Miragen Therapeutics, Inc. (MGEN) CEO William Marshall on Q2 2018 Results - Earnings Call Transcript

Miragen Therapeutics, Inc. (MGEN) Q2 2018 Earnings Conference Call August 7, 2018 4:30 PM ET

Executives

Daniel Ferry - LifeSci Advisors , LLC

William Marshall - President and CEO

Jason Leverone - CFO

Analysts

Jonathan Miller - Evercore ISI

Liana Moussatos - Wedbush Securities

Yun Wang - Jefferies

Operator

Good afternoon and welcome to the Miragen Therapeutics Second Quarter 2018 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 is being recorded.

I'd now like to turn the conference over to Mr. Daniel Ferry from LifeSci Advisors. Please go ahead

Daniel Ferry

Thank you, and good afternoon, everyone. On the call today are Miragen's President and Chief Executive Officer, Bill Marshall; Chief Financial Officer, Jason Leverone; Executive Vice President of Research and Development, Paul Rubin; and Chief Business Officer, Adam Levy.

Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Forms 10-Q and 8-K filed with the SEC.

I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of Miragen. Bill.

William Marshall

Thanks, Dan. Good afternoon, and thank you for joining us for our corporate update call for the second quarter 2018. We will begin today’s call with an update on our clinical programs, kind of brief review of our financials for the quarter, before opening up the call for questions.

We are excited and proud of what the team at Miragen has accomplished. We are developing a suite of microRNA-product candidates for patients in need across several indications. In the second quarter, we made important advancements in each of our three clinical stage programs.

We released new data from our lead product candidate cobomarsen in cutaneous T-cell lymphoma or CTCL and also initial observations in the first expansion indication for cobomarsen adult T-cell leukemia lymphoma or ATLL. Additionally, we announced the initiation of two new clinical trials. The first being a Phase 1 trial for MRG-110, followed more recently by the initiation of a phase 2 trial for REM Larson also known as MRG-201.

Let me start with our first potential expansion indications for cobomarsen ATLL is a highly morbid T-cell malignancy seen in patients previously infected with the human T-lymph atrophic virus type I patients. With the aggressive form of the disease had previously had a poor prognosis with mean survival time of 4 to 10 months after diagnosis and these years ASCO meeting we reported encouraging first observations from our Phase 1 clinical trial on the safety and efficacy of cobomarsen in ATLL patients.

These observations were for to patients considered to have aggressive disease at baseline who have been treated with cobomarsen including one leukemic patient and one with lympofatamus disease. As of our update at ASCO, both patients have remained stable on cobomarsen for more than five months and continue to receive doses of the product candidate.

The patient's continued to feel well and did not develop new signs or symptoms of ATLL. Dell activation markers and markers of malignant cell proliferation improved and the improvements were maintained while on treatment with cobomarsen. In the leukemic patient, malignant cell counts decreased with chemotherapy and remain stable for more than six months during treatment with cobomarsen alone, while in the lymfatamus patient who received cobomarsen alone, no evidence of recurrent nodal disease was observed for more than five months.

Cobomarsen was generally safe and well tolerated in ATLL patients. We're pleased with these results and anticipate announcing additional data from the trial at this year's American Society of hematology meeting or ASH in December. I also think it is important to remember that the ATLL subtypes of these initial patients are associated with extremely poor prognosis. A novel therapies are essential to improve patient outcomes in this devastating disease.

At ASCO this year, we also released new data from our Phase 1 clinical trial of cobomarsen in patients with the mycosis fungoides or MF form of CTCL. The data include efficacy, safety and tolerability observations from long-term dosing of cobomarsen via various routes of administration in patients who have been enrolled in the study were up to 7 in months.

Cobomarsen appeared to demonstrate durable responses in tumor reduction as measured by M slot scores and quality-of-life improvement as measured by Skindex-29 scores. Of the patients treated systemically with cobomarsen 29 of the 32 subjects of shown have & M slot score improvement and of the patients who showed improvements in M slot scores. These were observed regardless of whether the patient was receiving stable background medications for CTCL or cobomarsen alone.

