GTx, Inc. (NASDAQ:GTXI)
Q4 2013 Earnings Conference Call
March 3, 2014 9:00 AM ET
Mitchell Steiner – Vice Chairman and CEO.
Brian Klein – Stifel
Biren Amin – Jefferies
Good day, ladies and gentlemen. And welcome to the GTx Fourth Quarter and Year Ended 2013 Corporate Update and Financial Results Conference Call. My name is Glenn and I will be your operator for today. At this time all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purpose.
I would now like to turn the conference over to your host for today, Dr. Mitchell Steiner, CEO of GTx. Please proceed Doctor.
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 this morning, as well as the Annual Report we will be filing on Form 10-K with the SEC next week where we discussed the risks and uncertainties that may affect our business. The Company has made good progress in our three clinical programs and we have successfully completed -- financing sufficient for us to move these programs forward.
I will now update you on the progress of our clinical programs. Our most advanced clinical program is the evaluation of enobosarm 3 milligrams to prevent and treat muscle wasting in patients with non-small cell lung cancer. We released top line data in August of 2013 from our two Phase 3 enobosarm clinical studies, POWER1 and POWER2. Each clinical study enrolled approximately 325 patients who had either stage 3 or stage 4 non-small cell lung cancer, and over 80 clinical sites located in the United States, Europe, Russia and South America. The objective for these studies was to determine the potential of enobosarm 3 milligram versus placebo to prevent and treat muscle wasting and advanced non-small cell lung cancer patient when given at the same time the patients initiate standard first line chemotherapy consisting of a platinum doublet.
These studies were designed to take into account the concern expressed by FDA and the European National Authority Regulators about the need to control for chemotherapy these patients would be receiving during the Phase 3 clinical studies. The regulator shared the concern that chemotherapy itself may potentially influence the clinical measurements of lean body mass and stair climb power, and affect the trial results in patients with non-small cell lung cancer. Accordingly GTx designed it’s two Phase 3 clinical trials that have identical inclusion and exclusion criteria, end points and duration, but different patient populations based on the planned first line chemotherapy patients would be receiving, the platinum plus taxane or platinum plus non-taxane respectively, which in add-on therapy with placebo or enobosarm 3 milligram would be used so that any possible imbalances and benefit or toxicity related to chemotherapy that may confound the results on lean body mass or physical function could be determined.
The end points for the two clinical studies where lean body mass measured by DXA and physical function assessed by stair climb test. We agreed with FDA that we would make lean body mass and physical function measurements at Day 84 the co-primary end points for both studies, and that we would analyze these end points statistically by responder’s analysis. The responder’s analysis required that at Day 84 more patients in the study treated with enobosarm 3 milligrams had maintained or showed an improvement in the lean body mass and that they were more patients who had at least a 10% improvement in physical function in the treated group compared to the placebo. However, based on input from the EMEA representatives rather than having co-primary end points, we agreed that physical function would be the primary end point and lean body mass would be a key secondary end point.
Additionally, for purposes of data assessment in Europe, we pre-specified in our statistical analysis plan that these exact same end points, that is, stair climb power and lean body mass, would be assessed using the longitudinal continuous variable statistical analysis. This assessment allowed us to compare the changes from baseline over time in physical function and lean body mass in the treated versus the placebo patients in each study. This kind of comparison becomes especially important if you want to assess the differences in any decline in lean body mass and/or physical function from baseline in patients with non-small cell lung cancer. The EMEA representatives made it clear to us that while they were interested in determining the drugs clinical benefit by assessing its effect on physical function and lean body mass compared to placebo, they intended to look at the totality of the data to determine clinical benefit.
We did not meet the statistical criteria on the responder’s analysis as agreed upon with FDA for the co-primary end points of lean body mass and physical function. Data from the studies though clearly showed that enobosarm had a consistent positive effect on maintaining or improving lean body mass compared to placebo in both studies. By the responder’s analysis a larger proportion of patients receiving enobosarm maintained or increased lean body mass at both, Day 84 and Day 147 in both clinical trials compared to placebo. In the POWER1 trial with taxanes this equated to a P value of 0.036 at Day 84 and a P value of 0.026 at Day 147. And in the POWER2 trial with non-taxanes the P values were 0.113 and 0.013 respectively.
