Traws Pharma Inc (TRAW) 2017 Q2 法說會逐字稿

Good morning, and welcome to Onconova's Second Quarter 2017 Earnings Call and Webcast. (Operator instructions)

Please note that the remarks today will include forward-looking statements and that actual results could differ materially from those projected or implied in our forward-looking statements. For a description of important factors that could cause actual results to differ, we refer you to the forward-looking statements in today's press release and the note on forward-looking statements in the Company's SEC filings.

It is now my pleasure to turn the call over to Onconova's CEO and President, Dr. Ramesh Kumar. Dr. Kumar, please proceed.

Thank you, Lisa. Good morning, and welcome to our second quarter 2017 results call. Joining me from Onconova's management team is our CFO, Mark Guerin.

Today, I'm pleased to share with you that our two lead clinical programs continue to proceed towards multiple key milestones. In keeping with previous guidance, the INSPIRE trial with IV rigosertib is enrolling globally and the next milestone of the interim analysis is expected in the fourth quarter of this year. At the same time, we are moving forward with designing a Phase 3 trial for oral rigosertib in combination with azacitidine as a first line of therapy for higher risk MDS patients.

I'm also excited to share with you the significant interest in our pediatric RASopathies rare disease collaborative program with the National Cancer Institute, and the academia and in particular, for the rare disease juvenile myelomonocytic leukemia, JMML. There are also exciting developments underway in our preclinical programs, including CDK inhibitors for breast, lung and hematologic cancers, which has shown promising early results.

First, I will update you on the progress of our Phase 3 IV rigosertib trial as well as our oral rigosertib plus azacitidine combination Phase 3 ready program for patients with unmet medical needs in myelodysplastic syndromes.

Let's begin with our lead program. Our Phase 3 INSPIRE trial continues enrolling globally and they anticipate the next milestone, interim analysis, in the fourth quarter of this year. This analysis will be triggered after reaching 88 events or deaths. It is difficult to accurately forecast the timing of this milestone. Both the FDA and EMA have reviewed this statistical analysis plan for interim and top-line analysis, and we expect to complete the SAP in the third or early fourth quarter. This allows us to narrow our initial guidance range from the second half to the fourth quarter of this year.

As of the end of the second quarter, our INSPIRE trial had patients enrolled in 72 sites in 16 countries across four continents. So far in the third quarter, 12 more sites in two additional countries have begun to enroll patients. As previously mentioned, patient enrollment is challenging for this trial due to stringent eligibility criteria. It is important to note that these eligibility criteria allow us to enroll the proper patient population and it's intended to potentially benefit the eventual trial outcome.

As a reminder, these eligibility criteria are based on finding from our previous trial, the ONTIME trial, where the benefits to subgroups correlated with the risk stratification, as published last year in Lancet Oncology.

Enrollment for the trial has slowed recently, which could be related to seasonality. Patients and physicians may be less likely to enroll in a trial in the summer months. We are taking proactive measures to increase participation, including the addition of trial sites in three new countries and changes within the CRO group.

It is also possible for a full enrollment to be completed in the first quarter. It is still possible for the full enrollment to be completed in the first quarter of 2018, however, we are cautious given the current summer trends. Should enrollment not return to desired levels, full enrollment may be delayed by several months. We expect to have more clarity on the timing of full enrollment and top-line analysis after the completion of interim analysis, which is expected in the fourth quarter of this year.

In June, we presented a poster of the American Society of Clinical Oncology, commonly known as ASCO, providing further supporting rationale for administering rigosertib to higher-risk MDS patients who fail hypomethylating agents, or HMAs. The Landmark Analysis of this Phase 2 study of 64 patients (corrected by company after the call) demonstrated that bone marrow response correlated with overall survival. Importantly, in this trial, 22% of patients achieved complete bone marrow response and 47% achieved disease stabilization in this post-HMA patient population.

Our second advanced trial program, as you know, is an oral rigosertib plus azacitidine combination as a potential first-in-line therapy for patients with higher-risk MDS. This trial is now in Expansion Phase. Following a successful end-of-Phase 2 discussion with the FDA in the fourth quarter of 2016, a Scientific Advice process was initiated with the EMA and was completed this July. Based on this feedback, a pivotal Phase 3 trial is currently being designed, which we expect to begin after obtaining SPA, or Special Protocol Assessment, following the completion of the ongoing expansion trial.

