ZIOPHARM Oncology, Inc.
Q1 2018 Earnings Call Transcript

Published: 11 May 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the ZIOPHARM First Quarter 2018 Earnings Conference Calculations. [Operator Instructions]. I would now like to introduce your host for today’s conference, Mr. David Connolly. Sir, you may begin. David Connolly Thank you. Earlier today, we released our financial results for the first quarter 2018 with a press release available on our Web site, ziopharm.com. During today's call, representatives of the company will make a number of statements that are forward-looking, including statements regarding the potential of the therapeutic candidates in our development pipeline, forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control including the risks and uncertainties described in our SEC filings. On the call today are Dr. Laurence Cooper, our Chief Executive Officer; Dr. David Mooney, Executive Vice President, Chief Business Development Officer and Interim Chief Operating Officer; and Dr. Francois Lebel, the Executive Vice President of Research and Development and our Chief Medical Officer. Also we have on the call Brennan Doyle and Mike Biega from the Trout Group, our new IR agency. Thank you both. We are excited to have you on board. And now Dr. Mauney will begin today’s call and he will be followed by Dr. Cooper, and then we will take questions as time allows. With that, I will turn the call over to Dr. Mauney.

[David Mauney:]

Yes, so thank you, Dave, and thanks to everyone who is joining us for this call today. It's much appreciated. We will start with Slide 5. In the last several months we’ve made considerable progress in multiple areas and we now sit on the cusp of major value inflection points for our two key platforms, controlled IL-12, and Sleeping Beauty with point-of-care manufacturing. Our story is resonating well with potential strategic partners with whom our dialogues continue. These ongoing conversations have been critical in guiding our clinical, operational and financial plans going forward, and we're iterating those plans accordingly. We do realize our shareholders are frustrated and that we have not recently closed on a third-party transaction. We hear you and this can be especially frustrating since we’ve seen strong M&A and investment activity in our sector. The key point though is that the outside interest we have is real, but we’re not going to simply do a deal to check that box. We remain optimistic and confident as we plan to hit critical milestones across both of our platforms in the coming months, each of which has the potential to create immediate value. In order to have financial flexibility to achieve a better position of strength with that data, our number one priority has been to secure our balance sheet beyond 2018 with a development plan that resonates with our potential partners and is least dilutive to our shareholders. As you saw in our press release, those plans are now in place and our existing cash will last well into the second quarter of 2019. All of this with the benefit that we will be adding additional potential clinical markets at the same time. Our controlled IL-12 platform is maturing and expanding. We believe we are a leader in this field and expect to maintain that position and accelerate clinical activity into to new tumor types in the coming months. With regards to our Sleeping Beauty platform, we could not be better timed in terms of its need and the public spotlight. It's not only our politicians, but also healthcare constituents who are laser focused on drug pricing and the immediate need to significantly reduce expense. The sky high cost of current CAR-T therapies, in particular, are center stage, and our Sleeping Beauty point-of-care system is ideally suited to address these challenges. Now let's turn to our controlled IL-12 platform for the treatment of solid tumors. To repeat our theme, the idea here is to make immunologically cold tumors hot by calling in the bodies T cells via the tunable control of IL-12. Once these cold tumors are flush with cancer fighting T cells, the gates are now open to turbo-charge the effects by adding in combination therapies like checkpoint inhibitors. We want to remind our shareholders just how much clinical experience we have with this program. In summary, we've treated more than 80 patients in total across three cancers

[Laurence Cooper:]

Thank you, David. Thank you very much. As we’ve been saying since January, 2018 is important year ZIOPHARM. As the clinical development of cytokines and T-cell therapies are playing to our strengths. We said that using IL-12 can make cold tumors hot, which essentially means we can create a new immune attack where one did not previously exist. And this will significantly advance the fight against solid tumors. We believe that we're the leading company with regards to dosing IL-12, which is among the most powerful of the interleukins. We also said expense, complexity and time to manufacture genetically modified CAR-T cells with existing viral-based approaches, would offer only limited access to patient's at far too greater cost, and this script is clearly reading out over the recent months. This year we plan to be the first in the world to deliver autologous T cells to patient's that were manufactured in today's or less with a simple process and ultimately a lower cost. Finally, we said the CAR modified T cells will have limited utility to target solid tumors. And this is currently the case. 2018 is the year that our Sleeping Beauty platform will be adapted to generate TCR modified T cells, targeting solid tumors in a clinical trial in partnership with the National Cancer Institute. Slide 10. Let me address changes to the clinical platform plans regarding the IL-12 program. Based on experience with the approximately 80 treated patients to date, we understand this platform in ways that allow us to expand into new tumor types, new combination. We know that more data in more patients and in more cancer types will help rapidly build value for this platform. Recurrent glioblastoma remains an important indication for us and importantly for patients. While we have paused the pivotal trial, our work continues in this disease. In addition to our expansion substudy, we continue to evaluate stereotactic administration of IL-12 as well as our pediatric studies. Our clinical studies in the three tumor types

