Dare Bioscience Inc (DARE) 2016 Q1 法說會逐字稿

Welcome to Cerulean's first-quarter 2016 conference call. This call is being recorded. My name is Clarence, and I will be the operator today. With us from the Company are: Chris Guiffre, CEO; Gregg Beloff, CFO; Adrian Senderowicz, CMO; Alejandra Carvajal, GC; and Scott Eliasof, VP of Research. Mr. Guiffre, you may proceed.

Good afternoon everybody and thank you for joining us. Let's start with the comment from Alejandra on forward-looking statements that may be made during the call.

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 Factor section of our most recent Quarterly Report on Form 10-Q 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 for forward-looking statements as representing our views as of any date subsequent to today May 2, 2016.

Thanks Alejandra. In the first quarter we continue to demonstrate progress for our platform and the clinical candidates it created. The mark Davis PNAS paper published in March is a good example. Mark is a member of the National Academy of Engineering, the Institute of Medicine and the National Academy of Sciences. He published groundbreaking clinical data that demonstrates how our platform does what it is intended to do. That is concentrate anti-cancer payloads in tumor tissue while sparing healthy tissue.

The PNAS paper is a major milestone for Cerulean because it represents the first proof of mechanism in human cancer patients for our NDCs. Because of the papers importance I asked our VP of Research Scott Eliasof to join this call to share some highlights from the paper and to take your questions. Scott?

Thanks, Chris. These clinical results clearly showed the drug accumulating in tumors but not in adjacent healthy tissue. We believe this is the first clinical evidence of a phenomenon known as the enhanced permeation and retention effect or simply EPR. This clinical demonstration has important consequences for our platform because targeting tumor tissue while sparing healthy tissue should result in better anti-tumor activity and lower side effects thereby enabling more effective combination regimens.

I think it is quite remarkable that all nine of the patients showed the payload in the tumor and not in the adjacent tissue. These clinical results also provide important pharmaco-dynamic proof that the CRLX101 is knocking down its intended targets, Topo 1 and HIF.

We were able to analyze tissue from six of the nine patients and saw in all six patients that 101 inhibits Topo 1 NCA-9 which is a marker for HIF. If anyone has any questions about the PNAS paper or its implications for our platform, I'd be very happy to take them in the Q&A portion of the call.

Thanks Scott. Another example of progress for both our platform and its clinical candidates occurred shortly after the end of the quarter. We had an active AACR where five presentations showcased progress for CRLX101 and CRLX301, including pre-clinical data that open up to new frontiers for 101, that is combinations with DNA damage repair agents and combinations with IDO inhibitors. I will mention the AACR presentations as I update you on both 101 and 301.

Now let's turn to CRLX101. Last quarter I outlined the four frontiers of our 101 clinical development program with each frontier representing a unique drug combination opportunity. Three of the four frontiers were highlighted at AACR. The first frontier for 101 is combining it with anti-angiogenic drugs. Here we are combining 101 with Avastin to treat RCC and ovarian cancer.

With respect to RCC we have an important update to our guidance for when to expect a readout of our blinded study in third- and fourth-line RCC. You will recall that the readout is event driven. We plan to unblind the study when we see a total of 70 events.

Events are either patient deaths or disease progression. Of course, our ability to predict the rate of events is limited. Previously we had estimated that we would have seen 70 events in Q2. However, the rate of reported events appears to have slowed down recently, causing our third-party CRO to update its forecast last week. We now expect to unblind the study in Q3.

I must remind you that our study is blinded, so we cannot draw conclusions at this time about the reason for the rate of events in this trial. If the results of this study are compelling we now expect to launch a Phase 3 trial in the first half of 2017. To place 101 in the commercial context, let's review the important changes in the RCC treatment paradigm.

Nivolumab was approved in November in second line, but it appears to be moving into first-line. Cabozantinib was approved last week in second line and we expect approval soon for Lenvatinib also in second line. All three approvals are good news for people living with kidney cancer and they are good news for Cerulean, because they will help more patients get to third and fourth line making this a growing market opportunity.

