Calithera Biosciences' (CALA) CEO Susan Molineaux on Q2 2016 Results - Earnings Call Transcript

| About: Calithera Biosciences (CALA)

Calithera Biosciences (NASDAQ:CALA)

Q2 2016 Earnings Conference Call

August 9, 2016 04:30 PM ET

Executives

Jennifer McNealey - Senior Director, Investor Relations

Susan Molineaux - Founder, President and CEO

William Waddill - SVP and CFO

Analysts

Operator

Good day, ladies and gentlemen and welcome to the Calithera Biosciences, Inc. Second Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I'd now like to introduce your host for today’s conference, Ms. Jennifer McNealey, Senior Director of Investor Relations. Ms. McNealey, you may begin.

Jennifer McNealey

Thank you. Good afternoon, everyone and welcome to Calithera’s second quarter 2016 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; and Will Waddill, our Senior Vice President and CFO. Before we begin, I would like to remind you that today’s discussion will include statements about the company’s future expectations, plans, and prospects that constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the Risk Factors section of our Annual Report on Form 10-K, on file with SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Please note, this call is being recorded.

With that, I will turn the call over to Susan.

Susan Molineaux

Thanks, Jennifer. Good afternoon everyone and thank you for joining us today on our quarterly conference call. During the second quarter, we significantly advanced our pipeline of novel cancer therapeutics. Positive data presented on the tumor metabolism drug CB-839 at the American Society of Clinical Oncology helped us to define the path forward for clinical development in renal cell carcinoma and triple negative breast cancer.

With the FDA's acceptance of the IND for our metabolic immune checkpoint drug candidate, CBE-1158, we now have two novel metabolic agents targeting tumor and immune cell metabolism in clinical development. For CB-839, our glutaminase inhibitor we announced last week the enrollment of our first patient in a Phase 1/2 combination study with the Nivolumab.

This study significantly augments our currently enrolling multiple expansion cohorts in combination therapy with standard of care agents. At Calithera, our program targeting glutamine, arginine, and glucose metabolism are interrelated with each program targeting a different aspect of tumor specific metabolism.

Tumor metabolism and immuno-oncology continue to emerge as promising new fields for cancer drug discovery and recent clinical successes with therapeutic agents in each field have demonstrated the potential to create fundamentally new therapies for cancer patients.

We are developing agents to take advantage of the unique metabolic requirements of tumor cells and cancer fighting immune cells such as cytotoxic T-cells and myeloid-derived suppressor cells. With these programs, we believe that we have multiple opportunities to positively impact clinical outcomes for cancer patients by building a pipeline of novel therapeutic product candidates.

Now for an update on the pipeline. CD-839 is the first-in-class selective and potent inhibitor of glutaminase. We believe it is the only glutaminase inhibitor currently in clinical development. The drug was well tolerated in Phase 1 at doses that fully inhibited the glutaminase enzyme 24 hours a day.

We have seen signs of activity in multiple tumors, including single agent responses in renal cell carcinoma or RCC and acute myelogenous leukemia or AML, as well as prolonged stable disease and several other tumor types. At this year's ASCO conference, we presented initial positive Phase 1b combination data for CB-839 in renal cell carcinoma and triple negative breast cancer. And in both cases the combination data was with standard of care chemotherapeutic agent.

We have a series of Phase 1b trials ongoing, but with this positive data we now have primary focus in RCC and triple negative breast cancer. So for RCC the data was based on a combination of CB-839 with everolimus. The rationale for this combination supported by a series of preclinical experiments, down at Calithera, leveraging the mechanism of everolimus as one of several agents that inhibits glucose energy pathway.

We believe, CB-839 when added to everolimus starts the tumor of a second nutrient, which is glutamine. In addition CB-839 indirectly inhibits the mTOR pathway, complementing the mechanism of action of everolimus which is a direct inhibitor of mTOR. The data at ASCO included 25 patients in a Phase 1 monotherapy dose escalation study dose twice-daily. The majority of those patients were heavily pretreated with at least three prior therapy.

Overall, in the immunotherapy group there was one partial response with overall disease control in about half of the patient, Among the 10 patients treated in combo, that was an 80% disease control rate, including one partial response with a notable 100% disease control rate among clear cell and papillary renal patients.

This compares favorably to treatment with everolimus alone, where one would expect 30% to 40% of the patient's to progress at their initial scan. The Phase-1 combo study remains open and is enrolling. The data presented with for the first 10 patients with CD-839 in combination with foldout everolimus.

Patients in this cohort had a median of two private therapies and some have been treated with prior mTOR inhibitor. We are encouraged by the data with one partial response, as well as other minor responses which compared favorably to the 3% to 5% response rate expected of everolimus alone.

At the time of presentation 7 to 8 patients remained on study and for a duration that was at least as long or longer than their prior therapy. Some patients had had prior torso for a checkpoint inhibitor. In terms of safety, the drug was well tolerated in combination with everolimus and in general the great three events were similar to events typically seen with everolimus.

The median time of study at the ASCO presentation with 6.5 months, which also compared favorably to everolimus expected PFS of fortified months and several patients remained on study. Of note, in renal cell carcinoma there are limited combination treatment option. Historically, as its not been possible from a toxicity perspective to combine targeting kinase inhibitors with mTOR inhibitor.

