Poniard Pharmaceuticals, Inc. (NASDAQ:PARD)
Q1 2010 Earnings Call
May 10, 2010 4:30 pm ET
Ronald Martell - CEO
Dr. Michael Perry - President & CMO
Greg Weaver - CFO
Susan Neath - Investor Relations
Simos Simeonidis - Rodman & Renshaw
Good day and welcome to the Poniard Pharmaceuticals first quarter 2010 earnings conference call. Today's conference is being recorded. At this time, I’d like to turn the conference over to Susan Neath. Please go ahead Susan.
Good afternoon, and thank you for joining us to discuss the results of Poniard Pharmaceuticals first quarter 2010 earnings conference call. Poniard issued a press release this afternoon that is available on the company’s website at www.poniard.com.
Comments made on this call will contain forward-looking statements relating to the company’s picoplatin and product candidate and describing the company’s corporate strategies and objectives, regulatory and partnering efforts, product development activities, clinical and regulatory goals, financial conditions, future expectations, prospectus, projections and believes.
Actual results and events may differ materially from those indicated in these forward-looking statements based on a number of important factors including risks and uncertainties inherent in the company’s business including the company’s anticipated future operating losses, future capital requirement and ability to obtain future funding.
Direct strategic partners relationships may not be established on a timely basis on terms that are ultimately favorable to the company or at all the potential safety efficacy and commercial viability of the company picoplatin product candidates, the risk that the company’s additional analysis of data some clinical trails of picoplatin may produce negative or inconclusive results are maybe inconsistent with previously announced results are previously conducted trials.
The company’s ability to retain key personnel, competition from third-parties the company’s ability to preserve and protected intellectual property rights, the company’s dependence on third-party manufacture suppliers and other contractors, changes in technology, government regulation and general market conditions and receipt and timing of FDA and other require regulatory approvals and the other risks and uncertainties describe in the company’s current and periodic reports filed with the Securities and Exchange Commission including the company’s Annual Report on Form 10-K for the year ended December 31, 2009 and the company’s Form 10-Q for the quarter ended March 31, 2010.
You’re cautioned not to place undue reliance on these forward-looking statements which are based only on fact and factors currently know by the company. The company undertakes no obligations to update any forward-looking statements to reflect new information events or circumstances, after the day of this call or to reflect the occurrence of unanticipated events.
With that, I will turn the call over to Ronald Martell, Chief Executive Officer of Poniard. Ron.
Thank you, Susan. Welcome to our first quarter 2010 financial results and corporate update conference call. Joining me on the call today are our President and Chief Medical Officer, Dr. Michael Perry; and Greg Weaver, our Chief Financial Officer.
We would like to focus today’s call on our corporate strategy. I will begin with Poniard recent events and an overview of our strategic plan. Dr. Perry will then discuss the strategic approach to our picoplatin development program. Greg will review our financial results for the first quarter of 2010 and I will close with the brief recap of our objectives for the remainder of the year and then open up the call for questions.
Over the past few months, we announced several important initiatives to support our overall strategy to move the picoplatin program forward and to optimize its value for shareholders, together these initiative have focused our corporate organization, strengthened our balance sheet, crystallize the value proposition for picoplatin and advanced our efforts to identify an effective fast forward for this promising compound.
As we have previously discussed, we believe that picoplatin represents an attractive asset as a late-stage, highly differentiated, anticancer compound that has demonstrated positive clinical activity including favorable efficacy and safety data in a variety of solid tumor types.
At the beginning of 2010, we were fast with the difficult challenge, how to best advance this potentially high value program in both the near and long-term, given our current strategic position. It was clear that we needed to entirely review our strategic efforts to ensure that we were focusing our attention and resources on activities that we believe, offer us the best opportunity to advance picoplatin to market and optimize the value of the program.
We have evaluated all of our ongoing initiatives. In particular, our registration strategy in small cell lung cancer, following a detail analysis of primary and updated data from our Phase III SPEAR study in small cell lung cancer and an evaluation of the new drug application process with the FDA, a strategic decision was made to suspend our efforts to obtain regulatory approval based on a SPEAR data.
As we announced in late March, we are directing our energy and resources towards developing registration strategies in small cell lung, colorectal, prostate, and ovarian cancers. In support of this refocused strategy, we implemented a workforce reduction to align our operations with our continuing activities and reduced our operating expenses. This leads Poniard a linear organization, but one that we believe is equipped to execute our clinical and corporate strategies.
