Lumos Pharma Inc (LUMO) 2017 Q3 法說會逐字稿

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

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

I will now turn the call over to Mr. Jack Henneman, Chief Financial Officer.

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

Earlier this morning, we issued a press release providing updates on our clinical development program for indoximod, NewLink's IDO pathway inhibitor with a distinct mechanism of action, and third quarter financial results.

Dr. Link will review our clinical and scientific priorities for the rest of 2017 and 2018.

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

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 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 press release, we continue to focus on the clinical development of indoximod and believe we have shown significant progress towards our strategy in recent months.

Milestones for the quarter include updated Phase II data presented for patients with advanced melanoma, our collaboration with AstraZeneca, the granting of orphan drug status for indoximod, and the announcement today of the first patients dosed with the novel salt formulation.

Our key priority is to execute on our plan to complete the pivotal trial of indoximod in combination with PD-1 checkpoint blockade for patients with advanced melanoma, and we are progressing toward that goal.

We have formalized our pivotal trial design and have partnered with INC Research, a leading global CRO, to conduct the trial.

As you recall, the salt formulation of indoximod has the potential for improved pharmacokinetic activity, as seen in preclinical studies.

This novel formulation has now entered human clinical trials and will be the indoximod used in all new trials going forward.

We will begin to dose confirmation phase in the pivotal trial with the novel formulation eminently, with the randomized fortune of the trial to begin thereafter.

We continue to work toward the goal of enrolling the Phase III trial by the end of next year.

In addition, during the third quarter, we presented updated data from our Phase II trial for patients with advanced melanoma.

We anticipate reporting the final analysis of this trial in 2018.

Another near-term clinical priority is the final analysis and presentation of data from our single-arm Phase II study of indoximod plus gem/ABRAXANE for patients with metastatic pancreatic cancer.

The end point for this trial is overall survival.

We are waiting for the requisite number of events to trigger the final analysis, and we expect to present this data in the first half of 2018.

This trial is important for us because it informs the design of our Phase II trial of indoximod plus durvalumab in collaboration with AstraZeneca, which Dr. Kennedy will describe in detail in a few minutes.

We expect to initiate this trial in the first half of 2018, and we will provide updates as plans unfold.

An additional significant achievement during this quarter was dosing of the first patients with NLG802, the prodrug of indoximod.

We remain excited about this next-generation compound.

Finally, NewLink will regain exclusive global rights to NLG919 navoximod in December of this year.

NLG919 differs from indoximod in that it directly inhibits the ideal enzyme.

We believe that in the right combination with the proper trial design, NLG919 may have significant, unrecognized value.

We have more to say about our plans in the coming months.

Now let me turn the call over to Dr. Kennedy, who will go into our clinical programs with more detail.

Gene?

Thanks, Chuck.

We are working to commence 2 critical clinical trials: the pivotal trial studying indoximod in combination with PD-1 for patients with advanced melanoma; and the Phase II randomized trial studying indoximod in combination with durvalumab for patients with metastatic pancreatic cancer.

The pivotal trial is a 600-patient, 1-to-1, randomized Phase III study comparing indoximod plus PD-1 checkpoint inhibitor combination therapy to PD-1 checkpoint monotherapy.

In our trial, the study arm patients will receive indoximod plus either pembrolizumab or nivolumab based upon the treating physicians' decision.

Control patients will receive either pembro or nivo plus placebo.

The inclusion of both pembro and nivo in the trial design is intended to reflect current practice patterns and make potential results more applicable to standard-of-care decisions.

Patients will be stratified according to the PD-1 checkpoint selected, prior BRAF treatment, and stage of disease.

The trial is designed with co-primary end points of progression-free survival and overall survival.

Study treatment continues until unacceptable toxicity or disease progression.

We are actively recruiting sites in the U.S., Europe and Australia.

Our AstraZeneca collaboration builds on our Phase II study of indoximod plus gem/ABRAXANE for patients with metastatic pancreatic cancer.

The 200-patient, randomized, placebo-controlled trial is powered to compare a 4-drug combination of indoximod, durvalumab, gemcitabine and nab-paclitaxel to the chemotherapy doublet alone.

The trial also includes an additional arm combining durvalumab and the chemotherapy doublet.

We are pleased with the progress we have made by bringing the new formulation of indoximod into the clinic and executing on our clinical development plan focused on the goal of enrolling the pivotal trial for indoximod during 2018.

