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Citi Global Healthcare Conference

February 25, 2013, 1:30 pm ET



Unidentified Corporate Participant

Good afternoon. I’m looking forward to telling you about GTx. This is an exciting time for us. Before I do that, I do need to tell you that I will be making some forward-looking comments and I will refer you to the SEC filings included in our quarterly report, Form 10-Q filed November 8, 2012.

GTx has two late stage programs and we’re moving pretty quickly with both of them. We’re very, very excited. We’re in an excellent position at GTx. A lot of the news will be coming out by summer.

The first program is Enobosarm. Enobosarm is the selective androgen receptor modulator for the prevention and treatment of muscle wasting in patients with non-small cell lung caner.

It’s been in eight clinical trials and that included about 600 subjects. And I’m happy to report now we’ve fully enrolled our two Phase III programs adding another 650 patients to the safety database and we’re expecting to see top line data in the summer and I’ll tell – give you some more details somewhat dynamic but you’ll see why in a moment.

DSMV has met in October, agreed the trial can go as planned and the next DSMV meeting will be in April.

The second late stage program is Capesaris. This is an oral ER alpha agonist to be used in combination with primary ADT or as the first secondary hormone therapy. And eight trials have been done to date with this one and it’s currently in a Phase II, I call it Trojan horse study and you’ll see why in a moment, in metastatic castrate-resistant prostate cancer.

Let’s talk about Enobosarm. Well, Enobosarm is a selective androgen receptor modulator. Think of it as a testosterone product that’s not a steroid but it mimics testosterone, binds to the androgen receptor, it builds muscle, it builds bone.

But unlike testosterone, it does not cause hair growth, for example, in women. It doesn’t cause the voice box to get large. It doesn’t cause edema in men, at least (inaudible). It’s a selective agent.

And we have decided the best place to put this oral antibiotic agent is into a cancer-related symptom called muscle wasting, which is prevalent in all cancer types. And interesting, in cancer what happens is unlike starvation wherein starvation you lose weight, you lose muscle and you lose fat. As we see the patient who’s starved, the muscle and the fat will come back.

In cancer patients, they selectively lose muscle and then after they lose muscle they begin to lose fat. And if you give them nutrient fat calories back they do not grow that muscle back. They are in total catabolic activity. So they really need help with an anabolic agent.

So with that said, why do we pick non-small cell lung cancer? The reason we picked non-small cell lung cancer is we did a Phase IIB with five different cancer types. All of the cancer patients lose muscle and then lose fat.

But lung cancer is one of those cancers where they lose it in a timeframe that you can do a clinical trial and get the answer in an expeditious manner and it’s also the number one, unfortunately, cancer, both in men and women, so it’s a large market.

Now, it turns out at diagnosis half the patients with non-small cell lung cancer will have already presented with severe muscle loss. This is not the same thing as weight loss. So weight loss is a very different metric.

Weight – I mean, you could have obese patients that have muscle loss and I remember recently sitting in an oncologist office to meet with a gentleman that was part of our trial and I watched an obese patient walk across the room with a walker.

Muscle loss is independent of fat and it’s the muscle that’s a quality tissue that gets the patient into trouble. So half the patients with non-small cell lung cancer will present with muscle loss. Another 70% will go on to lose muscle and 88% already complaining at the time of diagnosis Stage 3, Stage 4 that already have lower body functional limitations, including inability to climb stairs, lift or carry 10 pounds, walk a quarter mile, stoop, crouch or kneel.

Anything that requires the quadricep muscles, the muscles of locomotion is where they get into trouble. And it incidentally turns out that the quadricep muscles are also the most sensitive to testosterone.

Performance status is a predictor of whether a patient will tolerate chemo. Performance status is the primary reason patients are not offered treatment and it turns out that performance status will independently predict the likelihood of hospitalization, the ability to maintain independence and survival.

Now, the Phase IIB, we did an analysis. It was an ad hoc analysis to look at the data the same way we’re looking at the data in our Phase IIIs. And essentially there were 61 of the 159 patients in this study that had non-small cell lung cancer and the mean weight loss at entry was 9.7%.

And we were able to show that when you look at a responder’s analysis, the definition of a responder’s analysis – we usually pick this definition – is this is the definition that the FDA and GTx agreed would represent clinical benefit. That’s important.

What you don’t want to do is be in a position where you look at your active compound versus your placebo and at the end of the study then have a discussion with FDA about what the clinical benefit means.

So what we did was we picked clinical benefit definition first, which is defined as maintaining your lean body mass and the second clinical benefit would be a 10% improvement in power measured by stair climb.

