Plus Therapeutics Inc (PSTV) 2020 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2020 Results Call. (Operator Instructions)

Before we begin, we would like to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics' future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time.

Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.

It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics' President and Chief Executive Officer. Sir, you may begin.

Thank you, Erica, and good afternoon, everyone. Thank you for taking the time to join us today as we provide a business update and discuss our 2020 fourth quarter and full year results.

Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer. But before Andrew provides a brief overview of our financial performance, I would like to provide an update on our drug development activities, focusing my remarks on 2 key topics. First, progress on the clinical development of our lead drug, Rhenium NanoLiposome, also called RNL, currently being developed for recurrent glioblastoma; and second, an update on additional potential clinical target indications for RNL, apart from recurrent glioblastoma.

Now for those of you who are new to the company, RNL, our lead drug, is a unique therapeutic consisting of isotopic rhenium-186, which is made in a fission reactor, that is chelated with proprietary technology and loaded into 100-nanometer liposomes.

RNL is interesting, in part because it releases 2 energy types, beta energy for cancer killing and gamma energy for imaging. Our lead indication for RNL is recurrent glioblastoma, which affects approximately 12,000 patients annually in the U.S. and about the same number of patients in the EU. It is the most common and lethal form of brain cancer. And essentially all primary glioblastoma tumors will recur after initial treatment.

The treatment of this devastating disease remains a significant challenge, and it's been about a decade since the FDA approved a new therapy to treat it. Not surprisingly, then, there is really no clear go-to standard of care for recurrent glioblastoma. And even in the few currently approved treatments, they provide only marginal survival benefit for those patients. So it's a real true unmet medical need.

Now external beam radiation therapy is commonly used for glioblastoma, and its efficacy against GBM is about as good as it gets, or really better than any other potential treatment used today. Compared to external beam radiation therapy, whereby external energy or radiation passes through healthy tissue to reach the tumor, with RNL it may be possible to deliver a radiation dose only to the tumor, that is up to 15 to 20x higher than with external beam radiation therapy as it's used today.

And despite the super high doses of radiation delivered by RNL and precisely because of its inherent tumor-targeting capability, unwanted radiation exposure to nearby healthy tissue is actually reduced.

Now the gamma energy produced by the RNL that I mentioned previously can actually be visualized in real time during administration of the drug. This may allow doctors the ability to better control the radiation dose and distribution in order to more effectively treat both the bulk tumor, and concomitantly the microscopic disease that's often left in the penumbra of healthy tissue.

In 2020, RNL was granted both orphan and fast track designations from the FDA for treatment of patients with recurrent glioblastoma. And to further assist the company in its efforts to develop RNL successfully for brain cancer and other cancers, Plus formed scientific and clinical Advisory Boards in 2020. These experts on our Boards are leaders in the fields of neuro-oncology, neurosurgery, preclinical drug development and nanotechnology, and will help guide and advise us as we advance our versatile proprietary nanotechnology forward.

The ongoing ReSPECT clinical trial is a Phase 1/2 design of up to 55 patients to determine the maximum feasible dose and to assess the safety, tolerability, distribution and potential efficacy of 186 RNL in recurrent or progressive malignant glioma, funded to a significant degree -- the trial is funded to a significant degree by the NIH or National Cancer Institutes. Through 2020 and into 2021, thus far we remain on track and on plan for our RNL development program for glioblastoma, including winding up the Phase 1 clinical program called ReSPECT, optimization of the regulatory plan and bringing the manufacturing and supply chains forward to industry standards in anticipation of the next steps in clinical development.

In 2022 -- in 2020, sorry, the Society for Neuro-Oncology annual meeting that was in November of last year, we provided an update on the ReSPECT trial for RNL. At that time, interim data from the first 15 patients through Cohort 5 in ReSPECT trial were available, and that data can be found in detail on our website. But the interim data in brief showed that intratumoral RNL can successfully deliver up to 15x the absorbed dose of radiation administered by standard external beam radiation therapy.

