Onconova Therapeutics, Inc.
Q3 2020 Earnings Call Transcript

Published: 12 Nov 2020

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics Third Quarter Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold the question-and-answer session. As a reminder, this conference call is being recorded today November 12, 2020. 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 third quarter 2020 financial results and business update 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 & Media 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. And then Mark Guerin, our Chief Financial Officer, will review third quarter financial results. Following Mark's report, we'll move to the Q&A portion of the call and will be joined by Dr. Ric Woodman our Chief Medical Officer. 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 and 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 us this afternoon. We hope you and your loved ones are safe and remain healthy. The COVID-19 pandemic has certainly impacted us all and how we leave and work together. At Onconova, we are still awaiting word on our funding requests to the National Institute of Allergy and Infectious Diseases Branch of the National Institutes of Health and Biomedical Advanced Research and Development Authority also known as BARDA. The possible funding of clinical trials with rigosertib in patients with COVID-19 disease. However, Cancer, and the development of effective new anti-cancer therapies remains a significant health issue and is our corporate focus. We believe Onconova is well positioned to play an important role in developing differentiated therapeutics for cancer care. During the third quarter, our product pipeline advanced nicely with ON 123300 entering the clinic in a Phase 1 study in China and oral rigosertib entering a Phase 1 investigator initiated study in combination with the PD-1 inhibitor Nivolumab in K-RAS mutated non-small cell lung cancer.

[Mark Guerin:]

Thanks, Steve and good afternoon, everyone. I plan to start with a quick review of our third quarter expenses, and then I'll discuss our cash position and cash runway. Research and Development expenses for the third quarter of 2020 were $4.2 million and this compares with $3.5 million for the third quarter of 2019. Increase was primarily related to higher consulting fees and manufacturing costs related to clinical supply for ON 123300 partially offset by lower expenses for the oral rigosertib combination program and the Phase 3 INSPIRE study. We announced the Phase 3 INSPIRE results on August 24. And we expect modest wind down costs for this trial to continue late into the fourth quarter. General and administrative expenses for the third quarter of 2020 were $2.1 million, compared with $1.6 million for the third quarter of 2019. The increase was due to higher pre-commercialization insurance and corporate legal and stockholder meeting expenses. We reported a net loss for the third quarter of 2020 at $6.2 million, compared to a net loss for the prior year third quarter of $4.6 million. Cash and cash equivalents as of September 30, 2020 were $24.2 million, compared to $22.7 million as of December 31, 2019. During the third quarter of 2020, we raised $2.7 million from the exercise of warrants. The company expects that its cash and cash equivalents will be sufficient to fund ongoing clinical trials and business operations into the first quarter of 2022. This completes my financial review, I'll now turn the call back to Steve.

[Steve Fruchtman:]

Thank you, Mark. So with that review about product pipeline and financial results, we'd like to open up this call for questions. Operator, please?

[Operator:]

Our first question comes from Joe Pantginis of H.C. Wainwright. Your line is open.

[Joe Pantginis:]

Hey guys, good afternoon. Thanks for taking the question. And hope you're doing well. So couple of questions, I'm going to go backwards in the chronology of the way you described them. So first, with regard to the lung cancer study, you mentioned, obviously there's five patients enrolled and we've already hit the top dose for the protocol. So just curious, besides 2021, since there is a I'll call it relatively decent number of patients in the study for an IST, by the time ASCO or other conferences roll around, would we be targeting those types of releases or is this really up to the investigator?

[Steve Fruchtman:]

Joe, thank you for that question and I'll ask Rick to take it, please, Rick?

[Ric Woodman:]

Thank you, Steve. And thank you, Joe, for the question. I think there's a couple of considerations, first is the practical one, that ASCO abstracts, I saw an email today announced that abstract deadline is February 17th. And so to have an abstract submitted for the well, I assume will be a virtual meeting next May, June timeframe, that's the timeline by which we would be operating. I think, to submit an abstract, there's also an important consideration of what is the information we would provide in it. I think that if there was a recommended Phase 2 dose identified and or DLTs and a maximum tolerated dose identified, that would be important information worthy of submitting an abstract. Whether that happens before February 17th is entirely unknown. Certainly, in addition to that, if we had any early signals, it's unlikely that we'd have any given the short time frame patients would be on treatment, but that would be another important, typical inclusion for an abstract on a study like this. So, I think certainly the investigator would be interested. It is his final decision. And I think some of the things I've described to you would be something that I'm sure he would discuss with us in his decision.

[Joe Pantginis:]

Great. Thanks for that, Ric. And then going backwards, so it's very intriguing, this new investigator study in squamous cell carcinoma for RDEB patients. So I think one of the - I think intriguing things to me as well, so I keep using that word, but it really applies is the safety profile of rigosertib to-date because the patients with RDEB are predominantly pediatrics. So I think to be able to move this IST forward in this patient population that literally spends about $10,000 a month just on bandages is very intriguing and exciting. So I don't know if you have any additional comments about the conduct of the study?

[Steve Fruchtman:]

So I think, Joe it's very impressive, first of all, that you know so much about this very rare disease that is amazing, but Ric, why don't you to take that as well.

