Onconova Therapeutics, Inc.
Q2 2017 Earnings Call Transcript

Published: 15 Aug 2017

[Lisa Sher:]

Good morning, and welcome to Onconova’s Second Quarter 2017 Earnings Call and Webcast. At this time, all participants have been placed on listen-only mode. At the end of the prepared statements, participants will have the opportunity to ask questions. [Operator instructions] Please note that the remarks today will include forward-looking statements and that actual results could differ materially from those projected or implied in our forward-looking statements. For a description of important factors that could cause actual results to differ, we refer you to the forward-looking statements in today’s press release and the note on forward-looking statements in the Company’s SEC filings. It is now my pleasure to turn the call over to Onconova’s CEO and President, Dr. Ramesh Kumar. Dr. Kumar, please proceed.

[Ramesh Kumar:]

Thank you, Lisa. Good morning, and welcome to our second quarter 2017 result call. Joining me from Onconova’s management team is our CFO, Mark Guerin. Today I'm pleased to share with you that our two lead clinical programs continue to proceed towards multiple key milestones. In keeping with previous guidance, the INSPIRE trial with IV rigosertib is enrolling globally and the next milestone of the interim analysis is expected in the fourth quarter of this year. At the same time, we are moving forward with designing a Phase 3 trial for oral rigosertib in combination with azacitidine as a first line of therapy for higher risk MDS patients. I'm also excited to share with you the significant interest in our pediatric rasopathies rare disease collaborative program with the National Cancer Institute, and the academia and in particular, for the rare disease juvenile myelomonocytic leukemia, JMML. There are also exciting developments underway in our preclinical programs, including CDK inhibitors for breast, lung and hematologic cancers, which has shown promising early results. First, I will update you on the progress of our Phase 3 IV rigosertib trial as well as our oral rigosertib plus azacitidine combination Phase 3 program for patients with unmet medical need in myelodysplastic syndromes. Let's begin with our lead program. Our Phase 3 INSPIRE trial continues enrolling globally and we anticipate the next milestone, interim analysis, in the fourth quarter of this year. This analysis will be triggered after reaching ADA-ed events or deaths. It is difficult to accurately forecast the timing of this milestone. Both the FDA and EMA have reviewed this statistical analysis plan for interim and top-line analysis, and we expect to complete the SAP in the third or early fourth quarter. This allows us to narrow our initial guidance range from the second half to the fourth quarter of this year. As of the end of the second quarter, our INSPIRE trial had patients enrolled in 72 sites in 16 countries across four continents. So far in the third quarter, 12 more sites and two additional countries have begun to enroll patients. As previously mentioned, patient enrollment is challenging for this trial. We have the stringent eligibility criteria. It is important to note that these eligibility criteria allow us to enroll the proper patient population and it’s intended to potentially benefit the eventual trial outcome. As a reminder, these eligibility criteria are based on finding from our previous trial, the ONTIME trial, where are the benefits to subgroups correlated with this stratification, as published last year and Lancet Oncology. Enrollment for the trial has slowed recently, which could be related with seasonality. Patients and physicians maybe less likely been enrolled in the trial in the summer months. We are taking proactive measures to increase participation, including the addition of trial sites in 3 new countries and changes within the CRO group. It is also possible that the full enrollment to be completed in the first quarter; it is still possible for the full enrollment to be completed in the first quarter of 2018; however, we are cautious given the current summer trends. Should enrollment not return to desired levels, full enrollment may be delayed by several months. We expect to have more clarity on the clarity on the timing of full enrollment and top-line analysis after the completion of interim analysis, which is expected in the fourth quarter of this year. In June, we presented a poster of the American Society of Clinical Oncology, commonly known as ASCO, providing supporting rationale for the administering rigosertib to higher-risk MDS patients who fail hypomethylating agents, or HMAs. The Landmark Analysis of this Phase 2 study of 65 patients demonstrated that bone marrow response correlated with overall survival. Importantly, in this trial, 23% of patients achieved complete bone marrow response and 47% achieved disease stabilization in this post-HMA patient population. Our second advanced trial program, as you know, is an oral rigosertib plus azacitidine