Traws Pharma Inc (TRAW) 2019 Q4 法說會逐字稿

Good afternoon, and welcome to Onconova Therapeutics Corporate Update and Full Year 2019 Financial Results Conference Call. (Operator Instructions) As a reminder, this call may be recorded.

At this time, I would like to turn the call over to Avi Oler, Senior Vice President of Corporate Development and General Counsel.

Thank you, operator. Good afternoon, and welcome to Onconova's fourth quarter and full year 2019 corporate update and financial results conference call. Earlier this afternoon, we issued a press release outlining our financial results and business progress during the year. If you have not seen this press release, it is available on the Investor Relations page of our website at www.onconova.com.

On today's call, Dr. Steve Fruchtman, President and CEO, will discuss the company's recent highlights and anticipated clinical and business milestones. After Steve completes his opening remarks, Mark Guerin, our CFO, will review our 2019 financial results. Following Mark's report, we will move to the Q&A portion of the call, which will be joined by Dr. Rick Woodman, our Chief Medical Officer. Lastly, Steve will come back with some final brief comments and a review of upcoming milestones.

Before we begin, I'll remind everyone that statements made today during this conference call will include forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made as the underlying facts and circumstances may change. Except as required by law, Onconova disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. Please see the forward-looking statements disclaimer in the press release issued this afternoon and the risk factors in the company's current and future filings with the SEC.

With that, I'll turn the call over to Steve.

Thank you, Avi. Good afternoon, everyone, and thank you for joining today's call. I would like to apologize for the delay in initiating the call. There were some technical factors from the operating system that really was out of our control. I also hope all of you are safe and practicing the guidelines as per our CDC. As you know, this is a very serious pandemic. So obviously, please take good care.

2019 and early this year represented a period of significant advancement in Onconova, highlighted by our recently completed enrollment of the pivotal Phase III INSPIRE trial in higher-risk myelodysplastic syndromes. With planned INSPIRE enrollment now complete, we await the reporting of 288 survival events before releasing top line survival data. As disclosed earlier this afternoon, we expect top line survival data to be available during the second half of 2020.

Survival events INSPIRE trial are occurring at a slower rate than anticipated from historical published data. The reporting of this data set is expected in the second half of this year. This is our best estimate at this time, however, the impact of the evolving situation with COVID-19 is not known.

As you recall, the INSPIRE trial is an open-label, randomized, controlled international study designed to determine the efficacy, safety and tolerability of single agent intravenous rigosertib in the treatment of patients with second-line higher-risk MDS. Patients in this study are less than 82 years of age and have progressed on, relapsed or failed to respond to previous treatment of methylating agent therapy. The study randomizes patients to receive either rigosertib with best supportive care or the physician's choice of therapy with best supportive care. The primary endpoint of this study is overall survival of all randomized patients in the intent-to-treat population.

There is a second opportunity for an FDA approval, which is the sequential analysis of the overall survival of the very high-risk subgroup as defined by the revised International Prognostic Scoring System. Should rigosertib prolong survival in the INSPIRE trial in a statistically significant manner, we believe rigosertib could be the first new treatment for higher-risk MDS in more than 15 years.

In addition to the INSPIRE trial, we are preparing for a pivotal Phase II/III combination trial of oral rigosertib and azacitidine for the treatment of adult patients, which [aid the risk] HMA-naive, high-risk MDS. We received feedback from the FDA in 2019 and are preparing a Phase II/III protocol. We anticipate this study will begin later this year in conjunction with the data readout from the INSPIRE study.

At the American Society of Hematology Annual Meeting in December 2019, Onconova presented a number of abstracts highlighting our development programs for both intravenous and oral rigosertib. The genomic data from the INSPIRE trial identifies the most common mutations in high-risk MDS following azacitidine failure, including those of the RAS pathway that are targeted by rigosertib. We believe the Phase II data of oral rigosertib in combination with azacitidine forms a foundation of a future adaptive trial in HMA-naive, high-risk MDS patients. We appreciate the recognition by ASH expert reviewers designate this data to be of such value that it was given an oral presentation at ASH.

