Onconova Therapeutics, Inc.
Q4 2019 Earnings Call Transcript

Published: 25 Mar 2020

[Operator:]

Good afternoon and welcome to Onconova Therapeutics' Corporate Update and Full Year 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call maybe recorded.At this time, I would 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 fourth quarter and full year 2019 corporate update and financial results conference call. Earlier this afternoon, we issued a press release outlining our financial results and business progress during the year. If you have not yet seen this press release it is available on the Investor Relations page 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 2019 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 brief 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, I'll turn the call over to Steve.

[Steve Fruchtman:]

Thank you, Avi. Good afternoon, everyone and thank you for joining today's call. I would like to apologize for the delay in initiating the call. There was some technical factors from the operating system that really was out of our control. I also hope all of you are safe and practicing the guidelines as per our CDC. As you know, this is a very serious pandemic, so obviously, please take good care.2019 and early this year represented a period of significant investment. Onconova highlighted by our recently completed enrollment of the pivotal Phase 3 INSPIRE trial in Higher-Risk Myelodysplastic Syndromes. With planned INSPIRE enrollment now complete, we await the reporting of 288 survival events before releasing topline survival data. As disclosed earlier this afternoon, we expect top line survival data to be available during the second half of 2020. Survival event INSPIRE trial are occurring at a slower rate than anticipated from historical published data. The reporting of this data set is expected in the second half of this year, this is our best estimate at this time. However, the impact of the evolving situation with COVID-19 is not known [ph].As you recall, the INSPIRE trial 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 this study are less than 82 years of age, and have progressed on, relapsed, or failed to respond to the previous treatment with methylating agent therapy. 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 subgroup as defined by the revised International Prognostics Scoring System. Should rigosertib prolong survival in the INSPIRE trial, in a statistically significant manner, we believe rigosertib could be the first new treatment for higher risk MDS in more than 15 years.In addition to the INSPIRE trial, we are preparing for a pivotal Phase 2/3 combination trial of oral rigosertib and azacitidine for the treatment of adult patients with HMA naïve higher risk MDS. We received feedback from the FDA in 2019 and are preparing a Phase 2/3 protocol. We anticipate this study will begin later this year in conjunction with the data readout from the INSPIRE study. At the American Society of Hematology Annual Meeting in December 2019, Onconova presented a number of abstracts highlighting our development programs for both, intravenous and oral rigosertib. The genomic data from the INSPIRE trial identifies the most common mutations in higher risk MDS following azacitidine failure, including those of the RAS pathway that are targeted by rigosertib. We believe the Phase 2 data of all rigosertib in combination with azacitidine forms the foundation of a future adaptive trial in HMA naïve high risk MDS patients.We appreciate the recognition by ASH expert reviewers designate this data to be of such value that it was given an oral presentation at ASH. As presented at ASH, a Phase 2 combination of oral rigosertib and azacitidine showed an overall response rate of 90%, 9-0, and a complete response rate of 34%. Complete response or CR by definition signifies the patient as a normal appearing bone marrow, and the bone marrow produces a normal peripheral blood gap [ph], thus, these patients who are typically transfusion-dependent or rendered transfusion independent which clearly offers great clinical benefits. The median duration of response is 12.2 months. The company believes these things support the design of a planned Phase 2/3 adaptive trial in HMA naive high risk MDS patient.We have also made important progress with additional pipeline programs as well. Beyond [indiscernible] focus, in MDS, we are pleased about our other pipeline progress. And in particular, the progress of our plans to study rigosertib in last driven, our cancers, including a study in KRAS-mutated lung adenocarcinoma. We anticipate the first patient to be entered onto the trial once the COVID-19 environment improved sufficiently. While checkpoint inhibitors represents a significant advancement in the standard-of-care in treating lung cancer, tremendous unmet medical need remains. In our view making our novel combination approach, which now will target RAS, a great interest to pursue.ON 123300 is our investigational, first-in-class, dual inhibitor of CDK4/6 and ARK5, which we believe has the potential to treat numerous cancers, including refractory metastatic breast cancer with CDK4/6 inhibitors have helped the [indiscernible] approval. As a reminder, we entered into a license agreement with HanX Biopharmaceuticals for ON 123300 in December of 2017, under which HanX will provide all funding required for Chinese IND-enabling studies performed for Chinese health authority, IND approval. We at HanX also intends these studies to comply with FDA standards. The R&D was approved in January of 2020 by the Chinese health authority. The manufacturer for ON 123300 has been identified already and qualified. We plan to file a US-IND to ON 123300 in the fourth quarter of 2020, after obtaining the required manufacturing data for that filing.For those who are not familiar with the field, CDK inhibitors have emerged as promising compounds targeting very large indications such as hormone receptor positive, metastatic breast cancer. The current generations of commercially-approved CDK inhibitors has limitations. Due to it's unique targeting of ARK5, as well as CDK 4 and CDK6, we believe ON 123300 has the potential to overcome many of these limitations making our drug candidate potentially suitable for certain cancers that may not be responsive to the current generation of CDK 4/6 inhibitors. If successful, we believe all ON 123300 could address this very large market opportunity with a potentially better therapeutic. We maintain global rights to ON 123300 outside of China.The fourth quarter of 2019 and early 2020 was productive on the business development front as well. We executed a licensed agreement for rigosertib for Canada with Knight Therapeutics, we executed a licensed agreement for rigosertib for Australia and New Zealand with Specialized Therapeutics, we reacquired the rights to rigosertib in Greater China from HanX Biopharmaceuticals, and we entered into a preapproval access collaboration with Inceptua Medicines for rigosertib in select countries outside of the United States. As a reminder, Onconova retains the rights in the United States, Europe and China for rigosertib, and we look forward to further business development opportunities.And now, I'd like to turn the call over to Mark Guerin, and our Chief Financial Officer, for a discussion of our financial results for fourth quarter 2019.Mark, please?

