Oncternal Therapeutics Inc (ONCT) 2011 Q3 法說會逐字稿

Good morning, everyone. And welcome to the GTx Incorporated third quarter financial results conference call. Today's conference is being recorded. I will now turn the call over to Dr. Mitchell Steiner, CEO of GTx. Please go ahead, sir.

Thank you, and welcome to the GTx third quarter 2011 financial results conference call. I will be making forward-looking comments during today's call, and I direct you to the quarterly report on Form 10-Q we filed August 9 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. We will begin with Ostarine which is a first in class selective androgen receptor modulator being developed to work in conjunction with chemotherapy to prevent and treat cancer-related symptoms of muscle wasting and physical function decline in patients who have non-small cell lung cancer. This is an unmet medical need in a new indication. Earlier this year, we announced agreement with the FDA on the clinical development program for Ostarine, including our two pivotal Phase III clinical trials, POWER1 and POWER2.

We have recently started these two clinical trials. The clinical trial designs with these two clinical studies are identical, except for the type of first-line chemotherapy subjects will receive during each study. In the POWER1 trial, the chemotherapy will consist of a doublet of a platinum agent and a taxane drug, and in POWER2 the chemotherapy will consist of a doublet of a platinum agent and a non-taxane drug. Both trials are evaluating Ostarine 3mg compared to placebo, in patients with Stage 3 or 4 non-small cell lung cancer with starting first line chemotherapy.

The clinical trials have co-primary endpoints of lean body mass and stair climb power at day 84. The demonstration of clinical benefit, a greater number of patients taking Ostarine than placebo should maintain or increased their lean body mass from baseline, as well as 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 90%. Patients will continue on the study for an additional two months to assess durability of these co-primary end point responses as a secondary end point. Overall survival will be collected and pooled from both the POWER1 and POWER2 as a secondary safety end point.

Each study will enroll 300 patients from more than 125 clinical sites in the United States, Europe, and South America. Clinical sites in the United States have already been activated, and we expect the first of the European clinical sites to begin enrolling patients later this month. The South American clinical sites should begin to enroll patients in January of 2012. We anticipate having top line results in both clinical trials in the first quarter of 2013.

At the end of October, we held an advisory panel of key opinion leaders for the Ostarine program. The consensus among these KOLs was that improvements in lean body mass and stair climb power will demonstrate the drug's clinical benefit for treating lung cancer patients. The KOLs have indicated that a survival benefit, which is extremely difficult to achieve in this lung cancer population, should not be needed to make this product successful, so long as Ostarine succeeds in making their patients' lives better. Finally the KOLs agreed that muscle wasting in patients with non small cell lung cancer is an unmet medical need and that there is currently nothing available to offer a cancer patient who is experiencing muscle wasting or who is at risk for a muscle wasting. They believe that a SARM, working through the androgen receptor, has the ability to improve muscle and improve physical function to address this need. We're excited about the Ostarine program and look forward to keeping you up to date on its progress.

We're also making good progress with our clinical development program for Capesaris, an oral selective estrogen receptor alpha agonist for first line and second line hormonal therapy of advanced prostate cancer. Currently available first line hormonal therapy agents to treat advanced prostate cancer include LHRH agonist such as Lupron and Zoladex, and LHRH antagonists such as Degarelix. These drugs lower total testosterone levels to below 50ng/dL. Since estrogen is made directly from testosterone, lowering testosterone to castrate levels also lowers estrogen to very low levels in these men. The estrogen deficiency side effects in men on androgen deprivation therapy have become 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, with an increased risk of fractures, as well as adverse lipid profiles, and fatty body composition changes that can lead to metabolic syndrome, diabetes, 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 these estrogen deficiency side effects. For first line hormonal therapy, the regulatory pathway is well established. During our meeting with FDA earlier this year, the agency confirmed that the primary end point required for approval in a Phase III clinical study would be the ability of Capesaris to achieve and maintain castration, which is defined as a serum total testosterone level of less than 50 nanograms per deciliter from day 28 through day 364.

We are currently conducting two Phase II clinical studies of Capesaris for first line hormonal therapy in men with advanced prostate cancer. A loading dose finding, clinical study, in 102 patients, and a maintenance dose finding clinical study in 156 patients. These two studies together were designed to determine the optimal dose of Capesaris to achieve and maintain castration from day 28 through day 364. In addition, the ongoing maintenance dose finding study will allow us to quantify the differences in estrogen deficiency side effects between Capesaris and Lupron in a maintenance setting. These two clinical studies will also help us to better asses Capesaris's clinical benefit and safety profile in first line hormonal therapy for the indication of palliative treatment of metastatic or advanced hormone sensitive prostate cancer.

Currently the Phase II maintenance dose finding clinical trial is fully enrolled with 156 patients who have advanced prostate cancer. The study is evaluating the once a day doses of 2,000mg, or 1,000mg, of Capesaris to determine that the proportion of patients who achieve and maintain castration by 60 days. And with the Lupron arm, we'll be able to assess the differences in estrogen deficiency side effects between Capesaris and Lupron, and at one year, changes in body composition, bone mineral density and additional safety information.

