CTI BioPharma Corp.
Q4 2016 Earnings Call Transcript

Published: 2 Mar 2017

[Operator:]

Good day and welcome to the CTI BioPharma Fourth Quarter and Full Year 2016 Financial Results Conference Call. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Ed Bell, Senior Director of Investor Relations. Please go ahead sir.

[Ed Bell:]

Thanks and welcome everyone to our fourth quarter and full year 2016 financial results conference call. The press release reporting our financial results can be found on our homepage and in the Investors section of our corporate at ctibiopharma.com. Following formal remarks by management, the conference call will be open for questions. Joining me today are Richard Love Interim President and Chief Executive Officer; Matt Plunkett Chief Business Officer, Bruce Seeley Chief Commercial Officer, Lou Bianco, Executive Vice President of Finance and Administration and Jack Singer our Chief Scientific Officer. Before we begin, please note that during the course of this call, we will make forward-looking statements based on current expectations. 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 fourth quarter and full year 2016, the Risk Factors section of the Company’s Form 10-K for year ended December 31, 2016 and in the Company’s other periodic reports and filings with the Securities and Exchange Commission. I will now turn the call over to Richard.

[Richard Love:]

Thank you, Ed, and good afternoon, everyone. It is my pleasure to update you on our recent achievements and progress. I’d like to lead off today’s call by highlighting our recent announcement of Adam Craig, M.D., Ph.D., has accepted the position of President and CEO and will become a member of our Board. Dr. Craig has over 20 years of experience in hematology, oncology, and drug development in both the U.S. and Europe. He most recently worked as an independent consultant, providing strategic and operational support to CTI and some other hematology oncology companies. Prior to consulting, Dr. Craig was Chief Medical Officer and Executive Vice President of development at Sunesis Pharmaceuticals, and CMO and Senior Vice President of Chemgenex Pharmaceuticals, a publicly traded biotech company, which was acquired by Cephalon/Teva in 2011. Dr. Craig is a member of the Royal College of Physicians and undertook Post-Graduate Training in Pediatrics and Pediatric Oncology. Dr. Craig has been working with the Company as a consultant over the past few months and has assisted the Company with the analysis of pacritinib data and correspondence with both the FDA and European Medicines Agency, as he has extensive experience working with both regulatory agencies. The Board and executive management strongly believe that Adam has skills, experience and acumen to lead CTI and move the Company’s programs forward. Adam’s appointment will be effective March 20. One other brief note on the Company’s leadership is that in January, we welcome Michael Metzger to the Board. Mr. Metzger has extensive experience leading and growing companies in the biopharmaceutical industry over the last 20 years. Mr. Metzger is currently President and Chief Operating Officer of Syndax Pharmaceuticals, a publicly traded immuno-oncology biopharmaceutical company. He has served in executive and senior management positions at Regado Biosciences, Mersana Therapeutics, Forest Labs and OncoNova Therapeutics. His experience and business development and strategic financial transactions will be a valuable resource for us as a our programs continue to progress. Now, moving on to development, I’ll first discuss the opportunity for pacritinib to address unmet needs in treating patients with myelofibrosis. There is only one approved therapy for myelofibrosis. This therapy is effective in treating a group of patients, but there remain a large number of patients that are ineligible to receive and tolerant or have insufficient response to the approved drug. Therefore, these patients have no effective treatment options and also generally have very poor outcomes. Recent data presented by researchers at the 2016 annual meeting of American Society of Hematology or ASH, in December, showed that the median overall survival for patients with platelets less than 50,000 per microliter was 15 months compared to 36 months for those with play that’s greater than 100,000 per microliter. In a separate presentation, it was shown that 85% of patients who discontinued front-line treatment with the approved drug and received no further therapy had a median overall survival of just seven months. We believe that the clinical data for pacritinib provides support that it could be an option for these patients. In December 2016, data from the randomized Phase 3 PERSIST-2 to clinical trial comparing pacritinib with physician-specified best available therapy or BAT including ruxolitinib for treatment of patients with myelofibrosis whose baseline platelet counts are less and 100,000 per microliter, that study was one of six late-breaking oral presentations highlighted at the ASH annual meeting. Patients in the trial will randomized to receive 200 milligrams pacritinib twice daily or BID, 400 milligrams pacritinib once-daily QD or best available therapy, BAT. Although only approximately two-thirds of the patients enrolled were available for efficacy evaluation at 24 weeks due to the clinical hold, the data demonstrated that the trial met one of the co-primary endpoints, showing a statistically significant response rate in spleen volume reduction in patients with myelofibrosis treated with pacritinib compared to be BAT. Including the approved JAK2 inhibitor ruxolitinib, the co-primary endpoint of reduction of Total Symptom Score or TSS was not achieved but trended toward improvements in TSS with the P value of 0.079. Importantly, in the subgroup of patients in the BID arm that had platelets less than 50,000 per microliter or had prior JAK2 inhibitor exposure, reflecting the unmet need I described earlier, the efficacy and safety was generally consistent with overall intent to treat results. In this subgroup, spleen volume reduction for pacritinib was 23% compared to 2% on the BAT arm with the P value of 0.001 and the reduction in TSS was 29% versus 13% with the P value of 0.058. We believe the results were well-received at the conference, and physician interest in pacritinib is strong and growing. Now, on the regulatory front, the Marketing Authorization Application or MAA was submitted in Europe by our previous partner Baxalta in early 2016 with an indication statement based on the PERSIST-1 trial data. And its initial assessment report, the Committee for Medicinal Products for Human use or CHMP, determined that the current application is not approvable because of the major objections in the areas of efficacy; safety, primarily hematologic and cardiovascular; and the overall risk benefit profile of pacritinib. Subsequent to the filling of the MAA, data from the second Phase 3 trial, PERSIST 2, were reported. As I described earlier, these data suggest that pacritinib may show clinical benefit in patients who have failed or intolerant to ruxolitinib therapy, a population for which there are no approved treatment. We’ve recently saw an advice from the regulators as to the best process to move the application forward. I would characterize our discussions with EMA as very collaborative and quite constructive. Following discussions with the EMA about how PERSIST-2 data might address the major objections and help to integrate the data into the current application, we have decided that the best course is to withdraw the MAA and re-file. We are preparing a new MAA that seeks to address the major objections by including the PERSIST-2 data. The new application will focus on patients who failed or are intolerant to rux. And we plan to submit this new application in the second quarter this year. In terms of the U.S., in January 2017 this year, the FDA removed the full clinical hold, following the review of our complete response submission, which included among other things final Clinical Study Reports for both PERSIST-1 and 2 trials and a dose-exploration clinical trial protocol that the FDA requested. At that time, we announced that we would conduct a new trial, PAC203, that plans to enroll up to approximately 105 patients with primary myelofibrosis who have failed prior ruxolitinib therapy. The objective is to evaluate the dose response relationship for safety and efficacy at 12 and 24 weeks of three dose regimens including the 200 mg BID regimen that was used in PERSIST-2. We expect to initiate this trial in the second quarter and we’ll provide further timing guidance at that time. Now, moving on to PIXUVRI. As a part of the conditional marketing authorization of PIXUVRI in Europe, we are required to conduct a post authorization trial, which we refer to as PIX306. PIX306 is comparing PIXUVRI and rituximab with gemcitabine and rituximab in the setting of aggressive B-cell non-Hodgkin’s lymphoma. PIXUVRI’s product label uses monotherapy for use as third and fourth line treatment. Current practice in the EU for these patients typically includes rituximab in a combination regimen. Therefore, the inclusion of rituximab reflects current practices in the EU. If positive, this trial would potentially extend the label to second line therapy and in combination with rituximab, a larger addressable population. The trial continues to enroll patients, and we expect to be able to release top-line results this year. With that, I will now turn the call over to Matt, who will review our financials for the quarter and full year.

