Oncternal Therapeutics Inc (ONCT) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the First Quarter 2006 GTx Earnings Conference Call. My name is Maria and I will be your audio coordinator for today.

[OPERATOR INSTRUCTIONS].

At this time I would now turn the presentation over to Mr. McDavid Stilwell, Manager of Corporate Communications. Please proceed, sir.

Thank you and good morning. On behalf of GTx I would like to welcome you to our first quarter 2006 conference call. We released our results our earlier this morning through the Newswire. If you do not have a copy of the release and want one you will find it on our website at gtxinc.com. We will have a replay of this call available on our website until May 11th, 2006.

With me today are Dr. Mitchell Steiner, Vice Chairman and Chief Executive Officer, Marc Hanover, President and Chief Operating Officer, and Mark Mosteller, Chief Financial Officer. Following this introduction Dr. Steiner will highlight first quarter clinical and corporate development. Next, Mr. Hanover will briefly detail our financial performance for the quarter. Dr. Steiner will then make a few closing remarks. We'll then open the call for questions.

Before we begin I'll remind you that information discussed on this call may include forward-looking statements and such statements are subject to the risks and uncertainties we discuss in detail in our reports filed with the Securities and Exchange Commission including in annual report on Form 10-K filed March 2nd, 2006.

We expressly disclaim any obligation to release publicly any updates to forward-looking statements made during this call. Now I'll turn the call over to Dr. Steiner.

Thank you, McDavid. I am pleased to report that in the first quarter GTx continued to make steady progress in the development of its drug candidates and toward our goal of commercializing these assets. With respect to the pivotal Phase III clinical trial with ACAPODENE 20 milligrams for the prevention of prostate cancer and men with high grade PIN at this time we are 30 patients away from attaining our enrollment goal of 1,260 men. We expect to announce within the next few days that we have attained our goal. We are proud of this achievement.

What this means, that we've been able to recruit this large clinical trial in about 15 months. We have been enrolling patients at about 150 sites in the United States, Canada, Argentina, and Mexico. This trial is being conducted under an SPA with the FDA and GTx is on track to perform an interim efficacy analysis in the fourth quarter of 2007 to the first quarter of 2008. If the efficacy endpoint is statistically achieved we will plan to file a New Drug Application with the FDA during 2008.

A non-invasive diagnostic test for high grade PIN would be an important advancement which has the potential to identify high grade PIN in the estimated 14 million men who unknowingly harbor the condition and have no warning signs. Currently high grade PIN may only be discovered through prostate needle biopsy usually after a patient has presented with an abnormal PSA or digital rectal exam. A non-invasive diagnostic test would allow for easy and early detection and monitoring of this high-risk condition.

We are pleased to be able to report progress in the development of a non-invasive diagnostic test for high grade PIN. MacroArray Technologies is a private diagnostic company in Philadelphia with whom GTx has a research collaboration, presented a poster at the annual meeting of The American Association of Cancer Research about its discovery of the ABCA5 protein. The ABC-A5 protein is over-expressed in high grade PIN allowing high grade PIN cells to be identified selectively in the urine. MacroArray Technologies is developing an ELISA test one of the next steps towards commercialization.

Additionally early this year we signed an exploratory research collaboration with Gen-Probe Inc. Gen-Probe plans to evaluate whether its research stage, PSA3 assay may be able to detect high grade PIN in urine samples. GTx also has research collaborations with a diagnostic company Hybritech, diaDexus, and Tessera.

With respect to the pivotal Phase III trial evaluating ACAPODENE 80 milligrams for the treatment of multiple serious side affects of androgen deprivation therapy, we announced last week our decision to initiate a Phase IIIb extension trial. Patients rolling off the current pivotal Phase III ADT trial will be available for this extension study for an additional year and will be able to continue treatment with either the ACAPODENE 80 milligram dose or placebo whatever they were on originally in the Phase III.

This new trial will not delay the final analysis for our ongoing pivotal Phase III trial. It, however, does provide GTx with an opportunity to continue to monitor these patients in an blinded fashion in order to collect additional safety and factor information. If needed these data may provide additional support for the New Drug Application.