After one year, patients who remain in the study will roll into an extension study to allow GTx to collect long term safety data. In addition to the primary end point, we will be evaluating the ability of Capesaris to raise serum levels of sex hormone binding globulin, or SHBG, a protein that binds the testosterone and reduces free testosterone to low levels achieved by LHRH agonists and antagonists. Free testosterone is the only component of total testosterone that is available to bind to the androgen receptors in prostate cancer cells. We expect free testosterone levels in 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 also expect the drug to avoid estrogen deficiency side effects commonly associated with Lupron and other forms of ADT. Key secondary safety end points related to estrogen deficiency side effects, which we are measuring in this study, include hot flashes, libido, bone turnover markers, bone mineral density, body compensation changes and insulin resistance.

We have also recently initiated a Phase II open label loading dose finding clinical trial in 102 men with advanced prostate cancer. The men, who are being randomized into this study, will receive either 1,000 milligrams twice a day, or 1,500 milligrams twice a day of Capesaris for 28 days. At the end of 28 days, the castrate patients will switch to a once a day maintenance dose of either 500 milligrams, 1,000 milligrams or 2,000 milligrams of Capesaris for the remainder of the 360-day study.

We have adjusted the doses we are actually evaluating in the study relative to what we have discussed previously. We have not changed the higher doses of the study, but rather we have add a lower dose for loading and maintenance. This change allows us to broaden the range of doses that we can evaluate for efficacy, and was not a result of a tolerability or safety issue.

The subjects who complete this loading-dose study will also roll into a Phase II extension study, so we can continue to collect long-term safety information.

Clinical data from both the loading and maintenance dose-finding trails will be needed in order to adequately assess the appropriate loading and maintenance doses to be evaluated in a Phase III clinical trial for first line hormonal therapy. We plan to release the preliminary top line data from both of these Phase II clinical studies together, when there is sufficient data from both studies to make a meaningful assessment of each trial's respective primary end point. Our goal at the time of the update is to announce top line information about what we have found to be the lowest effective dose needed to achieve and maintain castration in men with advanced prostate cancer.

We also plan to summarize the drug's safety profile and report on some of the relative differences we may see between Capesaris and Lupron regarding serum levels of free testosterone, SHBG, and PSA as well as the estrogen deficiency side effects. After one year of treatment, we will have the results of changes in body fat composition and in bone mineral density between the Capesaris and Lupron groups. The timing of the release of the preliminary top-line data from both of these clinical trials is subject to patient enrollment of the 102 patient Phase II loading dose finding trial. As most of the clinical sites enrolling patients into the loading dose finding clinical trial are also participating in the maintenance dose-finding trial, we expect enrollment to proceed smoothly and quickly.

However, since the Phase II loading dose clinical trial was initiated in late October, it is possible that we may not have sufficient patients enrolled in the loading dose study to have a meaningful assessment of both clinical studies by year end. In that event, we will provide the update in the first quarter of 2012.

The next largest prostate cancer market opportunity, following first line hormonal therapy, is second line hormonal therapy in men with castration resistant prostate cancer who have failed LHRH agonists. Non-selective estrogens have been shown to have a significant anti-cancer activity without the need for prednisone, as a secondary hormonal therapy against castrate resistant prostate cancer. We expect a selective estrogen receptor alpha agent, like Capesaris, to have similar activity. There are currently no hormonal drugs approved for men with metastatic, castrate resistant prostate cancer in a pre-chemotherapy setting. The only approved drugs are cytotoxic chemotherapies, which have significant and serious side effects.

The rational for the use of Capesaris in the second line hormonal therapy setting is that the mechanisms that have been reported for estrogen, including the ability to increase -- include the ability to increase SHBG, which reduces serum free testosterone to levels that can be achieved by Lupron and other forms of ADT, there's a reduction of adrenal androgen precursors like DHEA and DHEAS, and there's a direct antiproliferative effect on the prostate cancer cells by reducing intratumoral testosterone.

To take advantage of this opportunity, we have begun enrolling a Phase II clinical trial evaluating Capesaris as a secondary hormonal therapy in men with castration resistant prostate cancer, who have failed LHRH treatment. The study is evaluating an oral, once a day dose of 1,000 milligrams or 2,000 milligrams of Capesaris in 50 men. The primary end point of this clinical trial is the portion of subjects who have a reduction in serum PSA from baseline by day 90. The key secondary end point of the study will be the duration of this PSA response, also known as PSA progression, as defined by the Prostate Cancer Working Group Two.

We also will measure serum free testosterone and SHBG. Patients will be assessed for the effects of both bone and soft tissue metastases, as well as for tumor progression. We plan to provide preliminary top line results from this open label clinical trial in the first quarter of 2012.

We believe Capesaris has the potential to change the hormonal treatment paradigm for advanced prostate cancer. Once GTx has data from its Phase II clinical studies of Capesaris, in both first line and second line hormonal therapy, we will have to make a strategic decision about which indication, or indications, to pursue in a Phase III clinical study. Our decision will take into account the efficacy and safety data, the size of the commercial opportunities, clarity of the regulatory pathways, and the probability of success.

