Oncternal Therapeutics Inc (ONCT) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the GTx fourth-quarter and year-ended 2013 corporate update and financial results conference call. My name is Glen and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Dr. Mitchell Steiner, CEO of GTx. Please proceed, Dr.

Thank you, operator. I will be making forward-looking comments during today's call, and I direct you to the press release of our financial results we filed this morning, as well as the Annual Report we will be filing on Form 10-K with the SEC next week, where we discuss the risks and uncertainties that may affect our business. The Company has made good progress in our three clinical programs, and we have successfully completed a financing sufficient for us to move these programs forward. I will now update you on the progress of our clinical programs.

Our most advanced clinical program is the evaluation of enobosarm 3 milligrams to prevent and treat muscle wasting in patients with non-small cell lung cancer. We released topline data in August of 2013 from our two Phase III enobosarm clinical studies, POWER 1 and POWER 2. Each clinical study enrolled approximately 325 patients who had either Stage III or Stage IV non-small cell lung cancer in over 80 clinical sites located in the United States, Europe, Russia, and South America. The objective of these studies was to determine the potential of the enobosarm 3 milligrams versus placebo, to prevent and treat muscle wasting in advanced non-small cell lung cancer patients, when given at the same time to patients initiating standard first-line chemotherapy consisting of a platinum doublet.

These studies were designed to take into account the concern expressed by FDA and the European National Authority regulators about the need to control for chemotherapy these patients would be receiving during the Phase III clinical studies. The regulators shared the concern that chemotherapy itself may potentially influence the clinical measurements of lean body mass and stairclimb power, and affect the trial results in patients with non-small cell lung cancer. Accordingly, GTx designed its two Phase III clinical trials to have identical inclusion and exclusion criteria, endpoints and duration, but different patient populations based on the planned first-line chemotherapy patients would be receiving, either platinum plus taxane or platinum plus a non-taxane, respectively, for which an add-on therapy with placebo or enobosarm 3 milligrams would be used, so that any possible imbalances in benefit or toxicity related to chemotherapy that may confound the results on lean body mass and physical function could be determined.

The endpoints for the two clinical studies with lean body mass measured by DEXA and physical function assessed by stairclimb tests, we agreed with FDA that we would make lean body mass and physical function measurements at day 84, the co-primary endpoints for both studies, and that we would analyze these endpoints statistically by responders analyses. The responders analyses required that at day 84, more patients in the study treated with enobosarm 3 milligrams had maintained or showed an improvement in lean body mass, and that there were more patients who had at least a 10% improvement in physical function in the treated group compared to placebo. However, based on input from the EMA representatives, rather than having co-primary endpoints, we agree that physical function would be the primary endpoint, and lean body mass would be a key secondary endpoint.

Additionally, for purposes of data assessment in Europe, we prespecified in our statistical analysis plan that these exact same endpoints -- that is stairclimb power and lean body mass -- would be assessed using the longitudinal continuous variable statistical analysis. This assessment allowed us to compare the changes from baseline over time in physical function and lean body mass in the treated versus the placebo patients in each study. This kind of comparison becomes especially important if you want to assess the differences in any decline in lean body mass and/or physical function from baseline in patients with non-small cell lung cancer. The EMA representatives made it clear to us that, while they were interested in determining the drug's clinical benefit by assessing its effect on physical function and lean body mass compared to placebo, they intended to look at the totality of the data to determine clinical benefit.

We did not meet the statistical criteria on a responders analyses agreed upon with FDA for the co-primary endpoints of lean body mass and physical function. Data from the studies, though, clearly show that enobosarm had a consistent positive effect on maintaining or improving lean body mass compared to placebo in both studies. By the responders analyses, a larger proportion of patients receiving enobosarm maintained or increased lean body mass at both day 84 and day 147 in both clinical trials compared to placebo.

In the POWER 1 trial with taxanes, this equated to a P value of 0.036 at day 84, and a P value of 0.026 at day 147; and in the POWER 2 trial with non-taxanes, the P values were 0.113 and 0.013, respectively. Moreover, if we assess data from these studies using the longitudinal continuous variable statistical analyses rather than a responders analysis, as we prespecified for the European purposes, the POWER 1 taxane clinical study met the prespecified primary endpoint for physical change of change in stairclimb power through day 84, with a P value equaling 0.0147; and the secondary endpoints of change in lean body mass with day 84 P equaling 0.0002; change in stairclimb power through day 147, P equaled 0.0492; and change in lean body mass through day 147 P values less than 0.0001.

