Traws Pharma Inc (TRAW) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics 2020 Financial Results and Business Update Conference call. (Operator Instructions) As a reminder, this call is being recorded today, March 11, 2021.

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

Thank you, operator. Good afternoon, everyone, and welcome to Onconova's 2020 Financial Results and Business Update Conference Call. Earlier this afternoon, we issued a press release reporting our 2020 financial results and business progress. If you have not seen this press release, it is available in the investors and media section of our website at www.onconova.com. On today's call, Dr. Steve Fruchtman, our President and CEO, will discuss the company's recent highlights and anticipated clinical and business milestones. And then Mark Guerin, our Chief Financial Officer, will review our 2020 financial results. Following Mark's report, we'll move to the Q&A portion of the call and we'll be joined by Dr. Steve Cosenza, our Lead Scientist.

Before we begin, I'd like to remind everyone that statements made during this conference call by management 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 could 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, it is now my pleasure to turn the call over to Steve.

Thank you, Avi. Good afternoon, everyone, and thank you for joining us. We continue to hope you, your colleagues and your loved ones are safe and healthy. We are living in amazing times, witnessing the power of nature and the dramatic influence key scientific discoveries can have to help human kind, a truly extraordinary year.

Before I discuss the progress to enter the clinic, we are making and advancing our multi-kinase inhibitor, ON 123300, which I will refer to as ON 123. I want to thank our stockholders for your tremendous support of Onconova over the years. I also want to ask our stockholders a record as of January 12 that have not yet voted to vote today in Onconova's stockholders' meeting.

The Board of Directors firmly believes that the stockholder proposals to change our capital structure by a reverse stock split in the best interest of stockholders. Turning out the vote is imperative for the company to execute its strategic plan from a strengthened position. We believe the approval of these proposals will: one, ensure, we maintain our NASDAQ listing; two, a higher stock price will increase the company's appeal and permit institutional and fundamental biotech investors to invest in Onconova; and three, support in-licensing programs under evaluation. We believe approval of the proposals is needed to continue to progress new and existing programs and create long-term value for stockholders.

We urge all stockholders who have not yet voted to please vote today. At the March 4 special meeting, which was adjourned to April 1, more than 70% of the shares which had voted, voted in favor of two proposals: one for a reverse stock split; and two, a decrease in the number of our authorized shares. However, we did not meet the required threshold for approval of more than 50% of the outstanding shares for the two proposals.

In addition, to the support of our stockholders who voted, all 3 independent proxy advisory firms, ISS, Glass Lewis and Egan-Jones, have recommended stockholders to vote for the proposals. Their support is based on their view that a yes vote is in the best interest of stockholders. The stockholder meeting process is also costly to the company and to you. If any stockholders of record have not voted, we urge you to please do so to avoid the need for additional meetings. If you voted against the proposals, please reconsider your vote. Reach out to speak with any member of management or our proxy solicitor, MacKenzie Partners if you have any questions regarding the proposal or e-mail us at letter ir@onconova.us.

We announce that we will make a $50,000 donation to the American Cancer Society, if we can achieve 70% or more voting participation by stockholders of record on January 12, regardless of how these stockholders vote. As our focus is our study and cancer indications with our novel compounds, we believe that supporting the important work of the American Cancer Society to thank our shareholders for voting is worthwhile and fitting. Again, we thank you for your consideration, and please vote your shares today.

Let me now turn to a review of our business and clinical progress, starting with our lead product, ON 123. The fourth quarter of 2020, and recent weeks have been very active and productive as we continue preparations to advance ON 123 into the clinic in the United States. We submitted an investigational new drug application to the FDA for a Phase I study in advanced cancers, including hormone receptor positive HER2-negative, metastatic breast cancer patient's refractory or resistant to health authority approved CDK4/6 inhibitors.

In December of 2020, we received clearance from the FDA to begin the Phase I study and have since received institutional review board or IRB approval at our first site. We expect that the first patient will be enrolled in the study sometime during the second quarter of this year. 2 additional sites are in the study setup process with 3 Phase I sites, we expect we will be able to expedite the time line through the important milestone of establishing the recommended Phase II dose.

We anticipate 3 Phase I sites in the U.S. in conjunction with the Phase I trial being conducted with ON 123 in China will establish the recommended Phase II optimal dose to study specific cancer indications that overexpress the tyrosine kinase targeted by ON 123, in addition to CDK4/6. These Phase I studies will assess the safety, tolerability and pharmacokinetics of ON 123 administered orally at increasing doses, starting at 40 milligrams daily continuously for 28 days in the U.S. study or 3 out of 4 weeks in the study in China. These 2 different administration schemes mimic the different administration schemes used with the 3 FDA-approved CDK 4 and 6 inhibitors. And we believe we'll support finding the optimal recommended Phase II dose of ON 123.