In January of this year an independent drug safety monitoring board conducted a protocol review of the safety data for more than 2,000 patients enrolled in our two pivotal Phase III clinical trials of ACAPODENE, and recommended that GTx continue the trials as planned.

With respect to ostarine our lead SARM the proof of concept placebo-controlled Phase II clinical trial is set to begin mid-May. The study, which is being conducted in Europe, will evaluate efficacy and safety at different doses in 60 elderly men and 60 post-menopausal women. Endpoints of the trial include measurements of bone, fat, muscle mass, and function, and performance. We are excited about ostarine's potential to distinguish itself from the existing drugs to treat bone or muscle loss.

In preclinical studies ostarine promoted bone in two ways, by preventing bone loss it was anti-restorative. By stimulating new bone growth it was anabolic. Ostarine also demonstrated anabolic activity by building muscle mass and strength. If these positive effects continue to be confirmed in human clinical trials this will place ostarine, as a selective oral agent that both promotes bone and builds muscle, in a unique commercial position. Fractures occur in frail elderly patients not only because of bone loss, osteoporosis, but also because muscle mass has diminished. Muscle mass helps prevent fractures in two ways.

It provides additional support for bone when a fall occurs, and it helps maintain balance and gate so that a fall doesn't occur. We believe that ostarine may distinguish itself as a drug able to treat these underlying causes of fractures. The purpose of this trial is to provide more extensive proof of concept data to give GTx the information needed to choose the best development path for ostarine. Our initial strategy is to develop ostarine ourselves for acute indications which could include muscle wasting associated with disease stage such as an end-stage renal disease or cancer and muscle wasting associated with trauma such as severe burn/wounds while we intend to part of the larger indications such as frailty and osteoporosis.

We expect to report data from our Phase II trial in the second half of this year and will then select an indication or multiple indications for a pivotal Phase IIb or Phase III trial. And now I'd like to turn the call over to Marc for an overview of our financial results of the first quarter. Marc?

Good morning, the details of our financial results for the first quarter of 2006 are included in this morning's press release and are available on our website. I will therefore touch on the highlights. At March 31, 2006 the company had cash and cash equivalents of $65.3 million with no debt and no warrants.

The net loss for the first quarter was $9.9 million or $0.32 per share. Revenues for the quarter were $1.2 million including $876,000 and net product sales of FARESTON with collaboration income from Ortho Biotech on andarine providing the balance.

As for our 2006 guidance we still expect a net loss for the full year of between 37 million and $47 million. Based on current spending projections we anticipate our cash will last to the first half of 2007. We are looking at multiple ways to extend our cash run rate beyond our three primary data points. One results from our ABT trial in the second half of 2007.

Two, our interim efficacy analysis of our PIN trial in the fourth quarter of 2007 through the first quarter of 2008. And three, in the second half of 2006 we will report results from our proof of concept Phase II ostarine trial and depending on the indication we select we could have additional data from a Phase IIb or Phase III ostarine clinical trial within the same timeframe as our ACAPODENE trials.

We are pursuing multiple partnerships for rest of world rights to ACAPODENE and it is our goal to be able to announce a partnership deal by the middle of this year. In parallel we are considering a variety of strategy options for ostarine and our SARM program. I will now turn the call back to Mitch.

Thanks, Marc. I would now like to share with you our upcoming anticipated milestones. GTx will have two presentations at the annual meeting of The American Society of Clinical Oncology (ASCO) in early June. Dr. Matthew Smith an Associate Professor at The Harvard Medical School, and an expert on osteoporosis and other side affects of ABT will give an oral presentation on GTx's interim analysis of bone mineral density for the first 200 men to complete one year of treatment in our ABT trial. GTx has already reported top-line results of this positive interim analysis in December 2005.

Also at that meeting Dr. Mark Stearns founder and chief -- and Scientific -- excuse me, Chief Scientific Officer of MacroArray Technologies will present additional detail regarding the development of their non-invasive diagnostic test for high grade PIN.

In the second half of this year it's a big year for ostarine. GTx will report data for the proof of concept Phase II study of ostarine in elderly men and in post-menopausal women. Operator, we are now ready to take questions.

