Onconova Therapeutics, Inc.
Q4 2018 Earnings Call Transcript

Published: 26 Mar 2019

[Operator:]

Good morning ladies and gentlemen and welcome to Onconova Therapeutics corporate update and year-end 2018 financial results conference call. At this time, all participants are on a listen-only mode. Following management’s remarks, I will open the call up for your questions. At this time, I’d like to turn the call over to Avi Oler, Vice President of Corporate Development and General Counsel at Onconova.

[Avi Oler:]

Thank you, Operator. Good morning and welcome to Onconova’s corporate update and year-end 2018 financial and operating results conference call. This morning, we issued a press release with full year 2018 financial results along with business updates. The release is available on our website. On today’s call, Dr. Steve Fruchtman, our President and Chief Executive Officer will review the company’s progress and recent business and clinical highlights and milestones, then Dr. Ric Woodman, our Chief Medical Officer will review our clinical development programs in greater detail. After that, Mark Guerin, our Chief Financial Officer will review the financial results. Steve will then make some final remarks before we have the Q&A portion of the call. I remind everyone that statements made 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 earnings release issued this morning and the risk factors in the company’s current and future filings with the SEC. It is now my pleasure to turn the call over to Steve.

[Steve Fruchtman:]

Thank you, Avi. Good morning everyone and thank you very much for joining today’s call. 2018 was a year of progress and important achievements for Onconova. Highlights for the year included the following

[Ric Woodman:]

Thank you very much, Steve, and good morning everyone. This is my first opportunity to address you on a quarterly conference call. I joined Onconova last November because I saw a tremendous opportunity to bring to the clinic a new medical entity for the treatment of higher risk MDS and the potential on other RAS over-expressed or mutated cancers. All of these diseases have a huge unmet medical need. With a solid scientific foundation and a rigorous clinical trials program, I am confident that we have the potential to deliver the first new therapy for higher risk MDS in nearly 15 years. As a reminder, RAS is the most commonly mutated gene in cancer. Our drug targets RAS and several [indiscernible] molecules in that pathway. MDS is a highly complex disease of bone marrow failure syndromes that is associated with infiltration of the bone marrow with leukemia cells. It is most often seen in elderly patients. RAS over-expression and RAS mutations are part of the pathophysiology of MDS. Unfortunately, up to 30% or more of patients with higher risk MDS advance to acute leukemia, typically AML, hence the high risk designation and the high unmet medical need. These patients have a poor prognosis with an overall median survival of well under six months, especially after failing first line therapy with a hypomethylating agent such as either azacitidine or decitabine. Patients who transform to AML are typically more refractory to standard induction chemotherapy and invariably succumb to their underlying bone marrow failure and leukemia. There are currently no approved products for higher risk MDS patients who fail treatment with a hypomethylating agent, which is the current standard of care for higher risk MDS, thus we believe that rigosertib has the potential based on the ongoing INSPIRE trial to address this critical unmet medical need, and this is certainly a major motivating factor for investigators who are participating in the study. We have also conducted a Phase II trial with oral rigosertib in combination with azacitidine in higher risk MDS patients. This trial focused on both HMA-naïve and HMA-refractory higher risk MDS patients. Based on the Phase II study, we look forward to opening a pivotal Phase III trial in first line higher risk MDS patients. We presented initial Phase II safety data from the expansion study of oral higher dose rigosertib in combination with azacitidine in patients with MDS at the Sixth International Bone Marrow Failure Disease Symposium in March of 2018. We also reported data in an oral presentation from our Phase II oral rigosertib combination study at ASH in December last year. At this conference, we reported and observed overall response rate of 90% in hypomethylating-naïve patients, including a complete remission rate of 34%. We noted that the median duration of response for these patients was impressive at greater than 12 months. Based on the safety and efficacy profile of this novel combination, a pivotal Phase III trial is planned in patients with HMA and chemotherapy treatment-naïve higher risk MDS. In addition to the results I’ve just mentioned, we also observed promising results with oral rigosertib in combination with azacitidine in patients who had failed HMA therapy. We continue to actively participate in and present at major MDS and hematology conferences worldwide. We have several abstracts updating our data at numerous upcoming scientific conferences this year, including the American Association for Cancer Research Annual Meeting, the MDS Symposium in Copenhagen, the European Hematology Association Congress, and the American Society of Clinical Oncology Annual Meeting. We’ll have further updates about these presentations and conferences at the appropriate time. The RASopathies are a group of rare diseases that share a well-defined molecular basis in expression or defects involving RAS effector pathways. They are usually caused by germline mutations in genes that alter the RAS sub-family and mitogen-activated protein kinases that control signal transduction. These mutations are responsible for some of the most common genetic syndromes known to man. Together, this group of diseases can impact more than one in 1,000 individuals, according to the RASopathiesnet.org website. The National Cancer Institute is conducting pharmacokinetic, pharmacodynamic, and dose escalation studies in pre-clinical models for possible dosing of pediatric cancer patients with germline RAS mutations with single agent rigosertib therapy. In addition, pre-clinical models of JMML are also being studied at the University of California at San Francisco, an expert center in the studies of this disease. This preclinical study is being funded by the Leukemia and Lymphoma Society. In addition, we have numerous investigator-initiated studies, including a study for patients with myeloproliferative neoplasms, or MPNs, where the bone marrow makes too many circulating blood cells. Other investigator-initiated studies include a study on RAS-driven rare squamous cell carcinoma of the skin, which will be conducted at centers of excellence in the U.S. and Europe who have expertise in this rare disease. We believe together in collaboration with investigators and our corporate partners, we are advancing towards a Phase I trial of rigosertib in combination with an immuno-oncology agent in RAS-mutated non-small cell lung cancer this year. In summary, there are many exciting and important ongoing activities related to the advancement of both IV and oral rigosertib programs in MDS, which are approaching key milestones in the near term. We remain focused on driving these programs forward while also looking to enhance the potential of rigosertib through existing and new collaborations and partnerships. With that, I’d like to turn the call over to Mark Guerin, our Chief Financial Officer for a discussion of our financial results for 2018. Thank you. Mark?

