Onconova Therapeutics, Inc.
Q2 2020 Earnings Call Transcript

Published: 13 Aug 2020

[Operator:]

Good afternoon. And welcome to the Onconova Therapeutics Corporate Update and 2Q, 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would now like to turn the call over to Avi Oler, Senior Vice President of Corporate Development and General Counsel.

[Avi Oler:]

Thank you, Operator. Good afternoon, and welcome to Onconova's second quarter 2020 corporate update and financial results conference call. Earlier this afternoon, we issued a press release outlining our financial results and business progress during the quarter. If you have not yet seen this press release it is available on the Investor Relations page of our website, at www.onconova.com. On today's call, Dr. Steve Fruchtman, President and CEO, will discuss the company's recent highlights and anticipated clinical and business milestones. After Steve completes his opening remarks, Mark Guerin, our Chief Financial Officer, will review second quarter financial results. Following Mark's report, we will move to the Q&A portion of the call, which will be joined by Dr. Ric Woodman, our Chief Medical Officer. Lastly, Steve will come back with some final comments and a review of our upcoming milestones. Before we begin, I remind everyone that statements made today during this conference call will include forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made, as the underlying facts and circumstances may change, except as required by law, Onconova disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. Please see the forward-looking statements disclaimer in the press release issued this afternoon. And the risk factors in the company's current and future filings with the SEC. With that, it is my pleasure to now turn the call over to Steve.

[Steve Fruchtman:]

Thank you, Avi. Good afternoon, everyone and thank you for joining today's call. First, as the COVID pandemic continues to evolve in the US and abroad, we wish all safety and good health for you and your loved ones. We remain committed to executing our goals with INSPIRE and beyond. We remain focused on INSPIRE data readout and will speak more about the COVID pandemic shortly. Onconova has had a productive second quarter and exceeded the quarter carrying a significant momentum into the second half of 2020. As previously indicated, our pivotal Phase 3 INSPIRE trial recently achieved the required number of survival events to allow for data analysis, and we anticipate top-line data readout by the end of September. COVID has made access to the hospitals and clinics more difficult so data verification of key date such as survival and the most recent clinical encounters are more difficult to verify. But verify we must and we shall. Following top-line data readout, we expect to present more details data at a major medical meeting later this year. The meeting to be identified based on timelines. Of note most if not all major medical meetings are now virtual. To shorten the timelines for our anticipated new drug applications or NDA submission to the FDA, we've already begun NDA preparation prior to data readout. We are working also with regulatory consultancy experts on our NDA document for the US FDA for both the clinical and manufacturing modules of the NDA, as well as on the marketing authorization application or MAA document for the European Medicine Agency. We anticipate that this initial work will put us in a position to expedite our health authority applications when data becomes available. As part of this process, our clinical team under Ric Woodman's leadership is preparing for a Pediatric Investigational Plan or PIP, an important component of the MAA. We are also advancing our plans to be ready for commercialization, including the recent announcement of the election of a commercial expert Terri Shoemaker to our Board of Directors. Terri was instrumental in the successful, commercialization of azacitidine, the most commonly used hypomethylating agent in the world for high risk MDS. As you recall, INSPIRE is an open label randomized controlled international study designed to determine the efficacy, safety and tolerability of single agent intravenous rigosertib in the treatment of patients with second line high risk MDS. Patients in the study are less than 82 years of age, and have progressed or relapsed or failed to respond to previous treatment with the standard of care. A hypomethylating agent also called an HMA. The study randomized patients to receive either rigosertib with best supportive care or the physician's choice of therapy with best supportive care. The primary endpoint of this study is overall survival of all randomized patients in the intent to treat population. There is a second opportunity for an FDA approval which is the sequential analysis of the overall survival of the very high risk MDS sub as defined by the revised international prognostic scoring system. Should intravenous rigosertib demonstrate a survival advantage compared to physician's choice of therapy on the INSPIRE trial in a statistically significant manner; we believe rigosertib could be a major advance for high risk second line MDS patients with a novel mechanism of action. Hopefully broader and additional novel indications will follow. Beyond our progress with INSPIRE, a highlight of the quarter was the initiation of an investigator-initiated Phase 1/2 trial of oral rigosertib plus the immune checkpoint inhibitor Nivolumab in advanced metastatic KRAS positive lung adenocarcinoma. Over half of non-small cell lung cancers are classified as lung adenocarcinoma, and of these the largest subset has a KRAS mutation as the predominant genetic driver. Given their utility in multiple cancer settings, checkpoint inhibitors are among the world's top selling pharmaceutical products and continue to obtain FDA approval for broader indications. In our view, this makes our novel combination approach with rigosertib, a potentially meaningful option to pursue in lung cancer. We hope this will offer patients who have progressed on first line therapy, a second line approach. We are also initiating studies in other RAS pathway driven cancers as part of our investigator-initiated development program. Onconova has also recently featured pipeline developments in multiple venues. At the European Hematology Association's virtual conference in June, we announced updated aggregated baseline genomic data from HMA failure patients screened and entered into the INSPIRE trial. Briefly, the presentations show that RAS pathway mutations in these higher risk MDS patients were observed more frequently in patients who progress on HMA therapy as defined by the international working group's definition of progression compared to those who fail to respond to HMA therapy. In fact, in this study patients with mutations of the RAS pathway had a higher likelihood of progression on hypomethylating agents than those with TP-53 mutations, a well-recognized genomic abnormality predicting for progression in a number of cancers. We believe this is informative to the potential role of RAS targeting agents such as rigosertib and to our knowledge this mutational analysis is among the largest such databases to be collected. Patients on the rigosertib and physician's choice arms will have repeat analysis of their genomic status performed as part of the INSPIRE trial. Following the close of the second quarter, Onconova also announced the publication of Phase 1 data with the combination of all rigosertib plus azacitidine and higher risk MDS and AML in the journal Leukemia Research. A key strategy emerging in the treatment of MDS is the identification of safe and effective combination, particularly those involving oral agents. We anticipate meeting with the FDA in conjunction with the pivotal data readout from the INSPIRE trial for alignment with the agency on a registration trial for the combination of all rigosertib plus azacitidine IN HMA naive high-risk MDS. We look forward to these interactions with the agency. In the Journal Molecular Cell, we also announced the publication of additional pre-clinical data supporting rigosertib's mechanism of action as a last targeted anti-cancer therapy. Onconova believes this data sheds light on the ability of rigosertib to modulate the RAS pathway. We also disclose that we have embarked on early pre-clinical work exploring rigosertib potential in COVID-19. The background for this is as follows