combination as a potential first-in-line therapy for patients with high-risk MDS. This trial is now in expansion phase. Following a successful end-of-Phase 2 discussion with the FDA in the fourth quarter of 2016, a Scientific Advice process was initiated with the EMA and was completed this July. Based on this feedback, a pivotal Phase 3 trial is currently being designed, which we expect to begin after obtaining SPA, or Special Protocol Assessment, following the completion of the ongoing expansion trial. The Phase 3 trial design is one-to-one randomized controlled trial of oral rigosertib plus azacitidine compared with azacitidine plus placebo in first-line patients with high-risk MDS. Initiation of the Phase 3 trial, which is planned to be conducted globally, will require additional financing. We plan to initiate the FDA Special Protocol Assessment process, following completion of an ongoing expansion Phase 2 trial of the combination therapy. This expansion phase is designed to enroll up to 40 patients with key objectives of dose optimization and determining an optimal schedule of administration for the combination therapy. We have opened four sites in the US and plan to activate additional sites in the US, Europe and Australia. The first patient was enrolled in April and we hope to provide additional updates in our upcoming releases. Since this trial is for front-line patients and all patients will get an active drug, either AZA or AZA plus rigosertib, we expect this trial to approve more rapidly than trials for second-line patients, which has an inactive control group. Clinical and non-clinical data relating to the combination therapy was first presented at ASH 2016 and updated at the MDS Symposium held in May in Valencia, Spain, and in the 22nd Congress of the European Hematology Association in June. Previously presented data demonstrates that the combination therapy may overcome hypomethylating agent resistance and also indicates that further study of rigosertib in AML is warranted. Because up to 30% of patients with MDS can develop ML, it is our intention to study AML in the future. As mentioned earlier, we are excited to announce a new multi-product collaborative program with the National Cancer Institute, NCI, academia and non-for-profit organizations. This collaboration is focused on rigosertib in pediatric RASopathies, a group of rare diseases which together impact one in 1,000, according to a patient advocacy group. We are grateful that the NCI plans to support a broad rigosertib clinical trial for RASopathies. While the NCI will conduct a trial for RASopathies-related cancers in pediatric patients, the company will initially focus on Juvenile Myelomonocytic Leukemia, JMML, a pediatric imperative disease which shares characteristics of MDS and myeloproliferative neoplasms. JMML is a well-described RASopathy effecting children, which is incurable without an allogenic and metaphoric stem cell transplant. Our Chief Medical Officer presented findings that highlighted approaches for studying rigosertib and RAS-mediated diseases on July 30 at a conference organized by the RASopathies.net. As RASopathy is one of the most important pediatric genetic syndromes, we are pleased to bring together families, clinicians and scientists to foster collaborative research efforts. The program leverages our focus in MDS and MPNs and we expect to further advance approaches to studying rigosertib and RAS-mediated diseases. We are also exploring a collaboration with an academic group focused on development of novel therapeutics of these children. We will see grant support for these activities while supplying the drug and our expertise. We plan to sponsor on October 11 of this year a KOL breakfast to bring together disease area experts, patient advocacy groups and our own knowledge to draw attention to this unmet medical need and the potential for rigosertib and RASopathies. Also in the second quarter, we published positive data for our proprietary preclinical next-generation CDK4/6 +ARK5 inhibitor. These new CDK inhibitors have potential application and a broad range of solid tumors, particularly breast and lung. CDK inhibitors are likely to become an integral part of cancer therapy in the future. Our third-generation CDK inhibitor is differentiated from other products in the market, such as a Palbociclib, Ribociclib and Abemaciclib as well as those in development by competitors. We feel that these compounds broadened our pipeline by addressing solid tumors, which are, as you know, have significant market importance and represented sizable total addressable market opportunity. Our intention is to porter of these assets early as we believe them to be superior to currently marketed products as well as those in development. We are excited about the developments in our ongoing programs and just as excited about new collaborations and preclinical programs. I will now turn the call over to Mark Guerin, Onconova's CFO, for a discussion of our financial results in the quarter.