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'll focus only on the highlights. The net loss for the quarter ended September 30, 2011, was $9.3 million, compared with a net loss of $8.6 million for the same period in 2010, reflecting an increase in research and development costs in connection with Ostarine and Capesaris.

Revenue for the third quarter of 2011 was $2 million from net sales of Fereston, which is marketed for the treatment of metastatic breast cancer in post-menopausal women. Revenue for the third quarter of 2010 was $1.3 million, and consisted of net sales of Fereston of $960,000 and collaboration revenue of $336,000 from our former partnership with Ipsen.

For the three months ended September 30, 2011, and 2010, research and development expenses were $8.2 million and $5.6 million respectively. General and administrative expenses for the third quarter of 2011 were $2.9 million, compared to $4.1 million for the same period in 2010.

We expect R&D expenses to increase over the next few quarters as we continue to enroll clinical trials for both Ostarine and Capesaris. At September 30, 2011, GTx has cash, cash equivalents and short-term investments of $83 million, and GTx has no debt and no warrants. I'll now turn the call back to Mitch.

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

(Operator Instructions). And your first question comes from the line of Mike King. Please proceed, sir.

Good morning, gentlemen. Can you hear me?

Yes, we can hear you perfectly, Mike.

Thank for taking the question and congrats on all of the progress. A couple of questions. Let's just start with Capesaris for a moment. Could you comment, Mitch, about the decision to add the 500 milligram arm to the maintenance trial? It seems like that's an encouraging sign. I don't want to ask a leading question, but it seems like it is an encouraging sign that perhaps you're getting enough activity at that dose or believe you'll get activity at that dose to be comfortable with going down as opposed to higher up.

Right. And so as I said in my comments that the changes to -- we want to run a good Phase II dose-finding study, and so it's obvious that we have fully enrolled the Phase II maintenance dose study with 156 patients, and so we have accomplished that. And it would be foolish if the Company doesn't take advantage of that information to help us make sure we do the right loading-dose study. And what we learned is that the drug -- we need to bring the range of the drug down so that we can get the -- I have always said the lowest effective dose. And so the lowest effective dose is where we want to be. Now interestingly, the pituitary gland, once you shut down LH and you have lowered testosterone, what you need to get a patient castrate by day 28 is potentially different than the dosage you will need to maintain the patient.

Yes.

And what is interesting is that it is dose related. We do know that, from our other Phase II studies, that the higher the dose, the faster they castrate. This is a very classic estrogen. And so based on that, it makes perfect sense that when we end up with the loading dose study and the maintenance dose study side by side, we want to be able to say, what is the lowest effective dose? Well, the lowest effective dose also means that you want to try to get to a dose where you may not have activity too. And what is your highest effective dose? We want to get that too. So this is a good dose-finding study, and what I would take away from this is simply that GTx wants to make sure that we have the right doses to go into Phase III.

Right. Well, it reminds me -- the normal volunteer study, I believe -- didn't you guys -- in the [completest], wasn't your mean time to castration 17 days? Am I correct in that?

That's absolutely right. That's a perfect example where again, we know that dose matters. As you know that was a solution study, and what we're using today are tablets, so the PK --

Okay.

-- excuse me, the bioavailability is different, but the exposures are similar. So, no, we have -- the drug -- if you can get the dose -- if the dose is the right level, you will castrate, and you will castrate quickly, and what we're trying to do is take advantage of what will end up being 250 patients of data to make sure that we've got the right dose-finding studies to move forward.

Okay. Great let me -- I just wanted to ask one quick question on Ostarine and then I'll jump back in queue. Is there a quality of life questionnaire that accompanies the Phase III trial? Because I would be interested to know if patients experience any improvement in quality of living and/or fatigue. But I don't know if there's --

Yes. Yes. There are multiple quality of life questionnaires that will being used including what we call the FAACT, which is an anorexia/cachexia scale, but it always picks up fatigue. We're also using something called the FACIT-F, which is purely a fatigue scale. These are scales that we have used in our Phase IIb, and in the case of the FAACT, a 10% improvement in stair climb power translates to clinically relevant increases in the scales, in other words the scales that you would -- the domains of the scales that you expect to go up, went up, and it was statistically significant for patients that had a 10% improvement in stair climb. So that was part of the way that we were to be able to justify clinical benefit using stair climb power, was to be able to use a quality of life instrument. With that said, FDA usually doesn't like quality of life instruments for your primary claim.

No.

But we're collecting all of that information very carefully and I think we had something like five or six different instruments, of which I just named two.

Okay.

And the reason for that is that we do think there's one argument for regulatory and there's going to be another argument for payers and physicians, and we want to make sure that since we have seen the evidence that the drug can address the end points that the regulators want, and we have evidence that we can hit the quality of life end points, then want to make sure that we capture all of that information. But yes, absolutely, I think that's going to be critical.

Thanks for taking my questions.

Thank you, Michael.

Your next question comes from the line of Lucy Lu of Citigroup. Please proceed.