[Mark Guerin:]

Thanks, Steve and good afternoon, everyone. Cash and cash equivalents as of December 31, 2019 totaled $22.7 million, compared to $17 million as of December 31, 2018. Besides the $9 million of net proceeds from the financing we closed in early 2020, common stock warrant exercises since December 31, 2019 have added $5.7 million to the company's cash balance, resulting in a cash balance at February 29, 2020 of approximately $32.6 million. Based on our current projections, we expect that our cash and cash equivalents will be sufficient to fund ongoing trials and operations into the third quarter of 2021.Our net loss was $21.5 million for the year-ended December 31, 2019, compared to $20.4 million for the comparable period in 2018. Research and development expenses were $15.5 million for the year-ended December 31, 2019, and $16.9 million for the comparable period in 2018. General and administrative expenses were $8.3 million for the year-ended December 31, 2019, and $7.6 million for the comparable period in 2018. We continue to manage our resources carefully while maintaining our primary focus on completing the INSPIRE trial.This 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 Q&A, I'll finish with some closing comments. Because of COVID-19, the Onconova office is closed. So to make this as expedious [ph] as possible, when a question is asked, I will -- we are all in our home offices, so I will ask our internal experts to answer your question. So operator, please go forward.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Dr. Joe Pantginis with HC Wainwright. Your line is now open.

[Joe Pantginis:]

Hey guys, good afternoon. Hope you're all well and hope you all stay well. A few questions if you don't mind, first on INSPIRE. Steve, I want to merge two of your prepared comments. Obviously, as you said, you know, nothing's new in 15 years, especially in the advanced population. And then, you had your comment that based on observations for unblinded data, you -- it appears to have a slower rate of events versus historical controls. So I'd like to approach that from a devil's advocate perspective; obviously, you know, all of us want to hope that it's due to the presence of rigosertib. So I guess from a devil's advocate perspective, what do you believe could also be impacting that? Obviously, beyond the placebo group or the control group acting better than expected, but no changes in therapy -- therapeutic regimens, etcetera. So I'm just curious what your thoughts might be?

[Steve Fruchtman:]

Joe, thank you for that question. I'll ask our expert, devil's advocate, Dr. Ric Woodman to answer your question. Ric?