[Bin Lu:]

Hi, guys. This is Bin Lu on for Reni Benjamin. Thank you for taking my questions, and congrats on the progress made in the past quarter. I’ve two questions on IL-12 programs, if you don't mind. The first one is -- a bit of high-level question is, just given the results we've seen with other cytokines, for example, IL-2 or IL-10, as well as the big pharma's interest in cytokines -- in those cytokines, I was wondering if there are any learnings that you can claim for your IL-12 product? And any similarities or differences in the underlying biology so that your IL-12 could deliver something similar or even better? And then I’ve a follow-up.

[Laurence Cooper:]

Yes, a great question. So there's no head-to-head comparison you know for instance IL-10, IL-12 to IL-2, but there's certainly important learnings from the literature. And I give you sort of the general sense that IL-12 is certainly a master regulator of immune response. We know that IL-12 can remodel the tumor microenvironment. For instance, there can be immunosuppressive factors that occur in the tumor microenvironment known in the -- known by immunologists as Th2 responses. Those Th2 responses under essentially the control of IL-12 can be switched to Th1 responses, which are much more -- would give much more anticancer effects. So that’s a very important part of the story, because essentially you’re changing the immunosuppressive qualities of a tumor microenvironment to the ability for T cells to act and react within the tumor under IL-12. We also know that IL-12, for instance, can kick off IL-2. So, in other words, IL-12 is the dominant cytokines that then in a feedforward [ph] loop results in a cascade of cytokines by these immunologic effector cells, IL-2 being one of those actors, gamma interferon being another. So the key kind of top line sense is that IL-12 is the master regulator. But just to kind of go on a little bit here -- IL-12 has been recognized as the master regulator for quite a while, but it's only ZIOPHARM that’s been able to control IL-12, because you have to be able to tune the IL-12 dose basically to the patient's need. If the patient is going to benefit from this master regulator, and we've done that using the RheoSwitch system. And then your last part of your comment is what do we learn about big pharma, and that's exactly why we’ve made the pivot where we paused the randomized control trial because we see what's going on in the field with the partnerships of companies that can make cold tumors hot. IL-2 can make cold tumors hot. IL-12 can make cold tumors hot. And all importantly, IL-12 can make cold tumors hot, and we think this -- as I said in my thoughts, this will really open the bigger door towards potential partnership.

[Bin Lu:]

Great. Thanks a lot. That’s very, very helpful. And -- so the one follow-up on IL-12 is, so you mentioned that across all trials or different tumor types, approximately 80 patients have been treated with this product. So I was wondering on your hypothesis that this IL-12 can turn cold tumors hot, I was wondering how many patients have you biopsied to sort of test that hypothesis? Thank you.

[Laurence Cooper:]

Yes. So some of the clinical protocols allow for those biopsies, and you have to also respect the wishes of the patient's. What I can say is that in each of the tumor types, melanoma, breast cancer, and glioblastoma in each of those examples, we have definitively seen that cold tumors go hot. So, for instance, in breast cancer, we treated the patient with about a week of veledimex following the administration of the virus to deposit the IL-12 into the control of the switch, and then we waited five weeks. And we went back into the patient and we re-examined the tumor, and we can definitively see cold tumors going hot. In other words, there's influx of T cells and those T cells are not just there counting them on a slide. They are there actively producing gamma interferon. They are at war with the cancer cells. We know they’re biologically active. And the same type of biology we saw in the glioblastoma. We treated the patients in the recurrent setting with 14 days of veledimex after the injection of the adenovirus into the tumor. The patient have the safe delivery of IL-12, and then we waited months. In some cases up to six months before going back into the area that we injected and we saw just beautiful data, where we saw the T cells that were now invading into the tumor, cranking out gamma interferon. In other words, activated and angry going essentially to battle with the glioblastoma cells. In other words, definitively seeing that the cold tumor -- the cold glioblastoma goes hot.

