Daré Bioscience, Inc.
Q2 2015 Earnings Call Transcript

Published: 7 Aug 2015

[Operator:]

Good afternoon, and welcome to the Cerulean Second Quarter 2015 Conference Call. This call is being recorded. My name is Amanda, and I will be your operator for today. With us today from the company are Chris Guiffre, President and Chief Executive Officer; Gregg Beloff, Chief Financial Officer; and Alejandra Carvajal, General Counsel. Mr. Guiffre, please proceed.

[Chris Guiffre:]

Thank you, Amanda. Good afternoon, everybody, and thank you for joining Gregg, Alejandra and me for this call. To begin, I’ll ask Alejandra to comment on forward-looking statements that may be made during this call. Alejandra?

[Alejandra Carvajal:]

Thanks, Chris. Certain remarks that we make during this call about the company’s future expectations, plans and prospects 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 discussed in the risk factors section of our most recent quarterly report on Form 10-Q, which is on file with the SEC and can be accessed on our website. 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. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today, August 6, 2015. Back to you, Chris.

[Chris Guiffre:]

Thanks, Alejandra. I’ll start my prepared remarks by introducing Gregg Beloff on his first quarterly call as our CFO. Gregg has been in life sciences since 1998, beginning his career on Wall Street as a healthcare investment banker. In 2001, he became CFO at ImmunoGen, a tumor targeting company that is one of the leaders in antibody drug conjugates, or ADCs. Since then, he served as CFO of public and private biotech companies. Gregg’s operational expertise and familiarity with Wall Street make him an ideal addition to our team as we continue our evolution as a public company. Gregg?

[Gregg Beloff:]

Thanks, Chris. It’s great to join a team with so much momentum and so much opportunity just around the corner. I intend to help Cerulean accelerate its growth as a public company by leveraging the experience that I’ve accumulated in prior CFO roles in life sciences companies. I’m an entrepreneur at heart, so company building is a passion for me, and I feel fortunate to join Cerulean at this stage in its evolution. I’ll turn it back to you, Chris.

[Chris Guiffre:]

