Sesen Bio, Inc.
Q3 2017 Earnings Call Transcript

Published: 15 Nov 2017

[Operator:]

Good afternoon, and welcome to Eleven Biotherapeutics’ Update Conference Call. At this time all participants are in a listen-only mode. Please be advised that the call is being recorded at the company’s request. At this time, I’d like to turn the call over to Michael Schaffzin from Stern Investor Relations. Please proceed.

[Michael Schaffzin:]

Thank you, operator. Good afternoon, and welcome to Eleven’s update conference call. Today on our call, Stephen Hurly, President and CEO, will provide an overview and update on Eleven and its TPT platform; and Greg Adams will provide a discussion on the IO opportunities for Eleven. Any statements on this call about future expectations, plans and prospects for the company, the company’s strategy, future operations and other statements containing the words, anticipate, believe, estimate, expect, intend, may, plan, predict, project, target, potential, will, would, could, should, continue, and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the occurrence of any event change or other circumstances that could give rise to the termination of the license agreement with F. Hoffmann-LaRoche Ltd. and Hoffmann-Roche Inc.; the uncertainties inherent in receiving future payments pursuant to the license agreement. The uncertainties inherent and the initiation in conduct of clinical trials; our ability to successfully develop our product candidates and complete our plans’ clinical programs; our ability to obtain marketing approvals for our product candidates; expectations regarding our ongoing clinical trials, availability and timing of data from clinical trials, whether interim results from a clinical trial will be predictive of the final results of the trial or results of early clinical studies will be indicative of the results of future studies; the adequacy of any clinical models, expectations regarding regulatory approvals; our ability to obtain, maintain and protect our intellectual property for our technology and products; availability of fundings sufficient for the company’s foreseeable and unforeseeable operating expenses and capital expenditure requirement. The company’s projected use of proceeds from its November 2017 public offering; other matters that could affect the financial performance of the company; other matters that could affect the availability or commercial potential of the company’s product candidates. In addition, the forward-looking statements included on this call represent the company’s views as of the date hereof. The company anticipates that subsequent events and developments will the cause the company’s views to change. However, while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the company’s views as of any date subsequent to the date hereof. With that, let me pass the call over to Steve.

[Stephen Hurly:]

Thank you, Michael, and thank you, everybody, for joining us this evening. It has really been a very productive quarter for Eleven Biotherapeutics. We made significant progress on our core priorities, namely advancing recruitment on our pivotal Phase III trial and remaining on track to complete enrollment in the Q1 of 2018. In addition, we also completed a very important equity financing that gives us sufficient cash runway to support our release of top line three month data from that trial to mid-2018 without the need to raise additional capital. We also continued our work with the National Cancer Institute and the combination trial with Vicinium and AstraZeneca’s checkpoint inhibitor. And lastly, we completed the manufacturing of all of the Vicinium needed to complete each of these trials. We believe Eleven Bio is now well positioned heading into 2018. Let’s dig into some of the details. Vicinium, as a reminder, is our lead product candidate, is based on our proprietary Targeted Protein Therapeutics, or TPT platform. TPTs are based on the same basic concept of antibody-drug conjugates, or ADCs, which were the original smart missile concept in oncology therapeutics. They incorporate a targeting or navigating front-end, which brings the molecule to a specific cell marker known as an antigen that are over-expressed on cancer cells, the end of cytotoxic payload that after binding an internalization is released into that cancer cell to kill it. While these ADCs have had some successes, we believe our next-generation TPT platform has some significant advantages over those first-generation ADCs that could materially expand the clinical impact. Specifically, those advantages include, our TPTs utilize smaller, single-chain Fvs and antibody fragments. We believe they can better penetrate into the tumor bed than large antibody-based ADCs. Second, unlike the payloads that are used in most ADCs, which is primarily effective against rapidly dividing cells, our TPT payloads are designed to inhibit protein synthesis, which is necessary for the survival of dividing and non-dividing cells. We believe that this allows our TPTs to kill both rapidly dividing cancer cells in quiescent or stem cell-like cancer cells. Furthermore, our TPT payloads are not subject to the multi-drug resistance mechanisms, which can make ADCs less effective. Third, our payloads also promote a certain type of cell death called immunogenic cell death, which is known to spark an immune response against the cancer cells. This idea is supported by both preclinical and human clinical trial data suggesting that the TPTs have an exciting dual mechanism of action. And lastly, four, our proprietary manufacturing system allows us to construct our TPTs as single protein molecules. As a result, these products have a higher consistency or cheaper to make and do not fall apart like the antibody-drug conjugate families. We believe these advantages set us up for product candidates to potentially provide meaningful clinical benefit to patients across a variety of various unmet medical need. Let’s go back to Vicinium. Vicinium is in the development for the treatment of patients with non-muscle invasive high-grade bladder cancer who are not responding to BCG. Vicinium utilizes an anti-EpCAM antibody fragment targeting domain that is genetically fused to Pseudomonas Exotoxin A, or ETA, which is a very potent cytotoxic payload. Vicinium is administered directly into the bladder, the same way BCG is, where it selectively binds EpCAM on tumor cells. Vicinium is then internalized into these cancer cells, releases its payload ETA and interrupts protein synthesis, leading to the death of the cell. Importantly, this is really a good setting for our Targeted Protein platform, in that EpCAM is expressed to 98% of these non-muscle invasive bladder cancer cells and little to no expression on normal bladder cells. We do believe this is a perfect setting for Vicinium to potentially succeed as a therapeutic option for patients. High muscle – high-grade non-muscle invasive bladder cancer is a significant area of unmet medical need. As we’ve discussed in the past, therapeutic options for patients with NMIBC, who have stopped responding to BCG, are very limited. Due to the lack of other approved drugs in the space, the American Neurology Association recommends that the patients who are not responding to BCG undergo cystectomy or removal of the bladder and surrounding tissues. A cystectomy is a life-changing surgery that’s associated with significant morbidity and mortality. And as a result, many patients, in fact, refuse the surgery and are asking viable treatment alternatives. There are approximately 10,000 cystectomies or bladder removals a year in the states, and it’s projected that twice the number of patients refuse the surgery. Reflecting on this unmet medical need, the FDA actually came out with draft guidance laying the groundwork for drug development in this specific space. And importantly, we believe our trial design closely follows this guidance. Our Phase III study’s primary endpoint is complete response in patients with carcinoma-in-situ, or CIS. We’re enrolling 77 of these patients out of our trial sites in the U.S. and Canada. Our current Phase III builds on a promising results from our Phase II study, in which Vicinium showed safety and efficacy in 46 patients, who were refractory or intolerant to BCG. The Phase II had two arms, one, in patients that received weekly induction treatments for six weeks, and the other where they receive weekly induction for 12 weeks. If they receive – If they achieve to complete response, meaning no evidence of disease, they then move to maintenance, dosing up for 12 months. In that trial, at three months, Vicinium was able to drive 40% of the patients to a complete response, again, no evidence of disease, which is a significant response rate in the space. At one year, 17% of the patients still were a CR in the 12 week arm and 14 and the six week arm. Importantly, all of the CR patients at 12 week arm remained disease-free at last follow-up up to 25 months. Median time to recurrence is 480 days in the 12 week arm and 274 in the six week arm. We are on track to complete recruitment in the Q1 2018 and report top line three month data in mid-2018. We expect our study will achieve results that are similar or better than the results from our Phase II study, which we believe will support Vicinium’s potential as a therapeutic alternative to these patients. We look forward to finalizing trial and approaching the FDA regarding potential approval for Vicinium. Now we’ll turn to what I’m sure you’re all quite aware of is the recent excitement around the immuno-oncology development and the evolving treatment paradigms and the treatment for cancer patients. I’m going to pass the conversation off to our Chief Science Officer, Dr. Greg Adams, and he’ll provide an introduction to our role in this exciting space.