[Ric Woodman:]

Thank you, Steve, for that [indiscernible] introduction. Thank you for the question, Joe. I think we have to keep in mind that the historical data regarding survival was collected well over 12 years ago, and was not really collected in a randomized control trial. I think one of the potential factors that could be contributing to the event grade not being what we historically anticipated is improve supportive care that's occurred since that time the original cases cited in studies were done and survival was captured. I think that at this point in time, we do not see any impact of COVID on survival events, but obviously, this is something we're monitoring through our safety reporting process. And we will continue to go forward with that looking very carefully on a regular basis at the event rates.

[Joe Pantginis:]

Very, very helpful. Thank you for that. And then, I'll put two in here at the same time. With regard to the news flow around INSPIRE, based on your goal of hitting a medical conference later this year, I guess, presumably, ASH, if the data or if you hit the events ahead of time, would you anticipate just putting out a more simplistic press release that the -- maybe the primary had been met and then hold the data till ASH? And then secondly, based on the relatively late addition of additional geographies enrolling sites, like in Brazil, are you looking at any potential over enrollment?

[Steve Fruchtman:]

So, I'll take the first one. First Joe, if I may, so regarding release of information, if -- you know, it looks like it's a line and ideally we will present the survival data with ASH. Clearly, if we have data prior to ASH, we will be in discussions with ASH, to inform them of our need based on SEC guidance that the data needs to be released to the street, and we will do that in a timely fashion via press release at some sort. At the same time, make sure we inform ASH that the data will be released and yet ASH will permit us to present the data at that medical conference.And I think you had a second question Joe that I will ask Ric to take.

[Ric Woodman:]

Yes. Thank you, Joe. Your question was regarding over enrollment in INSPIRE, now that we've reached 360. The current industry practice for sponsors is that patients who have consented to the study prior to achieving planned enrollment be given the opportunity to be screened and considered the study for participation. We are doing that -- we are obviously following closely Health Authority guidelines such as the FDA, as well as national guidelines. None of those guidelines have yet said that over enrollment with screened patients is not possible. So I anticipate there may be a few patients that would still come into the study.

[Joe Pantginis:]

Got it. Thank you. And my last question and thank you for being patient with me. Obviously, you had some BD developments as well with regard to China rights to rigosertib from HanX, but you're obviously still dealing with that company for 123300, which is a mouthful, you got to get a better name. But, the -- just curious how things might be going in potentially, relicensing in China and beyond? Thanks.

[Steve Fruchtman:]

Thanks, Joe. Avi, can you take that please?

[Avi Oler:]

Sure. Thanks for the question, Joe, and you're right, we have an existing program with HanX Biopharmaceuticals. But the program with rigosertib is now, China rights are available, so that means the largest markets in the world outside of Japan and in China, Europe and the United States, Onconova maintains all those rights and know we've licensed rights in the fourth quarter, as Steve mentioned, to partners in Canada, and then Australia and New Zealand. Those territories very much remain available and as we complete enrollment here, and as we approach data, we believe it's going to be an exciting time for Onconova on various fronts, including business development.

[Joe Pantginis:]

Got it. Thank you very much, guys and stay well.

[Avi Oler:]

You too.

[Operator:]

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

[Ahu Demir:]

Hello, team. Thank you very much for taking my question. Nice to hear everyone's voice and I hope you're safe and you'll stay safe. So my first question -- but first of all, congratulations, we needed some good news. Congrats on the completion of enrollment. So since you're expecting data in the second half, do we expect any genomic -- any other types of data that will be press release or presented at a conference prior to the top line data?

[Steve Fruchtman:]

Ric, please.

[Ric Woodman:]

Yes. Thank you for that question. We have submitted an update on genomic profiling from aggregated data of the two arms of the study in INSPIRE to EHA. That abstract is under review now but -- and as some of you may have heard, some conferences are considering their status, to-date we have not had communication for EHA.

