GlycoMimetics, Inc. (GLYC) CEO Harout Semerjian on Q3 2021 Results - Earnings Call Transcript

GlycoMimetics, Inc. (NASDAQ:GLYC) Q3 2021 Earnings Conference Call November 2, 2021 8:30 AM ET

Company Participants

Shari Annes - IR

Harout Semerjian - CEO, President & Director

Eric Feldman - SVP & Chief Medical Officer

Brian Hahn - SVP & CFO

Conference Call Participants

Edward White - H.C. Wainwright & Co.

Zegbeh Jallah - ROTH Capital Partners

Jiale Song - Jefferies

Operator

Good morning, and thank you all for joining the GlycoMimetics call. [Operator Instructions]. I would now like to turn the call over to Ms. Shari Annes of the Investor Relations Group at GlycoMimetics. Please go ahead.

Shari Annes

Good morning. Today, we will review our accomplishments and financial results for the period ended September 30, 2021. We'll also update you on recent achievements. The press release we issued this morning is available on the company's website at www.glycomimetics.com under the Investors tab.

This call is being recorded. A dial-in phone replay will be available for 24 hours after the close of the call. The webcast replay will also be available for 30 days in the Investor Relations section of the company's website.

Joining me on the call today from GlycoMimetics are Harout Semerjian, Chief Executive Officer; Dr. Eric Feldman, Chief Medical Officer; and Brian Hahn, Chief Financial Officer. We'll start today's call with comments from Harout and then Eric. Brian will then follow to provide an overview of the company's financial position, and then we'll open the call to Q&A.

I'd like to remind you that today's call will include forward-looking statements based on current expectations. Forward-looking statements contained on this call include, but are not limited to, statements about the company's product candidates, uproleselan, GMI-1359 and GMI-1687, and our other pipeline programs, along with statements about expectations regarding our operations, plans for future development and potential commercialization and cash position.

Such statements represent management's judgment and intention as of today and involve assumptions, risks and uncertainties. GlycoMimetics undertakes no obligation to update or revise any forward-looking statement. For information concerning the risk factors that could affect the company, please refer to GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics website.

I'll now turn the call over to Harout.

Harout Semerjian

Thank you, Shari, and good morning, everyone. This is my first earnings call as GlycoMimetics' Chief Executive Officer, and I'm grateful for the dedication and perseverance of our employees and the support of our Board of Directors, especially during my CEO transition period. I'm excited about the strong momentum and opportunities we have in front of us.

In prior calls, we've shared that our operational focus is advancing uproleselan to commercialization and positioning it as a new foundational treatment in AML. Our belief is that drug combinations targeting both tumor intrinsic and microenvironment extrinsic pathways of AML will be essential for the successful clinical translation of new, more effective drug combination strategies. As a potential first-in-class therapeutic that selectively disrupts extrinsic pathways of chemo resistance, we believe uproleselan can be transformative for AML patients.

My goal is to transform GlycoMimetics from a research and clinical development organization to a commercialization powerhouse leveraging the advancement of uproleselan. These types of transitions have been a particular area of focus for me in the oncology, hematology space for the past 2 decades.

With two advanced uproleselan registration programs in AML, we have much to plan for from a path to commercialization perspective. These programs include: first, our company-sponsored Phase III trial in relapsed/refractory AML; and second, the National Cancer Institute's trial in older, newly diagnosed patients fit for chemotherapy. We have seen robust enrollment during the past quarter in our Phase III trial. I am pleased to share that completing enrollment of 300 patients - 380 patients in our company-sponsored Phase III trial is now imminent.

Our plan is to announce this important milestone in a separate press release once it concludes shortly. As you are aware, the primary endpoint of overall survival is event-driven. Based on our current projections, we expect top line results to come in after the year-end 2022. As more events occur, our goal is to provide more precision on the timing of the top line readout.

In parallel, we can also report significant CMC and regulatory achievements. We have had interactions with the FDA under Breakthrough Therapy Designation to align on key elements of our CMC program. Consistent with that guidance, we have completed the drug product registration batches required to support our NDA submission for uproleselan. I'd like to thank our internal team and our CMC partners for getting us to this stage of NDA readiness. We now shift our CMC focus to making the commercial batches to support a potential global product launch.

