Plus Therapeutics, Inc.
Q4 2019 Earnings Call Transcript

Published: 31 Mar 2020

[Operator:]

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2019 Earnings Results Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. [Operator Instructions]Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics’ future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section, included in the Plus Therapeutics’ annual results on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission from time-to-time.Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics’ President and Chief Executive Officer. Sir, you may begin.

[Dr. Marc Hedrick:]

Good afternoon. Thank you, Angela. And welcome to our Q4 full fiscal year 2019 earnings call. I’m Marc Hedrick, President and CEO of Plus Therapeutics. And joining me is our new Chief Financial Officer, Mr. Andrew Sims.First, on behalf of the entire Plus Therapeutics team, I wish all of you the best possible health during these incredible times. We are a company dedicated to healthcare, and we hope you and your families are coping as well as you can. And we do encourage you to follow the advice of your doctors and public health officials in this turbulent time.Today, though, I'm pleased to report the results of Plus Therapeutics fourth quarter and full fiscal year 2019. However, before we go through a review of last fiscal year, let's first focus on more current news, and in particular, our exciting announcement this morning. Most importantly, today, we announced that we have entered into a definitive agreement to license multiple rare cancer drug product candidates from private Texas-based biotechnology company, NanoTx Therapeutics. The transaction terms include an upfront payment of $400,000 in cash and $300,000 in Plus stock. Furthermore, the company may pay up to $136.5 million in development and sales milestone payments and a tiered single-digit royalty on U.S. and European sales. The transaction, subject to customary closing conditions, is expected to close in the second quarter of fiscal 2020.The licensed drug portfolio is anchored up nanoliposome-encapsulated radionuclides and related technologies for a number of cancer targets. The lead drug asset is a chelated Rhenium NanoLiposome, also called, RNLTM, initially being developed for recurrent glioblastoma. RNL is infused directly into the brain tumor via precision brain mapping and convection enhanced delivery technology to deliver very high therapeutic doses of radiation to patients whose cancer has recurred following initial surgical resection and treatment with chemotherapy and radiation.We are very excited about this transaction. It is consistent in all ways with our publicly stated strategic aims that have been mentioned frequently in the past few quarters. Among those aims, strategic expansion of our pipeline and in this case doing exclusive in-licensing transaction, also cost efficient development via a more virtual drug development model by leveraging non-diluted sources of funding, in this case, technology with a strong funding track record via the state of Texas and the NIH and National Cancer Institute, and a clinical focus in oncology and more rare poorly met indications, in this case, such as glioblastoma, carcinomatosis, and others, and then finally, leveraging our extensive expertise and novel drug formulation, in nanoliposomes, in this case by applying our internal capabilities on CMC, a clinical development to move these products into late stage trials, and one day potentially commercial introduction.Also, as we noted previously in our plan, we prefer to invest in drug candidates that meet three key criteria

[Andrew Sims:]

Thank you, Marc. And good afternoon, everyone. I'm very excited to be part of the team of Plus and I'll be discussing Plus Therapeutics’ financial results for the fourth quarter and full fiscal year 2019 as presented in our earnings release today.For the 12 months ended December 31, 2019, our net cash used in operating activities was $5.9 million as compared to $12 million in 2018. Our Q4 2019 net cash provided by operating activities was $1.03 million compared to cash used in operating activities of $2.5 million in Q4 2018. The reduction in annual cash burn was mostly related to discontinued operations, which resulted in reduction in operating expenses.Net income for Q4 2019 was $0.88 million as compared to a net loss of $2.2 million in Q4 2018. The increase in net income is mainly due to the increased BARDA development revenue and an increase in the fair value of warrants. For the 12 months ended December 31, 2019, the net loss was $10.9 million as compared to $12.6 million for the same period in 2018.The research and development expenses

[Dr. Marc Hedrick:]

Andrew, thank you very much.So, let me just update you on key forth coming milestones and then we'll turn it over for Q&A. And regarding these milestones related to new assets, we will be -- we'll be integrating those assets immediately, and report back soon as we refine and clarify upcoming milestones. So, I'll be a bit general here but I think you'll get the picture.First of all, most importantly, we want to complete the RNL Phase 1 trial as soon as possible and determine the maximum tolerated dose. We also want to work with the agency right away to determine A, the suitability of potential accelerated paths to market, such as designation, fast track or breakthrough designation; and then B , development to commercial clinical, and regulatory plan for RNL to glioblastoma. We also want to [Technical Difficulty] scalability work required [Technical Difficulty] pipeline. Regarding DocePLUS, as I mentioned, we want to rapidly in Q2 clarify its role in our overall pipeline and determine next steps for this asset.So, with that, I'll turn the call back over to Angela, the operator, for any questions.