Also of the patients receiving greater than one month of cobomarsen, 11 of 21 achieved the partial response which is represented by a greater than 50% reduction in M slot. The mean duration of partial response was 213 days and eight patients achieved a partial response lasting for more than four months. Here, again, cobomarsen continue to be generally well tolerated at all dose levels evaluated with no serious adverse events attributed to the product candidate.

We plan to present final data from this trial at Ash in December. During the fourth quarter of the year, we plan to initiate the global Phase 2 solar clinical trial in CTCL. As a reminder, we expect the solar trial to evaluate the safety and efficacy of 300 milligram of cobomarsen given by intravenous infusion in an active control comparison study versus [indiscernible], also known as [indiscernible].

We plan to enroll approximately 65 patients per treatment group. The primary endpoint of the solar study is an overall response rate of 50% or greater improvement in the severity of a patient's skin disease over the entire body or M slot, maintained for at least four consecutive months known as ORR4 with no evidence of disease progression in the blood. lymph nodes or Viscera.

Progression free survival would be a secondary endpoint and we plan to use patient reported outcomes as an exploratory endpoint to monitor quality-of-life improvements. Based on discussions with the U.S Food and Drug Administration, we believe the results from this study could potentially allow us to apply for accelerated approval of cobomarsen in the United States.

At this point, I would like to thank the Leukemia and Lymphoma Society or LLS for their support. This week, we announced that we have joined forces with the LLS in our efforts to advance cobomarsen as a novel potential blood cancer therapy. Through this new relationship, we believe LLS will provide invaluable support to our upcoming solar trial, including providing up to $5 million in the form of a series of potential investments in Miragen. We are very pleased to be working closely with the LLS to deliver new therapies to patients in need.

Turning to remlarsen also known as MRG-201, we recently initiated a double blinded randomized Phase 2 clinical trial to evaluate remlarsen in subjects with a predisposition for keloid formation. We believe that this is an exciting opportunity to build on the Phase 1 data in induced cutaneous fibrosis where remlarsen reduced scar tissue deposition in healthy human volunteers.

We expect to enroll 12 subjects in the study across multiple clinical sites in the United States. Participants in the trial are receiving small matching excisional wounds that are suture and then injected with either remlarsen or placebo. Thus patients will service their own control which increases the statistical powering of the trial. The lesions will be observed for up to 12 months to assess the effects of remlarsen treatment on keloid formation.

We're also very encouraged to report preclinical data demonstrating the potential of remlarsen to prevent both corneal and retinal fibrosis earlier this year. We announced results from this preclinical work at the Association for Research and Vision and Ophthalmology Annual Meeting. Patients suffering from ocular fibrosis have limited treatment options and this data demonstrates the possible utility of remlarsen to provide therapeutic benefit to these patients in need.

We are also pleased with the progress on our third clinical stage product candidate, MRG-110, which we are developing in collaboration with Servier. MRG 110 is an inhibitor of microRNA-92 which has been shown to be important in the regulation of new blood vessel growth and healing.

As a reminder, the first MRG-110 trial was initiated in March 2018 by Servier, which is evaluating the use of MRG-110 administered intravenously. This study is intended to support additional clinical studies that could allow for its potential use in the treatment of multiple indications including heart failure.

During the second quarter, we initiated a second Phase 1 clinical trial for MRG-110. This study is designed to evaluate the safety, tolerability and pharmacokinetics of MRG-110 after intradermal injection and healthy volunteers receiving induced wounds through biopsy. In addition to supporting use of MRG-110 to improve healing and both acute and chronic incisions ulcers and lacerations the second trial will also aid in determining dose selection and pharmacodynamics endpoints for all potential indications.

In summary, we believe this is an exciting time for Merigen. As we build out our team, move our clinical stage programs to more advanced trials and continue to demonstrate the safety and efficacy of our microRNA-based therapeutic platform. As of today we have three product candidates in human studies each of which may be applicable across several indications. With these clinical programs and a pipeline of promising preclinical microRNA therapeutic candidates. we are focused on building a sustainable company with the potential to deliver multiple product candidates for patients in need.

During the remainder of 2018 we will be focused on supporting each of our four ongoing clinical trials and successfully initiating the global Phase 2 SOLAR trial for cobomarsen in CTCL.