[Bin Lu:]

Got it. That’s very helpful. Thank you. Good luck going forward.

[Laurence Cooper:]

Thank you.

[Operator:]

And our next question comes from the line of Eric Joseph from JPMorgan. Your line is now open. Eric, your line is now open.

[Eric Joseph:]

Sorry, I was on mute there. Thanks for taking the questions, guys. I was just looking for a little more color around the rationale for pausing the pivotal GBM program. Just wondering if you could talk a bit about sort of what the remaining CMC hurdles are that you outlined here and whether you the ability to address those with the current processes you have in place or in fact, the Phase 3 we should think about that being more partnership dependent? And then I’ve a follow-up.

[Laurence Cooper:]

Sure. Thank you. So, yes, we actually talked about this at the conference back in January about our work in the -- essentially preparing the adenovirus for being a Phase 3 pivotal asset. And the -- essentially because we have rapidly gone from Phase 1 to Phase 3, there were some additional work to be done on qualifying that virus for a pivotal trial. It really went to the issue of potency, and those studies, they’re almost resolved now. So it's really not a major issue, but it's sort of a procedural issue and a box that we checked for us.

[Eric Joseph:]

Okay, got it.

[Laurence Cooper:]

Does that help, Eric?

[Eric Joseph:]

Yes, it does. And then I just had a question about the TCR program, whether you can kind of shed some insight into if -- whether there are particular solid tumor indications that you the NCI are focused on …

[Laurence Cooper:]

Yes, that’s a …

[Eric Joseph:]

… based on biology and unmet need.

[Laurence Cooper:]

Yes, yes. I mean, I think the way to think about it is, the NCI is the last stop for many of our nation's patients. Really, the patients with the worst disease end up at the NCI for treatment and this is something that Steve Rosenberg really has an international reputation for. So these are cancers that are going to be metastatic. They’re going to be epithelial. In other words, they’re going to be carcinomas and they’re going to be basically refractory to every other therapy. So we are in the business to create life-saving therapy for these patients. This is essentially the worst of the worst, but these are the patients who, I personally as an oncologist, and I'm sure all of the people on the phone call really want a help. And we’re going to do so by generating T cells that are targeting essentially the mutations that gave rise to those patient's tumors using the Sleeping Beauty technology and essentially personalizing the therapy for these individual patients. Great. There's a little bit of [indiscernible] maybe Eric to make sure I answered your questions here.

[David Connolly:]

Operator?

[Operator:]

And our next question comes from the line of Keith Markey from Griffin Securities. Your line is now open.

[Keith Markey:]

Hi, Laurence, David. Thanks for taking my questions. I have -- I was wondering if you might be able to elaborate a little bit about the pediatric Phase 1 trial that’s ongoing. How many patients, how many sites are involved, that sort of thing?

[Laurence Cooper:]

Yes, we haven't gone too far on that, Keith, yet. So, sort of stay tuned is the answer for that question.

[Keith Markey:]

Okay. And then do you have any -- or can you give us a sense as to what types of tumors you might explore with the upcoming Phase 1 -- I would assume, Phase 1 trial of IL-12?

[Laurence Cooper:]

Yes, in combination. So, obviously, the first one that we got initiated was in recurrent glioblastoma.

[Keith Markey:]

Sure.

[Laurence Cooper:]

And the company now is looking at other tumors. And some of those conversations, Keith, are really driven by our potential partners because as you can imagine, for instance, if we were to align with a company that delivers an immune checkpoint inhibitor, that company has a particular interest perhaps in a certain cancer, and we would want to align especially with those needs. And that also plays to our strengths because in three for three cancers, we can turn cold tumors hot. So we know in these 80 patients, these thousand doses now of veledimex across three cancer types, in every situation, cold tumors go hot and I think this is very appealing to potential partners as we consider what tumor indication to go after.

[Keith Markey:]

Okay. Thank you very much.

[Laurence Cooper:]

Yes, thank you.

[David Connolly:]

Being no more questions, that will be the end of the call. Take care, everybody.

[Laurence Cooper:]

Thank you so much.

[David Mauney:]

Yes, thanks everyone.

[Operator:]

Ladies and gentlemen, thank you for your participation in today’s call. This does complete the program and you may all disconnect. Everyone have a great day.

[Laurence Cooper:]

Thank you.