within 2 months. The FDA has 2 months to review the application, make sure it's complete before accepting the filing. And we should hear at that time whether we get prior to review. We do expect to get prior to review, but we have the right application for that with an unmet medical need in a small indication. So we do expect there to be proactive if that was the case. It would give us an opportunity to have approval before end of 2021.

I'm not showing any further questions in the queue. I would now like to turn the call back over to Adam for closing remarks.

Well, thank you, Tolanda, and thank you, everyone, for joining the call today. We look forward to further the conversations over the coming weeks.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.