Sierra Oncology, Inc. (SRRA) Q4 2019 Earnings Conference Call March 3, 2020 8:00 AM ET
Nick Glover - President and Chief Executive Officer
Mark Kowalski - Chief Medical Officer
Barbara Klencke - Chief Development Officer
Sukhi Jagpal - Chief Financial Officer
Conference Call Participants
Maury Raycroft - Jefferies
Sam Slutsky - LifeSci Capital
Good day ladies and gentlemen and welcome to the Sierra Oncology Year End 2019 and 2020 Outlook and Analyst and Investor Call. For your information, this conference is being recorded.
At this time, I'll turn the call over to your host today Nick Glover. Please go ahead sir.
Thank you. Good morning everybody. I'm Dr. Nick Glover, President and CEO of Sierra Oncology. Thank you very much for joining us today for our 2019 year end result and 2020 outlook conference call.
Joining me today are Dr. Barbara Klencke, our Chief Development Officer; Dr. Mark Kowalski, our Chief Medical Officer; Mr. Sukhi Jagpal, our CFO; and Mr. James Smith, our Vice President, Corporate Affairs.
Today, we reported on financial and operational results for the fourth quarter and year ended December 31st, 2019. Copies of our 10-K and press release and available on our website.
Before we begin today, I do have to point you to our Safe Harbor statement. We are a publicly-traded NASDAQ listed company and subject to all of the rules and regulations, risks, uncertainties, and assumptions that are associated with being a public company. We encourage you to review our regulatory filing and in particular, the risk factors that we update from time-to-time that are contained within those filings, which could cause actual results to differ materially from those described in any forward-looking statements.
Sierra undertakes no obligation to update any forward looking statements to reflect events or circumstances occurring after the date thereof other than as may be required by applicable law.
Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our fourth quarter and year ended December 31st, 2019 earnings for reconciliation of these measures to their most directly comparable GAAP financial measures. Unless otherwise noted, all references to financial metrics are represented on a GAAP basis.
Okay. On with the call. I'm very pleased to report that we had a great start to 2020 and our whole team is aligned, working hard, and very excited about the prospect they had with Sierra, momelotinib, and the MOMENTUM trial.
We believe momelotinib could become an important and beneficial option for many, if not most, patients have myelofibrosis, both in the first and second-line setting. This is because momelotinib is the only single agent drug, as far as we know, capable of meaningfully and robustly tracing all three hallmarks of myelofibrosis; anemia, constitutional symptoms, and enlarged spleen.
Importantly, momelotinib has potential utility across the entire spectrum of myelofibrosis patients, including the poorly addressed anemic and thrombocytopenic first-line patient population, as well as broadly across the second-line model fibrosis patient population.
We're confident in momelotinib's therapeutic profile because we have the benefit of drawing upon the robust body of data obtained from more than 820 myelofibrosis patients who have been treated with momelotinib to-date in a number of trials, including SIMPLIFY 1 and SIMPLIFY 2, the two head-to-head Phase 3 trials of momelotinib against ruxolitinib in the first and second-line settings, respectively.
And as we've noted previously, momelotinib has demonstrated long-term responses as reinforced by the fact that a sizable number of patients from these and prior clinical trials, actively remain on therapy and continue to provide us the valuable durability and safety data, some for up to eight or nine years.
Our keen focus across Sierra is on achieving regulatory and commercial success in momelotinib. During the fourth quarter of 2019, we launched the MOMENTUM Phase 3 clinical trial, setting Sierra on course to deliver anticipated topline data in late 2021 and positioning momelotinib for potential registration filing in 2022.
Our focus now is on activating global clinical trial sites over the coming month and driving enrollment for MOMENTUM. And we look forward to providing ongoing updates on our progress throughout the year. In a moment, I'll ask Dr. Mark Kowalski to briefly discuss the MOMENTUM trial and to provide a status updates.
It's important to remind everyone of the purpose of the MOMENTUM clinical trial.
Given the breadth and depth of our extent clinical data MOMENTUM has been designed to confirm in a statistically compelling manner the array of clinical benefits that I previously outlined.
As we look ahead to the potential registration of the momelotinib. This is important to remember that we intend to file the totality of data from all three Phase 3 studies; SIMPLIFY-1, SIMPLIFY-2 and MOMENTUM in a regulatory package. Fortunately, you won't have to wait until we file our regulatory submission to see the orientation of the SIMPLIFY data.
While our top line findings from the SIMPLIFY studies have been previously disclosed both of these studies continue to mature and Sierra’s indebt to more robustly and thoroughly interrogate these substantial sets of evolving data. We've already starting to present these new data in the public domain. And throughout 2020, we are planning for the additional dissemination of emerging data from the SIMPLIFY trials that further highlight momelotinib's differentiated durability, safety and efficacy profile.
After Mark, I’ll call on Dr. Barbara Klencke to elaborate on this and provide an overview of our plans to data disclosure in 2020.