[Mark Guerin:]

Thanks Ric, and good morning everyone. Cash and cash equivalents as of December 31, 2018 totaled $17 million compared to $4 million as of December 31, 2017. Based on our current projections, we expect that our cash will be sufficient to fund ongoing trials and operations into the fourth quarter of 2019. Net loss was $20.4 million for the year ended December 31, 2018 compared to $24.1 million for the year ended December 31, 2017 primarily due to lower operating expenses and increased revenue in the 2018 period from collaboration agreements executed during the first half of 2018. Research and development expenses were $16.9 million for the year ended December 31, 2018 and $19.1 million for the comparable period in 2017. General and administrative expenses were $7.6 million for the year ended December 31, 2018 and $7.4 million for the comparable period in 2017. We continue to pursue opportunities to reduce our cash burn to focus our resources on the INSPIRE study. For example, during the first quarter of 2019, we executed a reduction in our workforce which represents a savings of approximately $500,000 net of severance costs in 2019 and an ongoing annual savings of approximately $1.5 million. This completes my financial review. I will now turn the call back to Steve. Steve?

[Steve Fruchtman:]

Thanks Mark and Ric. As you all can see, our programs are advancing well and we expect to reach significant clinical and business development milestones in 2019. Thank you all for your attention, and we’d like the operator to now open the call for any questions.

[Operator:]

[Operator instructions] Our first question comes from Joe Pantginis with HC Wainwright. Your line is now open.

[Joe Pantginis:]

Hey guys, good morning. Thanks for taking the question. Two questions, if you don’t mind. First on INSPIRE, curious about what impact do you think the new geographical additions in Latin America would have on enrolment, and do you think--well, of course they’ll be needed and impactful on the study, but how you think that would impact the potential timing of driving events towards top line data, and parenthetically, do you still believe that top line data could still occur by the end of the year?

[Steve Fruchtman:]

Ric, why don’t you take that question from Joe? Thank you for your question, Joe.

[Ric Woodman:]

Thank you for the question, Joe. There’s really two parts to the question, and I’d like to begin first with the part that deals with the opening of sites in Brazil and Argentina. Brazil in particular has always been, in my experience with other registration studies, a very strong contributor to hematologic diseases. I have no reason to doubt that they will not--they will do anything other than continue that performance. Having Brazil in the study in fact not only ensures completion of enrolment in 2019 but in fact accelerates it. The approval by the Brazilian health authorities of MDS as a rare disease helps us accelerate opening of sites and the beginning of recruitment of patients in that country, so this has been an important part of our plan to ensure we complete enrolment in 2019. In regards to your second question regarding number of events occurring on INSPIRE, obviously we are tracking not only enrolment but events. Events is linked very closely to enrolment. The one thing I think I can share with you is that the initial study assumptions were based on approximately 50% VHR subgroup in the study. Since almost the beginning of the study, the proportion of VHR subset in the study is well over 70%, and that in fact will have a significant impact on the events, the number of events, when they occur in the study and in our follow-up. This is an important observation and linkage that we’re constantly monitoring, and that certainly will have an impact on the timeline of when we’re able to complete our analysis on the top line data and the primary endpoint of overall survival.