As presented at ASH, a Phase II combination of oral rigosertib and azacitidine showed an overall response rate of 90%, 9-0, and a complete response rate of 34%. Complete response or CR, by definition, signifies the patient has a normal-appearing bone marrow and the bone marrow produces a normal peripheral blood count. Thus, these patients who are typically transfusion-dependent are rendered transfusion independent, which clearly offers great clinical benefit. The median duration of response is 12.2 months. The company believes this data support the design of a planned Phase II/III adaptive trial in HMA-naive high-risk MDS patients.

We have also made important progress with additional pipeline programs as well. Beyond rigosertib's focus in MDS, we are pleased about our other pipeline progress. And in particular, the progress of our plans to study rigosertib in RAS-driven cancers, including a study in KRAS-mutated lung adenocarcinoma. We anticipate the first patient to be entered onto the trial once the COVID-19 environment improves sufficiently. While a checkpoint inhibitors represent a significant advancement in the standard of care in treating lung cancer, tremendous unmet medical need remains. In our view, making our novel combination approach, which now will target RAS, of great interest to pursue.

ON123300 is our investigational first-in-class dual inhibitor of CDK4/6 and ARK5, which we believe has the potential to treat numerous cancers, including refractory metastatic breast cancer where CDK4/6 inhibitors have helped authority approval. As a reminder, we entered into a license agreement with HanX Biopharmaceuticals for ON123300 in December of 2017, under which HanX will provide all funding required for Chinese IND-enabling studies performed for Chinese health authority IND approval. We and HanX also intend for these studies to comply with FDA standards. The IND was approved in January of 2020 by the Chinese health authority. The manufacturer for ON123300 has been identified already and qualified. We plan to file a U.S. IND to ON123300 in the fourth quarter of 2020 after obtaining the required manufacturing data for the aspirant.

For those who are not familiar with the field, CDK inhibitors have emerged as promising compounds targeting very large indications such as hormone receptor positive metastatic breast cancer. The current generation of commercially-approved CDK inhibitors has limitations. Due to its unique targeting of ARK5 as well as CDK4 and 6, we believe ON123300 has the potential to overcome many of these limitations, making our drug candidate potentially suitable for certain cancers that may not be responsive to the current generation of CDK4/6 inhibitors. If successful, we believe ON123300 could address this very large market opportunity with a potentially better therapeutic. We maintain global rights to ON123300 outside of China.

The fourth quarter of 2019 and early 2020 was productive on the business development front as well. We executed a license agreement for rigosertib for Canada with Knight Therapeutics, we executed a license agreement for rigosertib for Australia and New Zealand with Specialised Therapeutics, we reacquired the rights to rigosertib in Greater China from HanX Biopharmaceuticals and we entered into a pre-approval access collaboration with Inceptua Medicines for rigosertib in select countries outside of the United States.

As a reminder, Onconova retains the rights in the United States, Europe and China for rigosertib, and we look forward to further business development opportunities.

And now I'd like to turn the call over to Mark Guerin, our Chief Financial Officer, for a discussion of our financial results for fourth quarter 2019. Mark, please?

Thanks, Steve, and good afternoon, everyone. Cash and cash equivalents as of December 31, 2019, totaled $22.7 million compared to $17 million as of December 31, 2018. Besides the $9 million of net proceeds from the financing we closed in early 2020, common stock warrant exercises since December 31, 2019, have added $5.7 million to the company's cash balance, resulting in a cash balance at February 29, 2020, of approximately $32.6 million. Based on our current projections, we expect that our cash and cash equivalents will be sufficient to fund ongoing trials and operations into the third quarter of 2021.

Our net loss was $21.5 million for the year ended December 31, 2019, compared to $20.4 million for the comparable period in 2018. Research and development expenses were $15.5 million for the year ended December 31, 2019, and $16.9 million for the comparable period in 2018.

General and administrative expenses were $8.3 million for the year ended December 31, 2019 and $7.6 million for the comparable period in 2018. We continue to manage our resources carefully while maintaining our primary focus on completing the INSPIRE trial.