If you hit that, you’re a yes. If you die, you’re a no. If you don’t come in for the assessment, you’re a no. If you come in for the assessment and you don’t make it, you’re a no.

So it makes it very clear how many people in the placebo group make it, how many people in the treatment group make it and it’s that percentage that you compare.

So we did that in this study for physical function, stair climb. About 20% of the placebo patients were able with their chemotherapy alone to have the ability to improve their stair climb power by 10% or more. With the Enobosarm it was 42%.

And for lean body mass, being able to maintain their lean body mass or improve, it was 24% and it was 42% for Enobosarm. So what that means is that in addition to chemotherapy, we were able to show an additional benefit. Then from a safety standpoint, it’s really not much different than placebo.

Now, this is a trial that’s being run now. It’s international. We have had discussions not only with FDA but also with two countries that are national authorities and that’s EMEA and it has agreed to the trial design. So this trial could be used for filing both in the US and in Europe.

The indication we’re going after is the prevention and treatment of muscle wasting in patients with non-small cell lung cancer and the biggest issue that we have to sort through is whether or not these patients with Stage 3 or 4 lung cancers that are starting chemotherapy, whether or not it’s the chemotherapy that’s making them maintain the physical function and maintain their lean body mass and improve their physical function or is it the chemotherapy.

So we’re very, very careful to make sure that they start the medicine, whether it’s our drug or the placebo right when they start first line chemotherapy, not in the middle, not in the end, not during second line, right at first line.

Then they get four cycles of chemotherapy and at the end of four cycles, which is basically at three months, we go back and we look at the lean body mass measured by (Dexa) and we look at our physical function measured by stair climb.

All of these endpoints have been agreed upon by FDA. And that’s when we have the least missing data. And then the patients that resond, i.e. maintain their lean body mass and have an improvement in physical function, we follow them for two more months and to show the durability of the response. So it is a five-month study.

POWER 1 and POWER 2, the only difference between those two trials is the chemotherapy. Remember I told you the chemotherapy is what we’re trying to control for.

So in the POWER 1 study, they get the standard platinum doublet with a (taxane). In the POWER 2 study, they get a standard platinum doublet with a non-(taxane). And that’s really the only difference in the two studies.

In addition to measuring physical function of lean body mass and looking at the responder’s analysis, w’re looking at other endpoints that will be important as we think about the market and how we’re going to position the agent.

It’s not a (megase). This is not an appetite drug. It’s not a weight drug. It’s a cancer-related symptom treatment or prevention lean body mass drug. So the other end points we’re looking at is quality of life, healthcare resource utilization, adherence to chemo plans and tolerance to chemo, in particular the different side effects the chemo – the sicker versus not.

And the FDA sees this as a medical need and has granted us fast track status last month. So survival is one of the things that we are following. Survival is being followed as a safety end point.

The concept here is that if we do show and improvement in the patient’s ability to take chemo and they get more chemo or they maintain their plan, they may see a benefit in survival.

We did see a positive survival trend in our Phase IIB and we’re going to formally look at it in this study.

In terms of timing, the studies completely enrolled in December of 2012, five months, so the last patient that will come through will put us in May. So in May is when we expect the last patient to come out.

(Had) previously guided that we expected to see the data in June, July. June is the end of the second quarter. July is the beginning of third quarter. We believe we’ll be probably closer to the third quarter. So it’ll be in the July, August timeframe. We don’t know. It’s dynamic.

We know the last patient’s out in May. We have eight country and 80 sites to clean up and we’re going to do everything in our power to get the data.

Once we get the data, then we plan to announce top line data. There are three parts to top line data. One will be the of course whether we hit the code primary end points or not. Second will be some statement on safety and third will give an update on survival.

And the reason it’s an update is because we need to hit 450 deaths to make a decision and we will not have hit 450 deaths at the time that we present the top line data but we’ll at least tell you the numbers of deaths in each of the arms. This way you can get a sense. All the FDA cares about and it’s descriptive is that we’re not a detriment to survival.

Big market opportunity in non-small cell lung cancer that I mentioned is the number one cancer in both men and women, particularly the number one killer. It’s about 207,000 patients in the US of which 161,000 will be Stage 3 or Stage 4.

Half of them already present with muscle wasting and the other – 70% of what’s left will go on to develop muscle wasting.

We did formal market research, independent group. And in the market research, the baseline characteristics of the drug is that we improve physical function and we increase muscle mass and these were considered to be the two most favorable clinical attributes of Enobosarm.

