Oncternal Therapeutics Inc (ONCT) 2014 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the GTx third-quarter 2014 corporate update and financial results conference call. My name is Kim and I will be your operator for today.

(Operator Instructions)

As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to Henry Doggrell, Vice President, Chief Legal Officer and Secretary of GTx. Please proceed.

Thank you, Kim. Good morning and welcome to the GTx third-quarter 2014 financial results conference call.

This morning we issued two press releases. One release pertained to our $43.4 million financing that we will close later this week and a second release providing financial results and Company highlights for the quarter ended September 30, 2014. These press releases are available on our website at www.gtxinc.com.

Joining me on the call today are Marc Hanover, Interim CEO, President and COO; Dr. Mayzie Johnston, Vice President and Head of our Enobosarm Clinical Program; and Dr. Ramesh Narayanan, Associate Professor in the Department of Medicine and Director of the Center for Cancer Drug Discovery at the University of Tennessee health science.

Ramesh is a consultant to the Company and former Director of Drug Discovery at GTx who is actively involved in the preclinical development of Enobosarm. Marc will provide a corporate update and review important milestones for GTx. He will also provide a brief overview of the financial highlights for the third quarter as well as information regarding the financing we announced this morning.

We have made slides available on our website that Marc will be referring to during his remarks. If you would like to follow along, these slides can be accessed through the events calendar link on our investor relations page on our website, www.gtxinc.com.

As reminder, during today's call we will be making forward-looking statements. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risk and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These risks are described in our filings made with the Securities and Exchange Commission including our quarterly report on Form 10-Q, which will be filed with the SEC later today. You are cautioned not to place undue reliance on these forward-looking statements and GTx disclaims any obligation to update any such statements.

In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 10, 2014. GTx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I will now turn the call over to Marc Hanover.

Thank you, Henry, and thank all of you for being on the call today. I would like to spend the time this morning giving you an update on our redefined corporate focus.

Before I begin I would also like to welcome Biotechnology Value Fund and other affiliates of BVF Partners as a new institutional shareholder who participated in our recent financing and we thank them for their support. This financing, which is raising for the Company approximately $42.8 million net of expected closing costs, is sufficient for us to move our clinical development activities to the next set of important milestones.

In redefining who we are as a company the GTx value proposition is rooted in four key points as shown on slide 2. One, we are now primarily focused on treating breast cancer with our oral nonsteroidal selective androgen receptor modulator, enobosarm. Specifically, we plan to target the androgen receptor in women with metastatic breast cancer whose tumors express the estrogen receptor and the androgen receptor as well as treating women with advanced AR positive triple negative breast cancer. We have sound preclinical and clinical rationale to support these approaches, which I will review with you in more detail shortly.

Two, the commercial markets for both ER positive breast cancer and triple negative breast cancer are significant. Pursuing these indications is meaningful to patients and potentially provides shareholders with significant upside from where we are today if positive Phase 2 clinical results are achieved in either one of these indications.

Three, we plan to generate near-term catalysts from our breast cancer programs. With the initiation of two open-label Phase 2 clinical trials we will be able to monitor the progress of these studies starting in late 2015 and into 2016.

Lastly, we believe we are now in a solid position financially to deliver on our goals. The net proceeds that we are receiving from the financing announced today combined with our existing cash should be sufficient to fund our operations including our clinical studies through 2016, which is when we expect to have at a minimum clinical data from the first stage of each of our two planned Phase 2 clinical trials, one in ER positive/AR positive breast cancer and the other in AR positive triple negative breast cancer.

For those of you who are relatively new to the androgen receptor story I would like to refer you to slide 3 and take a step back to explain why targeting the androgen receptor in breast cancer is a valid approach. The androgen receptor is the most abundantly expressed steroid receptor in breast cancer making it an attractive therapeutic target.

Steroidal androgens like DHT were widely used in breast cancer prior to the introduction of SERMs and other estrogen targeted therapies. With the introduction of SERMs such as tamoxifen, greater efficacy including an overall survival benefit was seen in breast cancer patients with fewer virilizing side effects leading to diminished use of steroidal androgens. We believe that selective androgen receptor modulators like enobosarm provide a potential new approach to hormonal therapy for advanced breast cancer and in particular a nonsteroidal SARM should bind specifically to androgen receptor without the virilizing side effects seen in patients treated historically with steroidal androgens.