Good morning, guys this is (inaudible) for Lucy. Thanks for taking our question. (Inaudible) similar on the doses. Just wondering why did you guys decide to keep the 100 milligram dose twice daily in the loading, and not the 3,000 milligram once daily? Because from what I remember the maintenance study has all of the doses once daily, so just maybe give us some color on that.

Sure, and so actually that's an interesting question. We know that if you give a single dose of the product versus possibly the same dose divided over time, that the drug has a better -- potentially better bioavailability if you give it divided than you give it in single dose because of the solubility. So actually the 1m500 milligrams of BID is probably going to get you to a higher exposure than 3,000 milligrams once a day. So we're covering ourselves on the upper end, and then we do believe that once you have reached castration, that maintaining castration you don't need to have the same dose.

We have done modeling studies, where you can actually, in the maintenance dose, even at once a day, miss every other day and still maintain castration, because you'll have your PK levels where you need to be castrated. So there is a different dynamic. I mean we're actually kind of dealing, with for all purposes, an artificial system. And the artificial system is not can we achieve castration. We can. The question is can you create a profile of a drug where you castrate over 90% by day 28, and then you maintain that castration day 28 to day 364, so we're really doing PK modeling. PK/PD modeling. Because if the agency wants that, we're going to deliver. We're going to try our best to deliver that.

So we're going to castrate 90% by day 28, and then you back off on the dose if you need to, and then you follow it going further with what we would hope would be an easy, once a day oral drug, so this way compliance and all of the other issues that are important for a cancer product will be in place. So for true efficacy, as a urologist, I can tell you it doesn't matter. Because there's no such thing as an emergency castration. But what we're really trying to do is, if the stake in the ground is a regulatory end point, which is testosterone, and we're not going to have to show overall survival and time to progression and all of the other things you would have to show for second line and beyond, then we are going to have to make sure the biomarker is appropriately addressed, because that will be what we would be using in Phase III. So if that's the case, we want to make sure that we have tested enough doses and enough range that -- because 90% of the patients have to move in that direction. We want to have that clarity, so this is the time to do it in the nice, two large Phase II studies.

Thanks, Mitch for the additional color. Another question I have is then actually the second line study.

Yes.

I was -- maybe you can -- I don't know, it might be I missed it, but can you remind me what is the end point for the Phase II, and also the question of do you have any more thoughts going forward let's say on the Phase III what will be the regulatory (inaudible) and what will be the potential end point.

Yes, that's a good question. For second line, as you know -- First of all, let me take a step back. So what's is a little different is we added a higher dose. The 2,000 milligrams. Originally we were going to just test the 1,000 milligram and then 2,000 milligram in a second-line setting. If you go back to the literature, you'll see that estrogens have a very unique activity, so whether you have been on ketoconazole or not, whether you have been on other estrogens or not, whether you've been on chemotherapy or not, it appears that estrogens always give a robust response. Okay?

So the drug is active. And it's active becauseit doesn't work, necessarily, through the androgen receptors, it doesn't work through the lyase, it really has its own mechanism. All right. With that said, the -- our thought is let's do a good dose-finding study again in second line, and all dose-finding studies in second line and beyond, whether it's abiraterone, a Medivations drug, or the Takeda 700 drug, you always begin by taking patients with castration resistant prostate cancer and you are looking for a PSA response, which is defined as what percent of patients will have a greater than 50% reduction in PSA , in that 90-day period. So that's sort of in the index, and interestingly the drugs that I have mentioned all moved into Phase III, with only Phase II data showing a PSA response.

Because you are not going to do overall survival or anything like that in a second line setting -- excuse me, in a -- yes, in a second line or beyond setting, and interestingly if you have a PSA production greater than 50%, there are several studies that show, that will show you a survival improvement, and now with abiraterone and prednisone post chemo, and then we heard yesterday from Medivation with prednisone post chemo that indeed what you see in second line translates to a survival benefit.

Okay. With that said, we do know that for second line, the regulatory path is pretty darn clear. If you decide to go into a pre chemotherapy group -- let me back up. If you go into a chemotherapy -- post chemotherapy group, you need overall survival. If you go to a pre chemotherapy group, then you are looking at primarily a co-primary, which is going to be a progression free survival and overall survival. So the three studies that are currently going on, again, unique mechanisms. Two of them are the same, right? You have got the abiraterone plus prednisone in pre chemo and you've got the Takeda 700 with prednisone in second-line pre chemo, but those -- prednisone. Prednisone has their issues, and both of those have as their primary end points overall survival and progression-free survival. Medivation as you know is also running a study in this setting, completely different mechanism. Also end point, progression-free survival, overall survival.

