Kura Oncology Inc (KURA) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Kura Oncology, Inc. second-quarter 2016 earnings conference call. (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.

Thank you, Chanel. Good afternoon and welcome to Kura Oncology's second-quarter 2016 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 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. On today's call we will provide a corporate update, including a discussion of our drug discovery and development pipeline, as well as financial results for the second quarter. After that, Heidi, Antonio, and I will all be available to take your questions.

We will touch on some specific updates on our tipifarnib development efforts later in the call, but before we did so I wanted to take a few minutes to provide some context on two trends that shape our approach to drug discovery and development.

The first is an increased understanding of the molecular basis of cancer. Over the past several decades, scientists have identified hundreds of mutations, amplifications, and translocations in DNA that may contribute to cancer.

Some of these defects occur in the error-correcting machinery of the cell. Others are in the signaling machinery, which leads to the transmission of error signals. Some defect allow cells to become invasive, disrupting more healthy cells and tissues. And, finally, some defects make the cancer cell immortal so that it's resistant both to the body's natural defense mechanisms as well as anticancer therapies.

At Kura Oncology we are working to understand how specific molecular defects drive the activity of cancer cells and how we might use our small molecule drug candidates to address these defects.

The second trend is how we identify these molecular-level defects to prioritize the right therapy for the right patient. We have witnessed widespread migration of multiplex genetic testing from the research lab into the clinic. The promise of genetic testing is that if we can understand the molecular basis of cancer, we can direct patients to a targeted therapy specific for their disease. As a result, in nearly all the major cancer centers oncologists and pathologists are using multiplex genetic testing to make diagnostic and treatment decisions.

At Kura Oncology we are capitalizing on these trends. We have an increased understanding of the complex biology of cancer. We have potent and selective small molecule drug candidates that inhibit specific interactions that drive tumor cells, and the tools and technologies are now available to identify patients who have cancers that we believe are most likely to benefit.

Across our pipeline, our goals are to conduct the best science and to design and execute clinical trials that are disciplined, efficient, and based upon a strong scientific and clinical rationale. We have a particular interest in the mitogen-activated protein kinase, or MAPK, pathway and cancers that may be driven by mutations or other dysregulations in that pathway. Previous studies have shown that disruptions of the MAPK pathway are frequent contributors to cancer. Multiple inhibitors of the kinases RAF and MEK, two of the central nodes of the MAPK pathway, have been approved by FDA and other agencies, which underscores the importance of the MAPK pathway in human cancer.

Despite the successes of RAF and MEK inhibitors, however, there remains a significant unmet need for treating cancers that are driven by dysregulations of MAPK signaling. Our two most advanced programs, tipifarnib, our farnesyltransferase inhibitor, and KO-947, our inhibitor of the extracellular receptor-signaling kinase, or ERK, blocks signaling of the MAPK pathway and are intended to address this unmet need. As you listen to our program updates on tipifarnib and KO-947, the preceding discussion should help to unify and explain the development decisions we're making across our pipeline, both today and in the future.

We continue to be excited by the differentiated pipeline we are assembling at Kura. We look forward to sharing our progress.

I will turn now to provide an update on our development program for tipifarnib. We in-licensed tipifarnib from Janssen at the end of 2014 and we have worldwide rights for all disease indications with the exception of virology. Several of the features of tipifarnib that made it a compelling opportunity included substantial safety database, the fact that it has demonstrated objective responses in patients across multiple indications, and evidence of durable clinical benefit.

With tipifarnib we have a potent and selective small molecule inhibitor of protein farnesylation, a key cell-signaling process implicated in cancer initiation and development. After in-licensing the drug candidate, we sought to re-examine its potential in the context of the trends I mentioned earlier. Namely to look for opportunities to enrich for clinical activity based upon an increased understanding of the molecular basis of cancer and, secondly, to exploit advances in next-generation sequencing, or NGS, and other technologies to identify those patients most likely to benefit.

Put simply, could we take a drug candidate that works and make it work better by identifying the appropriate patient populations?

With that backdrop we are currently pursuing four initiatives for the development of tipifarnib: HRAS mutant solid tumors, peripheral T-cell lymphoma or PTCL, lower risk myelodysplastic syndromes or MDS, and chronic myelomonocytic leukemia or CMML. Among these initiatives, we currently have three Kura-sponsored Phase 2 trials and one investigator-sponsored trial underway; an additional Phase 2 trial planned; and if we obtain positive clinical data, we envision multiple potential paths to registration-enabling studies.