[Matt Plunkett:]

Thank you, Richard. I will now briefly review our financials for the fourth quarter and full year 2016. Please refer to our press release issued earlier today for more details. Net loss for the fourth quarter of 2016 was $6.4 million or $0.23 per share, compared to a net loss of $28.8 million or $1.27 per share for the same period in 2015. Net loss for the full year ended December 31, 2016 was $52.0 million or $1.86 per share, compared to a net loss of $122.6 million or $6.51 per share, for the same period in 2015. The decrease in net loss for the fourth quarter and the year ended December 31, 2016, compared to the respective periods in 2015 is primarily due to increased net product sales and license and contract revenue and a decrease in operating expenses. Total revenues for the fourth quarter and full year ended December 31, 2016, were $9.1 million and $57.4 million, respectively, compared to $11.3 million and $16.1 million for the respective periods in 2015. The increase in total revenue for full year 2016 is primarily due to recognition of $32 million in milestone payments and reimbursement of development costs from Shire plc related to pacritinib, recognition of $8 million or €7.5 million in a milestone payment from Servier related to the PIX306 clinical trial of PIXUVRI, and finally, increased net product sales of PIXUVRI. Our GAAP operating loss for the fourth quarter and full year ended December 31, 2016, was $5.6 million and $49.2 million, respectively, compared to GAAP operating losses of $26.2 million and $116.7 million for the respective periods in 2015. This includes non-cash share-based compensation expense for the fourth quarter and year ended December 31, 2016, which was $2.1 million and $13.3 million, respectively, compared to $1.8 million and $14.8 million for the respective periods in 2015. Turning to the balance sheet. As if December 31, 2016, cash and cash equivalents totaled $44.0 million. The cash balance does not include an $8.0 million milestone payment that was recognized as revenue in the fourth quarter of 2016 but not received until January 2017. As previously disclosed, our cash burn guidance for the year is $65 million to $75 million in account of the receipt of the January 27 milestone payment pro forma for receipt in the fourth quarter of 2016. We expect to meet our cash requirements for 2017 with existing cash and by partnering one or more product assets during the course of the year. With that I will now turn the call back to Richard.

[Richard Love:]

Thanks, Matt. Emerging from a challenging 2016, we believe this is an exciting time in CTI’s corporate evolution. I want to thank our employees for their commitment and tireless efforts as well as the patients and physicians that have participated in our clinical trials. Now, as we look ahead to the remainder of the year, I wanted to reiterate our key corporate objectives for 2017. For pacritinib, submit and advance a new MAA in Europe, initiate the PAC203 trial, and secure an ex-U.S. partner for pacritinib; for PIXUVRI release top-line results of PIX306. With recent events and corporate leadership in place, we believe we are well-positioned to achieve these objectives. This now concludes our formal presentation. So, operator, please open the call for questions.

[Richard Love:]

Thank you, operator, and thanks to everyone for joining us for this call. We appreciate your support and look forward to updating you on our future progress.

[Operator:]

And again, that does concludes today’s conference call. Thank you all for your participation.