Moreover, if we assess data from these studies using the longitudinal continuous variable statistical analysis rather than a responder analysis, as we pre-specified for the European purposes, the POWER1 taxane clinical study met the pre-specified primary end point for physical change and change in stair climb power through Day 84 with a P value equaling 0.0147 and the secondary end points of change in lean body mass through Day 84 P equaling 0.002, change in stair climb power through Day 147 P equals 0.0492 and change in lean body mass through Day 147, P value is less than 0.0001. In contrast, the POWER2, the study using non-taxanes did not meet the primary end point of change in physical function but had consistent effects on improving lean body mass through Day 84 and Day 147 with P values of 0.0227 and 0.0036 respectively. In both the POWER1 and POWER2 studies, declines in lean body mass and stair climb power observed in the placebo groups.
Enobosarm was well tolerated in both studies, although minor differences in adverse events were observed between the enobosarm 3 milligram and placebo groups in each of the POWER1 and POWER2 trials, there were notable differences in the adverse event profile between the studies with anemia and other hematologic toxicities being more prevalent in the POWER2, the non-taxane clinical trial. By controlling for chemotherapy GTx is now better able to understand the impact of chemotherapy side-effects as possible confounders that may explain the results of the physical function end point in the POWER2 non-taxane study. Survival is being assessed as another safety end point as specified in our statistical analysis planned, pooled overall survival data will be assessed after 450 of the approximately 650 patients in the two studies have died which we currently expect will occur by late April of this year. We have seen no adverse effects on overall survival from the enobosarm treatment from the survival data received to-date, and we expect this to remain the case [ph].
We have now met with both FDA and European authorities this quarter, and have a better understanding of the regulatory path forward for this promising product candidate. In our recent meeting with FDA, it was made clear that since our two studies did not meet the statistical criterion pre-specified for the co-primary end points of lean body mass and physical function, FDA was not willing to accept an NDA of the drug based on our current data. However, based on the input from the meeting, we believe that there is a regulatory path forward for enobosarm 3 milligrams, FDA appears to be open to and has requested a proposal for another Phase 3 program for this indication with possibly a narrow indication. They indicated they would consider a clinical program using the same end points with previously measured in the POWER1 and POWER2 Phase 3 studies and they would consider other possible study designs. They also stated they would accept other pre-specified statistical criterion to evaluate the primary end points including longitudinal continuous variable analysis.
Based on the positive efficacy and safety information we have from the POWER1 and POWER2 clinical studies, GTx is in a much better position today to propose and design a confirmatory Phase 3 program. Consequently GTx plans to meet again with FDA to get agreement on the Phase 3 program that will be required to provide the efficacy and safety data required by FDA with the indication of muscle wasting or Caucasian patients with non-small cell lung cancer. We will continue to update you on our progress.
In Europe, we believe the data from the POWER clinical studies are sufficient to allow us to file in marketing authorization application in the European Union for enobosarm 3 milligrams for the prevention and treatment of muscle wasting and patients with advanced non-small cell lung cancer. The POWER1 Phase 3 study of non-small cell lung cancer patients receiving taxane chemotherapy met the pre-specified primary statistical criterion on physical function of three months as assessed by continuous variable analysis. GTx recently met with representatives from two influential member countries today, European Medicines Agency, EMA, to review and to discuss the results of the POWER clinical trials to determine if there is an appropriate path forward for submitting a marketing authorization application in the EU for enobosarm 3 milligrams for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer.
Based on input from the two national authorities, an MAA may be acceptable if the indication is narrowed to the prevention and treatment of muscle wasting in patients with non-small cell lung cancer treated with platinum plus taxane chemotherapy. More specifically, the positive data from the POWER1 Phase 3 clinical study together with additional supporting data from POWER2 clinical study and our Phase 2B study could potentially support the MAA in this more narrow indication. Consequently GTx expects to submit the MAA by first quarter of 2015.
Because we’re moving ahead with the European submission, several standard Phase 1 studies are required to be completed for purposes of labeling under EMA guidelines. We have already completed the renal impairment, hepatic impairment, and mass balance Phase 1 studies. We decided to wait until we had an appropriate input from the European National Authority before undertaking the additional expenditures required to complete the other Phase 1 studies which include the standard battery [ph] of drug-drug interaction, absolute bioavailability, and QT studies. All of these Phase 1 studies should be completed by the third quarter of this year. In addition, EMA requires a pediatric investigational plan or a PIP, to be agreed upon prior to filing of an MAA for the conduct of post marketing studies to be carried out in the pediatric population.
GTx is in the process of working with EMA’s Pediatric Committee to get agreement on an acceptable PIP which we expect could take until the fourth quarter of this year. During this time period, GTx will be preparing its MAA submission and completing the remaining Phase 1 studies in order to file the MAA by the first quarter of 2015. We will provide you with updates on the timing of the filing later this year, as well as our commercial plans.
