Sesen Bio, Inc.
Q3 2016 Earnings Call Transcript

Published: 14 Nov 2016

[Operator:]

Welcome to the Eleven Biotherapeutics Third Quarter 2016 Financial Results Conference Call. This call is being webcast live on the Investors and Media section of Eleven’s website at elevenbio.com. This call is the property of Eleven Biotherapeutics and recordings, reproduction or transmission of this call without the express written consent of Eleven Biotherapeutics is strictly prohibited. As a reminder today’s call is being recorded. I would now like to introduce Leah Monteiro, Corporate Communications for Eleven Biotherapeutics.

[Leah Monteiro:]

Thank you. Good morning. The press release announcing Eleven Biotherapeutics third quarter 2016 financial results conference call was issued earlier today. It can be found on the Investor and Media Section of our website at elevenbio.com. Before we begin, I will read Eleven Biotherapeutics' Safe Harbor notice regarding forward-looking statements. During today’s call we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about our future expectations, plans and prospects, clinical development and regulatory timelines, the potential success of our product candidates, financial projections, projections for milestones, and upcoming events and presentations. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factor section in our annual report on Form 10-Q, our quarterly reports on Form 10-Q - our current reports on Form 8-K and other filings with the Securities and Exchange Commission. Any forward-looking statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. During today’s call, Eleven's President and Chief Executive Officer, Stephen Hurly will discuss recent company highlights and the progress of our product pipeline. Following Steve, John McCabe, our Chief Financial Officer will review financial results for the third quarter of 2016. Steve?

[Stephen Hurly:]

