Calithera Biosciences, Inc.
Q1 2019 Earnings Call Transcript

Published: 10 May 2019

[Operator:]

Hello and welcome to the Calithera Biosciences Q1 2019 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. I would now like to introduce your host for today's call, Jennifer McNealey. You may begin.

[Jennifer McNealey:]

Thank you Tonda. Good afternoon everyone. Welcome to our first quarter 2019 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO, Keith Orford, Chief Medical Officer and Stephanie Wong, Senior Vice President of Finance. We have 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 Litigations 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 risk factors discussed in the Risk Factors section of our quarterly report on Form 10-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 first quarter 2019 conference call. At Calithera, we are building an integrated biotechnology company that develops novel small molecule oncometabolism drug, 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. This year, we expect to achieve multiple key milestones in our clinical development program and have several data readouts, including topline results of the ENTRATA trial midyear and with our partner Incyte, data from the 1158 program in the second half of the year. In the first quarter, we have also made great strides in our earlier stage programs, advancing our cystic fibrosis program into the clinic and presenting preclinical data on our CD73 inhibitor, which is poised to enter the clinic by year-end. We continue to advance our program for telaglenastat, also known as CB-839 for the treatment of renal cell carcinoma or RCC. And in parallel, we are conducting earlier stage clinical studies outside of RCC. We completed enrollment of the randomized ENTRATA trial comparing the combination of telaglenastat plus everolimus versus placebo plus everolimus for the treatment of patients with late-stage RCC. We also continue to enroll our global randomized CANTATA trial comparing the combination of telaglenastat and cabozantinib versus placebo plus cabozantinib in earlier-stage patients with RCC. And we broadened our clinical development program for telaglenastat to two new clinical trial collaborations with Pfizer. Our internal drug discovery team continues to produce novel drug candidates with the potential to be highly differentiated new therapies in areas of unmet need. Our two new internally discovered novel small molecule drug candidates are both entering clinical development in 2019. The first one is CB-280, an oral arginase inhibitor for the treatment of cystic fibrosis, which is already in Phase 1 study. And the second one is CB-708, an oral small molecule CD73 inhibitor for the treatment of cancer. As our programs move forward in development, we look forward to a number of important milestones in 2019. For telaglenastat, the ENTRATA trial is fully enrolled and we expect to report topline data in mid-2019 and we also plan to enroll the CANTATA trial, a Phase 2 randomized trial with approximately 400 patients by year-end. For 1158, we and our partner Incyte expect to present data at a medical meeting in the second half of 2019. For CB-280, we achieved our goal of initiating a Phase 1 trial in the first quarter of 2019 and look forward to additional updates on this program. And for CB-708, at AACR presented preclinical abstract data describing CB-708. We believe there is increasing interest among the scientific community in the adenosine pathway and we expect to initiate a Phase 1 trial in 2019. And with that, I will pass the call over to Keith for an update on clinical programs.

[Keith Orford:]

Thank you Susan. Let's begin with a more detailed update on telaglenastat, our glutaminase inhibitor and our most advanced product candidate. We are currently focused on forging a clinical commercial path for telaglenastat in renal cell carcinoma. The program includes two randomized clinical trials of telaglenastat for the treatment of RCC. The Phase 2 ENTRATA trial of telaglenastat in combination with everolimus in late line patients recently completed enrollment. This randomized double-blind trial which is designed to evaluate the efficacy and safety of telaglenastat in combination with everolimus enrolled 69 late line clear-cell RCC patients who have been previously treated with at least two prior lines of systemic therapy, including VEGF receptor targeting tyrosine kinase inhibitor. Patients are being randomized in a 2

[Stephanie Wong:]

Thank you Keith and good afternoon everyone. Detailed financial results for the first quarter 2019 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 point. Cash and investments were $117 million at March 31, 2019. R&D expenses were $20.2 million for the quarter compared with $15.5 million prior year. The increase of $4.7 million was primarily due to a $2.3 million increase in the telaglenastat program, including our Phase 2 CANTATA trial, an increase of $1.1 million in the 1158 program, an increase of $1.0 million in the CB-280 program as well as investment in early-stage research. G&A expenses were $4.2 million for the quarter compared with $3.5 million prior year. The increase of $0.7 million was related to higher personnel related costs and professional services cost. Net loss from operations for the three months ended March 31, 2019 was $23.7 million or $0.61 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 are happy to open the line for questions.

[Operator:]

[Operator Instructions]. Our first question comes from the line of Jonathan Chang with SVB Leerink. Your line is open.

[John Barrett:]

Hello. This is John Barrett, on for Jonathan. Could you provide any additional color on the updated timing for ENTRATA?

[Keith Orford:]

Sure. Yes. So as you have noticed, we have updated the guidance to mid-2019, which is really, given that we are further along, we have more information, we are able to just narrow that timing down from our original guidance. So no significant change, just really a narrowing of the guidance.