The Phase I study of ON 123 in China has enrolled 3 patients, each with metastatic breast cancer, and enrollment in the second dose cohort of 80 milligrams has begun. We are pleased to report that ON 123 appears to be well tolerated thus far as no dose-limiting toxicities have been seen to date.

We are most interested in studying patients with refractory hormone receptor positive, HER2 negative breast cancer. Since this indication is the one to which the established commercial 4/6 inhibitors are approved, we believe evidence of efficacy in metastatic breast cancer, along with an acceptable safety profile, could be most rapid path for an approval and for the possibility to ultimately enter the first-line setting in this indication, perhaps as a single agent, which would minimize issues with tolerance when the estrogen pathway is interfered with as is required for the commercially approved CDK 4 and 6 inhibitors when prescribed.

Due to the broader kinase inhibitory spectrum of ON 123, it has the potential for efficacy in additional tumor indications as well. We will share with you our developmental plans following the completion of the Phase I studies and our interactions with the FDA. To remind you, ON 123 is a proprietary first-in-class multi-kinase inhibitor, which distinguishes itself by targeting CDK4/6 and additional tyrosine kinase pathways involved in the proliferation of cancer cells and the metastatic potential of cancers as well.

We believe with this mechanism of action targeting CDK4/6 and additional kinases such as FLT3 and others, ON 123 represents an innovative approach to treating solid tumors and hematological malignancies that are refractory or have become resistant to CDK4/6 inhibitors as well as tumor indications where this class of drugs to date do not have regulatory approval.

Based on preclinical models, ON 123 have utility for broader breast cancer indications, such as triple-negative breast cancer as well as additional tumor types. We're very excited about the potential to improve patient cancer care with ON 123. Our other pipeline compound, rigosertib target pathways involved in neoplasia that causes it to be cytotoxic to multiple tumor types in vitro.

The first description of its unique mechanism of action was described in the prestigious journal cell in 2016, suggesting rigosertib interfere with the mutated RAS pathway, subsequent published studies demonstrated that rigosertib may function as a micro turbulent inhibitor as well as influencing the junk with J and K pathway and thereby suppression of the RAS signaling.

We are supporting ongoing investigator-sponsored studies with the oral formulation of rigosertib and are preparing to support several new studies exploring the use of oral rigosertib for cancers driven by mutations of the RAS gene.

Currently, a Phase I study in patients with advanced KRAS-mutated non-small cell lung cancer is being conducted with rigosertib in combination with the PD-1 inhibitor, nivolumab, a drug provided for this study by Bristol-Myers Squibb. The study is open and continuing to enroll.

The study objectives are to identify the recommended Phase II dose of this novel doublet and to characterize its safety profile. The KRAS mutation is a predominant genetic driver of non-small cell lung cancer. Given their utility in multiple cancer settings, checkpoint inhibitors are among the world's top-selling pharmaceutical products, and they continue to gain FDA approvals with new indications.

In our view, this makes our novel combination approach with rigosertib, a potentially meaningful option to pursue in lung cancer and other disorders with KRAS mutations managed with immuno-oncology therapies. We hope these studies will offer patients who have progressed on first-line therapy with a potential efficacious second-line treatment. Results from the Phase I non-small cell lung cancer study are expected in 2021. In addition, an investigator-initiated Phase IB/II study with oral rigosertib monotherapy in advanced RAS mutated squamous cell carcinoma is now open. And another study, based on data presented at the American Association of Cancer Research Meeting in 2019 is under review in metastatic malignant melanoma, potentially in combination with KEYTRUDA.

A preclinical study is also evaluating oral rigosertib in clear cell renal cancer. Other than the cost of supplying oral rigosertib to the investigators, Onconova does not expect to incur significant expenses for this investigator-initiated studies. We are still awaiting work on our funding request to the National Institute of Allergy and infectious diseases and the Biomedical Advanced Research and Development Authority also known as BARDA for the possible funding of clinical trials with rigosertib in patients with COVID-19 disease.

In the interim, additional preclinical work is ongoing.

And now I'll turn the call over to Mark for a discussion of our 2020 financial results. Mark?

Thanks, Steve, and good afternoon, everyone. I'll start with the review of our 2020 expenses, and then I'll discuss our cash position and cash runway. Research and development expenses for 2020 were $16.9 million, and this compares with $15.5 million for 2019. The increase was primarily related to higher regulatory consulting expenses and manufacturing costs related to clinical supply of ON 123, and partially offset by lower expenses for the oral rigosertib's combination program and the Phase III INSPIRE study in the 2020 period.

General and administrative expenses for 2020 were $8.3 million, consistent with 2019. Lower personnel and stock compensation expenses in 2020 due to personnel reductions in the 2019 period were offset by higher pre-commercialization, insurance and corporate legal and stockholder meeting expenses in the 2020 period.

