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Executives

Dr. Mitchell Steiner - Chief Executive Officer

Marc Hanover - President & Chief Operating Officer

Analysts

Joel Sendek - Stifel Nicolaus

David Nierengarten - Wedbush Securities

Biren Amin - Jefferies

Ryan Martin - Lazard Capital Markets

Howard Liang - Leerink Swann

GTx, Inc. (GTXI) Q2 2012 Earnings Call August 8, 2012 9:00 AM ET

Operator

Good day ladies and gentlemen and welcome to the GTx Inc corporate update and second quarter 2012 financial results conference call. My name is Tahisha and I will be your operator for today.

At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions).

I would now like to turn the conference over to your host for today, Dr. Mitchell Steiner, CEO of GTx, please proceed.

Dr. Mitchell Steiner

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 today and the Quarterly Report on Form 10-Q we filed May 10, 2012 with the SEC, where we discuss the risks and uncertainties that affect our business.

GTx has made good progress in advancing our two late stage clinical programs, enobosarm for the prevention and treatment of muscle wasting in patients who have advanced non-small cell lung cancer and Capesaris as a secondary hormonal therapy in men with castration resistant prostate cancer.

As with the Enobosarm program, we are currently enrolling subjects into two international pivotal Phase III clinical trials called POWER 1 and POWER 2 in over 80 clinical sites located in the United States, Europe and South America.

Each clinical trail we will enroll 300 subjects who have either Stage III or IV non-small cell lung cancer. These subjects are being randomized to daily doses of either 3 mg of enobosarm or placebo at the time they start First Line Platinum Doublet Chemotherapy. More specifically, the chemotherapy regiment for the POWER 1 trial is a Platinum Plus a Taxane and for the POWER 2 trial is a Platinum Plus a Non-Taxane.

The primary end point end point for each of these studies is a co-primary end point consisting on a responder analysis of clinical benefit defined as maintaining or improving total lean body mass, assessed by DEXO and improving physical function assessed by the Stair Climb Test. Durability of the drug is being evaluated as a secondary endpoint at five months of treatment and those patients who are determined to have responded at three months.

Enrollment is progressing steadily in both studies of randomizing subjects at essentially the same rate. Based on the current enrolment trajectory, we expect to complete enrolment of all 600 subjects during the fourth quarter of this year. We expect to release top line results in both studies during the second quarter of 2013.

Early palliative care for the treatment of lung cancer patients is increasingly recognized as a necessary component for effectively providing comprehensive care to address host issues like quality of life, muscle wasting leading to a decline in physical function, fatigue, loss of independence and health care services utilization.

This past February ASKO issued a provisional clinical opinion of the integration of palliative care into standard oncology care. Seven published randomized controlled clinical trails have demonstrated early palliative care, given alongside of usual oncology care in patients with advanced cancer that maintains or improves survival and improves quality of life.

Based on this strong evidence, patients with metastatic non-small cell lung cancer should be offered concurrent palliative and standard oncology care initial diagnosis. Early palliative care leads to better patient and caregiver outcomes, which include improvement in symptoms, quality of life and patient satisfaction with reduced caregiver burden.

As the ASKO experts observed in their provisional clinical opinion and I quote “therefore is the panels expert consensus that combines standard oncology care and palliative care, should be considered early in the course of illness for any patient with metastatic cancer and/or high symptom burden. Strategies to optimize concurrent palliative care and standard oncology care with evaluation of its impact on important patient and caregiver outcomes for example quality of life, survival, healthcare utilization and cost and on society, should be in an area of intense research.”

The ASKO provisional clinical opinions now emphasizing quality of life, their point is, if patents do now survive longer, can they live better. For example if patients with advanced lung cancer had only a medium survival of eight to 12 months, will they spend most of their time at home being active or will they spend the majority of their remaining time requiring skilled nursing care hand or hospice care.

Muscle wasting has been shown to correlate with decline in physical function, weakness, fatigue, mobility disability, less tumor response and a potential for higher adverse side effects with chemotherapy, more frequent hospitalizations and shorter survival.

If the POWER 1 and POWER 2 clinical trials are successful and enobosarm demonstrates that by preventing and treating muscle wasting, there is an improvement of physical function which allows lung cancer patients to maintain their independence longer with better quality of life, then the avoidance of expensive healthcare services could translate to significant savings for the healthcare system.