[John Barrett:]

Got you. Second question is, how should we be thinking about the implications of ENTRATA data that you are now expecting in mid-2019 on the CANTATA study?

[Keith Orford:]

Right. So ENTRATA, as we have mentioned, is a randomized study, our first randomized study. It will be our first randomized data in RCC patients. And it's in combination with everolimus. And as you know, CANTATA study is also in RCC. So it will be our first data in RCC patients. There are differences and there are similarities between the two. We have preclinical data that suggests similar mechanisms of synergy but obviously the design of the study is different enough in terms of patient population and line of therapy that a direct read-through is not obvious, but -- yes, I will leave it there.

[John Barrett:]

Great. Thanks for the color. One more, if I may. How are you thinking about the adenosine landscape, post the recent data announcements from some competitors in the space?

[Keith Orford:]

Yes. So at AACR, there was some encouraging data for A2A receptor inhibitors and particularly in the prostate cancer space. So we saw that as very positive for the mechanism and for the pathway and we maintain our enthusiasm and we think the rest of the field maintains considerable enthusiasm for the adenosine pathway.

[John Barrett:]

Great. Thanks for answering my questions and good luck.

[Keith Orford:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Matt Phipps with William Blair. Your line is open.

[Matt Phipps:]

Hi. Good afternoon. Thanks for taking my questions. Just to follow up on the adenosine a little bit. Is this something where you think you would try to accelerate development specifically in prostate cancer or renal cell where we have seen monotherapy activity with the A2A inhibitors? And then is there any reason to think that CD73 inhibition would not or maybe different expression or somehow would be not correlated as far seeing responses of the A2A receptors as far as tumor types go?

[Keith Orford:]

Yes. So I think it would be definitely, our part of the, I guess the benefit of not being first-in-class here is that we are able to learn from the folks that are in front of us. So we think we have a best-in-class molecule that's orally bioavailable and can provide continuous inhibition of the pathway and we can learn from those that are in front of us. So absolutely we would expect to be able to increase the efficiency of development through learning from the other programs that are in front of us. And then in terms of differences between CD73 and A2A receptor inhibition, we expect there to be a lot of overlap there in terms of where one would expect to see activity. But we can't assume 100% correlation between them, but certainly activity that we see in that pathway is likely to be worth following up on.

[Matt Phipps:]

Thanks Keith. And then additionally, do you think there is an added benefit by inhibiting both the CD73 and A2A receptors? There is a number of those combination trials ongoing.

[Keith Orford:]

Yes. I think there is a diversity of opinions on that. I can certainly see the rationale, particularly given some of the characteristics of the pathway inhibitors that exist, that there may be utility in sort of hitting that pathway twice to ensure full inhibition. On the other hand, one could imagine that a more potent or maybe a more active molecule might make it unnecessary to hit that pathway vertically. So I think it's still remains an open question and one that is certainly still being debated and we can see, based on different sponsors' approaches to vertical inhibition, there isn't uniformity or a consensus around that at this point.

[Matt Phipps:]

Yes. Got it. Okay. And then lastly, for the CB-280, do we get biomarker or PKPD data from healthy volunteers this year? And are you going, planning on initiating the CF patient trial this year you as well? How quickly are these trials?

[Keith Orford:]

Yes. As you know, with the dose escalation, the timing is hard to nail down precisely, given that we have certain number of dose levels planned, but you never know exactly how the timing will play out. So we do expect to be able to get that study completed this year. And we certainly will have access to PK and to some amount of PD data. I think PD, it just should be noted that PD in healthy volunteer population is going to different from a patient population. So clear interpretation of that is, we will see what we see when we generate the data. In terms of the timelines, again I think we do expect to complete that study this year and then the plan would be to move forward with the patient study soon after.

[Matt Phipps:]

And as far as then dosing to try to get to your recommended dose, is it something where you actually going to look for cycle, urea cycle disruption structure, I am sorry, I can't remember exactly what it was, from the other arginase program?

[Keith Orford:]

Yes. The orotic acid, yes.

[Matt Phipps:]

Yes. That's it, I think.

[Keith Orford:]

Yes. We will certainly be monitoring that. As you know, orotic acid is a very early sign that we are starting to impact the urea cycle, although the reason to follow it is that we can see that elevation well before a clinically significant inhibition of the urea cycle. But we do plan on following that as well and that would inform dose selection to some extent, yes.

[Matt Phipps:]

All right. Great. Thanks. And good luck.

[Keith Orford:]

Thanks Matt.

[Operator:]

I am showing no further questions at this time. I would now like to turn the call back over to Jennifer McNealey for closing remarks.

[Jennifer McNealey:]

Thank you Tonda and thanks all for joining us today and have a good evening.

[Operator:]

Ladies and gentlemen, that concludes today's conference. Thank you for participating. You may now disconnect. Everyone have a wonderful day.