Achieve Life Sciences, Inc.
Q2 2014 Earnings Call Transcript

Published: 8 Aug 2014

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the OncoGenex Second Quarter 2014 Earnings Conference Call. My name is Sam, and I will be the operator for today's call. [Operator Instructions] At this time, I would like to turn the call over to Jamie Welch, Vice President of Marketing and Corporate Communications at OncoGenex Pharmaceuticals. Please go ahead.

[Jaime Welch:]

Thank you, Sam, and thanks, everyone, for joining us. With me today from OncoGenex are Scott Cormack, President and Chief Executive Officer; Cindy Jacobs, Chief Medical Officer; and Jerry Wan, Director of Accounting Operations. Before we begin, I'd like to remind everyone that today's conference call contains forward-looking statements based on current expectations. These statements are only predictions and actual results may vary materially from those projected. Please refer to OncoGenex's documents filed with the SEC concerning factors that could affect the company, copies of which are available on our website. I'll now turn the call over to Scott.

[Scott Daniel Cormack:]

Thanks, Jaime. Good afternoon, and thank you for joining us. I'd like to begin with an exciting update in regards to our management team. Earlier today, we announced that John Bencich has been appointed as Vice President and Chief Financial Officer effective Monday, August 11. John is a seasoned financial executive in the life science and technology industries, having served as CFO to 3 biotech companies prior to joining OncoGenex. He brings to our management team extensive financial leadership and strategic corporate development expertise. A more complete overview of John's experience is outlined in the press release that we issued earlier this morning. We are thrilled to have him join the team, and we look forward to his contributions as we embark upon this exciting time of growth. Before discussing our development programs, I'd like to first review our recent financing. In early 2014, in July, we completed a financing that provided net proceeds of $22.4 million. We ended June of 2014 with approximately $40.6 million in cash and cash equivalents. So, together with the proceeds of the financing, we had approximately $60 million in early July of 2014. We believe these capital resources will be sufficient to fund our currently-planned operations into the third quarter of 2016, and we expect that we would achieve the following milestones

[Operator:]

[Operator Instructions] And we have a question from Katherine Xu with William Blair.

[Filippo Petti:]

Just wanted to -- this is Fil in for Katherine. Just wanted to follow up a little bit on some of your comments on the timelines. You had touched base in terms of the interim analysis for ENSPIRIT this year. Is that going to both a PFS and an OS futility analysis, or is there something else that we're looking at there?

[Scott Daniel Cormack:]

Thanks, Fil, and again, thanks for the question. So the futility assessment for ENSPIRIT, there are 2 components to that. That includes both PFS and OS, and we'll be reporting predominantly on the OS outcome.

[Filippo Petti:]

Okay, that's great, appreciate the color there. And then in terms of OGX-427 apatorsen, in terms of -- can you give us a little bit of an update on the Pacific study and how that's going, and potential timelines regarding preliminary data from that study?

[Scott Daniel Cormack:]

Yes, so preliminary data, again, looking at the second half of this year, and as we've talked about before, that trial has additional accrual to go on, and we'll take a look at that data, and get that out and have a discussion around that when that data is available. And just to clarify on the Pacific trial, that is an open-label trial, which is what is allowing us to do that interim assessment as we're talking about.

[Operator:]

Our next question comes from Stephen Willey with Stifel.

[Stephen D. Willey:]

I know you've mentioned the longer-than-expected timelines to data with respect to apatorsen and frontline bladder, and kind of beyond the obvious rationale as to what might be causing that. Just wondering if you know anything maybe about baseline patient characteristics or, I guess, anything of the sort that might allow you to provide a little bit of color as to why you think that delay may or -- may be happening?

[Scott Daniel Cormack:]

Yes, we don't -- again, thanks again for the questions, Steve. We don't really have a lot of specifics on what is causing the shift. And I think as we've talked about in previous conference calls, we usually form our baseline of expectation around other published studies, and there are a couple of primary ones. The main one is Dr. Bellmunt's study that was published a number of years ago using the same baseline comparison against -- that they used the same that we are using as controls, versus that with M-VAC. And then there's another study that was done by the Dr. Vondermoss [ph]. And so those are kind of the baseline expectations. And of course, geographies and different [indiscernible] can contribute to the expectation of survival around those. That's probably the best that we can really do. There's nothing that -- it's pretty hard in trying to make cross comparisons in patient prognostic factors or baseline characteristics that would give you a lot of precision. I don't think we can give a lot of additional information to say this group is a lot different, or anything like that. At this point in time, we're just basically using it as a tracking metric. That's about as far as we can go at this point, I think, Steve.

