Dare Bioscience Inc (DARE) 2014 Q4 法說會逐字稿

Good afternoon and welcome to the Cerulean fourth-quarter and year-end 2014 conference call. This call is being recorded. My name is Andrew and I will be your operator for today. With us today from the Company are Paul Friedman, Executive Chairman; Chris Guiffre, Chief Operating Officer; and [Ronan O'Brien], Associate General Counsel. Now I would like to turn the call over to the Cerulean team. Doctor Friedman, please proceed.

Thanks, Andrew, good afternoon, everybody, and thank you for joining Ronan, Chris and me for this call. Today I'm going to update you on fourth-quarter activities, as well as recent news including some encouraging interim data in the Phase 2 study of CRLX101 in renal cell carcinoma that we reported this afternoon.

And Chris will provide an update on the team financial matters and milestones. And finally, we will answer your questions. Before we began I'll ask Ronan to comment on forward-looking statements that may be made during this call. Ronan.

Thanks, Paul, certain remarks that we make during this call about the Company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent annual report on Form 10-K, which is on file with the SEC and can be accessed on our website.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore you should not rely on these forward-looking statements as representing our views as of any date subsequent to today, March 19, 2015. Back to you, Paul.

Thanks, Ronan. As many of you know, Cerulean's nanoparticle-drug conjugates, or NDCs, consist of potent anticancer payloads chemically conjugated to the nanoparticle, which are designed to selectively target tumor cells, reduce toxicity by sparing the body's normal cells and enable therapeutic combinations.

We have two such NDCs in the clinic, the first being CRLX101, an NDC with campthothecin as its payload whose antitumor activity is driven by its durable inhibition of two important cancer targets, topoisomerase 1, or topo 1, and hypoxia-inducible factor-1 alpha, or HIF-1a.

As CRLX101 is being studied in combination with other cancer treatments in three tumor types, renal cell carcinoma, or RCC, ovarian cancer and rectal cancer. As we reported this afternoon in a Phase 1b/2 trial in relapsed RCC conducted by the University of Pennsylvania, CRLX101 in combination with Avastin met its primary endpoint with more than half of the patients enrolled achieving at least four months progression free survival.

The principal investigator, Dr. Steve Keefe, has submitted has submitted the full data from this trial to ASCO for presentation, but we are announcing top-line data today.

Importantly, as of the ASCO submission median PFS for this trial was a notable 9.9 months. That is more than twice as long as the roughly 3.5 months we would expect to see for standard of care in this setting.

The RECIST response rate at the time of the ASCO submission was 23% and that is also a marked improvement on the 2% to 4% response rate that we would expect to see. And 7 of the 22 patients enrolled on the trial remain on treatment. And importantly, 101 was found to be generally well tolerated.

I'd like to remind you that while these data are encouraging, they continue to mature. Therefore while the primary endpoint of this study has been achieved and the overall response rate cannot go down, the median PFS can move in either direction and we look forward to having updated data presented at ASCO and the final data submitted to a peer-reviewed journal later this year.

It is important to recognize the treatment landscape for third and fourth line RCC as it directs us in our forward-looking plans for the development of CRLX101 in this area. Patients with RCC are often given a tyrosine kinase inhibitor in first-line and a second TKI, or an mTOR inhibitor in second line.

When patients progress to third line they have very limited treatment options, another TKI or another mTOR inhibitor. As I said before, in general third and fourth line RCC patients receiving standard of care experience a median PFS of roughly 3.5 months and a response rate in the 2% to 4% range.

And the most recent evidence of these benchmarks with current standard of care is the 570 patient global registration trial published just recently in Lancet Oncology comparing the Novartis drug dovitinib to sorafenib.

So obviously patients at this stage in their disease need new treatment options, that is why we are exploring the combination of CRLX101 and Avastin in our ongoing randomized Phase 2 trial for third and fourth line RCC. The trial's statistical plan has 80% power to see a PFS improvement of 2.3 months over an expected 3.5 months for standard of care. And as a reminder, in the IST data announced today we have thus far seen a 9.9 month PFS.

There are 30 sites in the US participating in the randomized trial and we are in the process of opening additional US sites as well as five sites in South Korea. Enrollment is well underway and we expect it to complete this fall.