With that, I will now turn the call over to Jason Leverone, our Chief Financial Officer to review the financial results we reported earlier today. Jason?

Jason Leverone

Thank you, Bill. Good afternoon, everyone. I appreciate the opportunity to provide our second quarter 2018 financial results. Before I do so, I want to add on to what Bill said regarding the [indiscernible] Group's have become increasingly important in many aspects of drug development over the years. We helped -- and helped to ensure that patients have access to treatments. The OS is at the forefront of the fight against blood cancers. And at Miragen we very much look forward to working with them in the development of cobomarsen.

Turning to our financial results. We ended the quarter with approximately $76 million in cash, cash equivalents and short-term investments and believe that our current resources will be sufficient to fund our operations into early 2020. Net cash used in operations was $4.5 million for the quarter and a $11.9 million for the first half of the year. During the second quarter, we received a $3.7 million development milestone payment from Servier for the initiation of first clinical trials MRG-110, but occurred in the first quarter of this year.

In terms of revenue, we primarily generated revenue from our collaboration agreement with Servier and also from grants we’ve received. We recognized $2.2 million in revenue during the quarter and $7 million during the first half of this year. This compares to $0.7 million and $1.2 million recognized in the comparable periods in 2017.

The year-over-year increase and our total revenue is primarily attributable to the achievement of our first development milestone under our collaboration with Servier, as well as a related increase and development activity reimbursable to us under this agreement as we advanced MRG-110 into clinical development this year. Research and development expenses, so $8.4 million for the second quarter of 2018 and $14.8 million for the first half of the year.

While G&A expenses were $2.7 million for the quarter and $5.7 million for the first half of 2018. Overall, our operating expenses have increased over the last few quarters as we’ve initiated new clinical trials and added to our team at Miragen. We expect our strength to continue with the plan initiation of our global Phase 2 SOLAR trial later this year, as well as from the continued investment in all three of our clinical stage programs.

Before we open the call for questions, I want to eco what Bill said at the beginning of the call. Over the years we worked to build a sustainable company focus on developing drugs for patients in need. The milestones that we’ve achieved in development have come in large part from the strong foundation of knowledge that the team is built over many years.

And with that, I would like to ask the operator to open the call for questions. Operator?

Question-and-Answer Session

Operator

Absolutely. [Operator Instructions] And we will take our first question from Jonathan Miller with Evercore. Please go ahead.

Jonathan Miller

Hi, guys. Congrats on the quarter. I had a few questions all [indiscernible]. I know you presented ATLL data from cobomarsen at ASCO and you did previously said at least one indication of the expansion indications presented this year. Do you have plans to release additional expansion indications, especially DLBCL?

William Marshall

Thanks, Jonathan, and thanks for joining the call today. So we continue to recruit patients with both CLL and DLBCL into the trial. We have been -- I would say, principally focused in the area of CTCL and ATLL, ATLL is the first expansion on indication. Based on the fact that this is a cancer where essentially all of the patients have elevated Mira 155. So from a strategic perspective, it puts us in a position to test our hypothesis in a patient population when high probability of having a high miR-155. We continue to work on recruitment of the patients with both DLBCL and CLL as you know we’re treating patients at a [indiscernible] therapies. We at the same time are looking at potentially stratifying patients for their likelihood to have high 155, based on the diagnosis of the patients. So in other words, particular subtypes within DLBCL and in the relapsed refractory population in patients receiving [indiscernible] with CLL.

Jonathan Miller

Great. Thanks. And I suppose -- the other question I want to ask was on SOLAR. I notice that the PRO end point is now exploratory. Why -- previously you had mentioned that it was going to be a secondary endpoint. You mentioned that possibly getting positive results there in conjunction with positive ORR4 might be a potential registrational combination. Is there a reason PROs are now exploratory end point, not secondary.

