Poniard Pharmaceuticals, Inc. (NASDAQ:PARD)
Q2 2010 Earnings Call
August 9, 2010 4:30 pm ET
Susan Neath - Investor Relations
Ronald Martell – CEO
Dr. Michael Perry - President & CMO
Mike Jackson – Interim CFO
Simos Simeonidis - Rodman & Renshaw
Gary Polakoff - UBS
Good day, and welcome to the Poniard Pharmaceuticals Second Quarter 2010 Earnings Conference Call. Today’s conference is being recorded.
At this time, I would 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 Second Quarter 2010 Earnings Conference Call.
Poniard issued a press release today that is available on the company’s website at www.poniard.com.
Comments made on this call will contain forward-looking statements relating to, among other things, the commercial potential of the company’s Picoplatin and product candidates, the company’s corporate strategies and objectives, regulatory and partnering efforts, product development activities, clinical and regulatory goals, financial conditions, future expectations and prospects.
Actual results and events may differ materially from those indicated in these forward-looking statements based on a number of important factors, risks and uncertainties including the company’s anticipated future operating losses, future capital requirement and ability to obtain future funding, the risk that strategic partnerships may not be established on a timely on terms that are ultimately favorable to the company or at all, the potential safety, efficacy and commercial viability of Picoplatin, the risk of the company’s additional analysis of data from clinical trials of Picoplatin may produce inconclusive results or may be inconsistent with previously announced results or previously conducted trials, the company’s ability to retain key personnel, competition from third-parties, the company’s ability to preserve and protect intellectual property rights, the company’s dependence on third-party manufacturers, supplies and other contractors, changes in technology, government regulation and general market conditions, the receipt and timing of FDA and other required regulatory approvals and the other risk and uncertainties described in the company’s 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 June 30, 2010.
You should not place undue reliance on these forward-looking statements which are based only on information currently known by the company.
The company undertakes no obligation to update any forward-looking statement to reflect new information, events or circumstances after the day of this call or to reflect the occurrence of anticipated events.
With that, I will turn the call over to Ronald Martell, Chief Executive Officer of Poniard. Ron?
Thank you, Susan. Welcome to our Second Quarter 2010 Financial Results and Corporate Update Conference Call.
Before going into highlights for the second quarter, I would like to take a brief moment to thank Greg Weaver for his service to the company. As we announced this morning, Greg has left Poniard to pursue other opportunities. Mike Jackson, our Principal Accounting Office, and Controller has assumed Greg’s responsibilities and will serve as our interim CFO until such time as a permanent CFO is named.
Mike joined Poniard as controller in 2003, and has served as Senior Director of Finance since 2008. He is intimately familiar with our operations and finances, and we look forward to his contributions in this new role.
Poniard continues to take steps as an organization to focus our resources while we maintain key capabilities and operational flexibility for the long term. These efforts are consistent with our goal of enabling a strategic transaction.
Greg’s departure, as well as our plan to move our corporate headquarters to a smaller facility by September 15 fit with these efforts and with similar actions taken earlier this year.
Mike is joining me on today’s call along with Dr. Michael Perry, our President and Chief Medical Officer.
During the call, we will revenue recent clinical data, provide an overview of our Picoplatin clinical and regulatory plan, and review our financial results for this second quarter of 2010.
We will then close with a brief recap of objectives and follow that with a question-and-answer period.
Picoplatin represents an attractive asset as a late-stage versatile anticancer compound with demonstrated activity and tolerability in a variety of solid-tumor types.
To ensure that we optimize the value of this asset for our shareholders, we have been pursuing two principle strategic objectives. First, we are working with the Healthcare Investment Bank, Leerink Swann, to evaluate our strategic alternatives including a potential corporate merger, sale of the company, partnerships or financing.
This effort is continuing and we are in active-ongoing dialog regarding potential options. Because this process is dynamic and as one might expect, subject to uncertainty and negotiation, it is premature to provide specificity about the nature of any discussions.
That said, I would like to give you our top-level insight on our criteria for the next strategic step. Most importantly, the strategy we pursue must place an appropriate valuation on a Picoplatin program, including both its near and long-term value.
As we will discuss momentarily, we have worked diligently to strengthen the value proposition for Picoplatin in a variety of solid-tumor indications establishing multiple potential registration pathways based on extensive clinical evidence in small-cell lung, colorectal, prostate, and ovarian cancers.
