GTx Inc. (NASDAQ:GTXI)
Q1 2013 Earnings Conference Call
May 3, 2013 9:00 a.m. ET
Mitchell Steiner – CEO, Chairman of the Board
Brian Klein – Stifel Nicolaus
Ryan Martins – Lazard Capital Markets. LLC
Good day, ladies and gentlemen, and welcome to the Q1 2013 financial results and Company update. My name is Gary and I will be your operator for today.
At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions). As a reminder, this call is being recorded for replay purposes.
I would now like to turn the call over to Dr. Mitchell Steiner, CEO of GTx. Please go ahead.
Thank you, operator.
I will be making forward-looking comments during today's call, and I direct you to the press release of our financial results we filed today in the annual report filed on Form 10-K with the SEC on March 5, 2013 where we discuss the risks and uncertainties that may affect our business.
I will begin with an update of our clinical programs, starting with our two Phase 3 clinical studies, Power 1 and Power 2 of Enobosarm 3 milligrams for the prevention and treatment of muscle wasting in patients who have non-small cell lung cancer.
We have enrolled into each clinical study approximately 325 subjects who have either Stage III or Stage IV non-small cell lung cancer in over 80 clinical sites located in the United States, Europe, Russia, and South America. The objective of these studies is to determine the potential of the Enobosarm 3 milligrams versus placebo to prevent and treat muscle wasting in advanced non-small cell lung cancer patients, when given at the same time they initiate standard first-line chemotherapy consisting of a platinum doublet.
More specifically, in Power 1, subjects are receiving a platinum – cisplatin or carboplatin plus a taxane, docitaxel or paclitaxel. And in Power 2, subjects are receiving a platinum plus a non-taxane, gemcitabine, Vinorelbine or pemetrexed.
For this indication, clinical benefit, which is determined at day 84, is defined as maintaining or improving total lean body mass or muscle assessed by (dexep) and improving physical function assessed by Stair Climb Test. The co-primary endpoints for each of these studies consist of a responder analysis of clinical benefit. Durability of the drug is being evaluated as a secondary endpoint at five months of treatment in those patients who are determined to have responded at day 84.
Other key end points from these studies which, if demonstrated, should be important in the discussion with payors about the drug's pharmacoeconomic benefits are improvements in quality of life, reductions in healthcare resource utilization, increases in the likelihood of patients who will receive their planned chemotherapy, and improvement in overall survival.
Muscle wasting in non-small cell lung cancer is a common and devastating cancer-related symptom for which there are no medical treatments. In fact, we announced in January of this year that FDA has designated Enobosarm for the prevention and treatment of muscle wasting in patients with non-small cell lung cancer as a fast-track development program. The IND for Enobosarm is assigned to FDA's Oncology division. And this designation is consistent with my previous points on the seriousness of muscle wasting as a cancer-related symptom.
Fast-track status is a process designed by FDA to facilitate the development and expedite the review of new drug candidates that are intended to treat serious diseases and have the potential to fill an unmet medical need. With a fast-track designation, there is an increased likelihood; we will receive a priority review of a New Drug Application filed for Enobosarm and more opportunity for us to have frequent interaction with FDA, both prior to and following the filing of an NDA. FDA clearly recognizes muscle wasting in these cancer patients as a serious and unmet medical need.
It should be noted that GTx has already conducted a successful, adequate, well-controlled clinical of Enobosarm in patients with cancer, including non-small cell lung cancer, which will be supportive of the findings from our Phase 3 clinical studies. More specifically, we conducted a randomized, double-blind placebo-controlled Phase 2 clinical trial of Enobosarm to assess its effects of muscle wasting and physical function in patients with cancer, the results of which were recently published in Lancet Oncology Online ahead of the April print edition; the Phase 2 clinical trial, which enrolled 159 patients with non-small cell lung cancer, colorectal cancer, non-Hodgkin's lymphoma, chronic lymphocytic leukemia or breast cancer, demonstrated significant increases in lean body mass, the primary end point, and physical function, one of the secondary end points, in patients treated with Enobosarm 1 milligram or 3 milligram oral daily doses.