In contrast, the POWER 2, the study using non-taxanes, did not meet the primary endpoint of change in physical function, but had consistent effects on improving lean body mass through day 84 and day 147, with P values of 0.0227 and 0.0036, respectively. In both the POWER 1 and POWER 2 studies, declines in lean body mass and stairclimb power were observed in the placebo groups. Enobosarm was well-tolerated in both studies. Although minor differences in adverse events were observed between the enobosarm 3 milligram and placebo groups in each of the POWER 1 and POWER 2 trials, there were notable differences in the adverse event profile between the studies, with anemia and other hematologic toxicities being more prevalent in the POWER 2, the non-taxane clinical trial.

By controlling for chemotherapy, GTx is now better able to understand the impact of chemotherapy side effects as possible confounders that may explain the results of the physical function endpoint in the POWER 2 non-taxane study. Survival is being assessed as another safety endpoint. As specified in our statistical analysis plan, pooled overall survival data will be assessed after 450 of the approximately 650 patients in the two studies have died, which we currently expect will occur by late April of this year. We have seen no adverse effects on overall survival from the enobosarm treatment from the survival data received to date, and we expect this to remain the case.

We have now met with both FDA and European authorities this quarter, and have a better understanding of the regulatory path forward for this promising product candidate. In our recent meeting with FDA, it was made clear that since our two studies did not meet the statistical criteria on prespecified for the co-primary endpoints of lean body mass and physical function, FDA was not willing to accept an NDA for the drug based on our current data. However, based on the input from the meeting, we believe that there is a regulatory path forward for enobosarm 3 milligrams.

FDA appears to be open to and has requested a proposal for another Phase III program for this indication or possibly an error indication. They indicated they will consider a clinical program using the same endpoints we previously measured in the POWER 1 and POWER 2 Phase III studies and they would consider other possible study designs. They also stated they would accept other prespecified statistical criteria and to evaluate the primary endpoints, including longitudinal continuous variable analysis.

Based on the positive efficacy and safety information we have from the POWER 1 and POWER 2 clinical studies, GTx is in a much better position today to propose and design a confirmatory Phase III program. Consequently, GTx plans to meet again with FDA to get agreement on the Phase III program that will be required to provide the efficacy and safety data required by FDA for the indication of muscle wasting or cachexia in patients with non-small cell lung cancer. We will continue to update you on our progress.

In Europe, we believe the data from the POWER clinical studies are sufficient to allow us to file a Marketing Authorization Application in the European Union for enobosarm 3 milligrams for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer. The POWER 1 Phase III study of non-small cell lung cancer patients receiving taxane chemotherapy met the prespecified primary statistical criteria on physical function at three months as assessed by continuous variable analysis. GTx recently met with representatives from two influential member countries to the European Medicines Agency, EMA, to review and to discuss the results of the POWER clinical trials, to determine if there is an appropriate path forward for submitting a Marketing Authorization Application in the EU for enobosarm 3 milligrams for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer.

Based on input from the two national authorities, an MAA may be acceptable if the indication is narrowed to the prevention and treatment of muscle wasting in patients with non-small cell lung cancer treated with a platinum plus taxane chemotherapy. More specifically, the positive data from the POWER 1 Phase III clinical study, together with additional supporting data from the POWER 2 clinical study in our Phase IIb study, could potentially support the MAA in this more narrow indication. Consequently, GTx expects to submit the MAA by first quarter of 2015.

Because we're moving ahead with the European submission, several standard Phase I studies are required to be completed for purposes of labeling under EMA guidelines. We have already completed the renal impairment, hepatic impairment, and mass balance Phase I studies. We decided to wait until we had an appropriate input from the European national authorities before undertaking the additional expenditures required to complete the other Phase I studies, which include the standard battery of drug-drug interaction, absolute bioavailability in QT studies. All of these Phase I studies should be completed by the third quarter of this year.

In addition, EMA requires a Pediatric Investigational Plan, or a PIP, to be agreed upon prior to filing of an MAA for the conduct of postmarketing studies to be carried out in the pediatric population. GTx is in the process of working with EMA's Pediatric Committee to get agreement on an acceptable PIP, which we expect could take until the fourth quarter of this year. During this time period, GTx will be preparing its MAA submission and completing the remaining Phase I studies in order to file the MAA by the first quarter of 2015. We will provide you with updates on the timing and the filing later this year, as well as our commercial plans.