[Stephen D. Willey:]

Understood. And then, I guess, strategically, do the additional resources maybe change the way you may or may not pursue kind of a positive efficacy signal coming out of that study? I guess specifically, with respect to how quickly you would look to follow up on that with a larger study with registrational capacity? And I guess, as you kind of look at some of the immunotherapies now starting to play around in bladder cancer, does that kind of create a little bit of a greater sense of urgency just with respect to trying to get something up and running so that you're not maybe competing for patients?

[Scott Daniel Cormack:]

Yes. Again, thanks for that question. Obviously, with a disease like bladder cancer, where we haven't seen improvements in treatment outcomes for just about 2 decades now, the time to market is critical for trying to make an improvement for those patients and their families. So the focus is always trying to get to market as quickly as possible. As far as the financing goes, the dollars are really earmarked to continue to execute and underwrite basically the organization, so that we can see more of the Phase II trials mature out. Obviously, if we see a spectacular result or a result that would suggest going into a bigger Phase III trial for metastatic bladder cancer, taking those resources and allocating them to a Phase III, I think you'd have to do other things, like partnering or financing or a whole bunch of other activities that would justify being able to go into those subsequent development studies, just because of the size of the trials and the extent of those. So I don't think we would necessarily look to shorten our runway in order to advance that more quickly. But obviously, that would be a discussion that we would have with not only our board and management team, but also investors, as we think about other ways to develop and move the bladder opportunity as quickly to the patients as we could.

[Stephen D. Willey:]

Okay. And then just a housekeeping question. Should we expect the collaborative revenue to just continue to trend downwards here as some of the Teva-sponsored stuff begins to wrap up a little bit?

[Scott Daniel Cormack:]

Yes, that's exactly what we would expect. As we come to the completion of AFFINITY accrual, then you'll have those patients on treatment, which obviously has some reimbursement elements to it. But as that starts to come off, then those -- the collaboration revenues would also decrease, as would the expenses. So there should be an offset from those, because those expenses basically pass through. I just want to return back to your comment on the landscape for bladder cancer if I could, as well. We spent a bit of time in the prepared statements for Hsp27. It's a fairly new field that we're starting to look at for the role of Hsp27, and its impact on the immune system, and specifically immune modulation. As we talked about, there is appearing to be a fairly direct correlation for Hsp27 expression, allowing for, let's call it, a no-danger signal, which is exactly what's happening with some of these PD-L1 works. So while that field is advancing, and there's a lot of enthusiasm for it, I think it's a very interesting component of Hsp27's biology that is suggesting that not only do we get to manifest the biology that we've talked about previously for proliferation migration, et cetera, but this ability to also potentially hide from the immune system when Hsp27 is there, I think, facilitates a very interesting opportunity as we go forward in not just bladder cancer, but this probably operates in a number of different diseases. So it's a pretty exciting field. I think, that is starting to open up for apatorsen because of that combined biology.

[Operator:]

[Operator Instructions] Our next question comes from Chad Messer with Needham.

[Chad J. Messer:]

Scott, you mentioned that -- and I know we'll get final data -- or a presentation at ESMO, but that worse patients in SYNERGY appeared to live longer, I presume you mean in custirsen-treated versus the control arm. Is there anything you can share now about what worse, what constituted worse in that statement?

[Scott Daniel Cormack:]

Yes, there'll be a lot more coming out at ESMO, obviously, and I don't want to preempt what is going to be presented there obviously, because we don't want to lose a potential presentation spot. But what we've basically done is, and I think many of the people on the call would recognize, there's a number of baseline factors that generally contribute to survival, and they form the basis of a number of different assessments. You've probably seen Dr. Susan Halabi's nomogram that she uses, which is basically putting those same factors into the system, and then basically reporting out a survival outcome when you take a look at those. This is kind of using a similar methodology. We know things like hemoglobin, LDH, PSA at different times and different assessments. All these different things will contribute to different survival. The worst of those prognostic factor is typically the shorter the survival is. So what we have done is gone through that same assessment, and that's what is starting to reveal that those patients with worse or poor prognostic factors did, in fact, live longer on custirsen, as we talked about in the prepared statement.

[Chad J. Messer:]

All right, great. Looking forward to seeing that exciting data.

[Scott Daniel Cormack:]

Yes, it will be an exciting presentation, and we'd love to do some follow-up, obviously, after that data set is available in the public domain and be able to speak to it.

[Operator:]

I have no further questions at this time. I would like to turn the call back over to management for further remarks.

[Scott Daniel Cormack:]

Great. Thank you very much, Sam, and thanks, again, everybody, for participating on this call. We look forward to providing some further updates as we look forward to announcing the completion of AFFINITY accrual, and some of the other milestones that we talked about on the call. And at this point, we will let everybody go, and thanks, again, for participating.

[Operator:]

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect.