Kura Oncology Inc (KURA) 2015 Q4 法說會逐字稿

Welcome to the Kura Oncology earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Robert Uhl with Westwicke Partners. Sir, you may begin.

Thank you, operator. Good afternoon and welcome to Kura Oncology's fourth-quarter and full-year 2015 financial and operating results conference call. Joining me on the call from Kura Oncology are Dr. Troy Wilson, President and Chief Executive Officer; Heidi Henson, Chief Financial Officer and Dr. Antonio Gualberto, Chief Medical Officer.

Before I turn the call over to Dr. Wilson, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to Kura's filings with the SEC, which are available from the SEC or on the Kura Oncology website for information concerning the risk factors that could affect the Company.

I will now turn the call over to Dr. Troy Wilson, President and CEO of Kura Oncology.

Thank you, Robert. Good afternoon, everyone and thank you for joining our teleconference. Today, I plan on providing you with a corporate update, including a discussion of our development pipeline. Heidi will then walk you through our financial results and after that, Heidi, Antonio and I will be available to take your questions.

As this is our year-end conference call for 2015, I want to take a moment to reflect on our achievements over the past year. Last year was a transformational one for Kura Oncology. We initially financed the Company through a reverse merger and private placement with a group of premier crossover and public investors. With that support, we recruited an outstanding team and Board of Directors and undertook to execute on the promise of advancing our pipeline of drug candidates for the treatment of patients with cancer.

We initiated two Phase 2 studies for our lead program, Tipifarnib, in HRAS mutant solid tumors and peripheral T-cell lymphomas. At the same time, we progressed KO-947, the lead candidate for our ERK program, into IND-enabling studies. Finally, in November of last year, we completed a second financing transaction that strengthened our balance sheet, gave us the resources we need to execute against our near-term goals and enabled us to uplist to NASDAQ. So it was a busy year.

I am proud of all that we have accomplished and looking to the year ahead, 2016 promises to be an equally exciting year. Since our uplisting on NASDAQ, we have been actively engaged in outreach to familiarize investors with the Company. I imagine many of you on the phone know the Company well, so given that, I'm going to give you a very brief update on our development program.

Let me start with Tipifarnib. We inlicensed Tipifarnib from Janssen at the end of 2014 and have worldwide rights in the field of oncology. We were intrigued by Tipifarnib because we saw an opportunity to take a compound with established safety and efficacy data and use a precision medicine-based approach to identify the right patient populations for registration.

Through the efforts of both Janssen, as well as independent investigators, Tipifarnib has been studied in more than 5000 patients, which means we have a good understanding of its safety profile. We see Tipifarnib as a product candidate that was developed ahead of its time before we had many of the tools and technology such as next-generation sequencing and companion diagnostics, which are now a routine part of drug discovery and development.

What we found interesting and our primary motivation for inlicensing Tipifarnib was whether one looked at the Janssen trials or trials conducted by individual investigators we saw responses in different tumor types. In a number of cases, encouraging signs of activity were observed, but never at a sufficient level of activity to support registration.

We saw an opportunity to use those modern tools and technologies, as well as our experience and insight to identify those patients most likely to benefit from treatment with Tipifarnib. We are pursuing three initiatives for the development of Tipifarnib in HRAS mutant solid tumors, peripheral T-cell lymphoma or PTCL and lower risk myelodysplastic syndromes or MDS.

I will turn now to our initiative in HRAS mutant solid tumors. In May 2015, we initiated a Phase 2 clinical trial of Tipifarnib in patients with advanced tumors that carry HRAS mutation. HRAS is an oncogene, a cancer-causing gene, and here we are motivated by our preclinical data, as well as our insights into cancer genetics. The primary objective of our Phase 2 study is to investigate the antitumor activity in terms of objective response rate of Tipifarnib in patients with locally advanced unresectable or metastatic relapsed and/or refractory tumors that carry HRAS mutations.