Survival was not factored into it. And the reason for that is even chemotherapy, toxic chemotherapy is not able to change the eight to 12-month survival of these patients. And if you can’t get chemotoxic therapies to improve survival then how are you going to expect and anabolic agent to do that?

Now, we do believe we’ll see a trend. We do think that if the patient has a better performance status that we’ll see a benefit but you can’t put that into your models.

The other thing is that the concept here is can you keep a patient out of the expensive care? In other words, you only (get them) for eight to 12 months. Where do you spend that eight to 12 months. Do you spend it in hospitals with expensive therapies and healthcare utilization and walkers and nursing skill, nursing care or do you let them stay at home and let them do the things they want to do?

And so they spend more time with quality of life issues but, more importantly, not using as much in terms of healthcare.

So we looked at that and spoke to payers and 80% of the payers said they would cover Enobosarm with or without restriction. In fact, it was Tier III is where they thought they would cover it. And the rack was between $1500 and $3000 a month which is very consistent with other cancer-related symptoms type medicines like (Xteva), which is $55 a day, (Zometa), which is $40 a day and then lastly which is to prevent or treat the nuripenia with chemotherapy is about $5600 per dose.

We face on the lower end of the spectrum, so $1500 a month. At peak, we expect it just in US alone that non-small cell lung cancer will be in the order of about $750 million annual opportunity. This does not include Europe and this does not include other cancer types.

The IP is strong. We have the first composition of matter of patent would run out in 2024. And with the patent extension of five years, it would be 2029. We have issued patents in the us, issued patents in Japan and we just recently learned that there’s been no opposition to our patents in Europe and we expect that one to be issued shortly.

All right, move to Capesaris, the second late stage clinical program at GTx, this is a drug and this is – one of the things with (insoludomide) and (apparatarone) is people have become very familiar with the prostate cancer landscape, so it actually makes my job a lot easier.

Prostate cancer is moving in a direction very much like breast cancer and that is a patient with advanced disease will be treated with multiple different hormone therapies before they move to chemotherapy.

So prostate cancer is moving in the same direction and what’s going to determine which hormone therapy is going to be used first is going to be the efficacy and the safety. And you’re not curing these patients, unfortunately, but if you can keep delaying and delaying and delaying progression – the progression of the disease and putting off death, that would be a good thing.

The other thing that would be nice is if you could treat some of the side effects of the treatment at the same time.

So right now the current landscape is patients who develop advanced prostate cancer are put on (Lupon), a (Lupon)-type drug, which is an LHRH agonist. That’s what castrates the patient.

The patients unfortunately will break through that and develop what’s called castration-resistant prostate cancer and the concept there is that you would treat those patients with another hormone therapy that they continue to respond to hormones.

Now, do they continue to respond to hormones because it didn’t have an effective castration to begin with, in other words, the testosterone levels weren’t low enough? Or do they just happen to have these super agents to lower their testosterone levels even more?

So right now the landscape is you have (insoludomide) and (Abaradamone) in a post-chemo setting, (Abaradamone) in a pre-chemo setting and more and more people are pushing off chemo to the end and I really think we’ve reached the age of hormonal therapies.

We believe that Capesaris is positioned for either being used in combination with (Lupon) where you can make the testosterone even lower than (Lupon) alone without the side effects of estrogen deficiency or as the first secondary hormone therapy for patients that break through (Lupon) and develop castrate-resistant prostate cancer.

The reason for that is no use of prednisone and if we can get our VTE rate an acceptable range, then we should be the drug of choice in this area.

The drug works in four mechanisms. The feedback inhibition on the brain to shut off LH, a classic mechanism of estrogen, increases SHBG which is unique to this compound. SHBG is a protein that when it’s made by the liver grabs all the testosterone it can get and it does it in a tight fashion essentially irreversible, so it’s not available for cancer cells and it’s that unbound testosterone to cancer cell C, has direct effects on the cancer itself and it also may have effect on the adrenal to shut down adrenal production of (inaudible).

This is a complicated slide but it really drives home a great point and that even though 100% of the testosterone in the blood can be measured, whether it’s available for the cancer cell depends on what’s bound to SHBG. So the higher SHBG goes up, the less that fraction of free T, the stuff that floats around, will be available.

This is the day that from the baseline of the patients that will put on Capesaris – and you can see it, baseline – here’s the SHBG. Then as soon as they go on our drug, Capesaris, you drive that SHBG up and it really squeezes the free T to practically undetectable.

It’s that mechanism that’s basically doing kind of the same thing these other drugs are doing in a different way. What do I mean?

