Oncternal Therapeutics Inc (ONCT) 2011 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the second quarter 2011 GTx Incorporated earnings conference call. My name is Alicia and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session.

(Operator Instructions)

This conference call is being recorded for replay purposes. I would now like to turn the call over to your host for today, Dr. Mitchell Steiner. Please proceed, sir.

Thank you, and welcome to GTx's second quarter 2011 financial results conference call. I will be making forward-looking comments during today's call, and I direct you to the prospectus supplement we filed June 23, with the SEC, where we discuss in detail the risks and uncertainties that affect our business. This morning, I will update you on the progress of GTx's clinical development programs for Ostarine and Capesaris. We'll begin with Ostarine, which is a first in class selective androgen receptor modulator, or SARM. In June, we announced an agreement with the FDA on the pivotal Phase III clinical trial plans to evaluate Ostarine for the prevention and treatment of muscle wasting in patients who have advanced non-small cell lung cancer. Ostarine is a cancer care product being developed to work along with first line chemotherapy to prevent and treat cancer-related symptoms of muscle wasting and physical function decline in patients who have non-small cell lung cancer.

The two Phase III clinical trials are called power 1 and power 2. These studies have the same clinical trial design except for the type of first line chemotherapy. Both trials will evaluate Ostarine 3 mg compared to placebo in patients with stage 3 or 4 non-small cell lung cancer at the time they start first line chemotherapy. In the power 1 trial, the chemotherapy will consist of a doublet of a platinum agent and taxane, whereas in the power 2 trial, the chemotherapy will consist of a doublet of platinum agent and a non-taxane. Each study will enroll 300 patients internationally. The clinical trials will assess co-primary end points of lean body mass and stair climb power at 12 weeks in patients receiving first line chemotherapy in either Ostarine or placebo. For demonstration of clinical benefit, more patients receiving Ostarine should have no change or an increase in lean body mass from baseline. For stair climb power, more patients receiving Ostarine should have at least a 10% improvement in stair climb power from baseline.

The alpha for each end point is 0.05, and the power for each trial will be 93%. Patients will continue on the study for 5 months to assess durability of these clinical benefit responses as a secondary end point. Overall survival is another key secondary end point. Survival data will be collected and pooled from both the power 1 and power 2 studies for a descriptive analysis. As a result of FDA's input, the 5 month duration of these 2 clinical trials is shorter than we originally planned. GTx is now able to run both studies concurrently, potentially reducing the clinical development time lines by two years, and as we have already begun initiating clinical trial sites, we expect to start enrollment for both power 1 and power 2 clinical trials this month, and to complete enrollment for both studies in approximately 12 months. The plan is to have top line results from these studies in the first quarter of 2013.

We're also making good progress with GTx 758 or Capesaris. Capesaris is an oral selective estrogen receptor alpha agonist that is initially being developed as a first line hormonal therapy for advanced prostate cancer. Currently available first line hormonal therapy agents are designed to induce and maintain medical castration, and include LHRH agonists such as Lupron and Zoladex, and LHRH antagonists such as Degarelix. Castration causes low levels of testosterone, and because estrogen is made from testosterone in men, there are also low levels of estrogen. The estrogen efficiency side effects in men on ADT have been well established in recent years, and include symptomatic side effects such as hot flashes and loss of libido, and serious side effects such as osteoporosis and increased risk of fractures, as well as adverse lipid and fatty body composition changes that can lead to metabolic syndrome, diabetes, and a higher risk of cardiovascular disease, and mortality. Capesaris has the potential to treat advanced prostate cancer by achieving and maintaining medical castration, while avoiding estrogen deficiency side effects. The regulatory pathway for first line hormonal therapy is well established.

During our meeting with FDA in February of 2011, FDA confirmed that the primary end point required for approval in a Phase III clinical study would be the ability of Capesaris to maintain castration, which is defined as a serum total testosterone level of less than 50 nanograms per deciliter from day 28 through day 364. The Phase II clinical trials that we are conducting are designed to determine the optimal loading and maintenance doses of Capesaris to achieve and maintain medical castration for our Phase III clinical studies. In June, we initiated the Phase II-B maintenance dose clinical study in the 156 patients who have advanced prostate cancer. The study evaluated the 2,000 milligram and 1,000 milligram doses of Capesaris compared to Lupron, to determine the proportion of patients who achieve and maintain castration by 60 days, as well as to assess the differences in the estrogen deficiency side effects between Capesaris and Lupron.