Next, I will discuss the progress of our ongoing Phase 2 clinical study evaluating enobosarm 9 milligrams for the treatment of Androgen Receptor Positive and Estrogen Receptor Positive metastatic breast cancer in women who have previously responded to hormonal therapy. Based on a scientific literature, up to 80% of women with metastatic breast cancer will be both, Estrogen Receptor positive and Androgen Receptor positive, and our current study is certainly confirming this observation. Prior clinical studies have shown that women with metastatic breast cancer who have been previously treated with tamoxifen, and whose cancer has progressed have responded to non-selective non-aromatizable androgens, in other words, androgens which cannot be converted to estrogen with overall response rates ranging from 20% to 60%.
Although these non-selective non-aromatizable androgens have been used, and are currently recommended in the NCCN guidelines as treatment for metastatic breast cancer, the unwanted virilizing side-effects including an increase in facial and body hair, enlargement of the voice box, acne and edema have limited their widespread clinical use. Androgens normally oppose estrogen stimulatory actions in normal breast tissue and have anti-proliferative activity against breast cancer in women who retain both, an androgen and estrogen receptor. GTx believes that a selective androgen receptor modulator like enobosarm by targeting the androgen receptor in metastatic breast cancer has the potential to provide clinical benefit to women with advanced breast cancer by treating their disease while minimizing the unwanted masculanizing side-effects associated with androgens. Unlike steroidal androgens, enobosarm cannot be converted to an estrogen that could be detrimental in breast cancer.
GTx is conducting a Phase 2 open label study evaluating oral daily 9 milligram dose of enobosarm for the treatment of estrogen receptor positive and androgen receptor positive metastatic breast cancer in women who have previously responded to hormonal therapy for the treatment of their advanced breast cancer. Phase 2 is being conducted in 9 clinical sites in the US with Dr.Beth Overmoyer of Dana Farber serving as the lead principal investigator. The study is fully enrolled with 22 post-menopausal women who enter the study with actively progressing metastatic breast cancer. The primary end point of the study is a clinical benefit response after six months of enobosarm 9 milligrams treatment which is defined as either those women receiving treatment who have demonstrated a complete response, which is a disappearance of all targeted lesions, or a partial response, which is at least a 30% decrease in some of the diameters of the targeted lesions or stable disease, which means no disease progression from baseline. The expectation is that 14 of the 22 women will be determined to have AR+/ER+ metastatic breast cancer and a pre-specified objective of the study is there will be at least three women who achieve a clinical benefit response out of the 14 who are determined to be – to have AR+ breast cancer.
Company reported last month that it expects to meet the pre-specified goal of demonstrating at least three clinical benefit responses in a minimum of 14 patients with AR+/ER+ metastatic breast cancer. Enobosarm 9 milligram continues to be well tolerated by the patients in the study. The study is ongoing and the data from all patients in the study are expected late in the second quarter this year. Since we now anticipate that that study will be successful, we also plan to meet with our key opinion leaders to determine how best to move forward in the clinical development of enobosarm as a potential novel, targeted hormonal therapy with the treatment of AR positive, ER positive metastatic breast cancer.
Our third late stage clinical program is evaluating Capesaris, GTx-758, for the treatment of castration-resistant prostate cancer as a secondary hormone therapy. GTx is enrolling an open-label, Phase 2 clinical study to evaluate the safety and effectiveness of two doses of GTx-758, 125 milligrams and 250 milligrams oral daily dose in men with metastatic and non-metastatic castration-resistant prostate cancer. The primary end point of the study is to proportionate patients with a ≥ 50% reduction from baseline in serum PSA by Day 90. Other key endpoints include free testosterone levels, sex hormone binding globulin levels, and total testosterone levels, as well as the effects on tumor progression in the study subjects. In addition, the studies evaluate the ability of GTx-758 to treat certain estrogen deficiency side-effects associated with androgen deprivation therapy such as hot flashes, bone loss, and insulin resistance.
The clinical study will enroll a total of 76 patients with the first cohort of 38 patients with metastatic castrate-resistant prostate cancer receiving a 125 milligram daily dose of GTx-758. Having completed enrollment of the first cohort of patients, and following a planned safety review by an independent Data Safety Monitoring Board, the trial is now enrolling an additional 38 patients in the 250 milligram oral daily dose arm. The first 10 patients to receive the 250 milligram dose will be men with metastatic castration-resistant prostate cancer, and thereafter enrollment will be open to men with either metastatic or non-metastatic castration-resistant prostate cancer assuming GTx-758 continues to have an acceptable safety profile.
