OncoMed Pharmaceuticals' (OMED) Management on Q4 2017 Results - Earnings Call Transcript

OncoMed Pharmaceuticals (NASDAQ:OMED-OLD) Q4 2017 Earnings Conference Call March 8, 2018 4:30 PM ET

Executives

Peter Rahmer - IR

John Lewicki - President

Bob Stagg - SVP of Clinical Research and Development

Analysts

Maury Raycroft - Jefferies

Soumit Roy - SunTrust Robinson

Operator

Good afternoon everyone, and welcome to the OncoMed Pharmaceuticals' Fourth Quarter and Full-Year 2017 Financial Results Conference Call. This call is being recorded.

At this time, for opening remarks and introductions, I'd like to turn the call over to Peter Rahmer, Managing Director at Solebury Trout.

Peter Rahmer

Thank you, Jonathan. Hello everyone, and welcome to OncoMed Pharmaceuticals' financial results and corporate update call for the fourth quarter and full-year of 2017. Leading the call today is John Lewicki, our President. He is joined by Bob Stagg, our Senior Vice President of Clinical Research and Development, and Perry Karsen, Executive Chairman of the Board.

Before we get started, I'd like to remind you that during the conference call, OncoMed will make certain statements that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our business plans and objectives, and timing and success of clinical trials. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance upon them.

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. I refer you to our SEC filings for a discussion of risk factors that could cause our actual results to differ materially from those discussed today. We undertake no obligation to publicly update any forward-looking statements.

With that, I'd now like to turn the call over to OncoMed's President, John Lewicki.

John Lewicki

Thank you, Pete. Good afternoon, everyone and thank you all for joining us for OncoMed's fourth quarter and full-year 2017 financial results and corporate update call. OncoMed remains focused on discovering and developing novel anti-cancer therapeutics with the aim of having a meaningful impact on patient outcomes.

OncoMed's pipeline of wholly-owned and partnered drug candidates seeks to target the drivers of cancerous growth, resistance, recurrence, and metastasis. OncoMed is currently advancing three programs in the clinic, including the Phase 1a study of anti-TIGIT, which was initiated in May of 2017, the Phase 1a study of GITR ligand Fc, which was initiated in September of 2017, and two Phase 1b studies of navicixizumab, our anti-DLL4/ VEGF Bispecific antibody.

OncoMed is also continuing to pursue the discovery of novel candidates from its immuno-oncology and biologics research efforts. We expect 2018 to be a defining year for OncoMed with upcoming clinical updates from our navicixizumab and anti-TIGIT programs, and the opportunity to create value for both patients and shareholders. Today, we will focus on an update on our clinical development progress, with key milestones for 2018, followed by a brief corporate update and review of financials.

I'll now hand the call over to Bob Stagg for the clinical updates before providing recent corporate updates, and then an overview of financials. Bob?

Bob Stagg

Thanks, John. First, I'll start with our Celgene-partnered anti-TIGIT program. OncoMed continues to rapidly enroll the Phase 1a single-agent study of anti-TIGIT in patients with advanced or metastatic solid tumors. The Phase 1a clinical trial is designed to assess the safety and tolerability of escalating doses of anti-TIGIT and will enroll both dose-escalation and dose-expansion cohorts. The latter focused on patients with selected tumor types. Secondary objectives for the trial include characterization of pharmacokinetics, immunogenicity, and preliminary assessments of anti-tumor efficacy. Pharmacodynamic and potential predicted biomarkers focused on changes in immune system activation both within the periphery and in tumors will also be explored.

Our current plan is to report interim Phase 1a data from this trial in the fourth quarter of 2018. OncoMed plans to initiate a Phase 1b portion of the Phase 1 program to study anti-TIGIT in combination with anti-PD1 in the first-half of 2018. The Phase 1b portion of the anti-TIGIT trial will be designed to assess safety and tolerability of escalating doses of the combination treatment. In September, OncoMed dosed the first patient in the Phase 1a single-agent study with wholly-owned GITR ligand Fc in patients with advanced or metastatic solid tumors. GITR ligand Fc is a fusion protein with an IgG1 Fc-linked fully human trimer ligand and is designed to activate the costimulatory receptor GITR to enhance T cell-modulated immune responses.

GITR ligand Fc differentiates from most other programs which use agonist antibodies to activate GITR via receptor clustering. Our trimeric ligand activates GITR by direct ligand-induced signaling, and we have shown that it is significantly more effective than agonist antibodies in activating human T cell responses in vitro. The clinical is designed to assess the safety and tolerability of GITR ligand Fc. Secondary objectives include characterization of pharmacokinetics, immunogenicity, and preliminary signs of anti-tumor efficacy.