So it looks for the pre chemo space, we need to hit overall survival and progression free survival and if our drug shows a PSA response of greater than 50% in a significant number of patients, that should translate into success. So that's the reason why we're thinking the way we're thinking by adding an additional dose, because what we would like to be able to do is now sit with the Phase I data -- excuse me, Phase II data for loading and maintenance for first line, and then sitting with the -- in first quarter now for the second line, in first quarter sitting with what is our PSA response? Knowing what the landscape looks like, which means that our drug without prednisone and with a unique mechanism could be used sooner, then we have got to make a hard decision about what is the most commercial opportunity -- what is the best commercial opportunity for GTx, and how could we move them both, one? I don't know, we're going to find that out. But what I can tell you is, as a Company we're more excited than we have ever been, because this drug has activity, and now the question is -- and it has activity across the spectrum of prostate cancer, not just first line, second line, but post chemo and potentially post abiraterone, given what we know about estrogens in the

Okay. Thanks. That's very helpful. And the last question will be just -- so we know that the -- for the (inaudible) there's this FDA (inaudible) of 90%, but we're just curious, like from your perception what would be the good data for the for Phase II trials? Would it be like 95% based on the (inaudible) or something like that?

Yes, I would say for Phase II data, you want your Phase II data to get close to -- get what the regulators want in a Phase II setting. Because remember your Phase II setting is what you're going to used to power appropriately your Phase III. So if you go back and look at Degarelix, they did something like nine Phase IIs. Now we're not going to have to do nine Phase -- I think we're going to be plenty fine with what we have. My point is that you use your Phase IIs to determine what your patient trial size should be to achieve the PSA -- excuse me, thetestosterone castration rate that you need to get approved. So I would say that we're, in a small Phase II, we're going to look for something north of 90% to consider it a success. I'm talking about loading and for maintenance.

Okay. Thank you. Thank for the color.

Thank you.

Your next question comes from the line of David Nierengarten of Wedbush Securities. Please proceed.

Hey, thanks for taking the question. I have actually a couple of quick questions. First it's interesting to me that from the earlier study in healthy males, at 600 mgs, Capesaris didn't apparently do anything, right, to get any patients down below castrate, or any healthy young men down to below castrate levels.

Let me comment --

Yes, I would just like to hear -- are we seeing just the proportional 70-year-old men have half as much testosterone on average, or less than that, and so you can use half the dose? And then, sorry, just a quick question if we're going to see any of this data at ASCO GU? Any of the newer data. Thanks.

Got it. Good. So let me answer the first question. First of all that study was in healthies, and the 600 milligram was a solution study, and what we do know now is that the pharmacodynamics -- excuse me, the PK, not pharmacodynamics, the PK of the molecule is such that we have higher troughs than we did with the solution. So the solution goes in quickly, and your troughs go down because the absorption is pretty quick. With a tablet, your absorption is a little bit longer, and so consequently your trough is little bit higher. This is a perfect example where the doses don't necessarily match up when you go from solution to tablets and more importantly when you go from healthies, which are much harder to castrate than older men, which are easier to castrate.

With that said, the other part of it is when we used the 600 milligram in healthies to castrate, not to maintain. In the maintenance dose study we're using the heavy lifting with a higher dose to get to castration, and then the concept is can you go to a lower dose to maintain. That's very, very different than the Phase II where you just give 600 milligrams to a healthy individual. So it's hard to make those comparisons except the drug is active, then you want to make sure you get to the lowest effective dose.

As to the second question which is will we have data at ASCO GU. My understanding is that we have submitted -- let me say this, we've submitted an abstract, and we haven't heard yet, I don't know if anybody's even heard yet whether they have gotten their abstracts accepted, but our intent is if that abstract is accepted that we would bolster it with relevant new information so that you'll have information. With that said, we also plan to have information at AUA and also at the big ASCO meetings which are a little bit later. But as you know the other one will be in February, but the goal would be to provide some information at that time.

Great. Thanks.

Thank you.

Your next question comes from the line of Biren Amin of Jefferies. Please proceed.

Yes. Thanks for taking my questions. I had just a follow-up on an earlier question regarding requirements for a Phase III trial in the first line prostate cancer setting. Mitch, does your view change at all given the recent FDA panel on drug development in prostate cancer?

No. No. Not at all. Not for first line. So the question -- so what you are referring to is the September 14 meeting at ODAC with the question that was on the table is how to handle patients that are on androgen deprivation therapy that are non-metastatic that develop a rising PSA so basically they are non metastatic with castration resistant prostate cancer. The reason the FDA doesn't like that group is because the indication for first line is for the palliative treatment of metastatic or advanced prostate cancer. The advanced prostate cancer means it has got to be blocking your bladder outlet, it's got to be impinging on the ureters, I mean you are treating somebody with regional disease. The FDA never envisioned that physicians would be treating patients with non-metastatic disease, just treating a PSA.

With that said, that group is a big group, because the standard of care today is that patients get treated for PSA regardless of what their metastatic status is. So what the FDA is saying, is okay now we have this castrate resistant prostate cancer group M-0, now what are we going to use as an end point. And that was really the discussion. And what they were saying in that setting was the FDA at least in their briefing documents said that they would use a progression free survival end point, such as metastasis free survival, even time to progression or time to new met as a primary indication, and then as a secondary end point -- not primary indicate, primary end point. And as a second end point they would use overall survival.