Thank you, Leah, and good morning, everyone. The third quarter of 2016 has been filled with exciting changes for us at Eleven. As most of you are aware by now, as Dr. Helman [ph] President and CEO after Eleven acquired Viventia Bio on September 20th. The acquisition of Viventia means that Eleven is now late stage oncology company advancing a pipeline of novel product candidates based on our targeted protein therapeutics or TPT platform. Eleven's pipeline now includes lead product drug candidate Vicinium and Proxinium. Vicinium is in a Phase 3 clinical trial for high-grade, non-muscle invasive bladder cancer or NMIBC. The top-line data is expected in the first half 2018. Proxinium is expected to enter a Phase 2 clinical development in the first half 2017 for the treatment of late-stage squamous cell carcinoma of the head and neck. In addition, we have an innovative systematic platform contribute to our growth and plan on submitting an investigative – investigational new drug application, or IND with the FDA in 2017 for our lead product in our systemic pipeline based on our proprietary payload. All of these activities are possible to impart to Eleven's license agreement with Roche for IL-6 antagonist antibody technology that was announced in June and was approved by our stockholders in August. As a reminder, Eleven has received $30 million in payments from Roche to date, including a $7.5 million upfront payment and a $22.5 million milestone payment due to the IND for EBI-031 becoming effective. Under the terms of the agreement Eleven could receive up to an additional $240 million upon the achievement of certain future regulatory, development and commercialization milestone. Eleven is also entitled to receive royalties for net sales of potential future products containing Eleven IL-6 compounds. I'd like spend some time speaking about our four underlying technology platform, aforementioned targeted protein therapeutics or TPTs. Viventia developed TPTs is the next step in target oncology therapy. The idea of selectively treating cancer with a smart missile originated a long time ago in antibody drug conjugates or ADC. ADCs combined selectivity of an antibody designed to specific markers or antigens on the surface of cancer cells with the cytotoxic or cell killing ability of cytotoxic payload. The idea was deliver to payloads more specifically to cancer cells, thereby minimizing the toxicities to healthy tissues. While ADCs have had some success many have faced challenges due to the large size, on unstable linker and inability to fill non-dividing or slowly dividing cancer cells. We feel our TPTs address these issues and potentially represent an improved class of targeted therapeutics. First by utilizing smaller antibody fragments, our TPTs are designed to deliver greater amount of drug to and through the tumor bed. Second, by utilizing a protein cytotoxic payload that is not required to vision for their activity, our TPTs are designed to kill a broad array of cancer cells, the potential activity against both rapidly dividing and quiescent for cancer stem cell. We also believe our TPTs enhanced strategy immune environment following local administration of the TPT, potentially stimulating greater immune base killing of the tumor cell, thereby establishing a setting or combination with checkpoint inhibitor and other immune oncology drugs may be synergistic. Underlying all of these advances is our single step manufacturing process. By developing TPTs that are single protein products, we reduced manufacturing cost and avoid the instability issues associated with ADCs. We believe that this will lead to improved safety, minimizing off target toxicity when compared to many ADCs due to the chemically conjugated payload releasing from the antibodies before ADCs enter the cancer cells. Vicinium, our most advanced candidate is a biologic fusion protein comprised of an epithelial cell adhesion molecule or EpCAM targeting antibody fragment fuse to a cytotoxic protein as really only when inside the tumor cells. Vicinium is currently in Phase 3 clinical trial in the United States and Canada for the treatment of high-grade NMIBC. NMIBC is the second most common malignancy of the GU system in the US and accounts for about 70% to 80% of all bladder cancers. The current standard of care is BCG, which is associated with high failure rate with 50% of the patients experienced disease recurrence in one year and 90% within five years. We expect complete enrollment for the trial in the first 2017 with top line data in the first half of 2018. In a Phase II clinical trial Vicinium demonstrated complete response rate of 40% over three-months with no patients discontinuing treatment – due to treatment related serious adverse events. Today Vicinium has been evaluating in more than hundred patients in previously completed clinical trials. Our second most advanced program Proxinium is also a TPTs that targets EpCAM positive tumors and is being developed for late-stage squamous cell carcinoma of the head and neck or SCCHN. We intend to enter in discussions with the FDA relating to our proposed Phase II clinical trial. The trial will be designed to test Proxinium in combination with checkpoint inhibitor and is planned to commence in a moment in the first half of 2017. We believe Proxinium's mechanism of action creates a heightened local immune response which combined with the release of tumor antigen from the Proxinium treated cancer cells stimulate the therapeutic host anti tumor immune response that we expect will improve the function of immune oncology agents like checkpoint inhibitors. SCCHN is the most frequent malignant tumor of the head and neck region and seventh most cancer in the world. Existing treatments for SCCHN include surgery, drug agents, radiation, combination therapy. In previous clinical trials Proxinium was generally well-tolerated and showed signs of both direct anti-tumor activity and treated tumors, but also responses in un-injected tumors suggesting immune driven therapeutic action - mechanism. Proxinium has received orphan drug designation in the US by the US Food and Drug Administration and the European Medicines Agency best designation from the FDA. We are also developing next-generation cancer therapy for systemic administration utilizing our TPT platform and our proprietary payload deBouganin, our lead systemic product VB6-845d, and we intend to file an IND for the Phase 1 trial in 2017. We may explore additional therapeutic indications for Vicinium and Proxinium, as well as our systemic product candidate. To close, we at Eleven are excited about the team an opportunities ahead that creates not only sustainable growth for our shareholders, potentially new treatments for patients in need. With that, I will now turn the call over to John McCabe to provide a review of the financial results for the quarter. John.

[John McCabe:]

Thank you, Steve. And good morning to all. Earlier this morning, we issued a press release detailing our financial results for the third quarter of 2016. I'll review the financial highlights first and then speak to our cash position and our financial guidance. For the third quarter of 2016 we reported net income of approximately $19.5 million, compared to a net loss of $9.7 million for the same quarter in 2015. Total revenue for the third quarter of 2016 was approximately $28.7 million, compared to $0.1 million for the same quarter in 2015. The increase was primarily due to the fees received from Roche under the license agreement. Research and development expenses for the third quarter of 2016 were $2.8 million, compared to $6.7 million for the same period in 2015. The decrease was primarily due to a decrease of isunakinra related development expenses, which development activities are no longer ongoing, as well as decreases in EBI-031 related development expenses due to the license agreement with Roche. G&A expenses for the third quarter of 2016 were $6.4 million, compared to $2.7 million for the same period in 2015. The increase was primarily due to increased severance, retention and stock-based compensation expenses and professional fees related to our review of strategic alternatives and the acquisition of Viventia. We ended this quarter with $30.7 million in cash and cash equivalents. Based on our current operating plans, we believe that we have sufficient cash and cash equivalents to fund our operating expenses into 2018. With that, we can open up the call for questions. Operator?

[Stephen Hurly:]

Thank you once again everybody for your participation. You may now disconnect. Everyone have a great day.