Well, (insoludomide) is blocking the androgen receptor, so it’s blocking the receptor so you can’t see the free T. (Abaradarone) is blocking inter-tumor production of T as well as peripheral T but you have to do it at the expense of prednisone. And then our drug does it by increasing SHBG, lowering free T but while doing that also protecting the bones and no hot flashes and metabolic issues such as insulin resistance is less.

So in our Phase II studies we proved that the mechanism exists; we can increase SHBG, lower free T and have amelioration of the estrogen deficiency side effects. We were able to show that in three trials and but the doses that we used were as high as three grams a day and the lowest dose we used was 1000 milligrams a day.

And what we learned was those high doses gave us the efficacy but the safety issue that we got into, which is common for this class, is blood clots. And so with that, we decided to come back, lower the doses because it turns out that SHBG is a very sensitive protein. It goes up pretty quickly. It doesn’t require those mega doses. So we’re running a study now called the Trojan horse study because it’s going to get us into the city of Troy which means we can get into the earlier use in prostate cancer.

We’re not developing it, the metastatic castrate-resistant prostate cancer. We want to develop it for combination primary ADT or for non-metastatic castrate-resistant prostate cancer.

The way the trial works is we’re treating 25 patients in each of these cohorts, 125 milligrams, 250 milligrams, 500 milligrams, compared to the 707 study which is the one we did with similar patients. This is about 20 fold less than what we gave before.

So the pushback that we’ve gotten – we’re enrolling as we speak. The pushback that we got was, oh guys, you’re going to handle the VTE issue but the concern is you’re not going to have any efficacy. You’re just too low.

We’ll, I’m happy to report and we reported this last week, that in the patients that are in the 125 milligram cohort, we don’t have it already filled and (secluded) as we speak, but we’re getting the, the 125 milligram dose is increasing SHBG, is lowering free T. We’re seeing the PSAs come down and the degree of increase in SHBG is almost the same as if we gave the patient two grams each day.

So all that’s telling you is the liver saturates pretty quickly and we’re feeling pretty good that even at the lowest doses that we pick, we just pick doses that are too high. So far safety looks good and we’ll continue to update you as we move along. But we’re expecting that in summer time we’ll have more data for everybody.

We’ve picked a very important steering committee that will help us with this. Most of these KOLs that are on the steering committee were also involved with (Abaradarone) and (insoludomide) and (Phil Cantop) just recently has been named chair of the steering committee and, again, he was a big proponent, actually programs he was involved with (Abaradarone). He was involved in (insoludomide) and they believe that the best place for this drug will be early use because you don’t need the prednisone, you are protecting the bones and treating the estrogen deficiency side of it.

Oh by the way, you have to have efficacy. No one expects any of these hormone therapies to cure the patient. The question is how do you rotate them through and give them the best quality of life as you move towards chemotherapy?

And in fact, we had an investors hour at (GUASCO) – I’m losing track of time. I think it was last week some time and if you go to our website you can actually call up to the presentation and see the slides and also hear with the three experts that were at the panel, (Phil Cantop) from Harvard, (Tom Flay) from the University of Colorado and (Evan Hugh) from the University of Washington Seattle.

So the game plan is to have the study completed, open label, so we can provide information on the efficacy and safety of the drug as well as – efficacy being the mechanism match which is increasing SHBG and lowering free T and then to provide you information on the PSA responses and to give you clarity on where we’re going clinically which at this point we’re shooting for primary ADT and combination as well as non-metastatic castrate resistant prostate cancer.

We have about 43 composition matter method of use patents. The first of them will expire in 2029 and with the extra five years as a patent extension will be 2034.

So where we stand financially, we have 62.8 million shares outstanding. Our cash is at $56.1 million that we reported December 31, 2012 and we have no debt. We have no warrants. So that’s GTx.

We have a lot of news coming out during the summer timeframe with both Enobosarm, two Phase III programs that we would then to move to file both in the US and Europe and then Capesaris will provide clarity and where we’re moving forward clinically with the better understanding on the efficacy and safety of a very active agent that is a different mechanism, a different hormonal mechanism that what’s out there currently.

So I think this is the time I get to answer some questions.

Question-and-Answer Session

Unidentified Analyst

I have a question on Enobosarm. Given that the drug has some (inaudible) status, when do you think it’s a realistic time to prepare for an NDA? I think you mentioned around mid ’14 you said?

Unidentified Corporate Participant


Unidentified Analyst

And also where the (inaudible) around the drug and what parts (inaudible)?