What we're talking about in first line is again, testosterone and they are very solid on testosterone being an end point. They are even -- they don't even require a comparator, so this is really can your drug achieve castration and maintain that from day 28 to day 364. Again, no comparators required. So that's for first line. And it really doesn't change anything that we're doing except that we have to recognize that the FDA is going to review our product in the context of palliative treatment of patients with metastatic hormone sensitive disease that is -- that's the group. They are not going to be thinking of it in the context of a patient with a rising PSA that's not metastatic.

For second line, we are going after metastatic castrate resistant prostate cancer. So the issue of being non metastatic will not be an issue. And we're purposely avoiding that group, because I do think the FDA is evolving in their thinking. So the panel helped us to understand where the FDA's head is at, if you will. So for example, a question that came up was what --assuming you are able to delay metastases, what would be considered clinical benefit? Three months? Four months? Two years?

And just from me personally being at the meeting, my impression was anything less than six months is going to be very difficult for the FDA to agree -- this is just me talking now -- as being a clinical benefit. And so you are getting some information of the agency that they understand that in the prostate cancer field, we're getting many options now, and there are many different types of prostate cancer stages, that there's going to be a need for new drugs, and you are going to have to define what are the end points, and what is going to be considered the clinical benefit. In our situation we have picked situations that have pretty darn clear established regulatory pathways. That make it a lot easier for companies, like I always do, to plan.

Okay. And on the maintenance-dose study were there any serious safety adverse events reported to date?

Are you talking about in the Phase IIs that we have already done?

Yes, the Phase II Capesaris maintenance dose study.

No, the maintenance dose study, we have not announced anything about efficacy or safety, and we're going to do that when we have the loading-dose study, the number of patients at that point. The two safety issues that we have made public based on the 270 patients that have been treated to date, is that we had one patient that had an elevation ALT that was 4.7 times, something, 4.6, 4.7 times the upper limit of normal. It came in with an elevated or upper limit of normal ALT. The patient came right back down, off drug. We've never had any evidence in our animal models of hepatatoxicity. So that's number one.

Number two we did have one patient -- one only develop a DVT, that was quickly found, the patient was treated. And one out of 200 and something is about what you expect for these patients. And those are the two safety findings that we -- serious safety findings that we have reported. The safety and efficacy findings in the two studies that we have now, we're going to report them together. So this way you can have all of the efficacy information and all of the safety information at one time.

Okay. And just another last follow up. How long did the maintenance dose trial take to fully enroll?And would that be predictive of the trial enrollment for the loading dose study?

Yes. So the answer is -- we were talking about this yesterday. We loaded up 156 patients in four months. Okay? And this study is a smaller study. It's 102 patients, and we started enrollment last month, and so we think that -- like I said, we think it's going to enroll quickly. The reason we're giving ourselves a little bit more room is because our experience in the past, is we're heading into Thanksgiving and Christmas. And I can -- we can only take care of things that we can control.

We're using the same sites for the most part. These patients are out there. So we're confident with enrollment, the question is, we want to make sure we have enough precincts reporting, if you will, that we can call the drug -- and call the drug dose. And so I don't want to leave people on the call with the impression that we're absolutely positively going to be reporting results next quarter. What I want to leave the call with is we're doing our very best, enrollment is proceeding, and it's -- as soon as we get to a number that we think we can sufficiently provide, both loading dose, and maintenance dose information side by side, like we promised, then we think it's better for the product to do that. Half-baked information won't help anybody.

Great. Thanks for taking my question.

Sure thing.

Your next question comes from the line of Eric Schmidt of Cowen & Company. Please proceed.

Good morning. Thanks for taking my question. Mitch, on the decision to move away from once daily dosing to BID, at least for the initial 28 days in the loading dose trial, is there something that you're not able to get out of QD dosing? Are you not seeing the kind of castrate levels that you would hope?Because otherwise I think you would rather have a once a day than twice a day, no?

Part of it is it goes both ways. For example, from a commercial standpoint, is it easier to give 1,000 milligrams twice a day for loading, and then drop one of the 1,000s and just do 1,000 going forward for maintenance. Versus having to make a separate pill whatever, whatever. The characteristics of the pill -- of the medicine is that it does have a low solubility. So the bioavailability is -- and I have mentioned this before, is in the order of about -- depending on the patient, 15% to 20%.

So if you can give the drug in divided doses, then what that means is that it goes in, it dissolves in whatever gastric and intestinal fluids you have, and then it reaches the solubility index and that's it. But if you give it twice a day, then you have a chance to have it diluted in fresh solution, if you will, twice a day, and it gives you a higher trough. So we do think just from a PK stand point, and given the solubility of the compound that twice a day is probably a better way to get you where you want, in a high Cmax, with a single tablet for example. And so it's just playing with the PK, PD of the compound.

Can we achieve castration? The answer is, there is no question that there is a dose relationship between what you get in the blood, and whether a patient castrates, and the compound has performed very nicely in that regard. So this is just, Eric, Phase II dose finding, and one of the things that our team said would be helpful in getting more drug into a patient with the same dose, is instead of giving 2,000 milligrams once a day, 1,000 milligrams twice a day will achieve a higher PK.