We also are making progress in the first frontier in ovarian cancer. In a late breaking in AACR, MGH announced data showing that 56% of women with platinum-resistant ovarian cancer who were treated with 101 plus Avastin did not experience progression of disease by six months of therapy, which is also known as PFS-6, while 27% of women treated with 101 monotherapy achieved PFS-6. These data show 101's synergy and combinability with Avastin, the same combination being tested in the RCC trial.

The second frontier for 101 is combining it with chemo therapies. Here we're combining 101 with weekly Paclitaxel to treat relapsed platinum-resistant ovarian cancer patients. We recently declared the MTD and recommended Phase 2 dose for this combination at 15 mgs per metered squared, which is the same 101 dose we use as monotherapy and in combination with Avastin. Very importantly, five of the nine patients treated in the dose escalation portion of the study achieved a rhesus response.

Notably, one patient experienced complete disappearance of tumor by imaging scans. Although it's important to note, that the patient still had elevated CA-125 levels so she is not considered a complete responder according to the GOG ovarian response criteria. Carolyn Kranzler from MGH serves as the GOG study chair for this trial and she will present these results in an oral presentation at the gynecologic-oncology conference on May 19.

Given these outstanding results we're amending the protocol to add more patients to this study. We will compare this study to the Avastin combo study and order to determine which combination we would take into a pivotal study in platinum-resistant ovarian cancer. The third frontier for 101 is combining it with modulators of the DNA damage response including PARP inhibitors. Here we're combining 101 with LYNPARZA, the only approved PARP inhibitor.

Again AACR showcased our progress as AstraZeneca presented pre-clinical data for this combination. The AZ studies explored the unique narrow sparing features of 101 and how it's activity could be potentiated in combinations with each of LYNPARZA and AZD-1775, which is AstraZeneca's Wee1 inhibitor. AZ's data were impressive and they indicate that 101 may be combined with DNA damage response agents at active doses.

We expect the first patient to be dosed with CRLX101 plus LYNPARZA at the NCI imminently. The newest frontier for 101 is combining it with immuno-oncology products. Here we demonstrated a significant combination benefit of 101 with three IDO inhibitors in syngeneic tumor models; 101 kills tumor cells.

Dying tumor cells can up-regulate IDO which prevents the immune system from recognizing and attacking the tumor. Combining 101 with an IDO inhibitor makes sense because 101 directly kills tumor cells and an IDO inhibitor prevents immune suppression that could result from increased IDO expression. We presented data from these three combinations at AACR. These data suggest that 101 could be an excellent partner for IDO inhibitors and other immuno-therapies.

So we plan to explore this frontier by studying the immune-specific effects of 101 and the mechanistic basis for the combination response. We will use this information to guide our 101 immuno-oncology clinical strategy.

Now let's focus on CRLX301. On our last call, Adrian walked you through the Phase 1 data that leads us to believe that 301 could be better tolerated than Docetaxel at the equivalent dose. We expect to advance 301 into the Phase 2A portion of this study this month, where Adrian will look for signals of activity in taxane-naive cancers including bladder cancer.

We're running this arm of the study in parallel with a weekly dosing arm where we will explore whether 301 is tolerable when administered on a weekly basis. We are interested in the results of the weekly dosing arm because some taxanes appear to be more active when administered on a weekly basis. If we can declare a recommended Phase 2 dose for the weekly dosing schedule then we will move that schedule into Phase 2 as well.

When we complete this trial we will have thoroughly explored both schedules and chosen our preferred schedule for a pivotal study. Before we turn the call over to Greg for a financial update and milestone recap, I'll ask Adrian to give you a few highlights of the 301 data recently presented at both the TAT and AACR conferences.

Thank you, Chris. At TAT we presented clinical data for the once-every-three-weeks dosing schedule that allow us to declare the MTV at 75 mgs per meter square. 301 appears to be generally well tolerated and show hints of anti-tumor activity in highly refractory patients.

At AACR we presented the [tail-pharmacot] kinetic data. 301 showed a higher retention of drug and plasma slower clearance and control slow release of Docetaxel payload from the NDC. At the equivalent dose of 75 mgs per meter square, we observed that 301 stays intact in circulation for an extended period of time, resulting approximately 100 times greater plasma exposure of the intact NDC relative to published data for Docetaxel.

These [fake PK] results appear to be better than commercial Docetaxel, leading to much lower distribution from the plasma to normal tissues. These different [shaded PK] profile may allow for improved anti-tumor activity and tolerability of 301. Finally, the [see mask of release] Docetaxel and plasma, after 301 administration, was 21 for lower than that for commercial Docetaxel. Which may result in lower toxicity with 301. With early data like this we look forward to seeing how the Phase 2 study matures and presenting more data at (inaudible).

Now I'll turn the call over to Gregg.

Thank you, Adrian. I will briefly highlight our financial results for the first quarter of 2016 which are included in the Form 10-Q that was filed after market closed today. For the first quarter we had a net loss of $13.5 million compared to a net loss of $8.4 million for the first quarter of 2015. The increase in net loss for the period was due principally to expenses associated with our clinical development programs and related to CMC.

We ended the first quarter with cash and cash equivalents of approximately $60.5 million. We believe we will have the cash necessary to fund operations into Q2, 2017. We expect to achieve a number of milestones within that period.

In the first half of 2016 we have already achieved two of our previously stated milestones. We presented 301 clinical data at TAT and AACR and we reported top-line data from the ongoing ovarian trial with the GOG Foundation of 101 plus weekly Paclitaxel. In addition, in the remainder of the first half we expect to achieve three more milestones.

We will present additional 301 data at ASCO, we will dose the first patient in the Phase 1b/2 trial of 101 and LYNPARZA, and we will dose the first patient in the Phase 2a portion of the 301 trial.

Finally, we expect to report the following milestones in the second half of 2016. Top-line data from the randomized Phase 2 trial of 101 plus Avastin and RCC in Q3. Data from the weekly dosing trial of 101 alone and in combination with Avastin and additional interim 101 data from the ovarian and rectal ISPs.

With that let's open up the call for Chris, Adrian, Scott, and me to take your questions. Operator, please prepare the queue.

(Operator Instructions)

Debjit Chattopadhyay, Janney.

Hello, good afternoon, gentlemen. Thanks for taking my questions.

On the ovarian cancer side of things, what's your gating factor in terms of Avastin combo versus the Paclitaxel combo? And where does the once weekly dosing for CRLX101 fit in?

Okay, a couple of questions there.

The first part is, I think you said what's the gating factor? I would argue that both combos have already cleared the gate, meaning that both of them are very interesting to us. But we don't have unlimited resources here. And we would like to pick what we think the most beneficial combination will be for patients. And if we can make that decision based on the data we have from these two single arm studies, we will. That's our plan.

So gating, they've already cleared the gates. Which one we would move into a pivotal study, I can't comment on that now. I think they're both off to very promising starts. And I am more than happy to let Adrian add to that if there's anything you'd like to add.

Thank you, Debjit, for your question. I think it's a very important question.

This is a data-driven exercise. And we have multiple shots on goal. As you heard, we presented at AACR the combination with Avastin. We are going to be presenting in a couple of weeks the data with Paclitaxel, and the Phase 1 is very exciting.

The other shot on goal, I would say, is the data that we will have with CRLX101 and olaparib. That will open another angle in the ovarian cancer world. We can tell you some summaries that we are very excited about ovarian cancer. And one of these three combinations, we will be exploring soon, hopefully at the end of the year. We want to move forward for the people to study ovarian cancer.

So what I meant by gating factor is if I look at the data from the AURELIA study, Avastin plus Paclitaxel, I believe the PFS number out there was about 6.9 months. Where is your comfort level as your current data evolves in terms of PFS that will make it a compelling, pivotal study candidate?

These are great questions, and we really understand the AURELIA study. It's a very important study for the drug that has activity in ovarian cancer. But if you want to go forward thinking about the AURELIA study, it's a study that has some limitations.

Basically, it was not a randomized trial with different [donor] agents. And it was in a very peculiar population, where many patients were excluded. Whether they have prior Avastin first or maybe they have some CAT scan that was suggesting that the patient could have a bowl obstruction or patients who have an anticoagulation. We believe that that patient population was in better shape than the patients that we are treating ourselves.

What we can tell you is that we are very excited about the almost 60% response, including one complete responder in ovarian cancer study. And you will see in a couple of weeks, we are adding more patients to it. And we are, at least for the Avastin and CRLX101 combination, we have at least that PFS in, we believe, a more advanced setting. When patients who have multiple prior therapies as opposed to ovarian; that is AURELIA, there is only two prior therapies. I think AURELIA is important; Avastin is important. But with the data we have, we can beat that benchmark.

Just for clarification, on the Paclitaxel combo, the 56% partial response rate. How many of those patients were at the MTD as opposed to the 12 mg per meter square dose?

It's interesting, we have responses in both. We have three patients at 12 and six patients at 15. And we have activity in both.

And again, this complete responder is something almost unheard of in this heavily (inaudible)patient population. We have discussed with the GOG. They are very excited that we are putting many more patients to be sure that we can maintain this level of response. And we have been talking to different PIs who are thinking about the next steps for this combination.

Just to be clear -- Debjit, I'm sorry. The old lawyer in me jumps up right now. I heard Adrian say complete responder. And I want to be clear that we are specific and don't speak loosely. It is a complete responder by Reese's criteria. It is not a complete responder by the GOG Ovarian Response Guidelines. So I just wanted to clarify that.

And this is another question within an answer, I apologize. You asked about the question about the weekly. And we are actually studying the weekly administration for Paclitaxel and CRLX101. We are in the amendment process.

We believe that the weekly administration of CRLX101 is going to be even more active. Obviously, we need to test that in the clinic. And we want to have results, as Gregg mentioned, in the second half of next year.

How many centers are involved in the GOG study?

I will say it's around eight to nine centers.

Great.

Then moving on to the push-out in the RCC readout. If you look at the historic data, what's the fact there in terms of the long-term responders with, say, Avastin monotherapy or any of the TKI monotherapies?

Basically what we expect in this patient population is around 3.5 months median PFS.

Yes, but right now, since it's an event-driven readout, obviously some patients are doing better than your point estimates. Traditionally what will you expect? What percent of patients traditionally do fairly well with any of these monotherapies?

Again, the median, meaning 50% of patients, will do 3.5. And then you have, you know, patients who do worse and some patients who do better. So I don't know, 50%. So if you have a one standard of error -- we can start speculating, but 50% of patients will have a median PFS of 3.5.

Great. Thanks so much.

Thank you, Debjit.

Joe Pantginis, ROTH Capital Partners.

Good afternoon.

Hello, Joe.

Couple of questions, if you don't mind. First, still sticking with the ovarian program, assuming you go past your, I'd call it, your multi-pronged decision tree with regard to your different combinations. What could the potential regulatory path look like? Because this represents such an unmet medical need.

Obviously, you most likely have the combination arm. I don't necessarily see you being able to do a single-arm study. I'm assuming you would need a Phase 3. And any other color you would be able to add would be great.

Okay. I'm going to start, and I'm going to let Adrian jump in if he thinks there's anything I missed. The first thing I need to do, unfortunately Joe, is say that I don't like to speculate about things that I'm not certain about. So I'm going to try and be responsive to your question without getting into any undue speculation.