With this new direction, we also recognized the need to undertake a comprehensive review of strategic alternatives, including a potential corporate merger, sale, partnership or capital raise. The healthcare investment bank Leerink Swann was engaged to provide strategic advice and to lead this process.
To maintain our financial flexibility, while this process is ongoing, we entered into a new equity financing facility. Pursuant to which, we received a net proceeds of approximately $6.1 million in March. We’ve also been focused on enhancing the picoplatin value proposition by strengthening our intellectual property estates and presenting promising data on the compound’s activity in multiple cancers.
At the start of the quarter, we presented final data from our Phase II colorectal cancer study at the ASCO GI Cancer Symposium. This study made its primary objective demonstrating the picoplatin as a neuropathy-sparing alternative to oxaliplatin for the first-line treatment of metastatic colorectal cancer.
In March, we reported final data from our Phase II trial in prostate cancer at the ASCO GU Symposium, which Mike will review during his discussions on our picoplatin development program. We also submitted an abstract regarding the SPEAR data for presentation at the Annual ASCO meeting in June. The abstract outlining data from this Phase III trial of picoplatin at a second-line treatment of small cell lung cancer has been accepted for an oral presentation during the lung session on Saturday June 5.
In addition, the SPEAR trial was designated as one of the Best of ASCO 2010 that be featured in San Francisco and Boston in July as well as in local setting around the world following the ASCO Annual Meeting. This is an ASCO sponsored program that highlights abstracts from the 2010 ASCO Annual Meeting and provides greater accessibility to important scientific research to members of the oncology community.
The SPEAR trial is one of the largest second-line small cell lung cancer trials conducted in the world and provides valuable clinical insights for the treatment of second-line small cell lung cancer. Although the SPEAR trial did not meet its primary endpoint of overall survival, potentially due to an imbalance in the use of post-study chemotherapy, patients who received picoplatin demonstrated a trend towards a survival advantage. We also strengthened our intellectual property position in this quarter.
On April 6 of this year, the US Patent and Trademark Office reissued the composition of matter patent for picoplatin. This is significant to Poniard. Since the reissued patent includes additional claims specific to the picoplatin compound, it’s used for the treatment of any cancer, as well as its pharmaceutical composition and oral dosage form. The reissue patent has the same force and effect as the original patent and the same February 2016 expiration date, including the potential for up to a five-year patent extension until 2021 under the Hatch-Waxman Act.
Finally, to further strengthened intellectual property estate around picoplatin enhancing its value proposition and supporting our review of strategic alternatives. The first quarter of 2010 has been a challenging and productive time for Poniard. I believe that we have the team and resources in place to execute against our 2010 goals, which are to enabled a strategic corporate transaction and complete the preparation of pivotal registration strategies in various solid tumor indications for further discussion with the FDA. We continue to believe in the promise of picoplatin and are committed to bringing the program forward and realizing the potential of this important drug.
With that, I would now like to turn the call over to our President and Chief Medical Officer, Dr. Michael Perry to provide a review of our strategic development program for picoplatin and small cell lung, colorectal, prostate, and ovarian cancers. Mike.
Thank you. As Ron mentioned, our corporate strategy continues to focus on optimizing the value proposition of picoplatin. We believe that our work with expert clinical advisors to develop registration strategies for picoplatin in multiple indications and with the FDA to obtain concurrence on these strategies, our critical components to this effort that will enable a rapid transition into pivotal trials for a variety of significant indications.
Platinum-based chemotherapeutics continue to be the standard of care for the treatment of solid tumors such as lung, colorectal and ovarian cancers. Picoplatin was rationally designed to overcome a variety of platinum resistance mechanisms and by leveraging its differentiated products features we believe it has the potential to become a preferred platinum agent were platinum-based products are currently prescribed.
Furthermore, picoplatin has demonstrated clinically meaningful anticancer activity in tumor such as prostate cancer or platinum-based agents are not currently utilized. As such, we believe that picoplatin has significant market potential with multiple registration opportunities in a variety of solid tumors. Additionally, clinical studies have demonstrated the picoplatin works slow in combination with other anticancer drug treatment regimens. With these properties, we believe that picoplatin is in attractive development candidate for potential partner seeking to broaden its product pipeline.
In a focused effort to advanced picoplatin to the market, we are preparing pivotal strategies in the small cell lung, colorectal, prostate and ovarian cancers. We believe these parallel registration strategies highlight picoplatin’s broad potential utility in the oncology arena. For example, in the treatment of small cell lung cancer, a platinum containing regimen is the current standard of care for first-line treatment.