Net loss for 2020 was $25.2 million or $0.14 per share on 174 million weighted average shares outstanding, and this compares with a loss of $21.5 million or $1.49 per share for 2019 on 14.4 million weighted shares outstanding. Cash and cash equivalents as of December 31, 2020, were $19 million compared with $22.7 million as of December 31, 2019.

After the end of the year, we raised net proceeds of $35.2 million from 2 equity offerings with institutional investors. Since September 30, 2020, approximately 3.7 million warrants have been exercised, resulting in proceeds of $0.7 million.

As a result, our cash and cash equivalents on February 28, 2021, were approximately $49.5 million. We believe that this cash position will be sufficient to fund our ongoing trials and business operations for more than 18 months and through the achievement of significant milestones, including pursuing corporate development opportunities. This completes my financial review. I'll now turn the call back to Steve.

Thank you, Mark. We are very excited about our development plans for ON 123 and oral rigosertib and believe we have a very strong financial position. We urge our stockholders who have not voted to please vote today in anticipation of the special meeting. We'd now like to open the call for questions. Operator?

(Operator Instructions) Our question comes from the line of Joe Pantginis.

Great. This is [Matt Keller] on for Joe Pantginis. First, can you remind us of your cell line resistance studies using ON 123 and the benefits that you saw?

Sure. And thank you for that. Steve -- Dr. Cosenza, who's on the phone, did most of those studies. Steve, would you like to take the question?

Sure. Thank you for that question. This is Steve Cosenza. The -- I believe you are referring to the resistance cell lines that are resistant to palbociclib. And these cell lines were resistant due to a deficiency in the RB pathway, either by being no, meaning they're not expressing RB or they are mutated in that pathway. And therefore, these pathways are not required for cell division.

The main target of the approved CDK4/6 inhibitors, such as palbociclib and ribociclib and to some extent, abemaciclib, require or a functional RB pathway for these compounds to be active in these tumor cells.

Our compound since is a multi-kinase inhibitor were found to -- the cells who were found to be similarly sensitive to these -- to ON 123, 123300 as RB proficient cells.

Great. That's much appreciated. Second question for you guys. I know you kind of mentioned this in the presentation, but can you provide any more detail on when you might think that we could see some of the long data with rigosertib this year?

So again, thank you for that question. So you're asking about the combination lung cancer trial, KRAS-mutated lung cancer trial in advanced KRAS-mutated patients. So the dose of rigosertib has already reached the highest level of rigosertib that we've given in the current scheme in combination with full dose nivolumab.

We will determine based on whether or not those limiting toxicities are observed, if we've already established the recommended Phase II dose of the doublet if we have not seen additional dose-limiting toxicities, we may elect to continue to dose escalate rigosertib. In either scenario, we anticipate having the recommended Phase II dose of the doublet before the end of the year.

Great. Fantastic, also very helpful. One more question before I let you guys go, also related to time line. When do you think you can see some data from the squamous cell carcinoma data that's associated with RDEB patients?

Again, thank you for your question. That's a more difficult question to answer. So these are very rare squamous cell cancers because they are driven by genomic abnormalities of RAS. So these patients are few and far between. It is an international study in both Europe and the U.S., but it's very hard in rare indications to determine when we will have the clinical data. So I'm going to basically answer, I do not know it's going to be dependent on how offering, how frequent these patients can be identified, but we are working with centers that have great expertise in this very rare RAS-driven squamous cell carcinoma of the skin.

I'm showing no further questions in the queue at this time. I'd like to turn the call back to Mr. Steve Fruchtman for any closing remarks.

Well, thank you all for participating on today's update call. To reiterate, we have several near-term milestones and value drivers ahead of us. The first, we plan to commence patient enrollment in the second quarter of 2021 for a U.S. Phase I trial with ON 123 in advanced advances. Including metastatic breast cancer patients refractory to approved CDK4/6 inhibitors. We expect to have the recommended Phase II dose for ON 123 by the first half of 2022. Two, the pipeline of investigated sponsored studies with oral rigosertib is advancing and further progress is anticipated in 2021, including establishing a dose of further study of the combination of oral rigosertib and nivolumab in KRAS-mutated non-small cell lung cancer and other solid tumor RAS-driven cancers by the end of the year. Three, we are actively evaluating strategic opportunities to enhance our product portfolio driven by science and the potential for clinical benefit for patients, hopefully, before the end of the year.

Four, and again, as an important reminder, please take action today and vote for the proposals in the special meeting of stockholders. We greatly appreciate your continued interest in the programs of Onconova. Should you have any additional questions, please feel free to contact us. Thank you, again, stay safe, and have a nice evening.

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