Calithera Biosciences, Inc.
Q3 2018 Earnings Call Transcript

Published: 8 Nov 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the Calithera Biosciences, Inc. Third Quarter 2018 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Ms. Jennifer McNealey, Vice President of Investor Relations. Ma'am, you may begin.

[Jennifer McNealey:]

Thank you, Jewel. Good afternoon, everyone. Welcome to our Third Quarter 2018 Conference Call. Joining me today are Susan Molineaux, our Founder, President and CEO; Stephanie Wong, Senior Vice President of Finance; and Keith Orford, Senior Vice President of Clinical Development. We've issued our press release and it can be accessed through our website at calithera.com. Before we begin, I would like to remind you that today's discussion will include statements about our future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those in the risk factors discussed in the Risk Factors section of our quarterly report on Form Q filed with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Please note that this call is being recorded. And with that, I will turn the call over to Susan.

[Susan Molineaux:]

Thanks, Jennifer, and good afternoon, everyone. Thank you for joining us today on our third quarter 2018 conference call. At Calithera, we are building an integrated biotechnology company that develops novel small molecule oncometabolism drugs, drugs that are targeting tumor and immune cell metabolism pathways for the treatment of cancer and other diseases. By building a pipeline of novel therapeutic product candidates, we are creating multiple opportunities to positively impact clinical outcomes for patients and drive development programs towards commercialization. In the third quarter, we continued to execute our clinical development plans for our novel oral glutaminase inhibitor CB-839. We are primarily focused on executing a clinical development path for CB-839 in renal cell carcinoma, which is enrolling in two randomized double-blind trials in renal cell carcinoma now. We also announced two clinical collaborations to evaluate Pfizer's CDK4/6 palbociclib, also known as IBRANCE; and the dual mechanism PARP inhibitor talazoparib, also known as TALZENNA, each in combination with our glutaminase inhibitor CB-839. This allows us to continue maximizing the potential for CB-839 in other solid tumor indications. Our arginase inhibitor, a small molecule immuno-oncology therapeutic, continues to progress in the clinic. INCB001158 is being evaluated in two clinical trials for the treatment of patients with solid tumors, both as a monotherapy and in combination with immunotherapy or chemotherapy. 1158 is being developed as part of a collaboration and license agreement with Incyte. And data from 1158 is expected to be presented at a medical meeting in the first half of 2019. We've also deepened our pipeline with two novel programs entering clinical development next year. Our fully integrated drug discovery team continues to produce novel drug candidates with the potential to be highly differentiated new therapies in areas of unmet need. This includes our two new candidates; CB-280, a novel arginase inhibitor for the treatments of cystic fibrosis; and CB-708, an oral small molecule CD73 inhibitor for the treatment of cancer. As each of our programs move forward in development, we look forward to a number of important milestones and value inflection points in the near term. In 2019, we look forward to achieving the following goals

[Keith Orford:]

Thank you, Susan. Let's begin with a more detailed update on CB-839, our glutaminase inhibitor and our most advanced product candidate. We're currently focused on forging a clinical commercial path for CB-839 in renal cell carcinoma. The program includes two randomized clinical trials of CB-839 for the treatment of RCC. The Phase II ENTRATA trial of CB-839 in combination with everolimus in late line patients was initiated in August 2017. The randomized double-blind trial is designed to evaluate the efficacy and safety of CB-839 in combination with everolimus and approximately 65 clear cell RCC patients who have been treated with at least two prior lines of systemic therapy, including a VEGF receptor target a tyrosine kinase inhibitor. Patients are being randomized in a 2

[Stephanie Wong:]

Thank you, Keith, and good afternoon, everyone. Detailed financial results for the third quarter of 2018 were included in today's press release. I will briefly review our results on this call. Calithera ended the quarter well capitalized, which enables us to drive our clinical programs to meaningful value inflection points. Cash and investments were $141.5 million at September 30, 2018. Research and development expenses were $16.4 million for the quarter ended September 30 compared with $10.8 million for the same period prior year. The increase of $5.6 million was due to an increase in the CB-839 program, including for the CANTATA trial, which opened in 2018, an increase in the 1158 program, including Incyte's cosigning of development costs, an increase in CB-280 program as well as investments in early-stage research. G&A expenses were $3.1 million for both the 3 months ended September 30, 2018 and 2017. Net loss from operations for the 3 months ended September 30, 2018, was $18.8 million or $0.52 per share. And with that, I will now return the call back over to Susan.

[Susan Molineaux:]

Thank you, Stephanie. And with that, operator, we're happy to open the line for questions.

[Operator:]

[Operator Instructions]. Our first question comes from Konstantinos Aprilakis with JMP Securities.

[Konstantinos Aprilakis:]

So just if I missed or didn't address sort of the increase in size for the trial to 300 to 400, you've said a bit in your prepared remarks. But any more color we can get there? Is it - should we read into the sort of the delta that we're expecting there? Or is it purely sort of like you said just to get towards something that looks like a registrational trial? And then I have a quick follow-up.