In addition to the primary end point, we will evaluate the ability of Capesaris to induce the liver to produce sex hormone binding globulin, also known as SHBG, a protein that binds the testosterone, and reduces free testosterone below levels achieved by LHRH agonists and antagonists. Free testosterone is the component of total testosterone that is available to bind to the testosterone receptors on prostate cancer cells. We expect free testosterone levels on patients treated with Capesaris to be significantly lower as compared to patients who are treated with Lupron. Because Capesaris acts as a selective estrogen, we expect to avoid the estrogen deficiency side effects commonly associated with Lupron and other forms of ADT. Key secondary safety end points related to estrogen deficiency which we are measuring include hot flashes, libido, bone turnover markers, bone mineral density, body composition changes, and insulin resistance. We anticipate receiving by year end the Phase II-B maintenance dose clinical trial results, which will include the primary end point -- that is the proportion of patients who achieve medical castration by day 60, as well as other measurements of efficacy including; serum-free testosterone, serum SHBG, serum PSA, and prostate size.

Additionally, we should receive safety end points pertaining to estrogen-related side effects including hot flashes, libido, bone turnover markers and insulin resistance. The study will continue through 12 months, at which time we will get additional safety information, like bone mineral density and body composition changes. Patients who complete this one-year clinical trial will roll into a Phase II-B safety extension study, which we plan to continue through the filing of a new drug application for Capesaris. In addition to the maintenance dose study, we're also planning to initiate this year a phase 2 Capesaris loading dose open label clinical trial in 104 men with advanced prostate cancer to evaluate additional loading doses of Capesaris. These men will be randomized to either 1,500 milligrams twice a day or 3,000 milligrams once a day of Capesaris for 28 days. At the end of 28 days, we plan to switch patients to a daily maintenance dose of either 1,000 milligrams or 2,000 milligrams of Capesaris for an additional 28 days. We are currently anticipating enrolling the loading dose study to have data by year end 2011, and have the primary end point results, which is the proportion of men who achieve castration by day 28. The subjects who complete the loading dose study will also roll into a Phase II safety extension study, which we also plan to continue through the filing of a new drug application for Capesaris.

In summary, the Phase II clinical trials that we're conducting were designed to determine the optimal loading and maintenance doses of Capesaris to achieve and maintain medical castration. Additionally, with the extension studies, we will capture safety information for patients who have been on drug for up to 3 years. Capesaris also has the potential to be effective as a second line hormonal treatment in men with castration resistant prostate cancer who have failed LHRH agonist treatment. Since Capesaris has the ability to increase SHBG, we believe serum-free testosterone levels can be reduced lower than can be achieved by Lupron and other forms of ADT, thus further reducing the testosterone available to promote prostate cancer growth. Medical oncologists and urologists would welcome a second line hormonal treatment for a drug that would be less toxic than chemotherapy or abiraterone with prednisone.

Second line hormonal treatment is the next largest market of men with advanced prostate cancer after first line hormonal therapy. For this reason, we are planning to initiate later this year another Phase II clinical trial to evaluate a daily 1,000 milligram dose of Capesaris in 25 patients on ADT who have castration resistant prostate cancer. The primary end point of the Phase II Capesaris second line hormonal therapy clinical trial will be the proportion of subjects who have a reduction of serum PSA from the baseline. The key secondary end point of the study will be PSA progression, as defined by the prostate cancer working group 2. We will also measure serum-free testosterone and SHBG. We expect the serum PSA response data to be available in the first quarter of 2012, however, measuring PSA progression-free survival and the duration of this PSA response will take time. A long time, we hope, for the sake of our patients, so we don't expect to learn that information until late 2012.

If Capesaris is able to achieve our target product profile, Capesaris will have the potential to change the hormonal treatment paradigm for advanced prostate cancer. We will have a busy second half of this year. We will announce the initiation of the power 1 and power 2 Phase III clinical trials, evaluating the Ostarine for the prevention and treatment of muscle wasting of patients who have advanced non-small cell lung cancer. We expect to complete enrollment of the ongoing Phase II-B Capesaris maintenance dose and the planned Phase II Capesaris loading dose clinical trials for first line hormonal therapy, as well as the planned Phase II Capesaris second line hormonal therapy clinical trial. In June of this year, we further strengthened our balance sheet with a follow-on public offering of common stock, raising approximately $49 million net of expenses. Based on our current development plans, this infusion of capital provides GTx with the financial flexibility it needs to see the Capesaris Phase II and the Ostarine Phase III efficacy data points. I will now ask Marc Hanover to discuss our financial results for the quarter. Marc.

