Plus Therapeutics Inc (PSTV) 2020 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Third Quarter 2020 Earnings Results Call. (Operator Instructions) And before we begin, we want to advise you that over the course of this 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 report 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, Catherine. Good afternoon, and thank you for taking the time to join us today as we provide a business update and discuss our 2020 third quarter results. Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer.

Before Andrew provides the financial performance, (technical difficulty) glioblastoma; and second, an update on additional potential target clinical indications (technical difficulty) to cancer.

Recurrent glioblastoma is the most common and lethal form of brain cancer affecting about 13,000 patients per year in the United States. Essentially, all primary glioblastoma tumors occur after initial treatment. There are currently few approved treatments in the recurrent setting, which, in aggregate, provide only marginal survival benefit. RNL has a number of unique aspects that provide compelling scientific rationale that it may show improved outcomes over currently used therapies.

First, compared to external beam radiation therapy, whereby high energy radiation passes through and affects healthy tissue to reach the tumor, RNL is prepared in liquid form and injected directly into the tumor. This inside-out targeted approach with RNL may reduce unwanted radiation exposure to nearby healthy tissue. Furthermore, because rhenium can be visualized in real-time during administration, RNL may let doctors better control the radiation dose and distribution to more effectively treat not only the bulk tumor but also the attendant occult microscopic disease that lies in the surrounding healthy tissue and fuels recurrences.

Also it may be possible to deliver a radiation dose to the tumor that is up to 15x to 20x higher with RNL than with external beam radiation therapy. We have yet to determine a maximum tolerated dose in our preclinical or clinical studies.

In addition, with a long half-life, namely about 90 hours, liposomal encapsulation and low clearance rate, RNL's pharmacokinetic profile allows the drug to stay for a long time where it's applied, maximizing the time on tumor of the radiation and theoretically maximizing the cancer killing effects.

Finally, in terms of patient convenience, RNL is administered in a single treatment and a short hospital stay compared to external beam radiation therapy that may require 20 or more treatment visits for a full therapeutic course.

One of the company's first priorities in advancing the development of RNL is to surround and support our efforts with a world-class expert group who possess the knowledge and experience in the fields of neurosurgical operations and neuro-oncology as well as have a clear understanding and appreciation for RNL's profile and potential.

To that end, we were pleased to announce in October the formation of a clinical advisory board to help successfully bring our investigational RNL drug through the clinical development process. These 5 experts are leaders in their fields and will be important to our efforts on behalf of the patients with glioblastoma.

We are on track in making good progress on the important 2020 milestones for this program, including completion of the clinical trial enrollment, 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.

During the third quarter, the FDA granted both Orphan Designation and Fast Track Designation for RNL for their treatment of patients with recurrent glioblastoma.

Now let me just provide an update specifically on the ReSPECT, safety and feasibility trial for RNL. The fifth dose escalation cohort is now complete and 15 patients have been treated thus far with RNL. Single treatment radiation dosing with RNL is now above 10x the typical dose administered in the recurrent setting.

The increased treatment volume and dose in the 6 cohort should accommodate tumors up to approximately 4.5 centimeters, which should include the majority of tumor recurrences. No treatment-related serious adverse events have been observed thus far. And as previously mentioned, there appear to be early signals of efficacy in patients with adequate dosing and tumor coverage even at the lower volume and dosage levels.

We have also expanded enrollment to a second site and we intend to have a third site on board soon. Finally, as recently announced by the company, our abstract on the clinical experience thus far with regard to RNL, will be presented at the 25th Annual 2020 Society for Neuro-oncology held November 19th through 22nd and that's actually going to be a virtual meeting due to COVID-19, but it's being held in Austin, Texas. Regarding additional clinical development programs for RNL outside of recurrent glioblastoma, we intend to provide an update and discuss concrete next steps sometime in Q4. As previously mentioned, leptomeningeal carcinomatosis, peritoneal carcinomatosis and recurrent head and neck cancer represent 3 promising potential indications based on existing preclinical data that we have generated thus far.

Regarding our out-licensing activities, we are having discussions with potential partners regarding opportunities to help us expand RNL development internationally, while the company focuses its efforts primarily on the U.S. development for RNL. Regarding our 2 other clinical stage assets, DocePLUS and DoxoPLUS, we continued global partnering discussions while remaining focused primarily on RNL and its development in the U.S.

So now let me turn the call over to Andrew for a review of the third quarter 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 third quarter and 9 months ended September 2020. At September 30, 2020, cash and cash equivalents were $7.6 million compared to $17.6 million as of December 31, 2019.

Debt principal at September 30, 2020, was $4.3 million. In April 2020, we amended our debt with Oxford, providing additional flexibility by pushing out the interest-only period through May 2021, together with the paid down to $5 million of principal. Cash used in operations was approximately $5.2 million for the 9 months ended September 30, 2020, compared to $6.9 million for the same period last year. There were no reported revenues in the third quarter of 2020 as compared to $4.8 million in the same period last year. The decrease in both periods was due to the closeout of the BARDA contracts we mentioned last quarter.