Pharmacodynamic and potential predictive biomarkers focused on changes in immune system activation will also be explored. GITR ligand Fc will be administered as a single agent every two weeks at escalating dose levels. Once a maximum tolerated dose has been achieved, extension cohort will enroll patients with selective tumor types. The trial has being conducted at five centers in the U.S, and is expected to enroll approximately 30 patients in total.

Now to navicixizumab, OncoMed's anti-DLL4 anti-VEGF bispecific antibody continues to enroll patients in two Phase 1b multi-center open-label dose escalation and expansion studies in combination with standard of care chemotherapies; one in patients with platinum-resistant ovarian cancer, who feel more than two prior therapies or prior bevacizumab, and a second in patients with second line metastatic colorectal cancer.

We are encouraged that to-date OncoMed has enrolled over 90 patients across the Phase 1a and 1b trials. In the second-half of 2018, we expect to publish the Phase 1a data and report interim data from the ovarian cancer Phase 1b Study. Finally, OncoMed continues to harness its drug discovery platforms to discover new therapeutic agents in immuno-oncology, arena including novel approaches focused on areas of unmet need in IO space.

We expect to report additional details from these emerging discovered programs at appropriate times in the future. We should also note that multiple abstracts highlighting our preclinical and translational efforts, including those on anti-TIGIT and GITRL ligand Fc will be presented at the upcoming AACR meeting at Chicago. Details of these abstracts will be forthcoming upon publication.

I will now hand the call back over to John.

John Lewicki

Thank you, Bob. Moving to corporate updates is announced in January the board of directors has retained an executive search firm and initiated a search to fill the currently open CEO position. The company plans to provide an update on the CEO search once a final decision has been made. More recently the company announced that Executive Vice President and Chief Financial Officer, Sunil Patel has resigned effective March 9, 2018.

We are grateful for Sunil's nine years of leadership. His contributions stock to OncoMed and our patience and we wish him the best in all of his future endeavors. In the light of these management changes the company has appointed Perry Karsen as the Executive Chairman of the Board of Directors and myself, John Lewicki as President of OncoMed.

Before moving into financials, OncoMed has decided to conduct an annual earnings call instead of quarterly earnings calls going forward. The decision to move from a quarterly to an annual call is the result of a reduction in the number of current clinical programs with less frequent clinical news flow in the short-term. As you know, we are always available to answer your questions. Additionally, the company will host ad hoc investor calls as appropriate, to provide additional updates on significant corporate events.

Now to update our year-end 2017 financials, cash and cash equivalents and short-term investments totaled $103.1 million as of December 31, 2017 compared to $184.6 million as of December 31, 2016. Revenues were $38.2 million through the full-year of 2017, an increase of $13 million compared to $25.2 million for the same period in 2016. Research and development expenses were $59.8 million for the full-year of 2017, a decrease of $49.9 million compared to the $109.7 million for the same period in 2016.

General and administrative expenses were $16.8 million for the full-year of 2017 a decrease of $2 million compared to $18.8 million for the same period in 2016. Net loss for the year-ended December 31, 2017 was $39.1 million or $1.04 per share compared to $103.1 million, or 314 per share for the same period of 2016.

OncoMed's proprietary technology and robust Discovery Program platform, as well as our collaboration with Celgene have positioned OncoMed to advance its pipeline of therapeutics against a diverse array of oncology targets. With multiple trials underway as well as data expected in 2018 from the anti-TIGIT Phase 1a trial and Phase 1b ovarian cancer trial with navicixizumab, OncoMed remains well positioned for value creation for patients and shareholders.

OncoMed's founders started the company with a vision of building a platform for the discovery of therapeutic candidates in tackling novel targets that are central to fundamental cancer biology. The company remains committed to delivering on these goals. We look forward to updating you on our continued progress in the future.

I'd now like to open the call to Q&A. As a reminder, Bob and Perry are both available to help answer your specific questions. Operator?

Question-And-Answer Session

Operator

Certainly. [Operator Instructions] Our first question comes from the line of Maury Raycroft from Jefferies. Your question, please.

Maury Raycroft

Hi, good afternoon, and congrats on the updates. I'm wondering if you can provide a general estimate as to how many patients you include in the 4Q anti-TIGIT update. And if you can remind me how many patients were included in the Phase 1a dose expansion and what the gating factors were for moving into the dose expansion? And will these patients be included in the data update?

John Lewicki

Yes, hi, Maury. This is John. I'll actually turn that question over to Bob, if you want to respond Bob.

Bob Stagg

Sure. So the Phase 1a is going to be approximately a 30-patient trial, and the expansion cohort will have about 12 patients approximately in it. And we obviously can't tell you the exact number of patients who will be presented because the study is still occurring, but we hope that we'll include the majority of the patients in the Phase 1a study.