Thanks, Mitch. We released our financial results this morning through our quarterly press release, so I will focus only on the highlights. We reported a net loss for the quarter ended June 30, 2011, of $10.7 million, compared with a net loss of $12.9 million for the same period in 2010. Revenue for the second quarter of 2011 consisted of Fareston product sales of $1.6 million, compared to Fareston product sales of $599,000 for the same period in 2010. Revenue for the second quarter 2010 also included collaboration revenue $336,000 from our partner Ipsen. For the 3 months ended June 30, 2011, and 2010, research and development expenses were $7.6 million and $9.5 million, respectively. General and administrative expenses for the second quarter of 2011 were $4.5 million, compared to $4.3 million for the same period in 2010. At June 30, 2011, GTx had cash, cash equivalents, and short-term investments of $91 million. We have no debt and no warrants. I'll now turn the call back to Mitch.

Thank you, Marc. Operator, we're ready for our first question.

(Operator Instructions)

Joel Sendek, Lazard Capital Markets.

Hi. Thanks a lot. I guess I have a question on both of the programs. First of all, on Capesaris, I'm wondering around about the strategy to go after first line or second line. Would there be a lower regulatory hurdle to get the drug on the market in the second line? It seems like most of your thrust is along the first line. Can you talk a little bit about the one market versus the other?

Sure. So the question is, why first line and not second? Let me see if I can lay out what we're thinking. There's no question that Capesaris, being of a class of drugs that have been used in the past, we have some hints that -- not even hints, we know for sure that drugs of this class have been used in both settings, i.e., in first line and in second line.

First line being patients that all you're following is testosterone. They have hormone sensitive disease, and this is the first drug they're going to see. That's 700,000 patients in the US with 100,000 new ones each year. From a regulatory standpoint, it's actually the hurdle from an efficacy standpoint is easier, because really all you have to do is show that you have to lower testosterone less than 50 nanograms per deciliter from day 28 to day 364 and maintain it in that period of time. So, that's pretty good.

That means every single patient then counts in your analysis, as opposed to a second line where -- again, that's a big market, too, because now you're talking about the patients that failed first line. The first thing that happens to them is you get to second line hormonal therapy. This is not second line chemotherapy, this is second line hormonal therapy, which there is nothing available today, or to say it a different way, nothing approved today. So, in second line, what would you have to show there from a regulatory standpoint? I'll be honest with you, I'm not quite sure.

I think that you certainly have to show a PSA response in a Phase II setting, but in Phase III, will the FDA require overall survival? Will they require progression-free survival? I still think that's open, and we need to have those kinds of discussions with the FDA, because the field is becoming crowded in the end. In other words, the chemotherapy being docetaxel, then cabazitaxel, then you add on top of that abiraterone plus prednisone, and those are smaller patient markets, but nonetheless, patients that fail first line and second line hormonal therapy but go on to those therapies. So, there is this big opening in between that we could take advantage of.

And, by running this Phase II study in 25 patients with 1,000 milligrams of Capesaris, which we know from our other Phase I studies that we will increase SHBG between 400% and 500%, then our expectation is fully that we are going to reduce free t, and that's a mechanism by which we are going to get a PSA response. Most of the time, you get your PSA response information, and that's all you need to move into Phase III. So, we are kind of positioning ourselves, from a standpoint of efficacy, to show information in both first line and second line. From a safety standpoint, there's no question that the safety hurdle will be easier for second line than it will be for first line.

So far, Capesaris appears to be a pretty safe drug, but that's why we're testing it in larger numbers of patients, to understand what the safety is. And, if the safety is reasonable, then I think we need to go for first line, because that's a wide open field. If the safety is intermediate, in other words certainly safer than what's out there now, and could fit nicely in second line hormonal therapy, then we need to pursue that as well. But, the strategy would be to get first line first, and then go to second line after that.