Results from the trial included the following. Cancer patients receiving Enobosarm, either 1 milligram or 3 milligrams per day, showed a statistically significant increase from baseline to day 113 end of trial in total lean body mass and a significant improvement from baseline in the time and power in the Stair Climb Test. Cancer patients receiving placebo during the same period did not show significant increases in total lean body mass and no improvement from baseline in their mean time or power in the Stair Climb Test. In each of the cancer types, including those with non-small cell lung cancer, an increase in median lean body mass and Stair Climb power physical function was observed for both Enobosarm 1 milligram and 3 milligram with the greatest increase in lean body mass being observed in the colorectal cancer patients and the greatest increase in Stair Climb power being observed in the non-small cell lung cancer patients.
Although, the trial was not powered to assess survival in a post-hoc analysis, the survival has a ratio for patients assigned to Enobosarm 1 milligram versus placebo, was 0.8. And for those assigned to Enobosarm 3 milligrams versus placebo, was 0.7, representing a 20% and 30% improvement in survival, respectively. Enobosarm was generally well tolerated with the occurrence of serious adverse events; an overall pattern of adverse events being much the same among placebo and treatment groups.
We announced last month that, as per protocol safety review of the unblinded safety data by an independent Data Safety Monitoring Board, DSMB, resulted in a determination that GTx continue as planned its two pivotal Phase 3 clinical trials of Enobosarm. The DSMB has met every six months to review safety data from the two pivotal Phase 3 clinical trials and will not meet, again, until the data is locked and unblinded for a final assessment of safety data from the two studies.
With the last patient being enrolled at the end of December 2012, we expect all subjects to complete the two studies by the end of this month. And after taking into account the time required to finalize all patient documentation for both studies at clinical sites in eight countries in order to prepare for data lock, we currently anticipate that we will receive top line data from the studies in third quarter this year. We intend to share the top line data for both studies, Power 1 and Power 2, at the same time. The top line data, at a minimum, will include the co-primary end points of lean body mass and physical function, safety, and an update on the survival information available at that time.
We believe the prevention and treatment of muscle wasting in non-small cell lung cancer patients is an attractive market for Enobosarm. Approximately, 1.6 million people worldwide will be diagnosed with lung cancer this year, and the five-year survival rate for this diagnosis remains approximately – only approximately 15%, notwithstanding an introduction of many new cancer treatments. About 85% of all lung cancers are of the non-small cell lung cancer type, making this disease a leading cause of death for both men and women.
Our market research suggests that peak US sales from Enobosarm for the prevention and treatment of non-small cell lung cancer should be approximately $750 million. Of course, this estimate does not take into account sales outside the United States and the potential of Enobosarm to address muscle wasting in other disease states or to treat other indications.
We are already currently planning additional clinical studies for Enobosarm to address indications, where we believe there is a good opportunity to benefit patients and expand the drug candidate's commercial potential. For example, we announced earlier this week that GTx has initiated a proof of concept Phase 2 open-label clinical study to evaluate the potential of Enobosarm 9 milligrams to treat androgen receptor and estrogen receptor positive metastatic breast cancer.
Breast cancer is the most commonly diagnosed cancer in women, and the second leading cause of cancer deaths in women in the United States. Each year, over 200,000 new cases of invasive breast cancer will be diagnosed in the United States and approximately 39,000 women will die from the disease.
Clinical assessment of breast cancer includes routine characterization of a patient's receptor status, including the presence or absence of the estrogen receptor, progesterone receptor, and human epidermal growth factor receptor 2 in the tumor tissue. Receptor status is used to assess the potential for developing metastatic disease, as well as guiding treatment decisions. Hormonal manipulation with selective estrogen receptive modulators or aromatase inhibitors is the standard treatment given to patients with tumors that are estrogen receptor positive.
It is expected that a majority – 70% to 95% of subjects with estrogen receptive positive breast cancer will also express the androgen receptor in their primary tumor samples. High percentages – 72% to 84% of metastatic breast cancer lesions have also been found to be androgen receptor positive.
In preclinical and clinical studies, androgen suppressed breast cancer growth. In addition, multiple prior studies have shown that women with metastatic breast cancer, who have previously been treated with tamoxifen and have progressed do respond to nonselective androgens like fluoxymesterone, medroxyprogesterone and danazol with overall response rates ranging from 20% to 60%.
Although, these nonselective androgens have been used to treat breast cancer, the unwanted virilizing side effects, including unwanted facial and body hair, enlargement of voicebox, acne, and edema, have limited the widespread clinical use.