[OPERATOR INSTRUCTIONS].

Your first question comes from the line of Joel Sendek with Lazard Capital Markets. Please proceed.

Hi, thanks. Let's see, a couple of questions. The first is on the PIN trial so just to be clear that's event driven and not temporarily driven? Because I remember you describing it before as 24-month interim so can you just go over what the driver is to read out the data?

Sure that's a very, very good point. First of all the PIN trail under the SPA is not a last patient out trial. Let's start with that. The reason we're focusing on the enrollment is obviously you want to get it done, and with a few days away from getting it done. But the truth of the matter is the trial was already started. The clock has already started and we're shooting for 281 events, and at that point is when we're going to do the interim efficacy analysis.

What we have told people is that we believe that the interim analysis would occur somewhere between 18 and 24 months after the end of enrollment. The truth of the matter is that now that we've reached that point that we can now say that we believe that the interim efficacy analysis will actually be performed. We believe we'll get those 281 events between fourth quarter of '07 and first quarter of '08.

But as you know it's event driven, that can change and with 1,260 patients at this point being the number that we're going to attain and if it's anything like the ADT trial where we went for 1,200 and we ended up with 1,400 patients, you know, when you stop a trial you don't just stop a trial. You've got let everybody that's scheduled and in the pool get into the trial. So it's very likely we could be seeing it at about 1,400 patients in the PIN trial which means you'll get more events. If you get more events then hopefully we'll get closer to the 281.

Okay great. That's very helpful. And then I have a question on ostarine as well with -- just looking at the timeline here with the data are you still planning on meeting with the FDA prior to starting the Phase III or deciding what indications with regard to the Phase III and do you think the Phase III program might kick off early next year?

For ostarine?

Yes.

So where we are with ostarine is that -- the trial starts mid-May. We get the data back second half of the year. We meet with the FDA so our goal is to in a pivotal trial Phase IIb or Phase III the beginning of next year. And depending on the indication, if we do an acute indication by definition that means that you're talking about a 3-month treatment phase then those trials are a lot shorter than, for example, the ADT and the PIN trials that we had gone through over the past and fortunately we haven't seen the light at the end of the tunnel now. But with ostarine being that these are shorter indication -- shorter treatments for these indications we think it will be a much quicker timeline.

Thanks a lot, Mitch.

Your next question comes from the line of Meg Malloy with Goldman Sachs. Please proceed.

Yes, thanks. I have two questions. First, Mitch forgive me, I was kind of interrupted when you started to talk about an additional trial in the ADT setting. Could you elaborate on that and if memory serves you had already elected to follow for a potential survival benefit so I just want to understand what's going on there? And then secondly in terms of your goals around potential partnerships could you at least in general terms describe what you're thinking about?

Yes thank you, Meg. As you know it's no surprise that we've been telling everybody that we wanted to continue to follow the patients after they completed 2 years on the ADT trial so the pivotal Phase III trial mainly because that what do you do after they roll off? Do you put them on compassionate use? Do you put them on open-label trial or there some way to continue to capture data that can be used in a meaningful way when we file our NDA?

So the decision made by GTx was to go ahead and let these patients roll into a Phase IIIb trial so essentially it's an extension trial and what that means is the patients will roll off. Staying in a blinded fashion they would roll off. They need Phase III trial and ADT and if we need the trial, great. If we don't need the trial because the Phase III trial hits its endpoint and everything is fine that's great too.

But we are going to look at fracture data, additional safety data. We continue to look at things like PSA progression, survival, all those things that are kind of secondary endpoints, and they're going to be captured not only in the Phase III ADT trial, but also in the extension trial. So the concept, Meg, is that we would be basically allowing ourselves not to lose an opportunity to get additional information until we unblind the Phase III ADT trial.

Like this is not new though, Mitch, right?

That's correct. It's not new in the sense that, oh my God, GTx just -- something is going on, they've got to start another trial. No, this is taking advantage --.

But you had already indicated plans for an extension.

Absolutely.

Okay I just wanted to make sure I didn't miss anything.

