Onconova Therapeutics, Inc.
Q3 2013 Earnings Call Transcript

Published: 13 Nov 2013

[Operator:]

Good afternoon. We will begin the Onconova Third Quarter Conference Call in just a moment. Initially, all participants will be in a listen-only mode. Onconova will conduct a question-and-answer session after the conclusion of its prepared remarks. At this point, I will turn the call over to Benjamin Hoffman, Director of Public and Investor Relations at Onconova.

[Benjamin Hoffman:]

Good afternoon and welcome to our third quarter 2013 earnings call. We issued a press release providing an operational and financial update this afternoon, which is available under the Investor and Media tab on our website. Additionally, you can listen to this conference call via webcast by visiting www.onconova.com. A replay of this conference call can be accessed on our website approximately two hours after this call. Joining me on today’s call are Onconova’s President and Chief Executive Officer, Dr. Ramesh Kumar; and our Chief Financial Officer, Ajay Bansal. During this call, we will be making statements about the company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Ligation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements. Additional information on factors that could cause results to differ is available in our final prospectus filed on July 25, 2013 with the SEC pursuant to Rule 424(b)(4) of the Securities Act. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may like to update these update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Now, I would like to turn the call over to Onconova’s President and CEO, Dr. Ramesh Kumar, for his introductory remarks.

[Ramesh Kumar:]

Good afternoon and thank you for joining us. 2013 has been a productive year for Onconova and for our most advanced product candidate rigosertib. Last year, as a private company, we announced a major licensing agreement with Baxter for commercialization of rigosertib in Europe. Now as a publicly traded company, we are expanding our rigosertib programs in multiple indications in myelodysplastic syndromes (NYSE

[Ajay Bansal:]

Thank you, Ramesh, and good afternoon, everyone. Our financial results were included in this afternoon’s press release and will also be available with additional detail in our 10-Q. In terms of our cash position, we ended the third quarter with approximately $116 million in cash and cash equivalents. Our operating cash usage in the quarter was approximately $14 million and we expect to end fiscal year 2013 with approximately $98 million of cash. Our operating expenses for the quarter totaled $21.2 million, which included stock option expenses of approximately $4.1 million. We have two important collaboration for commercialization of rigosertib with Baxter in Europe and SymBio in Japan and Korea. Upon obtaining successful clinical results in lower risk MDS, higher risk MDS and pancreatic cancer. These collaborations could yield milestones totaling up to $128 million to Onconova over the next 12 to 18 months. With our cash balance and the potential milestone payment, we expect to be in a strong position to advance our expanding clinical program for rigosertib. With that, I would like to turn the call back to Ramesh to provide an update of the rigosertib development program and to elaborate on the upcoming milestone.

[Ramesh Kumar:]