Finally, in January 2020, we completed what has been a transformative process at Sierra culminating in a substantive financing that we believe provides us with the resources and capital structure appropriate to support the momelotinib program as we prepare for its potential registration and commercialization.
We are fortunate to have built both a healthy balance sheet and the critical mass of high quality supporting stockholders, including Vivo Capital, Longitude Capital, OrbiMed and Abingworth.
In addition, we recently welcome Gilead to the Sierra family which become a stockholder in the company in consideration for meaningfully reduced royalty rates and elimination of a near-term milestone that would have been payable under the terms of our Asset Purchase Agreement from momelotinib.
Later on our call, I’ll ask our CFO, Sukhi Jagpal to provide a brief overview of our finances as they now stand.
I'm now handing over to Dr. Kowalski, who can provide an update on the MOMENTUM trial.
Thank you, Nick. Of course, as Nick mentioned, MOMENTUM is a Phase 3 pivotal trial whose purpose is to confirm the therapeutic benefits of momelotinib as previously demonstrated in the SIMPLIFY study.
Let me tell you about a number of the key features of the MOMENTUM study. First, let me introduce the studies Chief Investigator, Dr. Srdan Verstovsek. Srdan is Chief, Section for Myeloproliferative Neoplasms, Department of Leukemia, Division of Cancer Medicine at The University of Texas MD Anderson Cancer Center in Houston. Dr. Verstovsek is a world renowned clinician scientist in the Myeloproliferative Neoplasms filed.
Dr. Verstovsek has been the principle investigator for more than 50 clinical trials testing novel therapy for patients with multiple forms of Myeloproliferative Neoplasms, including myelofibrosis. And he's also published over 400 peer-reviewed manuscripts. And it's the recipient of numerous prestigious awards in the field.
Moreover, Dr. Verstovsek has been involved in the development of really most of the investigational and approved agents for the treatment of myelofibrosis, including the development of the standard of care agent ruxolitinib for which he was the U.S. lead investigator.
In particular, Srdan has been involved in the development of momelotinib since back to 2011, both as an advisor to Sierra and as a Clinical Investigator, and he has previously gone on record stating the following. Ruxolitinib may control the signs and symptoms of the disease for some time, but it doesn't prevent progression.
Next, the leading cause of loss of response that has been published is anemia. The majority of patients need another agent to establish their quality of life to control spleen, symptoms and to improve the anemia is possible. And lastly, momelotinib, unlike any other JAK inhibitor, can benefit patients to a great extent on all three aspects of the disease.
So in addition, doctor with subject, we are expecting many other notable myelofibrosis key opinion leaders to be active contributor to the success of the MOMENTUM study, many of whom have participated in prior momelotinib clinical trial.
These include Dr. Reuben Mesa, Dr. Claire Harrison, Dr. Vikas Gupta, Dr. Jean-Jacques Kiladjian, Dr. Francesco Passamonti and Dr. Alessandro Vannucchi, among others. We believe the stature and standing of these clinicians in the international myelofibrosis community is a testament to the broad interest and support for momelotinib that continues to exist and build.
So what about the actual study design? In brief, MOMENTUM has been designed in order to demonstrate statistically compelling and clinically meaningful outcomes across all three domains of myelofibrosis. First, alleviating the debilitating symptomatic burden these patients face, which often leads to a very poor quality of life for patients with advanced myelofibrosis.
Second, addressing the chronic anemia that impacts all aspects of these patients lives, encompassing reducing or eliminating the common requirement for frequent blood transfusions. Many patients suffer through. In turn, potentially helping these patients can lead to fuller and more active life. And third, improving the painfully enlarged spleen that manifests in myelofibrosis as a consequence of the impaired red blood cell production that typifies the disease.
So in order to achieve these outcomes, MOMENTUM has been designed as follows. The study population is focused on demonstrably symptomatic and anemic patients that have been previously treated with an approved JAK inhibitor. Specifically, that would be patients that were previously treated with either ruxolitinib or fedratinib.
The competitor agent is danazol. Danazol is an androgenic steroid and it is included in the NCCN and ESMO treatment guidelines as an appropriate therapy to treat the anemia observed in myelofibrosis. The study will enroll 180 patients in a double-blind randomization design.
The randomization will be 2:1 momelotinib to danazol over a 24-week randomized treatment phase. Following that randomized treatment phase, patients who were randomized to danazol are able to switch on to momelotinib treatment for an extended treatment period.
Now, it's important to stress that the sign of MOMENTUM is the combination of a process of productive and constructive dialogue with the FDA, and it reflects their views on how to optimally drive momelotinib towards potential approval.
Specifically, based on FDA inputs, the primary study endpoint for the MOMENTUM study is the total symptoms for at week 24. This endpoint reflects the improvement in symptomatic burden from baseline to week 24 that we would expect to see for patients treated with momelotinib in this cohort, based on data, we obtained in the simplified studies, both of which showed a very consistent and noteworthy symptom improvement. Importantly, this primary endpoint is highly powered at 99%.