Additionally, we have also reached alignment with the FDA on the clinical pharmacology and nonclinical elements of our NDA. Our goal has been to work closely with the agency on as many aspects of the program as possible prior to the top line readouts from our pivotal program. I'm also pleased to report today that the National Cancer Institute's Phase II portion of its Phase II/III trial is also very close to completing enrollment of the required 262 participants for the Phase II analysis of event-free survival.

The anticipated imminent achievement of this milestone reflects the enthusiasm of our investigators that participated in this trial for this novel combination involving uproleselan. Like our own Phase III trial, once we learn that enrollment is completed, we will issue a press release. Thereafter, if the interim event-free survival analysis is positive, the data will be transferred to us to support GlycoMimetics' regulatory filing. Eric will provide you with more detail in his remarks.

Completion of enrollment in each of these pivotal trials will be a major accomplishment, especially in light of the logistical challenges over the last 1.5 years associated with COVID-19. Additionally, as you may have heard, our partner, Apollomics, plans shortly to initiate their own Phase III trial in China evaluating uproleselan plus salvage chemotherapy in the relapsed/refractory AML. The progress the Apollomics team has made integrating the program, initiating a Phase I PK bridging study, getting Breakthrough Therapy Designation and now being on the cusp of initiating the Phase III registrational study has been remarkable. We couldn't have a stronger partner for uproleselan in Greater China.

The groundwork we are laying out in 2021 and 2022 should enable us to file for an approval for treatment of patients in both the relapsed/refractory and the newly diagnosed settings should both our trial and the NCI's trial hit their primary endpoints. To be clear, if either one is positive, we intend to pursue regulatory approval in that particular setting.

I'll now turn the call to Eric to elaborate on our clinical program and to highlight the findings of our Phase I/II study recently published in BLOOD. Eric?

Eric Feldman

Thank you, Harout. Just to underscore what Harout said, we believe we will complete enrollment of our own registration trial in relapsed/refractory AML in the days to come. As we approach completion of enrollment, we have been coordinating with our investigators across 70 sites in 9 countries to ensure a seamless closure of patient enrollments.

Additionally, we have shifted our focus from enrollment to data collection and data cleaning so that we can plan to have the entire database ready for lock in advance of the event - final event trigger. We are making excellent progress on this front.

I would like to take this opportunity to thank all of our clinicians, our research nurses, trial coordinators and our GlycoMimetics clinical operations team for enabling a timely enrollment, particularly in a challenging COVID environment.

Additionally, I'd like to provide detail on what it means for the NCI to be nearing completion of the enrollment of the Phase II portion of its study. As you know, the NCI's Phase II/III trial is evaluating uproleselan in newly diagnosed patients 60 years or older with AML. More specifically, with a randomized controlled trial design, they are looking to see whether the addition of uproleselan to a standard cytarabine/daunorubicin 7+3 regimen in older adults with previously untreated AML fit for chemotherapy will improve patient outcomes. Completion of enrollment of 262 patients will trigger a planned interim analysis based on event-free survival.

There are 3 potential outcomes from the planned interim analysis. The trial could stop due to efficacy with a hazard ratio of 0.64 or better. The trial could proceed to Phase III to gain more data on overall survival with the combination or the trial would not proceed to Phase III due to a lack of benefit. For additional details on the NCI's protocol for data analysis, please refer to the poster presented by the alliance in 2019 at ASH, which is published on GlycoMimetics website under Publications.

Since this is an independent study, the progress of which is communicated to us by the NCI on a very high level, we're unable to give you a sense of timing on readout of EFS or top line results at this time. We do expect enrollment to complete imminently. We'll have to wait until the NCI shares the results of its internal projection.

Before I hand it back to Harout, I'd like to provide my own perspective on the recently released BLOOD publication of our Phase I/II trial in AML. First, while there have been a number of approvals in AML over the past couple of years, single-agent targeted therapies based on AML genetics have not resulted in deep and durable responses in the majority of patients. What has become clear is that drug combinations are needed and must target both intrinsic mutational factors as well as extrinsic microenvironmental factors.