As for Capesaris, our Capesaris program for advanced prostate cancer, we have clinical sites that are now beginning to screen for patients who have metastatic castration resistant prostate cancer. Approximately 25 clinical sites in the United Sates will participate in our Phase II 712 clinical study of Capesaris, as a secondary hormonal therapy for metastatic castration resistant prostate cancer.

The Phase II 712 clinical study will build on our previous clinical experience with approximately 500 subjects who have participated in our earlier Phase I and four Phase II clinical trials. The Phase II 712 clinical trails will test doses lower than those studied in our previous Capesaris Phase II clinical trails with advanced prostate cancer.

75 men with metastatic castration resistant prostate cancer will be randomized into one of three cohorts of 125 milligrams, 250 milligrams and 500 milligrams daily dose of Capesaris. Each arm will have 25 patients and the enrolment will be conducted sequentially, such that the 125 milligrams group will be enrolled first, followed by the 250-milligram group and then the 500-milligram dose group of Capesaris.

The enrolment into the next higher does cohort of Capesaris will occur if an acceptable incidence of VTEs is observed for 30 days following the enrolment of the last patient in the previous cohorts. The primary end point is the proportion of men who have achieved a serum PSA response by 90 days. In addition, we’ll be evaluating serum PSA progression, time to progression and progression free survival.

Phase II 712 clinical study will further confirm the mechanism of action for Capesaris, which is to increase SHBG and reduce free testosterone, thereby resulting in suppression of prostate cancer progression. We have observed this mechanism of action in the four previous Phase II clinical trails.

The safety single we will be monitoring, is the rate of venous thromboembolic events, a safety finding that has been previously reported with the estrogen class of drugs, as well as other hormonal therapies. We believe that a more expectable rate of VTEs will be observed in this new study than what we are seeing in our earlier Phase II clinical studies of Capesaris for the following reasons.

One, we will be evaluating lower does of Capesaris; two, the study is designed to exclude patients with a history of VTEs or who’s screened positive for blood clotting factors, mutations and deficiencies; three, we will provide a daily 81 milligram aspirin to subjects who are not already talking aspirin; and four, we plan to monitor patients with the development of new VTE risk factors while on study and where appropriate, consider the administration of VET prophylaxis.

With these additional requirements added to the protocol, we believe the rate of VTEs will be shown to be similar to what has been reported in men with prostate cancer, who have been treated with primary ADT achieved by LHRH-Agonist, LHRH antagonists or surgical orchiectomy.

Data from the previous Phase II clinical studies that were stopped earlier this year, as well as from the earlier Phase I and Phase II clinical studies, give us comfort that Capesaris will continue to be effective at the lower doses we are now testing in men with metastatic castration resistant prostate cancer.

One important observation from our previous studies, is that SHBG levels appear to become saturated at higher doses. That is, SHBG levels do not elevate to greater levels with higher does of Capesaris. Since the mechanism of action of Capesaris involves increasing SHBG to lower free-T, we will be trying to determine the optimal increase in the level of SHBG required to lower serum PSA in men with castration resistance prostate cancer, who already have achieved castration and are maintained at castrate levels while on primary ADT.

In the Phase II 707 clinical study in men with castration resistant prostate cancer, after 2000 milligram a day dosage of Capesaris, we reported that mean increase in SHBG was only 399 plus or minus 85% for men that had a serum PSA response, and we now have evidence from our previous Phase I and Phase II clinical studies that we can achieve similar increases in levels of SHBG at lower Capesaris doses. That we have data to suggest that even lower levels of SHBG could also lower free testosterone and serum PSA.

Another unique characteristic of Capesaris is that now only does it have the potential to reduce free testosterone in men who have already achieved castration, but also as an estragon-based therapy. We have observed that Capesaris improves the estragon deficiency side effects associated with ADT such as hot flashes, bone loss and insulin resistance. We expect to release our clinical data from these previous Phase II studies in several upcoming scientific meetings.

In summary, Capesaris offers a unique secondary hormone therapy to treat castration resistant prostate cancer by increasing SHBG and further lowering free-T, while potentially avoiding the estrogen deficiency side effects of ADT. It is now clear that advanced prostate cancer can continue to be suppressed by different hormonal therapies and the prostate cancer fields evolving to be more like the breast cancer field, where several secondary hormonal therapies will be used sequentially and in combination before cytotoxic chemotherapy is attempted.