RNL treatment volume and radiation dose were increased successfully from the earlier cohorts to the fifth cohort. Also, RNL was well tolerated with no dose-limiting toxicity observed, despite markedly higher absorbed doses of radiation compared to EBRT or external beam radiation.

In our view, one reason we've seen no systemic serious adverse events or SAEs, such as marrow ablation, is that the radiation stays in the brain tumor and the adjacent tissue, and exposure outside the brain is very low. And there's actually about a 3,000-fold difference between those 2. Although the dose escalation part of the ReSPECT trial is not designed to show efficacy per se, we have seen 2 long-term survivors greater than 30 months, and a median and mean survival duration in subjects with tumor coverage greater than 75%, which is currently 8.9 months and 13.6 months, respectively, and growing with 6 patients still alive.

In the interim, we expanded enrollment to a third clinical trial site, MD Anderson Cancer Center in Houston. We've completed enrollment of the 3 required patients in the sixth cohort of the ReSPECT trial, increasing both the RNL drug volume and radiation dose once again. And additionally, I can tell you that we have treated 1 of an additional 3 planned patients at the Cohort 6 dosage and volume, but with more aggressive drug delivery parameters.

So thus far, in summary, 19 patients with recurrent GBM have been treated in the ReSPECT trial. The latest patient update can actually be found in our February 2021 BIO CEO corporate presentation, which is now on our website. The plan then in GBM is to complete enrollment in the Phase 1 trial this year, as well as complete critical CMC activities by year-end or early 2022, such that we would potentially be ready for a Phase 2 pivotal about a year from now, of course depending on the strength of the data and FDA feedback.

Now switching gears and regarding additional clinical development programs for RNL. A priority for us in 2021 is to move additional indications beyond recurrent glioblastoma, forward into clinical trials. Although we have promising preclinical data for a number of potential indications, we intend to focus our near-term efforts on 2 additional CNS indications, leptomeningeal carcinomatosis, which the more modern term that's used is leptomeningeal metastases, and also pediatric brain cancer. Both are 2 very difficult-to-treat cancers.

All in, leptomeningeal metastases affects about 110,000 patients in the U.S., and there is no clear standard of care. And these patients die rapidly, despite what care we do provide to them. Pediatric brain cancers, though much rarer, carry an equally poor prognosis. The anticipated treatment approach for pediatric brain cancer would mirror our approach in adults with glioblastoma, using direct targeting and convection-enhanced delivery. However, LM is a disease of the lining of the spinal fluid space, and nanoliposomes seem to circulate freely if injected there, and preclinical studies thus far look promising.

Therefore that delivery approach, which would be in LN, direct into the CSF or cerebrospinal fluid, will go typically through an indwelling reservoir, which is commonly placed in these patients. Our goal is to have pre-IND meetings with the FDA for both indications in the early part of 2021, understand any gaps that we may currently have in the preclinical data, fill those as needed as rapidly as possible, and then move these into patients, hopefully by year-end 2021, if possible.

As a final note, and consistent with our stated philosophy of striving for maximum capital efficiency and minimal shareholder dilution in our drug development activities, we intend to apply for State of Texas funding through its CPRIT, C-P-R-I-T program, whenever possible, to help support our development expenditures, as we mentioned previously on other calls.

So now with that, let me turn the call over to Andrew for a review of the financial results. Andrew?

Thank you, Mark, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year ended December 31, 2020.

At year-end 2020, cash and cash equivalents was $8.3 million compared to $17.6 million as of December 31, 2019. Debt principal at December 31, 2020, was $4.3 million, down from $9.3 million at December 31, 2019.

In April 2020, we amended our debt with Oxford, providing additional flexibility by pushing out the interest-only period through May 2021 at the earliest, together with a $5 million paydown of principal. In the fourth quarter of 2020, we entered into a purchase agreement and registration rights agreement with Lincoln Park Capital Fund to sell to Lincoln Park up to $25 million worth of shares over the 36-month term of the agreement, subject to various terms and conditions. Plus will have the right at its sole discretion to sell these shares.