Intrinsic refers to the molecular changes that are inherent to the tumor cell that drive chemo resistance, such as BCL2 overexpression, p53 mutations, et cetera. Extrinsic resistance is present regardless of molecular subtype and is mediated by interaction between the leukemic cells and the bone-marrow microenvironment, such as E-selectin. Simply put, leukemia lives in the bone marrow, and we must disrupt tumor stromal interactions in addition to chemotherapy and targeted agents, if we expect to have any hope of further improving outcomes in this patient population. By targeting the E-selectin - E-selectin ligand access in the bone marrow that drives leukemic niche hijack, uproleselan represents a new approach for disrupting an extrinsic factor of chemo resistance.

This novel extrinsic approach with uproleselan was shown in our Phase I/II trial to result in the following 4 main findings: first, a high remission rate was seen compared to experiences with salvage chemotherapy alone. In the population enrolled in the Phase I/II trial, 41% achieved a CR or CRI with the addition of uproleselan, compared to a 20% or 25% expected response with chemo alone. Of note, 35% of patients achieved a full CR, which highlights the quality and depth of the response.

Second, a majority of the evaluable patients who achieved CR achieved MRD negativity. I'd like to underscore the high rate of MRD negative full CRs, which has been shown to be the strongest predictor for overall survival in AML. Third, a high percentage of responding patients underwent a subsequent transplant. Of the 22 patients achieving a CR or CRi, half went on to a potentially curative allogeneic transplant.

This suggests that the activity and, importantly, the safety of the addition of uproleselan as induction therapy allowed patients to get to transplant in a deep response and with a preserved performance status, both critical factors for success of transplantation. Finally, all of this accumulated in a prolonged survival, which is a great outcome.

I urge you to read the BLOOD article as it provides the basis as to why we are confident in the results in the ongoing Phase III programs.

I'll now turn things back to Harout.

Harout Semerjian

Thank you, Eric. In the glycobiology space, we have indeed established a leadership position and laid the foundation for future success. This field has been recognized as an untapped source of novel therapeutics. For that reason, focused as we are on our registration trials, we are further enhancing the value of our platform by advancing the development of GMI-1359, GMI-1687 and with our Galectin-3 inhibitor.

With regard to GMI-1359, we have agreed with the investigators at Duke University School of Medicine to close the current Phase I study at the end of this year. As you know, the primary objective of this trial was to gain additional data on the pharmacodynamic effects of GMI-1359 and to establish a biologically active dose for subsequent Phase II trials with this drug candidate. With clear evidence of dual antagonism now observed of both E-selectin and CXCR4, it is time to shift our focus to a next clinical trial. We are defining those clinical options as we speak.

The IND-enabling program for GMI-1687 is progressing as planned, with filing of the IND for acute vaso-occlusive crisis in sickle cell disease and first-in-human dosing is expected in the first half of 2022.

For our Galectin-3 program, we have demonstrated robust activity across numerous animal models and clear evidence of PK bioavailability and antifibrotic activity following oral dosing. This potentially enables us to treat chronic indications with pills rather than needles, which is a major breakthrough for our chemistry team.

Interest in GMI-1359, GMI-1687 and our Galectin-3 program is high, and we continue to explore all avenues to maximize the value of these assets and accelerate their development, including potential third-party collaborations.

Brian, I'll now turn it over to you to provide an overview of our financial results.

Brian Hahn

Thank you, Harout. As of September 30, 2021, GlycoMimetics had cash and cash equivalents of $101.9 million, as compared to $137 million as of December 31, 2020. Research and development expenses increased to $13.3 million for the quarter ended September 30, 2021, as compared to $10.7 million for the quarter ended September 30, 2020. The increase was due to higher clinical trial costs for our ongoing global Phase III clinical trial of uproleselan in individuals with relapsed/refractory AML, increased manufacturing costs with uproleselan validation batches and expenses related to IND-enabling studies for our GMI-1687 drug candidate. General and administrative expenses were $4.1 million for the third quarter ended June 30, 2021 and 2020.

I'd now like to turn the call back to Harout.

Harout Semerjian

Thank you, Brian. Before I conclude our remarks and begin the Q&A, I'd like to make everyone aware of some personnel changes that are occurring at GlycoMimetics. Eric Feldman, our Chief Medical Officer, has decided to leave GlycoMimetics to explore other opportunities. We have initiated a search to find a replacement and hope to have a new CMO in place in the coming months. I'd like to thank Eric for his contributions to GlycoMimetics and wish him the best in his future endeavors.