[Mark Guerin:]

Thanks, Steve and good afternoon everyone. First as a reminder, early this month Onconova received the letter from NASDAQ stock market stating that it had regained compliance with the minimum bid price requirement of the NASDAQ listing rule 555082 because it's common stock at a minimum closing price at least $1 per share for a minimum of 10 consecutive business days. Our cash and cash equivalents as of June 30, 2020 total $27.2 million, compared to $22.7 million as of December 31, 2019. Common stock warrant exercises since our financing transactions in November and December 2019 have added $9.8 million to our balance sheet since January 1, 2020. And as of August 12, 2020, we have 183,568,267 common shares outstanding. Additionally, of the almost - of the warrants outstanding as of June 30, 2020, over 80% of them were in the money as of August 12th. Based on our current projections, we expect that our cash and cash equivalents will be sufficient to fund ongoing trials and operations into the fourth quarter of 2021. Our net loss was $7.4 million for the quarter ended June 30, 2020, compared to $3.6 million for the comparable period in 2019. Research and Development expenses were $4.8 million for the quarter ended June 30, 2020 and $3.9 million for the comparable period in 2019. General and administrative expenses were $2.6 million for the quarter ended June 30, 2020 and $1.8 million for the comparable period in 2019. Our operating cash burn in the second quarter of 2020 was approximately $5.4 million. It completes my financial review; I'll now turn the call back to Steve.

[Steve Fruchtman:]

Thank you so much, Mark. With that, we'd like to open the call for questions. After the questions and answers; I'll finish with some closing comments. Operator, please open the Q&A Session.

[Operator:]

[Operator Instructions] Our first question comes from the line of Joe Pantginis from H.C. Wainwright. Your line is now open.

[JoePantginis:]

Hey guys, good afternoon. Thanks for taking the question and hope you're all doing well. First, I'd like to ask about your initial comments about the data verification process for the study. What do you think are the real rates limiting steps now? Either COVID related or unrelated? And then secondly, with that, I think this is more of a what if question, do you have any visibility now with regard to any potential patients lost due to COVID that might impact the statistics, and have you had any discussions with the FDA about this since they have put out recent public guidance a couple months ago about being a little more amenable to adjusting statistical plans due to COVID? Thanks a lot.