I will now turn to the breast cancer population in which we will be evaluating enobosarm. Let me begin with ER positive/AR positive breast cancer.

The androgen receptor is expressed in over 90% of patients with ER positive tumors. It is the most widely expressed hormonal receptor in breast cancer. Our ongoing enobosarm Phase 2 clinical study to treat metastatic ER positive/AR positive breast cancer patients is consistent with medical literature in that over 75% of these ER positive breast cancers also express AR and supports our theory of targeting the androgen receptor in this population.

And we know from historical data that androgens have been used successfully as hormonal therapies to treat breast cancer. In fact today some clinicians continue to use androgens in a late-stage setting after other hormonal options have failed, which is consistent with current NCCN guidelines.

Our market research, as shown on slide 4, suggests that of the approximately 230,000 new breast cancer patients diagnosed each year in the United States, approximately 30%, or 69,000 ER positive patients, relapsed after first-line hormonal therapy and could be a candidate for treatment with a SARM. Our rationale for pursuing metastatic ER positive/AR positive breast cancer is based upon our previously initiated and ongoing Phase 2 open-label clinical study that is evaluating AR status and the activity of enobosarm in women with ER positive and AR positive metastatic breast cancer who had previously responded to hormonal therapies and subsequently progressed.

In this study we enrolled 22 patients at seven US clinical sites. Prior to study entry these patients had metastatic disease and were heavily treated. The average number of prior hormonal therapies was three and many women had prior treatment with chemotherapy.

On slide 5 you will see that study participants received enobosarm 9 milligram once daily until they demonstrated evidence of clinical progression. The primary endpoint for the study is the proportion of subjects with AR positive breast cancer demonstrating clinical benefit at six months of treatment. Clinical benefit was defined as either stable disease, a complete response, or a partial response as defined by RECIST criteria.

Preliminary results were presented at ASCO this year by our lead investigator for the study, Dr. Beth Overmoyer from Dana Farber. The primary endpoint was assessed in 17 AR positive patients and 6 of these 17 patients demonstrated clinical benefit at six months exceeding the predefined statistical threshold for success. The results also demonstrated that after a median duration on study of 81 days, 41% of all patients, 9 out of 22, achieved clinical benefit as best response and also had increased serum PSA levels, which is an indicator of AR activity.

No confirmed complete or partial responses have been observed in the study. Enobosarm continues to be well tolerated with the majority of adverse events being Grade 1. Updated results from this study will be presented at the San Antonio Breast Cancer Symposium in December.

Now I will turn our plans for AR positive triple negative breast cancer. Triple negative breast cancer is biologically aggressive, has a poor prognosis and unfortunately has a shorter disease-free interval than ER positive breast cancer.

As shown in slide 6, of the 230,000 new breast cancer patients diagnosed annually in the United States, the literature suggests that 15% to 20%, or approximately 35,000 to 46,000 patients, are triple negative and of these triple negative breast cancer patients anywhere from 10% to 35% are AR positive. Therefore, the incidence in the United States of AR positive triple negative breast cancer is likely between 3,500 and 16,000 patients annually.

With so few therapeutic options available with which to treat these patients, our investigators tell us that a drug that demonstrate some benefit in these patients would be very meaningful. The rationale for pursuing AR positive triple negative breast cancer is based on the fact that GTx has preclinical data of enobosarm and GTx-027, a close structural analog of enobosarm, that has demonstrated anti-proliferative action in a triple negative breast cancer model.

As shown on slide 7, current medical literature reports that patients with triple negative breast cancer have more favorable outcomes when the androgen receptor is present along with the presence of androgen synthesizing enzymes. We recognize that this is a hard-to-treat population where multiple drugs and targets have previously been unsuccessful.

However, based on preclinical data, along with consultation with some key experts, we believe this is an opportunity that is worth pursuing. From the medical community perspective a non-cytotoxic targeted treatment option would indeed be welcome.