The number of secondary endpoints in MOMENTUM address momelotinib's unique anemia benefit and its ability to eliminate or reduce transfusion burden. For instance, the next endpoints be measured after symptom improvement is the transfusion independence rate at week 20. This specific endpoint was chosen as it is relevant to all myelofibrosis patients, including those with frequent, those with occasional or no need for blood transfusions and is powered at 90%.
Other anemia related endpoints focus on measuring the anemia benefit in a variety of ways, including the transfusion dependent to independent conversion rate. We presented at the ASH Conference in December of 2019 data from the SIMPLIFY-1study detailing several novel measurements of anemia benefit, including relative odds of being transfusion independent, and the cumulative transfusion burden on study. And we will measure these endpoints in MOMENTUM as well.
And last, we're also measuring the splenic response at week 24. As a reminder, today momelotinib is the only agent to have been studying head to head versus ruxolitinib. And in the SIMPLIFY-1 study, momelotinib met the primary endpoint of non-inferior splenic response rate versus ruxolitinib demonstrating that JAK inhibitor naïve patients that the two agents had comparable spleen benefit. The spleen response endpoint in MOMENTUM is powered at 90%.
So the key message for MOMENTUM is that the study is designed to confirm the therapeutic benefits of momelotinib across the three main hallmarks of disease, constitutional symptoms, anemia, and enlarged spleen and that is empowered for success. As for the status of the trial, MOMENTUM is being conducted as a true global study. The estimate that to enroll 180 patients that it will take approximately 18 months and then following a 24 week randomized treatment period, top line data is expected in Q4 of 2021.
Sierra was pleased to report at ASH in 2019 in December that the study had officially launched. We're currently in the process of activating sites across North America, Europe and the Asia Pacific region. We are pleased with the study conduct today. We're making very good progress with the regulatory approvals to conduct the study on an individual country by country basis, as well as across specific investigational sites within those countries. We expect to see this positive cadence continue as these operational activities mature through 2020.
Everything remains on track. We expect based on our current timelines to complete enrollment around mid 2021. And as mentioned, topline data are expected in Q4 of 2021. As we announced in May 2019, we have been granted Fast Track status by the FDA. So people certainly take advantage of the opportunity for frequent communications with the FDA. Overall, we are targeting a filing date of Q2 2022.
As a result, potential regulatory approval in the U.S. could be as early as Q4 2022 assuming priority regulatory review. Obviously, we'll keep everyone informed as we make progress for this dates.
I'm not going to turn it over to Dr. Klencke.
Thank you, Mark. As you can see, the trial is moving forward positively. And it's just a matter of time until we expect to have top line data; we look forward to continuing to provide ongoing updates on our progress with momentum throughout the year. As we've stated here, and enrolling MOMENTUM is the near term focus of the company. However, as we mentioned earlier, it's also important to remember that it will be the totality of the momelotinib data that will drive our plans regulatory submission and that includes data from the SIMPLIFY-1 and SIMPLIFY-2 trial in addition to the data from the Momentum trial. Indeed, we designed a MOMENTUM to confirm the positive of the array of positive verbal benefits that we have observed with momelotinib in the previous studies, which reveal a unique breath of clinical benefits.
Towards that end, we anticipate having a robust flow of emerging data to report throughout 2020 and 2021 from our prior clinical experience with momelotinib. I'll provide a flavor of some of these plan disclosures now. As you as you may know, momelotinib is a potent and selective inhibitor of JAK1, JAK2 & ACVR1, these three targets underpins momelotinib ability to address the three key hallmarks features of myelofibrosis. ACVR1, sometimes known as ALK-2 to in the literature, is the critical components of momelotinib profile. And just for clarity as we've been asked this question on occasion, momelotinib does have pronounced activity against ACVR1, possessing low nanomolar inhibitory potency. That is, it has a comparable biologic potency against all three of the targets that it inhibits, JAK1, JAK2 and ACVR1, but I returned to ACVR1 in a few minutes.
As a reminder, in aggregate, there is an exceedingly rich clinical trial database of both safety and efficacy outcome data for momelotinib in the treatment of myelofibrosis, with more than 820 patients with myelofibrosis treated to-date. This is one of the most comprehensive data sets in the field and momelotinib has shown remarkably consistent treatment effects across all of these studies that have been conducted.
Many of these patients are still on therapy today with quite a few patients continuing to benefit, six, seven, eight and even nine years out since the initiation of momelotinib continuing to receive continuous daily dosing. The vast majority of these long-term responders remain on full dose momelotinib. This really underpins the durability of benefits, the tolerability of the drug and the lack of cumulative toxicity.
The available data includes two key Phase 3 studies SIMPLIFY-1 and SIMPLIFY-2 which were conducted in the JAK inhibitor naïve, and then the previously JAK inhibitor treated patient population respectively. In both studies ruxolitinib which is the existing standard of care in myelofibrosis and a multi-billion dollar commercial success with the comparator in these direct head-to-head assessment momelotinib more than held up to scrutiny versus ruxolitinib achieving clinically comparable first [ph] or superior benefits to ruxolitinib across clinical endpoints encompassing symptomatic benefit, shrinkage of enlarged spleen and clear superiority on a variety of anemia endpoints.