Research and development expenses was $0.3 million in the third quarter of 2020 as compared to $0.9 million in the third quarter last year. For the 9 months ended September 2020, R&D expenses were $1.6 million compared to $3.6 million in the same period in 2019. The decrease was partly attributed to the completion of the BARDA contract in 2019. Approximately $0.8 million was incurred in Q2 2020, relating to the in-license agreement with NanoTx, $0.4 million was paid in cash and it closed in early May with the balance in stock. In addition, our grant from NCI covers the clinical costs on ReSPECT to RNL clinical trial.

Our sales and marketing expenses were approximately $0.1 million in the third quarter of 2020, and $0.3 million for the 9 months ended September 30, 2020, essentially unchanged compared to the respective period last year. G&A expense was $1 million for the third quarter of 2020, unchanged from the same period last year. For the 9 months ended September 30, 2020, G&A was $3.8 million as compared to $3.3 million in the same period of 2019. The slight year-over-year increase reflects an increase in professional fees in Q2 2020 relating to the recent in-licensing transaction. This increase was partially offset by a decrease in payroll and related expenses. Interest expense decreased in the 9 months to September 30, 2020, to $0.9 million from $1.5 million in the 9 months to September 30, 2019, reflecting the principal paydowns in 2019 and 2020. Net loss for the third quarter of 2020 was $1.7 million as compared to a net income of $0.5 million in the third quarter last year. This change is primarily due to the approximately $7 million loss from discontinued operations in 2019 that is related to the Q2 2019 asset divestiture. And now I'll turn it back to you, Marc.

Great, Andrew. Thank you. So just before we finish up and have Q&A, regarding previously announced forthcoming milestones. In short, we are on track. As to our primary year end goal, completion of enrollment in ReSPECT, we currently believe that cohort 6 will be the final dosing cohort and still intend to complete that by year end. To that end, active patient screening is ongoing now at Site 2. That's at UT Southwestern in Dallas, Texas, and Indiana to Houston is on track to begin screening soon and that will be Site 3.

As recently announced, we plan to report the up-to-date data set and enrollment progress on ReSPECT at the Society for Neuro-Oncology Meeting in mid-November of this year. Informed by the data from the final cohort, which, as I mentioned, we presume to be cohort 6, we'll take that data, optimize the regulatory and clinical plan for RNL for recurrent glioblastoma. And then seek FDA guidance on next steps, which will likely fall sometime in the second half of 2021.

Okay, going on in the background in parallel to the current ReSPECT clinical trial, in our regulatory efforts, as I mentioned before, our CMC team is now actively manufacturing the drug for ReSPECT. So we brought that in-house. As well, we're putting in place the proper manufacturing controls and capabilities appropriate to provide drug for a late-stage clinical trial and that we anticipate to also be a second half 2021 event. In Q4 of this year, as I mentioned, we'll discuss more publicly what we plan to move into the clinic as it relates to the RNL pipeline. And then we're going to continue to push forward on the RNL DocePLUS and DoxoPLUS partnering discussions and we'll discuss that further when and if those discussions merit the discussion. So with that, Catherine, I'll turn the Q&A over to you, and be happy to answer along with Andrew, any questions that anyone may have.

(Operator Instructions) Your first question comes from the line of Jason McCarthy with Maxim Group.

A couple of questions. First, as far as the data that we could expect to see it show in November, will we be seeing overall survival data? And if so, will that data be compared to some sort of historical control? And if so, that historical control, would it be kind of matched in terms of the disease states that these patients are in?

Hey, Jason. Yes, we'll provide overall survival data. The caveat there is there'll be patients that have been recently treated and still alive. So we won't -- we'll be able to draw meaningful conclusions on overall survival. Only in so much as that we can take a look at the patients that are both -- have expired or still alive. So it will be sort of a blend there. And then we'll discuss historical overall survival. We don't intend to have an age or a specific disease match control. But I think the overall survival in their current setting is pretty well-known to be in that 6- to 9-month range.

Great. And as you start thinking about meeting with FDA and then Phase II or a Phase II registration study, however you're going to map it out, we found that a lot has changed in the space just in the last 12 to 24 months. And now we're seeing smaller trials with external controls or the synthetic control arm that the FDA seems to be open to and also, the GCAR, the AGILE program for glioblastoma that's using a very large groups control for all the drugs that they're testing. Are these different avenues that you're looking at when you're thinking about getting RNL towards a registration study and how to actually frame that study?

Yes, they are. As you know, there hasn't been anything approved in recurrent setting since, I think, going back maybe almost a decade. So it's a tough problem. We've obtained Orphan drug status, Fast Track status. Breakthrough status is not out of the question, depending on the clinical data that comes forth out of the ReSPECT trial and then using synthetic control or looking at other trial approaches will definitely be something that we'll incorporate into our discussions with FDA. I think there are a lot of alternatives here. Based on the severity of this disease and the posse of good therapies.

Got you. And then just last question on the pipeline for expanding R&L, I know you haven't specifically said which indications, but are certain indications like prostate cancer or ovarian cancer kind of on your shortlist areas where brachytherapy and radiation implants are more widely used where these physicians will be comfortable using an isotope like rhenium and could make that switch and do those trials?