While we originally intended to provide response rate data by year end for this open label trial in advance of the PSF data for the primary endpoint, our advisors have strongly recommended that we not take an early look at the data to avoid potentially compromising our ability to use this trial as one of our two well-controlled trials for registration purposes or potentially as the basis for accelerated approval.

[Toward] these possible outcomes, while we will not appoint a data monitoring committee to give us an early look at the overall response rate, we've decided to conduct an independent review of the MRI scans to further ensure that this trial will be fully suited for registration purposes. Response data will now be released at the same time as the PFS data -- the primary endpoint. We reaffirmed guidance today that you should expect these data in the second quarter of 2016.

We are also evaluating 101 in ovarian cancer beginning, as we did in RCC, with an investigator sponsored trial. Our ISTs are designed to both confirm combinability of 101 with other cancer treatments in humans and to detect signals of activity.

In an ongoing Phase 2 trial conducted at the Harvard teaching hospitals evaluating CRLX101 plus Avastin in patients with relapsed ovarian cancer, one of the first nine patients enrolled in the trial has received -- has achieved a RECIST based partial response and another patient has achieved a net tumor reduction in excess of 20%.

It's also quite encouraging to see that all nine evaluable patients have achieved stable disease or better according to RECIST criteria. Four of nine patients remain on treatment; we continue to follow these patients for response rate and PFS. Additionally, we continue to enroll patients in this study.

And finally, it is good to see that, as with the RCC patients, the 101 Avastin combination appears to be well tolerated in these patients with relapsed ovarian cancer. This cancer is an area of extreme unmet need, as evidenced by the FDA's approval in November of Avastin in combination with three chemotherapeutics.

The one that provided the best results in combination with Avastin was paclitaxel given weekly. We recently announced that in conjunction with the GOG Foundation, leaders in this space, we are working to initiate a company-sponsored trial in relapsed ovarian cancer.

This Phase 1b clinical trial will evaluate the combination of CRLX101 and weekly paclitaxel, a mainstay of treatment in metastatic ovarian cancer. We anticipate this trial will give us valuable data to compare and contrast with the data we are generating in the IST at the Harvard teaching hospitals so that we can make the best decision as to if, when and how to proceed with a randomized trial in relapsed ovarian cancer next year.

The third setting in which we are studying CRLX101 is a frontline setting, presurgical or neoadjuvant treatment in combination with chemoradiotherapy known as CRT for the treatment of nonmetastatic rectal cancer. And this ongoing Phase 1b/2 study is an IST being led by the University of North Carolina at Chapel Hill.

The trial is evaluating CRLX101 in combination with standard of care, that is CRT, capecitabine plus radiotherapy. Unlike treating late state disease where we hope to improve overall survival and quality of life, this frontline setting gives us a real opportunity to improve cure rates by completely eradicating the primary tumor. This is called pathologic complete response, or PCR.

In single arm studies standard of care CRT demonstrates pCR rates in the 10% to 20% range, but randomized data suggests that the true pCR rate may in fact be somewhat less than 10%. Two of the first eight patients enrolled on this trial achieved a pCR. As the number of patients is small I hesitate to assign a percentage here, but this is an encouraging start compared to standard of care CRT.

Seven of eight patients achieved an AGCC -- AJCC/UICC tumor regression score of 0 or 1 on a scale of 0 to 3, with 0 being the best pCR 1, the next best being minimal residual disease and 3 being the worst, that is a poor treatment response. Two other patients have been treated but have not yet had surgeries to determine their outcomes.

As there were no dose limiting toxicities in any of these patients in this Phase 1B portion of the trial, the MTD of 15 milligrams per meter squared as established in our other patient populations is the dose being employed as we enroll patients in the expanded Phase 2 portion of this trial.

This demonstration of tolerability at the MTD and combinability with CRT is important. Because, while adding the topo 1 inhibitor irinotecan to CRT has been shown to increase pCR rates compared to CRT alone the toxicities of irinotecan have precluded the use of what was otherwise a very promising regimen.

Enrollment on this trial at the single site has not been as rapid as we would've liked, and to address this we have asked the PIs to add satellite sites and they have responded by adding four additional sites to the study. And would look forward to providing updates as the trial progresses.

