Aeterna Zentaris Inc.
Q3 2012 Earnings Call Transcript

Published: 14 Nov 2012

[Operator:]

Good morning. My name is Jonathan and I’ll be your conference operator for today. At this time I’d like to welcome everyone to the AEterna Zentaris Q3 Financial and Operating Results Conference Call. (Operator instructions.) Thank you. Mr. Paul Burroughs, Director of Communications, you may begin your conference.

[Paul Burroughs:]

Thank you. Good morning, everyone, and welcome to this call. With me today are Juergen Engel, President and CEO; Paul Blake, Chief Medical Officer; Dennis Turbin, Chief Financial Officer; and Nick Pelliccione, Senior VP Regulatory Affairs and Quality Assurance. Please take note that during this call we may be making forward-looking statements regarding future events and the performance of AEterna Zentaris that involve risks and uncertainties that could cause actual events and results to differ materially. These risks are described in further detail in the company’s press releases and reports filed with the US and Canadian Securities regulatory authorities. These forward-looking statements represent the company’s judgment as of today, Wednesday, November 14, 2012, and the company disclaims any intent or obligation to update these forward-looking statements unless we are required to do so by applicable law or by securities regulatory authority. However, we may choose to update and if we do so we’ll disseminate the updates the investing public. I’d now like to introduce the President and CEO of AEterna Zentaris, Dr. Jurgen Engel.

[Jurgen Engel:]

Thank you, Paul. Good morning to all of you and thanks for joining us. This was a very eventful quarter both at the drug development and corporate business levels. First, regarding our Phase III trial in multiple myeloma with Perifosine, you will recall that last spring we recovered North American rights to Perifosine from Keryx thus taking over full control of the trial. We then proceeded with an in-depth analysis of the situation and took appropriate measures that we believe will improve efficiency moving forward. As a result of these efforts, during the quarter we opened close to 20 additional sites in Europe and the Middle East and closed centers which were not active. Other potential sites in Europe have been identified and we are in the process of activating them. At the end of October enrollment stood at more than 120 patients. The next important milestone for this study will be the first interim analysis. Approximately 80 events defined as disease progression or death will trigger this interim analysis. We expect that the 80th event could occur in Q1 2013. An independent data safety monitoring board will look at both safety and efficacy data. Although we will not have access to this data we have notified DSMB members that we would like to have some indications of efficacy in order to take an enlightened decision to continue the trial or not. Furthermore, Yakult Honsha, our licensee for Perifosine in Japan, continued patient recruitment for its open label two-step (inaudible) trial in multiple myeloma in which Perifosine is combined with Velcade and dexamethasone in patients who have previously been treated with Velcade. The primary endpoint is safety while secondary endpoints include response rate, progression free survival, and time [due to] progression. Initiated in June 2012, the Yakult sponsored trial is expected to include 18 patients. Yakult expects the trial to be completed in Q4 2013. WE are also looking to expand work in other indications. Finally, data for the Phase I trial in malignant myeloma and for a Phase II trial in lymphoma with Perifosine will be presented over the next few weeks at the Society for Neuro-Oncology and the American Society of Hematology meetings respectively. Now let me turn to AEZS-108, our LH/RH agonist carrier linked to Doxorubicin. Subsequent to quarter-end of the consultation with key North American and European opinion leaders as well as FDA and DMA we filed a special protocol assessment with the FDA for our upcoming Phase III trial with AEZS-108 in endometrial cancer. The FDA has recently requested additional information from us which we are in the process of compiling and preparing for submission. We expect to receive FDA’s decision on our SPA shortly after the new year. Thereafter we plan to initiate the trial in Q1 2013 which would serve as a basis of approval for AEZS-108 in its first indication. As for the protocol, this will be an open label, randomized, multi-center Phase III trial comparing AEZS-108 with Doxorubicin as second-line therapy for locally advanced recurrent or metastatic endometrial cancer. [Process stream] will be 267 mgs per square meter of AEZS-108 by two-hour intravenous infusion on day one of 21-day cycles, and 60 mgs per square meter of Doxorubicin by intravenous bolus injection or one-hour IV infusion. The primary efficacy endpoint will be the three months’ improvement in [medium] oral survival, twelve months versus nine months. The trial will involve approximately 500 patients and will be conducted in North America and in Europe. Currently we are planning to include two interim analyses. Approximately 384 events would trigger final analysis of the data. Regarding earlier-stage clinical studies with AEZS-108, the Phase I portion of the ongoing Phase I/II trial in castration- and taxane-resistant prostate cancer was completed during the quarter and the Phase II portion has been initiated. The trial is sponsored by a $1.6 million grant from the NIH and is being conducted as an investigator-initiated trial by Dr. Jacek Pinksi at the Norris Comprehensive Cancer Center at USC, Los Angeles. We are pleased to report that additional clinical sites were recently added in the West Los Angeles and Pasadena Clinics and the Los Angeles County Hospital. The final Phase I data including information about circulating [cum. results] are expected to be presented at an upcoming conference in 2013. Still with AEZS-108, we’re very pleased with the recent site initiation at the Sylvester Comprehensive Cancer Center in Miami of the Phase II trial in chemotherapy refractory triple-negative breast cancer. In addition, the Universities of Gottingen and Regensburg in Germany will take part in the trial. Another promising oncology compound in our pipeline, Ozarelix, an LHRH antagonist, made good progress during the quarter. Our licensee Spectrum announced the initiation of patient enrollment of the second part of the randomized Phase II clinical program in men with prostate cancer for whom hormonal treatment is indicated. The objective of the international multi-center randomized open label study is to assess the safety and efficiency of a monthly dosing regimen of Ozarelix administered subcutaneously versus the LHRH antagonist ZOLADEX depot. Spectrum will enroll an additional 150 patients in Part II of the clinical program and expect results sometime in late 2013. Now for AEZS-130, our oral active ghrelin agonist as a treatment for cancer-induce cachexia. During the quarter we announced that a few [patients] had been recruited for the Phase IIa trial in cancer-induced cachexia. The trial is being conducted by Dr. Jose Garcia of the Michael DeBakey Veterans Affairs Medical Center which is funding the study under a CRADA between our company and the VA Center. This is a double-blind, randomized, placebo-controlled Phase IIa trial to test the effects of different doses of AEZS-130 in 18 to 26 patients with cancer-cachexia. The study will involve three sequential groups receiving different doses of AEZS-130 provided by our company. Each dose group will have six patients who will receive AEZS-130 and two to four patients who will receive placebo. After analysis of safety and efficacy at each dose level as well as placebo a decision will be taken as to either decrease or increase the dose. The primary objective of the study is to evaluate the safety and efficacy of repeated oral administration of AEZS-130 at different doses daily for one week with a view to develop potential treatment for cachexia. Secondary objectives will include food intake and changes in the following