In addition, in the fourth quarter of 2020, the company filed a shelf registration on Form S-3, allowing for the sale of securities at the market of up to $10 million. As previously discussed, our plan remains to maintain approximately 12 months of go-forward cash or access to cash on the balance sheet, such that we can reliably fund key product development efforts.

In addition, we will continue to utilize nondilutive sources of capital, such as the existing NIH grant that substantially offsets our clinical development costs. We will also continue to be aggressive in seeking further CPRIT and other grants and partnership dollars where able.

Cash used in operations for full year 2020 was approximately $8.4 million compared to $5.9 million in 2019. Reported revenues for full year 2020 were $303,000 compared to $7 million in 2019. This decrease was due to the closeout of the BARDA contract as previously disclosed. Research and development expenses were $2.7 million for full year 2020 as compared to $5.4 million for 2019. The decrease was partly attributed to the completion of the BARDA contract in 2019. G&A expense was $6.4 million for full year 2020 as compared to $5.3 million for 2019.

The increase reflects an increase in professional fees relating to the recent in-licensing transaction announced in 2020, partially offset by a decrease in payroll and related expenses. Interest expense decreased for full year 2020 to $1.1 million from $1.9 million for full year 2019, reflecting the principal paydowns in 2019 and 2020.

Net loss for full year 2020 was $8.2 million as compared to a net loss of $11.4 million for full year 2019. Net loss in 2019 was impacted by a $7.6 million loss from discontinued operations related to the asset divestiture in the second quarter of 2019.

And now I'll turn it back to you, Marc. I think you may be on mute, Marc.

Thank you, Andrew. Regarding our forthcoming milestones, to summarize from the previous text of the script, they are: complete enrollment of all patients in our ReSPECT Phase 1 trial for RNL in recurrent GBM; complete key CMC activities for RNL; complete the Phase 2 pivotal trial planning in conjunction with the FDA; conduct IND-enabling studies, if needed, for follow-on RNL indications, as mentioned; advance RNL into Phase 1 for leptomeningeal cancer and pediatric brain cancer, assuming we get the thumbs-up and go-ahead from the FDA. Complete additional preclinical studies, both for RNL and potential enhanced variants of RNL; continue to evaluate potential synergistic acquisitions and end licenses for new investigational drug candidates and related technology; and then continue to explore new partnering relationships, both for RNL and 2 of our legacy assets, DocePLUS and DoxoPLUS.

So with that, Erica, let's turn it over for Q&A.

(Operator Instructions) Our first question is from Jason McCarthy with Maxim Group.

It's Dave on the line for Jason. So I was just wondering if you could perhaps shed some color on when we could expect a full data readout for the Phase 1 trial, and if that would include overall survival data?

And then secondly, I just had a question about just the general risk profile of having patients undergo convection enhanced delivery. I guess I understand that in using CED, you're able to minimize systemic exposure. But I'm just curious as to how that minimized risk from that perspective balances out with the invasive nature, or relatively invasive nature of convection enhanced delivery?

Dave. Right now, I can't give you specific guidance on the Phase 1 trial data. And the reason why is, because it's a dose escalation trial, we really have to sort of play read-and-react with respect to the data. They're -- I'd say they're -- let me give you an update on what the goals of that trial are. And I think I could sort of guide you towards when that may come, but not exactly.

So in my mind, I think about it from 5 perspectives. First of all, feasibility, can we get RNL into the brain and get it to where we want to go and keep it there? I think the answer to that is yes. So I think you can check that box.

In terms of safety, and you brought up convection enhanced delivery. And that is also dose-related as well and delivery related. But so far, we've had no SAEs. So I think we're -- we've made good progress there, and I feel we're close there. The third thing that's important is getting to recommended Phase 2 dose. And I think we're getting towards the end of that derivation. We're getting now to a point where, with the volume and radiation dose we're using, we can treat tumors that are roughly golf ball size, so really getting the majority of the tumors that are out there. So we're close there.