[Mark Guerin:]

Thanks, Ramesh. At the end of the second quarter, our cash and equivalents totaled $15 million compared to $21.4 million as of December 31, 2016. This will now include the proceeds from the financing we completed in April in which we've raised approximately $5.2 million before underwriting discount, commissions and operating costs. On May 17, 2017, the underwriters exercised their option to purchase an additional 363,580 shares, which resulted in additional gross proceeds of $28 million. Total revenue was $0.3 million for the second quarter and $0.5 million for the six months ended June 30 compared to $2.2 million and $3.7 million, respectively, for the comparable periods of 2016. Research and development expenses were $4.6 million for the quarter and $9.5 million for the six months period compared to $5.6 million and $11.4 million, respectively, for the year ago periods. G&A expenses amounted to $1.8 million for the second quarter and $3.9 million for the six months ended June 30, compared to $2.1 million and $5.3 million, respectively, for the same period in 2016. I will now hand the call back to Ramesh for his closing remarks.

[Ramesh Kumar:]

Thank you, Mark. We are well positioned for multiple key milestones as we seek to address the underserved needs of patients with MDS. Our lead clinical programs are proceeding as planned, and combined with the progress on promising pre-clinical programs, demonstrate the depth of our pipeline. With additional funding in place, we are well placed to execute our clinical plan. We expect interim analysis for IV rigosertib and the launch of Phase 3 trial of 2018 for our oral combination therapy to represent key catalysts for the company. Thank you for your interest in the company and your continued support. Thank you for joining us today. I look forward to updating you soon on our continued progress. I will now open the call to questions.

[Operator:]

[Operator Instructions] Our first question will come from the line of Jason McCarthy with Maxim Group. Please proceed.

[Gabrielle Zhou:]

Hi. Good morning, guys. It’s Gabrielle Zhou for Jason. So I have a couple of questions. Can you tell us a little bit more about the plan for spending to a pivotal Phase 3 study for the double AZA and rigosertib for the first-line MDS? And how many patients as well as the endpoints and delta and timing to initiate a study? Thank you.

[Ramesh Kumar:]

Thank you, Gabby. Yes, this is a very important trial because, as you know, the last product approved for front-line MDS patients was more than 10 years, maybe more than 11 years ago. So there hasn’t been a new front-line therapy. So based on what we learned in our end-of-Phase 2 meeting with the FDA and the scientific advice from Europe, we plan to do a randomized controlled trial in which azacitidine plus rigosertib, the combo, will be compared with azacitidine plus placebo, ao effectively a single agent compared to the combo. And the combo was tested in our Phase 2 trial, which as I mentioned is now in NDA expansion phase. It will be a one-to-one randomized trial. And based on the comments we have from agency, the primary endpoint will be overall response rather than survival, and the response will be complete remission or partial remission. And these are very, very hard endpoints. But still since the endpoint is not survival, we have decided to pursue a Special Protocol Assessment. And as you are aware, the SPA process allows you to fully define the size of the trial, the scope of the trial, potential indication, and the delta that will get you approvable. So all of these things and the power of the trial, which will determine the size of the trial, are under discussion; and once we have the SPA agreement, Special Protocol Assessment agreed upon with the FDA and scientific advice completed with the EMA, we will be able to announce the size of the trial as well as the delta that we are shooting for. Hope that address your question.

[Operator:]

Thank you. Our next question will come from the line of Robert LeBoyer with Aegis Capital. Please proceed.

[Robert LeBoyer:]

Good morning. Thanks for taking the question. My question has to do with the dimension of the changes that you are making to continue enrollment in the current trial, and there was a mention of changes of the CRO and several other factors. Could you just expand a little bit on what you are doing to restore the rate of enrollment?

[Ramesh Kumar:]

Robert, thank you. That’s a very good question and very topical for us. First of all, this is a truly global trial. In addition to sites, we are sponsors of directly in the US, Canada, UK, Western and Eastern Europe, Australia and Israel. Our partner SymBio of Tokyo is running trials in more than 30 sites in Japan. So our partners uses their own CROs, their own internal operation, and we use a number of CROs to conduct our trials, including collection of genomics samples, which is parcel of the trial. So we are just are shuffling the deck so to speak so that they can improve the efficiency and make sure that the trial is done properly and as fast as possible. So both the quality and the speed of the trial are important. So one of the things that we note is that in summer, particularly in Europe, there is a very, very clear slowdown, and we just want to make -- take advantage of these summer months in making this transition so that we don't lose any time in transitioning and quickly go and continue to enroll. So our goal is really to update the investors and analysts following the company of how this is going. As you know, to get to interim analysis, you need ADA-ed events and we announced today that the fourth quarter will have interim analysis. So once we have the interim analysis, we'll be able to give you a clear guidelines and guidance on when we expect to get to 225 patients. This is the total number of patients, and from there when do we expect the range of time in which we'll have top-line analysis. Hope I answered your question.

[Robert LeBoyer:]

Yes, that was the kind of information I was looking for. Just one follow-up. With the interim analysis in the fourth quarter in view of the summer slowdown, is it possible that might move into the first quarter or is that of firm at this point as that as anyone can tell?

[Ramesh Kumar:]

Robert, as we commented, it's very difficult to pin it down, because we are dealing with lives, survival. But given everything we know, remember that we have done a fairly large global Phase 3 trial in this similar population earlier and the Lancet Oncology publication has gives us some guidelines on what we expect in terms of the survival of the control group and what are we shooting for up median survival in the test group. So keeping all these factors, we feel comfortable with the fourth quarter assessment, but obviously we will continue to update it and keep investors and analysts informed.