Okay. That explains it. Thanks. Just a quick question on Ostarine, do you need to meet both the co-primary end points or just one or the other?

Right. So, for the study, the study has to hit lean body mass and hit the physical function end point. The patient doesn't necessarily have to hit both. With that said, if a patient has an increase in lean body mass, there is a correlation with increase in lean body mass and physical function. So, you would expect those patients to do, quote, even better. The co-primary end point just requires the study to hit both end points.

Okay. My final question just on the -- I noticed you had some changes on your Board of Directors. Can you talk about that?

Yes. I'll be happy to. In fact, I'm going to ask Marc to comment on that since he was part of the decision to make that change. So, Marc?

Hey, Joel. It's relatively simple. The Company has reduced itself in terms of the size of the Company. The Board wanted to lead by example and reduce the size of the Board. So, John Pontius and myself voluntarily offered to step down, and, of course, as it relates to my role, it remains the same as President and Chief Operating Officer.

Okay. Thank you very much.

Thank you, Joel.

Lucy Lu, Citi.

Hi, guys. This is actually (inaudible) on behalf of Lucy. Thank you for taking the question. I was just wondering if you could maybe give more color on what's the rationale behind doing the separate maintenance on the loading studies. And then I have another question on those things.

Sure. The rationale behind that is that the agencies made a very simple statement. You have to show that you can -- your castration rate needs to be 90%, and you have to try to achieve that by day 28, and then maintain that from day 28 to day 364. So, consequently, to do all of those, quote, loading and separate maintenance dose studies in one study would be just too large. And so the other thing that has happened along the way is that when we originally announced our proof of concept Phase II data, it was actually in a solution and not in a tablet.

We -- you know, the good news is we now clearly have a tablet that can castrate. And, if we have a tab -- but the PK is slightly different between the solution and the tablet. In fact, the tablet looks better -- the tablet has a lower Cmax, it has a longer half-life, the trough levels tend to be more stable. So, the tablet actually is a better formulation.

As a result, we've got to make sure we've got the right loading dose and the right maintenance dose. So, what we're trying to achieve is the following. One, what is the dose of Capesaris required to get greater than 90% of the patients castrate by day 28? And, the second thing is, what is a dose of Capesaris that we need -- the lowest effective dose, remember, you always want to get the lowest dose -- what is the lowest effective dose of Capesaris that we need to maintain castration?

If it turns out that the loading dose is higher than the maintenance dose, is there a problem when you go from a high dose to a lower dose in terms of testosterone escapes? Theoretically, it's possible; practically I'm not sure. But, it would be nice have that data before we go into Phase III.

Lastly, you don't want to test your loading dose for 28 days against Lupron, because you want to test your maintenance dose, the dose that the patients are going to be chronically on to test whether or not you're going to have the bone loss, and the hot flashes, and the body composition changes. So really, you're asking 2 different types of studies. So, from the loading dose concept, both studies are going to contribute to the loading dose. So the maintenance dose study is testing 1,000 and 2,000 milligrams within that 28-day to 60-day period. The second study is testing 1,500 milligrams BID and 3,000 milligrams.

Okay, so those are 4 different dose regimens that we're testing in loading. For maintenance, the only 2 that are being tested are 1,000 milligrams and 2,000 milligrams, but you've got it across 2 studies. Then, the Phase II that has the higher dosage, the 3,000 and 1,500 milligrams BID, when you go down to 2,000 and 1,000, what happens to escape? So, you really need both studies to give you the information that you need to properly design your Phase III, so that you have the lowest effective dose to castrate and the lowest effective dose to maintain.

Okay, that actually makes sense. Thank you. Another question is actually related to the Ostarine survival data that was recently presented at ASCO.

Yes.

The data was presented in a way that compares probability of survival in classical group and placebo group in patients with different weight losses at baseline,

Yes.

Then separate and single comparison in treatment arm. So the question is, would it be, actually, statistically correct to compare the same patients with more than 8% loss at baseline between classical placebo and treatment arms? Would it be accurate or not?

You mean in the Phase III?

No, in the Phase II. Let's say if we just look at the Phase II data, and instead of comparing in the placebo group, different weight losses baseline, can we just compare placebo and treatment arm based on the data that was presented?

Right. I guess we can do that. I have to go back to our group find out, and see if we can generate that data for you.