The main question in prostate cancer today is how these hormonal therapies will be used, not whether they will be used prior to chemotherapy. They all will be used prior to chemotherapy. The use and order of the secondary hormonal therapies will be based on their respective efficacy and safety profiles.

We are excited about the potential of Capesaris to offer a novel treatment to men with advanced prostate cancer. We look forward to sharing the efficacy and safety data from this study by the summer of 2013.

This morning we also released our financial results for the second quarter of 2012. While I won’t review the financial results in detail, let me point out that we ended the quarter with $55.9 million in cash and short-term investments. Marc Hanover and I will be happy to answer any questions you may have about our financial results during the Q&A.

Operator, we are now ready for our first question.

Question-and-Answer Session

Operator

Great. (Operator Instructions) Your first question comes from the line of Joel Sendek from Stifel.

Joel Sendek - Stifel Nicolaus

Thanks. I guess I have one question on each of the programs Mitch. First of all on enobosarm, so you have two end points. I am just wondering, do you need both of them for the trial to be successful. In other words, do you need the responder analysis and the durability to be met. And also, can you just go over the difference as to what happens in three months and five months of durability and then I have a follow up on Capesaris after that. Thanks.

Dr. Mitchell Steiner

Okay. So first of all to be clear, the end point is a co-primary end point, which means that the study, not the patient, but the study needs to achieve one, to be considered a responder, maintain or improve your lean body mass, that’s one end point and the other end point is a 10% improvement in physical function measured by stair climb.

So a single patient and the endpoint happens at three months. The single patient doesn’t have to hit both, although we know that if you have the increase in a lean body mass and maintain it, your more likely to get both. But for the study to be successful, you need to hit physical function improvement and you need to hit an improvement or maintaining lean body mass if you have a P value of less than 0.05 for each and so again, the study at three months needs to hit both of those okay.

Now with that said, the durability is a secondary end point and so that’s a little different. In the secondary end point the patients who responded at three months, will then be looked at again to see if they continue to respond by five months or two months later if they are still responding. That’s really almost a descriptional statistics as opposed to a hard statistical end point, so that’s why it’s a secondary end point.

The other important point about the primary end point is it’s a responder’s analysis, so there’s no missing data. That means that the base, the patient is not going to be really compared to the placebo; the patient’s being compared to themselves. So if the patient maintains a lean body mass compared to their baseline then they win, that’s a yes.

If a patient has a 10% improvement in their physical function, then that’s a yes, and the goal is to see whether we have more yes’s with our drug compared to placebo. And so that’s a little different than typically when you look at continuous variable data, where it’s the mean or the median of the placebo versus the mean or the median of the treated; its actually from baseline and we know that our patients do best when you compare them to their baseline.

Joel Sendek - Stifel Nicolaus

Got it, okay. Thanks. And then quickly on Capesaris, I guess my concern would be, given the fact that you are making these provisions to reduce the potential for VTEs, is it no longer a real world study and might the FDA have some issues with you being able to – this drug still being safe in a general population that might not take all those measure.

Dr. Mitchell Steiner

Right, so let me see if I can answer that question. We do think it represents the real world and the reason it represents the real world is as a hormonal base therapy, especially in estrogen go read the labels for hormone replacement therapy with estrogen in post menopausal women and also go read the labels for oral contraceptives or any contraception in women and you’ll see that the language that they have will be pretty much the language that we’ll have, because at the end of the day, this is what this class does.

So we are not going to get away from that and all we are saying in our inclusion, exclusion criteria is to make sure that people that have a history of VTEs shouldn’t be taking one of these drugs and that’s real life with any of these drugs today. So we are not really changing the positioning of a hormone-based therapy; so that’s number one.

Number two, the only thing that would be different in the real world would be screening patients. In other words it may be that the label says, if you have a Factor V Leiden mutation, you shouldn’t be taking the drug. Well, that’s personalized medicine and that’s moving into a realm that the FDA likes and then quite frankly is using testing that we currently have.

So what is the rate and we’ll find out more from the study of patients that have Factor V Leiden mutation and other ones like that. It’s going to be less than 5% to 10% of your population. Another way of saying it is, 90% of your population is going to be just fine and why would you want to put them on a therapy if you know that the therapy may put them at risk. So that would probably be the only thing and if that’s the case, it will mark our market by 90%.

