Neoleukin Therapeutics, Inc.
Q2 2016 Earnings Call Transcript

Published: 6 Aug 2016

[Operator:]

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Aquinox Pharmaceuticals Mid-Year 2016 Conference Call. At this time, all participants are in a listen-only mode. Following the conclusion of the prepared remarks, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's conference call is being recorded. At this point, I would like to turn the call over to Mr. Brendan Payne, Senior Manager of Investor Relations.

[Brendan Payne:]

Thank you, Nicolas. Good afternoon and thank you for joining us. On behalf of Aquinox, I’d like to welcome everyone to our conference call to discuss financial and operational results for the second quarter of 2016 and provide an update of recent events. Joining me today are Mr. David Main, Chief Executive Officer; and Mr. Kamran Alam, Chief Financial Officer. During today's call, Mr. Main will begin with the business update on where we are towards the initiation of our LEADERSHIP 301 Phase III clinical trial with AQX-1125 in interstitial cystitis bladder pain syndrome or IC/BPS. Mr. Alam will then discuss our second quarter 2016 financial results. And 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 plans 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 Factor sections of our most recent 10-Q and other 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. And with that, I'll now turn the call over to David. David?

[David Main:]

Thank you, Brendan, and good afternoon everyone and thank you for joining us. As described in our press release earlier today, the second quarter of 2016 was predominantly focused on getting our LEADERSHIP 301 Phase III trial with AQX-1125 in IC/BPS up in running. But before discussing that trial, it’s worth mentioning that the positive results from our LEADERSHIP 201 Phase II trial with AQX-1125 were recently presented at the American and Canadian Urological Association Meetings and were published in the online version of the Journal of Urology, which of course is the Journal of the American Urological Association. We expect the full print version of that publication to appear in an upcoming issue. Now building on these results, we have commenced screening patients at a number of sites in the U.S., and consequently the LEADERSHIP 301 Phase III clinical trial remains on track to begin enrollment this quarter. It’s anticipated to enroll a minimum of 300 female patients and up to an additional 300 male patients at clinical research centers in the United States, Canada and Europe. The 301 trial will be conducted as a three arm multicenter randomized double-blind placebo controlled trial to investigate the ability of 12 weeks of treatment with either 200 milligrams or 100 milligrams oral once daily AQX-1125 to reduce bladder pain and urinary systems in patients with moderate to sever IC/BPS. The trial will also include an open label extension of up to 40 weeks following the 12-week treatment phase affording all participating patients including those randomized to the placebo arm, the opportunity to receive treatment with AQX-1125. The primary endpoint of the LEADERSHIP 301 trial will be to measure the difference in the change from baseline in the maximum daily bladder pain score at 12 weeks. Maximum daily pain is collected by patients answering the question of what was the worse pain that they have experienced in the previous 24 hour period as we just want to make that clear that maximum daily pain is the same as some literature reports of worse pain. Now, this endpoint will be based on the use of the well validated 11-point numeric rating scale, or NRS, which is exactly what we used in the LEADERSHIP 201 trial and also will be again recorded by electronic diary. Secondary endpoints will include urinary symptoms, most importantly urinary frequency, but also more specifically this time nocturia or night time awakenings as well as measures of quality of life. We will also be including the same questioners that we used in LEADERSHIP 201, the O'Leary-Sant and BPIC-SS questionnaires. We have selected ICON, a world leading CRO with specific experience conducting multinational IC/BPS trials to spearhead the LEADERSHIP 301 trial and we have added several members to our internal team in 2016 to oversee the effectiveness and efficiency of the trial. Due to the diligent efforts of the entire team, thus far we have completed our country selection and safe feasibility, which include up to 100 sites for this trial. These sites will be in the United States, Canada and select countries in the Europe as I have mentioned. Now more specifically, the protocol was submitted to the FDA in May and they have not yet provided any written comments to date, but did indicate to us verbally that there are no clinical hold issues, so we are proceeding with the trial initiation as planned. We have also completed our submission to the Canadian authorities and have received a no objection letter, so we’re proceeding with site initiation in Canada as well. Several European submissions have been filed and others are ongoing. There importantly, we have named our principal investigator for this trial. Dr. Robert Moldwin, Associate Professor of Urology at the Hofstra North Shore-LIJ School of Medicine and Director of Pelvic Pain Center at The Arthur Smith Institute for Urology in Long Island, New York, has been appointed as Global Coordinating Investigator for the 301 trial. Dr. Moldwin has an international reputation as a leader in the field of pelvic pain with special interests in varied pain syndromes including interstitial cystitis painful bladder syndrome as well as chronic prostatitis and chronic pain syndrome. Dr. Moldwin currently serves on multiple medical advisory boards and importantly the Interstitial Cystitis Association’s Advisory Board. He is affiliated with numerous medical societies including the American Urological Association, International Association for the Study of Pain, and Society of Urodynamics and Female Urology and is past President of the Society for Infections and Inflammation in Urology. And we feel extremely pleased that he’s taken on this lead role for this trial. Another key activity that has recently taken place was in Chicago. Our North American investigators meeting was held in June and we are planning for a European investigators meeting scheduled for early October. As I have mentioned with patients screening having commenced in the United States, we continue to anticipate enrollment of the first patient in the 301 trial this quarter with top line data still anticipated in the fourth quarter of 2017. Just as a reminder for our overall plan upon completion of this first Phase III study, our 301 trial, and assuming a positive outcome, we will select one of the two doses that we are studying to be our preferred dose for confirmation in a second confirmatory two arm randomized double-blind placebo controlled Phase III trial. To support our stated goal to independently commercialize AQX-1125 in the United States, we have recently welcomed the addition of Mrs. Abigail Jenkins as Chief Commercial Officer and U.S. Business Head. Abby will lead to design and implementation of the commercialization strategy for AQX-1125 and she'll be located in our newly established office in San Bruno, California. In addition to Abby's joining us, we of course have the goal of partnering our ex-U.S. rights to AQX-1125, so we've also recently welcomed Mr. Paul Brennan as Vice President of Business Development. Mr. Brennan will be responsible for the identification and posturing of corporate alliances to support and complement our global business strategies. So in summary, we are proceeding on track and are well equipped both from a management and financial perspective to execute on our development and commercialization strategy for AQX-1125. If you'd like more information about the high unmet need and debilitating nature of IC/BPS or if you'd like to learn more about our prior results in this area, we invite you to visit our website at www.aqxpharma.com. With that, I'll turn the call over to Kam Alam, our Chief Financial Officer, to discuss our second quarter financials. Kam?