This completes my financial review. I'll now turn the call back to Steve.

Thank you so much, Mark. With that, we'd like to open the call for questions. After the Q&A, I'll finish with some closing comments.

Because of COVID-19, the Onconova office is closed. So to make this as expeditious as possible, when a question is asked, I will -- we're all in our home offices, so I will ask our internal expert to answer your question.

So operator, please go forward.

(Operator Instructions) Our first question comes from Dr. Joe Pantginis with H.C. Wainwright.

Hope you're all well and hope you all stay well. A few questions, if you don't mind. First, on INSPIRE. Steve, I want to merge 2 of your prepared comments. Obviously, as you said, that nothing is new in 15 years, especially in the advanced population. And then you had your comment that based on observations for unblinded data, it appears to have a slower rate of events versus historical controls. So I'd like to approach that from a devil's advocate perspective. Obviously, all of us want to hope that it's due to the presence of rigosertib. So I guess from a devil's advocate perspective, what do you believe could also be impacting that? Obviously, beyond the placebo group or the control group acting better than expected, but no changes in therapeutic regimens, et cetera. So I'm just curious what your thoughts might be.

So Joe, thank you for that question. I will ask our expert devil's advocate, Dr. Rick Woodman, to answer your question. Rick?

Thank you, Steve, for that illustrious introduction. So thank you for the question, Joe. I think we have to keep in mind that the historical data regarding survival was collected well over 12 years ago and was not really collected in a randomized controlled trial. I think one of the potential factors that could be contributing to the event rate not being what we historically anticipated is improved supportive care that's occurred since that time the original azacitidine studies were done and survival was captured. I think that at this point in time, we do not see any impact of COVID on the survival events. But obviously, this is something we're monitoring through our safety reporting process, and we will continue to go forward with that, looking very carefully on a regular basis at the event rates.

Very, very helpful. And then I'll put 2 in here at the same time. With regard to the news flow around INSPIRE, based on your goal of hitting a medical conference later this year, I guess, presumably ASH, if the data -- or if you hit the events ahead of time, would you anticipate just putting out a more simplistic press release that the -- maybe the primary had been met and then hold the data until ASH? And then secondly, based on the relatively late addition of additional geographies enrolling sites like in Brazil, are you looking at any potential over enrollment?

So I'll take the first one first, Joe, if I may. So regarding release of information, if -- it looks like it's aligned and ideally, we will present the survival data at ASH. Clearly, if we have the data prior to ASH, we will be in discussions with ASH to inform them of our need based on SEC guidance that the data needs to be released to the Street, and we will do that in a timely fashion via a press release of some sort. And at the same time, make sure we inform ASH that the data will be released and yet ASH will permit us to present the data at that medical conference. And I think you had a second question, Joe, that I'll ask Rick to take.

Yes. Thank you, Joe. Your question was regarding over enrollment in INSPIRE now that we've reached 360. The current industry practice for sponsors is that patients who have consented to the study prior to achieving planned enrollment be given the opportunity to be screened and considered the study for participation. We are doing that. We are obviously following closely health authority guidelines such as the FDA's as well as national guidelines. None of those guidelines have yet said that over enrollment with screened patients is not possible. So I anticipate there may be a few patients that would still come into the study.

Got it. And my last question. Obviously, you had some BD developments as well with regard to China rights to rigosertib from HanX, but you're obviously still dealing with that company for 123300, which is a mouthful. You got to get a better name. But the -- just curious how things might be going and potentially relicensing in China and beyond.

Thanks, Joe. Avi, can you take that, please?

Sure. Thanks for the question, Joe. And you're right. We have an existing program with HanX Biopharmaceuticals, but the program with rigosertib is now -- China rights are available. So that means the largest markets in the world outside of Japan and in China, Europe and the United States, Onconova maintains all those rights. And now we've licensed rights in the fourth quarter, as Steve mentioned, to partners in Canada and in Australia and New Zealand. Those territories very much remain available. And as we complete enrollment here and as we approach data, we believe it's going to be an exciting time for Onconova on various fronts, including business development.

