Mirna Therapeutics's (MIRN) CEO Paul Lammers on Q4 2015 Results - Earnings Call Transcript

| About: Mirna Therapeutics (MIRN)

Mirna Therapeutics Inc. (NASDAQ:MIRN)

Q4 2015 Earnings Conference Call

March 29, 2016 15:00 ET

Executives

Paul Lammers - President & CEO

Alan Fuhrman - CFO

Miguel Barbosa - CSO

Casi DeYoung - Chief Business Officer

Operator

Greetings and welcome to the Mirna Therapeutics Inc. Fourth Quarter and Full Year 2015 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Alan Fuhrman. Thank you, Mr. Fuhrman, you may begin.

Alan Fuhrman

Thank you, Darren. Good afternoon everyone, and thank you for joining our call. With me today are Dr. Paul Lammers, Mirna's President and Chief Executive Officer; Dr. Miguel Barbosa, our Chief Scientific Officer; and Casi DeYoung, our Chief Business Officer.

Earlier this afternoon, we released financial results on the fourth quarter and full year ended December 31, 2015. If you have not received this release or if you'd like to be added to the distribution list, you can do so on the Investor Relations page of our website. Today's conference call will include forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements, including without limitations statements regarding our research and development plans and financial outlook. These forward-looking statements involve a number of risks and uncertainties, are based upon our current estimates and various assumptions and reflect our opinions only as of the date of this call. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of any new information, future events or otherwise. Actual results may differ from those indicated by these forward-looking statements due to numerous factors including those discussed in the risk factors section of our Annual Report on Form 10-K for the year ended December 31, 2015 which will be filed with the SEC later today. This conference call contains time sensitive information, and in fact it only as of the live broadcast today, March 29, 2016.

I'll now turn the call over to Paul.

Paul Lammers

Thank you, Alan and good afternoon, everyone. Thank you for joining us on our first earnings conference call as a public company. Our agenda this afternoon is to provide an overview of 2015 and recent milestones, outline our clinical development plan and key objectives for 2016 and beyond and review our financial results for the fourth quarter and full year 2015.

Before I start with our clinical program, I want to briefly touch on several quarters of milestones achieved last year. We raised a total of over $100 million in gross proceeds from public and private financings which included a grant from the Cancer Prevention and Research Institute of Texas. We also strengthened our leadership team welcoming Miguel as Chief Scientific Officer and Alan as Chief Financial Officer. These added resources and expertise leave us well positioned to advance our clinical development strategy and fully leverage our pioneering work in the promising new field of microRNA therapeutics.

In 2015, we continue to develop our broad pipeline of microRNA mimics and oncology furthering the clinical study for our lead product candidate, MRX34, in a variety of cancers. MRX34 is a mimic of miR-34, a naturally occurring microRNA that is encapsulated in a lipid, not a particle formulation. miR-34 plays a key role in controlling the extraction of more than 30 oncogenes. In addition, in a recently published preclinical study, our collaborative, MD Anderson Cancer Center, found that MRX34 can induce an ended tumor immune response by directly repressing the checkpoint signaling in molecule PD-L1. For these reasons, we believe MRX34 is a highly promising next-generation cancer therapeutic with a potential to affect multiple pathways of cancer growth and immunization. It is unlike current approaches which often target a single pathway of oncogene.

MRX34 is the first mimic to undergo clinical testing. And as to date demonstrated compelling clinical results as a single agent therapy in late-stage cancers. Our ongoing phase 1 trial launched in 2013 looked designed to help us determine the maximum tolerated dose of MRX34 and to select the recommended dose for future clinical trials. Secondary objectives of the study included assessments of safety, tolerability, pharmacokinetics, as well as biological and clinical activity of MRX34. Once the recommended dosing schedule and dose were identified, an expansion phase was initiated in late 2015 in order to focus on specific tumor types. We have now studied more than 100 patients in the phase 1 trial across two different dosing regiments. This broad experience showed us that liposomal infusion related, as well as immune mediated first events might occur which can be ameliorated by steroids co-administration during the dosing week of MRX34. The recommended dose and dosing schedule had been determined at 93 milligrams per meter square in a daily times five schedule and 21 day cycles which we expect to use in our ongoing phase 1 study expansion cohorts and future clinical trials.

