Lumos Pharma Inc (LUMO) 2017 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the NewLink Genetics Second Quarter 2017 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Mr. Jack Henneman, Chief Financial Officer.

Good morning, and thank you for joining Dr. Charles Link, Chairman and Chief Executive Officer and Chief Scientific Officer; Dr. Eugene Kennedy, Vice President, Clinical and Medical Affairs; and me, for the NewLink Genetics Second Quarter 2017 Financial Conference Call.

Earlier this morning, we issued a press release announcing our financial results and provided updates on our clinical development program for indoximod, NewLink's small molecule targeting the IDO pathway with a distinct mechanism of action.

Dr. Link will review our clinical and scientific priorities for the second half of 2017 and early 2018.

Dr. Vahanian, who usually joins us on these calls, is on a temporary medical leave.

Dr. Kennedy will highlight our clinical progress in our indoximod programs, and I will wrap up with the second quarter 2017 financial results.

Certain statements made during this call are forward-looking statements under U.S. federal securities laws.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

Additional information concerning factors that could cause actual results to differ is contained in our periodic reports filed with the SEC.

The forward-looking statements made during this call speak only as of the date hereof and the company undertakes no obligation to update or revise the forward-looking statements.

Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K to be filed later today, which may be accessed from the Investors page of the company's website.

I will now turn the call over to Dr. Link.

Thank you, Jack.

Thank you for joining us today.

As we stated in this morning's press release, we continue to focus the company on indoximod, NewLink Genetics' IDO pathway inhibitor, and are progressing with our plan to initiate a pivotal trial with indoximod in combination with PD-1 checkpoint blockade for patients with advanced melanoma.

Data presented thus far and our work on the molecule's mechanism of action lead us to believe that indoximod is a potent IDO pathway inhibitor with promising activity as a combination therapy for a number of types of cancer.

I would now like to discuss our clinical and scientific priorities for the next -- for the rest of the year and into 2018.

As mentioned previously, our priority is to initiate a large pivotal trial of indoximod in combination with PD-1 checkpoint blockade in advanced melanoma and we are progressing toward that goal.

We have had ongoing discussions with the FDA toward these efforts, and this month, the agency provided positive feedback on trial design in a face-to-face meeting.

As a result of the discussion with the FDA, we feel confident that our plans for a large pivotal trial in advanced melanoma with a goal of full enrollment by the end of 2018 are on track.

Another priority has been to strengthen the intellectual property around indoximod and to continue clinical development in support of our life cycle management strategies.

To that end, we were pleased to receive a notice of allowance from the U.S. Patent and Trade Office earlier this month for a patent covering the novel indoximod salt and prodrug formulation.

When issued, this patent will provide exclusivity until 2036.

I would like to call your attention to Slide 4, which describes various periods of potential exclusivity for indoximod in the melanoma market.

The new patent substantially extends our period of exclusivity for the indoximod franchise compared to our original patent in regulatory exclusivity period in the United States.

We are pursuing further patent protection outside the United States as well.

As you are aware, NewLink Genetics' lead program consists of 2 differentiated product candidates directed towards the IDO pathway: the indoximod salt and NLG802, a prodrug of indoximod.

As we have discussed, the salt formulation is essentially a refinement of the current free-based formulation.

The salt formulation has shown preclinically a 30% to 50% improvement in bioavailability compared to the current formulation and will be used in ongoing studies and in the pivotal melanoma trial.

NLG802, on the other hand, is a new molecule with potentially further improved pharmacokinetics and is being developed under a new IND.

NLG802 is part of the company's life cycle management strategy and we are pleased to have announced yesterday that the first patient has been dosed with NLG802.

Finally, we expect to update clinical data for the Phase II trial of indoximod plus nab-paclitaxel for patients with metastatic pancreatic cancer late this year or early in 2018.

Now let me turn the call over to Dr. Kennedy to review recent highlights.

Gene?

Thanks, Chuck.

I'd like to brief -- I like briefly to review the data presented since our last quarterly conference call.