The AstraZeneca collaboration for patients with pancreatic cancer furthers our efforts to establish indoximod-based combination therapies as therapies for patients with great unmet need.

The ideal pathway is being increasingly validated as a key target in immuno-oncology by the work of ourselves and others in multiple malignancies.

We look forward to presenting the study results for the ongoing melanoma trial and pancreatic cancer trial.

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 recent financial events, new financials for Q3 and guidance for rest of the year.

In early October, NewLink Genetics raised approximately $55 million after fees in an underwritten offering of 5.75 million shares of stock.

In addition, during Q3, we sold approximately 1.9 million shares under the company's ATM.

With both of these transactions completed, we believe we have a solid balance sheet with sufficient capital to enroll our Phase III trial on advanced melanoma and our collaboration trial for patients with pancreatic cancer as well as trials currently underway.

NewLink Genetics ended the third quarter with cash and cash equivalents totaling $120.7 million compared to $131.5 million for the year ending December 31, 2016.

We expect to end 2017 with approximately $150 million in cash and equivalents.

NewLink Genetics reported a net loss of $20.6 million or $0.69 per diluted share for the third quarter of 2017, compared to a net loss of $15.5 million or $0.54 per diluted share for the third 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 Stifel Healthcare Conference in New York City on November 14, and the Jefferies Healthcare Conference in London on November 16.

Chuck?

Thank you, Jack.

The key takeaways from this call are, first, that the Phase III pivotal trial is our top priority and we continue to work toward our goal of enrolling this trial by the end of 2018.

Second, the AstraZeneca collaboration represents a significant step forward in our effort to expand the clinical program and differentiate indoximod from other IDO pathway inhibitors.

Finally, we believe our investors understand the opportunity for indoximod goes well beyond these indications.

With that, we'll open up for questions.

(Operator Instructions) Your first question comes from the line of Mike Ulz with Baird.

Congrats on all the progress and starting dosing with the salt formulation.

Just curious, you started dosing in the healthy volunteer study and if you can just remind us of your dose selection strategy for the new formulation?

So our dose selection strategy for the new formulation is a 3-pronged approach, as you may recall.

This involves introducing the new formulation into the ongoing AML Phase I program, the healthy volunteer program and the dose confirmation program in melanoma.

And progress is being made on all 3 strategies in parallel.

I think once we have the results from all of these, we can share more with you at that time.

Got it.

And then you mentioned providing final data from the Phase II melanoma study in 2018.

Just wondering if you can maybe narrow that a little bit.

Should we expect a more first half or should we think of it more as a second half event?

Well, we'd really like to present the data at a quality meeting.

And so it's really going to depend upon the availability of the data relative to abstract deadline, but we're certainly interested in getting out that data sooner rather than later.

Your next question comes from Peter Lawson with SunTrust Robinson Humphrey.

Just thinking about the AML update, when could we see that?

Well, I think as we've stated, we have, shall we say, leveraged the ongoing AML study to gain experience with the salt formulation and thereby accelerate the registration -- the pivotal trial of indoximod in advanced melanoma.

By doing that, one of the trade-offs is that our ability to present the next round of data with AML will be somewhat deferred.

We haven't guided to exactly when, but once we complete the dose escalation with the new formulation, we hope to be able to present data at a future academic meeting.

And then just the pancreatic study, I mean, when is the earliest do you think we could really see that data?

On that study, Peter -- and good to hear you this morning.

We were hoping originally to get it into GI ASCO.

So we thought that we were getting pretty close.

There is a certain number of events that have to occur in the trial to trigger the final analysis, and the overall survival is the sort of primary end point of the study.

So we hadn't met that requisite number of events.

We were pretty close.

So I think that we'll be able to get that data together near term.

And then again will be the same thing, trying to find the appropriate, earliest meeting that we can, where we can hit the abstract deadline after that analysis is completed.

Your next question comes from Stephen Willey with Stifel.

I hopped on a little bit late.

So forgive me if I'm asking something that was already mentioned but -- so I guess, I heard you reiterate that you're in '18 enrollment guidance for the Phase III.

And just wondering if that guidance contemplates any potential enrollment pressure as a result of competitor studies.

I guess, maybe specifically the announcement from Bristol now with respect to them looking to initiate a registrational trial by year-end.