[Steve Fruchtman:]

Okay, thank you very much, Ric. And since, I always since -- we know you'd love RAS, I will also add that we now -- we know what the KRAS mutations are, the different subtypes of KRAS mutations seen in our patients based on the mechanism of action or rigosertib, that should not matter which actual KRAS, a type of mutation is found but we will share that data with the medical community as well.

[Ahu Demir:]

Okay, that's great to hear, Steve. I want to follow-up with you on, now you have the cash-in-hand; what would be the strategies moving forward? Do you plan to carry any other assets in the clinic or any differences that we did not see in the past year? Would we see anything different in 2020?

[Steve Fruchtman:]

Avi, would you like to talk about new assets?

[Avi Oler:]

Thanks very much Ahu for the question. We've been in a really strengthened position as a result of the recent financing. So we do have options, our highest priority is completing INSPIRE and doing the necessary NBA prep commercialization after that, but we are certainly looking for opportunities of value and we're in the strongest position we've been in some time and have that luxury. So, thanks for the question.

[Ahu Demir:]

Sure. Thanks for your answer, Avi. I guess, I will direct my next question to Mark, so you don't feel left out either. Mark, what would be the outstanding warrants in 2020? I believe most of them are not outstanding anymore, but I was just curious.

[Mark Guerin:]

That's a good question Ahu, and thanks for including me in your questions, I appreciate it. So, I think if you saw the details in the press release, we said that we have $5.7 million of proceeds from warrant exercises. You'll see the full story when we file our 10-K but of those proceeds, mostly, I guess all of those warrants from -- since 12/31 19

[Ahu Demir:]

Okay, thank you very much, Mark. I would like to ask one more question and then I will pass it. So the CDK4/6 IND is little bit postponed compared to previous disclosures. So, what will be the main reason in any way that could be faster than expected?

[Steve Fruchtman:]

So, I'll take that. So the issue was a simple one which is not unusual with problem with previously identified manufacturer that we felt, and the FDA felt was not upto their standards and rather than waiting for them to do corrective measures, we made a decision to identify a new manufacturer which was done, of course that took time for our quality team to make sure that they are upto our turnover standards and FDA standards and once that was identified, and it was -- we are ready to move forward but it did cause a bit of a delay, but we think it's worth it.

[Ahu Demir:]

Thank you very much, everyone. Have a great evening. Looking forward to catching up later.

[Steve Fruchtman:]

Thank you, Ahu.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Dr. Yale Jen with Laidlaw & Company. Your line is now open.

[Yale Jen:]

Good afternoon, guys. And I wish you all to keep it safe and keep continue to be safe. And thanks for taking the questions. First of all, that -- Steve, you may or may not answer the question, but just curious. What's the current [indiscernible] of the INSPIRE study right now; the event numbers as of the study right now? And what gives you the confidence that you will have that result? I mean, did the study be completed by second half of this year?

[Steve Fruchtman:]

So Ric, would you like to take that?

[Ric Woodman:]

Yes, thank you. Thank you for the question. We're currently over 85% of the required event rate to proceed to primary endpoint analysis. Based on our tracking of event rates over the past year, we're confident that we will meet the required number of events in second half 2020.

[Yale Jen:]

Okay, great. That's very, very helpful. And my second question is that the oral combination drugs, Phase 2/3 study, you just mentioned on your prepared remarks that will be studied -- will start in conjunction with the readout of the INSPIRE study. Just curious whether you anticipate to start the Phase 2/3 study before or maybe -- or you want to tap afterward the data readout?

[Steve Fruchtman:]

I'll take that. Thank you, Yale. As I mentioned, it's going to be based on the need to complete our protocols submitted to the FDA, have their review, there is always going to be give and take regarding the study and optimization we need when we meet with the FDA. We anticipate approximately, it's always hard to tell with precision; one, we don't know how long patients will live but we anticipate -- excited that will probably be about simultaneous with the readout from the INSPIRE survival data, so that's our best estimate, and of course could change based on a number of factors which of course, is determined by how long patients will live, which is a little bit difficult to precisely say.