Despite the high response rates to initial treatment, most patients have progressive disease in a poor survival prognosis. Effective second-line treatment of small cell lung cancer represents a key unmet medical need as there always presently no FDA approved therapy for patients, who do not respond to initial platinum treatment.
Although, our Phase III SPEAR trial did not meet the overall survival endpoint in the indented treat population, potentially due to an in balance in the use of post-study chemotherapy between the two treatment arms, patients who receive picoplatin showed a trend towards survival advantage. We believe a modified trail design would have demonstrated a statistically significant survival advantage.
In a current treatment of colorectal cancer, neuropathy is a common debilitating and often dose limiting side effect of oxaliplatin, the present they standard for first-line treatment. NCCN guidelines recommend the discontinuation of oxaliplatin from the standard chemotherapeutic regimen, when significant neuropathy occurs.
In our Phase II study, picoplatin administered in combination with 5-fluorouracil and leucovorin known as the FOLPI regimen was associated with a statistically significant reduction in neurotoxicity p <0.004 compared to oxaliplatin also administered in combination with 5-fluorouracil and leucovorin in the FOLFOX regimen. Neuropathy was 2.5 times more frequent in FOLFOX treatment patients compared to FOLPI treated patients and no Grade 3 or 4 neuropathies was seen in FOLPI treated patients.
Full data from this trial indicate a picoplatin as a manageable toxicity profile and presents a neuropathy sparing alternative through oxaliplatin there by potentially offering an attractive treatment option to both physicians and patients. We believe prostate cancer represents another large market opportunity for picoplatin. There are presently no platinum chemotheraptics approved to treat prostate cancer within the current standard of care for patients suffering from this disease.
Final data from our Phase II trial showed that picoplatin, in combination with docetaxel and prednisone led to a clinically meaningful result as measured by overall survival, progression free survival and prostate specific antigen or PSA response rate. Median overall survival was 21.4 months for the 29 patients to receive picoplatin, in combination with docetaxel and prednisone.
In contrast, data from published literature reported overall survival benefit of 18.9 months for patients who received standard doses of docetaxel and prednisone alone. These data demonstrate, the picoplatin can be safely and effectively combine with the current standard of care docetaxel and prednisone for the treatment of frustration resistant prostate cancer.
The current standard of care of the first-line treatment of patients with ovarian cancer is a platinum based chemotherapy, aggressive therapy is often necessary as most patients present with late stage disease. Although most ovarian cancers respond to this initial chemotherapy, the majority of ovarian cancer patients including those who achieve a complete response to first-line chemotherapy, will relax and eventually circum to their disease. Effective treatment a prolong survival in this patient population represents a key unmet medical need.
Here too, we believe picoplatin may play a significant role in improving treatment for these patients. Picoplatin has been evaluated in two separate clinical trials including women with ovarian cancers, this disease was refractory or resistance to our first-line platinum containing treatment regimen. The first trail of Phase II study evaluating picoplatin as a single agent was conducted in 94 women with ovarian cancer and which 41% objective response rate were achieved including eight patients or 17% with complete responses. Notably, picoplatin demonstrated activity in patients that were either sensitive or resistant to first line platinum treatment.
The second trial was a Phase I study evaluating the safety of picoplatin in combination with pegylated liposomal doxorubicin in 16 patients, five of them had ovarian cancer, and one of who had peritoneal cancer, an overall response rate of 31% was achieved in this study including a complete response in the patient with peritoneal cancer. We are very encouraged by these data and are in discussion with our clinical advisors to design our registrations, strategy for picoplatin, targeting the second line treatment of ovarian cancer.
There are numerous treatment settings, where picoplatin may have a significant and clinically meaningful therapeutic impact and we look forward to finalizing plans for conducting registration trials in these indications.
With that, I would now like to turn the call over the Greg. Weaver, our Chief Financial Officer, as he will review the first quarter 2010 financial results. Greg.
Thanks Mike. Looking at the first quarter of 2010, we reported a net loss of $11.9 million, compared to a net loss of $13 million for the first quarter of 2009. This represents a diluted loss for common share of $0.29 for the quarter. Total operating expenses for the first quarter of 2010 were $11.3 million as compared to $12.2 million for the first quarter of 2009. The decrease in expense was driven primarily by reduced clinical activity.