Okay. Got it. Thank you, that's very helpful.

Sure. Thank you.

Eric Schmidt, Cowen and Company.

A question also on the Capesaris and the ongoing Phase IIb trial versus Lupron. I got a little bit confused, Mitch, with your answer to the last question about solution or tablet. Does the ongoing trial, then, include a solution, and that's why you don't need to do any kind of loading dose in that trial?

Ask that last part again? You're saying that --

I guess which formulation, solution or tablet, is being used in the ongoing study?

Got you. We switched to tablets only. So, everything from this point forward, the ongoing Phase IIb -- what I was saying was, when we did the proof of concept last fall and presented a 91% castration rate in healthy males, that was done with a solution. Since that time, we've been doing formulation work, and we have come up with a tablet that achieves the PK required for castration, and we've demonstrated the castrate. But, the Cmax is lower, which is safer for the liver, and the trough is higher, because the absorption takes a little bit longer so your half-life is longer. Therefore, it's a better formulation. That better formulation is what's in the current ongoing Phase IIb maintenance study and the Phase II loading study that we'll be starting.

So, the ongoing Phase IIb study doesn't include any kind of a loading?

It does have a loading because you've got your 1,000 milligram dose and your 2,000 milligram dose, and your Lupron dose, and you're testing the proportion of patients that castrate by 60 days. But, guess what, we can also determine who's castrated by day 28 in that same study. Remember, all we're trying to do is find out what's the proportion of patients that castrate by day 28 that we're going to be using in our Phase III. I will tell you, the 2,000 milligram dose and the 1,000 milligram dose are levels -- or to say it differently, we know the PK is such that it is possible that those doses can achieve the AUC that's required for castration. But, we want to be on the safe side and, again, we want to get the lowest effective dose. But this is a Phase II. Let's see what happens if you push to those a little further.

That's where the second study comes in, because the FDA wants 90% plus to be castrated by day 28. We know from the solution study and we also know from the formulation tablet studies, the higher the dose, the faster they castrate. So we feel pretty good we can achieve that. But then, for maintenance, we want to get the lowest dose possible. When you go from a high dose to low dose, then you worry about escapes. But, if you go from 1,000 and 2,000 to a maintenance dose, we're not going to be worried about escapes, so that's why you really need both studies. I'm sorry if I confused you.

I think I've got it now. Thanks for the clarification. One second question is on compliance in the ongoing Phase II. I recall on your earlier study you thought that some of the healthy volunteers weren't compliant with Capesaris. What are you doing, specifically, to make sure everyone takes their medication in the ongoing trial?

Right. I have, actually, 2 ways to answer -- I have 3 ways to answer that. The first one is that these are older patients. They tend to be more like 70 or 72, on av, because they have advanced prostate cancer. So, they have diaries, they come in an a regular basis, they count their pills. We check the diaries and we count the pills. They have cancer, they're more likely to take it. That's what we're doing actively.

So, they're brought in very often for the first 6 weeks, because you want to make sure at least once a week you're seeing them. After that, it's once a month. Once you get past the first 6 weeks, you going to know pretty well who's taking the medicine and who's not taking the medicine. The second way to answer is, I can tell you now that, the study that started in June, that we have enough patients on the study that I can tell you that compliance does not appear to be a problem.

Then, the third thing I can tell you is that, interestingly, patients on our kind of drug tend to get -- this is theoretical, but it makes sense, that once they get castrate, just like with Lupron, their testes, particularly the latex cells, begin to involute, which means they're just not making testosterone, so the cells that make testosterone start to shrink. So, if you stop a dose, for example, of Capesaris, and there's no estrogen around, which is what Capesaris basically is, selective estrogen, they start to get hot flashes. So, there is a built-in compliance mechanism that will remind the patient that they should be taking their medicine, because they don't want to have the hot flashes. But, I can -- again, these patients are clearly different, and we're being very active about compliance, I do think, by having things in the trial to make sure they're compliant. The good news from my perspective is that cancer patients are appearing that they're very compliant.

Just to follow up, how do you know they are taking their medication early on? Is that just from the diaries and your interviews?

Yes. Just the diaries and pill counts.

Thanks a lot.

Thank you.

David Nierengarten, Wedbush.

Hi, guys. Thanks for taking the question. I just have a couple quick questions here, I think. First of all, I just want to double check. If I'm recalling correctly there is no interim look in the POWER1, 2 studies with Ostarine?