So I would say those, the ones you mentioned are probably second tier. First tier are going to be those indications where we have preclinical data that we think is suggestive of potential clinical success. We like [comenzio] carcinomatosis, of which there's nothing approved for that. The only approved drug, Depocyt was taken off the market in the last couple of years. And peritoneal carcinomatosis similar, both indications, in fact, about 100,000 patients in the U.S. every year. Late-stage recurrent head and neck cancer is also an area where there's promising preclinical data and not a lot to offer these patients who are usually been maxed out on surgery, radiation and chemotherapy. Anything that goes much beyond those will require additional preclinical studies? It doesn't mean we're not interested, but those 3 I mentioned before, things that we think are things we're looking at most closely.

Potentially, there are some other areas in the CNS in the brain or the related structures that might be useful that aren't specifically recurrent glioblastoma but might provide some indications where we can leverage existing clinical data set to get into the clinic more rapidly.

Your next question comes from the line of Ed Woo with Ascendiant Capital.

My question is on cohort 6. Do you expect the time line on that to be similar to the cohorts that you've done before? Or have there been either increases in speed or delays in speed, particularly with what's been going on with the pandemic?

Yes, it's Marc. So we'll -- when we enroll the first patient in cohort 6, we'll announce that. We'll have a 30-day review period. We'll increase both the dose of the drug and the volume of the drug. So we're obligated to wait 30 days and go back to the DSMB before we can go back and complete that cohort. So that cohort will likely be a total of 6 patients. The -- I would say, the enrollment pace is accelerating. Just having corporate resources behind the trial as opposed to this being a purely academic trial and also having the NCI behind the trial, which is new to 2020. I think all those things together, allowing us to move more quickly, adding additional sites also is important. As you know, UT Southwestern is now on board, MD Anderson, we hope to be a third site. So that's why we're still cautiously optimistic we could complete enrollment by the end of the year. But still be a push, but we think we can get there. And then we'll have to let the last patient, the trial play out 6 months before we're ready to move, proceed to the next step.

But I think, as mentioned, I think we're roughly on track with that time line.

Great. And then has there been any update on funding from the state cancer fund? And also how will that funding affect your decision into moving on to other cancer indications.

So CPRIT has -- COVID, didn't answer your question about COVID in the trial. COVID hasn't really hurt our efforts in a meaningful way with respect to enrollment. Where COVID has made an impact is on the availability of CPRIT grants. And in fact, we were just alerted I think in the last week or so, that there's likely an RFP coming that we might be able to go to seek funding for either RNL for recurrent glioblastoma or additional indication. So we're waiting for specifics around that, but it looks like now that CPRIT is now back open for business, where there historically have been 2 funding periods, 1 in the December, January, February time frame and 1 in August, September time frame. So it's our plan to submit at each cycle, and we hope that they are getting back to a normal cycle, which will be 2 grant submission opportunities on a yearly basis. And our plan would be to use that both for these new indications or potentially follow-on trials with RNL, for example, in diffuse intri-potine glioma, nonoperable glioblastoma and potentially some other areas that we're not currently treating or addressing.

Your next question comes from the line of Sean Lee with H.C. Wainwright.

Most of my questions have been answered, but I just have a quick one. In the prepared remarks, you mentioned that the CMC work has been -- are doing -- have been completed and guys are preparing the GMP batch for the pivotal study. So I was wondering whether there's any additional work left to be done on the manufacturing side? Do you intend to produce all the drugs yourself going forward? Or at least for the study needs? And when do you expect the GMP batch will be ready?

Thanks, Ed (sic) [Sean]. So right now, as I mentioned, we're manufacturing the drug along with our radionucleotide manufacturing partner in San Antonio for the Phase I trial. We make the liposomes and then we work with them to load them and then make them available to the 3 clinical trial sites. And the background, we're working on the validation and verification studies as it relates to the drug to move it kind of out of Phase I drug readiness into a potential pivotal trial. That's going to require not only the [BNB] work that I mentioned before, but also the scale-up to, so that we can get roughly 10% of commercial scale. So all that's going on in the background. That will largely be outsourced, even though we have a fully capitalized clinical stage and even commercial stage manufacturing facility in San Antonio. Our plan is to -- because of the unique nature of this drug, the fact that there's a radionucleotide that the liposomes have to be loaded, we'll likely outsource a lot of that CMO work. And then once we get approved, then we'll decide kind of whether to completely outsource that or bring that in-house. We have the capability to bring it in-house. But the supply chain and logistics are such that can't -- it's a little too early to tell whether that will make sense at this point.

And there are no further questions at this time. I'd like to turn the call back over to Dr. Hedrick.

Great. Thank you, Catherine. I appreciate everyone that joined in and participated in the call. Just to close, I'd like to thank the employees of the company and the patients involved in the trials and the physicians that are increasingly excited about the opportunity to potentially work with us and helping to bring this through the approval process. So have a good evening. And again, appreciate you being on the call.

Ladies and gentlemen, this concludes today's conference call. Please disconnect your lines at this time, and have a wonderful day.