Moving now to our second platform generated candidate, CRLX301 an NDC that incorporates docetaxel as its pay load. In preclinical studies we have seen that 301 delivers approximately 10 times as much docetaxel into tumors compared to an equivalent milligram dose of commercial docetaxel and high drug levels are maintained in tumors for prolonged periods.

Those increased concentrations seem to matter as CRLX301 was superior to docetaxel in seven of seven models with a statistically significant survival benefit in five of those studies. In December we announced the first patient in for a Phase 1 dose escalation trial launched in two sites in Australia. We expect to announce data by the end of the year as well as our plans for a lead indication. With that I will turn the call over to Chris.

Thank you, Paul. The clinical development program for CRLX101 continues to expand. In addition, we put our second platform generated candidate, CRLX301, in the clinic at the end of last year.

With so much clinical development going on it was important for us to add a seasoned professional to our management team to run our clinical operations. Tiffany Crowell joined us as Vice President of Clinical Operations in January and she brings deep clin ops experience. Tiffany's experience running clinical trials at AVEO, Inotek, Vertex and Therion will serve her well as she manages our growing portfolio of clinical trials.

Tiffany completes our post-IPO management team expansion that also includes Alejandra Carvajal, our General Counsel, and Pam Strode VP of regulatory affairs, both of whom we announced joined us in the fall. Now I will turn to a quick financial update and a summary of upcoming milestones, than Paul and I will take your questions.

Here is a brief highlight of our financial results for the fourth quarter of 2014 which are included in the annual report on Form 10-K that was filed earlier this afternoon.

For the fourth quarter we had a net loss of $7.5 million compared to a net loss of $3.5 million in the fourth quarter of 2013. And a net loss of $23.3 million for the full year 2014 compared to a net loss of $17.1 million for the full year 2013. The increase in net loss for the 2014 period was due principally to expenses associated with the initiation of the randomized Phase 2 trial in RCC and the incremental expense associated with operating as a public company.

Importantly, we ended the fourth quarter with cash and cash equivalents that totaled $51.2 million. In January 2015 the Company also entered into a loan and security agreement with Hercules for a term loan of up to $26 million and we sold $1 million of Cerulean common stock to Hercules in a private placement. We believe that we will have the cash necessary to fund operations into the third quarter of 2016.

Turning from the financial update to an update on milestones, I will lay out the key milestones we expect to achieve in 2015 and 2016.

During the remainder of 2015 Cerulean expects the presentation of updated data for the Phase 1b/2 IST of CRLX101 plus Avastin in relapsed RCC by Dr. Steve Keefe at the 2015 ASCO annual meeting; the announcement of updated clinical results from the ongoing Phase 2 IST of CRLX101 plus Avastin in relapsed ovarian cancer; the announcement of updated clinical results from the ongoing Phase 1b/2 IST of CRLX101 plus chemoradiotherapy in nonmetastatic rectal cancer; and of the announcement of clinical results from the ongoing Phase 1 trial of CRLX301.

Looking to 2016, Cerulean also expects the announcement of clinical results from the planned Phase 1b trial with the GOG foundation of CRLX101 plus weekly paclitaxel and relapsed ovarian cancer. And very importantly, the announcement of the PFS endpoint as well as overall response rate data from the randomized Phase 2 trial in RCC that Paul mentioned earlier. With that we will open up the call for your questions. Andrew, please prepare the queue.

(Operator Instructions). Mike King, JMP Securities.

Congrats on the encouraging results. Just want -- a couple of quick follow-up questions on the RCC study. Just remind us, clinicaltrials.gov listed an enrollment goal of 22. Is that correct, is that the correct size of the study?

That is the correct number of patients, 22 patients in the IST that will be presented at ASCO. That is different obviously than the randomized trial which is 110 patients.

Yes, okay, great. Just wanted to be clear on that. (technical difficulty).

His line is disconnected from the conference. Should we take the next person in the queue?

Sure.

Michael Schmidt, Leerink Partners.

Congrats also for me on the RCC data. I was wondering, so at ASCO will the data be mature enough to have a first look at overall survival?

-- I doubt that we would have a full overall survival set by ASCO, but -- it probably wouldn't be that helpful.