Thank you, Ajay. Our lead product candidate, rigosertib, is a small molecule inhibitor of the PI3-Kinase and PLK pathways. We believe that this dual inhibition of key regulatory pathways helps support a broader spectrum of therapeutic potential for rigosertib. Rigosertib is currently being tested in a number of Phase 1, 2 and 3 clinical trials. As of the start of this quarter, more than 1,000 patients have been treated with rigosertib in clinical trails. In hematology, we are focused on development of rigosertib for unmet medical indications in both high risk and low risk MDS. MDS affects bone marrow function and the quality of life of patients, and in many cases, MDS patients can progress to leukemia. For many MDS indications, there is a lack or dearth of efficacious treatments and we are passionately committed to addressing the unmet needs of these patients. During the second quarter, we announced that our pivotal Phase 3 ONTIME trail for intravenously administered rigosertib in high risk MDS patients for whom hypomethylating agents had failed, had reached its enrollment target of 270 patients. We now expect the top line data from this study will be available following our previous guidance either in December of this year or more likely in the first quarter of 2014. Lower risk MDS patients suffer from the many problems associated with frequent transfusions. We are evaluating a twice a day oral dosage form of rigosertib in two Phase 2 trials for transfusion-dependent low risk MDS patients. We presented encouraging interim analysis from the ONTARGET trial at ASCO this June. Additional data from this trial will be presented at the 2013 ASH Annual Conference. Please note that the abstract of this presentation was made available on November 7 on the ASH website. The enrollment target of 60 patients has been reached for the Phase 2 ONTARGET trial and a second Phase 2 trial in low risk erythropoiesis-stimulating agents ESA refractory patients is now enrolling at multiple sites. We’re also developing rigosertib for the treatment of solid tumors, the most advanced trial for solid tumors referred to as the ONTRAC trial is a combination therapy trial in front-line metastatic pancreatic cancer. In this trail, we are comparing IV rigosertib plus gemcitabine against gemcitabine alone. Overall survival is the primary endpoint. Under consultation with the FDA, we began ONTRAC as a Phase 3 trial with a preplanned interim analysis. In March 2013, we reached the enrollment target of 150 patients for the first stage of this trial. We expect the preplanned interim futility and safety analysis will be carried out by the Data Safety Monitoring Committee next month in our decision for the next step, indication will be available also next month. The second solid tumor indication for rigosertib is in metastatic squamous-cell carcinoma with a focus on head and neck cancer. We’re advancing the oral formulation of rigosertib in this Phase 2 trial for this indication, which will evaluate both human papillomavirus, HPV positive and HPV negative group of patients. We expect to complete enrollment of 80 patients in this trial in the second half of 2014. Maximizing the potential of rigosertib in both hematological diseases and solid tumors to meet the unmet needs of patient is the primary objective of Onconova. We are focusing on our advanced trials in MDS, as we expand into additional indication to realize the full potential of rigosertib. In our third quarter earnings release, we announced initiation of two new trials, rigosertib and MDS. The first trial referred to as the 04-24 study is the single-arm Phase 3B study of IV rigosertib in higher risk MDS patients who have failed treatment with hypomethylating agents, azacitidine and decitabine. This study follows a completion of our Phase 3 pivotal trial and is designed to provide this patient population with continued access to rigosertib in a clinical trial setting. This study will provide additional tolerability and activity data helpful for future commercialization activities. The 04-24 trial is expected to enroll 90 patients in the U.S. and Europe. In our S-1 filling, we disclosed plans to initiate a second Phase 2 study also referred to as the 09-07 study, a single agent oral rigosertib in lower risk MDS patients who have failed ESAs. This 40-patient, multi-center trial will complement the ONTARGET trial in further exploring the safety and the possible effects of rigosertib on increasing healthy blood sales and reducing blood transfusion in patients who are refractory to ESA. The third trial referred to as the 09-08 study is aimed at expanding the use of rigosertib into front-line MDS. This is a Phase 1/2 trial, examining the combination of oral rigosertib, plus azacitidine or Vidaza, a hypomethylating agent that is indicated for first-line treatment of MDS patients. The goal of this trial is to determine the maximum tolerated dose of rigosertib that can be given in combination with azacitidine in MDS patients. This trial will allow us to assess the safety, tolerability and efficacy of this novel combination therapy in this patient population. This indication is based on published non-clinical studies, which have demonstrated a synergistic benefit of this combination therapy. The trial is now open and is designed to enroll up to 40 patients. In summary, rigosertib remains the focus of our efforts. We are committed to the advancement of rigosertib towards commercialization, while exploring opportunities to expand its clinical utility. Except for our productive partnerships with Baxter for Europe and SymBio for Japan and Korea, we have retained rights to commercialization of rigosertib elsewhere. We are heartened by the progress we have made over the past year in clinical and corporate development, as rigosertib approaches pivotal data in multiple indications, we look forward to sharing results from our trials in the coming months. We will now open the call to your questions. Operator?

[Operator:]

Thank you. (Operator Instructions) Our first question comes from the line of Jonathan Eckard of Citi. Your line is open.

[Jonathan M. Eckard:]

Thank you for taking the questions. So I was just wondering, Ramesh, if you could tell us about the ESA refractory patient trial that you talked about, I think, it was low intermediate risk, MDS. I guess, what was the genesis behind starting that trial, was it based on observations we saw previously and maybe if you can just talk a little bit about that? Then I have another question regarding the Phase 2 as well?

[Ramesh Kumar:]

Thank you, Jon. As you know, in low risk MDS patients other than del(5q) patients where home REVLIMID is indicated, today, do not have an approved treatment. So generally, these patients are either on blood transfusions or they are on ESAs. So typically, most of these patients experience ESA at one-time or the other. So our first trial, the one that we presented interim data from at ASH, ASCO and will present final data at ASH, involves both ESA refractory patients and also patients who may not have been ESA refractory. So the first trial, the interim data was presented at ASCO, showed that our drug is active in giving transfusion independence to these patients. So the second trial really is a complement to the first trial, only that we are purposely excluding patients who are not ESA refractory at the onset. So the patients have to be documented to be ESA refractory. They are denied ESA and given only single agent rigosertib. So what we are trying to do is document the activity of the drug to the exclusion of ESA in this patient population.

[Jonathan M. Eckard:]

Very good, and then with regards to the Phase 2 data, the final data that you’re referring to, while not trying to get you to talk outside the four corners of the abstract, could you just kind of talk to us again, generally, what are the most important takeaways that we should be looking for from a trial in this setting that would give us the best clarity about rigosertib’s both competitive profile as well as what the next steps could be clinically with regard to development?