Our next steps are to initiate two Phase 2 clinical trials, one in metastatic ER positive/AR positive breast cancer patients and another in advanced AR positive triple negative breast cancer. These studies, which we plan to initiate during the first half of next year, will enroll up to approximately 90 patients per study to assess clinical benefit within six months of treatment.

Both of these studies will be conducted as a Simon's two-stage approach, meaning that we intend to enroll approximately half of the patients in the first stage, which we are hopeful will provide us with a signal with which to advance to the second stage. I look forward to updating you during the first quarter of next year on our progress in initiating these two studies.

Regarding enobosarm 3 milligram to prevent and treat muscle wasting in patients with non-small cell lung cancer, you'll remember that we have been evaluating whether data from the POWER trials are sufficient to support a filing of a marketing authorization application, or MAA, with the European Medicines Agency. Last week we met again with the Medicines and Healthcare Products Regulatory Agency, or MHRA, which is the organization responsible for regulating all medicines and medical devices in the United Kingdom, to review with them more detailed analysis of the data from the POWER clinical studies.

Based on the conversation that we had with them, we believe that data from the POWER clinical studies may not be sufficient to support the filing and approval of a marketing authorization application in the European Union without confirmatory data on physical function from another Phase 3 clinical trial for this indication. We do not currently intend to file an MAA and will evaluate whether there is commercial rationale and partner interest to support additional clinical development required for approval.

Lastly, Capesaris or GTx-758, our oral nonsteroidal estrogen receptor alpha agonist is being developed to treat advanced prostate cancer and is being tested at two doses, 125 milligram and 250 milligram, in men with metastatic and high-risk nonmetastatic prostate cancer. The 125 milligram cohort of 38 patients has been fully controlled and we expect the 250 milligram cohort of 38 patients to be fully enrolled by the end of this year.

The primary endpoint of this open-label study is the proportion of men with a decline in serum PSA levels of 50% or greater from baseline by day 90 with secondary endpoints to include data on serum, total testosterone, free testosterone, SHBG, bone turnover markers and hot flashes.

Once top-line results are available from our current study, which we expect early in the second quarter of 2015, we will evaluate potential next steps in the clinical development of GTx-758 including entering into a license or collaboration agreement in order to fund additional clinical development.

The financial results for the quarter and nine months ending September 30, 2014, are included in the press release issued earlier today. I will not summarize this financial information but will point out that we reported $11.5 million in cash and short-term investments at September 30, 2014, which does not include the approximate $42.8 million in net proceeds we are raising from the financing we announced today. As I mentioned earlier these funds, together with our cash on hand at the closing of the financing, should be sufficient to carry us through 2016 and allow us to see at a minimum Stage I results from each of the breast cancer studies that we plan to initiate in the first half of 2015.

At this time I and the rest of the GTx team with me today will be happy to answer any questions you may have. Kim, we are now ready to take our first question.

(Operator Instructions) Brian Klein, Stifel.

Thanks for taking my questions. Congrats on the new financing today.

So I guess the first question is, in terms of the breast cancer program is there any potential readthrough from competitors that are out there looking to impact the estrogen and androgen receptors? Specifically I am referring to XTANDI and how that data set, which is coming out I believe also in San Antonio breast cancer meeting, how should we read that data in terms of impact on yours?

Brian, thank you for being on the call and thank you for your questions. I'm going to turn this question over to Dr. Johnston and Dr. Narayanan.

Sure. To begin, yes, we are aware that Medivation is going to be releasing some data on XTANDI. Our understanding is for the treatment of AR positive triple negative breast cancer.

So as you know our approach is twofold. We are looking at really the full spectrum of breast cancer in that we are looking at ER positive and AR positive breast cancer, which we are aware that Medivation has a study in that space along with exemestane, to which we have no knowledge of the data. And then we are also looking to pursue AR positive triple negative breast cancer.

Based on our data, and Ramesh can comment further, we believe that there is strong preclinical and clinical rationale for our approach. We do feel that there may be a subset in which XTANDI enzalutamide may also work in triple negative breast cancer. As you know this is a very complex heterogeneous disease with multiple different subtypes. So our approach really is to look at the best option for treating these patients with this biologically aggressive breast cancer and we hope that there is -- we just hope that there is a chance for both drugs to actually offer benefit for this patient population.