Our next question comes from Dr. Ahu Demir with NOBLE Capital.

Nice to hear everyone's voice, and I hope you're safe and you all stay safe. So my first question, first of all, congratulations. We needed some good news. Congrats on the completion of enrollment. So since you're expecting data in the second half, do we expect any genomic, any other types of data that will be press released or presented at the conference prior to the top line data?

Rick, please?

Yes. Thank you for that question. We have submitted an update on genomic profiling from aggregated data of the 2 arms of the study in INSPIRE to EHA. That abstract is under review now. And as some of you may have heard, some conferences are considering their status. To date, we have not had any communication from EHA.

And since -- Ahu, since we know you love RAS, I will also add that we now -- we know what the KRAS mutations are, the different subtypes of KRAS mutations seen in our patients. Based on the mechanism of action of rigosertib, that should not matter which actual KRAS type of mutation is found. But we will share that data with the medical community as well.

Okay. That's great to hear, Steve. I want to follow-up with you. Now you have the cash in hand, what would be the strategies moving forward? Do you plan to carry any other assets in the clinic or any differences that we did not see in the past years? Would we see anything different in 2020?

Avi, would you like to talk about new assets?

Thanks very much, Ahu, for the question. We've been in a really strengthened position as a result of the recent financing. So we do have options. Our highest priority is completing INSPIRE and between the necessary NDA prep, commercialization after that. But we are certainly looking for opportunities of value and we're in the strongest position we've been in some time and have that luxury. So thanks for the question.

Thanks for the answer, Avi. I guess I will direct my next question to Mark so you don't feel left out either, Mark. What would be the outstanding warrants in 2020? I believe most of them are not outstanding anymore, but I was just curious.

That's a good question, Ahu. And thanks for including me in your questions. I appreciate it. So I think if you saw the details in the press release, we said that we have $5.7 million of proceeds from warrant exercises. You'll see the full story when we file our 10-K. But of those proceeds, mostly, I guess, all of those warrants from -- since 12/31/19 were $0.20 warrants. So if you do the math, you would see that we're somewhere in the range of $28-or-so million that remain outstanding.

I would like to ask one more question, then I will pass it. So the CDK4/6 IND is a little bit postponed compared to previous disclosures. So what would be the main reason? And any way that could be faster than expected?

So I'll take that. So the issue was a simple one, which is not unusual, with a problem with a previously-identified manufacturer that we felt and the FDA felt was not up to their standards. And rather than waiting for them to do corrective measures, we made a decision to identify a new manufacturer, which was done, of course, at the time for our quality team to make sure that they are up to Onconova standards and FDA standards. So once that's been -- once that was identified, and it was, we are ready to move forward. But it did cause a bit of a delay, but we think it's worth it.

(Operator Instructions) Our next question comes from Dr. Yale Jen with Laidlaw & Company.

I wish you all keeping safe and keep continue to be safe. First of all, that -- Steve, you may or may not answer the question, but just curious, what's the current event rate of the INSPIRE study right now -- the event numbers of the study right now? And what gives you the confidence that you will have that result -- I mean, the study being completed by second half of this year?

Sure. Rick, would you like to take that?

Yes. Thank you. Thank you for the question. We are currently over 85% of the required event rate to proceed to primary endpoint analysis. Based on our tracking of event rates over the past year, we are confident that we will meet the required number of events in second half 2020.

Okay. Great. That's very, very helpful. And my second question is that the oral combination drug, the Phase II/III study, you just mentioned on your prepared remarks that will be -- will start in conjunction with the readout of the INSPIRE study. Just curious whether you anticipate to start that Phase II/III study before or maybe -- or you want to do that afterward the data readout?