We are also investigating a number of secondary objectives, including evaluation of progression-free survival, duration of response and safety. In parallel with our Phase 2 clinical trial, we are supporting an investigator-sponsored Phase 2 trial of Tipifarnib in patients with advanced urothelial carcinoma tumors with HRAS mutations. The study is being conducted under the direction of Dr. Se Hoon Park in the division of hematology oncology at the Samsung Medical Center in Seoul, South Korea. The primary endpoint of that study is objective response rate and secondary objectives include evaluation of progression-free survival, duration of response and safety.

We anticipate we will have top-line data from our first Phase 2 trial during the second half of this year. At that time, we should be able to address whether Tipifarnib demonstrates meaningful activity in HRAS mutant solid tumors, the level and duration of antitumor activity and provides clarity on potential paths forward in HRAS mutant solid tumors.

Our second initiative is in the area of PTCL. We were motivated to investigate Tipifarnib in PTCL based on a previous Phase 2 clinical trial conducted by Dr. Thomas Witzig and colleagues at the Mayo Clinic and University of Iowa. In that study, which was published in 2011 in the Journal of Blood, Dr. Witzig and colleagues observed an encouraging level of activity in a group of heavily pretreated patients with PTCL.

PTCL consists of a group of rare and usually aggressive forms of non-Hodgkin's lymphoma developed from mature T cells. Although Dr. Witzig's trial enrolled a relatively small number of patients, we thought that if we could extend those results and perhaps understand at a molecular level why certain patients were responding, we could design a clinical trial to support registration of Tipifarnib in PTCL.

Although several drugs have been approved for PTCL, the patients generally have a poor prognosis with a low response rate and they commonly experience repeated treatment failures. So in our view, there is still a significant need for new and better agents.

In September 2015, we initiated a Phase 2 clinical trial of Tipifarnib in patients with relapsed or refractory PTCL. The primary objective of the study is to evaluate the efficacy of Tipifarnib in terms of objective response rate. The secondary objectives include evaluation of progression-free survival, duration of response and safety. We are also evaluating a number of biomarkers, which may help us to segregate responders and nonresponders. We anticipate having top-line data from the trial in the second half of 2017.

Let me now turn to our third initiative, which is in lower risk MDS. MDS are a group of hematopoietic stem cell malignancies with significant morbidity and mortality. They are characterized by ineffective blood cell production, which leads to low blood cell counts or cytopenias and a risk of progression to acute myeloid leukemia. In addition, there is increasing evidence of an autoimmunity component to lower risk MDS.

Our interest in MDS arose from a previous Phase 2 clinical trial sponsored by Janssen and conducted in patients with intermediate and high risk MDS. The objective response rate for all patients in that study was 32%, 26 out of 82 patients demonstrated a response with 12 complete responders. We conducted additional work internally to identify a series of biomarkers we believe may be predictive of response to Tipifarnib in patients with lower risk MDS.

A number of the potential biomarkers relate to autoimmunity and given the role of autoimmunity in the setting of lower risk MDS, we look forward to evaluating whether those markers could guide patient selection in the setting of any future pivotal trial.

We remain on track to initiate a Phase 2 clinical trial in lower risk MDS in the second quarter of this year and we anticipate having top-line data from that trial in the first half of 2017.

In summary, we anticipate by the middle of this year to have three Kura-sponsored Phase 2 trials underway to evaluate the activity of Tipifarnib in patients with HRAS mutant solid tumors, PTCL and lower risk MDS. We see multiple potential paths forward to registration-enabling studies and we look forward to announcing our top-line data.

In addition to Tipifarnib, we are also engaged in identifying novel drug candidates to treat cancers with significant unmet needs. I will briefly summarize the progress our team has made with our pipeline programs over the past year. The first of these preclinical assets is KO-947, a potent and selective inhibitor of ERK. ERK sits at the bottom of the RAS pathway, one of the most important pathways in human cancer.