In addition, tyrosine kinase inhibitors and mTOR inhibitors cannot always be tolerated in combination with I-O drug. With CB-839 tolerability profile it is and then a therapy that’s an ideal complement to standard of care therapy, and we believe it has the potential to be a backbone in the treatment of RCC. Further, the benefit of the dual metabolic blockade of glucose and glutamine, may be an important mechanism in the treatment of RCC overall.

Next an update on our TNBC trial in combination with paclitaxel. As of the time at the ASCO presentation, we had treated 15 patients in combination with paclitaxel. They all had locally advanced or metastatic TNBC triple negative breast cancer. Patients were dosed twice-daily in combo with full dose paclitaxel and the combination was well tolerated.

Among patients treated with at least 600 milligrams BID, there were three partial responses or 38% and disease control in seven patients or 88%. Two of the three patients with PR had a prior testing in the metastatic setting without a response to that testing. The majority of patients have been treated with at least three lines of prior therapy and 40% have had more than five or more lines of prior therapy.

Most patients had received prior testing and higher value there would be adjuvant neo-adjuvant setting or metastatic setting. The historical expected PFS of this population would be 2 to 3 months. We and our investigators are particularly pleased with the responses seen today and patients from a received taxanes in the metastatic setting.

And we look forward to updating you on this trial later this year. Last week we announced the first patient enrolled in our new volume app combo trial. Checkpoint inhibitors like Nivo promote the activation and tumor killing properties of the patient's own immune cells such as cytotoxic T cells.

CB-839 could potentially you have a one/two punch in the treatment of cancer by first starving the tumor cell. And second, facilitating the activation of T-cells in the nutrient deprived tumor microenvironment. The Phase 1/2 study will assess the safety, pharmacokinetics and pharmacodynamics of CB-839 and Nivolumab.

The study will enroll patients with clear cell, renal cell carcinoma who were either a naïve to checkpoint inhibitors or who were recently treated with nivo without a tumor response, as well as melanoma and non-small cell lung cancer patients who have received anti-PD-1 monotherapy at their most recent line of therapy without tumor response.

We are also looking forward to the initiation of an investigator sponsored trial in a biomarker selected colorectal cancer cohort. This trial is expected to begin in the second half of 2016 at Case Western Reserve University, overseen by Dr. Jennifer Eads, Alok Khorana and Neal Meropol. The trial will be enrolling colorectal cancer patients with a PIK3CA mutation for treatment with a combination of CB-839 and capecitabine.

Next our immune-oncology program, CB-1158. We recently announced the acceptance of our IND for CB-1158 and we plan to enroll the first patients in a very near term. We are planning initial trials at the mono-therapy with the ability to move into combination therapy as quickly as possible. There is a rational to combine CB-1158 with other immune oncology therapies that target T-cell activation, such as CTLA-4 and PD-1 antibodies. This therapy is the first-in-class arginase inhibitor. In pre-clinical studies we’ve shown that CB-1158 to be a potent, oral, bio-available inhibitor of arginase.

Arginase is expressed in myeloid-derived suppressor cells or MDSCs and has a normal immune suppressor function in the immune system. Its function is to deplete arginine which is required for the activation and proliferation of T-cell. Tumors are able to co-op this mechanism and shut T-cells off in the tumor microenvironment by bringing in myeloid-derived suppressor cells that’s expected to originate, deplete arginine and check the shut the T-cell activation down.

CB-1158 is a well tolerated molecule that increases the arginine levels in tumors in animals. In pre-clinical models it had single agent activity in immunocompetent mice, and when we looked in tumors we found arginase expressing MDSCs in all human solid tumors. Expression was particularly high in human lung and gastrointestinal tumors.

Looking forward, our near term anticipated milestones include the following. For CB-839, we anticipate clinical updates in both RCC and TNBC in the fourth quarter. And for CB-1158, we look forward to enrolling our first patients now that our IND has been accepted.

With that, I’ll pass it over to Will, for an update on our financials.

William Waddill

Thank you, Susan, and good afternoon everyone. Calithera finished the second quarter in a solid financial position to drive our first in class tumor specific metabolism programs forward. As reported in our filing today, our cash, cash equivalents and investments as of June 30, 2016 was $60.4 million compared to $68.3 million as of March 31, 2016. Research and development expenses for the second quarter 2016 were $7.8 million compared with $5.5 million in the prior year, an increase of $2.2 million which was primarily attributed to increased development activities in our arginase inhibitors program. General and administrative expenses for the second quarter 2016 were $2.7 million compared with $2.3 million in the prior year. The increase of $0.3 million was primarily due to higher employment related expenses including stock-based compensation expense. Loss from operations for the second quarter 2016 was $10.4 million or $0.55 per share.

And with that, I’ll turn it back over to, Susan.

Susan Molineaux

Thank you, Will. And with that operator, we’re happy to open the lines for questions.

Question-and-Answer Session

Operator

Q -

A -

Susan Molineaux

Once again, thank you all for joining the call today. And in closing we look forward to seeing you in investor conferences and calls. Thank you and have a good day.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.

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