Unidentified Corporate Participant

All right, so one of the – so the question has to do with the fast track status and typically the fast track status means that the FDA has recognized that this is a medical need and there are no alternatives and, therefore, they’re willing to work with the company with frequent communications to help guide you along.

The second part of it is that it doesn’t guarantee but it does make the likelihood of a primary review more likely and the third thing about a fast track is you’re allowed to do what’s called a rolling NDA which means that you’re allowed to submit portions of your FDA – of your NDA for review rather than sending it all in at once.

So I’ll take the last part first. Today that’s not practical. Today you submit an electronic NDA. They have no clock that says they have to review it. Why should they review it until they have everything place? So usually the rolling NDA thing sounds good but it’s not practical.

So really you’ve got to file it all at once. So to us, the value of the fast track is the FDA making it clear that this is not something – I mean, they will tell you there are other alternatives. We’ve dealt with them before where we had a program where it was very clear to them there were other alternatives and they told you that in writing.

This is not one of them. (Megase) is not an alternative. (Marinol) is not an alternative. This is the first muscle wasting agent to be developed for prevention and treatment.

In terms of when to file an NDA, where we stand with that is our goal is that we’re shooting for the end of this year, beginning of ’14 and what’s going to determine that is not the data that we get back but we’re also running a bunch of Phase Is that are required for the label.

Some of them are doing it risk and some of them are not doing it risk. And that – but the ones that are not doing it risk should not be the critical path because they all could be done in a timeframe that lets us file the NDA in that timeframe. So that’s what the rate limiting step is there.

Unidentified Analyst

I’m just curious as to why you picked (inaudible) as an endpoint for the Capesaris given just the relevance of that endpoint these days with all the other agents.

Unidentified Corporate Participant

So the question is why PSA reduction is greater than 50% as an endpoint. Well, I would have agreed with you two years ago. What has happened over the past two to three years is that there’s been a readout of two very important Phase III programs.

In fact, the reason I’m hesitating is there’s actually three. You can count the pre-chemo for (Abaradarone) and prednisone. So the prostate cancer working group two has laid out the endpoint that people working on prostate cancer agents and patients with castration-resistant prostate cancer should follow.

And the endpoint that is in the prostate cancer working group two group is that a PSA greater than 50% reduction at 12 weeks is your endpoint. What’s not known is whether that endpoint has any relevance to progression-free survival, overall survival because you cannot get approved on a PSA endpoint. You can only get approved on for castration-resistant prostate cancer, on progression-free survival; and if it’s metastatic castration-resistant prostate cancer, overall survival.

If you are in hormone-naïve prostate cancer, testosterone is the only endpoint you need. Every product that’s being used for hormone-naïve prostate cancer, all you have to show is you can reduce total testosterone less than 50 nanograms per deciliter and that’s all you need to show.

Now if you label doesn’t say you’re curing the patient, the label won’t say survival, the label won’t say progression-free survival. The label says you can castrate. That’s it.

But what has happened in the last two to three years is now we have that correlation. It turns out the only way (Abaradarone) and prednisone moved to Phase III and the way it was powered was not on (CFS) and not on overall survival. They were Phase IIs and they used a PSA reduction at greater than 50%, the same thing with (insoludomide).

And they went on to Phase III and ultimately showed progression-free survival and overall survival. And that was the first time in prostate cancer’s history that we had the link between what they saw in an earlier study using that to power the Phase III study.

Now, does that mean PSA can be used as an endpoint? No, not at all. But what it does mean is that we now have good evidence that if you have good PSA responses it should translate to the more regulatory approvable endpoints, which would be progression free survival and overall survival – could not say that two years ago.

In fact, what I could say today I couldn’t even say a year ago is there appears to be a correlation now between progression-free survival and overall survival. We didn’t know that before and that’s because of the three studies showing every time you hit overall survival you also hit progression-free survival.

And let me qualify that. That’s radiographic progression-free survival. That means looking at soft tissue and bone, not just bone alone. So, yes, there’s been a transformation that we could take advantage of in our clinical program but PSA is an endpoint and it’s purely a screening, if you want to call it that, endpoint but is not an endpoint that would be in a Phase III.

Unidentified Analyst

(inaudible – off mic)

Unidentified Corporate Participant

In the Phase III setting? Absolutely you can. No, again, the negative there is these are small numbers of patients and you are going to get very limited information. In typical PSF studies you want about 1000 patients per arm.

So with just 20 to 50 patients or even 75 patients, you’ll get some information but it will never be enough to power a big study.

Any other questions? Great, well, I thank you for your attention and look forward to updating you on GTx’s progress in the future. Thank you.

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