[Dennis Turpin:]

Thank you, Jurgen. First, let me update you on our financing activities. Regarding our aftermarket issuance program, during the quarter ended September 30, 2012, between July 2nd and August 1st, 2012, we issued a total of 167,000 common shares as adjusted to take into account our recent 6

[Jurgen Engel:]

Thank you, Dennis. My colleagues and I will now answer your questions. I’m therefore turning the call over to the Operator for instructions on the question-and-answer period.

[Operator:]

(Operator instructions.) Your first question comes from the line of George Zavoico with MLV and Company. Your line is open.

[George Zavoico:]

Good day, Jurgen and Dennis. A couple questions about the data safety monitoring board regarding the multiple myeloma trial. You mentioned that you wanted to ask them to give you some clues as to the efficacy. How is the DSMB set up in the first place – is it just safety? And how does this alter at all the powering of the trial or the risk of losing a little bit of the powering if you know a little bit of the efficacy?

[Paul Blake:]

George, Paul Blake here, thanks for the question. The DSMB was set up by Keryx when the study was initiated and it’s all part of the special protocol assessment that was agreed with the FDA. The membership remains the same; they remain active. We’re regularly involved with providing the information that their charter calls for. At the interim review that’s planned, the DSMB will still be blind to the treatment but we have suggested they modify slightly the way they look at the data to make it including something called the conditional power calculation that can allow them to be more numerically confident or not that the treatment arms are separating. They will not see which the treatment arms are. We want to make sure that there is good reason to continue the study.

[George Zavoico:]

So I know you probably can’t say, but you’ve decided in your mind what the go/no go criteria will be based on what the DSMB has said ahead of the analysis?

[Paul Blake:]

We have worked with the DSMB so that they have agreed what a reasonable recommendation will be. And the DSMB is relatively conventionally constituted with expert statisticians and experts in the disease area in question, as well as with an ethicist.

[George Zavoico:]

I see, okay. Thank you very much. That’s clearly going to be a very important decision. I have a question regarding the Phase I trial in CRPC. You moved forward to Phase II, congratulations on that. What were the criteria for the decision to move forward that were met?

[Paul Blake:]

Paul here, again, I’ll take that one. The study in prostate cancer is the most advanced one in males – all our previous work had been in females. So the first part of the study was to see if men with taxane-resistant prostate cancer required a similar or identical dose to women or not, and in fact it turned out that the men who qualify for the study tend to be older than the women we have studied via protocols, and they’ve also been exposed to more chemotherapy in the past. So in the dose finding we were looking for dose-limiting toxicities and the dose chosen for Phase II is lower than the dose that was successful in both endometrial and ovarian Phase II studies is 210 mgs per square meter as Jurgen mentioned, whereas in our endometrial cancer working Phase III we’ll be going with a higher dose of 267 mgs per square meter. So Dr. Pinski was looking for the maximum tolerated dose that would be suitable to take forward in the larger number of patients. Does that answer your question, George?