No, not at all. The only thing that we did is officially announce that in that last one, you know, what happened as patients starting rolling off the ABT trial.

I see, okay.

And so once that first patient rolls off and starts the new trial then that's when we made the announcement.

Okay.

The second question which is a general comment on partnership discussions or partnership strategy as you know we have been talking about maintaining the US rights for ACAPODENE mainly because Metaform oncolgists and neurologists is a defined and finite group of physicians that GTx would be able to provide marketing support and sales support.

As far as rest of the world, GTx has been in discussions and it is GTx's intention to license those rights, and it's also GTx's intentions that we will be able to announce -- we would announce the results or let's say definitely we will announce that we have executed one of those agreements, and the goal would be to do that here over the next 6 months. That would be the goal. But as you know these discussions and really -- and going back and forth with the documents can take more time than you think. But GTx has been -- we've been in discussions for a while getting to a point where we can announce here in the next 6 months or so.

That would take care of the rest of the world for ACAPODENE and allowing us then now to ask a different question is what do we do with our ostarine program, and in particular the rest of the SARM program. Well, GTx's strategy there is a little bit more strategic in a sense that it all depends on what happens with ACAPODENE. If we do a deal with ACAPODENE it basically gives us the luxury of waiting until we have the ostarine proof of concept Phase II data, and to decide which indications that we want to go into because one of the things that can happen with a small company is that you -- you don't get your proof of concept data. You don't maximize the value of that asset as you go forward so our goal would be to maximize it. As you know when you take risk out of your molecule in the Phase II program then that is really kind of a nice time to get as much value out of the asset as you can as you move forward with essential partnerships.

So I guess the challenge then -- let me back up -- we are in active discussions with the SARM program today so there is a lot in SARMs mainly because GTx has been able to stay on the cutting edge and we have been able to advance SARMs ahead of all other pharmaceutical companies. Just the fact that we're starting the Phase II shows that we have maintained our lead and with that we want to take advantage of that. So the way we take advantage of that is to make sure that we keep moving towards commercial opportunity i.e. the market and to do that means that you have to start an acute indication and you move forward on that acute indication. In the meantime we look at a broader indication, a much more chronic indication in a Phase IIb study or even an early Phase III study which is really sort of the way we would keep the discussions moving in a positive way for GTx with a large pharmaceutical company.

Great, thanks very much.

[OPERATOR INSTRUCTIONS].

Your next question comes from the line of Leland Gershell with SG Cowen. Please proceed.

Yes good morning, Mitch.

Good day.

Hi, I just wanted to ask one question. Most of them have been answered. I just wanted to know if you have any more visibility on the andarine program for this year?

Yes, a great question. I wish I could give you more visibility on it. As you know we signed the agreement in March 2004, and it has been -- we are part of the joint development committee with Johnson & Johnson so we have been well informed about the progress andarine and where we stand right now is we're watching andarine moving and it's not moving as fast as we'd like it to move. So I wish I could give you more color on it.

I wish we had control. But as you know when you have a joint development committee it's done by committee and it's moving slower than we'd like. So one thing I can tell you is the deal that we did with Johnson & Johnson was with andarine only and back ups for andarine and we've kept the rest for SARM program. And we essentially moved ostarine forward to a point that ostarine leap frogged andarine. And so our focus right now is in the molecule we have the most control and we have complete rights to and that's ostarine.

And as you can tell that's moving into a Phase II mid-May so that's where we're focusing right now.

Fair enough. Thanks very much.

Sure.

Your next question comes from the line of Matt [Jacobson] with [Ledear] Research. Please proceed.

Hi, thanks for taking my questions. First, just quickly on the upcoming ASCO topic Dr. Smith, were there other data points that were looked at, at this interim 200 patient look beside what we saw in top line? Is there anything else just generally that you could tell us to look forward to at this?

Thank you, Matt. The question is we presented the top line data. As you know it was a -- it was a planned interim analysis with the first 200 patients and it was -- as you know the FDA and GTx are very, very careful not to taint the full study by getting too much information that could affect how we move forward. Having said that the interim analysis was limited to the bone mineral density in those three skeletal areas with those 200 patients only.