Research and development expenses for the first quarter of 2010 were $4.9 million, as compared to $8.2 million in the first quarter of 2009. The decrease in R&D expenses was attributable primarily to reduced clinical and drug product manufacturing activities. G&A expenses for the first quarter of 2010 were $4.8 million, compared to $3.9 million in the first quarter of 2009. This increase in G&A expenses was attributable to a one-time development credit of $500,000 in the prior year; and increased non-cash share-based compensation expense in Q1 of 2010 were approximately $1 million related to the company’s staff restructuring.
At March 31 of 2010, we had total cash and investment securities of $38.3 million, which includes $6.1 million in net proceeds from our equity financing in the first quarter of this year. Our net cash used in operations for the quarter ended March 31, 2010 was $8.3 million, as compared to $11.1 million in the first quarter of ’09 and we believe that our total cash and investment securities will be adequate to fund our operation and satisfy our loan facility, requirements and cash needs through the end of 2010.
I’ll now turn the call back to Ron.
Thank you, Greg. We’ve had a challenging and productive start to 2010, taking necessary steps to help ensure that we are well positioned to execute our strategy. Our focus is on optimizing the value of picoplatin for our shareholders and we are looking for our strategic alternatives to help us achieve this goal. We look forward to seeing those of who have planned to attend the oral presentation of the SPEAR data at ASCO this June 5 in Chicago.
With that, I’d like to thank you for joining our call today. We’d now like to open the call up for questions; operator.
(Operator Instructions) Our first question comes from the line of Simos Simeonidis, Rodman & Renshaw; please proceed.
Simos Simeonidis - Rodman & Renshaw
Are you able to give us an update on your meetings with the FDA regarding ovarian, colorectal and prostate? You guys talked about preparing the parallel registration strategies and I’m assuming that means, you’re doing some internal work, some consultants are helping you and you’re talking to the FDA. So can you update us on the FDA part of that process?
We’re working with our advisors right now and then of course we do working parallel with the Food and Drug Administration, but it’s basically a policy not to comment on any of the ongoing discussions with the FDA until we have conclusions to those discussions and can present those.
Simos Simeonidis - Rodman & Renshaw
In term of the four different settings you could potentially try picoplatin in a Phase III trail. Do you currently have a little more clarity, which one might be more likely to go forward? In the past you have talked Ron, you said that ovarian might be the one that you take forward by yourself, because it’s a cheaper sort of trial to do. Do you have any updates for us there?
Certainly, first of all, the proof of concept data that we’ve generated in all four of those tumors, give us the belief that the drug is Phase III ready in all four tumors. Then the key questions are strategically, which programs to move forward with and how do we go about developing those and at this point in time, we are moving all four of those forward in a parallel fashion, purely from the standpoint, it’s in parallel with our ongoing strategic alternatives activity and we believe, we’re setting the table nicely for any potentially partner or acquirer or whatever that outcome might be, such that all four of those tumor types will be set up, so it taken move them directly into clinical development.
That said, small cell lung cancer we have the most data on and certainly, it’s a program where we believe, we would have a high probability of success if we were to move that into a Phase III clinical trial, it’s also a clinical trial similar to that ovarian were given that’s in a second line setting and with the survival endpoint, it is a trial that would not require as many patients as the first line trial, it would not take as long to hit the survival endpoint thus setting that value creation point sooner.
So, if we were to look at the tumor types in a Poniard standalone setting, small cell lung cancer and ovarian are two that we highlight there. However, strategic potentials here obviously have their eyes on very big market opportunities like colorectal and prostate. So, we’re moving all four of those programs forward in parallel.
Simos Simeonidis - Rodman & Renshaw
You spend about $11.5 million or $11 million this quarter, if you back out the restructuring for the two changes that you made in the workforce in the first quarter, will be fair to assume a $40 million burn rate for the year?
For the full-year, this year?
Simos Simeonidis - Rodman & Renshaw
It’s actually dropping, Simos that’s a good question, I think you see at drop in step fashion form Q1 down to Q2 and then a further reduction in the second half of the year based upon our staffing restructure.
(Operator Instructions) At this time, there are no further questions in queue. I’d like to turn the call back over to Mr. Ron Martell. Please proceed.
Thank you, Christopher. Again we’d like to thank you all for joining the call today. We look forward to see many of you at ASCO next month. Thank you for your continued support to the company.
Ladies and gentlemen, this concludes today’s conference. Thank you for joining us and have a good day.
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