William Marshall

So thanks for the question. The -- we had a follow-on discussion with the FDA to specifically discuss patient reported outcomes, after that meeting we determined based on advice from the FDA that we would be looking at several different patient reported outcomes given the nature of the trial design being open label, the potential of no confounding effects on patient reported outcomes can be heightened. So we agreed to use the patient reported outcomes as an exploratory end points. Tentatively a bolster, the improvements in quality of life that patients are achieving with cobomarsen. But also in sort of the development of some additional PRL metrics that may be useful in future studies. So the study remains with a primary endpoint of ORR4 and then a key secondary endpoint of progression free survival and we have -- we will be looking at the patient reported outcomes. As you may remember we also presented data at both the T-cell lymphoma forum and ASCO that showed in the Phase 1 setting that we were seeing correlations between improvements in Skindex and reductions in M-slot scores.

Jonathan Miller

Great. Thanks. And that was [indiscernible] for me now. I will hop back in the queue.

William Marshall

Thanks.

Operator

Thank you. We will hear now from Liana Moussatos with Wedbush Securities.

Liana Moussatos

Congratulations on your progress, pretty amazing of the different programs. And my question is or question, what kind of preclinical lung fibers [indiscernible] are we going to see in the second half. And does the Phase 1 data for 110 triggering their milestone from [indiscernible] and 4M Larson. Can you talk about how it could be used potentially in ocular fibrosis.

William Marshall

Absolutely. Thanks we had -- I appreciate your joining the call and with the great questions is useful. So the -- in the first question, the lung fibrosis data, what we have been assessing is the -- we’ve reported already that remlarsen is stable to nebulization. It can be inhaled with this chemical structure intact. You get high deposition in the long and we had evidenced for biomarker changes in [indiscernible] model of pulmonary fibrosis. What we’ve been endeavoring to do over additional preclinical studies is really optimized both the dose and the schedule. So at this point in time we’re assessing in the same bleomycin pulmonary fibrosis model, various doses of the compound as well as frequency of administration. This is going to be really important as we think about an inhaled therapy moving forward in terms of planning for the necessary toxicology studies as well as the downstream clinical studies. And then we have also been focused on additional molecules sort of backup or next-generation molecules of migrating 29 mimics. These are -- have alterations in the chemical structures. Noble [indiscernible] attached to them which may allow for parenteral administration of the compound rather than inhaled and it really do will be the culmination of data on viability of the inhaled approach as well as the parenteral approach that will drive us in decision-making moving forward. On the development of remlarsen or miR-29 mimics in IPF, In terms of 110 treat -- treatments, in terms of the interaction with Servier, we will likely be anticipating a milestone at another initiation of a clinical event rather than after the completion of this, particular clinical trial. And then -- so remlarsen in ocular fibrosis. So we were at the American -- the ARGO meeting, where we really had the first presentations of this data. Remlarsen in the intact [indiscernible] it can be injected intra virtually. And it show very good bio-distribution and pharmacodynamics in the setting of retinal fibrosis. So this is one area that is of heightened problem and the diabetic population and proliferative [indiscernible]. And also in the setting of certain treatments for AMD. So we view this as an interesting opportunity. At the same time, we’ve been spending a fair amount of time you understanding the availability of remlarsen with various routes of administration in the eye, what we presented at RVO in the setting of corneal fibrosis was that in the alkaline burned -- alkaline burn model of ocular lesions we saw very nice uptake and biodistribution of remlarsen we administered topically. So we are currently and the indications for that would be in things like keratitis. so corneal fibrosis that can lead to hazing of vision. So at this point, we’re really doing additional preclinical studies to assess formulation for the molecule as well as dose optimization and will be discussing this further as time goes on and giving additional guidance.

William Marshall

Liana Moussatos

Paul wanted to add a couple of points. Yes, so the alkali LeBrun model serves as a good surgeon for all potential ulcerating defects in the cornea serves as a good surgeon for all potential altering defects in the cornea including things like keratitis. So still -- there's not a common issue [indiscernible] to bacterial keratitis after injury from contact lenses as well as [indiscernible] infection in the eye result in keratitis. Both are very common and have virtually no therapies that could present the fibrosis that occurs which occurs in virtually all patients that develop an ulcer. So there's still a big need with no potential therapies and I think our preclinical data at least kind of approves the concept in a road model that we can prevent the scarring from occurring in these particular diseases.

Liana Moussatos

Thank you.

Operator

Thank you. We will take our next question from Yun Wang with Jefferies.