We believe Enobosarm, by targeting the androgen receptor, has the potential to selectively treat metastatic breast cancer, while minimizing the unwanted masculinizing side effects associated with androgens. If approved, Enobosarm would be the first new target in hormonal therapy introduced for the treatment of breast cancer in many years.
The proof of concept Phase 2 open label study will initially randomize 20 postmenopausal women with estrogen receptor positive metastatic breast cancer at approximately six clinical sites in the United States. The women who will receive 9 milligrams of Enobosarm once a day until they have evidence of clinical progression or have completed 336 days of treatment with Enobosarm.
The primary end point is clinical benefit, which will be assessed at six months and is defined as either those women receiving treatment, who have demonstrated a complete response, a partial response, or stable disease. The study will recruit women with metastatic breast cancer who have previously responded to androgen hormone therapy for three years or longer and women diagnosed with metastatic disease who have been treated with hormone therapy for at least six months and now have progressive disease.
Now, to update you on Capesaris, also known as GTx-758, an oral selective estrogen receptor alpha agonist developed by GTx scientists, which is in a Phase 2 clinical trial for the treatment of advanced prostate cancer. We believe Capesaris can offer a unique treatment option for men with advanced prostate cancer by reducing free or unbound testosterone to levels lower that can be typically achieved by LHRH agonist or surgical castration. Capesaris accomplishes this is by causing the liver to increase the production of a protein called sex hormone binding globulin, or SHBG, which binds very tightly to the unbound or free testosterone circulating in the blood and further reduces the levels of serum free testosterone in the castrate environment.
Treatment of prostate cancer with androgen deprivation therapy, or ADT, improves prostate cancer symptoms, but patients eventually develop castration-resistant prostate cancer as their cancer adapts and uses the available free testosterone in the blood to grow.
GTx announced in March that its poster presentation entitled GTx-758 in ER alpha agonists reduces serum free testosterone lowered lower that can be achieved by Leuprolide, with a significantly lower rate of hot flashes in men with advanced prostate cancer, was selected as one of the best posters at the 28th annual European Association of Urology Congress held in Milan, Italy this past March.
The data presented represents findings from the Phase 2 clinical studies of men with advanced prostate cancer,, which examines the ability of GTx-758 to further reduce the levels of unbound or free testosterone to potentially limit the cancer's advancement to castration resistant prostate cancer.
In addition to its ability to further suppress free testosterone, GTx-758 may also, by replacing estrogen, provide the prospect for an improved quality of life with a better side effect profile than what is more typically experienced by men with advanced prostate cancer treated with commonly utilized forms of androgen deprivation therapy. GTx is currently enrolling a Phase 2 clinical study to evaluate the safety and effectiveness of lower doses of GTx-758 to treat men with metastatic castration resistant prostate cancer.
Enrollment of this study is progressing. We have clinical sites in the United States and Hungary and anticipate that we will have data from this open label study in the second half of this year. We believe the lower doses now being studied will be effective in substantially raising SHBG and thereby lowering free testosterone, 3while minimizing concerns associated with BTEs in our studies of Capesaris at higher doses. If this proves to be true, then GTx will assess the potential treatment options available to Capesaris, including using the drug product as a first secondary hormone therapy or as a primary therapy used in combination with ADT in the treatment of advanced hormone naive prostate cancer.
This morning, we also released our financial results with the first quarter ended March 31, 2013. While I will not review the financial results in detail, let me point out that we reported $42.2 million in cash and short-term investments at the end of the quarter and we have no debt for warrants outstanding.
Marc Hanover and I will be happy to answer any questions you may have about our financial results during the Q&A. Operator, we’re now ready to take our first question.
Thank you. So, ladies and gentlemen, your Q&A session will now begin. (Operator Instructions).
Okay. And the first question comes from the line of Ryan Martins, Lazard Capital Markets, LLC
Ryan Martins – Lazard Capital Markets, LLC
Thanks for taking the questions. Maybe to start off, Mitch, can you confirm if you will be having the five-month durability period in Enobosarm and you have top line data? And then I have a few other questions.
Yes. So, the answer is yes. We should have that at the same time because we’re locking down the database after the last patient completes five months. Let me point out that that number is a descriptive number because all we’re doing is reviewing whether these patients still respond at five months in those patients that responded at three months. And so, will make some statement on durability.