These data are important because they show indoximod has the potential to amplify the responses of patients when combined with therapies beyond PD-1 checkpoint inhibitors.

These include standard chemotherapy as well as therapeutic cancer vaccines.

At ASCO, Phase II data from a randomized, double-blind, placebo-controlled trial of indoximod in combination with the anticancer vaccine PROVENGE for patients with metastatic castration-resistant prostate cancer showed a remarkable improvement in radiographic progression-free survival of 10.3 months compared to 4.1 months in the placebo arm with a p-value of 0.011.

Later in June, Phase Ib data from a trial of indoximod in combination with standard of care chemotherapy for patients newly diagnosed with AML were presented at the European Hematology Association Annual Congress.

These data showed, as expected, 7 out of 9 patients who completed treatment protocol achieved morphologic complete response or CR.

Importantly, all 7 patients with CR had no evidence of minimal residual disease, which is quite favorable compared to historical data.

Again, these data, although early, are further evidence that indoximod appears to augment multiple standard therapies across a number of cancers.

Now I will discuss the progress we have made, moving the new salt formulation into the clinic, including initiating a pivotal trial in melanoma.

As Chuck noted, we had a face-to-face meeting with the FDA to discuss our plans.

The discussed plans include developing, in parallel, data with the new salt formulation of indoximod and our ongoing Phase Ib trial in AML, data further supporting the appropriate dose in healthy volunteers and data confirming the dose from the dose escalation aspect of our pivotal trial.

This was a collaborative and productive meeting and represents a significant step towards initiating the pivotal melanoma trial.

To sum up, we are extremely encouraged by our data and our progress with indoximod.

Last fall, at our Investor Day, we said that we were developing new formulations with a potential for stronger IP protection and more potency.

We also said that we would wait for the data to mature before settling on a clinical strategy.

With our progress in CMC and the GMP production of the salt form, the first patient already dosed with NLG802, the melanoma data presented at AACR, and finally, the forthcoming initiation of our pivotal trial for patients with advanced melanoma, we continue to execute on our plans just as outlined.

With that, I would now like to turn the call over to Jack Henneman to discuss the financials.

Jack?

Thank you, Gene.

Before we move to the Q&A, I want to provide a quick overview of key financials for Q2 2017 and guidance for the rest of the year.

We continue to remain well capitalized with a strong -- solid balance sheet.

Earlier this week, we substantially restructured the company to focus our resources on the development of indoximod.

We are reducing our headcount by approximately 50% to roughly 70 people and cutting outside spend almost entirely for non-indoximod programs.

NewLink Genetics ended the second quarter with cash and cash equivalents totaling $107.8 million compared to $131.5 million for the year ending December 31, 2016.

We expect to end 2017 with approximately $75 million in cash and equivalent, which excludes any cash that may be raised from financing.

We believe we have the resources to proceed with our business plans including the initiation of the pivotal trial of indoximod.

NewLink Genetics reported a net loss of $16.7 million or $0.50 -- $0.57 per diluted share for the second quarter of 2017 compared to a net loss of $32.4 million or $1.12 per diluted share for the second quarter of 2016.

Please refer to the press release we put out this morning for more detail on financial results.

As we look ahead, NewLink Genetics plans to present at the Baird Healthcare Conference and the Cantor Healthcare Conference in New York in September.

With that, we'll open up for questions.

Operator?

(Operator Instructions) The first question is from Stephen Willey of Stifel.

Congratulations on getting 802 up and running.

Just wondering if there's anything that you can say regarding the FDA feedback that you received on the Phase III trial.

Any details you might be able to share, just in terms of trial size and maybe how big the adaptive portion of the study is going to be as well.

So I would characterize the meeting as very productive, very collegial.

I think that there was a sense that after that meeting, that the plans that we have to initiate the pivotal trial are good, especially those plans related to the way that we're going to do the dose-finding for the new salt formation.

And as we just explained, between the experience with the drugs that we'll gain in the leukemia trial, the experience that we'll gain in the normal patient volunteers, and then the experience in the brief dose escalation portion of the pivotal trial, that, that should all be set.