The fourth issue is delivery optimization. And I think we're getting close there. And as I mentioned, in the Phase 1, we've opted -- we've completed phase -- the sixth cohort. And our plan now is to focus on improving and, in fact, making more aggressive the delivery parameters, specifically the rate of convection, which correlates to the pressure head behind the convected drug. So I think we're getting close there.

And then finally, with respect to efficacy signal, that's the one that, clearly, the trial is not powered for. And because it's dose escalation, it's really the patients at the end of the escalation period that are really going to drive that efficacy signal, which is going to inform powering decisions going forward.

So the way we I'd sort of guide you is that we feel pretty confident that we can get through the -- 2021 and have the trial fully enrolled. We can answer, I think, the majority of those 5 factors that I mentioned before. The one I -- we can't answer really is efficacy. And so that really drives then what we do next. And it's sort of a long answer, but I'm going to hit on a couple of things here.

So regarding the next clinical step, there are a couple of options. One is to go directly from Phase 1 into Phase 3, one is to do an interim Phase 2 or a -- what we call sort of a expansion cohort to help nail down those 5 features. And so our goal is to be ready with a pivotal-ready drug by approximately the end of the year, and we're on track for that. Wind up the Phase 1 trial and enrollment in 2021, plan out that next step, whether it's directly to Phase 3 or an interim trial of some sort, and then lay all that out to shareholders and the community as soon as possible. So 2021 will be a really important year for winding down the Phase 1, defining the -- what interim step there might be going into a pivotal and what the pivotal looks like.

So that's a long-winded answer to try to cover a lot of ground there. I hope I did that.

On the second question, regarding the risk profile of CED. So it has been remarkable that we've had no treatment-related SAEs, and the adverse events that we've had have been things related to instrumenting the skin and developing burr holes into the skull. That includes up to kind of more recently, putting 4 catheters into the brain to get optimal tumor coverage.

So with respect to the surgery and the instrumentation, it's been very safe. With respect to the convection, we're now increasing the rate. We think that we might be able to do a better job convecting out beyond the tumor and get it to the rim of the cells that are responsible for the recurrence. We're doing a great job when we deliver over 75% absorbed dose to the tumor volume, of really creating a cavity or void where the tumor was. You really just see empty space there once the RNL has had a chance to do its thing.

So really we're now becoming, I think, more sophisticated, where we're actually focusing on the cells, those pesky cells that we know that are there, that are potentially responsible for recurrences and trying to address those by optimizing the delivery parameters. We may run into safety issues. But thus far, I think it's been remarkably safe, given when you step back and think about what we're actually doing.

Your next question is from Emad Samad with Octaviant.

I just have a question on -- I think, Andrew, you mentioned non-dilutive funding from the State of Texas in CPRIT. I know in previous calls, that you've stated that the company's base in Texas could receive up to $20 million in non-dilutive funding from Texas or up to Phase 2 trials. So I was just wondering if we could get a status update in the sort of the grant cycle round in Texas. And any sort of color or visibility you can give on Plus Therapeutics qualifying for CPRIT funding, now that you've -- you're closer to exiting Phase 1.

Do you want me to -- Marc, do you want me to take it?

Yes, Andrew, I'll address -- you go ahead and then I may have something to add afterwards.

Sure. Thanks, Emad, for the question. So obviously, one of the underlying reasons for the move to Texas was to become eligible for the CPRIT grants. And at this point, we have submitted an application in the last month to help assist us funding leptomeningeal metastases indication. So that's -- the deadline for the application was end of January, and now we're waiting on the CPRIT process. So realistically, over the next -- the process runs over the next 60 to 90 days. And then the goal is to have a decision sometime late summer, in the August, September time frame.

Yes. Emad, yes, I would just -- to reiterate what Andrew said. I mean I think he said, though, in his remarks, and then I mentioned as well, our goal is to maximally leverage the unique opportunity that being an oncology company in Texas provides. Our plan is not to specifically guide towards grant funding, because there's just -- these are -- these can be hard to get and can be fraught with bureaucratic requirements and so forth that make it hard to forecast until you actually sign the paperwork and it gets approved.