Ryan Martins – Lazard Capital Markets, LLC
Okay. And then on the recently initiated breast cancer study, can you maybe guide us through your thoughts on selection of the doors – 9 milligram doors? And the other part of the question is on the termination of androgen receptor status. Is this with historical samples in this kind of study? And how does the androgen receptor status maybe change as you get treated with hormonal therapy?
Yes. Monotherapy with what? With – you mean the hormone therapy monotherapy?
Ryan Martins – Lazard Capital Markets, LLC
Yes. With tamoxifen.
Yes. Yes. Okay. So, hormone status. Got it. Okay. So, the dose – well, first of all, I want to make it clear that this is a study that we’ve been planning and you probably have watched us talk about it now for about a year and a half.
And so, finally, all the pieces came together. The first patient was actually enrolled this week. We‘re very excited about this study because whereas we’ve been talking about expanding indications of muscle wasting because we have a muscle drug, one of the things that's really kind of exciting is that we could actually treat the cancer as well. In this case, it would be breast cancer.
And so, in breast cancer, as you know, they have the androgen receptor. And one of the most powerful anti-proliferative stimulus that you can give a breast cancer cell is to be an AR agonist. And that's why men will have very active breast tissue do not have breasts because our testosterone keeps it in check.
With that said, we do not know which dose we need to treat the cancer. We definitely know what dose we need to build muscle. We know it's between 1 and 3 milligrams. And so, typically in a pilot Phase 2 study where you are doing dose finding, what you would need to do is pick some maximally tolerated dose.
Well, it turns out our agent is extremely well-tolerated. So, what we did is we picked transient increases in ALT as sort of the marker that we would use to push our dose as high as we could. We know from our Phase 1 studies that, if we get to 30 milligrams of the drug, that we see starting transient increases in ALT.
And so, what we did is we just backed off a third log to get to 9 milligrams. And actually – technically, its 10 milligrams, and we have 3 milligrams tablets, so we went with 9 milligrams. So, 9 milligrams is where we believe the MTD will be in these women. And that's how we picked the dose.
In terms of the numbers I gave you during the presentation, those numbers come from historical samples and very recent. So, if you look at the AR positive literature, you’ll be amazed at how active it is. And so, these are really contemporary historical samples. And what we’ve done is we’ve – we’re working with a group called Qualtech that has also characterizing – for this study will be characterizing the androgen receptor.
What we also know is that, in women that are ER positive, and are treated with time tamoxifen or aromatase inhibitor, if they do progress, they do retain the androgen receptor. And so, the number I gave you of about 80%, that's in the metastatic lesion.
So, the primary is high and the metastatic lesion is high. And so, that's why we believe that this would be a great opportunity for us to show how Enobosarm can be a gift that keeps on giving in that it will treat a cancer as well as treat muscle wasting.
Ryan Martins – Lazard Capital Markets, LLC
Okay. Thank you.
Thank you for your question. The next question comes from the line of Brian Klein of Stifel (inaudible), Brian.
Brian Klein – Stifel Nicolaus
Great. Thanks for taking my questions. So, first, on the Power studies, just wondering if you could help us handicap the trials in that you’re utilizing two different chemotherapy regimens in combination with the Enobosarm. And in general, vinorelbine and gemcitabine aren't as common – commonly used in the US. Do you have any data demonstrating the combinability of Enobosarm with those two different regimens? And how should we think about whether Power 1 versus Power 2 is more important is more important or more relevant from the FDA's perspective for US population?
Yes. So, again, so the discussion is not so much which chemotherapy regimen is more popular or more of effective or more utilized in one country versus the other. The issue for the FDA was to control for chemotherapy so you can show the effect of your drug. And so, what's more important to us is that the chemotherapy is as controlled as much as possible.
So, for example, in Power 1, we said that we wanted a taxane. Well, it turns out, over 90% of the patients are getting a platinum plus paclitaxel. So, even though they are allowed to have docetaxel, almost all of the patients are getting paclitaxel.
In Power 2, gemcitabine appears to be the most common one used. And, again, this probably represents more of what's happening in first-line across the world, including the United States.
But, again, the point is not that gemcitabine is the more popular one. The point is that the population is going to be a much more homogeneous one because, in both studies, for all practical purposes, you've got a platinum plus paclitaxel, and the second one is a platinum plus gemcitabine.