Yes, that's a very good question.

I mean, as you know, the immuno-oncology field remains very competitive, and access to patients and competitive pressure is always present.

So we're well aware of what's been announced by competitors.

And the reason that we are designing a trial that has basically the ability to enroll patients in Europe, United States and Australia is we knew that we're going to need a very broad net to be able to be competitive with these enrollment pressures from the company you mentioned and from others.

So it remains a very competitive effort.

And it's sort of job 1 for us to work as hard and as diligently as possible and do the requisite elbow grease to work towards that goal of getting everyone enrolled in 2018.

Okay.

And then just from a trial design perspective, is there anything that you can mention with respect to potentially structuring an interim analysis, whether it be either on PFS or on OS?

I wanted to say one thing for the other answer, which is when you see the movement from BMS and others continue to expand IDO efforts, including the other recent collaboration with AstraZeneca and Incyte, I think it continues to bode well that there is continuing belief that IDO is becoming a more validated target.

And so in some ways, although these things do create competitive pressure, it also continues to drive home the message that IDO and PD-1 blockade could be a really key combination for immuno-oncology.

The current study, as it's currently designed, it does not have an interim analysis contemplated mostly because of the speed of enrollment that's contemplated in the trial.

So if -- the progression-free survival, by the time you're in a position to analyze it, it's likely that the trial -- certainly, our hope that the trial will be completely enrolled by that time before that first interim analysis would occur.

And there is, in the trial, going to be an interim analysis related to overall survival.

But for progression-free survival, which is the sort of the first readout from the trial, a very important readout, there won't be.

Understood.

And then maybe just lastly on the Phase II indoximod pancreatic data, you talked about hoping to find kind of an early appropriate meeting once the event number has been triggered.

Will you also, at that point, be in a position to disclose kind of the majority of the biopsy data that's been collected today out of that -- and I guess it's a biopsy-specific cohort that's been enrolled.

Thank you, Steve.

Yes, we're making a lot of progress on analysis of the biopsy cohorts and not just for this trial but also making progress now on the melanoma biopsy cohort expansion group.

So my hope would be that a significant portion of the data will be available and presented at the same time.

Your next question comes from Ying Huang with Bank of America.

This is [Chen] on behalf of Ying.

So basically 2 -- and by December, you will have your GDC-0901 back -- 0919 in-house so that you have indoximod and also a direct IDO inhibitor.

You previously mentioned that you are thinking about what is the right combination or what is the proper design.

I'm just wondering whether you can elaborate more on that in terms of your future thought about these.

And secondly, just wondering whether you will stratify your pivotal trial for melanoma on the PD-1 status.

Will you have any specific analysis related to the PD-1 status?

So let me start with your question about 919.

Under our contract with Genentech, Roche, there's sort of a set procedure that originally will get the drug back to us by year-end.

And then there's additional tech transference, some other things that will go on for a number of months after that.

There has been a lot of investment, and that project is very well organized.

And we believe that 919, in the right trial design, in the right clinical setting, has a significant potential to unlock value for our shareholders, and we look forward to sort of rolling out more of those plans.

I think that 919, as a specific enzymatic inhibitor, obviously, has a different mechanism of action of indoximod.

So you asked a good question in terms of these 2 different types of IDO pathway inhibitors.

And as you recall, we published data a few years ago in a preclinical model only thus far because of the different mechanism of action that the 2 drugs could be synergistic and potentially benefit each other when used in combination.

So we haven't made final plans about how we're going to approach 919 development, but we are -- we definitely are of the mind that in the right clinical setting with the right clinical design that there may be benefit there.

In malignant melanoma -- and we're in the process of obtaining this data from the majority of the patients that are in our Phase II data set that hopefully will be presented with the final analysis of that Phase II data set.

PD-L1 status will be determined.

Clinically and talking with key opinion leaders and other melanoma experts, PD-L1 is not usually used as a marker to choose whether or not patients get anti-PD-1 blockade therapy.

The main reason is that there are still significantly higher response rates in patients that are PD-L1 negative.

So it's not being used as a gatekeeper for clinical decisions by the majority of clinicians treating melanoma patients.

We do think that it's important data to have, and we intend to obtain that.

But there won't be a registration -- or I'm sorry, a stratification based on PD-L1 status, in part for the practical reason that, that those [outpatients] can take a little while to come home, to come back.