[George Zavoico:]

Yes it does, thanks. And finally, one last question also about -108 and the endometrial trial SPA

[Paul Blake:]

Yeah, that’s a good and important question, George, and there are mechanical methods that we can keep ourselves unaware of the progress but make sure that the DSMB is aware appropriately; and that’s part of the discussions that are ongoing with the protocol in the FDA and with the evolving DSMB charter that we hope will be finalized very shortly. So I can’t give you a definitive answer because I haven’t agreed it yet with the DSMB, but it’s one of the aspects that we clearly have to pay attention to and there are techniques that we can employ that will allow that to be appropriately handled.

[George Zavoico:]

And part of the rationale for having an open label is that Doxorubicin, it’s easy to tell what’s Doxorubicin based on its color – is that correct? Is it just difficult to design a double blind trial here?

[Paul Blake:]

It would be very difficult, and I think with overall survival as the primary endpoint that’s clearly one of the aspects we’ve discussed with both the FDA and the EMA during our scientific advice procedure.

[George Zavoico:]

Okay. So the design makes it a little bit more efficient to run the trial, because of that, and presumably you’ll get to announce a little bit faster and a little bit less expensively without really sacrificing anything because it’s an overall survival endpoint?

[Paul Blake:]

It’s certainly cheaper not to go… We’d have to have done the double dummy technique if we had tried to make it double blind, and that clearly increases the costs and it increases the complexity and the chance of something else to go wrong. And as you mentioned, overall survival being the primary endpoint – that’s not usually something that’s in doubt.

[George Zavoico:]

Usually not, I agree. Okay, thank you very much gentlemen and good luck. We’re looking forward to the interim multiple myeloma results.

[Jurgen Engel:]

Thank you, George.

[Operator:]

(Operator instructions.) Your next question comes from the line of Jason Kolbert with Maxim. Your line is open.

[Jason Kolbert:]

Hi guys, it sounds like you’ve been busy with a lot of progress but I’d like to target my question to Paul Blake. I missed the first minute-and-a-half, two minutes of the call. Paul, can you walk me through what the powering assumptions were on the current trial? I just want to remind myself what the assumptions are so that we know kind of how you conclude that we should see the expected event rate by Q1 2013.

[Paul Blake:]

I’m assuming you’re talking about Perifosine, the multiple myeloma study?

[Jason Kolbert:]

Absolutely, I think that’s what everybody’s focused on right now.

[Paul Blake:]

Right, well remember that the primary endpoint is progression free survival, which includes both survival and disease progression; and I’m going back to the original planning was for a 50% improvement in progression free survival. I don’t know if we or Yakult publicly stated what the power calculation was for that.

[Jason Kolbert:]

Well let’s talk a little bit about what’s the expected survival in the control arm? How many months?

[Paul Blake:]

We are expecting 5 months in the placebo group and 7.5 months in the Perifosine group.

[Jurgen Engel:]

And this is progression free survival, not overall survival.

[Jason Kolbert:]

Right. And just remind me, based on the Phase I data what the assumptions were in order to power this trial.

[Paul Blake:]

There we’re going back to the data to Dana-Farber from Paul Richardson and his colleagues there, and I’m just pulling that up so that I don’t misspeak. If you just bear with me for a moment…

[Jason Kolbert:]

Sure, no problem, Paul, I totally understand. And you understand where I’m going with this. I’m just trying to understand how much wiggle room there is in terms of the assumptions and how conservative they are, so that we get a feel for what to expect and what the probability is that if this goes out beyond February that’s potentially good news.

[Paul Blake:]

Yeah, in Paul Richardson’s Phase I/II trial, progression-free survival was 8.8 months in Velcade-relaxed patients, 7 months in Velcade-refractory, giving an overall progression free survival of 6.4 months. And that protocol included more severely ill and more heavily pretreated patients than the current one. So from that subset you should look at the Velcade relapsed patients with a PFS in Phase I/II of about 8.8 months. So with our 7.5 months assumption here I think we’re being appropriately conservative.

[Jason Kolbert:]

Okay, terrific. Thank you so much, that really helps. Congratulations on bringing the capital in the quarter. It sounds like you’re really making a lot of progress. I’m looking forward to connecting with you later today.

[Jurgen Engel:]

Thank you, Jason.

[Operator:]

There are no further questions at this time. I’ll turn the call back over to the presenters.

[Jurgen Engel:]

We thank you for your attention and look forward to speaking with you in the near future. Thank you.

[Operator:]

And ladies and gentlemen, this concludes today’s conference call. You may now disconnect.