Given the importance of this pathway to a number of cancers, including lung, colorectal, head and neck and pancreatic cancers, as well as melanoma, we saw an opportunity to develop a drug candidate that can inhibit ERK. Throughout the last year, we have advanced our ERK program through IND-enabling studies and remain on track to submit an IND for KO-947 in the second quarter of 2016.

KO-947 has shown promising activity in patient derived xenograft models. In addition, we believe its combination of potency, flexible administration by oral or IV routes and demonstrated activity with intermittent dosing provides potential to overcome the limitations of other RAS pathway inhibitors by increasing tumor exposure with acceptable tolerability. We look forward to providing more updates on KO-947 later this year.

Finally, let me mention our menin-MLL inhibitor program. We are excited about the novel mechanistic approach and the therapeutic opportunity this innovative program represents. Our team has made progress in the hard work of drug discovery and we anticipate nominating a development candidate for this program during the second half of 2016.

That covers the update on our development programs. I will now turn the call over to Heidi Henson to cover the financial results for the quarter and full-year 2015.

Thank you, Troy, and good afternoon, everyone. Just to remind everyone, Kura was incorporated in August 2014; therefore, there were limited operations in that year. In March 2015, we completed a private placement of our common stock to new institutional investors and existing investors that resulted in gross proceeds of approximately $60 million, including approximately $7.5 million in bridge notes that converted into common stock at the closing. In conjunction with the private placement, Kura completed a reverse merger. In November 2015, we closed a public offering that raised gross proceeds of approximately $55 million.

Now let me turn to our financial results. Total operating expenses for the fourth quarter of 2015 were $6.8 million compared to $3.9 million for the fourth quarter of 2014. Operating expenses for the full-year 2015 were $23.9 million compared to $3.9 million for the period from August 2014 through December 31, 2014.

Operating expenses for 2015 consisted primarily of expenses related to the expansion of Kura's research and development activities and our transition to a public company. R&D expenses for the fourth quarter of 2015 were $5.1 million compared with $2.6 million for the fourth quarter of 2016. R&D expenses for the full year of 2015 were $17.8 million compared to $2.7 million for the period from August 2014 through December 31, 2014. G&A expenses for the fourth quarter of 2015 were $1.7 million compared to $1.2 million for the fourth quarter of 2014.

For the full-year 2015, G&A expenses were $6.1 million compared to $1.3 million for the period from August 2014 to December 31, 2014. The net loss for the fourth quarter of 2015 was $6.5 million compared to a net loss of $3.6 million for the fourth quarter of 2014. For the full-year 2015, our net loss was $22.6 million compared to a net loss of $3.7 million for the period from August 2014 to December 31, 2014. As of December 31, 2015, we had $85.7 million in cash, cash equivalents and short-term investments and approximately 21.4 million shares of common stock outstanding on a fully diluted basis. We expect that our current cash, cash equivalents and short-term investment securities will be sufficient to fund operations into 2018. With that, I will now turn the call back over to Troy.

Thank you, Heidi. In summary, 2015 was an important year for Kura Oncology. Our teams laid a strong foundation for the future and I'm proud to work with a group of people who are so dedicated and passionate about the drug candidates we are developing for the critical needs of patients. I also want to thank our investors for their support of the Company. With that, operator, we are now ready for questions.

(Operator Instructions). Paul Matteis, Leerink.

Great, thanks very much and thanks for the update. I have a few questions. The first one, Troy, the Phase 1/2 HRAS study was originally supposed to enroll 11 patients, I believe and recently we looked at clinicaltrials.gov and it actually says the N is 36. Did you expand this study and are there any implications that we can draw regarding the degree to which you have seen responses and met certain pre-specified thresholds for recruiting more patients?

Thanks for the question, Paul. I think to clarify on the number that you are seeing on clinicaltrials.gov, the 36 patients consist of two cohorts of 18 patients each and you may recall that the trial is designed as assignment two-stage with 11 patients in the first cohort and then 7 patients in the second cohort. We haven't given any additional updates except to say that we expect to release the top-line data in the second half of the year.