So let me begin with an update on our initiative in HRAS mutant solid tumors. The HRAS protein is involved in regulating cell division in response to growth factor stimulation and other signals.

HRAS is an early player in many signal transduction pathways and it acts as a molecular on/off switch. Once HRAS is turned on, it recruits and activates proteins necessary for propagation of the signal. In certain tumors, mutations in the HRAS gene cause the HRAS protein to be permanently on, resulting in persistent activation of downstream growth and proliferation signals.

We prioritized evaluation of HRAS mutant tumors because we thought that among tumors with mutations in the MAPK pathway, those with mutations in HRAS should be uniquely sensitive to tipifarnib. This is because the HRAS protein is farnesylated and, unlike KRAS and NRAS, it cannot be alternatively modified by another enzyme, geranylgeranyltransferase, and thus HRAS mutant tumors should not be able to escape inhibition of the farnesyltransferase enzyme.

Furthermore, our preclinical data in patient-derived xenograft models indicated that if we inhibited farnesyltransferase in HRAS mutant tumors we should see tumor growth inhibition and, in some cases, tumor regression. We initiated a Phase 2 trial in May 2015 to evaluate the activity of tipifarnib in pages with HRAS mutant solid tumors and today I am very pleased to report we have observed positive preliminary indications of activity.

The primary objective of the 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. Secondary objectives include evaluation of progression-free survival, duration of response, and safety.

This trial is a Simon two-stage design, meaning two objective responses are required among the first 11 evaluable patients to advance to the second stage. In cohort two, which consists of patients with non-hematologic tumors with HRAS mutations other than thyroid cancer, we've met the criteria to advance to the second stage. Cohort one, which consists of patients with thyroid cancers with HRAS mutations, continues to enroll patients.

The most common histologies in cohort two are salivary gland tumors with five patients and head and neck squamous cell carcinomas with three patients. Importantly, among the three patients with head and neck squamous cell carcinoma, we observed two confirmed partial responses and disease stabilization in the third patient. The two PR patients have been on study for more than 12 and five months and responses were seen after six and two cycles of treatment, respectively.

No objective responses have been observed in patients with salivary gland tumors. However, three of five salivary gland cancer patients experienced disease stabilization beyond six months at more than six, nine, and more than 11 months. Although the data set is small with three patients, we believe that the activity we observed is meaningful because of the setting: HPV-negative, relapsed/refractory squamous cell head and neck cancer. These patients have an overall survival of approximately six months and few therapeutic options and new therapies, including immunotherapy, show a response rate in the range of 10% to 25%. We have proceeded into the second stage of cohort two of the trial, as per the study protocol, and will enroll an additional seven patients.

Given the unmet need in head and neck cancers, including related tumors of the salivary gland, as well as the fact that there are no approved treatments that target HRAS mutations specifically, we are encouraged by these early indications of activity and we look forward to continuing to investigate the potential for tipifarnib to provide benefit to patients with HRAS mutant solid tumors.

I will turn now to give a brief update on our other tipifarnib trials. We are also evaluating tipifarnib in multiple hematologic malignancies. Specifically, we currently have ongoing Phase 2 clinical trials in PTCL and lower-risk MDS. In addition, we expect to initiate a Phase 2 clinical trial in CMML later this year.

In each of these indications we have evidence of objective responses from prior Phase 2 trials conducted by Janssen and others. In addition, we have identified potential biomarkers in each disease that we believe may enable us to identify those patients most likely to benefit. We have prioritized these indications for study because we can conduct small, disciplined Phase 2 trials, each with a compelling scientific rationale and strong clinical precedent, enabling multiple shots on goal.

We remain confident that our ongoing Phase 2 trials and our additional planned trial in CMML provide us with multiple potential opportunities to position tipifarnib for a first registration-enabling pivotal study in late 2017 or early 2018. In addition to our efforts to advance tipifarnib, we are also engaged in identifying and advancing novel drug candidates that treat cancers with significant unmet need.

Currently we have two preclinical programs in development. The first is KO-947, a potent and selective inhibitor of ERK. The MAPK pathway is activated in more than 30% of human cancers, including cancers arising from mutations in KRAS, NRAS, and BRAF. Although inhibitors of both BRAF and MEK have been approved for treatment of melanoma, acquired resistance to these inhibitors has been documented both in preclinical and clinical samples due to reactivation of ERK1/2 kinases.