[SteveFruchtman:]

Joe thanks for that question. And I'll ask Ric to please provide the answers.

[RicWoodman:]

Thank you, Steve and thank you, Joe. So all along the biggest challenge that we observed with our study related to COVID was access to documents and at the site. And this is not necessarily physically being able to get the size, but even having remote monitoring opportunities. We have been able to overcome almost all of those difficulties and challenges. Now we are still in database lock and so we are continuing to clean data and monitor and source data verify. But to date, it's gone very well. And I think it's in part, the understanding by the sites regarding where we are in the lifecycle of the study, and the importance of this data to the outcome of the study and to this disease. We have not lost any patients due to COVID at this time, the commonest challenge we see is that patients are, have symptoms suggestive of COVID and then undergo testing and then report us the results negative or positive.

[JoePantginis:]

Got it. Thank you very much for that. And as things continue to - continually get more exciting for you guys coming into the data, I guess I'll ask the question at this point again. And I know I do ask this a lot about what you feel is outstanding with regard to the oral study ahead of your upcoming FDA meeting?

[RicWoodman:]

Well, I think the primary challenges are related to the unique adaptive design we're proposing to the FDA. And that will require some discussion between us and the agency. I think that the timing of INSPIRE, if positive, could very much support their interest in an adaptive study design that has an expedient execution and conduct with oral rigosertib.

[Operator:]

Thank you. Our next question comes from the line of Naureen Quibria from Maxim Group. Your line is now open.

[NaureenQuibria:]

Hi. Steven team. Congrats on the quarter. So, I guess - I want to start off with the KRAS study that's going on right now, obviously, so I was just wondering, it's an open label study. Do you have any idea if we'll have any updates this year on that? And then what kind of response rates would you - would give you some confidence in terms of, you feel there's activity in this tumor type? I know it's a long way away, but I'm curious about that as well?

[SteveFruchtman:]

So, thank you, Naureen. I just want to point out that this is a Phase 1 study, and I'll ask Ric to give - offer the more details that we may have.

[RicWoodman:]

Thank you, Steve. So we're in the early phases of enrollment with this study. I think obviously with these studies, data can become available sooner than anticipated or conversely take much longer than anticipated depending upon dosing and development DLTs. Because this is a Phase 1 study Steve mentioned safety, DLT determination and determination of a recommended Phase 2 dose for the combination is the priority. I think like all Phase 1 studies, we are always excited about responses, but that is not what's going to determine the success of the study or the ability to proceed with other studies. It will be dosing and safety.

[NaureenQuibria:]

Fair. That's helpful actually. And then in terms of moving oral or looking at oral rigosertib in COVID. And you mentioned that you'd applied for a grant. I was just wondering what's the turnaround time for that, and when will you know anything? And then in terms of the economics, is this just a sufficient? Would it be sufficient for IND enabling studies or actually for a clinical trial?

[SteveFruchtman:]

So, I'll take that and thank you. So you mentioned oral rigosertib. So why we believe rigosertib should be studied in COVID disease is because we have oral and intravenous rigosertib. So as you know, there's different levels of disease with COVID infections; some relatively mild and some pent demand to pulmonary [serada]. So based on the inhibition of SARS-COV-2 in cell culture systems, as you mentioned, we've applied for funding through the NIH federal mechanism of studying COVID disease. Early in the disease, ideally it would be with oral rigosertib to see if it would prevent progression to pulmonary insufficiency. The patients, who have already reached unfortunately the stage of pulmonary insufficiency requiring ventilator support. That would be a group of patients, who could be studied with intravenous rigosertib. Because the global pandemic is changing rapidly, it is unclear to us how NIH and the federal funding agencies will make decisions regarding both therapeutics and vaccines. We believe as long as the pandemic continues to rage, there is a great need for the development of additional efficacious therapeutics. So thus we believe based on the preclinical studies, we would like to participate in any clinical trials at the NIH maybe considering the therapeutics, but clearly the NIH is appropriately focused on the development of vaccines and thus it's unclear to us where NIH stands on the issue in question of the role of therapeutics during the pandemic, and the role of vaccines. Any information we have going forward we will be happy to share that with the investment community.