Yun Wang

Thanks for taking my questions. I have quick question on the SOLAR trial. How many sites do you have opened and how long do you think it's kind of take to enroll 130 patient? And what [indiscernible] do you need to show and go back to [indiscernible], Thanks.

William Marshall

Sure. So, our plan at this point is to open 40 centers globally. We are actively in the process of getting sites up and site initiations visits completed. We are on track to initiate the study in the fourth quarter of this year. The -- it will be a global study comparison with vorinostat. We anticipate being able to recruit the study in approximately 18 months and then we would initiate having a data set in hand in the second half of 2020. And then we will, obviously, use that data set for discussions with the US Food and Drug Administration where we've been told that the potential for accelerated approval would, of course, be based on review of the data. So we anticipate reading that out second half of 2020.

Jason Leverone

ORR4

William Marshall

ORR4.

Jason Leverone

Yes, the data that’s required for theoretical accelerated approval is solely based on the ORR4. So that’s the kind of -- yes, that’s the first end point that we will read out and simultaneously be looking at progression free survival, so theoretically we would be able to receive from this trial both an improvement compared to vorinostat, ORR4 as well as PFS which obviously provides an opportunity not only for applying for accelerated approval, but if PFS were also to show a significant difference would be able to apply for complete approval as well.

Yun Wang

Okay, great. Thank you.

William Marshall

Thank you.

Operator

We will now take our next question from Madhu Kumar with B Reilly FBR.

Unidentified Analyst

Good afternoon, guys. This is [indiscernible] on for Madhu. Thank you for taking our question today and congrats on the process. So three questions. First, based on today’s information, could you please remind us of the powering assumptions for the SOLAR trial? Second, can you please compare SOLAR to the recent [indiscernible]? And third, to what extent does your firm's recent agreement with [indiscernible] effective recruitment range assumptions for SOLAR? Thank you,

William Marshall

Great. Well, thank you very much. Its -- I appreciate the questions. So the power assumptions in SOLAR, what we did empowering a study at 65 patients per group, we have the ability with 90% confidence to detect a 25% difference between the control arm of the study and the cobomarsen treated arm of the study. So in our assumptions we assumed we’re in a stat, that would demonstrate and all our four roughly 10%, meaning we would have a 90% confidence of being able to detect a 35% ORR4 for cobomarsen in the study. So the -- comparing the solar trial to the extras trial, they’re really several significant differences. The [indiscernible] trial is primarily focused on stage I be 3 patients with mycosis fungoides we -- they need to have failed at least one therapy or progress from one therapy. As opposed to the etcetera study which was really focused on two primary factors, CD30 positivity, so the patients have to demonstrate CD30 positive. They also had to failed one previous radiation therapy attempt. So what that does in practice you will find mycosis fungoides typically towards the later stage. So stage III and the most certainly in stage IV which is more commonly known as [indiscernible] syndrome, that that’s the primary population with elevated CD30 that would be kind of appropriate for treatment with etcetera. So the other I think key difference would be the comparators that we will put in use. So the comparator for the etcetera study was a dealer's choice between methotrexate and [indiscernible] team. And that in the -- obviously in our study we’re going to be looking at the comparator, we are in a stat. And then how will the LSS collaboration impact the SOLAR timeframe? We’re not really giving any altered guidance. We are really excited to have the opportunity to work with such a well-known patient advocacy group and hope that they will provide benefits to us on multiple levels, including some important investments in Miragen.

Unidentified Analyst

Awesome. This is very helpful. Thanks guys.

William Marshall

Thank you.

Operator

Thank you. [Operator Instructions] With no additional questions in the queue, I would now like to turn the conference back over to Mr. Bill Marshall for any additional or closing remarks.

William Marshall

Thank you very much and thanks to you all for taking some time this afternoon to catch up on the latest progress at Miragen. We are energized by the clinical results we've obtained to date and committed to building on these results to hopefully bring life-changing medicines to patients in need. We look forward to seeing many of you at the upcoming Wedbush PacGrow Healthcare Conference. As always, please feel free to reach out to us anytime with questions. I hope you have a great afternoon,

Operator

And that does conclude today's conference. Thank you for your participation.. You may now disconnect.