Okay. And then in terms of the decision to marry the two trials, the two Phase II studies together for release and provide as you say kind of a broader set of context for investors, what do you think we'll get in a loading-dose trial that we won't get in the maintenance trial?

Good question. Let me just answer the question backwards and I'll come back to what I think I'm going to get out one versus the other.. The maintenance dose study all along wasn't meant to castrate 90% of your patients by day 28. We were really trying to find a dose that we could "get to a castration" and begin to compare some of the estrogen deficiency safety differences between Capesaris and Lupron. Okay?So if we reported that and the primary end point was 60 days, and people look at day 28, they're going to say, oh my gosh, these guys didn't hit, and therefore, I know it's 60 days and I know it's a maintenance study, but I really want to see 90% of the patients hit at day 28.

So it takes away from the value of the trial in the sense that that was never the intent of that trial. The intent of that trial was to pick a maintenance dose and compare that dose to Lupron. So we made a decision, so we don't confuse the investor, because the investor is going to be looking for two pieces of the equation, one is what dose does it take to get to greater than 90% castration by day 28, and the second question is, from day 28 to day 364 what is your maintenance dose, and then how does that compare to Lupron?

All right. With that said, that's the reason why it doesn't make sense to put the maintenance study out there, without marrying it with the loading dose. Now. What are we getting out of the loading dose that we're not going to get out of the maintenance dose study? Okay, I'll tell you. With the loading dose study, we're going to show you that we're going to be able to -- the goal is to show you that we can castrate over 90% of the patients with one of these doses by day 28.

Then, Eric, we're going to drop down. We're going to go from a higher dose to -- potentially drop down, right, because 1,000 milligrams BID and going to 2,000 milligrams is really more lateral. But if you go from the 1,000 milligrams BID down to the 1,000 milligrams or the 500 milligrams, one of the concerns is do you get escapes? Do patients begin to have their testosterone levels pop back up because you gave them a lower drug. I don't know that. We don't believe that's going to be the case, because there's examples of other estrogens in the literature where that doesn't happen, but we have to prove that.

So one of the things that you are going to get out of the loading dose study that you can't get out of the maintenance dose study is what happens when go from a higher close to a lower dose. Do you get escapes?And the other thing you're getting out of the loading dose study, of course, is the intent of the loading dose study is the 28-day castration data where you are intentionally going for 90%, whereas the maintenance dose study is a 60-day end point. Where you're not going for the 28 day, you're trying to get to the castration by day 60, because that's going to be your maintenance dose. We don't even have a Lupron arm in the loading dose study because that's irrelevant. What we're trying to do here is again, just reach this regulatory hurdle, which is castrate 90% of your patients by day 28.

And then why do you need the stepdown after day 28? Why not start high and continue high?

Well, that's certainly a possibility. If you go back and look at other estrogen products, they typically load -- like if you look at PEP, polyestradiolphosphate, which is given as an injection, many of those regimens, they load you up, they castrate you, and they back down to a lower dose. And again, intuitively you would want to move to a lower dose, because if you can be at a lower dose, then potentially you are doing everything you can to have the lowest effective dose, which, from a standpoint of efficacy versus safety, you are trying to balance that benefit. But we don't know that. I mean it may be that the -- you go high and stay high. And that's the reason why we're doing these two studies with so many arms.

Okay. And just last quick question for Marc, housekeeping. The SG&A was quite low in Q3. I don't know if there's something that you've done to reduce costs, or whether that was [variant], and we should expect a bounce back in future quarters?

Yes, Eric. We will have an increase in the fourth quarter because we're going to be in the thick of the enrolling Ostarine, which we'll have obviously more patients, and we'll also be in the thick of three studies for Capesaris --

Talking about SG&A, though, Marc.

Oh, I'm sorry. I'm sorry. I thought you were talking about the other. Yes, in regard to SG&A, the reason that number was down is because we reduced costs for Fereston promotional activity and all of the people related to it. So that number is going to go down, and that number should stay consistent like that.

Thanks a lot.

Thank you, Eric.

Your next question comes from the line of Jonathan Eckard of Leerink Swann. Please proceed.

Hello. Thank you for taking the question. So I just wanted to ask, there has been a lot of comments about the tough levels of various doses and forms. How important is the trough level in assessing the potential efficacy of a dose? I believe there is -- you made some comments regarding how patients can actually miss doses or take doses every other day, and maintain testosterone below the desired threshold, so I'm just trying to get an understanding of how important these trough levels are in assessing the dose.

Okay, that's fair. The reason we get trough levels, as you know your calculation for AUC requires a different set of data than your trough. Troughs are easy to get. It just turns out to be that when we go back to our other Phase II information, our PK PD studies, we're able to show there is a correlation between exposure, AUC, and also the trough. We haven't been able to separate the two, so we don't know whether AUC is more important than trough or trough is more important than AUC, and as you know they are pretty related.