[Greg Adams:]

Thank you, Steve. Good afternoon. I’m sure that you’re all aware of the recent advances of immuno-oncology that have demonstrated that a patient’s own immune system can be effectively motivated to fight their own cancer. The lead molecules in this space are known as checkpoint inhibitors. They act by blocking the inhibition or releasing the brakes that a cancer often puts on the immune system’s ability to fight disease. However, in order for checkpoint inhibitors to be effective, a patient must already have mounted an immune response against their own cancer cells. Many cancer treatments cannot promote this necessary initial immune response. And so they’re unable to set the stage for effective checkpoint inhibitor therapy. One of the most exciting qualities of our TPTs is that in addition to directly killing targeted cancer cells, they have demonstrated the ability to induce the type of immune responses that these checkpoint inhibitors rely upon. This ability was obtained both in-vitro and in a pre-clinical study performed in mice, in which VB4-845, which is Vicinium and Proxinium, treatment with this of a tumor on one side of the animals increased the impact of a systemic checkpoint inhibitor against PD1. This also was demonstrated in our Proxinium human clinical trials, where we saw a reduction in the size of contralateral tumors was not treated with Proxinium following treatment on the tumor on the other side of the neck. This dual mechanism of action suggests that our compounds are not only differentiated from existing treatments in the non-muscle invasive bladder cancer space, but they may have real synergy with the checkpoint inhibitors and other immuno-oncology compounds in development. These observations were the driver behind our ongoing Cooperative Research and Development Agreement, or CRADA, with the National Cancer Institute, or NCI. Under this CRADA, the NCI will evaluate Vicinium in combination with AstraZeneca’s PD-L1 checkpoint inhibitor, durvalumab, for the treatment of non-muscle invasive bladder cancer. Principal investigator, Piyush Agarwal of the NCI cancer center research Urologic Oncology Branch will conduct a Phase I study in patients with high-grade non-muscle invasive bladder cancer to evaluate the safety, tolerability, efficacy and biologic [Audio Dip] of Vicinium and durvalumab combination therapy. We are particularly excited that the NCI will be performing an extensive evaluation of the key immune biomarkers that are relative to the immuno-oncology space. These include the presence of immune cells both in the circulation and infiltrating into the tumor the expression of PD1 and PD-L1 checkpoints that are targeted by the checkpoint inhibitors, and the release of cytokines, often known as the molecules that are associated with the immune response into the urine. We expect the results of this biomarker analysis will support our hypothesis that Vicinium induces immunogenic cell death and will serve as the foundation for further immuno-oncology collaborations around our TPT platform. We are pleased that this study is on track now to initiate in the fourth quarter of 2017, with initial data expected in the third quarter of 2018. I will now pass you back to Steve Hurly.

[Stephen Hurly:]

Thanks, Greg. Exciting stuff. Quickly on the corporate side. I just wanted to first welcome Rich Fitzgerald as our interim CFO. Rich brings significant strategic leadership, financial and capital-raising experience to our team, and we’re thrilled to have him onboard. It is testament to the addition of Rich that we’re able to close our financing shortly after he joined. Lastly, I want to update with respect to the company’s quarterly reporting. The company is finalizing certain purchase price accounting with allocation accounting analysis with Ernst & Young relative to a September 2016 acquisition of Viventia. We will be filing the 10-Q on a delayed basis as soon as analysis is finalized, which we expect be in the next five days. With that, again, I’d like to thank everybody for their time, and have a good rest of your evening.

[Operator:]

Ladies and gentlemen, this concludes today’s presentation. Thank you, once again, for your participation. You may now disconnect. Everyone have a great day.