As of December 31, 2015, we have observed in our phase 1 study confirmed positive responses in patient with renal cell carcinoma, acral melanoma and primary liver cancer. In addition, a number of patients with advanced solid tumors achieved long-term stable disease while on treatment with MRX34. These responses were observed in cancer patients with advanced stage 4 metastatic disease who previously received multiple rounds of therapy. Though we expect to report additional updates on this phase 1 study later this year in 2017, we're very excited about the findings to-date as to have provided us with the clinical evidence needed to advance MRX34 into its next phase of clinical development.

As you may have read in our press release this afternoon, we intend to advance MRX34 into two phase 2 studies, one on patients with renal cell carcinoma and acral melanoma. These cancers were selected based on the responses observed today than the ongoing case phase 1 trial and on the high unmet medical need, this partly availability of new therapies. Each of these phase 2 studies is expected to enroll upto 30 patients at clinical trial sites that have specialized in treating patients with renal cell carcinoma or melanoma. The objectives of this study are prefer to characterize the safety and efficacy of MRX34 in these specific tumor types where we believe there is great potential for our lead product candidate. We anticipate launching these trials by the end of 2016 as we update during the second half of 2017.

While we previously disclosed a long-term partial response in primary liver cancer, a stable disease of considerable duration for several of these patients, we decided not to pursue this indication as a monotherapy at this time. The emergence of immuno-oncology drugs including the Volomap [ph] which has shown impressive initial results in primary liver cancer along with the promising results we have seen with MRX34 in renal cell carcinoma and acral melanoma causes to conclude that focusing on these two candidates was the most promising path forward in our MRX34 development program.

With that I will now turn the call over to Miguel to review our translation and preclinical activity.

Miguel Barbosa

Thank you, Paul. I will share our plans for three key R&D strategic priorities; the mechanistic effect of MRX34 in patients, the potential for MRX34 in combination therapy, and the discovery strategy for our product pipeline.

As we announced in today's press release, Mirna is preparing to launch a phase 1b translational medicine study. The study to be conducted in patients with melanoma build on the insights we gained in our clinic and preclinical studies during 2015. One of the key learnings this past year related to the ability of miR-34 to modulate immune-regulatory pathways including PD-L1 and the T-cell receptor. The goals of this experimental medicine study article form the pharmacodynamics activity of MRX34 and develop deeper mechanistic insights into the tumor suppressor and immuno-modulatory activities of our drug. We expect to launch this study this year.

Turning to the potential of MRX34 for combination therapy, I'd like to provide you with an update of our recent activities and plans. Our research team in in vitro experiments has found significant synergy between MRX34 in standard of characterized in kinase inhibitors and chemotherapeutic drugs. In addition, as Paul mentioned earlier, our collaborator at MD Anderson Cancer Center has shown that miR-34 represses PD-L1 checkpoint gene expression. We are building on these findings by testing these drug combinations in relevant preclinical animal tumor models. Results from these studies will inform our selection of the appropriate combinations to test in the clinic.

Regarding our discovery portfolio, we continue to progress our pipeline of unique microRNAs. Our discovery strategy integrates the unique biology regulated by the individual microRNA targeted genes with complex mechanisms driving the tumor microenvironment pathology. We are now focused on differentiating each of our product candidates according to their potential therapeutic effect in specific cancer indications. We expect to select a new microRNA product candidate in 2016 and file a 9D in late 2017.

With that, I will turn the call over to Alan to discuss the financial results.