The other side of the equation is efficacy. DES, diethylstilbestrol is a sloppy, non-specific estrogen that’s being used today in patients with prostate cancer and its being used today because it works. Its been used for 60 years. It works for primary castration, it works when somebody fails primary castration, it works when somebody fails abiraterone or any of those drugs, it fails ketoconazole, it works after somebody fails an AR blocker, it works after chemotherapy and it works even after you stop the drug and reintroduce it.

So there is a place for this compound and the question is, if all our label shows is that we have basically an estrogen based type therapy with those caveats and we have to screen patients with new science, that could get into trouble, then you’ll really still be only with 90% of the population that can have a tremendous benefit. It’s worth pursuing a drug that’s a souped up, a better selective and safer DES.

Joel Sendek - Stifel Nicolaus

Okay, thank you.

Dr. Mitchell Steiner

Thank you.

Operator

Your next question comes from the line of David Nierengarten from Wedbush Securities. Please proceed.

David Nierengarten – Wedbush Securities

Hi, thanks for taking the question. I was just wondering if you could define what you thought or if you had any guidance on what the acceptable rate of VTEs would be in your Capesaris study.

Dr. Mitchell Steiner

Yes. So if you go back and look at the – I’ll give you two end points, okay. If you look at DES, diethylstilbestrol, that VTU rate can be as high as 24%, so that’s a pretty high VTE rate. If you look at Lupron and there’s some great studies showing that people have just started Lupron for the first time and then you follow those patients, the VTE rate is about 3.8%.

So what we observed in our studies, when you look at the 709, 710 and 705 studies in the maintenance part, we saw a VTU rate that was 5.86%, roughly 6%. So what we are asking is with these new provisions, can we move that VTE rate down towards the 3.8%, can we get it less than 4%. If we can get it less than 4%, then we’ll be in the realm of what you would expect with primary hormone therapy and certainly a lot lower than the estrogens that are being used today.

David Nierengarten – Wedbush Securities

And then a quick follow-up, thanks for that. In terms of how we are evolving to these, essentially what I would call super hormones with insuledamide (ph) and abiraterone, how do you see or do you think an interesting niche or an interesting positioning of the compound since we don’t know yet, really how patients respond.

If they respond, if they take insuledamide (ph) and then abiraterone, that’s kind of like will you – you will have a place because you have a different mechanism of action and your product positioning, so a physician would feel comfortable prescribing that, knowing he would have the option to use insuledamide (ph) post Capesaris for example.

Dr. Mitchell Steiner

Yes, so the way I look at it is, I look at it in the following ways. First of all, would you consider a hormone therapy or would you consider a chemotherapy and I see chemotherapy being pushed way out as these hormonal therapies, whether its abiraterone, prednisone, enzalutamide or Capesaris, they would all most likely be used before you attempt cytotoxic chemotherapy, okay, that’s point one.

Point two, I see that the angin receptor blockers and drugs like abiraterone with prednisone will further castrate the patient in making the rest of the deficiency side effects worse. So the bone loss, the hot flashes, fractures, all that stuff will get worse only because your squeezing the T even more. The advantage of Capesaris in that setting, is that in addition to squeezing the T more, we are also, because its estrogen based, are replacing the estrogen that’s deficient, so that the potential or avoid the potential for hot flashes, bone loss, insulin resistance and some of these other things.

So what I see happening is the following: one, is that the sequencing of these drugs, whether its abiraterone, prednisone or enzalutamide by itself or our compound is going to be based on the efficacy profile and the safety profile. Then again, because they are all hormonal therapies, they are going to be better to have them in cytotoxic chemotherapy.

Then the next thing that’s going to happen is how do you sequence them, in other words, which one should you go first and I would say its going to be based on efficacy and safety and the second thing is, and we know this is true, that when using these drugs in combination, that there should be even more activity.

In the breast cancer field for example, tamoxifen was I guess introduced approximately 30 to 40 years ago and the New England Journal of Medicine just reported on a combination hormone therapy study, using drugs that have been in this space for a long time.

So I think that the question of combination and sequencing is going to be a long one. I mean, this is going to be five, 10 years and so the monotherapies are now getting their seat at the table and to have monotherapy you need to show that you work this monotherapy and because we have a different mechanism and its not ME2 and the drugs of this class have shown activity, then we need to move forward with evidence based science to show that we have a place.