[Kamran Alam:]

Thanks, David. As we have reported in our press release, cash, cash equivalents, short-term and long-term investments totaled $99.2 million as of June 30, 2016, compared to $112.9 million as of December 31, 2015. This decrease was primarily driven by the ongoing advancement of AQX-1125 towards initiation of our LEADERSHIP 301 clinical trial in IC/BPS. Research and development expenses for the second quarter of 2016 increased to $9.2 million from $3.6 million in the second quarter of 2015. This increase was primarily driven by increased expenditures related to the initiation of our LEADERSHIP 301 clinical trial. General and administrative expenses for the second quarter of 2016 increased to $1.8 million from $1.2 million in the second quarter of 2015. This increase was primarily driven by higher personnel related costs and the establishment of our office in San Bruno, California. Net loss for the second quarter of 2016 was $10.9 million compared to a net loss of $4.8 million for the second quarter of 2015 with this increase primarily driven by increased operating expenditures related to the initiation of our LEADERSHIP 301 clinical trial. Overall, we ended the second quarter of 2016 with cash resources anticipated to carry us through mid-2018, which we expect will be sufficient to see us through the reporting of top line results from our LEADERSHIP 301 trial. With that I'll turn the call back over to David.

[David Main:]

Thanks, Kam. In closing, our progress thus far in 2016 has been on target and our prior guidance remains unchanged. We also remain steadfast with focused on the key objectives for the company. We look forward to keeping investors abreast of our progress in the LEADERSHIP 301 trial over the months ahead. And I'd also like to take this opportunity to acknowledge the efforts of our growing Aquinox team that continues to work tirelessly to ensure the highest quality most expeditious Phase III program possible. Thank you all again for joining us today. We appreciate your continued support and look forward to updating you as we continue to advance through this trial and other developments of the company. Operator, we can now open the call up for questions.