[Yale Jen:]

Okay, that's good to know. And maybe one more question here, which the -- sort of unfortunate fact of the COVID-19 infections, mostly vulnerable is the older patients. So given the age group of the people in this study; do you think that could potentially -- I guess, accelerate the time for readout just based on these sort of fundamental characteristics of the patients?

[Steve Fruchtman:]

Ric? We may have lost Ric. So Yale, just succinctly what is your question? And I'm sorry. Oh, there is Ric. Okay.

[Ric Woodman:]

Okay. Sorry for that. As you might predict, it's hard to predict for event rates. The actual impact of COVID-19 on this patient population in our study is somewhat precarious. To date, we have not seen any dramatic effects and -- but we will continue to monitor the situation.

[Yale Jen:]

Okay, great. And again, thanks for answering all these questions and just keep safe and we look forward to see the readout and starting the trials early on this year.

[Steve Fruchtman:]

Thank you.

[Operator:]

Thank you. And we do have a follow-up from Dr. Joe Pantginis with HC Wainwright. Your line is now open.

[Joe Pantginis:]

Hey guys, appreciate taking the follow-up here. Steve, even part of your prepared comments you're focused on pipeline development and expansion, obviously. So, I guess I always want to ask some of your behind the scenes activities, you know, not just sitting around waiting for INSPIRE to readout but what you're doing behind the scenes with regard to say pre-commercialization activities, what you're looking at for potential NDA prep -- timing for NDA prep, those sort of things? Thanks.

[Steve Fruchtman:]

So, I'll take that. So there is number of questions actually in there, Joe, right. One of the things we are doing is we believe rigosertib has many other potential indications with KRAS driven cancers. So as you know, based on -- and these remarks [indiscernible] that people can enjoy, do it off the cuffs, by the way. So KRAS-mutated lung cancer is one disease I'll first attack, but there are variety of other diseases we want to look at. And now that we have the funds, we could do it as a variety of approaches, most likely investigator initiated trials but those that are of interest to us are melanoma, refractory myeloma, a variety of other neurofibromatosis, histiocytosis [ph], those are all RAS driven cancers. Regarding the NDA prep, we are in the process of looking at candidates who run regulatory affairs on behalf of Onconova, looking at expert NDA organizations and all they do is submit NDAs as we plan to work with them; so we can expedite. Already working on your parts of the NDA as you probably know, you don't need the clinical data. So the preclinical storage, manufacturing; these all can start, we started on already, so when we flip the car and hopefully have a positive survival result that we could just put the clinical data into that report. Obviously, other previous studies also have to be part of the NDA and all that work can be done.And finally, we're getting advice regarding the commercialization; what needs to be done, what our gap analysis is. So we are in discussions with commercial experts getting their advice, so we can move forward on that path as well. I hope that answers your question, Joe?

[Joe Pantginis:]

It certainly does, Steve. Thanks again for the follow-up.

[Operator:]

Thank you. And I'm showing no further questions in the queue. At this time, I'd like to turn the call back to the speakers for the closing remarks.

[Steve Fruchtman:]

So, thank you all for participating on todays update call. Really, we're very excited about the progress we've made with IV rigosertib and our pipeline programs, overall, and I hope you share our enthusiasm. Important milestones we look for in the near and medium-term include, and this listing is in no particular order. One, initiating enrollment of the Phase 1/2a trial of rigosertib plus [indiscernible] in KRAS-mutated advanced non-small cell lung cancer as an investigator-initiated trial. Two, beginning a Phase 2/3 combination study of oral rigosertib and azacitidine in HMA naïve higher risk MDS patients in conjunction with the INSPIRE data readout. Three, US IND submission of ON 123300 during the fourth quarter of 2020, followed by clinical trial initiation. And of course, most significantly, and the data we wait for with great enthusiasm is number four; during the second half of this year, the release of topline survival data from the INSPIRE trial following reaching 288 survival events.That concludes my closing remarks. As always, we truly appreciate your continued interest in the programs of Onconova. Should you have any additional questions, please feel free to contact us. And thanks, again. Operator?

[Operator:]

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