David Nierengarten – Wedbush Securities

Great, thanks.

Operator

Your next question comes from the line of Biren Amin from Jefferies; please proceed.

Biren Amin – Jefferies

Hi Mitch, thanks for taking my questions. It seems that the power enrollment timelines are slightly delayed since previously the company was guiding for finishing enrollment at the end of the summer versus current guidance with Q4 completion. So Mitch, can you maybe I guess discuss the reasons for the delay and also, can you give us the enrollment split across the US versus ex-US in each of the two trials.

Dr. Mitchell Steiner

Right, so the question is a delay. We have been guiding everybody that we were planning to complete the study at the end of summer, which is the September timeframe. The good news is that we now have enough data and trajectory in our enrollment that we are quite pleased with our enrollment.

Our enrollment is as I said in my comments, enrolling steadily. Its enrolling equally in both studies. At one point I was concerned that maybe one will enroll more than the other and that we are feeling pretty good that this thing is going to be fully enrolled in the fourth quarter, which compared to the end of the third quarter it’s not much of a delay, given the complexity of a trial of this nature, where your dealing with newly diagnosed advanced lung cancer stage III, stage IV, CAT catching them right when they are starting their chemotherapy. So I’m proud of our team and I don’t think the delay will be material.

With a that said, in terms of the mix or patients, I don’t know the exact statistics, but the United States has roughly 30 sites and we have about 80 sites worldwide and so I’m not sure on the split. We are shooting for having good US representation, but the truth of the matter is that we are also running all through Europe and all through South America. So we will just have to see how it shakes out.

Biren Amin – Jefferies

And with regards to the consistency of the sites ex-US, in your opinion, did the South American sites, are they constant as far as measuring for steer client power for example or DEX (ph) versus the US sites.

Dr. Mitchell Steiner

Yes, very consistent. They get extensive training. First of all the DEXs (ph) are all centrally read by SYNARC and before any site, wheatear its U.S., Europe or South America can begin to test patients, they have to go through complete training and sign off and qualification and validation through SYNARC who centrally reads the information.

In terms of stair climb power we have again extensive training, the monitors are constantly going back and making sure that everything is done correctly and what we’ve seen so far, its been very consistent across continents and of course when the study is compete, FDA requires that you also show whether there is any geographical variation. But at this point now, those are pretty hard end points.

I mean for DEX (ph) having that done by central read is important and stair climb, the only thing that the sites are measuring quite frankly is the height of the staircase, which is eight steps and the computer does the rest of it. The patient touches the pads and the pads are all identically and the equipment is all identical across the world.

Biren Amin – Jefferies

Okay, and I guess moving on, I saw on clin trails like recently that GTx is about to initiate a Phase II trail with Ostarine in 89 patients with metastatic breast cancer who have failed prior hormonal therapy. It doesn’t seem that its being studied at palliative given the primary end point as response rates. Can you maybe discuss the rational for evaluating (inaudible).

Dr. Mitchell Steiner

Yes, so where we are with that is, we have not pulled the trigger on that trail because we are focusing primarily on the neoplasm and getting that to the finish line and Capesaris doing the Phase II study and making sure that we are getting data.

We did file that trail which has not started and the reason we filed it because we are thinking about it, but we certainly are not going to executive it without money. With that said, the trail design is exciting from a standpoint that its well know, that in addition to estrogen, anträgen receptor is very, very important in breast cancer. In fact its been used for again, approximately 50 to 60 years people have used halotestin and other testosterone like products to treat breast cancer and the new hormonal therapy had not been introduced into breast cancer in over 20 years.

It turns out that if a patient is Estrogen Receptor Positive and Angin Receptor Positive that the Angin Receptor is antiproliferative and this is again been shown with these dirtier off target compounds.

Well our SARM is a clean AR positive binding agent that doesn’t cause a virilization in woman. We now know this with, if you count the number of patients that will be done in our current study, plus the other studies that we’ve, I mean 600 to a 1000 patients, we know pretty much that this not a virilizing drug at this point and so that’s based on those eight clinical studies that we’ve done in 600 patients, not referring to the study that we are doing at this point.

Now I don’t have any data, but with the past studies it doesn’t virilize. So if that’s the case, then we do think there’s a roll for at least showing in the Phase II setting that we can effect breast cancer progression.

