Oncternal Therapeutics Inc (ONCT) 2015 Q2 法說會逐字稿

Welcome to the GTx second-quarter 2015 corporate update and financial results conference call.

(Operator Instructions)

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

Thank you. Good morning and welcome to the GTx second-quarter 2015 financial results conference call.

This morning we issued a press release providing financial results and Company highlights for the quarter ended June 30, 2015. The press release is available on our website at www.gtxinc.com.

Joining me on the call today are Marc Hanover, our Chief Executive Officer; Dr. Rob Wills, our Executive Chairman of the Board; Dr. Mayzie Johnston, Vice President, Medical Affairs and Clinical Operations; and Dr. Ramesh Narayanan, Associate Professor of the Department of Medicine and the Director of the Center for Cancer Drug Discovery at the University of Tennessee Health Science Center.

As a reminder, during today's call we will be making certain 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 risks 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 annual report on Form 10-K filed with the SEC for the period ending December 31, 2014 and our quarterly report filed for the period ending March 31, 2015. You are cautioned not to place undue reliance on these forward-looking statements and GTx disclaims any obligation to update such statements.

In addition this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 6, 2015. 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 begin by outlining the progress we made over the last few months.

During the quarter we announced that Dr. Diane Young would be joining the Company in July as our new Vice President, Chief Medical Officer and we are very pleased to now have Diane on board to add her clinical development and medical expertise to our team. With two breast cancer studies just getting underway and several other clinical opportunities being evaluated her strategic insight and recent development experience will be invaluable.

During the second quarter we initiated our Phase 2 clinical trial of enobosarm in patients with advanced androgen receptor positive triple negative breast cancer. With more sites coming online over the next few months in the United States and abroad we anticipate having the first stage of the study enrolled during the first half of 2016.

We plan to initiate our Phase 2 AR+, ER+ advanced breast cancer study in the third quarter of this year and we anticipate that we should be able to enroll the first stage of the study during the first half of 2016. We continue to advance the optimization of our lead SARD candidates in collaboration with scientists at the University of Tennessee and we expect to be able to move forward by the end of this calendar year to the next phase of preclinical testing needed to bring the best SARD compounded to the clinic. We believe that SARDs may provide a novel treatment for men suffering from castration-resistant prostate cancer including those who are unresponsive or are resistant to currently approved therapies.

We mentioned last quarter that we were evaluating other compounds in our SARM portfolio for indications outside of oncology where unmet medical needs in muscle-related disorders may benefit from building muscle. There are several interesting opportunities including orphan indications which we continue to evaluate. One of these includes the use of a SARM to treat Duchenne muscular dystrophy which Rob will outline in greater detail shortly.

Finally, in regards to our ongoing Phase 2 clinical study of GTx-758 or Capesaris for metastatic and high risk non-metastatic castration-resistant prostate cancer all patients dosed with either 125 milligrams or 250 milligrams of GTx-758 crossed the day 90 efficacy evaluation period in July. The purpose of this study was to confirm the safety and mechanism of action of GTx-758. The final meeting of the independent Data Safety Monitoring Board took place in June and did not identify any addressable safety issues with either dose.

Additionally, the study confirmed the drug's mechanism of action with increases in SHBG leading to reductions in free testosterone and PSA. Final efficacy and safety data will be provided at an appropriate scientific meeting and submitted for publication.

Before turning the call over to Rob let me conclude with a brief update on our financial results for the quarter ended June 30, which are more fully outlined in our press release issued earlier today. We reported $39.4 million in cash and short-term investments at the end of the quarter. We believe our cash should be sufficient to carry us through 2016 and allow us to see preliminary results from each of our Phase 2 breast cancer studies.

Additionally, I would like to note that we reported a net loss for the second quarter of $48 million. This net loss included a non-cash loss of $43 million due to the change in fair value of the Company's warrant liability.

The warrant liability was recorded in conjunction with our November 2014 private placement and we anticipate continuing to recognize the related non-cash gains or losses through the earlier of December 2016 or the exercise of these warrants. Excluding the non-cash warrant expense the actual operating loss for the second quarter of 2015 was approximately $5 million.

Now I'd like to turn the call over to Rob Wills.

Thank you, Marc. First let me say how great it is to be working with Diane Young again. I can tell you from my experience working with Diane in the past that she is going to add a great deal of value in terms of medical expertise particularly in the oncology area.

As importantly I can also say firsthand that she has a track record of getting drugs approved -- drugs developed and with the attention to optimizing the overall drug profile both safety and efficacy particularly as it compares to existing and evolving treatment options. We are fortunate to have someone of Diane's caliber at GTx.

As I mentioned during the call, during the last conference call I am pleased with the assets we have within the GTx portfolio and I'm confident in the two track strategy we have implemented since I joined the Company. Our primary focus continues to be developing enobosarm for the treatment of advanced breast cancer and advancing our SARD program to the clinic. Our second track is to monetize certain of our pipeline assets as business development opportunities arise.