[Ramesh Kumar:]

Thank you. Thank you, Jon. As you know, ASH embargo rules prevent us from talking about the contents of the presentation, but the abstract is available on the ASH website. So what I can talk about is based on our presentation at ASCO, which was, as you know, very well received. There was a lot of excitement about the level of activity. There were some questions about tolerability, because they were some early indication of urinary side effects in these patients. So going into ASH, the general expectation from investigators that we hear from different conference is they want to see continued activity, high level of activity that was shown at ASCO in these patients, that’s number one. Number two, they want to see how we address safety tolerability issues, everybody recognizes that lack of myelosuppression is a huge advantage for this drug, but they wanted to see how the urinary events first reported at ASCO are managed. And thirdly, we guided during our road show and made apart of our S-1, is that the investigators are very keen to find a marker if there could be one found that allows us to further preselect patients and reach for patients who could have response to the drug. So these three things, I think, are first and foremost in the minds of our investigators and therefore we are very much hoping that they will be addressed in the ASH presentation.

[Jonathan M. Eckard:]

That’s great. I’ll get back in the queue. Thank you very much.

[Operator:]

Thank you. Our next question comes from the line of Charles Duncan of Piper Jaffray. Your line open.

[Charles C. Duncan:]

Hi, Ramesh. Thanks for taking the question and congrats on the progress in the quarter. I wanted to ask you about the data or the push out of timelines for the high risk MDS trial, is that – can you give us any color, at least, on a blinded basis on [indiscernible] at this point?

[Ramesh Kumar:]

Charles, thank you. Our guidance in our S-1 was 4Q 2013 and 1Q 2014, and as you recognize, a survival trial cannot have a very defined endpoint, you can’t really say exactly when you will do – when you’ll do the top line analysis. We completed the enrollment target in the second quarter. I think we made an announcement to that effect and as is typical with these trails, you end up enrolling few more patients than the actual target and we are monitoring this trial carefully. As you know, it’s a first randomized trial in high risk MDS patients who have failed hypomethylating agents. Before this…

[Charles C. Duncan:]

Yes.

[Ramesh Kumar:]

…no other studies were conducted. So we are following this and our guidance changes as we get more data and as you rightly pointed out, we are blinded to the survival results, but we do know the total number of events. So based on that, our guidance still remains the same 4Q 2013 and 1Q 2014, we are just refining it to say, it could be in the end of this quarter or as projected earlier, the first part of 2014. So the guidance hasn’t really changed. It just gets refined as we go forward.

[Charles C. Duncan:]

It’s helpful, and then, with regard to the turnaround of that data into a possible filing, what your sense is if you got pretty decent results as to the timing of an NDA filing, how quickly could you work through that process?

[Ramesh Kumar:]

Charles, very good question. As you know, filing results – successful results into an NDA is not a trivial matter. There are lot of individual pieces and we are just dedicated that for the sake of the patients, because now we brook no delays from positive data to filing of the NDA. So our guidance still remains the same as in our prospectus, second half of this year, we’ll be prepared without delays to file the NDA in the U.S. and something that people maybe not be aware that we are also responsible for filing in Europe for our partner, Baxter, So we are very much committed to support our partnership filing in Europe as soon as possible after the U.S. filing with a minimal of delays between the two. So everything is on high alert. Everybody is working very hard in the company and the progress has been very, very gratifying for us.

[Charles C. Duncan:]

And then my final question is how do you think about commercialization, should you have decent results, are you prepared to monitor at least capital efficient sales effort and launch your product on your own in the States?

[Ramesh Kumar:]

First of all, Charles, we are very fortunate to have the opportunity to commercialize the product. We have U.S. rights, as you know, as a matter of fact, rights all over Americas. We have rights in China, India, many other geographies. So except for our excellent partnership with Baxter for Europe and with SymBio for Japan and Korea, we have the potential to really maximize the commercial future of this product. Having said that, the discussion of how exactly it’s going to be executed remains to be seen and I wanted to see if my colleague, Ajay has something more to add to that?

[Ajay Bansal:]

No, Chad. I think as Ramesh said, we are excited; we have the opportunity to potentially commercialize this on our own, while we look at other options as well. It is our intent to launch the product on our own in the U.S.

[Charles C. Duncan:]

Thanks, guys for the added color. Sorry for the background noise.

[Operator:]

Thank you. Our next question comes from Jason Zhang of Edison Investment Research. Your line is open.

[Jason Y. Zhang:]

Okay. Thank you. Can you guys hear me?

[Ramesh Kumar:]

Yes.

[Jason Y. Zhang:]

Okay. Ramesh, can you confirm that a total enrollment for the ONTIME trial, is the patient number, is it around 290?