Next, I will discuss the progress of our ongoing Phase II clinical study evaluating enobosarm 9 milligrams for the treatment of antigen receptor positive and estrogen receptor positive metastatic breast cancer in women who have previously responded to hormone therapy. Based on the scientific literature, up to 80% of women with metastatic breast cancer will be both estrogen receptor and androgen receptor positive, and our current study is certainly confirming this observation. Prior clinical studies have shown that women with metastatic breast cancer who have been previously treated with tamoxifen, and whose cancer has progressed, have responded to non-selective, non-aromatizable androgens. In other words, androgens which cannot be converted to estrogen, with overall response rates ranging from 20% to 60%.

Although these non-selective, non-aromatizable androgens have been used, and are currently recommended in the NCCN guidelines as treatment for metastatic breast cancer, the unwanted virilizing side effects -- including an increase in facial and body hair, enlargement of the voicebox, acne, and edema -- have limited their widespread clinical use. Androgens normally oppose estrogen stimulatory actions in normal breast tissue, and have anti-proliferative activity against breast cancer in women who retain both an androgen and estrogen receptor. GTx believes that a selective androgen receptor modulator like enobosarm, by targeting the androgen receptor in metastatic breast cancer, has the potential to provide clinical benefit to women with advanced breast cancer by treating their disease, while minimizing the unwanted masculinizing side effects associated with androgens.

Unlike steroidal androgens, enobosarm cannot be converted to an estrogen that could be detrimental in breast cancer. GTx is conducting a Phase II open label study evaluating oral daily 9 milligram dose of enobosarm for the treatment of estrogen receptor positive and androgen receptor positive metastatic breast cancer in women who have previously responded to hormonal therapy for the treatment of their advanced breast cancer. Phase II is being conducted in nine clinical sites in the US, with Dr. Beth Overmoyer of Dana-Farber serving as the lead principal investigator. The study is fully enrolled with 22 postmenopausal women who entered the study with actively progressing metastatic breast cancer.

The primary endpoint of the study is a clinical benefit response after six months of enobosarm 9 milligrams treatment, which is defined as either those women receiving treatment who have demonstrated a complete response, which is the disappearance of all targeted lesions; or a partial response, which is at least a 30% decrease in the sum of the diameters of the targeted lesions; or stable disease, which means no disease progression from baseline. The expectation is that 14 of the 22 women will be determined to have AR positive, ER positive metastatic breast cancer, and to prespecify the objective of the study is there will be at least three women who achieve a clinical benefit response out of the 14 who are determined to be -- to have AR positive breast cancer.

The Company reported last month that it expects to meet the prespecified goal of demonstrating at least three clinical benefit responses in a minimum of 14 patients with AR positive/ER positive metastatic breast cancer. Enobosarm 9 milligrams continues to be well-tolerated by the patients in this study. The study is ongoing, and the data from all patients in the study are expected late in the second-quarter this year. Since we now anticipate that the study will be successful, we also plan to meet with our key opinion leaders to determine how best to move forward in the clinical development of enobosarm as a potential novel targeted hormonal therapy for the treatment of AR-positive/ER-positive metastatic breast cancer.

Our third late-stage clinical program is evaluating Capesaris GTx-758 for the treatment of castration-resistant prostate cancer as a secondary hormone therapy. GTx is enrolling an open label Phase II clinical study to evaluate the safety and effectiveness of two doses of GTx-758, 125 milligrams and 250 milligram oral daily dose in men with metastatic and nonmetastatic castration-resistant prostate cancer. The primary endpoint of this study is to proportion the patients with a greater or equal than 50% reduction of baseline and serum PSA by day 90. Other key endpoints include free testosterone levels, sex hormone binding globulin levels, and total testosterone levels, as well as effects on tumor progression in the study subjects.

In addition to studies evaluating the ability of GTx-758 to treat certain estrogen deficiency side effects associated with androgen deprivation therapy, such as hot flashes, bone loss, and insulin resistance. The clinical study will enroll a total of 76 patients, with the first cohort of 38 patients with metastatic castration-resistant prostate cancer receiving a 125 milligram daily dose of GTx-758. Having completed enrollment of the first cohort of patients, and following a planned safety review by an independent Data Safety Monitoring Board, the trial is now enrolling an additional 38 patients in the 250 milligram oral daily dose arm. The first 10 patients to receive the 250 milligram dose will be men with metastatic castration-resistant prostate cancer; and thereafter, enrollment will be open to men with either metastatic or nonmetastatic castration-resistant prostate cancer, assuming GTx-758 continues to have an acceptable safety profile.