Number one is I think it's fair to say that we would go forward with a pivotal study that would be head-to-head with the comparator, as opposed to a single-arm study. I agree, the unmet need is very high there; and single-arm studies are not unprecedented in certain tumor types. But our base case expectation, and therefore I think your base case expectation, should be comparative study.

What we don't yet know is what the comparator would be, and that could largely depend on what our combination will be. The size of the study, I think you should expect that it would be larger than the RCC study that we are running now. But the exact numbers that we have, I don't know them; Adrian doesn't know them. So I don't think we can guess at that. Beyond that, I'm not sure what else we can say at this point.

As you know, the PFS is an acceptable endpoint for full approval in ovarian cancer, particularly in the unmet medical need. And I agree with Chris completely that the most likely scenario will be a randomized trial. Unless we are improving even further the response rate and the durational response that we're seeing with this small Phase 2 trial.

I worked there -- the FDA. So it's always good to talk to my former colleagues and see whether they will be impressed with the high response rate in this [tumor refractive] population with longer duration. Short of that, we are going to go for a Phase 3 trial, the other study. And we are excited about the data -- as excited as it sounds like you are.

You know, that's very fair, thank you.

And if I could just switch gears quickly to the IDO program. I guess my question is two-pronged. First, in your prepared comments when you talked about potentially looking at mechanistic data, just curious to see how you might be able to, or might not be able to, look at the mechanism of action regarding the chemotherapy aspect providing many more tumor antigens presented to the immune system or epitope spread. And is that part of your mechanistic analyses?

And then the second question is, and this goes to the study design. Obviously, there are some open-ended questions in immunotherapy still with regard to what might be better. And I think it's almost on a case-by-case basis regarding having sequential therapy or concurrent therapy because of the role of chemotherapy in at least perceived views in muting the immune system. So thanks a lot.

Thank you, Joe. I think I'm going to let Scott jump in. I'm glad to have his help on answering the question.

I'm going to again sort of -- I hate to do this -- but say that there's a limit to how much we can talk about our plans on the studies that Scott is planning to do to further understand the mechanisms and so forth. So we may not be able to give you quite as much of an answer of you are looking for. But he can certainly talk at a high level about some of the studies he's planning and what he's going to do there.

Go ahead, Scott.

With respect to the mechanism of action, we are doing immune profiling type of studies in multiple models that span the range of sensitivity and PD-L1 levels at the baseline. We're going to be also definitely looking at the relative timing of sequential versus concurrent. We haven't yet presented any of those data, but that's a very important question.

That's great. Fair again. Thank you very much.

Think you, Joe.

John Newman, Canaccord.

Hello. Thanks for taking my question.

The first question I had was do you think that the prior use of PD-1, or the potential prior use of PD-1, over the course of the RCC study has changed at all?

And the second question that I have is regarding the observation that the event rate seems to be slowing down. Has that been something that has been developing over time, or has there been a specific time point where the CRO really noticed that there was a lengthening in terms of the time between events? Thanks.

Sure. So let's take the prior PD-1 question first. If I understood you correctly, you are asking whether there is a change in PD-1 use over time. And the answer to that certainly is yes. We have, I believe, a small number of patients on the current study that had experienced prior PD-1. And in fact the Phase 3 study that we have tentatively designed and discussed with the FDA assumes PD-1 prior exposure.

So that would be a difference between the Phase 2 and the Phase 3. In the Phase 2, we had very, very few patients with PD-1. And in the Phase 3, every single one of them would have prior PD-1 as part of the protocol design. So that's the first question.

The second is about the rate of events slowing down. I'm not sure I know how to answer your question with specificity. I can tell you that up until last week, the CRO was forecasting that we would have our 70 events in the second quarter. We would be very close to the 70 events now.