[Operator:]

[Operator Instructions] And our first question comes from the line of Biren Amin with Jefferies. Your line is now open. Please proceed with your question.

[Biren Amin:]

Yes, hi. Thanks guys for taking my questions. Maybe I'll just start with the Phase III trial design. Are you planning on taking the interim look at any point in the trial?

[David Main:]

No, we’re not. It's fully designed you know to be able to have enough patients in the trial for an interim look to be valuable would be probably be pretty close by the time we have all of the patients enrolled anyways. So we didn't feel that that was valuable at this stage.

[Biren Amin:]

Okay. And then with regards to the 100 milligram dose was I guess rationale for studying that versus – why do you choose that versus let's say 150 or 15 milligram dose?

[David Main:]

That’s a great question. It’s both based upon something that’s very practical that I will explain and the others based upon our experience from preclinical pharmacodynamic PK modeling. So, first off, we actually produce AQX-1125 in 100 milligram tablets, so it’s very easy for us just to be able to do a 200 milligram dose, which is two tablets, or 100 milligram dose which is one tablet plus one placebo tablet and keep the matching across all of the arms very easily. The other reason why we chose 100 milligrams is we may have explained to many of you before that based upon our preclinical models that where we see a plateau and efficacy in pre-clinical models is around 100 nanograms per mL plasma level of AQX-1125. And just coincidentally the 100 milligrams daily dose gets us kind of close to that 100 nanograms per mL whereas that 200 milligrams daily dose you're you know twofold above that. So it was a nice way for us to keep a very simple dosing of the drug from a practical product format as well as getting closer to what we see and be able to compare if plasma levels correlate with similar efficacy to what we saw in pre-clinical models.

[Biren Amin:]

Okay. And then David a lot of times in pain trials, I know this is a traditional pain study, but in pain trials drug developers use a leading strategy to try to offset some of the placebo response. Is that strategy that you plan on evaluating in the study?

[David Main:]

That’s again a great question. We went through a number of different trial designs. We went through the historical results from a number of trials that use placebo run in. And even though it’s discussed as one of the ways to enrich and to eliminate the placebo response in fact the literature doesn’t support, but that’s again a really great precedent of the Pfizer trial of Tanezumab in IC/BPS, so a placebo running didn't really change the placebo effect. So, we have just elected to go straight to screening patients with no placebo running having very strict inclusion criteria of making sure that we are in that moderate to severe category of pain and symptoms and then sizing the trial to expect a certain placebo response. So we felt that we've kind of covered that anticipation of what response we would see without complicating the trial.

[Biren Amin:]

Okay. And then maybe just one last question. The press release says the minimum of 300 patients, is that – I know you’ve disclosed previously 100 female patients in each arm and haven't really say the number on a number of male patients that you plan to enroll. Is that strictly just the fact that you’re planning on enrolling 100 female patients and less than 30 male patients.

[David Main:]

It's not. So the trial is open to equal numbers of men and women, but enrollment will be completed as soon as we hit a minimum of one hundred women per arm. So we could have up to 300 men, again with 100 men per arm, but our expectation is that the release probably considerably less than that. We're taking best efforts to get as many men as possible into the trial, but if we look at the current diagnosis rate of men versus women plus the historical participation in IC/BPS trials for men, women is typically only about 10% to 15%. But if there’s some reason, a lot of men that have been diagnosed with IC/BPS are interested. We certainly aren’t going to cap them anymore than we would the women because that that would – just overall that increases the power of the study, but it also adds to our ICH safety database requirements, but the trial will stop as soon as we hit 100 women per arm.

[Biren Amin:]

Okay, great, thanks.

[Operator:]

[Operator Instructions] No further questions in the queue. I’d like to turn the call over to Mr. Payne for any closing remarks.

[Brendan Payne:]

Great. Well, thank you everyone for joining us today. Please don't hesitate to reach out to us if you have any further questions and we look forward to keeping you appraised of our continued progress. Have a great afternoon.

[Operator:]

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