[Joe Pantginis:]

Got it. That’s helpful, Ric, thank you for that. My second follow-up question regarding the SPA, I guess two concepts. First, do you feel that the government shutdown impacted your discussions with the FDA at all regarding, say, the initial 45-day clock, I guess I would call it, and then can you provide any more color as to have you received responses, has the proverbial clock been reset? Where do you stand in that process? Thanks.

[Steve Fruchtman:]

Joe, I’ll take that one, and thank you for that question. Obviously we do believe the government shutdown has delayed the interactions with the agency, but they’re back online and we’ve had interesting and robust interactions with the agency regarding the endpoints of that trial, the anticipated clinical benefit, and these negotiations are ongoing and we do hope to complete them within the first half of 2019, so most likely the second quarter, so that protocol and the key endpoints of that trial can be agreed upon between Onconova and the FDA to optimize this study for patients with first line high risk MDS.

[Joe Pantginis:]

Got it. Thanks Steve, and thanks everyone for the additional color.

[Operator:]

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

[Naureen Quibria:]

Hi, good morning. This is actually Naureen on for Jason. Congrats on the progress. I was just wondering about the INSPIRE trial. Based on the poor prognosis of the very high risk patients that you have, you have about 70% or more actually that you’ve commented on that’s in the trial so far, is it possible to hit the 288 events prior to completion of enrolment?

[Steve Fruchtman:]

Ric, please?

[Ric Woodman:]

Thank you, Steve. Thank you for that question. It is possible. I think it’s too early to know exactly when enrolment and events will in fact--the required number of 288 events and the required enrolment target of 360, how they will exactly--when they will exactly be met and how they will exactly occur in relationship to each other. I think that it is--all possible scenarios at this time could occur, events could complete the number of 288 before we reach 360. It also could be that it follows 360. This is something obviously that we’re monitoring very closely as part of our observation of the study.

[Naureen Quibria:]

Great, that’s helpful. If we can just pivot to the CDK program, and I may have just missed it, will you or your partner be filing the IND on that program, and when was the timing that you would expect for the filing of the IND?

[Steve Fruchtman:]

Our corporate partner, HanX in Greater China are conducting at their expense the underlying requirements of the toxicology studies in animal models. Once that’s completed, and we anticipate that to be completed quite soon, Onconova will submit IND to the FDA based on those studies, and we anticipate that IND and Phase I clinical protocol to be submitted to the U.S. FDA by first half of 2019.

[Naureen Quibria:]

Got it. Very helpful, thank you. That’s it for me.

[Operator:]

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

[Yale Jen:]

Good morning and thanks for taking the questions. Just two here. The first one is that you mentioned a little bit about the oral rigosertib and aza Phase III study, and you did mention that earliest could be starting in the second half of this year for the Phase III study. I’d just like to see, is there any other thing I should read--any read through I should have from that comment?

[Steve Fruchtman:]

I’ll take that. I’m not sure what you mean by read through. Obviously we want to conduct this study under a SPA, because this way we have agreement on both the endpoints and the anticipated clinical benefit that we were impressed with based on our Phase II study regarding both efficacy and safety. With adequate funding and business development deals, which will be required to start this study, we anticipate that hopefully sometime, Yale, in the second half of 2019, as we mentioned.

[Yale Jen:]

That’s probably precisely the point, I’m trying to at least tease out a little bit in terms of either sufficient funding or BD activity to jump off the starting of the trial. Was there any thoughts on any [indiscernible] suggesting that something could or might happen in the second half of this year?

[Avi Oler:]

This is Avi Oler speaking. Steve has referred to me for the business development discussions. As you know, Yale, we have global rights outside of Japan, Korea and Latin America, where rigosertib is already partnered with SymBio and Pint. We have with respect to ON 123300 worldwide rights outside of China, where it is partnered with HanX, so we are in active discussions and we’ll announce in the coming months, we hope, transactions when they occur, but we’re working towards that vigorously.

[Yale Jen:]

Okay, great. That’s very helpful. Maybe just one more question here. You did mention earlier in terms of a clinical study in Japan on non-small cell lung cancer, and I note that you have talked about that during the KOL days recently. Could you give a little bit of color in terms of what that study might be, in terms of the trial design and any other color on that study?