Last month, primary -- last month, preliminary efficacy and safety data for the 125 milligram cohort was presented at the GU ASCO meeting. We reported that the mechanism of the drug, induction of sex hormone binding globulin, and the reduction of free testosterone, was confirmed in a cohort of patients receiving 125 milligrams of GTx-758 treatment. Of the 36 patients for whom we then had available laboratory values, 83% have levels of SHBG that more than doubled from baseline, and free testosterone was reduced in 92% of these patients, with 81% of the patients having at least a 50% reduction in testosterone -- in free testosterone. Of the 22 patients who had completed 90 days on the trial, 91% experienced decreases in PSA levels, with 36% exhibiting decreases greater than 30%.

Estrogen deficiency side effects associated with androgen deprivation therapy, including hot flashes and bone loss, may negatively affect quality of life and mortality. Treatment with an estrogen receptor alpha agonist like GTx-758 could ameliorate these estrogen deficiency side effects. Preliminary data shows that a majority of subjects who are experiencing hot flashes prior to taking GTx-758 have reported improvement in or stabilization of their hot flashes, and bone turnover markers have decreased in the majority of these patients as well. As for safety, GTx-758 continues to be well-tolerated, with no reported venous thromboembolic events or deaths. We're continuing to enroll patients in the 250 milligram cohort. And so far, the drug appears to be well-tolerated at this dose as well. We expect the study to be completed and data available in the second half -- later in the second half of this year.

We met with the FDA during the last quarter of 2013 to get more regulatory clarity for the development of GTx-758. FDA agreed that a potential regulatory path forward for GTx-758 may be in men with high risk nonmetastatic castrate-resistant prostate cancer. A trial design that may be acceptable to FDA is to randomize men who have high-risk nonmetastatic castration-resistant prostate cancer to either GTx-758 or placebo, and the primary endpoint of the study could be metastases-free survival. Additionally, the study could use free testosterone levels to identify men who have suboptimal castration, which should allow us to correlate free testosterone levels with metastasis-free survival. FDA would be open to discussing the way to evaluate free testosterone as a surrogate endpoint in the future.

Today, we reported that GTx has executed a securities purchase agreement to privately place $20 million of GTx common stock at par. When the transaction is closed later this week, the $20 million financing will result in the issuance by the Company of approximately 12 million shares of stock to the purchasers, and the total issued and outstanding shares of GTx stock will then be approximately 75.2 million. The purchasers also are receiving warrants to buy at the same purchase price 0.85 of a share of GTx common stock for each share of stock acquired in the financing, for which they are paying, at closing, additional consideration in the aggregate of approximately $1.3 million. Our Chairman and largest shareholder, Pitt Hyde, who is participating in the offering, will increase his stake in the Company to approximately 32.6% upon closing of the financing later this week.

This morning, we also released our financial results for the fourth-quarter and year-end of 2013. While I will not review the financial results in detail, let me point out that we reported $14.7 million in cash and short-term investments at December 31, 2013. And with this recently announced financing, we added an approximately $21 million. These funds should be sufficient to carry us into the first quarter of 2015, which will allow us to complete the Phase I clinical trials for our enobosarm MAA; prepare and file the MAA; get FDA regulatory agreement on the enobosarm 3 milligram Phase III program in non-small cell lung cancer; report the results of the Phase II clinical study evaluating enobosarm 9 milligrams for the treatment of AR-positive metastatic breast cancer; and report the results of the Phase II clinical trial evaluating GTx-758. If the warrants issued in connection with the $20 million financing are exercised over the next 12 months, we should have sufficient funding to take us into the first half of 2016.

Marc Hanover and I will be happy to answer any questions you may have about our financial results during the Q&A. Operator, we are now ready to take our first question.

(Operator Instructions). Brian Klein, Stifel.

Thanks for taking the questions. First, on enobosarm 3 milligrams for muscle wasting, in your interactions with the FDA, do you anticipate pursuing a new SPA for the next trial that you'll need?

Okay, so the question there is whether or not if we -- after we have agreement with FDA, whether or not we'll memorialize that, if you will, with a Special Protocol Assessment?

Correct.

Yes. The answer is that would be one way to do that. And again, given agreement, it would make sense to try to get an SPA. But I -- but again, if the agreement is pretty black and white in the minutes, then it may be a waste of time. But, yes, we will do everything we can to make sure it's clear.

