Five Prime Therapeutics Inc
Q1 2015 Earnings Call Transcript

Published: 14 May 2015

[Operator:]

Good day, ladies and gentlemen, and welcome to the Five Prime Therapeutics 2015 Q1 quarterly earnings call. [Operator Instructions] I would now like to introduce your host for today's conference, Aron Knickerbocker, Chief Business Officer for Five Prime. Sir, you may begin.

[Aron Knickerbocker:]

Good afternoon and thank you for joining us. On behalf of Five Prime Therapeutics, I'd like to welcome everyone to our conference call to discuss financial and operational results for the first quarter of 2015. Joining me today are Dr. Rusty Williams, Chief Executive Officer; Dr. Julie Hambleton, Chief Medical Officer; and Mr. Marc Belsky, Chief Financial Officer. During today's call, Rusty will begin with introductory remarks on our progress during the first quarter. Julie will then give you an update on our clinical programs, and I'll provide an update on our immuno-oncology discovery program. And then Marc will discuss our financial results. Finally, we'll conclude the call with a Q&A session. Today's conference call will include forward-looking statements under the Private Securities Litigation Reform Act of 1995, including statements regarding our research and development programs and financial outlook. Actual results may differ from those indicated by these forward-looking statements due to numerous factors, including those discussed in the Risk Factors section of our SEC filings. Our expectations and assumptions could change. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. I'll now turn the call over to Rusty.

[Lewis Williams:]

Thanks, Aron. Good afternoon, everyone, and thanks for joining us. We're really pleased with the progress we've made so far this year in all of our development and discovery programs. As you may know, we now have three clinical stage assets covering 11 different indications. So I'd like to take a few minutes to highlight the many milestones we expect to achieve during the next 12 months. Beginning with FPA008, our CSF1 receptor antibody, we anticipate initiating two additional clinical trials by mid-2015. The first trial, which we'll be conducting in collaboration with Bristol Myers-Squibb to evaluate the combination of FPA008 with nivolumab. That's BMS's PD-1 immune checkpoint antibody. We expect to complete Phase 1a dose escalation and expand into Phase 1b in six different tumor types in late 2015 or early 2016. We'll also test FPA008 in a Phase 1/2 clinical trial for pigmented villonodular synovitis, PVNS, a tumor driven by the CSF1 receptor pathway. Of note, we recently obtained IND clearance and expect to initiate this trial in the coming months. We believe we could have initial efficacy data by yearend or early in 2016. Additionally, we continue to enroll rheumatoid arthritis patients in the open label portion of our ongoing FPA008 Phase 1 clinical trial. We expect to share dose escalation safety and biomarker data as well as preliminary assessment of clinical activity by the yearend. Now, I'll turn to FPA144, our FGF receptor 2b isoform-selective antibody, which we are developing for a subset of patients with gastric cancer. As you'll probably recall, we engineered this antibody to have enhanced ADCC to better recruit NK cells to kill cancer cells. The dose escalation portion of this Phase 1 trial is initially enrolling patients with gastric cancer or other solid tumors. We plan to report preliminary safety data from the dose escalation portion by the end of the year. We'll then advance FPA144 into selected gastric cancer patients with FGFR2b protein overexpression or FGFR2 gene amplification in their tumors. With regard to FP-1039, an FGF ligand trap, GSK continues to enroll patients with squamous non-small cell lung cancer and mesothelioma into three arms of the ongoing Phase 1b trial. And we expect that they'll report preliminary efficacy data at a scientific meeting later this year. Finally, I'd like to note that we are making important progress in our immuno-oncology discovery program, which Aron will touch upon briefly later. With antibody campaigns already underway for multiple targets, we set ourselves a goal of having one new IND per year beginning in 2017. And with that, I'd like to turn the call over to Julie to give a more detailed update on the clinical programs.

[Julie Hambleton:]

Thank you, Rusty, and good afternoon, everyone. Many of you listening today likely attended our Research and Development Day last week and tuned into the webcast. I will highlight some of the new information we shared regarding our clinical development program, particularly for FPA008. You can listen to a replay of the event or download our slides on fiveprime.com. In addition to presentations from management, we had in-depth presentations from three clinical experts

[Aron Knickerbocker:]

Thanks, Julie. At the end of last quarter, we were pleased to sign a multi-target target collaboration agreement with Vaccinex, allowing us to utilize their ActivMAb antibody platform for the discovery of human monoclonal antibody directed to Five Prime's target. We continue to advance our immuno-oncology discovery programs to our preclinical development. We now have fully human antibody campaigns underway with BMS, Adimab and Vaccinex directed to multiple immuno-oncology targets. During our R&D Day last week, Dr. Brian Wong, Five Prime's Vice President of Research and Head of Immuno-Oncology, provided an overview of our unique approach to immuno-oncology discovery, which gives us a competitive advantage in this field. He also reported some of the preclinical filings on our undisclosed novel immune checkpoint candidates. Our immuno-oncology discovery collaboration with BMS on two specific checkpoint pathways also continues to make good progress. We plan to provide further updates on our internal immuno-oncology programs at future scientific meetings and aim to have our first IND from this program in 2017. With that, I will turn the call over to Marc to discuss our financials.