SIMPLIFY-1 and SIMPLIFY-2 represent a continuum of myelofibrosis patients with intermediate and high risk disease as assessed by the common prognostic scales used to triage patient treatment. Recognizing this, in aggregate, the SIMPLIFY data reflect the broad survey of myelofibrosis. And in totality, we believe these data support that momelotinib demonstrates a unique breadth of clinical benefit and our view delivers a greater overall breadth of clinical utility than does ruxolitinib.
As such, momelotinib has a potential important role to play in the treatment of this disease, assuming the drug is approved. Of course, it is momelotinib’s ability to address the chronic and progressive anemia of myelofibrosis that is a key differentiator of the agent.
A significant of proportion of myelofibrosis patients develop anemia, with many becoming dependent on frequent blood transfusions. The anemia of inflammation, which typifies the anemia found in myelofibrosis is a dynamic complex process characterized by high levels of peptides and increased inflammatory cytokines along with decreased serum iron and decreased hemoglobin.
Indeed Dr. Verstovsek that Mark alluded to earlier has commented on this in the public domain, noting that "Anemia is a major area of unmet need. That's one of the major problems. A quarter of these patients at the beginning they require transfusions. And after one year of therapy, almost half of patients already required transfusion. Anemia and transfusion dependency are important prognostic factors."
Drug progress has been made in treating the splenomegaly and hypercatabolic symptoms and the error of JAK inhibitors, anemia remains the major untreated negative determinants of myelofibrosis related quality of life and is a key negative prognostic factor in overall survival.
Currently approved JAK inhibitor therapies are myelosuppressive and thus they exacerbate anemia and transfusion dependency. Momelotinib in contrast has a unique mechanistic driven anemia benefit this occurs via the inhibition of ACVR1 and as demonstrated by an immediate and sustained clinical benefit evidence by increases in hemoglobin, and an array of additional and unique anemia benefits.
But why is ACVR1, so fundamentally important in myelofibrosis, and why is it such an attractive therapeutic target? Well, it's because of the systemic inflammation in myelofibrosis that leads to an increase in ACVR1 activity, that's increasing the secretion of hepcidin. This resulting in perturbed iron homeostasis, and an iron-restricted anemia. Normalizing this inhibition of ACVR1 leads to a reduction in hepcidin, a restoration of iron homeostasis, and the restoration of red cell production and an alleviation of the anemia and transfusion dependency.
We assume data demonstrating this anemia benefits in the public domain previously, they encompass transfusion independence, a conversion from transfusion dependency to transfusion independency, and a variety of measures related to transfusion frequency. In treating certain patients that were followed also show an improvement in bone marrow fibrosis, albeit that was not a key focus of the simplified studies.
Further in the ASH meeting in Orlando last December, that's the American Society of Hematology meeting, new analyses of red blood cell transfusion data can simplify one represented in a poster by Dr. Ruben Mesa. He's a world renowned expert in myelofibrosis and the Director of the Mays Cancer Center at the UT Health System, San Antonio, MD Anderson Cancer Center.
These analyses demonstrated the patients who receive ruxolitinib had a significantly increased transfusion requirements compared to those treated with momelotinib, including a nearly tenfold higher odds of receiving transfusions during a 24 week study period.
In other words, according to these data, a typical myelofibrosis patients is very likely to be transfused if they receive ruxolitinib, and far less likely to be transfused on momelotinib. This is clinically important and Nick will come back to this later as he outlines our clinical -- our initial commercial positioning.
We’re very fortunate to have such a rich data set from the simplifies studies that continue to mature with many patients still receiving active therapy after many years of studying the trial, demonstrating the durable efficacy and consistently well tolerated safety profile.
In 2020, we plan to continue to reinforce momelotinib, it’s overall clinical profile with additional dissemination of data and associated publications from these studies, with a focus on quantifying the previously unreported durability, the long-term safety and dose intensity data that I spoke of earlier, as well as other features of momelotinib benefit, including a deep dive into the robust symptom improvement observed in both simplified studies.
Momelotinib’s demonstrated durability is noteworthy. In the real world, various publications indicate that the median time on ruxolitinib therapy for myelofibrosis patients can be in the range of seven to 12 months. We believe our data to be published later this year stands in contrast to these findings, with most patients on active therapy for at least a couple of years, or longer.
Moreover, because we're not as mild as other JAK inhibitors, patients generally maintain a full dose of momelotinib, achieving full benefits of the agents for extended periods of time. A striking findings from the simplified studies is how challenging it is to maintain full dose of ruxolitinib with frequent dose adjustments necessary due to tolerability from profound cytopenia. Indeed, our overall safety profile remains very favorable, as you'll see later this year, even when dosing out for several years.
We’re also conducting, as I mentioned, sophisticated analyses of the symptom data obtained from the simplified studies and we're generating data that we will believe -- that we believe will be persuasive to reinforcing the magnitude of the clinical improvement on symptom burden, and that it's comparable for momelotinib and ruxolitinib in the JAK inhibitor naive population.