Last month primary – last month preliminary efficacy and safety data for the 125 milligram cohort was presented at the GU-ASCO meeting. We reported that the mechanism of the drug inducts in a sex hormone binding globulin and the reduction of free testosterone, what’s confirmed in a cohort of patients receiving 125 milligrams of GTx-758 treatment. Of the 36 patients for whom we then had available laboratory values, 83% have levels of SHBG that more than doubled from baseline, and free testosterone was reduced to 92% of these patients with 81% of the patients having at least a 50% reduction in free testosterone. Of the 22% who had completed 90 Days on the trial, 91% experienced decreases in PSA levels, the 36% exhibiting decreases greater than 30%.
Estrogen deficiency side-effects associated with androgen deprivation therapy including hot flashes and bone loss, they negatively affect the quality of life and mortality. Treatment with an estrogen receptor alpha agonist like GTx-758 could emulate [ph] these estrogen deficiency side-effects. Preliminary data shows that a majority subjects that were experiencing hot flashes prior to taking GTx-758 have reported improvement and/or stabilization of the hot flashes, and bone turnover markers have decreased in a majority of these patients as well. As for safety, GTx-758 continues to be well tolerated with no reported venous thromboembolic events or deaths. We’re continuing to involve patients in the 250 milligram cohort, and so far the drug appears to be well tolerated at this dose as well. We expect the study to be completed and data available in the second half – later in the second half of this year.
We met with the FDA during the last quarter of 2013 to get more regulatory clarity for the development of GTx-758. FDA agreed that a potential regulatory path forward for GTx-758 maybe in men with high risk non-metastatic castrate-resistant prostate cancer. A trial design that maybe acceptable to FDA is to randomize men who have high risk non-metastatic castration-resistant prostate cancer to either GTx-758 or placebo, and the primary end point of the study could be metastasis free survival. Additionally, the study could use free testosterone levels to identify men who have sub-optimal castration which should allow us to correlate free testosterone levels with metastasis free survival. FDA would be open to discuss in their way to validate free testosterone as an end point in the future.
Today we reported that GTx has executed a securities purchase agreement to privately place $20 million of GTx common stock at par. When the transaction is closed later this week, the $20 million financing will result in the issuance by the company of approximately 12 million shares of stock to the purchasers. And the total issued outstanding shares of GTx stock will then be approximately $75.2 million. The purchases also receiving warrants to buy at the same purchase price, $0.85 of a share of GTx common stock for each share of stock acquired in the financing for which they are paying at closing additional consideration, and the aggregate of approximately $1.3 million. Our Chairman and largest shareholder, Pitt Hyde, was participating in the offering, will increase his stake in the company to approximately 32.6% upon closing of the financing later this week.
This morning we also released our financial results for the fourth quarter and year-ended 2013. While I will not review the financial results in detail, let me point out that we reported $14.7 million in cash and short-term investments at December 31, 2013; under this recently announced financing we added approximately $21 million. These funds should be sufficient to carry us until the first quarter of 2015 which will allow us to complete the Phase 1 clinical trials for our enobosarm MAA; prepare and file the MAA, get FDA Regulatory Agreement on the enobosarm 3 milligram Phase 3 program in non-small cell lung cancer, report the results of the Phase 2 clinical study evaluating enobosarm 9 milligrams for the treatment of AR+ metastatic breast cancer, and report the results of the Phase 2 clinical trial evaluating GTx-758. If the warrants issued in connection with the $20 million financing or exercise over the next 12 months, we should have sufficient funding to take us into the first half of 2016.
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.
(Operator Instructions). And your first question comes from the line of Brian Klein with Stifel. Please proceed.
Brian Klein – Stifel
Hi guys, thanks for taking my questions. First, on enobosarm 3 milligrams, for muscle wasting, in your interactions with the FDA do you anticipate pursuing a new SPA for the next trial that you’ll need?
Okay. So the question here is, whether or not if we – after we have agreement with FDA whether or not we’ll memorialize that, if you will with a special protocol assessment?
Brian Klein – Stifel
Yes, the answer is that would be one way to do that, and again, given agreement it would make sense to try to get an SPA but I – but again, if the agreement is pretty black and white in the minutes, then it may be a waste of time. But yes, we will do everything we can to make sure it’s clear.
Brian Klein – Stifel
Okay. You mentioned that you’re expectation for the survival analysis might be completed at the end of April. Can you give us a sense of where that data will be either reported or presented and how you might do so?