The Phase 3 trial design is 1:1 randomized controlled trial of oral rigosertib plus azacitidine compared with azacitidine plus placebo in first-line patients with high-risk MDS. Initiation of the Phase 3 trial, which is planned to be conducted globally will require additional financing.

We plan to initiate the FDA Special Protocol Assessment process following the completion of an ongoing expansion Phase 2 trial of the combination therapy. This Expansion Phase is designed to enroll up to 40 patients with key objectives of dose optimization and determining an optimal schedule of administration for the combination therapy. We have opened four sites in the U.S. and plan to activate additional sites in the U.S., Europe and Australia. The first patient was enrolled in April and we hope to provide additional updates in our upcoming releases.

Since this trial is for front-line patients and all patients will get an active drug, either AZA or AZA plus rigosertib, we expect this trial to accrue more rapidly than trials for second-line patients, which have an inactive control group.

Clinical and non-clinical data relating to the combination therapy was first presented at ASH 2016 and updated at the MDS Symposium held in May in Valencia, Spain, and in the 22nd Congress of the European Hematology Association in June.

Previously presented data demonstrates that the combination therapy may overcome hypomethylating agent resistance and also indicates that further study of rigosertib in AML is warranted. Because up to 30% of patients with MDS can develop AML, it is our intention to study AML in the future.

As mentioned earlier, we are excited to announce a new multipart collaborative program with the National Cancer Institute, NCI, academia and non-for-profit organizations. This collaboration is focused on rigosertib in pediatric RASopathies, a group of rare diseases which together impact one in 1,000, according to a patient advocacy group. We are grateful that the NCI plans to support a broad rigosertib clinical trial for RASopathies. While the NCI will conduct a trial for RASopathy-related cancers in pediatric patients, the company will initially focus on Juvenile Myelomonocytic Leukemia, JMML, a pediatric inherited disease which shares characteristics of MDS and myeloproliferative neoplasms. JMML is a well-described RASopathy affecting children, which is incurable without an allogeneic hematopoietic stem cell transplant.

Our Chief Medical Officer presented findings that highlighted approaches for studying rigosertib and RAS-mediated diseases on July 30th at a conference organized by the Rasopathies.net. As RASopathies is one of the most important pediatric genetic syndromes, we are pleased to bring together families, clinicians and scientists to foster collaborative research efforts. The program leverages our focus in MDS and MPNs and we expect to further advance approaches to studying rigosertib and RAS-mediated diseases. We are also exploring a collaboration with an academic group focused on development of novel therapeutics for these children. We will seek grant support for these activities while supplying the drug and our expertise.

We plan to sponsor on October 11 of this year a KOL breakfast to bring together disease area experts, patient advocacy groups and our own knowledge to draw attention to this unmet medical need and the potential for rigosertib in RASopathies.

Also in the second quarter, we published positive data for our proprietary preclinical next-generation CDK4/6 +ARK5 inhibitor. These new CDK inhibitors have potential application and a broad range of solid tumors, particularly breast and lung. CDK inhibitors are likely to become an integral part of cancer therapy in the future.

Our third-generation CDK inhibitor is differentiated from other products in the market, such as a Palbociclib, Ribociclib and Abemaciclib as well as those in development by competitors. We feel that these compounds broaden our pipeline by addressing solid tumors, which are as you know have significant market importance and represent a sizeable total addressable market opportunity.

Our intention is to [partner] these assets early as we believe them to be superior to currently marketed products as well as those in development. We are excited about the developments in our ongoing programs and just as excited about new collaborations and preclinical programs.

I will now turn the call over to Mark Guerin, Onconova's CFO, for a discussion of our financial results in the quarter.

Thanks, Ramesh. At the end of the second quarter, our cash and equivalents totaled $15 million compared to $21.4 million as of December 31,2016. This amount includes the proceeds from the financing we completed in April in which we've raised approximately $5.2 million before underwriting discounts, commissions and operating costs.

On May 17, 2017, the underwriters exercised their option to purchase an additional 363,580 shares, which resulted in additional gross proceeds of $0.8 million.

Total revenue was $0.3 million for the second quarter and $0.5 million for the six months ended June 30, compared to $2.2 million and $3.7 million, respectively, for the comparable periods of 2016.

Research and development expenses were $4.6 million for the quarter and $9.5 million for the six month period, compared to $5.6 million and $11.4 million, respectively, for the year ago periods.