[Ric Woodman:]

Yes. Joe I'm also impressed. I'm not sure if what I've learned about this rare disease, $10,000 a year might be an underestimate.

[Joe Pantginis:]

No, a month, unless I'm mistaken, a month.

[Ric Woodman:]

A month. Oh, sorry. Thank you. I think, first of all, let me clarify. This Phase 1 study we're doing is in adults, age 18 and over. At this point time, it's unknown whether we're able to move into a pediatric population. I think the important thing to consider is that not only do these patients have terrible skin disease and risk for squamous cell carcinoma, but they also have epithelial webs forming there throughout their gastrointestinal tract. And so, in this particular study, we have the need to investigate either oral or intravenous based on individual clinical circumstances for each patient. So I think, again, it won't be a pediatric study initially, but certainly if there is benefit demonstrated, that's a possibility.

[Joe Pantginis:]

Got it. Very helpful again. And then I guess more quickly, because you really did, Steve delineate the types of dosing differences you're going to be looking at for 123300 is, I guess based on - I guess look at this way, based on the preclinical profile for the drug, do you believe you'll see a particular dosing regimen beating the other one or you just need to do the experiment at this point?

[Steve Fruchtman:]

Yeah, I think Joe, thank you again for the question. I think that's why we're doing that experiment to determine if the 21-day cycle or the 28-day cycle is preferable. As we mentioned, the commercially available has either regimen depending on which drug we're talking about. So we think we're going to get very interesting data both from the patients in China and the patients in the U.S. And the study in China is going to help us greatly because they started at a low dose of 40 milligrams, the cohort does not have any dose limiting toxicities when we open a U.S. trial, we could already start at the next cohort. And after we put all the data together, then we'll determine what is the best safety approach is in to 21-day regimen or the 28-day regimen. And until we have the data, I can't - we can't answer your question, Joe. Thank you.

[Joe Pantginis:]

Understood. Thanks for the added details, guys.

[Operator:]

Thank you. Our next question comes from Jason McCarthy from Maxim Group. Your line is open.

[Unidentified Analyst:]

Hi, everyone. It's Ajay on the line for Jason, thanks for taking my question. So when can we expect a data react from the Phase 1 Chinese trial? And do you guys plan on exploring any potential combination trials for ON 123300?

[Steve Fruchtman:]

Thank you for that. Ric, would you like to handle that?

[Ric Woodman:]

Yes, thank you, Steve. And thank you, Jason. I think that - to answer your question, I think it depends on what you call data readout. I think that, we're anticipating that for one of those studies, by fourth quarter 2021, we would have an understanding of maximum tolerated dose and recommended Phase 2 dose as well as the safety profile in the monotherapy setting. I think it will be difficult to have final readout on any efficacy signals, given that patients who may be benefiting, may be on study for several months longer, hopefully. And they're depending on the last patients come into the study on the expansion phases, we also determine, what we know about efficacy? I want to emphasize again, this is a phase - more phased to Phase 1. And obviously, reading efficacy signals with these studies can be challenging. And that's certainly not the primary objectives of the study.

[Steve Fruchtman:]

If I could expand on Ric's comments regarding a combination of approaches, as a second part of your question. Just to highlight to you and as you probably know, all the commercially available CDK 4/6 inhibitors have limited efficacy as single agents. Typically they're given, not typically always given within our invitation inhibitor in combination, because ON 123300 targets ARK5 in addition to CDK 4/6. Our drive appears to be cytotoxic or refractory CDK 4/6 inhibitor refractory breast cancer cell lines. So it is possible we'll have efficacy as a single agent, but perhaps in combination with a non-mutase inhibitor or some other compound will have even greater efficacy and clearly those studies will have to be conducted after Ric's team determines what the maximum tolerated dose for the Phase 2 Shelby.

[Ric Woodman:]

I would just add, it also depends what disease we see a response in. What Steve's described this is for metastatic breast cancer, but if we had a response in another tumor type, which there may be because of the ARK5 that may dictate the feasibility of doing combinations. And it's hard to know what those combinations might be until we understand which tumor types are in fact responding.

[Unidentified Analyst:]

Got it. Thanks for the additional color guys. Appreciate it.

[Operator:]

Thank you. Our next question comes from Ahu Demir from Noble Capital Markets. Your line is open.

[Ahu Demir:]

Good afternoon. And thanks for taking my question. I have a follow up on the CDK 4/6 and ARK5 targeting. So I'm really curious is ARK5 emphasizing any other chances. Do you believe one of the chances will be one better as Ric comment. And if so, what are the indications you might consider going after stronger than others. Do you have any strategies or any ideas about that to start with?

[Steve Fruchtman:]

Thank you, Ahu. And Ric, would you like to take that please?

[Ric Woodman:]

Sure. Yes, there are number of other tumors that have increased expression of ARK5 such mantle cell lymphoma, hepatocellular carcinoma, multiple myeloma and obviously there is some increased expression in breast cancer. Glioblastoma is another example, and this compound does cross the blood-brain barrier. So there are a number of tumors that potentially have up regulation of the target. And so will be of interest as we move through the clinical studies to see what kind of safety and efficacy we observe in those diseases?