[Robert LeBoyer:]

Okay, great. Thank you very much.

[Operator:]

Thank you. Our next question will come from the line of Yale Jen with Laidlaw & Company. Please proceed.

[Yale Jen:]

Hey, good morning and thanks for taking the questions. Sorry, I came a little bit late. As you indicated in the press release that the recruitments have been slowed down a bit, I just want -- I may have missed that area, so would that be a possibility that the interim data could be in the first quarter of next year added so after that you have finalize the statistic plan and scope of the FDA?

[Ramesh Kumar:]

Thank you, Yale. I just answered Robert LeBoyer question which was similar. At this point, we think that the interim analysis is likely in the fourth quarter. And the slowdown of enrollment is more recent. It’s in the summer months. And as you know, to get to certain number of deaths, you need enrollment way in the past. So we don’t think that the most recent slowdown impacts it. So that’s why we were able to refine the interim analysis to fourth quarter from our earlier guideline broader time range of second half of the year.

[Yale Jen:]

Okay. And in terms of the statistic analysis that you discussed with FDA, would you [indiscernible] in terms any specific? Or was something sort of different or unanticipated compared to what’s you earlier thoughts or there is not much of surprises there?

[Ramesh Kumar:]

Well, thanks, Yale. As you know, in a global development program, and ours is truly global, you have to seek, in our case, sequentially the opinion of the FDA, the EMA and then eventually the PMDA in Japan and it’s rare that all three of them are complete rubberstamp exactly the same. So what we are doing right now is that having to seek feedback from the FDA and EMA, we are reconciling it, make sure that there is one document that all of the agencies will allow us to use because this is global trial. So at this point, it will be unwise for us to say more because we believe that we are very close getting this reconciled SAP in place. And once we have that, we will be happy to make everybody aware of the fact that the SAP in hand; and then secondly, if there is anything unusual or different, we can talk about that. So at this point all I can say is that we’re moving towards getting a finalized SAP. We are working diligently on that.

[Yale Jen:]

In addition, I assume prior to you reporting the data also possibly occur in the fourth quarter or that’s -- would that be a reasonable timeline to think?

[Ramesh Kumar:]

Guidelines in the call script and in the releases we expect it to be a third quarter or early fourth quarter event, based on -- which is our hands. As you know, the other parties, the regulatory agencies, they are aware of our estimates of when the events will occur. So I expect it to happen in that timeframe.

[Yale Jen:]

Okay, and last question here. Again, if you have -- sort of apologize, which is for the first-line, this combination therapy, thinking SPA, could you give a sort of the timeline in terms of when you’ll be submitting that? I understand that after that will be on agency’s hands in terms of when potentially to -- so to provide definition, but have you [indiscernible] when you may be submitting that?

[Ramesh Kumar:]

We have completed two steps out of I think three or four steps in getting to the SPA. Since we have had written feedback from the FDA which happened last year, late last year, and that we have feedback from EMA which happened just in July. So we have those two parts. The third part really is to get this expansion trial pretty much enrolled. And as you know, this is moving faster because this is the first-line patients and all the patients get active drug. So once we have all these three pieces, and the last piece is really to get the SPA and the scientific advice documents in front of regulators, we do also have to go to Japan because that will be part of the global trial. So although it’s very difficult to nail it down to month or a week, we feel that we are moving towards the third of the three parts. So in the next quarterly earnings call or sooner, we'll be able to talk about actually having started the process. So I'm afraid to really give you a in-precise timetable at this point. So this will have to wait, as I said, for the third part.

[Yale Jen:]

Okay, great. That's very helpful. And maybe a last question a little bit just on the expanded study. I mean what might be anticipated or planned is the number of patients? And could you characterize those patients more of their solid status? And so that will be my last question here.

[Ramesh Kumar:]

So thank you, Yale. This study is going to be conducted in the U.S., Europe and Australia. So so far we have open sites, four open sites in the U.S., and the first patient was enrolled in April. And it's going quite well, especially compared to second-line trials going well, because all the doctors are looking for a new frontline therapy. And once the European and the Australian trials open, which we expect will be substantially open in this quarter, the remainder of the third quarter, we will be able to talk about how far are we

[Yale Jen:]

Okay, great. And again thanks a lot and congrats on the progress so far.

[Operator:]

Thank you. Our next question will come from the line of Leonard Elman, private investor. Please proceed.

[Unidentified Analyst:]

Yes, good morning. I'd appreciate if you can give us an idea of what information you'll actually provide with the really look at the INSPIRE trial hopefully in quarter four or if necessary in quarter one next year?