General and administrative expenses amounted to $1.8 million for the second quarter and $3.9 million for the six months ended June 30, compared to $2.1 million and $5.3 million, respectively, for the same period in 2016.

I will now hand the call back to Ramesh for his closing remarks.

Thank you, Mark. We are well positioned for multiple key milestones as we seek to address the underserved needs of patients with MDS. Our lead clinical programs are proceeding as planned, and combined with the progress on promising pre-clinical programs, demonstrate the depth of our pipeline. With additional funding in place, we are well placed to execute our clinical plan. We expect interim analysis for IV rigosertib and the launch of Phase 3 trial of 2018 for our oral combination therapy to represent key catalysts for the company.

Thank you for your interest in the company and your continued support. Thank you for joining us today. I look forward to updating you soon on our continued progress. I will now open the call to questions.

(Operator Instructions) Our first question will come from the line of Jason McCarthy with Maxim Group. Please proceed.

It's Gabrielle Zhou for Jason. So I have a couple of questions. Can you tell us a little bit more about the plan for expanding to a pivotal Phase 3 study for the double AZA and rigosertib for the first-line MDS? And how many patients as well as the endpoints and delta and timing to initiate a study? Thank you.

Thank you, Gabby. Yes, this is a very important trial because as you know the last product approved for front-line MDS patients was more than 10 years, maybe more than 11 years ago. So there hasn't been a new front-line therapy.

So based on what we learned in our end-of-Phase 2 meeting with the FDA and the Scientific Advice from Europe, we plan to do a randomized controlled trial in which azacitidine plus rigosertib, the combo, will be compared with azacitidine plus placebo, so effectively a single agent compared with a combo. And the combo was tested in our Phase 2 trial, which as I mentioned is now in the Expansion Phase.

It will be a one-to-one randomized trial. And based on the comments we have from agency, the primary endpoint will be overall response rather than survival, and the response will be complete remission or partial remission. And these are very, very hard endpoints. But still since the endpoint is not survival, we have decided to pursue a Special Protocol Assessment.

And as you are aware, the SPA process allows you to fully define the size of the trial, the scope of the trial, potential indication, and the delta that will get you approval. So all of these things and the power of the trial, which will determine the size of the trial, are under discussion; and once we have the SPA agreement, Special Protocol Assessment agreed upon with the FDA and Scientific Advice completed with the EMA, we will be able to announce the size of the trial as well as the delta that we are shooting for. Hope that addressed your question.

Thank you. Our next question will come from the line of Robert LeBoyer with Aegis Capital. Please proceed.

My question has to do with the dimension of the changes that you are making to continue enrollment in the current trial, and there was a mention of changes of the CRO and several other factors. Could you just expand a little bit on what you're doing to restore the rate of enrollment?

Robert, thank you. That's a very good question and very topical for us. First of all, this is a truly global trial. In addition to siteswe are sponsors of, directly in the U.S., Canada, UK, Western and Eastern Europe, Australia and Israel our partner, SymBio, of Tokyo is running trials in more than 30 sites in Japan. So our partners uses their own CROs, their own internal operation, and we use a number of CROs to conduct our trials, including collection of genomics samples, which is part and parcel of the trial.

We are just are shuffling the deck so to speak so that we can improve the efficiency and make sure that the trial is done properly and as fast as possible. So both the quality and the speed of the trial are important.

One of the things that we note is that in summer, particularly in Europe, there is a very, very clear slowdown, and we just want to take advantage of these summer months in making this transition so that we don't lose any time in transitioning and quickly go and continue to enroll.

Our goal is to update the investors and analysts following the company of how this is going. As you know, to get to interim analysis, you need 88 events and we announced today that the fourth quarter will have interim analysis. So once we have the interim analysis, we'll be able to give you a clear guidelines and guidance on when we expect to get to 225 patients, which is the total number of patients, and from there when do we expect the range of time in which we'll have top-line analysis. Hope I answered the question.

Yes, that was the kind of information I was looking for. Just one follow-up. With the interim analysis in the fourth quarter in view of the summer slowdown, is it possible that might move into the first quarter or is that firm at this point as best as anyone can tell?