[Marc Belsky:]

Thank you, Aron. In the first quarter of 2015, Five Prime had a net loss of $11 million or $0.44 per basic and diluted share compared to a net loss of $8.6 million or $0.46 per basic and diluted share for the first quarter of 2014. The increase in net loss was primarily related to advancing the FPA008 development program into additional indication and expanding internal immuno-oncology discovery activities. Collaboration revenue was $4.3 million for the first quarter of 2015 compared to $3.5 million for the first quarter of 2014, primarily due to revenue recognized under the immuno-oncology research collaboration with BMS. Research and development expenses were $11.2 million for the first quarter of 2015 compared to $8.9 million for the same period in 2014. This increase was primarily related to advancing the FPA008 development program into additional indications and expanding our internal immuno-oncology research activities. General and administrative expenses were $4.2 million for the first quarter of 2015 compared to $3.3 million for the same period of 2014. This increase was primarily due to increases in personnel related expenses including non-cash stock-based compensation. Cash, cash equivalents and marketable securities as of March 31, 2015 were $217.1 million compared to $149.1 million as of yearend 2014. This increase was primarily attributable to Five Prime's January 2015 public offering of common stock offset by cash used in operations. Today, Five Prime filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission. The shelf registration statement will allow Five Prime the flexibility to offer and sell common stock from time to time, in one or more offerings. The prices and terms would be determined at the time of any future offering. We expect full-year 2015 net cash used in operating activities to be between $59 million and $63 million and estimate ending 2015 between $165 million and $170 million in cash, cash equivalents and marketable securities. We expect to have cash to fund operations into the first half of 2018, without entering into any additional collaboration agreements or receiving any future milestone payments. This provides a sufficient runway to move all three of our clinical programs beyond efficacy data readouts and to move one or more new immuno-oncology candidates into clinical trials. And with that I'll turn the call back over to Rusty.

[Lewis Williams:]

As you can see we continue to make good progress in all of our clinical and discovery programs and we look forward to delivering on our milestones throughout the year. We're now happy to take your questions. We also have here with us Dr. Brian Wong, our Head of Immuno-Oncology as well as Dr. Bob Sikorski, Vice President of Global Clinical Development. And both of them presented last week during our R&D Day. So operator, please go ahead and open the Q&A session.

[Operator:]

[Operator Instructions] Our first question comes from Tony Butler with Guggenheim.

[Tony Butler:]

The question revolves around 008. Brian and I had shared -- he direct me to [indiscernible] paper from Wash. U and I wanted to -- it was very interesting as it relates to at least a mouse model for pancreatic tumors. And I'm sure you know it well and the change in tumor macro environment, at least the changes related to CD8 and Tregs. The question I had is while you're monitoring those parameters in humans, I guess, I'm trying to understand what kind of expectations would you have when you think you're moving from that mouse pancreatic model into humans? Do you think that you'll see the same kinds of CD8 Treg ratios or do you think they'll be any different? What gives you confidence that that will be the case regardless of what we're seeing and what would be happening with any kind of efficacy? And point two around that, would you actually be able to report that data based upon what you're seeing in the 1b study?

[Brian Wong:]

Yes, absolutely. As you heard during our R&D Day, we are planning to monitor the T cells as we expect to be modulated by FPA008, as well as a combination with 008 and nivolumab and that includes an increased CD8-positive T cells as well as the decrease in regulatory T cells. This is not only worn out in preclinical models, where it is shown in multiple situations that this is the case, including our own models, but also there is data from clinical studies from Roche that shows the same thing, the dose escalation study. So we're very confident that we should see these changes pre and post-treatment in our clinical trials. And in terms of the timing, I'll turn it over to Bob Sikorski about the timing of that data.

[Robert Sikorski:]

We're trying to have a very strong translational component to this Phase 1 trial, so let me back up. Realize we have dose escalation component, and we're doing pre and post-biopsies on all of subjects. We're also doing pre and post-biopsy on monotherapy component in that trial. So we'll not only have data on the combination, but we'll also have data for the first time in humans in the monotherapy setting. And what are we looking for? So we're looking for changes either in cell type, changes in architecture, changes in PD-L1 status, which can inform us how to move forward. As you know pancreatic cancer is thought to be pretty T cell core tumor. We don't know if the drug causes infiltration to the T cells that are different from the natural state, if other cells traffic in or out of that tumor environment. So looking at things like CD8 T cells, CD4 T cells, looking at Tregs, I think as Brian mentioned, as well as others are going to be very important for us to sort this out as we go forward.

[Operator:]

Our next question comes from Eun Yang of Jefferies.

[John Ryan:]

This is John in for Eun, Rusty. Can you guys provide a little more color on the patient registry plan for use with FPA008 and PVNS?

[Lewis Williams:]

Yes, sure. Bob Sikorski is secure heading that. So he is going to answer that.

[Robert Sikorski:]

Yes, sure. So we're using Danish national patient registry as the backbone for that study. You realize that registry has 5.6 million gains that are registered since everybody in the country is in that registry. And so I think by using that, minding that registry we can learn very good detail on the prevalence, incidents, and some other factors in that setting. That should be translatable we think to the broad U.S. population. It's been used before in filings, in supporting registry. This registry is supporting regulatory filings for other molecules, and should we move forward with this molecule toward the registration path we would envision using that data as well to support it.

[Operator:]

I'm showing no further questions. I would like to turn the call back to Rusty Williams, Chief Executive Officer for closing remarks. End of Q&A

[Lewis Williams:]

Well, thank you. We obviously took a lot of your questions last week at our R&D Day and we really appreciated such a full participation in that event. I'm excited about the progress we're making in our clinical and discovery programs and the milestones we expect to during the next 12 months, and we look forward to updating you further during our next quarterly call. So thanks again everyone.

[Operator:]

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