This recognizes, of course that the simplified two study has have already shown that we are superior as compared to ruxolitinib and symptom improvements for advanced patients and that's our belief post-talk analyses of the symptom improvement in the first line setting, so that momelotinib is at least as good, if not better on symptoms when one looks across the entire intermediate and high risk patient population. That presented by the totality of the simplified data.
Not only will these new analyses contribute further to the overall submission package for these future registration of momelotinib, that as we roll out the data we believe that these data will serve to help build broader awareness for momelotinib in the clinical community. We expect to publish these data later this year.
I'm going to hand it back to Nick to comments on the market opportunity now.
Thanks Barb. That was a very nice preview of the new data disclosures that you can expect from Sierra in 2020 which we believe will further reinforce the unique profile of the compound. I just want to take a couple of minutes to quickly overview the market opportunity that we believe momelotinib profile could potentially address.
Sierra's been engaged by the third party in a sophisticated review with the current and evolving modified practices market. In particular we've been testing how on a blinded basis momelotinib profile resonates with the clinical community. Although this market research continues, we've been exceedingly pleased with the reset secrecies that we have heard since, before pre-dealing this analysis, let's set the stage. There were about 50,000 patients living with myelofibrosis. About 75% of them are intermediate high risk, same population of the simplified trials, conservatively about 70% of these patients received first line treatment, perhaps more of which about 25% are already transfusion dependent, as we've stressed previously transfusion dependent is a chronic and progressive culmination of the anemia of this disease.
Even in the naïve population many patients are already transfusion dependent as they first receive therapy. Recognizing that about 70% of intermediate high risk models, fibrosis patients have some form of anemia, so it's not too surprising that many other patients who aren't actually transfusion dependent or one on the way. Having moderate to severe anemia and perhaps having occasional blood transfusions. These are patients that are not going to do well on other JAK inhibitors.
We estimate that about 75% of patients will require a second line therapy after first line silent JAK inhibitor and over half of these will be demonstrably transfusion dependent with many who have is getting occasional transfusions or on the cusp of needing them. The majority of patients in the second line setting by definition will be moderately to severely anemic.
Some of the comments we've been hearing from the clinical community, we enforce how an agent with momelotinib profile is optimally positioned to address unmet medical needs in myelofibrosis.
For instance, one U.S. high volume prescribed [Indiscernible] the dual mechanism and clinical data point to a strong anemia benefit. So I would definitely look to prescribe this in my front line patient who has severe anemia and cords. Similarly, our European KOL agreed and stated close transfusions can be a major problem for patients and this product shows a clear benefit to transfusion independence in all studies. So I would use it in the majority of my frontline patients with severe anemia and close.
In the second line setting, that's the thoughts of the subject who introduced earlier I stated on record that three quarters of the patients would be candidates for second line therapy. The majority of patients in second line would potentially be candidates for momelotinib.
In summary, we believe that momelotinib has the potential for commercial uptake in both the first line and second line settings with its use tailored to the unmet needs that exist in both populations.
We believe momelotinib has the potential to be a commercially successful Asian on the basis of its differentiating profile, encompassing both the Brexit benefit from symptom burden, enlarged spleen, and critically cytopenia, both our ability to directly address anemia and transfusion burden, but also how we spare all-improved platelets.
Moreover, as you will hear more later in 2020, our durability of response has been noteworthy. There will be no emergent or cumulative toxicities in those and our ability to maintain full dose intensity has been markedly superior to ruxolitinib in a head-to-head session.
In summary, there are obvious unmet medical needs in myelofibrosis and we believe momelotinib is uniquely positioned to potentially address these.
Given that responses to momelotinib notably durable, given that this is a chronic and progressive disease, characterized by life expectancy extended over many years, and you start to get an appreciation of why we're so encouraged by the commercial prospects for momelotinib.
We intend to further elaborate on the commercial opportunity as we move further towards potential registration.
Let's move on for now. Sukhi, can you provide a quick summary of our finances please?
Sure. Thanks Nick. Good morning everyone. I will provide some key financial highlights for the year and ask that you refer to our annual 10-K filing in your earnings release for further details.
During 2019, cash used in operating activities totaled $51.2 million. Operating expenses for the year ended December 31st, 2019 totaled approximately $67 million compared to $55.4 million for the prior year.
However, note that 2019 operating expenses included $10.5 million non-cash R&D charge related to obligation to issue common stock and a warranty in consideration for historical rate in regulation of our near-term milestone payment.
Including this $10.5 million non-cash charge, R&D expenses increased by $12.2 million from $41.1 [ph] million to $52.3 million for year ended December 31st, 2019 as compared to the prior year.
Momelotinib related R&D costs, which include clinical trials and development costs, and third-party manufacturing costs, increased by approximately $13.7 million in 2019 versus the prior year. These costs were partially offset by $11.4 million decrease in SRA737 and SRA141 cost related to clinical trial, third-party manufacturing, and research and preclinical work.