KO-947 has a unique profile compared to published data for other ERK inhibitors that translates into prolonged pathway inhibition in vitro and in vivo. KO-947 demonstrates comparable efficacy in vivo including tumor regressions, whether dosed daily or on intermittent schedules. This attribute may provide an opportunity to maximize the therapeutic window with flexible administration routes and schedules and create a differentiated profile.

We are excited by the preclinical safety and efficacy data supporting the potential clinical utility of KO-947 in MAPK dysregulated tumors and look forward to advancing the program into the clinic. However, we have revised our timelines for IND submission and Phase 1 initiation due to a delay in completion of GMP manufacturing. We are working closely with our contract manufacturing organization to complete the manufacturing activities as IND-enabling studies, including GLP toxicology studies, are otherwise complete. We plan to submit the IND later this year and initiate the Phase 1 clinical trial in the first half of 2017.

Our third program, menin-MLL inhibitors, remains on track with a goal to nominate a development candidate for advancement into IND-enabling studies later this year.

I would like to now turn the call over to Heidi, who will update you on the financial results for the second quarter.

Thank you, Troy, and good afternoon, everyone. Total operating expenses for the second quarter of 2016 were $6.8 million compared to $5.9 million for the second quarter of 2015. The increase in expenses is primarily due to the expansion of our research and development activities and the costs of being a public company.

R&D expenses for the second quarter were $4.9 million compared to $4.4 million for the same period in the prior year. Meanwhile, G&A expenses for the second quarter were $1.9 million compared to $1.5 million a year earlier.

Our net loss for the second quarter of 2016 was $6.7 million versus $5.6 million for the second quarter of 2015. During the second quarter we put in place a $20 million term loan facility, of which $7.5 million was drawn down during the period. As of June 30, 2016, we had $80.1 million in cash, cash equivalents, and short-term investments and approximately 21.4 million shares of common stock outstanding.

We expect that our current cash, cash equivalents, and short-term investments will be sufficient to fund our current operations into 2018.

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

Thanks, Heidi. In summary, we are encouraged by the preliminary data from our Phase 2 trial in HRAS mutant solid tumors. We believe the data provide initial validation of a molecular strategy for the identification of patients who may receive clinical benefit from treatment with tipifarnib.

With several additional trials ongoing, we look forward to further evaluating tipifarnib and its activity among the additional patient populations. For those of you tracking our progress, the important milestones to watch out for as we move through the rest of the year are initiation of the Phase 2 clinical trial for tipifarnib in patients with CMML planned for the second half of 2016, submission of the IND for the ERK inhibitor KO-947 that is anticipated in the second half of 2016, as well as nomination of a development candidate for the menin-MLL program that is also anticipated in the second half of 2016.

With that, operator, we are now ready for questions.

(Operator Instructions) Mike King, JMP Securities.

Good afternoon, guys. Thanks for taking the questions. Troy, I just wondered if you could tell us a little bit more about the patients with head and neck cancer. Would this -- I know they're HRAS positive, but just wondering if -- would this be a similar population for Keytruda, or can you tell us if they had previously had Keytruda? Maybe just a little color in that regard would be helpful.

Sure, Mike. Thanks for the question. I'm going to actually ask Antonio to address your question.

So we are certainly going to let the investigator present the data on the characteristics of the patients on [EMA] upcoming meeting. Probably what is important to tell you is that these are refractory patients that have progressed in other therapies. Patients in which we will not have an expectation to see a response or the responses in that setting will be less than 10%.

We certainly are not able to comment on the present time on the relationship with immunotherapies.

Okay. But the response rates you're citing are those that would be associated with platinum-based chemotherapies or cetuximab and the like; is that correct?

That is correct. Those size standard therapies my understanding is they're not necessarily participants in immuno-oncology studies.

Right, okay. Then if I could switch gears to ERK for a moment, I think you are probably aware that selumetinib, unfortunately, had a negative trial that was announced yesterday. I just wonder how that, if in any way, has caused you to rethink about approaching tumors that have MAP kinase pathway activation.

Sure. It's unfortunate that it's a population of high unmet need, Mike, but two points of differentiation of our ERK inhibitor relative to other ERK inhibitors for which there's published data, as well as MEK inhibitors.