Let me update you on our Phase 2 clinical trial of enobosarm to treat androgen receptor positive triple negative breast cancer. Although the majority of breast cancers are hormone receptor positive up to 20% of women will be diagnosed with triple negative breast cancer, meaning there is an absence of estrogen receptor, progesterone receptor and the HER2 receptor. These patients do not respond to the available treatments for hormonally responsive tumors or HER2-directed therapies.

Triple negative breast cancer occurs more frequently in younger patients, women under 50 years of age and generally shows a more aggressive behavior. For these patients the standard palliative treatment options are limited to cytotoxic chemotherapy. However, even after initial response to chemotherapy the duration of response may be short and there is a higher likelihood of visceral metastases, rapidly progressing disease and inferior survival compared to hormone receptor positive breast cancer.

Medical literature suggests that the androgen receptors expressed in 15% to 50% of triple negative breast cancer tumors, a wide variation depending on particular patient population and results of certain histological scoring criteria. We know from previously reported clinical studies that the androgen receptor expression is a favorable prognostic indicator and the androgen receptor expression coupled with androgen synthesizing enzyme inversely correlates with the tumor proliferation marker Ki-67.

Ki-67 is a protein found in growing dividing cells. The higher percentage of Ki-67 the more rapid the tumor growth. Our preclinical data of enobosarm and companion compound GTx-027, which is a close structural analogue of enobosarm, has demonstrated antiproliferative action and triple negative breast cancer cell lines in patient-derived xenograft models.

Tumor growth was reduced by greater than 75% in these in vitro models. Androgen receptor agonists including our SARMs up-regulate the expression of tumor suppressor genes and down-regulate oncogenes in preclinical models of triple negative breast cancer, resulting in the inhibition of cancer cell proliferation and migration. In addition our SARMs inhibit paracrine factors such as interleukin 6, matrix metalloproteinase 13 and chemokine ligand 5 which are secreted during epithelial mesenchymal cell interaction which promote migration and metastases of cancer cells.

Initiating our open label proof-of-concept Phase 2 trial of a daily dose of 18 milligrams of enobosarm in patients with androgen receptor positive triple negative breast cancer was an important milestone for us. The study will enroll up to 55 patients to obtain 41 evaluable for the primary efficacy objective defined as clinical benefit at 16 weeks.

There will be two stages of evaluation in the clinical trial, the first stage assessment occurring following 16 weeks of the treatment for the first 21 evaluable patients. If at least two of these 21 patients achieve clinical benefit the trial will continue to enroll the second stage of the study. Clinical benefit is defined as a complete response, partial response or stable disease as measured by standardized response evaluation criteria at 16 weeks.

During this third quarter of this year we will also initiate a Phase 2 clinical trial of estrogen receptor positive and androgen receptor positive advanced breast cancer to evaluate whether a 9 milligram or an 18 milligrams once-daily dose of enobosarm can effectively and safely treat this disease. Medical literature as well as our initial enobosarm 9 milligram Phase 2 pilot study indicate that over 75% of breast cancer patients expressing ER also express AR.

Additionally we have generated data in preclinical models using cell line and patient-derived xenografts to support our rationale that a SARM can treat estrogen receptor positive and androgen receptor positive breast cancer. Our SARMs up-regulate the expression of tumor suppressive genes and down-regulate oncogenes in preclinical models of estrogen receptor and androgen receptor positive breast cancer, resulting in the inhibition of cancer cell proliferation and migration. In addition, our SARMs inhibit several estrogen receptor target genes such as progesterone receptor, the estrogen receptor and a gene that is referred to as PS2 which secretes the proliferation of tumor cells.

In our Phase 2 clinical study in the estrogen positive and androgen positive breast cancer the study will enroll up to 118 patients to obtain 88 evaluable patients, 44 patients in each of two cohorts. One cohort will receive a daily dose of 9 milligrams enobosarm and the other cohort a daily dose of 18 milligrams of enobosarm. There will be two stages of evaluations in the clinical trial with the first stage assessment occurring following 24 weeks of treatment for the first 18 evaluable patients in each of the two cohorts.

If at least three of these 18 patients achieve clinical benefit in one or both cohorts the trial will continue through the second stage for that cohort. Clinical benefit is defined as a complete response, partial response or stable disease evaluated by a standardized response evaluation criteria.

Patients demonstrating clinical benefit at 24 weeks will be allowed to remain on the study for up to 24 months provided they continue to have clinical benefit which will allow us to collect additional safety and efficacy data. We look forward to providing you with additional information of both of these Phase 2 enobosarm advanced breast cancer clinical trials as we have material information to report.