Further, we want to ensure that where our shareholders remain invested in the Picoplatin program, action is taken that puts the right level of resources behind a program, both in terms of investment and level of commitment. The process is one that takes time and careful diligence.
Our second strategic objective is the advancement of the parallel registration strategies I mentioned a moment ago. We are working with regulatory agencies and our clinical advisors to ensure that these potential development pathways provide market opportunities to fit a variety of strategic needs.
In support of these objectives, we continue to main a visible presence at scientific meetings, sharing our clinical data package with key opinion leaders and further establishing the potential efficacy and safety profile of Picoplatin in a variety of solid tumor settings.
Most recently, the full data from our Phase III SPEAR trial of Picoplatin in second-line small-cell lung cancer were presented during an oral presentation at the ASCO Annual Meeting; a presentation which is being featured as one of the Best-of-ASCO 2010.
As a reminder, the trial evaluated Picoplatin versus best supportive care. Let me take a brief moment to review some of the key outcomes of this study.
Median overall survival in the intend-to-treat population, the primary endpoint of this study, was 20.6 weeks in the Picoplatin arm compared to 19.7 weeks in the best-supportive care arm. This measure was based on 321 evaluable events.
While this endpoint did not achieve statistical significance, there was a statistically significant difference on an intend-to-treat basis in favor of Picoplatin for two important and clinical relevant measure; progression-free survival, or PFS, and time-to-progression, or TTP.
Study findings demonstrated a PFS of 9 weeks in the Picoplatin arm compared to 6.6 weeks in the best-supportive care arm, with the P-value of 0.0281, and a median time to progression of 11.3 weeks in the Picoplatin arm versus 6.7 weeks in the best-supportive care arm with a P-value of 0.0002.
As previously reported, we believe that an important factor in this study not meeting its primary endpoint was a statistically significant imbalance in the use of post-study chemotherapy in the favor of the best-supportive care arm with a P-value of 0.012.
It was reported that 27.6% of patients in the Picoplatin arm received post-study chemotherapy compared to 40.6% in the best-supportive care arm. To elucidate this point beyond the results seen in PFS and TTP, data from these patients who did not receive post-study chemotherapy showed a statistically significant overall survival benefit from Picoplatin. Specifically, among the 273 patients who did not receive post-study chemotherapy, there was a statistically significant difference in overall survival in favor of Picoplatin with a P-value of 0.0345 with an overall survival of 18.3 weeks in the Picoplatin arm compared to 14.4 weeks among individuals receiving best-supportive care alone.
Importantly, Picoplatin demonstrated an overall survival benefit among 294 patients who were relapsed or refractory within 45 days of first-line platinum-based chemotherapy. Additionally, there was balance used to post-study chemotherapy between arms in these 294 patients.
In this population, patients in the Picoplatin treatment arm experienced an overall survival of 21.3 weeks compared to 18.4 weeks for those receiving best supportive care alone resulting in a P-value of 0.0173.
We believe Picoplatin addresses a major unmet medical need in the treatment of second-line small-cell lung cancer as there is currently no FDA approved therapy for patients who are refractory or relapsed within 45 days of first-line platinum-based therapy.
Picoplatin was found to be well tolerated in the SPEAR study and demonstrated a safety profile consistent with prior clinical experience. Based on the data from the SPEAR trial, we believe that Picoplatin is an active and effective therapeutic option for the treatment of small cell lung cancer.
These results reinforce the value proposition for Picoplatin and provide critical insights on the potential path forward in small cell lung cancer.
We continue to work with our clinical advisors and with regulatory health authorities to develop a strategic plan to move Picoplatin in to registration trials in this indication as well as three other solid-tumor indications; colorectal, prostate and ovarian cancers.
I will turn the call over to President and Chief Medical Officer Dr. Michael Perry to provide more insight into these plants. Mike?
Dr. Michael Perry
Thank you, Ron. As you know, platinum-based chemotherapeutics continue to be the stand of care for the treatment of solid tumors such as colorectal, lung and ovarian cancers. Picoplatin was rationally designed to overcome a variety of platinum-resistence mechanisms and as such, we believe, may have significant potential within indications where a platinum agent was previously utilized.
As Ron mentioned, we are currently preparing clinical and regulatory strategies in several indications. Regarding small cell lung cancer, although our Phase III SPEAR Trial did not meet the overall survival endpoint, it is our goal to leverage the clinical insights gained from SPEAR to design a registration trial in small cell lung cancer focusing specifically on patients who are refractory to or relapsed within 45 days of receiving first-line platinum based therapy.