G&A expenses decreased from $14.3 million to $13.7 million for year ended December 31st [technical difficulty] the prior year.
GAAP net loss for the year ended December 31st, 2019 totaled $88.3 million compared to $53.3 million for the prior year. Note, however, our 2019 net loss includes the previously mentioned non-cash $10.5 million charge related to the Gilead amendment and a $20.9 million charge included in other income expenses related to the change in fair value and warrant liabilities.
Non-GAAP adjusted net loss the year ended December 31st, 2019 totaled $51.2 million compared to $36.5 million for the prior year. Please refer to our earnings release for further details on a reconciliation of GAAP to non-GAAP financial measures.
Now, turning over our balance sheet. In the fourth quarter of 2019, we bolstered our cash position by raising $103 million of gross proceeds in an underwriting equity offering. Net proceeds after deducting underwriting and operating expenses totaled $97.7 million. We also repaid our 5 million term loan in December 2019 and terminated our debt ability.
As Nick said we close the year with the cash and cash equivalents total of $137.5 million, compared to $106 million as of December 31, 2018. And we then tried our multi-year burn rate; we anticipate our current resources will be sufficient to execute on our development strategies to momelotinib into the second half of 2022.
I would also like to point out that the Series B warrant issued in the November 2019 financing, our only cash exercisable and expire on the 75th day anniversary, following the announcement of top-line data from the MOMENTUM Phase 3 trial. If these Series B warrants are fully exercised, we will receive approximately $34 million in additional proceeds to further extend our runway.
I will add a few more comments on the amendment of our Asset Purchase Agreement with Gilead, which was competed in the first quarter of 2019. The improved agreement and commitment from Gilead and women from events to potential long-term value of momelotinib and our stockholders. Gilead is now a stockholder in Sierra with a blend of annual royalty rates payable to Gilead should -- commercial successful by brining substantially regimes. Net royalty now range from very low double-digit to $10 million [ph] in sales to teams for greater than $1 billion in sales. We also eliminated a milestone payment by -- Gilead upon the initiation of agreement further extending our financial resources.
So in summary, we are now appropriately capitalized with momelotinib towards potential registration and commercialization and with a solid base of alignments and stakeholders who vote us and showed their enthusiasm for the potential for momelotinib as it outline today. In concert with our financing, we also welcome new Board members associated with Vivo Capital, Longitude Capital, OrbiMed and Abingworth.
Thanks, Sukhi. Okay, so in summary, primary objective here is to secure regulatory approval for momelotinib, one of the most expedient timeline. Primary registration strategy is by a single pivotal, confirmatory Phase 3 trial, the MOMENTUM trial, oriented to demonstrating meaningful benefit in the second line myelofibrosis setting. We've launched MOMENTUM and extremely focused on recruitment for the study.
Moreover, we're advancing a concerted and holistic overarching strategic regulatory and commercial strategy to optimize and maximize the opportunity that we believe momelotinib represents.
Our emerging view of the myelofibrosis market is that momelotinib is ideally positioned to address unmet medical needs broadly myelofibrosis, including in the anemic and thrombocytopenic populations. It's also arguably an appropriate JAK inhibitor for emerging combination therapies.
Today, no standalone issue available emerging or in development has demonstrated robustly compelling data across all three myelofibrosis hallmarks except for momelotinib.
In context of a well-capitalized with the stellar suite of stakeholders, sophisticated investors and Gilead and running the highly power with those three clinical trial for potentially valuable commercial asset, we believe Sierra is very well-positioned.
With that, I’m pleased to turn over the call to our analysts to ask questions with management. Operator, can we have the first question please?
[Operator Instructions] Today's first question is coming from Maury Raycroft calling in from Jefferies. Please go ahead. Your line is open.
Hi, good morning, everyone and congrats on the quarter. Thanks for taking my question. So just checking on momelotinib's MOMENTUM status. So if you can mention how many sites have been activated and are recruiting currently? And what specific can you provide around expectations for the cadence of site rollout and patient enrollment to get to that 180 number by mid 2021?
Yes. Thanks, Maury. As you can appreciate, we're not anticipating providing a blow by blow of site activation and enrollment status. We'll be guiding towards the overall timelines that we've provided today. So, of course, you get a flavor of where we were by checking ClinicalTrials.gov. But, of course, I'm stressing where we were, because ClinicalTrials.gov is always a little bit behind by necessity for where we actually are in the real world.
Now going to ClinicalTrials.gov right now, I think you'll see that there are a number of countries that are now cleared from a regulatory perspective and a number of sites that are activated, and you'd expect to see that continue to grow dramatically over the next couple of months.
As Mark alluded to, everything in there pretty much on track, very pleased with the progress through -- on a country by country basis, the regulatory process. And we're very much focused now on site activations and on driving in enrollment and recruitment. So I think the study is off to a great start. We feel very confident in making those tight amounts.