So we're -- I think the key piece of guidance here is we're going to continue to aggressively seek funding like that, like the NIH, like other things that we think is -- our technology warrants that. We think there's a lot of interest and people wanting to see this successful and -- both from patient-related groups to scientific groups that have access to capital.

So we're going to be aggressive there, but we'll be careful about not guiding towards any particular grant or grant funding. And if we get it, great, if we don't, we're going to keep trying. And we think that's a good use of our -- the time and the talent of our team.

Yes. No, thank you for that. I think it's a unique opportunity for a Texas-based biotech company. And so I always just want to sort of see what the current guidance is on that. And it's -- whether you get it or not, it's great to be able to leverage your status as a Texas company to take advantage of that. So it's always just top of mind when we're talking about these programs.

Your next question is from Ed Woo with Ascendiant Capital.

Going back to the funding question, how much of the Phase 1 has currently been funded through grants?

Andrew, do you want to take that or shall I?

You want to take it? And then I'll...

Yes, and then yes, you can fill in any gaps. Yes. Thanks, Ed. So I'll take you back to the timing of the grant, because it may be illustrative. So when we -- certainly after signing the agreement with NanoTx to end license the RNL product, the grant had really just been funded. It's a 5-year grant of approximately just north of $3 million to cover the hard costs of the clinical trial. So it is -- again, it's Phase 1 and Phase 2 up to 55 patients.

So the -- we closed the deal, I think, in Q2, Q3. So it's covering a substantial amount of the clinical trial cost, probably on the order of 80% or more. The funding that we're actually contributing to the trial, beyond our time and the overhead that comes with that, the hard costs are really related to drug availability. And why that's important is that investment that we're making in terms of drug availability helps us transition this to a registrational drug supply downstream.

So we're kind of investing in what we think is one of the really difficult challenging parts of transitioning a Phase 1 program to a later-stage clinical program is getting the CMC right. So that's really where we've kind of picking up the ball from the NanoTx team and really try to nail down the CMC component of that. So I think 80-20 is probably a good number, and with most of that 20% being in CMC.

Great. And then my last question is in terms of timing, you said you hope to have most of the study wrapped up by the end of the year. Is there any possible delays either with COVID or any other external factors?

Yes. So initially we had concerns about the impact in COVID. Those fears have largely been unfounded. These are sick patients, and they are -- they get preferential treatment in the health care system because of the acuity and life-threatening nature of the disease. The -- so the direct answer to your question is really no, we haven't seen any impact of COVID per se.

Indirectly, we do see a fight for resources within the academic institutions where they are running various trials. People may be sick or out or working from home or working different schedules. And then frankly, kind of unrelated to COVID, there's a lot of competition in the workforce for clinical trial resources. And so to the degree that academic institutions are involved in the clinical trial execution, there's increased competition for those resources from pharma.

So I would say that, on the whole, we really haven't seen a meaningful delay, don't anticipate any meaningful delay. The things that we're seeing are sort of at the margin and are things that we can all -- we've been able to successfully manage through.

There are no further questions at this time. Dr. Hedrick, I'll turn the call back over to you for closing remarks.

Great. Thank you very much, Erica. On behalf of our team, we appreciate everyone that joined in to participate on the call and ask questions. And furthermore, I would like to really thank our Plus team for their dedication and hard work. It was a very productive 2020 as it relates to Plus Therapeutics. I'd like to also thank the patients that have been involved in our trials and participated in the communication effort related to the potential for RNL in these tough diseases, and then also the physicians and providers that care for these patients.

If you'd like to learn more about what we are doing, please go to our website. There are a lot of resources there, including presentations, videos, interviews with patients that are available to you. And then we post on many of the social media channels to help educate you and keep you aware of what's going on.

We are truly excited about the progress thus far. I hope you can see that in what we're doing and what we say. And we're very excited also about the vision we have for helping these patients, and all these very difficult, rare cancers. So once again, thank you, and have a good evening.

Thank you. This does conclude today's conference call. Please disconnect your lines at this time, and have a wonderful day.