As Ron mentioned, Picoplatin demonstrated a statistically significant survival benefit in these patients who current have no FDA approved therapy to treat their disease.
Beyond small cell lung cancer, earlier this year we presented clinical evidence supporting Picoplatin’s use in colorectal and prostate cancers. Specifically, at the ASCO GI or gastrointestinal cancers symposium, we reported final data from our Phase II colorectal cancer study. This study successfully met its primary objective, demonstrating that Picoplatin in combination with 5-fluorouracil and leucovorin or FOLPI was associated with a statistically significant reduction in neurotoxicity compared to FOLFOX, a regimen of oxaliplatin in combination with 5-fluorouracil and leucovorin while maintaining a comparable efficacy profile.
As you’ll recall from earlier discussion, we believe that an effective treatment regimen with reduced neuropathic side effects will be an attractive alternative to both physicians and patients.
At the ASCO GU, or Genital, Urinary Cancer Symposium, we presented final data from our Phase II clinical trial of Picoplatin as a first-line therapy for men with metastatic castration-resistant hormone-refractory prostate cancer.
In this open-label study, patients treated with Picoplatin in combination with docetaxel and prednisone experience a clinically meaningful overall survival of 21.4 months as compared to data from published literature which shows an overall survival benefit of 18.9 months for patients who receive standard-of-care treatment or docetaxel and prednisone alone.
These data also demonstrated a benefit as measured by progression-free survival and prostate-specific antigen response rate.
Picoplatin has been administered to over 1,100 patients to date and there is a growing body of positive clinical evidence indicating that Picoplatin may have a significant and clinically meaningful therapeutic impact in multiple tumor types and treatment settings.
In addition, Picoplatin is designed to overcome platinum resistence and the trials conducted to date have demonstrated that it is active in cancers where patients have completed prior platinum-containing treatment. For example, in lung and in ovarian cancers.
As Ron mentioned, we are working to develop the best path forward for Picoplatin in four indications; colorectal, prostate, ovarian and small cell lung cancers. And we expect to define this strategic plan this year.
With that, I would now like to turn the call over to Mike Jackson to review our financial results. Mike?
Thanks, Mike. I would like to provide you with an overview of our financial results today. In the second quarter we reported a net loss of $6.5 million compared with a net loss of $9.7 million for the quarter ended June 30, 2009.
Total operating expenses were $6 million compared with $9.1 million for the quarter ended June 30, 2009.
Second quarter operating expenses were comprised of 2.1 million of R&D expense and $3.9 million of G&A expense, which includes the completion of our recent reorganization and the wrap up of the majority of our Phase II and SPEAR Trial activities.
At June 30, 2010, we had total cash and investment securities of $29.3 million. Net cash used in operations for the second quarter was $7 million.
We continue to believe that our total cash and investment securities will be adequate to fund our operations while satisfying the minimum cash requirements of our loan facility, at least to the end of 2010.
We submitted an application in the second quarter to be considered for a qualifying Therapeutic Discovery Project Tax Credit. As many of you know, this program was established by the Patient Protection and Affordable Care Act to provide tax credits and grants to research and development projects that result in new therapies to treat areas of unmet medical need, reduce long-term healthcare costs in the United States, or significantly advance the goal of curing cancer by 2040.
I will now turn the call back to Ron.
Thank you, Mike. The main focus on Poniard is to optimize the value of Picoplatin for our shareholders. We have put substantially all of our available resources behind this effort and I believe that we’re making meaningful progress against our goals.
These goals remain to maintain the visibility of Picoplatin within the medical community, an effort which has included presentations at important medical conferences such as the ASCO Annual Meeting, ASCO GI, and ASCO GU.
Secondly, to work closely with health authorities and our advisors to establish multiple potential registration pathways in small cell lung, colorectal, prostate and ovarian cancers in an effort to clinically demonstrate the therapeutic advantages of Picoplatin and its adaptability to multiple portfolios.
And to realize the value of the Picoplatin program for our shareholders through a strategic transaction including a potential corporate merger, sale of the company, partnership, or financing.
We look forward to updating you on our efforts in the coming months and at this time I’d like to open the call for questions. Operator?
(Operator Instructions) Your first question comes from the line of Simos Simeonidis with Rodman & Renshaw. Please proceed, sir.