Let me now turn your attention to our SARD program. Although current therapies have improved overall survival in men with castration-resistant prostate cancer approximately one-third of these patients do not respond to these therapies due in part to the presence of splice variance including the androgen receptor variant 7.

Splice variants of the androgen receptor have been identified in which the ligand binding domain, the binding site for androgens and necessary for action of many of the current therapies is lost. In addition, most patients who initially respond to available treatments eventually progress due to the emergence of resistance to these therapies.

It is believed that castration-resistant prostate cancer growth remains highly dependent on androgen receptor activity although the mechanism which underlie this resistance are not fully understood. We believe a therapeutic agent that would safely degrade multiple forms of the androgen receptor including those without the ligand binding domain would be uniquely positioned to address this patient population.

Since we introduced the SARDs to you in the first quarter this new platform has generated a great deal of excitement both internally and among potentially interested partners since it offers a new hope for men with castration-resistant prostate cancer and may well offer new treatments for other medical conditions. We are very enthusiastic and continue to conduct research in collaboration with the University of Tennessee Health Science Center to select and optimize appropriate drug development candidates to move into the preclinical studies required to support initial clinical trials. Again we believe our SARD compounds can degrade multiple forms of the androgen receptor including the androgen receptor variants.

Let me take you back to a comment made earlier by Marc in reference to Duchenne muscular dystrophy or DMD and explain our rationale for using a SARM. By way of background, the Company has developed a core competency in the area of SARM technology which includes extensive preclinical and clinical development experience as well as an expansive library of SARM compounds. Based on the substantial data we have accumulated from our SARM research efforts we believe our SARM technology is uniquely well-suited to treat specific muscle-related disorders such as DMD.

DMD is a rare genetic disorder characterized by progressive muscle degeneration and weakness. It is caused by the absence of dystrophin, a protein that helps keep muscle cells intact. Symptom onset is in early childhood, usually between the ages of three and five and the disease primarily affects boys.

Until recently boys with DMD did not survive much beyond their teen years but advances in cardiac and respiratory care survival into their early 30s is becoming more common. DMD remains an unmet medical need which the FDA has recently issued guidance affirming FDA's interest in finding new treatment options for this disease.

Patients suffering from DMD may be able to benefit from a SARM's ability to increase muscle mass. We are undertaking preclinical studies and have initiated discussions with experts to better understand the potential of SARMs as a treatment option for DMD. As material data becomes available we will provide further updates.

We are also looking at another muscle-related indication which we plan to update you on later this year.

As we have stated before the primary focus of our Company is enobosarm for the treatment of advanced breast cancer and the development of our SARD technology. We plan to fund continued development of these programs through the sale or licensing of certain other of our assets including GTx-758 and our ER, our estrogen receptor alpha agonist library of compounds or perhaps through a collaboration with potential strategic partners who have expressed an interest in our primary focus technologies. We will only enter a collaboration in a way that will preserve the value of the program for GTx and its shareholders.

I look forward to updating you on additional progress across our programs in the coming months. Operator, we are now ready to take our first questions.

(Operator Instructions) Biren Amin, Jefferies.

Yes, thanks for taking my questions. Maybe I will just start off with enobosarm.

In the triple negative study you characterize these patients as advanced patients. How many lines would these patients have failed before enrolling in the study?

Hi, Biren, it's Mayzie. Patients that would be eligible for this study they must have received at least one prior chemotherapy but currently the maximum number of chemotherapies is two. So we're looking at treating in the second and third line.

Got it. And then on the ER+ study, why evaluate the 9 milligrams dose? Is it mainly to optimize the clinical profile from a safety efficacy benefit?

Yes, that would be correct.

And I guess are you evaluating combination with aromatase inhibitors or would these patients have failed on aromatase inhibitors?

We are not evaluating the combination of aromatase inhibitors or any other compound at this time. And yes these patients will likely have failed aromatase inhibitors, have responded at some point but then have progressed.

Got it. And then just a last question on the DMD program, which animal models are you evaluating the SARMs on?

So we're looking at a knockout mouse model which would knockout dystrophin and mimic the human condition.

Got it. Is there any plans to evaluate in the Golden Retriever muscular dystrophy model?

Not currently actually. Hi, it's Ramesh Narayanan here. Not currently right now because of the variability in that model and other conditions that we want to limit ourselves to the mice model, as what Rob mentioned we are evaluating in the single knockout dystrophin model.

I think it's also fair to say that we're talking with experts and we're in the process now of gathering information that may be helpful and deciding what are the appropriate models. And the dog model has been mentioned but it does have its difficulties.

Got it. Thank you.

(Operator Instructions) As there are no further questions I would now like to turn the call back over to Marc Hanover for closing remarks.

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

Ladies and gentlemen, thank you for participating in today's conference in this concludes the program. You may now disconnect. Good day.