So that’s why its in there, its exciting, I know other companies are going after AR blockers, palmetto AR blockers and this has been done with bicalutamide, that’s a much smaller group of patients, but the majority of patients are going to be those that are ER positive, AR positive, that want to avoid chemotherapy and will be happy to have another hormonal therapy, but again taking advantage of a more binding anti receptor, be antiproliferative and also help bone. Because remember Ostrim was the old name for the compound, because it increases BMD.

Biren Amin – Jefferies

Great, thank you.

Operator

Your next question comes from the line of Ryan Martin from Lazard. Please proceed.

Ryan Martin - Lazard Capital Markets

Hi, thanks for taking the questions. The first one is just a question on enobosarm. It does its regulatory strategy. Lets say one of the trials are successful the other is not. I mean how do you think about regulatory strategy there. And secondly, have you done any pricing reimbursement work on enobosarm, given as you mentioned as close as you didn’t put out this, I guess this guidance on early palliative treatment and also wanted to find out what kind of educational effort do you think maybe needed once you think about launching this drug.

Dr. Mitchell Steiner

Great. So the first question is sort of a regulatory strategy and that is in the event that one trial comes in positive and the second trial does not. Again, there is all what ifs? But I would argue that if either one of the studies come in positive, the only difference between the two studies is the chemotherapy that’s being used.

So for POWER I its Taxane and with the platinum and POWER 2 its Taxane with a non-platinum. Its well known that platinum Taxane could have their own set of issue, independent, and that’s the reason why we ran it separately, so at least from a safety standpoint we will be comparing apples-to-apples.

In the even that one study is positive and the other one is not-positive or at least supportive, we still think that there is a way forward, because then you will have information that you can go to FDA; it is a cancer patient population and your are treating a cancer related symptom and as you know the FDA, especially in a patient survival and the patient group that has poor survival, this would be important. So our precision would be to still move forward and have a discussion with the FDA and see what paths to take forward.

In terms of your second question, which is have we done any work to understand how doctors and payers feel, we have and then to answer your question about education we have and I’m going to turn both those questions over to Marc Hanover, since he’s been responsible for the independent research that’s been conducted on behalf of GTx. Marc.

Marc Hanover

Hey Ryan. We have gathered independent market research and as Mitch mentioned, the market research includes interviews with docs, patients and managed care organizations.

A few of the takeaways that I think are important to mention and again we are still gathering this, but the target product profile for enobosarm is seen by the docs and the managed care folks that we interviewed as being a benefit to patients. They view the target product profile as potentially being an important component to the treatment (inaudible) for these patients.

I think what’s most important to us that we saw throughout this market research was the acceptance and the importance of seeing that this drug is potentially very valuable and should be given at the earliest point that the patients are diagnosed. And I think that in and of itself to us was important from a market perspective and that A, they see the value of what the drug can being to the table, but B, it also brings into the equation a benefit to the patient, which untimely gives us flexibility on pricing, so I think that was very important for us to see.

And the other key takeaway was that in doing the market research it was very clear that this drug has the opportunity to be a $750 million drug in the US alone. That doesn’t take into account anything ex-US. So we feel that enobosarm continues to be a very valuable asset and one that we are excited about.

From the educational standpoint, clearly there is -- if there is one thing that we saw in this independent market research is it does require education, it will require education and that’s something that we are currently working on right now. Our team is doing that currently, but we also know that we have to do more and that’s something that we will do and continue to do and then of course look to do as well post data.

Dr. Mitchell Steiner

Right and just to add a couple of more points on the payers side, the payers did make the point that if there is a patient benefit in spite of survival, just showing the benefit and physical function, but even the payers are stepping in and realizing that this is an important product to the patient, because just because sometimes the physician thinks so, it doesn’t mean the payers will and that’s not what we learnt from our independent research.

Second thing is there was great awareness about a product of this type by the medical oncologist and it quite frankly rated pretty high in terms of whether they would adopt and use it both in prevention and treatment. But Marc is absolutely correct; in order to take advantage of that high rating, we need to make sure that we educate them on the efficacy and safety of our product once we have the data.

Ryan Martin - Lazard Capital Markets

Thanks and just one final one is in Capesaris what kind of mutations are you screening for? Can you go though some of the detail on that?