Robert, as we commented, it's very difficult to pin it down because we are dealing with lives, survival. But given everything we know, remember that we have done a fairly large global Phase 3 trial in this similar population earlier and The Lancet Oncology publication gives us some guidelines on what to expect in terms of the survival of the control group and what are we shooting for of median survival in the test group. So keeping all these factors, we feel comfortable with the fourth quarter assessment, but obviously we will continue to update it and keep investors and analysts informed.

Thank you. Our next question will come from the line of Yale Jen with Laidlaw & Company. Please proceed.

As you indicated in the press release that the recruitments slowed down a little bit, I just want -- I may have missed that earlier, so would that be a possibility that the interim data could be in the first quarter of next year and that -- so that after that you have finalize the statistical plan and scope with the FDA?

Thank you, Yale. I just answered Robert LeBoyer's question which was very similar. At this point, we think with the interim analysis is likely in the fourth quarter. And the slowdown of enrollment is more recent. It's in the summer months. And as you know, to get to certain number of deaths, you need enrollment way in the past. So we don't think that the most recent slowdown impacts it. So that's why we were able to refine the interim analysis to fourth quarter from our earlier guideline, a broader time range of second half of the year.

Okay. And in terms of the statistical analysis that you discussed with the FDA, would you shed a little bit more light in terms any specifics? Or was something sort of different or unanticipated compared to what your earlier thoughts or there is not much surprises there?

Well, thanks, Yale. As you know, in a global development program, and ours is truly global, you have to seek, in our case, sequentially the opinion of the FDA, the EMA and then eventually the PMDA in Japan and it's rare that all three of them are complete rubberstamp exactly the same. So what we are doing right now is that having to seek feedback from the FDA and EMA, we are reconciling it, make sure that there is one document that all of the agencies will allow us to use because this is a global trial.

So at this point, it will be unwise for us to say more because we believe that we are very close in getting this reconciled SAP in place. And once we have that, we'll be happy to make everybody aware of the fact that the SAP is in hand; and then secondly, if there is anything unusual or different, we can talk about that.

At this point, all I can say is that we're moving towards getting a finalized SAP. We are working diligently on that.

And this should be done, I assume now prior to you reporting the data also possibly occur in the fourth quarter, would that be a reasonable timeline to think?

Well, our guidelines have in the call script and in the releases, we expect it to be a third quarter or early fourth quarter event, based on -- which is in our hands. As you know, the other parties, the regulatory agencies, they are aware of our estimates of when the events will occur. So I expect it to happen in that timeframe.

Okay, and last question here. Again, this first-line combination therapy, thinking SPA, could you give us a little bit timeline in terms of when you'll be submitting that? I understand that after that will be on agency's hands in terms of when potentially to -- so to arrive destination, but at least on your part, when [maybe] submitting that?

We have completed two steps out of I think three or four steps in getting to the SPA since we have had written feedback from the FDA which happened late last year, and we have feedback from EMA, which happened just in July. So we have those two parts.

The third part really is to get this expansion trial pretty much enrolled. And as you know, this is moving faster because it is the first-line patients and all the patients get active drug. So once we have all these three pieces, and the last piece is really to get the SPA and the Scientific Advice documents in front of regulators, we do also have to go to Japan because that will be part of the global trial.

So although it's very difficult to nail it down to month or a week, we feel that we are moving towards the third of the three parts. So in the next quarterly earnings call or sooner, we'll be able to talk about actually having started the process. So I'm afraid to really give you a in-precise timetable at this point. So this will have to wait, as I said, for the third part.

Okay, great. That's very helpful. And maybe a last question a little bit just on the expanded study. I mean what might be the anticipated or [planned] number of patients? And could you characterize those patients a little bit more in terms of their solid status? And so that will be my last question here.

So thank you, Yale. This study is going to be conducted in the U.S., Europe and Australia. So, so far we have open sites, four open sites in the U.S., and the first patient was enrolled in April and it's going quite well, especially compared to second-line trial. It's going well because all the doctors are looking for a new frontline therapy. And once the European and the Australian trials open, which we expect will be substantially open in this quarter, the remainder of the third quarter, we will be able to talk about how far are we? Are we there two-thirds of the way?

In general, it's our policy not to talk about actual enrollment at all and certainly not before all the sites are online. So this is not going to take a long time to enroll. And the good news is that this is a response-based trial. We're just looking for CR or PR, which can be had as quickly as three months after the patient enters the trial. Remember that we are looking for both efficacy and safety.