[Steve Fruchtman:]

Sure, I’ll take that, Yale, if I may. Approximately 30 to 40% of patients with non-small cell lung cancer have a mutation of the KRAS gene. In the modern era, pretty much all patients are treated first line and/or second line with an immuno-oncology product, and as you know, those are multi-billion dollar commercial enterprises, but unfortunately all the patients will ultimately progress. Our thought is because we have--rigosertib targets the mutations involved with the KRAS gene, we in collaboration with our KOLs hopefully will begin a Phase I study where following progression on an immuno-oncology agent, a commercially available immuno-oncology agent, we will use our targeted rigosertib plus an alternative immuno-oncology agent in a Phase I trial. We anticipate doing this at sites in the U.S. and also along with our corporate partner in Japan. Despite a reduction in smoking in Japan, for whatever reasons the incidence, unfortunately, of KRAS mutated lung cancer continues to increase, so our corporate partner, SymBio, also has great interest in this approach.

[Yale Jen:]

Okay, great. That’s very helpful. I really appreciate that. Congrats on the progress, and look forward to the data soon.

[Steve Fruchtman:]

Thank you, Yale. We appreciate those kind words.

[Operator:]

Thank you. As a reminder, ladies and gentlemen, if you’d like to ask a question, please hit star then the number one key on your touchtone telephone. Our next question comes from Ahu Demir with Noble Life Sciences. Your line is now open.

[Ahu Demir:]

Good morning, gentlemen. Congrats on achieving [indiscernible] milestone in the program. I have two questions. One of them is following up on the lung cancer trial. Do you have a timeline when that might go into clinic? When do you expect to establish a partnership perhaps or move that--move rigosertib in lung cancer trials in combination with IO partners or agents?

[Steve Fruchtman:]

Right, so we anticipate opening the trial, initiating the Phase I sometime second half of 2019. The trial is being written by our lung cancer experts and will be submitted for IRB approval, and we anticipate as an investigator-initiated study to start this study at two sites in the U.S. along, as I mentioned, with our corporate partner in Japan. As part of a Phase I study, you never know when you’re going to hit the DLT, but we anticipate initiating the Phase I study with adequate funding sometime in second half of 2019.

[Ahu Demir:]

Okay, that’s great, thank you, Steve. My second question is on the RAS driven pediatric cancer. Do we expect any data on the pre-clinical side and when that would be, also when do you think the initiation of the clinical trials would take place?

[Steve Fruchtman:]

Those studies are being conducted, the pre-clinical studies at both the National Cancer Institute, the NCI pediatric oncology branch in Bethesda, as well as University of California San Francisco, so the data is controlled and the experts are at those centers and the studies are continuing. I can’t really tell you with certainty because you know how these experiments go - there’s always uncertainty regarding the mice. What they’re doing is using tumor-derived grafting from children who have RAS mutated cancers, typically they’re sarcomas which the NCI is mostly working on, and in California, UC California San Francisco, they’re working mostly with JMML and both sites are putting these tumors into nude mice and a pedi-X model and looking at the activity or rigosertib, and we look forward to seeing that data. Hard to tell you precisely when, but we anticipate again at some point second half of 2019, and it will be published at the appropriate time when the experiments are concluded.

[Ahu Demir:]

Thank you. Thanks Steve.

[Steve Fruchtman:]

Sure thing.

[Operator:]

Thank you. I will now turn the call back to Steve Fruchtman for any closing remarks.

[Steve Fruchtman:]

Thank you, Jimmy. For the remainder of 2019, we anticipate continued progress in our important clinical programs. As we’ve mentioned, we have surpassed key milestone of 75% accrual in our pivotal trial, the INSPIRE trial with intravenous rigosertib as we are advancing our Phase II program with oral rigosertib in combination with azacitidine to a pivotal Phase III trial in contrast for first line high risk MDS patients. Very important to our ongoing strategy is initiating additional collaboration and geographical licensing agreements, as Avi outlined, for our pipeline. We have ongoing discussions with potential partners and hope to report on these efforts in the upcoming months. We also look forward to continuing our proven track record of inclusion in high quality scientific publications and presentations at key medical and scientific conferences. With our cash on hand and multiple late stage clinical programs, we remain optimistic that we will achieve our clinical milestones and advance business development opportunities for our pipeline. We look forward to sharing the results of our key developments with you. Again, we all at Onconova want to thank you for your participation on our call today and have a wonderful day, and we look forward to answering any additional questions you may have. Have a great day, and thank you.

[Operator:]

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