We are apparently behind that. And so last week they updated us, as they regularly do, and told us that they thought that the 70th event would not occur this quarter and was more likely to occur next quarter. As I said before, there is a limit to how much they can sort of predict how long a patient will stay on a treatment, especially an investigational drug. I understand there's some limitations in their ability to forecast. And I think moving the event out of two or three months is something that we just have to live with when you run studies.

But I don't think I know how to answer your question of is there a particular date and time where it started to change. If there is, I don't know that. But it seems like in the last couple months, things have started to slow down.

Okay. Great. Thank you.

Thank you.

(Operator Instructions)

Michael Schmidt, Leerink Partners.

Hello. This is Varun Kumar calling for Michael Schmidt.

I have a question on CRLX101. For the ongoing trial in ovarian cancer for CRLX101 with weekly Paclitaxel, can you remind us if there was a prior study with CRLX101 and every-three-week Paclitaxel in ovarian cancer. And if so, what kind of response rate was observed?

Thank you for the question. This is the first study that we are doing in combination with Paclitaxel. And as you know, every three weeks Paclitaxel is given as a first-line therapy. These are patients who are relapsed, platinum resistance. So for those patients you (inaudible), we give you more dosing [then in] paclitaxel. There is none; so this is the first study ever with Paclitaxel.

Okay, great.

Continuing with ovarian cancer, you have guided to move either with Avastin combo or Paclitaxel combo after the final data. How much the safety profile will play a role if you get to see a kind of similar response rate? Like is one combo more tolerable over another?

I think it's a very good question, and safety is very important for Cerulean and for patients in oncology. However, as you know, the primary endpoint on all the sample sets, etc., is based on efficacy. Assuming that both are the same efficacy and the same safety, that's going to be unlikely. Because in general you have some differences. We will go with the more efficacious [antiplural] agents.

Actually, I would say that if one has PFS and an objective response rate over the other one that only has PFS, I would take that combination that has both response rate and PFS. While I assume that this has the acceptable safety. By the way, we haven't discussed in detail the safety profile for the combination Paclitaxel. You will see that in the next 10 days, if the safety is great.

Okay, great.

My last question is on 301. Do you think it's going to be all [comma] design? Or will you have selection bias for a few indications? I know you mentioned bladder cancer. But do you have any few indications in mind?

Yes, obviously we have several. One, as we shared with you, that makes a lot of sense. And as you know, bladder cancer is a tumor type where taxels, particularly Docetaxel, is active. And we're going to explore patients who are taxel naive. I can tell you the other one studies can all use for Docetaxel is triple-negative breast cancer. So these are the couple that we can share with you.

And certainly, at least with these two tumor types, we'll be expecting a significant number of responses. And we are expecting that's going to be the case. And then we're going to move forward. We want to continue with the weekly Phase 1 trial. And as soon as we have the recommended Phase 2 dose for the weekly, we're going to test similar indications. And then we're going to have an interesting discussion, which of the two we want to move forward for (inaudible).

Okay great. Thank you for taking my questions.

Thank you.

Jon Eckard, Barclays.

Hello. Good afternoon. Thanks for taking my questions.

Hello, John.

I guess I have two kind of like big-picture, strategic questions. The first one, scenario is that the RCC data comes out and it's clearly positive.

Chris, I think in the past you've talked about exploring, you know, potentially expedited ways of getting this drug approved if that were the case. Do think that's still a possibility, given some of the changes in the landscape? I know they're earlier aligned. But do you think that that is still a possibility if the data was very strongly positive for some sort of an expedited pathway to this drug?

Yes. Thank you for asking the question. It's a very fair question in light of all the changes that have been going on in the RCC paradigm.

But I will remind anyone on the call that when we started this program, we not only thought those changes were possible. We expected them, and we've been predicting them for quite a while. We predicted Nevo; we predicted cabozantinib; we predicted lenvatinib. And so far, we're two for three; and I expect we'll be three for three with lenvatinib.

All of those changes are in first and second line. We intentionally did not go into the middle of that. There are other companies who are developing drugs in second line -- very reasonable things to do. And it's just a very crowded space and highly competitive.