That's correct.

Okay. Then, obviously, we see a lot of clinical trials going on here, which is great. I just wondered if you could give any guidance on your R & D spend going forward, or if you were beginning to -- or thinking about providing that?

I would be happy to. Marc, do you want to comment?

David, just to kind of let you know, we don't give guidance on a line-by-line basis. We haven't even given guidance this year. But, let me just give you some color so it helps you a little bit. If you look at our current numbers right now and our current run rate, the $91 million that we have is going to take us late into 2013. Now, having said that, keep in mind our overall expenses are going to increase as it relates to the increase in our trials and so forth that we're running for Capesaris and for Ostarine. So, there will be a slight increase overall in our numbers on a quarterly basis, pretty much starting in this third quarter and essentially lasting to the middle of next year when we will just have Ostarine running, and then starting of Phase IIIs for our Capesaris, hopefully, later in the year. So, that's kind of the way we look at it and, ultimately, we feel like our $91 million will take us, not into late 2013, but instead middle of 2013.

Which will allow to us see the Phase II Capesaris data for all those 3 trials, plus we'll be able to see the 2 Phase III end points for the POWER1 and POWER2 trials.

Right.

Based on the current enrollment plan.

Great. Then, I just had a little deeper question. We've seen some of these -- the abiraterone and MDV 3100 as kind of a second line hormone treatment, and they work on various aspects of the androgen receptor or other cellular processes. I was curious if you could speak a little bit more to the mechanism behind the SHBG, and how you think about that in terms of a second line hormonal treatment?

Sure.

How it hits -- prevents androgen from hitting the cells?

Yes. Good question. So, just kind of take it from the top, abiraterone plus prednisone is currently approved for post chemotherapy patients, so these are patients after they've been docetaxel. The way that drug works is you take a castrate patient that's on Lupron that's already had chemotherapy, and then you give them abiraterone, which shuts off testosterone within the tumor. But, because the enzyme that it hits is so far upstream, it means that the patient is going to have a difficult time making glucocorticoids in addition to sex hormones, as well as mineralocorticoids, and so you have to give them a lot of prednisone. Or to say it a different way, prednisone replacements is probably the best way of saying it.

The problem with that is that the prednisone itself offers a level of toxicity that you have to factor in when you treat a patient. So, the principle of treating a patient, when you start with first line, move into second line and beyond, is you want to start out with something less toxic, and then move to something more toxic. So, I think abiraterone is a very effective drug, and I think the place for it, where it is now, is a good place.

But, if it wanted to move to first line, and compare itself, for example, to Lupron or to Capesaris first line, that would be difficult to put a patient on a drug like abiraterone with prednisone for 10 years, for example. That would be high toxicity. If Capesaris can come in and not have the bone loss, which is what I'm worried about with prednisone, and can be able to increase SHBG and decrease free t, so that you try to squeeze down the testosterone in the microenvironment as much as possible, that would be great. Then, what would happen after that -- I do think at that point, abiraterone plus prednisone may make more sense before you go to chemotherapy.

So, you start out with the hormonal therapies, and you do Capesaris, and then you move -- if somebody starts Lupron, you have Lupron or you do Capesaris. If they start with Lupron and they fail, then you go to Capesaris second line. Then, when you fail second line, you go to abiraterone plus prednisone. Then, you go to your chemotherapy. That probably makes sense, going from your minimal -- less toxicity to greater toxicity.

The Medivation product is a more difficult one, because I do think there's a role for the Medivation product which binds to the androgen receptor, degrades the androgen receptor in second line -- and the real question is, whether or not you can hit the cancer with Medivation's product and Capesaris at the same time. So, I do think -- part of the challenge physicians are going to have is deciding, not so much what to use when, but more importantly when to use them in combination. That will take some time to sort out. Prostate cancer is an exciting field right now and we're happy to be part of it. In first line we're really it. In second line, we certainly have a product that is -- without the prednisone and the bone loss and all that stuff could be less toxic. Then you move to more toxic therapy. So, I do think the field is getting more crystallized in terms of how to handle the patient.

Great. Thanks for that.

Sure. Thank you.

Howard Liang, Leerink Swann.