Yes, I think once we know the data and – then we’ll – I think we’ll just announce it at the next scientific meeting or – it’s a good question. I mean [ph] – the late April will put us – yes, I think we’ll just take advantage of any presentation that we have, ASCO or something like that, and we’ll make sure it’s clear. But again, at the way we’re tracking right now, we’re looking at late April to get that information, and we reported out in a timely fashion if it’s material.
Brian Klein – Stifel
Okay. And will your next FDA meeting occur after that survival analysis?
Brian Klein – Stifel
Perfect, thanks. And then just quickly on the enobosarm 9 milligrams for breast cancer. Can you give us a sense of where within the treatment spectrum you anticipate that drug might fit?
Yes, it’s a good – so, where we are right now as you know, the field has SERMs, aromatase inhibitors, and if you believe (inaudible) is a pure estrogen receptor antagonist, that’s pretty much the flavors of the hormonal therapies you have for breast cancer. And breast cancer unlike prostate cancer, is extremely sensitive to hormone therapy, and in some women you can actually cycle these hormone therapies, even if they respond and stop responding and come back and they’ll respond again once you give them a holiday. So androgens have been used for as long as estrogens, and our part of the NCCN guidelines in terms of treating women who have previously responded to hormones, the goal here is to figure out a way to avoid chemotherapy which is toxic and stay with the target of hormone therapy. So the thought would be that we would be a player in armamentarium of treating women with hormone sensitive disease. And so if they start aromatase inhibitor and they fail, they [started strong] and they fail, and they had metastatic disease, then – and they are androgen receptor positive, then that maybe a very good patient that could benefit from SERM. And, so we see ourselves at being early, being part of the hormonal therapy, and knowing that women with breast cancer tend to be hormonally sensitive, and so we see ourselves as sort of in the pre-chemo space.
Brian Klein – Stifel
Great. Thanks for taking my questions.
Thank you, Brian.
And your next question comes from the line of Biren Amin with Jefferies. Please proceed.
Biren Amin – Jefferies
Yes, thanks for taking my questions. Mitch, maybe I could start with enobosarm. In Europe, does the company plan to partner the program, given your developments on the regulatory front? Thanks.
Yes, so – thank you for the question, Biren. The answer is, everything is on the table at this point. Our main goal right now is to move forward with the MAA and do the Phase 1’s but certainly now that we’ve got regulatory clarity it’s opened up discussions for potential partnerships, not only in Europe, quite frankly, ex-Europe too because as you know, if you have an approved MAA that’s currency in terms of being able to go to other parts of the world. And we also have plans to also get more clarity in Japan. But with that said, we have to evaluate all of our options which is whether or not GTx considers commercialization in Europe by itself, whether we partner it, those are all the things that we’re exploring now that we’ve gotten this positive news from Europe. Our job is to figure out how we can maximize shareholder benefit for this asset, especially this is the asset that’s closest to producing revenue for our company, we’ve got to figure out how to hold on to the lion share of that as we develop our other programs. So there is no question we’ll see more interest but more importantly is what does GTx need to do to make sure that we retain as much of this value as possible given as hard as we’ve worked to get to this point.
Biren Amin – Jefferies
And can you talk a little bit about the market potential in Europe?
Yes, what I can tell you about Europe and this may – I’ll tell you the facts and I’ll tell you what we need to learn. The facts are that about 186,000 patients in the five major European markets that will be starting first line chemotherapy with stage 3, stage 4 non-small cell lung cancer. We know about one-third of those patients will be starting with the taxane is still considered a major first line add-on if you will for the platinum doublet. But more importantly, in second line and third line it appears that patients with non-small cell lung cancer, almost every patient is going to see a taxane at some point in their therapy if they get passed first line, second line and third line. So the market is significant, what we’re also trying to understand is, because we now have a better sense of the attributes of our drug, in other words, we affect the lean body mass unambiguously, we affect physical functions, that’s important. But one thing that we didn’t anticipate was the effects on survival and how that will play into the pricing, and particularly, I’m referring to the landmark survival data. And then, furthermore, the drug is safe. So we have to go back and do our homework now and understand better. We did some qualitative work, preview of the data, but now we need to go back with the attributes that we have now to get a better understanding of pricing. And once we do that we’ll be able to come back and tell you all what we think the market potential is, but the market size is significant.
Biren Amin – Jefferies
Great, thank you.
At this time I would now like to turn the call over to Dr. Steiner for closing remarks.
Thank you, operator. We would like to thank you all for your interest in GTx and we look forward to updating you on our progress in the future.
Ladies and gentlemen, that concludes today’s conference. Thank for your participation. You may now disconnect. And have a great day.
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