[Ramesh Kumar:]

I don’t think we’ve actually announced the actual number, but as Jason, these multisite randomized studies usually run some 10% over the enrollment target. so I can’t confirm the actual number, but it was well above the 270 enrollment target.

[Jason Y. Zhang:]

Okay. And also the – I guess the power implication of that added patient number in the trail, can you comment on that?

[Ramesh Kumar:]

Jason, that’s good question, as you know, we are fortunate to get an SPA for the U.S. development of this program and the SPA specifies a target not only for enrollment, but also a target hurdle for the events that must be monitored. So how we are going to handle the additional events remains to be seen, but we will follow very closely, our SPA agreement with FDA.

[Jason Y. Zhang:]

And also a question on the lower risk MDS and so the ONTRAC trial is in patient for may or may not yet they’re refractory, but the second smile would be specifically for those patients who are refractory to ESA. If you look at a possible rigosertib path forward is your [indiscernible] suggesting that ESA refractory patient will be a something you’ll have to focus on going forward?

[Ramesh Kumar:]

Hi, Jason. first of all, I want to clarify something, the entry criteria for our first as well as the second trail is that the patients must be transfusion dependent. they must have four units of pancreatic cells in the requisite period that by implications suggested all of these patients are ESA refractory, because if ESA is working in these patients, it’s unlikely that they will get blood transfusions. So I want clarify that for the first slide – first trial. The second Phase 2 trail explicitly state that they must be transfusion independent and proven to be ESA refractory and they are denied ESA of any kind during the – first of all we except their treatment cycle. So it’s a very fine almost a semantic difference, but it’s important to note that all the patients that we are treating are transfusion dependent. Now secondly, the question of further development as you know depends upon our plants as well as guidance from the agency. So we have yet not discussed the definitive trial design with the agency so we won’t be able to comment on that at this point.

[Jason Y. Zhang:]

Okay. Thanks.

[Operator:]

Thank you. Our next question comes from the line of Howard Liang of Leerink Swann. Your line is open.

[Unidentified Analyst:]

Hi. This is Rich [indiscernible] calling in for Howard. Thanks for taking my question. I was just wondering if you were planning on incorporating any assessment of methylation profiles in the second Phase 2 trial in low risk MDS? Thanks.

[Ramesh Kumar:]

Rich, that’s a good question. and again, have a disadvantage here, because I can’t talk too much about what’s going to be shown at the ASH, but obviously you have seen some illusion to this in the abstract. So why don’t we wait till the ASH presentation where we hope to talk more about the methodology use and the implication of that for current and future trials.

[Unidentified Analyst:]

Okay. Thank you.

[Operator:]

Thank you. We have a follow-up question from the line of Jonathan Eckard of Citi. Your line is open.

[Jonathan M. Eckard:]

Thanks. I just had a quick question regarding the pancreatic Phase 3 trial. So it seems like that timing of that seems like it’s definitely pointing for December. could you outline again to as just what the potential outcomes of this long-term analysis could do and generally what type of information would likely accompany that release depending on those outcomes? Thanks.

[Ramesh Kumar:]

Jon, as you know, this trial is – was started well before the Abraxane plus gemcitabine combination. Data was available and the drug combination was approved. So the design really was to compare gemcitabine plus rigosertib with gemcitabine alone. So our standard in this randomized trial is gemcitabine. So obviously, we were asking to see if the combination gives you a survival benefit over gemcitabine alone. All of us know what that hurdle is and having seen the Abraxane label. So we also know what the parameters are in terms of getting the hazard ratio and the patient numbers et cetera. So the DSMC is going to look at the futility and safety and also guide us on what makes sense going forward, what’s the size of the trial if the resizing of the trial is required and if any other design characteristics need to be changed. So none of these have yet been discussed, because the DSMC has not met yet. So once the DSMC meets, they will guide us and then we’ll make the best decision overall for rigosertib, because rigosertib is in very important trials in other solid tumors, as well as in both high and low risk MDS. So the best guidance I can give you today is that once the DSMC gives us their view, we will be able to make a decision on the next steps.

[Jonathan M. Eckard:]

That clarifies. Certainly, one option would be futility to stop the trial, another option would be resize the trial and a third one would be a tenuous plan?

[Ramesh Kumar:]

Exactly. So those are three very clear and we would think very objective ways of looking at future for this program.

[Jonathan M. Eckard:]

Great, thank you.

[Operator:]

Thank you. At this time, there are no more questions. I will now turn the call over to Dr. Kumar for concluding messages.

[Ramesh Kumar:]

Thank you. Onconova has made significant progress over the past several months, both operationally with the completion of our IPO and clinically with the continued progress in expansion of the rigosertib development program. We now look forward to the important results from our ongoing rigosertib trials and thank you for joining us today and we look forward to updating you all very soon. Thank you.

[Operator:]

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