There's really nobody else -- at most you'd say there's one other person in third and fourth line. We will be the only folks who have a data set in third and fourth line that includes patients who have been treated with at least two or in sometimes three cases TKI and NDOR and mTOR. And what I can tell you is that if we see 9.9 months in this study, like we saw in the UPenn study, that would clearly be -- I'm trying to find a word that is even more exciting than exceptional. That would be outstanding data. And we would believe that that data would warrant approval based on a single trial, and we would talk to the FDA about that.

Even if we saw something in the seven-month range, that would be in third and fourth line what cabozantinib saw in second line. So I think that there is some argument that even there, you might want to move forward. But I don't get to decide that.

The FDA gets to decide whether we need this study or an additional study. And our base case plan has always been, and continues to be, that this study will tell us whether this combination is active in late-stage kidney cancer patients, who currently only get about 3.5 months benefit and only about a 4% response rate.

If we can do much better than that, then I feel that we have done something very good for our patients. And we will run a Phase 3, and get it done as fast as we can and get the drug approved in that indication.

Let me add one thing to Chris, and I agree completely.

When we visited the agency last year in October, we asked the same particular question to them. And they said that they're open, assuming that they call it the wild data or the knocks-the-socks-off data.

Still, we believe that if that's the case, we want to go there. And I'm sure that they will be opened because it will be potentially unethical not to approve a drug like that. That is helping patients so much. And repeating a new trial would not be ethical for patients, for the (inaudible) possible patients. Thank you.

Great. And then if I could just ask another question, which is kind of on the flipside. I'm not sure how much you're willing to divulge. If the trial is negative for RCC -- now earlier in the call here, you mentioned how you (inaudible) forward in ovarian. What do you see is the optimal way strategically to monetize or to recognize the maximum value for CRLX101?

Could you still run a trial with combination with paclitaxel or Avastin, while still potentially leaving open partnership opportunities with PARPs, [SIDOs], and so on and so forth? So again just big-picture wise, again under the assumption that the RCC is negative, what's the best way to maximize the value of CRLX101 thereafter?

Okay. Thank you. I'm happy to chat about that.

If the trial were to be negative, that would be a disappointment and a surprise, given what we've seen about this combo in prior studies, both in ovarian and RCC. But anything is possible, especially in oncology. And I think it's fair to discuss what the path forward for CRLX101 is.

In that situation, we would still be sitting on a drug that is clearly active and clearly well-tolerated in multiple combinations. And at least in my view, and I believe in Adrian's view, and I believe in the view of my Board, is a drug that is likely to be approved. It's just a matter of when and what indications and how many indications and which combinations.

So I think it's important to note that this drug is much more than just an RCC drug, or it's much more than just a drug that helps Avastin to do its job better. We talk about our four pillars of the Clinical Development program or the four frontiers. The first is antiangiogenic drugs, of which Avastin is of course one.

I would like to think that the $5 billion or $6 billion a year of antiangiogenic drugs that are being sold every year could provide better outcomes for patients if those drugs were combined with our drug. And we will look to various ways to either work by ourselves or in combination with partners to try and get this drug approved in combination with other antiangiogenic agents.

But again, the RCC trial is in the first frontier. So let's say, in your hypothetical that we were to miss the endpoint in this study for whatever reason. In that case, we would still have combinations with chemo. And obviously, the GOG data that we just announced are extraordinarily promising. And the market opportunity there is vast because there are two different ways to skin that cat.

One is to replace chemos in certain combinations that already exist with a better-tolerated and potentially more active chemo, a better Topo I inhibitor. And the other is to layer a Topo I inhibitor on top of an existing chemo, like we're doing with weekly Paclitaxel. So that thesis would still be intact.

Similarly, we are about to announce -- I think I used the term imminently in the script in my prepared remarks. We're about to announce the first patient in combining our drug with a PARP inhibitor. There are other PARP inhibitors out there, and there are other DNA damage repair agents out there.