[Steve Fruchtman:]

And in addition, unfortunately, women with metastatic breast cancer frequently have metastatic disease to their brain. We hope based on what Ric said and evidence of efficacy targeting ARK5 and thus crossing also the blood-brain barrier that that could be a great benefit to women with metastatic breast cancer who are at risk to CNS disease.

[Ahu Demir:]

Thank you very much.

[Steve Fruchtman:]

Yes, we're very excited about the future development of ON 123300.

[Ahu Demir:]

Sorry. So my second question will be about the partnership that was mentioned in the previous quarter earnings call. So are you slowly seeking for additional access and have you made any developed any additional progress in that? And if so, when should we expect any new programs or partnership?

[Steve Fruchtman:]

Thank you. Ahu. RV, would you like to handle that?

[Rajwanth Veluswamy:]

Sure. Thanks, Ahu and thanks, Steve. I joined Onconova because Steven Ric has a tremendous track record of developing oncology drugs. And we're very excited about ON 123300 and oral rigo as well. We are actively looking for opportunities to enhance our portfolio. And when there are future developments, we will certainly report them. We are actively looking.

[Ahu Demir:]

Okay, thank you very much for taking my questions.

[Steve Fruchtman:]

Thank you, Ahu.

[Operator:]

Thank you. And our next question comes from Yale Jen from Laidlaw & Company. Your line is open.

[Yale Jen:]

Hello, good afternoon, and thanks for taking my questions. The first question is that just want to be clarified that for the 1233 conjunct, when you get into the expansion stage. And you mentioned 36 patients, are those only for the breast cancer or the breast cancer and NHL combine?

[Steve Fruchtman:]

Ric what are the plans once we get the maximally tolerated dose?

[Ric Woodman:]

Right. So I think that's for both diseases. And, and so I don't know how they would be evenly distributed in terms of enrollment. There's also going to be in the HanX study, an enrichment in their expansion phase for patients with breast cancer. So, the advantages of this study are the simultaneous conjuncts of two phase one studies in advanced cancer with the same agents. And I think that the data is likely to be very complimentary, but also, we'll have more data than we might we see developed in the same timeframe with most agents. So we're very excited about this opportunity of two simultaneous Phase 1 studies.

[Yale Jen:]

Okay, great, that's helpful. And maybe just back on that a little bit, which is that for the Phase 1 dose findings study in the United States. The patient on metastatic breast cancer patients, but not necessarily all patients are currently CDK 4/6 resistant patients, at least some of the dose finding part, hoping that will be correct?

[Ric Woodman:]

Yes. I mean the patients with advanced phase disease that are hormone receptor positive, HER-2 negative. Standard of care is generally that these patients will have to receive the CDK 4/6. It's possible they might come into our study after third line therapy with some form of chemotherapy as well as part of their prior treatment. And certainly those patients would be eligible. And so, I'm a little hesitant to say that they would only be following CDK 4/6. They might have also had other therapies. And I think it's important emphasizing that, the commercially available CDK 4/6 inhibitors are not curative. And so the need, there's a high need for these patients continuing despite the advances and standard of care that they have made.

[Yale Jen:]

Okay, that's very helpful. And actually just back on your answer here, maybe just find the question here is that. You mentioned that 123300 is cytotoxic, whereas the others are marked as cytostatic. Could you explain the reason in terms of mechanism actions, why is that just because you target one more medical target to cause that or make any other comments on that?

[Ric Woodman:]

Well, I think my comment is the cytotoxicity, it's due to the ARK5 inhibition that occurs with CD - with ON 123300. Remember that this is a dual inhibitor in contrast to the other CDK inhibitors. And it is the ARK5 - inhibition of ARK5 that disrupts cellular energy metabolism in the cancer cell. And that's what causes the cytotoxicity. And this is what we think is also a particularly advantageous aspect of this drug in these patients.

[Yale Jen:]

Okay, great. That's very illuminating and congrats on the progress on this treatment.

[Ric Woodman:]

Thank you.

[Steve Fruchtman:]

Thank you, Yale.

[Operator:]

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back over to the speakers for any closing remarks.

[Steve Fruchtman:]

Thank you all for participating in today's update call. We greatly appreciate it. We're very excited at Onconova to pivot to the development of a new lead product, ON 123300 and look forward to upcoming important milestones in the near future as follows. One, we plan to file the U.S. IND for ON 123300 in the coming weeks, followed by clinical trial initiation with patient enrollment, expected to begin in the first half of 2025. Two, the pipeline of investigators sponsored studies, with oral rigosertib is advancing. And further progress is anticipated in 2021, including establishing a dose for further study of the combination of oral rigosertib and Nivolumab in K-RAS mutated, non-small cell lung cancer and will establish the dose of the combination in other solid tumor RAS driven cancers. And three, we're actively evaluating strategic opportunities to enhance our product portfolio. We truly appreciate your continued interest in the programs of Onconova. Should you have any additional questions, please feel free to contact any of us. Thank you and have a nice and enjoyable evening.

[Operator:]

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and you may now disconnect. Everyone have a wonderful day.