The first is the potency. KO-947 has, we think, among the best potency as you look from in vitro into cells and then ultimately into human whole blood. The second is, as I mentioned, you see this prolonged pathway inhibition on a variety of different dosing schedules. One of the reasons that we chose to move forward with an intravenous form of administration is it may offer us the opportunity to provide greater exposure with acceptable tolerability.

Clearly, this pathway is critically important to a number of tumors, non-small cell lung among them. Our view is you really have to inhibit the pathway as strongly and as hard as you possibly can. And as you know, we have both an IV and an oral formulation. We have prioritized the IV formulation for that reason.

We've also done an extensive campaign in patient-derived xenograft models to try to identify models that are uniquely sensitive to ERK inhibition. We've found some of those models have mutations in members of the MAP kinase pathway, but others don't have mutations but have other dysregulations. And we're going to continue to look very closely at that preclinically. Then those are candidates, ultimately, for expansion cohorts, if we are able to find a dose and schedule that allow us to move forward with 947.

So I think, in sum, it's unfortunate. It's particularly unfortunate for that compound, but I think it reinforces the strategy that we are taking with 947. The preclinical data is very promising and we are working as hard as we can now to move it into the clinic.

Thanks for answering in such a thorough way. If I could just maybe jump back a minute to tipi, I wonder if you can offer your thoughts about the differences in response in head and neck versus salivary and perhaps your thoughts on the importance of stable disease as an indicator of potential clinical benefit. Thank you.

Sure. I will comment and then I will maybe invite Antonio to add his thoughts. I think we are encouraged by the activity that we have seen in both head and neck cancer and salivary gland cancer. These are -- with HRAS mutations. These are both cancers of high unmet need.

We were not terribly surprised that we saw disease stabilization in one setting and regressions in the setting of head and neck. I think we're quite excited by the activity that we are seeing in head and neck, but it's consistent with the hypothesis that this is a driver oncogene and it's consistent with the preclinical data that we've seen.

It tells us this is the first agent we think that has sort of meaningfully inhibited one of the RAS isoforms, so that is -- to us that's something to be quite happy about. We obviously -- we are looking to position tipi for the most efficient pivotal study we can and, given the signal that we are seeing in head and neck cancer and the unmet need, that's what makes us so excited about head and neck.

But, clearly, there's also activity in salivary gland cancers. And I think we have validated that HRAS is an oncogene and tipifarnib is a way of inhibiting that oncogene in such a way that you can provide clinical benefits to patients.

I don't know if -- I will invite Antonio maybe to add his thoughts.

In the case of head and neck the responses are essential. We are obviously now currently working on the question of differentiation. You mentioned before the (inaudible) based therapies. We know that the HRAS mutation and the [AGF] (inaudible) and they are non-overlapping.

The question about PD-1 and immunotherapy is something that we are currently working on. But certainly we are quite enthusiastic to see responses, and very durable responses 11, 12 months in this setting.

The question on salivary gland is actually much simple, so salivary glands have no standard therapy. The patients basically become Phase 1 patients. They have no other treatments; cisplatin-based may have responses in the single digits. So certainly an opportunity for us, in a setting in which survival is measured in months, to have patients that have been one year on a study.

Thanks again for taking the questions, guys.

(Operator Instructions) Joel Beatty, Citi.

The first is for the next set of patients that you'll enroll in the second cohort. Will you be looking to enroll all comers for non-thyroid solid tumors or looking to enroll specific types of cancers where you saw response or some other method of selecting patients?

Good question, Joel. I'll let Antonio answer that question.

Obviously we're quite excited by the (inaudible) responses in head and neck, so we are currently discussing an amendment of the protocol with the investigators and we will solve that fairly quickly.

Okay, great. And then one more follow-up is could you just discuss how the drug has been tolerated to date? If there had been some dosing amendments, if they improved, what you were looking for with that?

Yes, the regimens have been well-tolerated. There are no changes with the profile that we have described previously.

Great, thank you.

Thank you, I'm showing no further questions at this time. I would now like to turn the call over to Mr. Troy Wilson for closing remarks.

Thank you again for participating in the call today. If you have any questions, please feel free to follow up with me or Heidi and otherwise we wish all of you a great evening. Thanks again for dialing in.

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