[Ramesh Kumar:]

Thank you, Mr. Elman. As I replied to the previous question, we are right in the middle of completing the Statistical Analysis Plan in consultation with the FDA and the EMA. As soon as that is in hand, and our estimate is third quarter or early fourth quarter, we'll be free and able to talk about the nature of the interim analysis, which right now our forecast is for the fourth quarter of 2017. So the interim analysis is very important. I think it’s a key milestone for this trial for second-line patients. And we’ll be able to say more about the interim analysis, maybe even refined further the timing of the analysis once we have SAP in place.

[Unidentified Analyst:]

And second and perhaps related question. If unfortunately the data from the interim analysis of INSPIRE is not favorable, what sort of funding you have available to pursue the frontline plan going forward?

[Ramesh Kumar:]

Well, thank you again. This is a good question, but I am low to speculate in this context. Obviously for the sake of patients and the physicians we are working on the trial, we would like the interim analysis to be filed the way we designed of the trial to succeed. So unfortunately I will not be able to give a specific answer to your question.

[Unidentified Analyst:]

And I have one final question. Do you have any sense or hunch why the market capitalization of the company is so minute given the fact that you have a very promising Phase 3 study close to read out and a potential Phase 3 study for frontline therapy? I can’t think of any other biotech company that is so evolving valued with the promising studies close to the hand?

[Ramesh Kumar:]

Thank you, Mr. Elman. I appreciate your sentiment and question. And certainly we are in a unique position. I can report two facts. One is you heard questions from various analysts covering the company. You can look at the reports and their estimates, which are substantially higher than where we are today. It’s just the nature of the status of the company and the stage of the company, and our goal as management and the team we have is to really improve on that. And one way we do that is through hitting milestones. As you pointed out, we have one Phase 3 trial ongoing more than midway, because interim analysis is ahead, and another Phase 3 trial ready to go. And in addition, we have an orphan drug program. We have really promising pipeline. So all the ingredients for higher value and greater success are there, and it’s not yet recognized. So I would say looking at the mirror that it’s our job really to get that recognized. And part of that is to execute on the trial and also to send the message through forums like this one and others that we have potentially very valuable pipeline and potentially really disease-changing paradigm. So thank you for your question.

[Unidentified Analyst:]

And just one final question. Is there any further DMSB contemplated through INSPIRE?

[Ramesh Kumar:]

I think there are several periodic DMSB we have announced. We went through two of those successfully, and I am sure that in this trial, if we went through two before interim, they will be more contemplated for the remainder of the study. And we will be making those announcements as those meetings are held and the report released.

[Operator:]

[Operator Instructions] Our next question will come from the line of Jason McCarthy with Maxim Group. Please proceed. Pardon me, Jason. [Operator Instructions] Moving on, our next question will come from the line of Yale Jen with Laidlaw & Company. Please proceed.

[Yale Jen:]

Thanks for taking the follow-up questions. Just given that you anticipate – you’re comfortable that the interim analysis data and that will occur in the fourth quarter as roughly your guidance over the second half of this year, so should we also anticipate that the potentially the complete patient recruitment should be done maybe by first quarter of this year and have the final top-line data in this first half of this year? Or you think that will be push out slightly towards maybe a quarter or so?

[Ramesh Kumar:]

Thank you, Yale. What we said earlier is that we will have a much better idea of those two things, the full enrollment and top-line analysis, after we reach the interim analysis. Because we know communication are there at that time, what's the run-rate. Because of the recent summer slowdown, we've been cautious and are making that projection prematurely. So we'll be updating that as we go through the summer as the new changes take effect, new countries come online, we'll be able to give you guidance on whether it will be delayed or it will be on time; and if it's delayed, how much it will delayed? Is it delayed by a month? Is it delayed by a quarter? So at this point, we are sticking to focusing on the interim analysis, gathering all of the information so we can give you a very clear and hopefully reliable estimate of when the trial will be complete.

[Yale Jen:]

Okay great, thanks. I appreciate it.

[Operator:]

Thank you. [Operator Instructions] And I'm showing no additional or follow-up questions. I'd like to hand the conference back over to management for some closing comments and remarks.

[Ramesh Kumar:]

Lisa?

[Lisa Sher:]

Okay. Thank you, everyone, for joining today's call. And we look forward to communicating with you again for the third quarter. Have a great day.

[Ramesh Kumar:]

Thanks, everybody.

[Operator:]

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program, and we may all disconnect. Everybody, have a wonderful day.