John Lewicki

Yes. The other thing to note there, Maury, is that we’ve been very pleased with the rate at which these studies have been enrolling, both the anti-TIGIT and the GITR ligand Fc trials. In fact, they're both enrolling ahead of our initial projections. So we started anti-TIGIT in May of 2017, we started GITR ligand Fc dosing in September of 2017, and we're extremely pleased how robustly we've been able to enroll patients.

Maury Raycroft

Great, that's very helpful. And also in the press release you mentioned pharmacodynamic biomarkers that are being assessed. Can you provide any more specifics around what you're looking for there?

John Lewicki

Yes. So what we've done is we've undertaken really a conservative, broad biomarker program to really query our anti-TIGIT and GITR ligand Fc trials. So basically what we've done is we've got a number of biomarkers that we can assess in peripheral blood, PD biomarkers, flow-based methods to look at different T cell populations, cytokines, genomic-based methods to also assess different immune cell populations.

Additionally, we're planning to -- we're moving to get some paired biopsies in these trials. And in paired biopsies we've actually developed really nice, I think, very powerful multiplexing methods to look at various targets simultaneously in the tumor, and to determine how those change with treatment. So those are just really examples of sort of the broad-based biomarker platform that we have in place.

Maury Raycroft

Got it. And you mentioned before that you expect your GITR ligand Fc to potentially be more potent because of the trimeric interaction. Are you getting a sense of the dose range where you may see activity with that molecule…

John Lewicki

We started -- yes, I'm sorry.

Maury Raycroft

And have you seen any signals that you would view as encouraging or surprising so far?

John Lewicki

Yes, we can't comment on the latter. But what I will say is based on all of our preclinical data, both in vivo and in vitro information; we had to start dosing in this trial and actually desire to start dosing in this trial at quite low doses. So we've been rapidly dose escalating from those initial doses. And based on preclinical studies, we think we're approaching the range where we might start to see things, at least if one scales appropriately from the animal models to the human studies.

Maury Raycroft

Got it. And my last question, so we noticed that AbbVie recently started a trial with ABT-165 which is their bispecific and combo with chemo and metastatic colorectal cancer. And it looks like it's a 100-patient study Phase 2, so they're definitely moving ahead in this indication. I'm just wondering how you view that, if you see it as a positive read-through to your bispecific program.

John Lewicki

Yes, I'll let Bob take that.

Bob Stagg

Well, yes, I think we certainly do. I mean they obviously have looked at their data from their Phase 1a/1b study and concluded that it's worth moving forward. So I think that is a positive for our program as well.

John Lewicki

As we mentioned, we'll be updating that this fall. So we think it's an appealing agent.

Maury Raycroft

Yes, I'm really looking forward to the data. So, thank you very much.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Peter Lawson from SunTrust Robinson. Your question, please.

Soumit Roy

Hi, this is Soumit Roy for Peter Lawson. Thank you for taking the question. Just following up on the TIGIT program, can you give us any clarity what tissue type you are enrolling more in the TIGIT? Is it more ovarian breast patients are more coming in or you are getting more immunoactive tissue types? And which line are you seeing more enrollment? Any color would be helpful.

Bob Stagg

Yes, so we can't comment on the specifics of the patients that have been enrolled until we actually present the data. But the dose escalation portion is an all-comers [ph] solid tumor study, so as expected, would be a variety of different tumor types that are fairly heavily pre-treated patients. The expansion cohort is where we are fully focusing down on selected tumor types. And those tumor types are based upon both some biomarker work we did internally which guided us in terms of what tumor types to include, as well as, obviously, some tumor types that would be potentially expected to respond to IO agents.

John Lewicki

And just to elaborate on that a little bit more. Our anti-TIGIT antibody that we've taken into the clinic, and we've talked about this previously, but it's an IgG1, so it's a depleting antibody and it turns out that TIGIT is highly expressed on Tregs and exhausted T cells. So those are two cell populations that one might want to deplete. So when we think about the sorts of tumors to enroll we also think about tumors that may have high levels of Tregs or be sort of a Treg dominated tumor type. We look at things like TIGIT expression and expression of the TIGIT ligand such as the PVRs. And when we were talking about the biomarkers a few minutes ago, I talked about all of that. I have seen multiplexing in everything that we have in place. So we can really query these tumors in detail.

Soumit Roy

Great. Thank you so much.

Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to John Lewicki for any further remarks.

John Lewicki

Thank you again for joining us today. And we appreciate your continued support. We look forward to updating you on progress across our research and development efforts in the months to come. And as I stated previously, we're always available to answer your questions. Thank you very much.

Operator

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.