I note there were a lot of questions around the issue and we think that those questions have been settled.

We're going to provide further expanded details about the trial a little bit later in the fall as everything is cemented in place and the protocol is finalized.

But I think that the size and scope of the trial will be sort of akin to the size and the scope of typical Phase III trials in this setting.

I don't think there'll be anything surprising there about the design.

And can you say at this point whether or not there's any kind of pause required after the adaptive portion, whereby you go back to FDA, essentially show dose equivalency and then move forward into the randomized portion?

No, we were very clear in our discussions.

This is Gene Kennedy answering.

We were very clear in our discussions with FDA and our design does not include a pause.

And we felt we walked out of there with a nice consensus with FDA.

Okay.

And then, just lastly here, just curious what, if anything, you might have learned about the biology and mechanism of indoximod since the last Phase I single-agent dose escalation trial and whether or not that now might allow you to look at some surrogate markers of on-target activity in the Phase I 802 study.

Yes, that's a good question, Steve.

After the reorganization that we just did, the scientific team that's working on mechanism is all working ahead and are still intact.

You ask a very interesting question.

We are looking at potential methodologies to look at potential pharmacodynamic markers that we can measure with indoximod.

We are not ready to move those into the clinic as yet, but there's an intense area of active research there.

We are trying to nail down more formally all the aspects of the mechanism of indoximod.

As you know, it has a multifocal mechanism to block the IDO pathway, both in its effect on dendritic cells and its effect on T cells specifically, independent of the dendritic cell effect, which makes it really a different type of mechanism for sure than epacadostat or the Bristol-Myers drug or GDC-0919, which are all specific enzymatic inhibitors.

We think that there actually may, in fact, be some advantages to that differentiated mechanism and continue to do very active sort of intense research there in our labs and with some of our collaborators.

The next question is from Mike Ulz of Baird.

Just maybe a follow-up to Steve's question in terms of the pivotal melanoma study.

Do you think it is possible for you guys to enter the randomized portion of that study in 2017 or is that more 2018?

So we're going to provide more color and give you a better update in the fall on all of this as the timing of everything else unfolds to try to give more precision, both to the design and give you some idea.

I think that we expect that the -- there's going to be a dose level or 2 or 3 that we'd have to go through in order to begin the randomized portion.

But we're going to give more color as we go.

But the key point is that we do believe the way we're designing things and with the support we're going to get for the trial, that we'll be able to fully enroll the trial in 2018, which is really the key metric that we're going to follow.

Got it.

And then maybe separately just for the Phase II pancreatic indoximod study, it looks like time lines got pushed out a little bit there.

Just curious if there's anything behind that?

And then...

No, it's just -- I think it just depends on how the abstracts are accepted and what the timing of the abstracts are.

Got it.

And then in terms of what you need to see from that study to potentially take that indication forward, is there any particular bar in terms of OS, PFS that you're looking for there?

I think that in that study, the -- that's a study that's combining it with chemotherapy and there is no other checkpoint blockade in combination.

Our view is that the majority of our resources, the vast majority of our resources are focused on the Phase III pivotal trial, its execution and the target enrollment completion in 2018.

And so that's really where we're focused.

Expanding other trials and other indications, the current plan is to do those through partnerships and we -- we're under discussion with a number of different companies.

I don't have anything to report on that front today.

As soon as -- if and when those -- our collaborative discussions are approved, I'll let people know immediately, of course.

But we really want to focus all the resources on the first potential marketable indication, which, of course, would be melanoma, and of course, there's -- it's a very competitive landscape there.

The next question is from Peter Lawson of SunTrust Robinson.

For the pancreatic study, where are you thinking of presenting that data?

We usually don't announce where we're presenting data until we have the abstracts accepted and have that feedback from whatever the scientific meetings are.

Obviously, as you know, there's several different meetings towards the end of this year and there's meetings that are specific to pancreatic cancer earlier in the year next year.

Yes.

Just with the pushback of that data, I was just trying to work out what was going on, whether there was a better venue you were shooting for or whether maybe it was just taking longer than expected to get a read.