And so, you really have a homogeneous population so that at least you are controlling for the chemo so that the effect that you see in muscle wasting will be due to the drug and not having to raise the question, “Did you have too many regimens?”
The FDA was not focused necessarily on the regimen, as much as they were on the timing of our drug. And they were very happy that we decided to give the medicine to the – to give you the placebo or our drug to patients right when they started chemotherapy. And they were also very supportive about looking at day 84 because that's when you're going to have the least missing data and the patients would have gone through four cycles of chemo. So, that's how I would look at it.
Now, the question about handicapping, meaning that, “Is one regimen going to be different than the others? And would the patient populations necessary be different?”
Well, at ASCO, we’re going to be presenting – or I should say, at ASCO, we’ll be publishing an abstract that will talk about the baseline characteristics of our patients. And the two trials – you’ll see from that abstract that the two trials are very similar in terms of the patient population, so that the Power 1 and Power 2 trials are probably more like each other than different.
And that's good because then you don't have to bring in, “Well, was it patient selection based on the chemotherapy being used?” It doesn't seem to be the case at all.
And so, that's why we feel very comfortable pooling the survival information. We feel very comfortable with presenting them both at the same time. And, interestingly, they both enrolled almost identically. So, all, again, suggesting that first-line chemotherapy in lung cancer, it still utilizes multiple different regimens and that's why we wanted a control for that.
And, finally, in the Phase 2 that we reported in Lancet Oncology, those lung cancer patients, we did not control for chemotherapy. We just let them have our drug or placebo. It could have been before they started chemo. It could have been while they were on chemo. It could have been while they were on second-line chemo. And in all those instances, Enobosarm benefited the patient.
So, I'm not – I think that the experiment being done by controlling for chemotherapy only going to help us. And the Phase 2 and smaller numbers where we didn't control for the chemotherapy, we still came in positive. So I think, from that standpoint, it is hard to “handicap it”. I think that both studies will be very similar.
Brian Klein – Stifel Nicolaus
Great. Thanks. Also, given that you're expecting the data sometime in the third quarter, do you think it's likely that, pending positive data, you would be able to file an NDA by the end of the year?
I think a safer bet – and, again, it's all dependent on when in third quarter we get our data, but the safer bet would be first quarter of ‘14 because it's not just getting the positive data, but we have a few Phase 1s – drug, drug interaction, those kinds of studies to do for the label. And their final reports would come in later in the year and early first quarter. So, really, I think, first quarter is probably the soonest that we could file, again, assuming the data comes back early third quarter.
Brian Klein – Stifel Nicolaus
Great. And then just lastly, can you give us an update on the ex-US strategy?
Yes. So, the ex-US strategy is kind of an exciting one because it turns out that the Europeans are much more keen on physical function and quality of life as a regulatory agency. And also, the other thing that is exciting is there a lot more lung cancer patients in Europe than in the US, so it's a big market. And in their mind, the quality for them – you know, it's almost funny that, in Europe, they’d rather you have improvement in physical function than two weeks or a month in survival, for example, because quality of life is something the patient feels and that the regulatory agencies in Europe support.
So, the strategy in Europe right now is that we have gone to Europe and met with – and I've mentioned this before. We've met with the MHRA. We've met with the MPA. MHRA, as you know, is in England. And the MPA is in Sweden. And so, we do know that the trials that we’re running will qualify for international studies and will be the basis for filing in Europe. They – so the trial design is acceptable in both.
So, our job, then, is, as soon as we get positive results, is to quickly file as soon as we can in the US and certainly side-by-side do the same thing in Europe. And so, the strategy there is not to wait and file in the US and don't do anything in Europe and then go back to Europe. The strategy now, given the openness of Europe for this indication and for these trials to satisfy the need of international studies that we need to do that as quickly as we can.
Great. Thanks for taking my questions.
Sure. Thank you, Brian.
(Operator Instructions). Ladies and gentlemen, that now concludes the Q&A session for today. I'd now like to turn the call back over to Dr. Steiner for any closing comments. Thank you.
Thank you, operator. I would like to thank everybody for their interest in GTx, and I look forward to updating you in the near future on our progress. Thank you for joining us this morning.
Thank you very much, ladies and gentlemen. That now concludes your conference call for today. You may now disconnect. Thank you.
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