[Operator:]

Thank you. Our next question comes from the lines of Ahu Demir from Noble Capital. Your line is now open.

[AhuDemir:]

Hello, gentlemen. Thank you very much for taking my question. Congratulations on the progress you've made in this quarter. I got a few questions and I'll start with as we all waiting excitedly about for the top line INSPIRE data. Could you provide some color on the NDA and MAA application timelines and commercial efforts following the top line data readouts?

[SteveFruchtman:]

So I'll take that Ahu and thank you. We anticipate filing of the NDA in the first half of 2021. And we've already begun pre-commercial planning for that pivotal event. As I mentioned, we have a commercial expert, and she's very unique. Being an MDS expert, who also was the leader of the commercialization of azacitidine, when we began initial epidemiology and other studies to have a better understanding of the commercial value of a second line IV rigosertib product? So the summary is we anticipate filing the NDA first half of 2021.

[AhuDemir:]

Okay. That's very helpful. Thanks Steve. My second question will be on the oral rigosertib as well. So when do we expect the FDA review to conclude or have the discussions maybe concluded for the product protocol and maybe advance it into the clinic? What will be the timeline or surgery that you think that will happen?

[SteveFruchtman:]

So again, I'll ask Ric to answer your question regarding regulatory guidelines for the oral combination study and what we anticipate in our plans. Ric?

[RicWoodman:]

Thank you. Our plans are to have the Type C meeting with the FDA following INSPIRE top line analysis. Typically that would be late fourth quarter. And from that we'll proceed once we get their feedback on our adaptive Phase 2, Phase 3 design, and move forward then with as quickly as possible with opening the study and into enrolling patients. We think that an oral compound coupled with a positive INSPIRE outcome would generate a lot of interest by physicians and investigators for participating in an oral combination study.

[AhuDemir:]

Thank you, Ric. I'll refer my next question to Mark. Mark, I was curious do you see, expect any increase in the SG&A expenses in the fourth quarter, or is it going to be more in the 2021 timeline?

[MarkGuerin:]

Hi. Thanks for the question. I think we projected our cash burn per quarter will still be in the range of $5 million to $6 million in the near term. As we talked about last quarter, the composition of that burn has shifted from primarily clinical and now includes regulatory spending for anticipated NDA, and also the long lead time items for pre-commercialization activities. I suspect and project that shift will continue. But I do not expect that we'll have any spending on commercial - pre-commercialization activities in earnest until later in the fourth quarter or early 2021.

[Operator:]

Thank you. Our next question comes from the line of Yale Jen from Laidlaw & Company. Your line is now open.

[YaleJen:]

Good afternoon and thanks for taking the questions and congrats on the development that you guys be waiting for a very exciting month and half for the data and we all are. My first question is that in terms of the top line data readout, what - it is a sequential analysis. So even you be successful in the IPT version of the readout, would you still analyzing for the very high-risk patient outcome, and we do record that concurrently with the top line or you will report that much later on.

[SteveFruchtman:]

I think I answer that. What you're asking is about the sequential analysis and the way the statistical analysis plan was written. If we have positive pivotal data on the intent to treat population, there's actually no need to look at just a very high risk. That doesn't mean we can't do it, but from an FDA perspective, if we meet the statistical hurdle for the intent to treat, that's the primary endpoint and now it will be the data we [Indiscernible] and the FDA going forward.

[SteveFruchtman:]

We do have a second option. If the intent to treat population does not meet a statistical hurdle, then the FDA had given us permission because of the tremendous unmet medical need for the very high risk MDS population to look at them separately in a sequential fashion, and then share that information with the FDA in the setting of the intent of treat not meeting its statistical hurdle. So I hope that answers your question, Yale?

[YaleJen:]

Sure. I mean, actually, I'm thinking about the very high risk, even you have reached the positive outcome for the intent to treat is that probably for maybe even just academic reasons or other information reasons to do that analysis for the high-risk patients?

[SteveFruchtman:]

And yes, we have a number of secondary endpoints, and we are called an academic group. And so it's questions like time to leukemia transformation, a risk of infections, responses in the RAS sub group, we had a whole variety of analysis as an academic group at Onconova, we will be interested in looking at and no doubt they are very high risk as part of that more generalized analysis that you're asking about.