Dr. Mitchell Steiner

Yes, so essentially what we are screening for is a Factor V Leiden mutation, because just take a step back. We were very fortunate that we can go back to the hormone replacement therapy data in postmenopausal women, which is estrogen based and as well as in oral contraception again in women.

And when you go back and look at those studies and ask the question, which woman got into trouble with VTEs, 85% of those women if you screen, if you screen in that point is not the right term, if you measure some of these clotting factor disorders, you will find that 85% of these women, you could have screened them out of the study if you knew ahead of time, okay that’s a big comment.

So with that said, the ones that we’re screening is going to be Factor V Leiden mutation, which is probably the most common one. The other one is measuring protein C and protein S deficiency, because those patients could get into trouble. We are going to a prothrombin mutation and then some of the esoteric stuff that we are going to look just mostly for education.

We will be looking at for example some of these antibodies like against cardiolipin and phospholipids and these are small ones, we don’t expect much. I would say the bulk of what we are doing will be again Factor V Leiden, Protein S and Protein C deficiency and the prothrombin mutation.

My bet is that the Factor V Leiden will be the most reveling and that’s only because of what we’ve seen both in prostate cancer patients that were taking Estramustine or DES and also in the hormonal replacement therapy, in contraception data, at all points these are easily measurable things that we could limit patients exposure to drugs, they should not be on drug.

Ryan Martin - Lazard Capital Markets

Okay, thank you.

Operator

(Operator Instructions) Your next question comes from the line of (Inaudible) from Cowen; please proceed.

Unidentified Participant

Hi, thanks for taking my questions. Actually most of them have already been asked. But I just wanted to ask, can you talk a little but about, you talked about the positioning of Capesaris and I was just wondering if could spend a little bit more on that. I know it’s a bit early, but just in terms of your thoughts going forward, what potential combinations or sequencing trails in the future.

Dr. Mitchell Steiner

Yes and so to answer that question you have to think of your compound as achieving its target product profile and our target product profile is of course we are going to be efficacious, but in addition to being efficacious, being a different mechanism, that we will have the ability to treat bone, because we won’t see the bone loss.

The hot flashes, which is an important quality of life issue will be able to avoid hot flashes and just those things alone and being an oral agent, raises the question where in this sequencing of events should we be used.

So if a patient has been on Lupron for five to 10 years and they being to have a rise in PSA and they develop metastatic castration resistant prostate cancer, do you want to put them on an agent that will further reduce their testosterone and further increase or would you say worsen their quality of life as it results in hot flashes and bone loss and having to take addition bone drug or can we limit the polypharmacy and just add for example Capesaris in which case, Capesaris had been added, patient gets the treatment for the cancer and in addition to that, gets a benefit by treating the estrogen deficiency side effects. This is also assuming that our VTE is less than 4%.

Then what I would imagine would happen at that point, the patient will progress. He always unfortunately, with alcomono therapies eventually that patient will progress. And then the next therapy decision would have to be what is the next drug that would be efficacious and safe and I would argue that the next one probably should be enzalutamide, because enzalutamide has an excellent profile and you are not adding for example prednisone, which is going to make the bones worse and metabolic syndrome worse and may be that’s the next one.

And then after that I would think abiraterone, prednisone would make sense and again, this is all in the pre-chemo setting, because in the future I just don’t think that this will all be given post-chemo, it will all be given pre-chemo. So in that setting I then envision, abiraterone, prednisone being important and again, you can see the beauty of the first secondary hormonal therapy, the second secondary hormonal therapy, the third secondary hormonal therapy and patients that respond to hormones tend to continue to respond to hormones and then you move into chemotherapy and post chemotherapy.

But then how to use them in combination, which they will be, how to use them sequentially in terms of how you compare them and stuff like that, that’s going to be years. And so I think just initially for mono therapy, if you come in with a new mechanism that’s not a duplication of the mechanisms that are already on the market and you are not sided toxic chemotherapy, then I think you have a place at the table.

Unidentified Participant

Great, thank you so much, and I guess my last question is about your cash, in terms of how far you can take it. If I remember correctly, before you had said something like mid-2013. I was just kind of wondering if that’s still the case and just what your situation is on that.