Hello, this is Jon Eckard in for Howard. Thank you for taking the question. I wanted to continue on a topic that was brought up earlier around Capesaris. In the Phase II trial in healthy volunteers, was the castration rate for the entire 1,500 milligram cohort ever released or presented at a medical meeting? And also, if you could discuss what happens to a patient's testosterone levels, for example, if they miss 1 dose or 2 doses, and does it recover if they get back onto the drug?

Right. The first question, have we ever released for the whole group? The answer is, we've shown the data of all of the folks for the Phase II solution study, but the study that we did was a PKPD study. So, we were trying to understand how much drug gets delivered, and what is the body's response to that drug that gets delivered, and, in the case of PD, where we were asking the question, reduction in testosterone. We just happened to also look at the castration rate, because that would be important in ongoing development, and we were able to show a dose response in terms of how fast patients became castrated.

We were also able to show what the AUC and the minimum trough levels should be to achieve castration. That was what we tried to get out of that study in healthy males. It was never really developed to say that it was an intent to treat analysis and what percent -- that's what we're doing right now in the Phase IIb and the Phase II. Those studies have been powered for that kind of stuff.

So, the data is out there, but I wouldn't -- when you have healthy young men taking the drug at home, we knew who was taking it and who was not because it had at a period of time they were in-house, so they did reach steady state. We know exactly, when they went home, who stopped taking the medicine and all that stuff; so, the real purpose of this study was, given the PK, what was your PD? The second question you're asking, which comes out of the PKPD work, is what happens if a patient misses 1 or 2 doses? We've done a lot of PK modeling. As I said in the previous discussion, it really -- in the previous question, by Eric Schmidt, related to compliance, it depends when you look.

So, let's just take the example of somebody that you're trying to induce castration, where the testes still have latex cells that have not been atrophied because of long-term castration. Long-term castration means certainly at least 6 weeks, because by that time, your latex cells will involute. We've done PK modeling to show that, at the 2,000 milligram dose, for example, a patient can miss every other day of dosing and still hit the AUC and the minimum trough required for castration. So, if you missed your drug every other day, that's shame on you. But, because of the half-life of the drug, we're able to show that you can maintain.

In terms of what happens after the patient has reached 6 weeks, what we know -- and this comes from the LHRH literature where they do intermittent ADT therapy -- that the testes don't spring back. It does take a period of time. In these 70-plus-year-old men, it takes weeks to months before their T-levels come back up. So, in that setting, with Capesaris, they would know they're not taking the medicine, not because the testosterone levels have come up, but because they develop hot flashes. When they did intermittent therapy, where they were trying to show that they can reduce testosterone and waited for the PSA to come up before they hit them again with Lupron, what they learned very quickly was that the hot flash rate was still about 91% to 93%. And patients really don't like hot flashes. So, we're very fortunate that, with a 91% to 93% rate of hot flashes -- and I'm not talking about severe hot flashes, but hot flashes -- that we have sort of a built-in compliance factor.

That's helpful. So, I'm guessing that, based on what you're saying, the most important part of the ongoing and future trials will most likely be the induction period, when the patient still has active ability to produce testosterone?

Correct.

The compliance in that part will be the most key.

That's correct.

So, with regards to -- you said the future populations that you will analyzing for both the Phase II and Phase III, would these be the intent to treat?

Yes.

They would be.

Yes. So, it's intent to treat. These would -- well, let me back up. The answer is, yes, they're intent to treat for Phase II. In Phase III -- and, the Phase II we're looking at proportion of patients that castrate. The reason I say it that way is, in Phase III, the requirement is not proportion of patients, the Kaplan-Meier analysis, where you want to show that you have a greater than 90% maintenance of castration day 28 to day 364, but you have to hit the 95% -- lower bound of the 95% confidence interval.

So, it's a little more complicated, but because it's Kaplan-Meier, and if somebody drops out, for example, at 6 months and they don't get to 364, they count. So, it really helps you, because people drop out for all kinds of reasons. But, that's the analysis that the FDA requires for Phase III, and if you want more clarity on that, I'd recommend you look at the degarelix medical review, both in Europe and US, and you'll see -- we're kind of doing exactly like that.

That's very helpful. Thank you very much.

Thank you.

Ladies and gentlemen, this concludes the conference call. I will now return the call over to Dr. Steiner for closing remarks. Please proceed.

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

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.