Great. Thank you. In terms of starting the new studies and trying to get some data, is it reasonable to expect we might see initial results at the 2015 San Antonio Breast Cancer Conference?

Yes, our plan is to initiate both these studies during the first half of 2015. As I think you are aware these are open-label studies, so we will be monitoring the data coming in as we are progressing.

We may do something like we did this year at ASCO where we presented preliminary data on the patients that we had enrolled to date, so there is an opportunity that we may be able to get some of our data. It is unlikely that we would have all of Stage I data but we definitely want to present whatever valuable information we have at that time at that important meeting.

Perfect. And similarly for Capesaris in terms of both dose cohorts, is that something for ASCO in 2015?

Yes, we're hopeful we finish enrollment in the 250 milligram dose by the end of this year, which means that we would have early data sometime in the beginning of the second quarter. So I don't know exactly what our timing will be and what meeting we will present it at but we are looking at those options.

Great. Thank you so much for taking my questions.

Biren Amin, Jefferies.

Maybe I will start with this year's San Antonio Breast Conference and the Phase 2 study. What type of data will we see at that meeting?

We are going to be presenting a continuation of the data that we presented at ASCO, so as you are aware we presented six patients that had stable disease at the six-month endpoint. We have continued to follow those patients throughout -- through actually today until they have actually progressed. So we're going to be providing time to progression and PFS for those patients.

Okay, and then maybe the two Phase 2 trials that you plan to start next year, how many patients are you planning to target for each trial? And I think the press release states that it's going to be an open-label design but are you also looking at including a comparator arm in both studies?

In both studies we are looking at approximately 90 patients for the entire study. We are actually going to be looking at two doses of enobosarm, so the 9 milligram dose that we just studied in our Phase 2 along with an 18 milligram dose. At this time we are not planning on adding a comparator arm because they really are single seeking studies, so we need to determine what our effect size is to take the next step with a comparator.

Got it. And then maybe just from a preclinical aspect can you talk about why you are embarking on this strategy, especially I think an earlier question related to the J&J Medivation Fellows programs where they have started and focused on developing anti-androgen therapies as potential to drive antitumor responses in breast cancer, so why do you think that androgen expression may actually lead to antitumor benefit?

Ramesh.

Literature evidence strongly suggests that AR expression coupled with androgen synthesizing enzymes do have a great benefit in these patient populations, both ER positive and triple negative breast cancer. The second is that androgens have been clinically used in breast cancer even before the knowledge of the receptors existed in the 1960s and 1970s. And at the time it provided beneficial opportunities for all the breast cancer cases irrespective of the class because of the lack of the separate knowledge.

And also we conducted studies for the last four to five years in our political models and we found that the enobosarm, its structural analogues, as well as androgens as a whole have great beneficial effect in the models that we have used in our preclinical studies.

So all these put together we feel that the approach is good that it is going to be a beneficial effect with our drugs. And as you are aware that breast cancer is highly heterogeneous, there are different classes and there may be a class that is treatable with antagonists and there may be a class that is treatable with agonists. We will have to wait and see.

Got it. And then Marc maybe a question for you with the recent financing. I may have missed this, but how long does it extend the runway? Will be financing enable you to complete both Phase 2 trials in breast cancer and do those assumptions include any out-licensing efforts?

The cash that we raised takes us through 2016 and, which I mentioned earlier, at a minimum we should see Stage I data for both of these Phase 2 studies, that's triple negative and ER/AR positive. So obviously depending on enrollment timing and so forth I would love to see it happen, I would love to enroll the full study and be able to get data by the end of 2016 but at a minimum we are going to see Stage I data. Our models and our cash runway, the comment I made with regard through 2016 does not take into account any kind of partnering discussions or any cash from that.

Great. Thank you.

Thank you, ladies and gentlemen, that concludes our question-and-answer session. I will now hand the call back over to Marc Hanover for closing remarks.

Thank you, Kim, and thank everyone for being on the call today. We look forward to updating you in the near future. Thank you.

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