[YaleJen:]

Okay, great. That's very helpful. And you mentioned above that it depends on the timing. You might - you could present it at major medical conferences. If we guess that could be ASH, would that be possible? Can you get a potentially a placeholder there before you actually have the full data set to be presented later on?

[SteveFruchtman:]

Ric, could you mention our plans for ASH and possibly other conferences as well, please?

[RicWoodman:]

Yes, thank you, Steve. So in terms of the upcoming ASH meeting, we - our plan is to utilize the mechanism of a late breaking abstract. And in that particular mechanism, sponsors have the opportunity to submit an abstract typically in the middle of October. And that abstract, often those abstracts are Phase 3 studies with novel new therapies advances in a variety of hematologic diseases. And so given that this is a randomized control study in the population it is, if the study were to have a positive primary endpoint. We are optimistic that ASH would be very interested in considering this as a late breaking abstract. And we'd move forward with that approach at this time.

[YaleJen:]

Okay, that's very helpful. And maybe a two quick one. The first one is in terms of oral rigosertib. You mentioned about adaptive study design. I know you still need to have get volume, but could you briefly describe - what means results of study design?

[RicWoodman:]

Yes. So, if I understood your question, it was just briefly describe the study design.

[YaleJen:]

Yes. The adaptive study design.

[RicWoodman:]

Yes. So it has two parts. First part is a Phase 2 study with three arms; one arm being azacitidine as the control, and then the other two arms being investigational arms with two different doses of rigosertib. And one dose is 1120 per day and the other is 840 per day in divided doses. And there would be an interim analysis at the end of Phase 2 to pick, so to speak the most efficacious and safe rigosertib dose. Patients would then continue in the Phase 3 to be enrolled to that rigosertib arm which was determined by an IDMC to be the choice - preferred choice for moving into the Phase 3, we continue in the Phase 3 with the control arm of azacitidine and the primary endpoints would be complete response, partial response at both the end of the Phase 2 and the end of the Phase 3. This particular design has a lot of advantages for us, two of which are most important are the time to execution of a sequential Phase 2 and Phase 3 is not nearly as long it is in this adaptive design. So the adaptive design is faster and it requires fewer patients. And so both of those are clearly advantages that were part of our decision to use this particular study design for oral rigosertib.

[YaleJen:]

Could you remind us in terms of Phase 2 and Phase 3? Each one how many patients you will intended at this moment?

[RicWoodman:]

Yes, so the total study; it'd be 475 patients. Right now the sample sizes are for the Phase 2, it'd be around 225 patients and in the Phase 3; it'd be around 250 patients. Now these are somewhat artificial numbers because obviously, we haven't had a chance to discuss these numbers with the FDA. But this study design has been published last year as a poster at ASH, and many of the details are listed in that poster, and the rationale for the study.

[YaleJen:]

Okay, great. Maybe the last question here is that in terms of your filing, you say it will be in the first half of next year, should we assume that the rolling submission and the you might have be able to submit for some of the CMC stuff a little bit earlier, and then ultimately the clinical data and others?

[SteveFruchtman:]

So the answer is yes, and we've got our estimate; clearly, we want to shorten timeline as much as possible, and we will participate in a rolling submission. And thank you.

[Operator:]

Thank you. That's all the time we have for questions. At this time, I'd like to turn the call back over to the speakers for the closing remarks.

[Steve Fruchtman:]

So thank you all for participating on today's update call. We're obviously very excited. And we hope you are as well about the important progress we have made during the quarter. Important milestones we look for in the near and medium term include, and in no particular order. First, top line data from the INSPIRE trial sometime before the end of the current quarter, followed by presentation at a major medical conference later this year. Two, meeting with the FDA following the INSPIRE readout for alignment on a registrational trial, with oral rigosertib plus azacitidine in HMA naive higher risk MDS as Ric described to us; three, continued expansion of the rigosertib investigator-initiated study program into additional tumor types. Four; U.S. IND submission of ON 123300 during the fourth quarter of 2020; followed by clinical trial initiation; five, determining next steps in COVID-19 research. We truly appreciate your continued interest in the programs at Onconova. Should you have any additional questions, please feel free to contact any of us. Thank you. Operator, you may now end the call.

[Operator:]

Ladies and gentlemen, thank you for your participation on today's conference call. This concludes today's event. You may now disconnect.