So from the standpoint of additional information about those patients such as fractures and all the other stuff. We did not unblind those 200 patients to those data. Now having that said that we have done something else, and that is we are looking at the baseline data of the 1,400 patients, and we hope to be able to come back and tell you a little bit more about the characteristics of the patients that are in the trial. That doesn't unblind the trial because of baseline data but it will give you color on are these patients -- have these patients lost enough bone for you to see enough fractures. What is the composition of this group, and as you know what makes a good trial is how well you stick to your inclusion/exclusion criteria to answer the question you're trying to answer. And I think you'll be pleased when you see those results. So that's something to look forward to here in the short term.

Great, thanks for sharing that. Another thing just when I review the hybrid PIN literature it seems like there's a lot of variability in how people have done different studies albeit most of them are pretty small ones in terms of the number of core biopsies they take. It seems like that really tends to impact the data quite a bit. Can you talk about just the implications of the number of core biopsies you take and how that impacted your trial design and in the Phase II and the Phase III?

Yes, I appreciate that question. When we talk about high grade PIN it is so important that you ask the question -- let me actually take a step back. The only way that we can diagnose high grade PIN today is by needle biopsy. The needle biopsies are done with an ultrasound machine and you place the needles to the ultrasound probe and you actually sample the prostate. Doesn't it make sense that the more times you pass the needle into the prostate and take a sample that the more likely you're going to find something if it's there. There are some neurologists that are doing 100-core, okay? So you're not going to miss anything.

But in the old days we were doing, and the old days are not that long ago. This is when we were doing our Phase IIb study, it was a 6-core biopsy so you can see that if you did 6 samples versus 8 versus 10 versus 100 you're going to pick up missed cancers that you may not pick up with a smaller number of biopsies. To say it a different way is the less the number of biopsies that you take at the session the more likely you're going to miss cancer.

So where we are today and how it affects the design of our trials, we never told anybody that we expect ACAPODENE to cure prostate cancer. What we did say is that we believe that if affects PIN and it affects the prostate to prevent prostate cancer. So one of the confounding things, and the reason I brought this up and the reason I appreciate the question is there's this confusion in the literature.

Yes.

If you look at the literature, forget number of cores for a moment, when you look in the literature if somebody has high grade PIN two things need to come into the physician's mind. One, did I do enough biopsy cores that I didn't miss cancer that's nearby. Okay, that's question one. The second question is how do I follow this patient going forward to make sure because they're now at high risk for developing cancer in the future do I biopsy them right away? Do I biopsy them once a year.

All I know is I've got to keep biopsying them, but what is that schedule. So the literature is becoming clearer now in that people are saying that the number of cores that are taken today between 10 and 12 cores will miss cancer in about 2.5% to 5% of patients. So the tolerance, if you will, of missing cancer is about 5%. Okay? So the 'chances' of missing cancer today with the number of cores that are being done today is not like before where people had to run back and re-biopsy these patients. All right, now having said that the question is in our trial, how are we handling this?

Well in our trial we saw in the Phase IIb a 16% miss rate which has been reported in literature by Norberg and others even basically the same number of patients, 500 patients, and is about being the rate that you would expect. In the current trial we are doing a minimum of 10-core biopsy but most of the patients are getting more than that. So that means that the miss rate in the trials should be something like 2.5% to 5% if you follow the literature. GTx did not do that. We built into the trial about a 9 to 11% miss rate so the thought behind that is it's better to add the numbers of patients that you need to get beyond the miss rate than to have a bit miss rate and [inaudible] difference.

Sure.

So that's kind of how we positioned the trial to take advantage of, even if we believe the miss rate is between 2.5% and 5% we're going to give ourselves a lot of cushion to make sure we have enough patients to see the difference that we need to see to get our statistics.

Great, thanks. That was very helpful.

Thank you, Matt.

And at this time there are no more questions in queue. I will now turn the call back over to Dr. Steiner.

Thank you, Operator. We would like to thank you all for your interest in GTx and we look forward to providing you with update on our future progress. Thank you again for joining us on today's call.

Thank you for your participation in today's conference, ladies and gentlemen. All parties may now disconnect. Enjoy your day.