[Keith Orford:]

Yes. So the study - we've increased the study really to make it something closer to what would typically be a registrational study. We have - as we've presented back in October, encouraging data on our Phase I study of the combination. So that encourages us to further invest here in this program. And I think it puts us in a better place for registration, but also to support the commercial intent of the study with - particularly with the secondary endpoint of overall survival. So - in addition of that, given the number of sites we have open, we don't expect this will delay our time line much at all. So we can really get to this larger study size in the similar time line.

[Konstantinos Aprilakis:]

Okay, great. And then just remind us the primary endpoint of PFS sort of, I know, you haven't probably haven't had official discussions with the FDA just yet, but what should we be thinking of in terms of success there help with the data into context when we do get them? What are we looking for PFS number? And given the setting that you guys are looking at?

[Keith Orford:]

Yes. So the original study was looking for 35% improvement or has a ratio of 0.65. And it has a ratio actually doesn't change significantly. It's a little closer to 0.7 now. But in addition, we've improved the power of the study. So again, so the increase sample files goes a long way toward helping us reduce the potential for a false negative.

[Operator:]

Our next question comes from Jonathan Chang with Leerink Partners.

[David Ruch:]

This is David Ruch on for Jonathan. So understanding that 1158 is a partnered program, is there any additional color you can provide on the data we can see in 2019? And in terms of monotherapy versus combo? And any patient population information there?

[Keith Orford:]

Yes. At this time, I think, we would plan to provide an update on the study. As you know, we have monotherapy, we have PD-1 combination, we have chemotherapy combinations all ongoing. So the goal is to provide an update across the program.

[David Ruch:]

Okay, great. Second question, could you provide some additional color on the trial design you're thinking of for the Pfizer partner programs? And any information on general time lines or anything you can guide investors to there?

[Keith Orford:]

So the designs, we're looking at two different studies for two different combinations. We have the palbociclib combination, which is a CDK4/6 inhibitor as well as the talazoparib combination, which is a PARP inhibitor. There will be two tumor types that we're interested, two patient populations for each of those. For the palbo combination, we're looking at KRAS mutant colorectal cancer and non-small cell lung cancer. And these will be signal finding studies with mode-sized cohorts, single-arm cohorts to look for activity and similarly, the talazoparib combination will be, again, modest - sort of single-arm cohorts with the idea of looking for signals. In this case, we're looking at triple-negative breast cancer patients as well as RCC patients. And then each of those has the potential to expand based on activity.

[Operator:]

Our next question comes from Matt Phipps with William Blair.

[Matthew Phipps:]

Just one for me. In the Phase Ib data from cabo and 839, you guys presented and then updated just a moment ago. Thinking about half of the patients how to prior checkpoint inhibitor, have you ever broken out the responses based on whether or not a patient had a prior checkpoint inhibitor since that is likely to be the patient population you enroll in the CANTATA trial does seem like the kind of best responders or longest responders had maybe more lines of therapy than patients you dropped off sooner?

[Keith Orford:]

Yes. When we've looked at that, the prior PD-1 therapy patients sort of distribute across, whether it's common study or prior responses. But you're right, a lot of the responders actually had quite a few prior therapies, and those have stayed on therapy for a while as well. And we see that as an encouraging sign that these heavily persuaded patients were patients that got benefit from the combination.

[Operator:]

Our next question comes from Robyn Karnauskas with Citi.

[Srikripa Devarakonda:]

This is Kripa on for Robyn. Given the large number of ongoing trials in RCC, I was wondering if you can just talk a little bit about your experience with enrollment rates in the CANTATA trial. And you said that you don't expect there to be a change in time lines for completion of the trial? So that was one question. And I also was wondering, given that you're enrolling more patients, the trial is larger. How should we be thinking - and all these new trials that you expect to initiate next year, how should we be thinking about expenses for the next year or so? Would it be fair to assume that we will see an increase in the 4Q run rate for 2019? And how does that change your cash runway?

[Keith Orford:]

Sure. So why don't I take the first study - the first question so in terms of enrollments, you're right, there's been a lot of activity in terms of clinical development in RCC. Although you'll notice most of it's in the frontline setting. So from the perspective of a second, third line study like this, we - there is not a huge amount of competition. Enrolling this study, it's opening - it's opened and sites continue to open, but we're on track with our time lines and have not had any concerns there.

[Stephanie Wong:]

Yes. In terms of our expenses and the 4Q run rate, we don't comment specifically on quarters or years in terms of trends. But I can say that we're expecting our cash balance will meet or exceed our cash guidance for 2018. We're also expecting on the current cash balance is going to be enough to complete to the CANTATA trial, including the increased number of patients that we plan to enroll as well as advance all the other clinical programs, which are milestones that we've discussed.

[Srikripa Devarakonda:]

Okay. Oh, sorry, can you remind us if you expect any more milestone payments over the remainder of this year?

[Susan Molineaux:]

We've never commented specifically on milestones. There are several within the collaboration agreement, and we do monitor that. But we haven't disclosed any in the near term or in the future.

[Operator:]

I'm not showing any further questions at this time. I would now like to turn the call back over to Jennifer McNealey for any closing remarks.

[Jennifer McNealey:]

Thank you, Jewel, and thanks all for joining us today. We welcome your follow-up calls with any additional questions you might have that we were not able to address on today's call. Thank you.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. And you may all disconnect. Everyone, have a great day.