Yes, it is a good question. I agree with Paul, but I don't think we actually know the answer. Remember, this is an IST so they are not our data. Dr. Keefe is the one who prepared the abstract and submitted it and he will be the one who has the final say on what goes in his poster.

Got it, sure. And then on the ovarian cancer study, so you reported one of nine responses. I guess it still tracks a bit below your sort of target of 20%. How many more patients are you planning to enroll in this Avastin combination study, number one? And number two, is there a mechanistic rationale to combine 101 with paclitaxel or is it simply a -- the best possible combination in this line of therapy?

So, indeed there are a number of intriguing aspects, I will take the second part first, to combining paclitaxel with weekly administration with 101. We have seen good synergy in animal models of giving the two drugs together.

There is existing data and we're in the process of developing more for weekly paclitaxel most likely by virtue of damaging the endothelial cells in the tumor of having anti-angiogenic activity which would play to the strength of the mechanistic idea of if inhibition helping efficacy for any angiogenic agent.

So we like that. We also like the fact that paclitaxel is such an accepted agent used in the ovarian metastatic patient population. And also the fact that it worked the best in the combination studies in the AURELIA study.

With respect to your first question, currently I believe we are planning to keep that study open in parallel to the GOG study. And we have not determined a specific end where we would cut the study off.

Yes. So I think during the course of this year, Michael, we want to make sure that we get data for both combinations before we decide what is the best path forward for a randomized study. And by the end of the year or early next year we are hoping we have enough patients in each of those studies to make a very informed decision.

Got it, great. And then last question, I noticed an abstract at ACR for CRLX101 in breast cancer. And I was wondering if you had any additional plans in breast cancer for the agent, maybe also in context of the recent Nektar results.

Yes. So, you are correct, that is one of the presentations that will be about 101 at ACR and we are looking forward to that.

In terms of future indications for the development of this drug, we have not commented publicly on what the next indication will be. As you know very well, because you are very familiar with this drug, one of its advantages is that it is theoretically a pan tumor product candidate. Meaning because we target the leaky vasculature that is present in all solid tumors we have a wide range of opportunities to choose from.

The challenge we have is not that we don't have enough opportunities to pursue, it is that we have too many to pursue with the resources we have at this point. So which indication will be prioritized next is an open question. I honestly do not know the answer today. I am not being coy; I don't know which one will be next. But we won't be commenting on which will be next until we are ready to formally announce that it is our next indication.

Okay, great. Thanks so much.

John Newman, Canaccord Genuity.

Hey, guys, this is Kevin in for John, congratulations on the progress. The first question I have is I just want to clarify your current renal cell carcinoma update. So is that including the total 22 patients that you guys have right now?

Yes.

Okay.

It is the status of the 22 patients at the time that the abstract to ASCO was submitted, which was in the beginning of February.

And to put that in context, when we went public we had interim data on that trial. We had 11 of those 22 patients. Those are the data that are included in the S1 for our IPO. So now this is the full 22.

Okay, great. I was wondering if you could give me a little color on these patients. I was wondering if you could tell us a little bit if they previously were treated with more TKIs or (mTORs). The reason why I ask is because we know mTOR is also a HIF-1 inhibitor. So I was just wondering what these patients actually look like.

Yes, so, I don't have the specific numbers for you at my fingertips, and I apologize for that, but I can tell you considerably more treatment with TKIs than (mTORs).

So the most common drug used in the treatment paradigm that we see wherever we look for RCC is that Sutent is often used in first line. I won't say it is universally used in first-line, but I think all or most of -- almost all of the patients, the 22 patients would have seen Sutent in the first line.

I think your question points to the diversity of treatments that exist in the second lin. And there I can tell you there are plenty of docs who will use another TKI in second line, axitinib is often used, and there are some docs who will use one of the two (mTORs) in the second line. But there is probably not -- there is a little more heterogeneity in second-line treatment than there is in first-line treatment.

But I think an important part of our thesis here is that once you get through those first two lines you have exhausted the two classes that are available. And when you go into third line we are creating a new option for these patients. So not a recycled TKI, which we do not think is beneficial to the patients, and not a recycled mTOR, but a new class. And that is why we are so excited about the promise of this randomized trial.

Okay, great. That was actually very helpful. Moving to ovarian cancer, I was wondering if you could tell us a little bit about those patients as well, given the fact that were they mainly platinum resistant or platinum sensitive or did they just not respond to initial therapy in the first place?