[Operator:]

Thank you. [Operator Instructions] Thank you. And our first question comes from the line of Ed Woo. Please go ahead.

[Ed Woo:]

[Technical Difficulty] for taking my questions. And congratulations on the deal today. And I’ll seek thank you for donating the medical supplies. Obviously, everything helps in this time of need. My question is on DocePLUS. I know you mentioned that you're going to do a review in the second quarter. But, are you leaning towards putting more emphasis on the assets that you guys acquired today or is it really just everything's on the table?

[Dr. Marc Hedrick:]

I think, there -- we in-licensed so many diverse assets that I think it behooves us to take a step back, a rapid step back, recalibrate and deploy our capital where we can make the biggest impact for stockholders. So, yes, I think where are we looking at that asset, we think it's a great asset, it requires some more development dollars but you know we also are really enamored with the assets we just in-licensed. So, I think to be fair, we just do -- and I assure you, this process has been ongoing, but we want to finalize that. That's a reevaluation process. Make a clear, definitive decision and then communicate that and then move the ball forward.

[Ed Woo:]

Great. And then, I know you touched on a little bit about how you guys are still reviewing other possible assets that you guys might be interested in. Has the coronavirus changed any of the outlook in terms of the type of opportunities and products that are out there?

[Dr. Marc Hedrick:]

Yes. It's a great question. In my view, it’s too early to tell whether that has changed the outlook on the opportunities that are out there. But what I will say is that the November state legislative approval and voter approval of the CPRIT has got a lot of inbound interest in our Company based in Texas with the deep connections into CPRIT in terms of our team and people that advise us. A lot of companies that maybe have had run out of capital or capital constraints that have very exciting oncology assets and they're looking for ways to partner.We had hoped that being in Texas might create some visibility as it related to that and that seems to be the case. But, we have a pretty aggressive outward facing process of trying to identify new assets that we can bring in. And we like assets like the one we announced today that comes in with partial funding that's pretty -- that is increasingly deep in the clinical development program. So, that's -- today is I think the example of the kind of assets that we like.

[Operator:]

[Operator Instructions]

[Dr. Marc Hedrick:]

Angela, we have an email question.

[Operator:]

Okay, go ahead.

[Dr. Marc Hedrick:]

All right. The question is about the market opportunity for RNL, for glioblastoma and the overall market size. So, just briefly, currently there are approved treatments for glioblastoma, but none of them are particularly great. It’s one of the most aggressive of the primary tumors that occur in people. So, I mentioned there are about 12,000 people a year that have that disease. So, once a patient fails standard frontline therapy, which is the typical course of prognosis is very poor, the active reintervention drugs in their current situation like bevacizumab and lomustine have been proven to prolong survival, but they're not great. And after treatment failure, survival's not good about the 120 days or so.So, if you look at just a recurrent GBM market with that as a context, we think alone, this is a about a $750 million a year opportunity. Now, if you add on other potential opportunities in first line GPM or some of the other cancers, I mentioned, I think the opportunity runs well over $1 billion. So, based on the kinds of things we're looking for, this fits very nicely into that bucket.

[Operator:]

[Operator Instructions] We have no further questions at this time. I will now turn the call back to Dr. Hedrick for any additional or closing remarks.

[Dr. Marc Hedrick:]

Thank you, Angela. And thank you again for those of you on the call and are listening on the recording. Once again, the transition we completed in 2019 has positioned Plus Therapeutics to optimize the value of our core expertise and nanoparticle drug formulation, drug manufacturing and scale up, as well as clinical development. And while we're extremely pleased by the transaction we announced this morning, we see more such transactions possible in the future. We'll diligently continue to evaluate a number of other opportunities to support and build out a valuable drug development pipeline, consistent with the criteria we’ve laid out in previous two quarters and typified by today's announcement.So, as always, on behalf of the Board and management, thank you again for participating in this call. More information can be found at our website at plustherapeutics.com. And on our LinkedIn and Twitter, social media sites. Have a good evening. Thank you.

[Operator:]

Thank you. This does conclude today's conference call. Please disconnect your lines at this time and have a wonderful day.