Got it. Okay. And then second question is just for the extended access they do for momelotinib. If you can provide an update as to how many patients are still in that study, you collect data from those patients? And will that study be a source of new data that could be disclosed on the close of the year?
Yes. I mean, we're not going to provide a blow by blow on where the study currently is. I think, we'll provide some general updates through the year and we had 120 patients still on study as of the last update. And that obviously reflects, as Barb alluded to, many, many years on therapy for patients, they're recognizing that the simplified trials would be the last point of enrollment and those trials initiated several years ago. So patients from simplified are already four, five, six years out in that extended Access Protocol.
It's an important study for us and that's why we stress it. At the end of the day, what regulators wants to see is, we have demonstrable activity, yes, but that activity is durable. And we have a very impressive dataset here in terms of long term durability.
As Barb alluded to, that data set will be the source for publications to look for in 2020 and beyond, as we provide more clarity on -- specific metrics on time on study, durability on study, the safety over long term periods of time, etcetera. So do stay tuned, as that’s an important data set us, Maury. We think it's a release in our head.
Got it. Okay. Thanks for taking my questions. I'll hop back in queue.
Okay. Thanks, Maury.
Thanks a lot, sir. [Operator Instructions] We have a question that's coming in from Mr. Sam Slutsky calling in LifeSci Capital. Please go ahead.
Hi, everyone. Thanks for taking questions. Could you just remind us once again on the role of danazol and splenomegaly and soon as paradigm and how that competitor impact or benefit momelotinib study?
Sure. Mark, perhaps you want to jump into it. Maybe Mark.
Yeah. Sure, sure. So as, as I mentioned, danazol is an androgenic steroids its main utility and the treatment of myelofibrosis patients, and as recommended by the guidelines is to treat the anemia associated with myelofibrosis. There is relatively limited published data on danazol, but what we do see is that it will have a limited benefit in earlier stage patients with myelofibrosis on their anemia being an androgenic steroid. We don't expect it to have a major benefit on the splenomegaly enlargement and the symptoms. But there is limited data, but that's also confirmed from clinicians, which we have spoken to who have used danazol.
So, we realized, we've accommodated this in the study designed by allowing, for instance, should patients have splenic progression on danazol because of this lack of benefit, then, if they have Splenic progression then we accommodate that in the study to designed by allowing them to cross over early to momelotinib. We spoken to our clinicians, we've gotten assurances from them given the objectives of the trial, that -- it's a viable competitor and the study design accommodates that as well.
Yeah. So I'll just, this is Barbara. Just emphasizing that, it's as placebo like as you can get, it has no mechanistic ability to control the screen size or the inflammatory symptoms associated with myelofibrosis. So it truly is, as Mark said, a therapy that's been recommended for the management of anemia, which is only one of the manifestations of myelofibrosis and there its been published to provide an anemia benefit has been in a patient population that's much earlier than what we're enrolling into the MOMENTUM study. The fact that it's very close to a placebo essentially means that we need to use other collaterals to encourage patients to enroll, to encourage physicians to enroll their patients, and those include two to one randomization to momelotinib. It includes crossover, as Mark alluded to.
So as we've talked about the durability and the long-term benefit of momelotinib, it's very important for patients -- for potential patients to realize that that should they actually get randomized to danazol and in effect, they won't know it's a double blind study, so nobody will know who's on what therapy, but no matter which arm, a patient is enrolled to do the crossover at 24 weeks if not earlier and then they have the opportunity to continue to benefit for potentially years as we've seen in other studies settings.
So, this design gives us absolutely the highest probability of success. This will allow momelotinib to show a magnitude of benefit over a very weak anemia agent and show dramatic benefit on the other manifestations, symptoms and spleen. So it allows us to have a high probability of achieving success with the endpoint and allows patients the opportunity to receive momelotinib potentially for years no matter which arm they are enrolled to.
Got it. That's helpful. And then lastly [indiscernible] during the fall, but in terms of the potential ruxolitinib I think the first-line [Indiscernible] with both from a preclinical -- from a first-line typically [Indiscernible] anemia [indiscernible].
Yeah. Some of the drugs that we highlighted today during the call service as a potential reflection of the frequency of anemia, myelofibrosis is a disease with a bone marrow and anemia is one of the most common presenting symptoms, so unexplained anemia, enlarged spleen being another but that unexplained anemia is often how patients come to life.
And as patients enter the intermediate and higher risk categories of this disease, I believe that Dr. Verstovsek has said a quarter of patients are transfusion dependent at the time of diagnosis and half of patients the transfusion dependent over the course of the first year of therapy for this disease. So, clearly one of the most important factors. It's common. It's prognostically important. It's not treatable by any direct means in any other way. Momelotinib has this unique mechanistically driven anemia benefit as a unique differentiated component of the profile.
And just to add…
In the quarter…
Oh, no, go ahead. Go ahead.
No, please Mark. Go ahead.
No. I just going trying to say quarter may be estimated to be transfusion dependent, but an additional percentage of those patients are still anemic and it's progressive. So as you've heard, as they perceive they will become eventually transfusion dependent, so that opens up the door I think for use in patients who are moving in the direction of transfusion dependence, but who may just have significant anemia.
