CTI BioPharma Corp.
Q1 2018 Earnings Call Transcript

Published: 4 May 2018

[Operator:]

Good day and welcome to the CTI BioPharma First Quarter 2018 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Tricia Truehart from Solebury Trout. Please go ahead ma’am.

[Tricia Truehart:]

Thank you and welcome to CTI BioPharma’s first quarter financial results conference call. Following formal remarks by management, the conference call will be opened for questions. Joining me today are Adam Craig, President and Chief Executive Officer, David Kirske, Chief Financial Officer and Bruce Seeley, Chief Operating Officer. Before we begin, please note that during the course of this call, we will be making forward-looking statements based on current expectation. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. Additional information concerning these risks and uncertainties is contained in the press release reporting our financial results for the first quarter, the Risk Factors section of the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 and in the company’s other periodic reports and filings with the Securities and Exchange Commission. I will now turn the call over to Adam.

[Adam Craig:]

Thank you, Tricia and good afternoon. As we discussed a few weeks ago during our 2017 review, over the last 12 months, CTI has become a lean focused and well financed company. We recently completed a public offering of our common stock and now have sufficient cash to carry us into 2020. We have two important clinical milestones occurring soon. First, during this quarter, we will be conducting the interim analysis of the PAC203 study of pacritinib in patients with myelofibrosis. Second, during the third quarter, we expect the top line results of the PIX306 Phase 3 trial of PIXUVRI in patience with aggressive B-cell or Grade 3 Follicular non-Hodgkin’s lymphoma. Our lead development candidate, pacritinib, is the second generation JAK2 inhibitor, which we are developing to address the unmet medical need of myelofibrosis patients who have received prior ruxolitinib and/or have thrombocytopenia. Our dose-finding study PAC203 continues to enroll well and we are on track to conduct the interim data analysis by the independent data monitoring committee before the end of this quarter. As previously discussed, we plan to discuss the interim data with the FDA with the aim of establishing a registration pathway for pacritinib in the U.S. PAC203 is expected to complete enrollment over the summer with the top line trial results being available in the first quarter of 2019. Regarding our marketing authorization, MAA submission in Europe, we remain on track to provide our responses to the Day 120 list of questions from EMA in May. I am expecting opinions from CHMP in the third quarter this year. In March, the results from the Phase 2 study of pacritinib were published online in JAMA Oncology providing a detailed look at the study which compared the efficacy and safety of pacritinib compared to best available therapy in patients with myelofibrosis and thrombocytopenia. This study was completed in 2016. Regarding PIXUVRI, we are also looking forward to the top line data from the Phase 3 post-marketing study of PIXUVRI in patients with aggressive B-cell NHL of Follicular Grade 3 Lymphoma. PIXUVRI was granted conditional approval in Europe in 2012 for the treatment of third and fourth line aggressive B-cell NHL. If positive, new trial data could support a second line label extension for Servier in the EU. The reporting of this study is event-driven and we now expect to report the top line results in the third quarter of this year. I will now ask David to provide the financial updates.

[David Kirske:]

Thank you, Adam. As of March 31, 2018 cash and cash equivalents totaled $104.6 million compared to $43.2 million as of December 31, 2017. This reflects our recent fund raising efforts in February which raised net proceeds of $64.2 million and the $10 million milestone from Teva Pharmaceutical. Net revenues for the first quarter ended March 31, 2018 were $10.5 million compared to $800,000 for the same period in 2017. The increase in total revenues was primarily due to the previously mentioned recognition of the $10 million milestone revenue from Teva related to the FDA approval of TRISENOX. We did not have product revenues from PIXUVRI for the first quarter of 2018 as compared to $600,000 for the same period in 2017. And this was a result of the restated and expanded agreement with Servier in 2017 where we moved to a royalty based revenue model. Under the agreement with Servier they have expanded rights to all markets with the exception of the U.S. where we have retained those rights. GAAP operating losses for the first quarter of 2018 was $4.3 million compared to $19.3 million for the same period in 2017. Non-GAAP operating losses which excluded non-cash based compensation, share based compensation for the first quarter of 2018 was $3 million compared to $17.5 million in the same period for 2017. Share based compensation expense for the first quarter of 2018 was $1.3 million compared to $1.8 million for the same period in 2017. The decrease in operating costs for the first quarter of 2018 was primarily due to a decrease in selling, general and administrative expenses related to a reduction in personnel costs and professional fees which were made in the last half of 2017. For more information on CTI BioPharma’s use of non-GAAP operating loss and a reconciliation of such measure to GAAP operating losses, see the section in our press release. The net loss for the first quarter of 2018 was $4.1 million or $0.08 per share compared to $19.8 million or $0.071 per share for the same period in 2017. As mentioned the reduction of the net loss quarter-over-quarter was a result of cost reductions made in the second half of 2017. So with that I will now turn the call back to Adam.

[Adam Craig:]

Thank you, David. That concludes our formal remarks. Cynthia, would you please open the call for questions.

[Operator:]

Very good. [Operator Instructions] We will take our first question from Gill Bloom with Needham & Company. Please go ahead.

[Gill Bloom:]

Hello. Thank you very much for taking my question. It seems the timeline for the PIXUVRI trial changed a little bit from the first half to the third quarter of this year, is that you would say a positive trend?

[Adam Craig:]

It’s really – thank you for your question. It’s just a result we are waiting for the remaining events before we can report the top line data. It’s really just a function of an event driven trial. And we are going to describe it as positive or negative, we are just waiting for the remaining events. And as soon as we have them we have had to present the data and report what top line data. So it’s just the result of us waiting for that number of events before we can report.

[Gill Bloom:]

Right, excellent. Thank you very much for taking my question.

[Operator:]

[Operator Instructions] And at this time there are no further questions in the queue.

[Adam Craig:]

Thank you, Cynthia. Well, in summary, we continued to make progress with both the pacritinib and PIXUVRI programs and we look forward to providing additional updates over the coming months and throughout the year. Thank you for joining the call today.

[Operator:]

Ladies and gentlemen, this will conclude today’s conference call. We thank you for your participation. And you may disconnect at this time.