Alan Fuhrman

Thank you, Miguel. In the fourth quarter of 2015, our research and development expenses were $6.3 million compared to $3.5 million in the fourth quarter of 2014. For the full year 2015, our R&D expenses were $18.9 million compared to $10.5 million in 2014. The increase in R&D expenses in 2015 was primarily due to cost related to the ongoing phase 1 clinical trial, including a higher number of patients, additional investigator sites, and additional drug costs. In 2015, our research and development costs related to personnel intellectual property and licensing costs also increased compared to 2014.

For the fourth quarter of 2015, our general and administrative expenses were $2.5 million compared to $900,000 in the fourth quarter of 2014. For the full year 2015, our general and administrative expense were $6.1 million compared to $3.4 million in 2014. The increase in G&A expenses was primarily due to an increase in personnel costs and outside professional services expenses incurred for operating as a public company. Mirna reported a net loss of $8.8 million for the fourth quarter of 2015 compared to $4.4 million in the comparable period in 2014. These results included non-cash stock-based compensation charges of approximately $424,000 for the three months ended December 31, 2015, and approximately $121,000 in the comparable period in 2014.

For the full year 2015, we reported a net loss of $25 million compared to $15.8 million in 2014. Included in these costs are non-cash stock-based compensation charges of approximately $985,000 for the year ended December 31, 2015 and approximately $408,000 for the comparable period in 2014. Mirna ended 2015 with cash and cash equivalents totaling $89.7 million compared to $9.3 million at December 31, 2014. The increased resulted from our two private financings and our IPO in 2015 offset by our operating expenses. At December 31, 2015, the company had no debt. Based on our current operating plan, the company expects that cash resources will be sufficient to meet operating results into 2018.

Now I'll turn the call back over to Paul.

Paul Lammers

Thanks, Alan. As you've heard today, 2016 is shaping up to be another highly productive year for our company as we prepare to launch two phase 2 clinical trials and the phase 1b translational medicine study for MRX34, as well as to further research necessary to select both, a combination therapy approach for MRX34 and a second microRNA therapeutic candidate for clinical study. Our leadership team and employees are excited about the important work ahead and the potential to generate breakthrough cancer therapies for patients who desperately need them.

Thank you for listening, and we will now open up the call for question.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from Yankel Lakhmovhic [ph] with Citi Group. Please state your question.

Unidentified Analyst

Hi guys, how are you? Thanks for taking the questions. Could you just comment in a little more detail possibly regarding the combination plans for MRX34 in non-small cell lung cancer? You mentioned checkpoint inhibitor TKI and chemo and some of the animal tumor models you were looking at. Do you have any more clarity or path there as far as which of those may be more relevant to combine with and would you just be picking one or could you possibly go in multiple directions as far as combo?

Paul Lammers

I appreciate the question, I'll hand it over to Miguel.

Miguel Barbosa

Thank you, Paul. So as we're looking at MRX34 as a potential firs-in-class drug, we do want to explore the different potential combinations and our plan is to pretty much follow-up on what we've started from the in vitro data that we have generated, where we saw again very strong synergy potential with TKIs but we also saw at with several PKIs, we've also seen it with chemotherapy. What we are doing upon, deeper discussions with key opinion leaders in the field is exploring those combinations with the most relevant animal models to then select the ones to go for clinical development. And we expect to look at those three classes; the immune modulating inhibitors, the TKIs, as well as the chemotherapeutics molecule. So within those classes, the studies that we are conducting in vivo will be to select those that we believe have the higher potential for clinical testing.

Unidentified Analyst

Okay. And do you have any sort of working hypothesis as to which might be the most promising or is that it's really just a matter of doing the experiments and getting the data?

Miguel Barbosa

I mean right now we do see potential with each of those three classes looking at our in vitro data. And so -- which I think highlights some of the opportunity with the broad mechanism that the microRNA such as miR-34 has been shown by us in other labs to have. So right now I can't handicap which of these combinations might be better because at this moment I think they all have significant potential.

Unidentified Analyst

Got it. And then, I ventured the R&D, sort of second asset, is there anything you can say more specifically there about which one is the lead, if there is a lead between 101-2015 in miR-16?