And you also don't want those delaying the enrollment of patients in your trial, making a barrier to entry of getting patients into the trial.

In diseases outside of melanoma, I think the PD-L1 status has a much more important role to play as we've seen it unfold, certainly, in the non-small cell lung cancer arena.

But I think that also is going to evolve and most -- the other tumor types that PD-L1 status may be very important in designing trials that have PD-1 or PD-L1 blockade as part of the trial design considering the level of PD-L1 expression is going to be very important.

And I think that there is sort of a growing consensus around that idea.

Your next question comes from Biren Amin with Jefferies.

I just wanted to ask on the Phase III melanoma trial.

Can you discuss the powering of it in terms of OS, PFS benefit, what you're hoping to see and, I guess, how you're splitting the alpha between the 2 end points?

And I guess, for the control group of KEYTRUDA and OPDIVO, will those patients be pooled into one control arm?

Or are those patients going to be individually evaluated in each arm?

Biren, it's Gene.

We haven't publicly stated the details of how we're splitting the alpha and the power yet.

So I don't think we want to get into it at this moment.

As far as the question of pooling the 2 checkpoint inhibitors, this is actually a topic we discussed with FDA as part of vetting our trial design at our meeting back in July.

And yes, our intention is to treat them as a single-control group and a single-treatment group.

And we have bind on that from those who make regulatory decisions.

So that is going to be our plan.

It's not a 4-arm trial with separate powering.

It's 2 arms, PD-1 checkpoint plus indoximod versus PD-1 checkpoint powered one arm versus the other.

Got it.

And then just maybe an update on the prodrug formulation and where you guys are on that.

Yes.

So we're very happy that the prodrug formulation -- the prodrug -- it's not really a formulation, different -- it's really a different chemical composition of matter.

It's now in human clinical trials.

As you recall, in preclinical models, we were able to achieve a 300% to 500% increase in pharmacokinetics and peak levels using that drug.

So far, that trial is going very well with no unexpected issues.

And hopefully, we can make significant progress in completing that Phase I over the next several months that then we'll be able to comment further.

Got it.

And then maybe a question for Jack.

Your year-end cash guidance implies that $25 million burn for Q4.

Do you anticipate -- the $150 million at year-end implies that, that potentially lasts you 6 quarters.

So I guess my question is, do you anticipate having sufficient resources to finish the Phase III melanoma trial?

Yes.

So the spend -- good question.

The spend in Q4 is higher than we expected to be on average over the next couple of years.

So it's for a bunch of the reasons, mostly to do with setting up the Phase III trial and building the inventory for the trial.

So the guidance we had given really remains that -- right now, if we hit our schedule, we will have cash that gets us through the data readout on the Phase III, and so we feel pretty good about that.

And your next question comes from the line of Stephen Willey with Stifel.

So just another question on the Phase III trial design, I guess kind of specifically with respect to the pooling of the various PD-1 patients.

Is there a cap, an enrollment cap, that you're going to be implementing to make sure that you have equal or some threshold representation of either PD-1 inhibitor?

And I guess, has FDA indicated that for labeling purposes, you would need to have x amount of patient data on either PD-1 in order to secure a claim?

We -- I think the best way to sum up our discussions is that we have no specific numbers, percentages or caps in there.

We had a great discussion with them, and the discussion really came down to the idea of building a trial that represents current care then replicating that with the enrollment and then, at the end, having discussions with them about the label that would represent what we achieved in the trial in the current care.

So there's no 51, 47 or 53.

It reflects what has actually been done out there in the clinic in your trial and then present that to the FDA.

It was a very good discussion.

Okay.

And then just another quick one.

Chuck, you talked about, I guess, the importance of ascertaining PD-L1 status and other nonmelanoma tumor types.

Is -- the planned AstraZeneca study in pancreatic, is that going to be assessing baseline PD-L1 status?

All of the final details of that trial has not been completed between the 2 joint clinical development committees.

So we'll roll out more detail and color on that when that's all completed.

Thank you.

I'm showing no further questions in the queue at this time.

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

We thank you for your interest and look forward to seeing you at our investor conferences through the rest of the year and early 2019.

Ladies and gentlemen, thank you for participating in today's conference.

This does conclude the program, and you all may disconnect.

Everyone, have a great day.