Dr. Mitchell Steiner

Sure, it is the case. It actually goes a little bit beyond that. I want to make it clear though, that we’ve said all along that both data points, both enobosarm and Capesaris data points are subject to enrolment. We ought to have both of those data cards before we run out of money, so just to remind you that we mentioned that earlier.

Unidentified Participant

Great. Thank you very much.

Dr. Mitchell Steiner

Thank you.

Operator

The last question comes from the line of Howard Liang from Leerink Swann. Please proceed.

Howard Liang - Leerink Swann

Thanks very much for taking the questions. First on Capesaris, what will be the path to registration as a second hormonal therapy? I think the other secondary hormonal agent so far have done overall several studies. Would testosterone suppression would be sufficient in the study?

Dr. Mitchell Steiner

Right. So I view Howard the next study that we are doing is sort of a Trojan Horse from the stand point that we are going to get efficacy data at lower doses, understand our target and product profile and then mostly again, show that we can achieve a VTE rate in a selective population of less than 4%. If we do that, we do know that the compound if we decide to pursue a primary ADT population, we do know that our compound will castrate and maintain castration, but the FDA will require that you castrate by day 28 and you maintain castration from day 28 to 360.

So in that setting what we will invasion is very much like I’ve said in the other conference calls, is that we would probably start out by castrating the patient with Lupton but maintaining that case of castration and having all the benefits of estragon replacement and never having to give the patient another short of Lupton after they start our drug.

So that’s one path forward, in which case you meet the need of reducing testosterone to castrate less than 50 nanograms per deciliter by day 28 and maintaining from day 28 to day 360.

The other path to take is that we are a unique mechanism and expect to show just like we’ve already shown in our Phase II 707 study activity in castration resistant prostrate cancer. If that’s the case, the path to market, the path to registration will include a progression free survival and the question on the table is whether or not overall survival will be required, given that the filed is expanding and overall survival is going to be difficult to show in a pre-chemo setting.

Our position though is we’ll have discussions with the FDA after we complete this Phase II and we’ll be able to comment more solidly what that path forward will be. But our position at this point is that progression free survival, which is now being validated – has been validated by the Aberdaron, Zytiga and also by enzalutamide and will be further validated with the pre-chemo studies that we will come out, so that GTx can come in and say, well look, now you’ve got your link between progression free survival and overall survival.

At some point, cancer therapy moves to progression free survival only and that for example, it happened in breast and lung cancer and renal cell and so on. So that’s kind of how we are thinking about it right now, but its still very early.

Howard Liang - Leerink Swann

Okay, great. For the Phase III trails of Enobosarm, is the treatment continues as long as the patient can tolerate it or is it for a fixed duration and what’s the guideline in the protocol treatment discontinuation. And the second part of the question is, I think FDA wants to see overall survival data from this trail. How (inaudible) have to be before you can file.

Dr. Mitchell Steiner

Right, so the first question has to do with dosing in a five-month study, how long are they being dosed. So in a five month study the patients are being dosed everyday with 3 milligrams of Enobosarm or they are getting at placebo.

Now the drug as you know from our previous studies, we have not seen, let me say it in a differ way, it compares to be well tolerated. In this setting however, either these patients are getting citotoxic chemotherapy and we do expect the drop out rate and the drop out rate that we’ve built into the trail is 30% for each trail and I’m happy to report that we are lower than that dropout rate, so the assumption is still in place.

Patients that drop out statistically are handled as a non-responder. So if they drop out, that’s typical for any caner trial. So that’s already built into the study. If a patient discontinues Enobosarm, but they can still come in for an assessment, they would be still counted in the assessment.

And then after five months the patients who continue to be followed for survival, and so we expect by the time we get our data and we file the NDA, at a 120 days after we file the NDA, we expect to have 450 deaths in the 600 patients and we do think that’s going to be enough to certainly show safety and if we show a benefit, that’s certainly enough numbers to do that. The FDA is only requiring, overall survival as a safety end point and it’s a key secondary endpoint and really the script of only.

Howard Liang - Leerink Swann

Okay, great. Thanks very much.

Operator

That concludes the Q&A. I would now like to turn the conference back over to Dr. Steiner for any closing remarks.

Dr. Mitchell Steiner

Great, thank you operator. I’d like to thank everybody for your interest in GTx and I look forward to updating you in the future. Bye-bye.

Operator

That concludes today’s conference. Ladies and gentlemen, you may now disconnect. Have a great day.

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