Okay, fair enough. Maybe more qualitatively, Troy, could you just speak to the rate of enrollment that you have observed? I know that we are going off various published incidents numbers for the number of patients out there. Have you been satisfied with the pace at which you have accrued patients in this study?

Yes, in the case of the HRAS study, Paul, we have been pleased with the recruitment. In the case of PTCL, the enrollment has been a little slower than we predicted initially. However, we are opening additional sites and we expect the enrollment to accelerate throughout the year.

It is an attractive market, it is also a competitive market with the patients in academic sites. So we hope and expect that with these additional sites we should pick up enrollment in PTCL. And other than that, I think we have been quite pleased with how the trials are progressing.

Okay, thanks. Maybe just one more quick one. On PTCL specifically, obviously, a really hard to treat tumor type. Are you getting any sense of the degree of pretreatment or the degree of, I guess, for lack of a better word, refractoryness of the patient population that is accruing into that study?

At this point, Paul, I don't think we can give any more detail other than to say that we are progressing along. All the patients are relapsed refractory. That is a condition of enrollment to the trial, but other than that, I don't think there is much we can say yet at this point.

Okay. All good. Thanks very much, Troy.

Thank you, Paul.

Mike King, JMP Securities.

Thanks for taking the question as well. I guess my questions are a bit derivative of the last ones. I was wondering, Troy, if you could possibly comment about screen failure rate in the HRAS solid tumors. Maybe give us some thoughts about how many patients are you admitting to the trial versus those that you screen and is the assay performing as you expected, etc.?

So, Mike, just to remind you, the presence of the HRAS mutation is a criterion for enrollment. The patients come to us with a documented HRAS mutation, but in response to your specific question, it has been pretty standard, nothing exceptional to report.

Are the tumor types of the histology that you are expecting?

We haven't given any sort of specific information, Mike, on the breakdown of the different histologies at this point. All of that, we are planning to release when the data comes out, the top-line data, in the second half of the year.

Okay.

Is there another question, Mike?

No, that is fine. Thank you.

(Operator Instructions). Joel Beatty, Citibank.

Good afternoon, thanks for taking the questions. The first one is related to the HRAS tumor trial. Are there particular subgroups from that trial that could be meaningful in helping to decide to go forward or are we really going to be looking just at the overall response rate there?

Yes, that is a really good question, Joel. We haven't released any data yet from the Phase 2 trial. Depending on the level of activity that we observe in different tumor types, there may be a number of different registrational paths across the different histologies. As you probably appreciate, they can be quite different, so I think we need to look at the level of activity, we need to look at the specific clinical indication and then I think we can give you the guidance that you are looking for.

Sure. And then one other question on KO-947, the ERK program, how do you think about the strategic positioning of that program with other agents in that pathway targeting BRAF and MEK inhibitors?

Thanks for the question. So we are really pleased with KO-947. It is a very potent and selective inhibitor of ERK. It has great drug-like properties and it demonstrates significant antitumor activity in certain genetically-defined tumors, importantly, when we give it either on a daily schedule or on an intermittent schedule. And that activity on the intermittent schedule, coupled with the fact that it has drug-like properties that permit us to give it via an intravenous infusion, are really what motivated us to prioritize the IV formulation for the first-in-man study.

We think that that combination of potency, flexible administration and then the efficacy that we are seeing or the activity that we are seeing on an intermittent schedule give us the potential to overcome the limitations of other RAS kinase pathway inhibitors that you mentioned potentially by driving increased tumor exposure with acceptable tolerability.

We are really working aggressively to try to get the IND submitted with the agency. We are expecting that in the second quarter of the year and then we are looking forward to providing more updates on KO-947 later in the year.

Very good. Thank you.

Thank you. I am showing no further questions at this time. I would like to turn the call back to Dr. Wilson for closing remarks.

Thank you all for participating on the call today. If you have any additional questions, please feel free to contact us and otherwise, have a great afternoon and evening, everyone and thank you for your participation.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a wonderful day.