Gene, you want to?

Well, Peter, as I'm sure you're aware, it's an overall survival study.

That's the primary endpoint of the study.

And these trials are event driven.

And it's a euphemism but you have to accumulate a certain number of events before the data is ready to submit.

And once we have adequate number of events, we will submit to a respectable meeting, as we always have, in collaboration with our investigators who remain really enthusiastic, at least about the concept.

Got you.

And then, when is the next time we could see the AML data?

It's kind of encouraging and...

Yes, we haven't made a projection of that.

Obviously, there'll be more data coming because we're going to introduce the new salt formulation in that setting clinically first.

That would be the first place we anticipate using it.

So stay tuned.

Okay.

And then just finally, 802, could you remind me, where does that push your IP out to?

Till 2036 would be the period of exclusivity on NLG802 with the newly issued patent that we just announced.

So that's the same for both the prodrug and the salt.

That is correct.

The next question is from Mara Goldstein of Cantor Fitzgerald.

On the pancreatic cancer study, just can you remind us in terms of what data it is that we would be likely to see when you do present that, such that there is the 2 -- the Phase I and the Phase II components of the trial and if, at that time, you would also have biomarker data?

That's a great question.

And sure you recall that the trial has about 100 patients roughly in the Phase II section and then a small number of patients in the dose-escalation Phase I. The responses in the dose-escalation Phase I have been presented.

When we make a final presentation of the trial, when the endpoints met, we expect to present the overall survival data.

We will also present the response data, which is part of the secondary analysis of the trial.

The biomarker data is from a separate cohort of patients, not the 100 patients in the Phase II portion, but a separate cohort, which is still open to enrollment and has a few more patients to go.

We're working on that in parallel.

And obviously, if the data are ready at the same point in time, we'd be happy to share them concurrently.

If they're not, we'll share them sequentially.

The next question is from Biren Amin of Jefferies.

Just maybe on the Phase III melanoma trial.

Is there an interim analysis built into that Phase III design?

And can you just talk about the primary endpoints?

Are you looking at both overall survival and PFS for that study?

And then, I guess, a last question on that trial.

Would you be enrolling patients based on PD-1 status?

So let me take the last question first.

As you know, PD-1 status in melanoma all-comers has not turned out to be used in the clinic to make decisions about whether or not to treat patients with PD-1 blockade or in particular because negative -- PD-1-negative melanoma patients can still respond with a significant frequency.

So that hasn't been used as a marker in melanoma the same way that it's been used as a marker in non-small cell lung cancer or bladder cancer or renal cancer.

So I think that the biomarker part of that is less important in an all-comers study but could give better elucidation of the IDO pathway effects on IDO relative to PD-1 status.

The trial intends to enroll completely in 2018.

There won't be a pause with that type of an enrollment plan for the protocol.

We'll give more details and more color on the specifics of the protocol in the fall.

And so stand by and we'll get that information to you as soon as everything is exact and finalized.

And maybe just follow-up on that.

Is there a PD-1 of choice that you would like to use in this trial?

And I think you had some comments on financing.

Is this something that you would look to finance with a partner?

So I think that on the financing front, all options are open.

But we've designed all of our planning around the fact that we will finance this trial ourselves.

If some type of partner comes into that process, that's a possibility.

But really, all of our plans, all of our budgeting, all of our long-term focus around the indoximod melanoma program currently assumes that we will have the fund to finance that -- all that work ourselves.

And what was the other part of your question, Biren?

Is there a PD-1 that you'd like to use or have identified for this trial?

So we'll give more information about that strategy in the fall when we give the update of how the entire trial is designed.

There are no further questions in queue.

I'll turn the call back over to Dr. Link for closing remarks.

NewLink Genetics remains focused on its IDO pathway inhibitor indoximod and we'll provide updates as we can.

We thank you for your interest and look forward to seeing you at investor conferences in September and throughout the fall.

Thank you.

Ladies and gentlemen, this concludes today's conference.

You may now disconnect.

Good day.