With that said, looking at the trough is a good way of telling what their AUC is. If that makes sense. And so we do know that if you have the same product that is disbursed over a longer period of time, then you are going to have a higher trough from day-to-day, and our feeling is that if we can maintain a higher trough, we know that there's a magic number that we can draw a line. I think we have said this publicly before. We said it is between 12 and 13 nanograms per milliliter, that if you are above that, you are going to get castrated. So if that's the case, then we want to maintain that. Achieve and maintain that.

If you do PK modeling, and which certain of our doses that we're testing, if the patient misses every other day that trough should remain above that cutoff. Okay? Which means, of course, that for the most part we're probably giving more drug than that minimum trough. That would make sense. Otherwise, you don't want to live on the edge. And so the formulations do make a big difference in what that trough is. The formulations don't necessarily make a big difference in terms of AUC, because you just have to give more drug.

Okay. With regards to say the trough of the 600-milligram tablet, which is higher I believe than the oral 600 milligram, where would that --

I'm sorry, Jonathan, we don't have a 600 milligram tablet. The tablets are 500 (inaudible - multiple speaker). We had a 600 milligram solution.

So the 500 milligram, sorry.

Yeah.

Where would the trough of that lower dose fit compared to the trough levels of the higher solution levels that you saw in the healthy volunteer trial?

I personally have not seen the 500 milligram dose trough. I have seen the 1,500 milligram solution, and I have seen the 1,000 milligrams and the 2,000 milligrams that we're giving, and I would say that the 1,500 milligram solution is similar to a 3,000 milligram dose. Oral tablet. Does that make sense? So it's like a 50% difference.

Okay.

Lower for the tablet.

Okay, great, thank you very much.

Sure thing.

Your final question is a follow-up question from Mr. Mike King, of Rodman. Please proceed.

Oh, now Mr. Mike. Okay. Mitch, I just wonder if you could talk a little bit about strategy because I envision this -- for the Capesaris development program, it could get pretty expensive very quickly. So I just wonder how you think about driving to a value inflection point and if you then consider partnering so that you can do the full, what I would refer to as a pharmaceutical company quality development program. Special populations, drug-drug interactions, all that kind of stuff that would be required not just for FDA approval, but commercial success as well.

Yes. So the strategy is that -- part of the deal here is that we know if you work your way backwards -- so in other words, if you say to yourself okay, where is the premium markets? Well, the premium markets are, if you go into first line, it's 3.4 billion world wide. That's a big market. Sure, you're going up against Lupron, but you've got a lot of the clinical benefits from the standpoint of estrogen deficiency, and if you don't have to take polypharmacy, which means somebody on Lupron's taking something for their bones and for their hot flashes and all that stuff, the payers are going to have to pay a lot more than what they're paying just for the Lupron. Can we come in at a price that still is a savings for the payer, but we still have a large patient population. We've got to plug that into the formula and figure out what we need to do.

But before we can -- that's in working backwards. So that's a premium indication. Equally premium, is there are about 100,000 patients with castrate resistant prostate cancer that are metastatic, and what's beautiful about that group is there's lots and lots and lots of data showing that we're going to have activity as an estrogen but being safer is going to mean that we're going to be in a spot where we're not going to have to train physicians, and they're going to be happy to see this drug, with a pricing that will be similar to, for example, some of the other oral compounds that are coming out in prostate cancer. So that's a real premium, and you don't need to get a lot of that market to really make a difference in your company.

So what we're doing, and the efficacy/safety that you need for first line, is probably different than the efficacy/safety you need for second line. Why? For first line, they live three years, five years, or beyond. For second line, they've got 18 months. Okay? That's their median survival. Okay. So that means that you have a different risk-benefit profile. So what we want to do, is we want to lay all three trials on the table. We want to see what happens with a loading maintenance, and whether we're able to achieve, what the does efficacy look like, what does the safety look like, and do the same thing for second line.

Okay. If all things equal, then we have to make a decision whether we want to go into the first line, second line, or both. And a lot of that is going to be determined, quite frankly, as you mentioned, by our finances. And we believe that if you have those data sets, that you're going to be in a much better position to find a partner. GTx's interest is to find a partner, ex-US, and [keep] US. We have had multiple discussions with multiple pharmaceutical, large pharmaceutical types, and if you were a pharmaceutical type, and if you were GTx, because you want the value, you want to wait until you have the data sets so that you can get the best deal and have the most leverage. And that was the reason why our investors allowed us to get -- that's why our investors invested in us, is so (inaudible - technical difficulties) to that point.

Yes.

And so, we're just doing exactly that. So the strategy would be get the data, make a determination clinical of how you want to roll this out. I will give you an example. Let's say you go after first line and you just publish in second line. Why do you go after second line -- you have options beyond that. So the goal for GTX is let's get the Phase II data from two indications, and then those data will clearly determine what we need to do next. We'll continue to execute on that, and at the same time we will seek an ex-US partner.

Okay great, thanks so much.

At this time there are no further questions in queue, and I would like to turn the conference over to management for closing.

Great. Thank you very much, and I want to thank everybody for being on today's call, and we look forward to providing you updates on our future progress, and thank you again.

Thank you for your participation in today's conference. This concludes the presentation, you may now disconnect. Have a wonderful day.