Just to point out, many combination trials in the past have suffered because of duration of treatment and we are very mindful of that. We want to make sure that the patients in the combination arm stay on the drug for as long as is beneficial to them. And that requires you to give the right dose and right schedule, and we are taking a little bit more time to make sure that that is considered and that's completed before we embark on this very important pivotal Phase 3 trial.

Thank you. Our next question will come from the line of [Leonard Elman], private investor. Please proceed.

I'd appreciate if you could give us an idea of what information you'll actually provide with the early look at the INSPIRE trial hopefully in quarter four or if necessary in quarter one next year?

Thank you, Mr. Elman. As I replied to the previous question, we are right in the middle of completing the Statistical Analysis Plan in consultation with the FDA and the EMA. As soon as that is in hand, and our estimate is third quarter or early fourth quarter, we'll be free and able to talk about the nature of the interim analysis, which right now our forecast is for the fourth quarter of 2017.

So the interim analysis is very important. I think it's a key milestone for this trial for second-line patients. And we'll be able to say more about the interim analysis, maybe even refined further the timing of the analysis once we have SAP in place.

And second and perhaps related question. If unfortunately the data from the interim analysis of INSPIRE is not favorable, what sort of funding will you have available to pursue the frontline plan going forward?

Well, thank you again. This is a good question, but I'm lost to speculate in this context. Obviously, for the sake of patients and the physicians who are working on the trial, we would like the interim analysis to be positive. We designed the trial to succeed. So, unfortunately, I will not be able to give a specific answer to your question.

And I have one final question. Do you have any sense or hunch why the market capitalization of the company is so minute given the fact that you have a very promising Phase 3 study close to read out and a potential Phase 3 study for frontline therapy? I can't think of any other biotech company that is so lowly valued with promising studies close at hand?

Thank you, Mr. Elman. I appreciate your sentiment and question and, certainly, we are in a unique position. I can report two facts. One is you heard questions from various analysts covering the company. You can look at their reports and their estimates, which are substantially higher than where we are today. It's just the nature of the status of the company and the stage of the company, and our goal as management and the team we have is to really improve on that. And one way we do that is through hitting milestones.

As you pointed out, we have one Phase 3 trial ongoing more than midway because interim analysis is ahead, and another Phase 3 trial ready to go. And in addition, we have an orphan drug program. We have very promising pipeline. So all the ingredients for higher value and greater success are there, and it's not yet recognized.

So I would say looking at the mirror that it's our job really to get that recognized. And part of that is to execute on the trial and also to send the message through forums like this one and others that we have a potentially very valuable pipeline and potentially a really disease-changing paradigm. So thank you for your question.

And just one final question. Is there any further DMSB contemplated for INSPIRE?

I think there are several periodic DMSB. We've announced that we went through two of those successfully, and I'm sure that in this trial, if we went through two before interim, there will be more contemplated for the remainder of the study. And we will be making those announcements as those meetings are held and the report released.

Moving on, our next question will come from the line of Yale Jen with Laidlaw & Company. Please proceed.

Thanks for taking the follow-on questions. Just given that you anticipate - you feel comfortable that the interim analysis data -- announce will occur in the fourth quarter as roughly your guidance over the second half of this year, so should we also anticipate that the potentially the complete patient recruitment should be done maybe by first quarter of next year and have the final -- the top-line data in this first half of next year? Or you think that will be pushed out slightly towards maybe a quarter or so?

Thank you, Yale. What we said earlier is that we will have a much better idea of those two things, the full enrollment and top-line analysis, after we reach the interim analysis. Because we'll know how many patients are there at that time, what's the run-rate. Because of the recent summer slowdown, we've been cautious and are making that projection prematurely. So we'll be updating that as we go through the summer as the new changes take effect, new countries come online, we'll be able to give you guidance on whether it will be delayed or it will be on time. And if it's delayed, how much is it delayed? Is it delayed by a month? Is it delayed by a quarter?

So at this point, we are sticking to focusing on the interim analysis, gathering all of the information so we can give you a very clear and hopefully reliable estimate of when the trial will be complete.

Thank you. (Operator Instructions) And I'm showing no additional or follow-up questions. I'd like to hand the conference back over to management for some closing comments and remarks.

Lisa?

Okay. Thank you, everyone, for joining today's call and we look forward to communicating with you again for the third quarter. Have a great day.

Thanks, everybody.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program, and we may all disconnect. Everybody, have a wonderful day.