I'll take that. Thank you, Yale. As I mentioned, it's going to -- based on the need to complete our protocol submitted to the FDA, have their review. There's always going to be give and take regarding the study and optimization. We need to meet with the FDA. We anticipate approximate. It's always hard to tell with precision. One, we don't know how long patients will live. But we anticipate, at site, it will probably be about simultaneous with the readout from the INSPIRE survival data. So that's our best estimate. But of course, it could change based on a number of factors, which, of course, is determined by how long patients will live, which is a little bit difficult to precisely say.

Okay. Okay. That's good to know. And maybe one more question here. With the sort of unfortunate effect of the COVID-19 infections mostly vulnerable is the older patients. So given the age group of the people in this study, do you think that could potentially, I guess, accelerate the time for readout just based on this sort of fundamental characteristics of the patients?

Rick? Rick? We may have lost Rick. So Yale, this is -- succinctly, what is your question now? Sorry.

Hi. Sorry.

So there's Rick. Okay.

Okay. Sorry for that. As you might predict, it's hard to predict for event rates. The actual impact of COVID-19 on this patient population in our study is somewhat precarious. To date, we have not seen any dramatic effects and -- but we will continue to monitor the situation.

Okay. Great. And just keep safe, and we look forward to see the readout and starting the trials later on this year.

And we do have a follow-up from Dr. Joe Pantginis with H.C. Wainwright.

I appreciate taking the follow up here. Steve, you did impart in your prepared comments, you're focused on pipeline development and expansion, obviously. So I guess, I always want to ask some of your behind-the-scenes activities, not just sitting around waiting for INSPIRE to read out, but what you're doing behind the scenes with regard to, say, pre-commercialization activities, what you're looking at for a potential NDA prep, timing for NDA prep, those sort of things.

So I'll take that. So there's a number of questions actually in there, Joe, right? One of the things we are doing is we believe rigosertib has many other potential indications in KRAS-driven cancers. So as you know, based on -- and these remarks are not pre-prepared, Joe. I do it off the cost, by the way. So KRAS-mutated lung cancer is one disease (inaudible) first attack, but there are a variety of other diseases we want to look at. And now that we have the funds, we can do it as a variety of approaches, most likely investigator-initiated trials. But those that are of interest to us are melanoma, refractory myeloma, a variety of other neurofibromatosis, schistocytosis. Those are all RAS-driven cancers.

Regarding the NDA prep, we are in the process of looking at candidates to run regulatory affairs on behalf of Onconova, looking at expert NDA organizations that all they do is submit NDAs. And we plan to work with them so we can expedite. We're already working on their parts of the NDA. As you probably know, you don't need the clinical data. So the preclinical story, manufacturing, these all can start, we started on already. So when we flip the card and hopefully have a positive survival result there, we could just put the clinical data into that report. Obviously, other previous studies also have to be part of the NDA, and all that work can be done.

And finally, we're getting an advice regarding the commercialization, what needs to be done, what our GAAP analysis is. So we are in discussions with commercial experts, getting their advice so we can move forward on that path as well. I hope that answered your question, Joe.

It certainly does, Steve.

Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to the speakers for their closing remarks.

So thank you all for participating on today's update call. Clearly, we're very excited about the progress we've made with IV rigosertib and our pipeline programs overall, and I hope you share our enthusiasm.

Important milestones we look for in the near- and medium-term include, and this listing is in no particular order: one, initiating enrollment of the Phase I/IIa trial of rigosertib plus nivolumab in KRAS-mutated advanced non-small cell lung cancer as an investigator-initiated trial; two, beginning a Phase II/III combination study for oral rigosertib and azacitidine in HMA-naive, high-risk MDS patients in conjunction with the INSPIRE data readout; three, U.S. IND submission of ON123300 during the fourth quarter of 2020, followed by clinical trial initiation; and of course, most significantly and the data we wait for with great enthusiasm, is number four, during the second half of this year, the release of top line survival data from the INSPIRE trial following reaching 288 survival events.

That concludes my closing remarks. As always, we truly appreciate your continued interest in the programs of Onconova. Should you have any additional questions, please feel free to contact us. And thanks again. Operator?

Ladies and gentlemen, thank you for your participation on today's conference call. This concludes today's event. You may now disconnect.