And not be that definition.
I was going to echo the same point, I mean using our empirical data from SIMPLIFY-1, 25% would demonstrably transfusion dependent and about another 10% plus were receiving infrequent transfusions, but were not transfusion free. So about a third of the patients were getting some form of transfusions either occasional or frequent in the navies assay in SIMPLIFY-1.
And you asked about thrombocytopenia and interestingly, and perhaps not surprisingly, those things are usually synonymous. It's very rare, certainly nowadays, and if you look through the literature, to see a patient who's demonstrably thrombocytopenic that isn't an anemia, those two things go hand-in-hand. So the majority of patients in our data talking 800 patients is myelofibrosis data here. It’s a very large data.
In our hands myelofibrosis anemia and thrombocytopenia a coincidence and Gilead did a number of studies in their commercial preparatory work, a couple of years ago that reinforced this and we've actually presented some of those data in public previously and we'll continue to update this as we move forward.
But I would argue that subpoenaed population, is the population that we would be focused on and those patients will have an immune thrombocytopenia. It's important to remember that we spared platelets and in fact in the percentage of patients, especially those who showed at the most trouble, anemia benefit on momelotinib, but we also saw an increase in platelets as well. So I think more ideally positioned for that, sarcopenia patient population and maybe that's about fair to front line. It's the majority of second line.
Got it. Thanks.
Thank you. We’ll now go to [indiscernible] Oppenheimer. Please go ahead.
Yeah. I think at the end of the day, we enjoy a very productive relationship with Gilead from Andy Dickinson down. Andy -- and he's been incredibly supportive of the relationship and I have nothing to praise for the Gilead team. They recognize that we need to get to the finish line together to realize for any commercial outcome here, obviously if we don't get the drug registered then, then it's worth nothing. If we get the drug registered then it could be worth something considerably more. And, we did it to ensure that we capitalize the company to get there. And then we executed it as quickly as possible. And I want it to be helpful to make that happen. They recognize that -- a reshaping of the economics to ensure that they still sharing the upside, which they will as a stakeholder, direct equity holder in the company, they hold about 7% of the stock in the company now. As well as still getting, you know, reasonable votes every time, but obviously far less attractive than it was previously, gives them the best challenge to assuming a long term benefit from them allotment, and sharing in the success of the company as we move forward. So I think it was win-win.
Great. Thanks. And I think we might one or two more data this year. Could you just tell us like what are the important characteristics of data that will present this year in contrast with those patients or other combinations that might be instated?
I can't comment on other people’s data. But I'm not sure what their volumes to speak, I mean, I think the reality is -- as I currently understand it to be is that in the front-line setting that inhibitor combinations are largely focused on patients with robust psychology, so good count of [Indiscernible] [058:15] good hemoglobin.
And that's where ruxolitinib plays the best as defined. If you have relatively robust hematology, ruxolitinib is a good drug, we're not presenting otherwise, nor are we presenting that we would try and displace rux in that area. I think what we're focus is on is where the unmet needs are. So these are the patients who are anemia and thrombocytopenia, those two things as I said are synonymous, that's our sweet spot in the front-line. And I don't think anyone else is going to be playing now as robustly as we are.
When it comes to the second-line testing, I think everything's on the table for the same reasons, majority of these patients for both anemic and thrombocytopenia, but those are ideal patients for momelotinib. I'd love to see momelotinib study with JAK inhibitor. I would like to see how those biologists compliment. We do have some intriguing preclinical findings that reinforce again, how different ruxolitinib and momelotinib are.
We do not behave the same biological for a variety of reasons. And in particular, we showed some preclinical data on the TGF beta pathway, but its very interesting that you just don't see ruxolitinib. So I think biologically, that combination will be very interesting to study and we're hopeful that we can at some point. I think and stress this before, we can get momelotinib approved and I think it could be used as a backbone JAK inhibitor in a variety combination settings and I'd love to see that happen.
Great. Thank you so much and congrats again.
Thanks, Jason [ph]. I think we will have to start wrapping it up. Now it is 9 o'clock. I just got a couple of closing comments.
Thank you, sir. There are no further questions. Back to you, sir.
Okay. Great. Well, before concluding, I'd like to remind everyone that we do have a presentation scheduled for tomorrow at the Cowen Healthcare Conference in Boston 10 O'clock Eastern. We'll also be making ourselves available for scheduled meetings with investors who are participating at Cowen. Our presentation at Cowen will be webcast live will be available on archived on our website along with an archive of this call. Of course, there is lots of opportunities to engage with management.
So, please do reach out to James Smith, if you have additional questions or comments or want to schedule a meeting with management. Thanks again for joining the call today. This concludes the call. And we look forward to lots of updates in 2020 an exciting year for Sierra. Thank you.
Thanks. Mr. Nick Glover. Ladies and gentlemen, that will conclude today's presentation. Thank you for your attendance. You may now disconnect. Have a good day.