Miguel Barbosa

We are -- we have our effort, as I mentioned that is really prioritizing those on essentially as the data comes in. Right now the one that has shown some increased potential in our benchmark tumor model has been 2015 that showed higher potency. But we continuously asses the others according to the unique mechanisms that each one of them regulates through the specific target genes that they inhibit. But 2015 is the one that has a more advanced preclinical dataset.

Unidentified Analyst

Okay. And then, just a quick -- if you could just provide a quick update on enrollment, I think you mentioned that you're trying to recruit eight or hundred patients across all the cohorts this year. Can you say how that's going and what the split has been between phase 1 between the U.S. and Korean sites?

Paul Lammers

Sure, I appreciate the question, it's Paul. So basically to-date, we have as of December 31 a 122 patients enrolled including 19 patients in the expansion cohorts that is a mixture of Korean, as well as U.S. based patients. Again, quite a few degrees on Korean patients are HEC patients and that was having a green size involved in the first place. There is a number of patients active from there, a number of patient's long-term stable disease continuing in HEC. We expect that given the fact that we will be -- we aim to launch the two phase 2 studies and the phase 1b translational medicine study later this year that we might at that point in time based on these discontinue in enrollment in the ongoing expansion cohorts that would make more sense. We think that at the end of the day we've targeted about 30 to 34 patients total enrolled in expansion cohorts this year.

So it's a bit of a shift, initially thinking we would enroll 80 to 100 in the expansion cohorts. Now with the suggesting advice of our ex-person, advisors, to go for the phase 2 studies and we continue to enroll while we try for the initiation of those studies. We continue enrollment in the expansion cohorts and a number of patients are active from drug. But we likely will stop enrollment once the phase 2 studies have started.

Unidentified Analyst

Thank you. And then final question, more enough on the platform on SMARTICLES, as you know, some of the gene-editing companies has also licensed the SMARTICLES Technology and we just wanted to get your thoughts on how that might impact manufacturing as with any capacity constraints as far as manufacture of the SMARTICLES to support your platform as well as some of these other novel technologies? Thanks.

Paul Lammers

That's a great question, and obviously, we have a very good relationship with our counter manufacturer. We have our slots basically are in the queue to lined up and we do not foresee any issues with clinical batches/preparation for us, forwarded either to phase 1 to phrase 2 or the translation medicine study in the foreseeable future.

Unidentified Analyst

Great. Thank you very much.

Paul Lammers

Sure.

Operator

Our next question comes from Michael Smith with Leerink Partners. Please state your question.

Unidentified Analyst

Hi, it's John Dechanks [ph] stepping in for Michael. Thanks for taking my questions. First in the ongoing phase 1 study, how many patients worth of data can we expect in the mid-2016 update?

Paul Lammers

Hi Jonathan, it's Paul. We appreciate the question. So obviously we did -- we submitted a number of extracts to ASCO, we don't know yet if they are going to be accepted or not, we are hopefully to hope it will be accepted if not for a poster presentation. Obviously the cover basically, as of late December, so at that point in time I think that we will have a substantial amount of new data, especially also on the responders that we've mentioned, especially the renal cell and the acral melanoma patients involved. So we're waiting to hear back from ASCO about acceptance of that abstract.

Unidentified Analyst

Okay, great. Thanks. And secondly, for the response achieved in RCC, are those from the dose escalation portion of the study, is that correct?

Paul Lammers

Yes, so that patient was enrolled in the -- basically in the highest dose at the 110 milligrams per meter squared, and basically showed a really significant response both in tumor sizes, in tumor burden which we -- especially the renal cell guys were very excited about given the fact that this is a patient who had had extensive previous therapy and had significant tumor burden.

Unidentified Analyst

Thanks. And can you remind me how many RCC patients have been treated in a phase 1 study in both, the dose escalation and I guess how many will be in the dose extension portion of the study?