We’re glad to have you, Gregg. I’ll point out that Gregg is the fourth executive team member we’ve added since going public. He joins Pam Strode, our VP of Regulatory Affairs; Alejandra Carvajal, our VP and General Counsel; and Tiffany Crowell, our VP of Clinical Operations, as the newest members of our team. We operate in a competitive environment, and we recognize that building a strong team is critical to our ability to capitalize on the significant opportunity that lies ahead of us. In addition to building the management team, we’ve been intentional about building a board that is well suited for a company that develops and commercializes oncology drugs. Shortly before going public, we recruited Paul Friedman, Bill Rastetter, and Bill McKee to our board. Shortly after our IPO, we recruited Susan Kelley and David Parkinson to our board. And just as the second quarter ended, we added Stuart Arbuckle to our board. Stuart is the Chief Commercial Officer at Vertex, and he is leading the watch of Orkambi. He joins our board as we begin to plan for the commercialization of CRLX101. His deep oncology commercialization experience from both Amgen and GSK will be invaluable to us as we evolve from an R&D company to a commercial enterprise. Now, let’s move to an update on the CRLX101 programs. The randomized Phase 2 trial studying the synergistic combination of CRLX101 and Avastin in patients with third and fourth line RCC continues to enroll well. And importantly, we expect to announce the last patient in, or LPI, this fall. We continue to remain on track to report the top line data from this study in the first half of 2016. The FDA granted this program fast track designation and if all continues to progress accordingly, we will launch our Phase 3 registration trial before the end of 2016. As many of you know, RCC is the most common form of kidney cancer. Primary tumors are often treated with surgery, but once the cancer has metastasized it cannot be cured and treatment is instead focused on slowing disease progression and alleviating symptoms. This is true of third and fourth line treatments, but also true of first and second line treatments. In the US alone, about 60,000 people per year are diagnosed with RCC and we estimate that about 10,000 of those patients per year will progress to third and fourth line. We actually expect the number of patients progressing to third and fourth line to grow due to new options in first and second line treatment that show an overall survival benefit. If treatment options in the first and second line improve, we believe more RCC patients will make it to third and fourth line, and they’ll be fitter when they get to third and fourth line, allowing treatment for longer periods. So recent advances in RCC treatment are not only good for patients, but they’re also good for Cerulean. Many of you have heard me talk about the RCC treatment paradigm before. We emphasize this landscape because it is important to draw the distinction between the first and second line space, which is becoming even more crowded and the third and fourth line space, which has limited treatment options and is Cerulean’s focus. In first line, RCC patients are often treated with a TKI, in most cases Sutent, and often with some success. In second line, RCC patients are often treated with a second TKI or an mTOR inhibitor, often with much less success than what is seen in first line. As patients progress, they need agents that use a distinct mechanism of action from first and second line treatments. In the third and fourth line, treating a patient with a TKI or mTOR inhibitor after that patient has progressed on a different drug with the same mechanism is a poor treatment option for obvious reasons. This point was highlighted in data released at ASCO this year from an historical study of 4,450 third line patients that shows these patients have a median PFS of about 3.4 months. Third and fourth line RCC patients deserve more efficacious options and they deserve better tolerated options, so we are encouraged by the results we’ve seen in the single-arm RCC study of CRLX101 plus Avastin, and we look forward to the results of the randomized RCC study of CRLX101 plus Avastin. Changes are coming in the treatment paradigm for RCC as other agents come to market. I’ll provide a brief overview here and some thoughts on how we see CRLX101 fitting in this disease space. As many of you know, there are multiple agents approved to treat RCC. The new candidates being explored in first and second line RCC include immuno-oncology products, including nivolumab, ipilimumab, and pembrolizumab, say that three times fast, and other PD-1 and PD-L1 antibodies. We expect that these products will be approved in the near future, and that they will claim a piece of the frontline setting. Recent data from BMS show that nivolumab had superior OS compared to everolimus, which is an approved mTOR inhibitor used in advanced RCC. We expect that immuno-oncology products will provide a meaningful benefit for a small percentage of patients in the frontline setting, and the remainder of those patients will continue to be treated with Sutent. In the second line setting, there are four important new options being tested in the clinic. Today axitinib is used frequently in the second line, and there are two combinations with axitinib being studied. Tracon is studying TRC105 in combination with axitinib and Acceleron is studying dalantercept in combination with axitinib. In addition, Eisai is studying a combination of lenvatinib, a TKI and everolimus. And finally, Exelixis is studying cabozantinib, another TKI, as a monotherapy in this setting. Each of these potential entrants in the market appears to have the potential to improve outcomes for patients in the second line and we hope that all of them get approved. For third and fourth line, however, we view the CRLX101 Avastin combination as the only promising potential treatment option after one or more TKIs and/or TKI combos have failed. There is a clear need for a new mechanism. That is where a treatment option with a new mechanism that is not a TKI will be highly differentiated. And importantly, the CRLX101 Avastin combination appears to be quite well tolerated, which is particularly important for these late-stage patients. We just do not see any of the current third or fourth line treatments as meaningful competitors, nor do we see any drugs in development as a meaningful competitor in the third and fourth line setting. So we expect dominant market share in the third and fourth line setting. Before we move on to an update on CRLX301, I’ll make a few quick comments about the other CRLX101 studies. The ovarian program has been awarded orphan designation by the FDA. This program includes two combination studies. The first study is an IST of CRLX101 in combination with Avastin at the Harvard teaching hospitals. It is co-sponsored by Genentech, which is donating the Avastin. We will announce interim data before the end of this year. The second study is a trial of CRLX101 in combination with weekly paclitaxel that is being conducted in collaboration with the GOG Foundation. We announced treatment of the first patient in this study in July and we anticipate that we will report data in the first half of 2016. The rectal program is an IST of CRLX101 in combination with chemoradiotherapy at six hospitals led by the University of North Carolina. We will announce interim data from this study before the end of this year. We do not have enough data at this time to make a go, no-go decision on launching a randomized trial of this indication, so we will not launch a randomized trial in the first quarter of 2016 as originally planned, but we will provide an update on our plans in rectal on our November earnings call. At this point, I’ll transition to the second platform-generated NDC that Cerulean has put into the clinic, that’s CRLX301, which is an NDC with a docetaxel payload that has the potential to be even more active than docetaxel, but with a better tolerability profile. We’ve been treating patients with CRLX301 since December. So far, we’ve completed the first five dosing cohorts with no DLTs. By the end of this year, we will announce Phase 1 data. We also expect to announce our plans for Phase 2. At this point, I can tell you that we expect to begin the Phase 2a portion of the ongoing Phase 1/2a trial in the first half of 2016, and we anticipate that we will then launch a randomized Phase 2 trial in the first half of 2017. Now, it’s my pleasure to turn the call over to Gregg, so he can provide his first financial update as our CFO, and to wrap up our prepared remarks with a recap of upcoming milestones. Gregg?

[Gregg Beloff:]

Thanks, Chris. Let me briefly highlight our financial results for the second quarter of 2015, which are included in the Form 10-Q that was filed after market closed today. For the second quarter, we had a net loss of $9.9 million compared to a net loss of $7.4 million for the second quarter of 2014. The increase in net loss for the 2015 period was due principally to expenses associated with our ongoing clinical development program, specifically those costs related to our Phase 2 RCC trial for CRLX101 and our Phase 1 trial for CRLX301, both of which commenced in 2014. We ended the second quarter with cash and cash equivalents that totaled $85.5 million. This figure includes proceeds from the follow-on offering completed in April and we believe that we will have the cash necessary to fund operations into 2017. We expect to achieve a number of key accomplishments well within that time span. In particular, during the rest of 2015 and into 2016, we are entering a data rich period that should provide important results in multiple studies of CRLX101 and CRLX301, and we expect to achieve the following milestones. First, we expect to announce the LPI in our Phase 2 randomized RCC trial this fall. We expect to announce additional interim data from the ovarian and rectal ISTs before year-end and we also expect to announce data from the Phase 1 portion of the Phase 1/2a trial of CRLX301 before year-end. We expect to announce Phase 1b data from the ovarian GOG trial in the first half of 2016. And finally, we expect to announce data from the randomized Phase 2 RCC trial in the first half of 2016. That ends the prepared portion of our remarks. With that, let’s open the call up for your questions. Amanda, please prepare the queue.

[Operator:]

[Operator Instructions]

[Chris Guiffre:]

It appears that our prepared remarks were so comprehensive that we have answered everyone’s questions. With that, I think it’s time to end the call today. So I’ll say thanks to everyone for joining us today. We look forward to reporting on our continued progress in November. Have a good night.

[Operator:]

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