Great. You mentioned that your expectation for the survival analysis might be completed at the end of April. Can you give us a sense of where that data will be either reported or presented, and how you might do so?

Yes. I think once we know the data and then we'll -- I think we'll just announce it at the next scientific meeting or -- it's a good question. Late April will put us -- yes, I think we'll just take advantage of any presentation that we have, ASCO or something like that, and we'll make sure it's clear. But, again, the way we're tracking right now, we're looking at late April to get that information. And we'll report it out in a timely fashion if it's material.

Great. And will your next FDA meeting occur after that survival analysis?

Yes. Yes.

Terrific. Thanks. And then just quickly on the enobosarm 9 milligrams for breast cancer, can you give us a sense of where within the treatment spectrum you anticipate that drug might fit?

Yes. It's a good -- so, where we are right now, as you know, the field has SERMs, aromatase inhibitors. And if you believe Vasolex is a pure estrogen receptor antagonist, that's pretty much the flavors of the hormonal therapies you have for breast cancer. And breast cancer, like prostate cancer, is extremely sensitive to hormone therapy. And in some women, you can actually cycle these hormone therapies. Even if they respond and stop responding, you can come back and they'll respond again once you give them a holiday.

So androgens have been used for as long as estrogens, and are part of the NCCN guidelines in terms of treating women who have previously responded to hormones. The goal here is to figure out a way to avoid chemotherapy, which is toxic, and stay with the targeted hormone therapy. So the thought would be that we would be a part of the armamentarium of treating women with hormone-sensitive disease. And so, if they started aromatase inhibitor and they failed, they start a SERM and they failed, and they had metastatic disease, then -- and they're androgen receptor positive, then that may be a very good patient that could benefit from a SARM.

And so we see ourselves as being early, being part of the hormonal therapy, and knowing that women with breast cancer tend to be hormonally-sensitive. And so we see ourselves as sort of in the pre-chemo space.

Great. Thanks for taking my questions.

Thank you, Brian.

Biren Amin, Jefferies.

Thanks for taking my questions. Mitch, maybe I could start with enobosarm in Europe. Does the Company plan to partner the program, given your developments on the regulatory front? Thanks.

Yes. So, thank you for the question, Biren. The answer is, everything is on the table at this point. Our main goal right now is to move forward with the MAA and do the Phase I's. But certainly now that we've gotten regulatory clarity, it's opened up discussions for potential partnerships not only in Europe, quite frankly, ex-Europe too. Because you know, if you have an approved MAA, that's currency in terms of being able to go to other parts of the world. And we also have plans to also get more clarity in Japan.

But with that said, we have to evaluate all of our options, which is whether or not GTx considers commercialization in Europe by itself, whether we partner it -- those are all things that we are exploring now that we've gotten this positive news from Europe. Our job is to figure out how we can maximize shareholder benefit for this asset; especially this is the asset that's closest to producing revenue for our Company, we've got to figure out to hold onto the lion's share of that as we develop our other programs.

So there's no question we'll see more interest. But more importantly is, what does GTx need to do to make sure that we retain as much of this value as possible, given as hard as we've worked to get to this point.

And can you talk a little bit about the market potential in Europe?

Yes. What I can tell you about Europe, and this may -- I'll tell you the facts and I'll tell you what we need to learn. The facts are that about 186,000 patients in the five major European markets that will be starting first-line chemotherapy with Stage III/Stage IV non-small cell lung cancer, we know about one-third of those patients will be starting with a taxane. It's still considered a major first-line add-on, if you will, for the platinum doublet. But more importantly, in second-line and third-line, it appears that patients with non-small cell lung cancer, almost every patient is going to see a taxane at some point in their therapy if they get past first-line, second-line and third-line.

So, the market is significant. What we're also trying to understand is, because we now have a better sense of the attributes of our drug -- so, in other words, we affect lean body mass unambiguously; we affect physical function, so that's important. But one thing that we didn't anticipate was the effects on survival and how that will play into the pricing. And particularly, I'm referring to the landmark survival data. And then, furthermore, the drug is safe.

So, we have to go back and do our homework now and understand better. We did some qualitative work pre-view of the data. But now we need to go back with the attributes that we have now and get a better understanding of pricing. And once we do that, we'll be able to come back and tell you all what we think the market potential is. But the market size is significant.

Great. Thank you.

At this time, I would now like to turn the call over to Dr. Steiner for closing remarks.

Thank you, operator. We would like to thank you all for your interest in GTx and we look forward to updating on our progress in the future.

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