Paul Lammers

So basically, so far we have only had two renal cell carcinoma patients enrolled Jonathan, so obviously we don't want to talk about the response of one of two. I know that we are working with the sites, we have advice the sites now into expansion course of focus on melanoma and renal cell and perhaps some other solid tumors where we can basically get tumor biopsies because that is critical for us to go into the biopsy of the tumor. So far we only have we have one out of the two responders but I don't want to use that math. So clearly we need to have more renal cell and that's also to release now since we are so advanced with our phase 1 study Jonathan, our renal cell advisors advise us to start this phase 2 study later this year.

Unidentified Analyst

Great, thanks.

Paul Lammers

We try to get more on expansion cohort but it's more difficult at this stage where we have a study that is already been ongoing for so long.

Unidentified Analyst

Okay, great. Thank. And then maybe just one last one. In terms of the stable diseases that you mentioned in the press release, I saw and make sure I understand this, so these are longer term follow-up of existing stable diseases reported or these are new stable diseases here?

Paul Lammers

It's a combination of stabile disease that already started during the dose escalation and have continued, as well as moved on, that have started. Obviously for us, the question is what is clinically meaningful stable disease, not like two enforced cycles but really one's that are 6 A10/12 cycles, that really becomes clinically significant. So we have several doses that had been along the term stable disease already.

Unidentified Analyst

Great, thank you very much.

Paul Lammers

Sure.

Operator

[Operator Instructions] Our next question comes from Chris Beroy [ph] with Oppenheimer. Please state your question.

Unidentified Analyst

Hi, good afternoon guys, thanks for taking the question. Congratulations on your first fiscal year. I was wonder if you could actually comment on perhaps something that hematological proxy seen in some of your studies. It may just be a reminder that how does that look at some of the higher dose levels. And then, is that really maybe inhibiting any potential immune response against the tumors or are you seeing this as a potentially more sort of selective hemotox on a subset cell? Thanks.

Paul Lammers

Hi Chris, it's Paul. Thanks for the question. So regarding -- first, starting with the hemotoxicity, clearly we know that what is seen the liposomal infusion reactions or liposomal effect reaction that you see a drop in platelet counts, as well as in drop in neutrophil and white cell counts at the higher doses, and that's also the reason we think that 93 is really good dose. Take four, the 93 we see last time with 110 makes them a little square, so that's why the 93 is established as the maximum total rated dose and take the dose to take forward in phase 2. Again, these are a type of observations that are well known. The other things in terms of immune-mediated, clearly the dosing with dextrametazone is required during the week of MRX34; one to mediate the liposomal infusion reactions. B, we see some immune mediated adverse events as well. Interestingly enough, both, the renal cell, as well as the acral melanoma patient both have the very strong response, they continue -- they either show or start showing the response during the treatment with MRX34 or after they seize treatment, stop treatment with MRX34 for different reasons. So the continued response is not directly inhibited by the co-administration with dextrametazone.

Unidentified Analyst

Great, thanks. And then just in terms of may be thinking by your combination plan. How much work have you done on the ability for resistant tumors and when do we likely see some of that initial data? Thanks.

Paul Lammers

Miguel?

Miguel Barbosa

We have a couple of research programs going looking at that. We do not -- we again, believe that based on our in vitro data we work well with both sensitive and resistant to different class inhibitors. We also have a research program looking more deeply at the mechanisms underlying resistance. So I think the complementarity of potential synergy between MRX34 and different resistant cancers that may arise from the different classes of drugs that I mentioned earlier will not limit the potential for combinations with MRX34.

Unidentified Analyst

Okay, great. Thank you.

Paul Lammers

Sure.

Operator

There are no further questions. I'd like to turn the floor back over to management for closing remarks.

Paul Lammers

Thank you again for participating on today's call. Before we wrap up, I'd like to acknowledge our Board of Directors, the management team and employees for their continued hard work dedication. And thank our shareholders for the continued interest and support. Have a great evening.

Operator

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.

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