Yes. So, I'm going to make sure that I clarify this answer by introducing another piece of data into the mix. You are not asking about the patients who were treated in the 29 patient monotherapy study at the Harvard teaching hospitals. Those patients -- we announced we met the endpoint on that study more than a year ago I believe.

Those patients were a mixture of platinum sensitive, platinum resistant and platinum refractory, although most of them were platinum resistant. In this study that we are running now at the same four Harvard teaching hospitals we are combining with Avastin and we are treating only platinum resistant patients.

Okay, good. Thanks. And then sorry, just one more question on the rectal cancer. I was wondering, what is the timeframe after you are giving treatment that pathological response is actually accessed. And do you guys think that if pathological effect was assessed a little bit longer or shorter would a difference in response actually be seen?

-- I think pretty much they get their treatment regimen and then they go to surgery and it is about a 14-week period from start to finish. And then the histopath is looked at at that point to determine the scoring and how many show no residual (inaudible) tumor on extensive histopathological examination.

Okay, great, thank you guys so much. thank you guys so much.

Mike King, JMP Securities.

I am back; I don't know what happened on the last question. I am terribly sorry, but I am back. One of the questions -- the follow-up question was answered on the RCC study. But just curious, was -- in regard to the prior therapies was it required to have both TKI and an mTOR as previous therapy before admission to the trial?

No.

Was not, okay. I guess it was just assumed that the patients would have some mix of standard of care.

Correct.

Okay. Can you also say how many patients remain on drug if any?

Of the 22 patients seven remain on treatment.

Okay, great. And then thirdly, I am just wondering if you could help us -- I think one of the concerns one typically has when you get a result from a small -- a Phase 1/2 trial, especially one that is run at a single center, is about generalizability to larger randomized studies. And you have obviously got a lot of PFS to play with.

But I'm just wondering if you could help us get our head around the comparability of the patients in the Penn study versus the randomized trial?

So, I think your point is very well taken that small single center studies can be occasionally misleading with respect to larger studies. I don't think that is going to be the case here. I think we specify in the randomized trial that you had to be third and fourth line and that is it. I think there may have been one or two people in the 22 who was not third or fourth line.

But your point is well taken. Also your point about we have significant amount of PFS to play with I think it is an important point, because we have in the randomized trial 80% power to detect our target of a 2.3 month improvement in PFS over standard of care of 3.-5. Which I think if you add up is about 5.8 and we are currently sitting in an interim look at data from the 22 patients at 9.9.

So, even if that 9.9 came down a bit we'd still be well above what we would need for statistical significance in the randomized trial with the 80% power that we have put into the trial.

Right.

It doesn't change your point at all, Mike, but just as a technical point, it actually started out as a single center study, but in an effort to try and pick up the pace of enrollment U Penn actually did bring Thomas Jefferson University (multiple speakers)

Oh, yes.

(Multiple speakers) in. So there are two sites. But it doesn't change your point. And I think that we think it is a representative patient population, but we won't know until we read out on the randomized trial, that is the way we are running the study.

Yes, yes, thanks for pointing that out. I see that here later in the release. And then just a quick question on colorectal -- I'm sorry, in rectal, the neoadjuvant. The patients in that study will be followed for overall survival?

We will -- I'm sure we will learn something over time about what happened to them, but at the moment it is -- you talking about the eight or nine that we currently have (multiple speakers).

Correct.

I think, sure, we will hear whatever we hear from them. But.

It is important -- Mike, I mean, remember in this setting these patients are tracking disease-free survival like five years out. So, I guess I wouldn't be holding your breath waiting to hear about the disease free survival stats in this trial. We will make our decision on a go/no go for a randomized trial long before we have any disease free survival data to look at.

Okay, fair enough. Thanks, guys. Appreciate the questions.

Thank you. That concludes the question-and-answer session for today. I will now turn the call back to Dr. Friedman for closing remarks.

Thanks for joining us today and we look forward to reporting on continued progress next quarter. With that we will end the call. Good night.

Ladies and gentlemen, thank you again for your participation in today's conference. This now concludes the program and you may all disconnect your telephone lines. Everyone have a great day.