Simos Simeonidis – Rodman & Renshaw
Hi, guys. Thanks for taking the question. I know you can’t -- I know, Ron, that you have a policy of not commenting on your dealings with the FDA, but are you able to tell us where in the process of planning, you know, next steps in the four solid-tumor settings you might be? Anything you can tell us in terms of whether you proposed some plans to the FDA and/or have received feedback from them? You know, anything you can tell us about where you are in the process. Thank you.
Sure. Good afternoon, Simos. And thank you for the question. We are in an active process. We have had conversations with the agency, and we are in the process of finalizing protocols, and look forward to bringing this to a conclusion this year, thereby with the objective of enabling clinical trials to be conducted beginning in 2011.
Simos Simeonidis – Rodman & Renshaw
Okay. You probably are not going to be able to give me much color on this one, but I’ll give it a shot. You know, like you said, you’re not going to comment on the status of the strategic alternatives you’re showing, but can you tell us if you’re at the point in the process where you are able to incorporate potential input from your, you know, partners or choirs on the next steps in the development of Picoplatin?
So another really good question. We are in active and ongoing dialogue and sort of imbedded into the comment that any strategic transaction would need to ensure that the ultimate path must place appropriate value on the Picoplatin program, that that would include then input on the clinical development of Picoplatin. And we are certainly taking that into consideration as we move forward.
Simos Simeonidis – Rodman & Renshaw
Okay. And finally, question about your P&L. You know, I see that you cut your spending almost in half this quarter over Q1. And that you’re only spending about 4 million a quarter in cash it seems like out of the 6 you spent. Is this first of all a level where you think you’re going to be operating out of the next, you know, couple of quarters at least?
That would be correct, Simos. To provide a little more clarity here, we’re burning about 1 ½ million a month right now, and about half of that is debt service. And so, or said another way, yes, I think that the current organization as we sit here today maintains the financial flexibility in the balance sheet for the possible strategic transactions and equally as important, maintained the core skills and competencies within the organization to advance the clinical development of Picoplatin that we previously discussed.
Simos Simeonidis – Rodman & Renshaw
So if you -- for the 29 ½ in cash that you have, if you back out the 15 ½ or 16 in debt, you have 13 ½ in net cash. So in terms of cash spending, it looks like you have cash for three full quarters almost. Is that correct?
Well, I’m sorry, I can’t provide guidance, if you will, onto the ultimate terminal on the cash. But you’re numbers in round numbers are generally correct. And again, with finishing the quarter with about 30 millions, 29.3 and burning it at about 1 ½ million a month.
Simos Simeonidis – Rodman & Renshaw
Okay great. Thank you for taking the questions.
Thank you, Simos.
(Operator Instructions) Your next questions comes from the line of Gary Polakoff with UBS. Please proceed.
Gary Polakoff - UBS
Good afternoon. First question is, if you’re going to -- you said you’re going to plan on doing some more trials in 2011, how are you going to pay for it?
Let me provide some clarity there. Our objective today is to ensure that we can initiate or that clinical trials can be initiated with Picoplatin in 2011. And thereby depending on what strategic transaction we do, how those trials would be funded. So if a strategic transaction ends up in a sale or a merger, we believe we’re continuing to create value for our shareholders by enabling a partner or an acquirer to conduct those trials as expeditiously as possible. On the far right of that spectrum would be if we so choose to do a financing to raise money to conduct those trials as Poniard, then we’ve enable that value creation as well so that we can start those trials as soon as possible.
Gary Polakoff - UBS
As a follow up, the value that you’re putting on Picoplatin obviously evaporates if you run out of money. What value are you putting on it right now, on a per-share basis?
On a per-share basis, that would largely depend on which clinical trial or trials are being conducted and the NPV associated with that indication, and the –
Gary Polakoff - UBS
As today, as of August 9, what trials -- you know what trials are being done right now, none. So what is the value of Picoplatin?
Well, the clinical trial that -- so you’re correct, there are no clinical trials that are being conducted. However, there is an inherent NPV that’s associated with Picoplatin and that NPV then, yes, to your point, needs to be unlocked by conducting clinical trials. And so that’s what we’re in the process of doing right now, is to make that decision whether that’s in a partnered situation or whether that’s in an acquired situation, or whether we’re financing those clinical trials on behalf of Poniard as a standalone company.
With no further questions in the queue, I would now like to turn the call back over to Mr. Ronald Martell for closing remarks. You may proceed, sir.
Thank you, Operator. Again, we’d like to thank you all for joining the call today, and thank you for your continued support of the company.
Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.
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