Many of those require us to work with other companies because those are not approved drugs. So we have novel/novel combos where we need to collaborate. But I would like to think that they would like to increase the ability to help patients with their drug as much as we would, and we would find ways to collaborate with them over time.

And then last but not least, the newest frontier is combining with immunooncology products. We don't have any clinical data there yet. But we sort of announced our entry into that new frontier at AACR with some fanfare. And I think the preclinical data there are very promising.

So again, we would want to work with companies who have IDO inhibitors or potentially other immunooncology agents, to see if we could get those combos approve together.

I hope that addresses your question.

Absolutely. Generally I just wanted to hear your response to the fact that there's many potential paths forward, even if there was a disappointment in RCC. So thank you very much.

Thank you, John.

Debjit Chattopadhyay, Janney.

I want to compare your underlying technology with everything else that's being done to encapsulate chemo to make it more tolerable and potentially better, including the recent success from our competitor in AML. How should we differentiate your platform technology versus the rest?

Sure. I'm going to invite Scott to chime in a little bit.

But I'm going to start out by saying something that you know because I've talked to you about it many times, which is that we conjugate where other companies entrap. That is very, very important. And that is why our molecules are called NPCs, nanoparticle drug conjugates. And other folks talk about nanotherapeutics or nanomedicines or whatever.

There's a very big advantage from a commercial standpoint with conjugation. That is that we are able to get composition of matter IP, not just dosing patents, like entrapped molecules are. And we believe there are certainly multiple advantages from up a therapeutic standpoint with conjugation. Including the ability to stay intact in the bloodstream; the ability to stay intact in the tumor tissue, while we penetrate deeply; the ability to be taken up inside the cells through macropinocytosis; and very importantly, the ability to have a slow release of the payload over time, which is the only reason that our Topo I inhibitor is also a HIF inhibitor. No other Topo could make that claim.

So I think there are a lot of differences. We don't view other nanoparticles as competitors. That's a term you used. We're excited for them because we want them to deliver medicines to cancer patients as well.

We are happy for Celator; we're happy for other good technologies in the space. We just do something a little different, and we think it's very important.

So with that said, Scott, is there anything else that you would like to jump in on?

Yes, I would echo everything that you said.

I think conjugation is really a major part of the secret sauce. And in addition to all the advantages that Chris mentioned, it also gives us the ability to control PK very, very exquisitely. Because we can be put different linkers in there and then thereby control the rate of release, both in the plasma and also in the tumor as well.

And then the other thing I would add is -- a couple more things. One is that the PK that we've seen clinically is very, very compelling. It is a very robust and reproducible PK that you don't see often with other nanoparticles. Because typically, like liposomes and these larger [polymer] particles, have PK that can vary quite a bit from patient to patient because they are rapidly recognized by the immune system and removed pretty quickly. Whereas RPK has been very, very reproducible from patient to patient, and we've shown that in a 2013 PNAS paper.

And then the other thing I would mention is along the lines of translatability. I think one of the real key strengths of our platform is how well it has translated from animals to humans. And I would specifically point out the recent PNAS paper that we published in which we demonstrated that CRLX101 accumulates in tumors but not in adjacent healthy tissue.

And we've seen that not only in the gastric cancer paper that we just published. But we've also seen it again, which we just presented at AACR, in an ovarian cancer patient where six days after a single dose of CRLX101, we saw that the nanoparticles were diffuse throughout the tumor. In other words, they were not hanging around by the vasculature, which is what most other nanoparticles and liposomes do. And we saw sustained DNA damage six days after a single dose. I think this translatability of our technology is also a very, very important aspect of what we do.

Awesome. Thank you so much.

Thank you, Debjit.

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Chris Guiffre, CEO, for any closing remarks.

Thanks for joining us today. We look forward to reporting on continued progress in August. Have a good night.

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