We continue to attract top talent at GlycoMimetics. And I'm pleased to say that we have hired a new VP of Regulatory Affairs. We will make an announcement when she starts her first day of employment later this month, but I wanted to let you know that she has extensive experience in the hematologic malignancy [Technical Difficulty]. She had served as a regulatory head with numerous approved therapies and a C-suite leader. Her direct experience leading NDA submissions in biotech companies will prove invaluable to us as we begin to prepare the regulatory dossier for uproleselan.

Additionally, we brought in a commercialization leader, Bruce Johnson. Bruce brings a tremendous wealth of oncology hematology experience from his 25-year career across commercial and development at Novartis Oncology. He led as VP and Global Franchise Head, Malignant Hematology, VP and Global Disease Leader Leukemia franchise, including midostorin in AML and U.S. oncology brand leader. Bruce has also - was also VP in Global Commercial Development at AbbVie in oncology and worked on venetoclax.

His focus will be to help prepare us with uproleselan commercialization strategy, competitive readiness and medical education efforts so the market understands our science and embraces us as we have our 301 data mature.

I'm now going to turn it back over to the operator for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions]. Your first question comes from the line of Ed White.

Edward White

First question I have is just on 1359. It wasn't mentioned in the press release, but you did discuss it on the call. I'm just curious if there's any change in the prioritization of this program? And also you said that the - you'll finish enrollment of the trial at the end of this year. Are we going to be - see data at the end of this year? And how should we be thinking about the next step? Is that something you'll discuss in 2022?

Harout Semerjian

Yes. Thank you, Ed, for that. So I'll answer the first part and then turn it over to Eric for further details. But there isn't any change in our direction with 1359. When we had set up the study, we wanted to understand further about its activity, and we have that data. So from that perspective, we're making sure we're making progress on it. And within 2022, we'll further communicate when appropriate what can be the future direction or potential indications we will look at. But maybe, Eric, you want to add something?

Eric Feldman

Yes. We did a small trial at Duke in breast cancer, primarily to demonstrate proof of the mechanism of action. In other words, this is a dual inhibitor of CXCR4 and E-selectin. And with a small number of patients, we were able to show that at a tolerable dose of 1359 we achieved targeting on both CXCR4 and E-selectin. And so we have achieved what we needed to see in that trial, and we are now discussing what will be the next steps.

Edward White

Great. And a question maybe for Brian. R&D was up 30% sequentially. You had mentioned about the CMC and manufacturing. I'm just curious as what we saw in this quarter could be considered a baseline going forward as you're starting to manufacture product for commercialization. Or is this more of a onetime uptick and expenses should continue back at the rates we've seen in the past few quarters? And then any guidance on cash runway?

Brian Hahn

Thanks, Ed. So yes, I would say it's more of a one-off for this year from the validation batches from CMC and then a little bit of increase off of the clinical trial as we complete enrollment shortly here, you'll see some of the clinical trial costs start to come down a little bit as well as the manufacturing batches.

Current cash on hand gets us into the first half of 2023. Just to remind you, we had a little bit more aggressive in the budget with a little bit higher headcount, but we're currently at about 50 employees. So fixed burn is still about $2 million to $2.5 million a month. We've been burning about $15 million of cash. You can see that going consistently out and maybe dropping a little bit in 2022.

Edward White

Okay. Great. And my last question, you have several ISTs with upro, those that watched you and UC Davis and MD Anderson. I'm just wondering if we should expect any updates at ASH or perhaps any comments you can make on data expected in 2022?

Eric Feldman

No, we won't have anything at ASH. Those ISTs have started. They are enrolling. Obviously, these are being run by the individual investigators at their sites, so we don't control that. But we do expect that as the data comes in and how it looks with that, there would be potential to - in 2022 to share some of that data publicly.

Operator

Your next question comes from the line of Zegbeh Jallah.

Zegbeh Jallah

Thanks for the really thorough update. Just wanted to ask a couple of quick questions. A lot of good questions have already been asked. But I think, for me, just additional clarity on some of the CMC issues. Just trying to think about anything that could influence the time line of the NDH badly?

Harout Semerjian

Yes, yes. Thank you, Zegbeh, for that question. And our whole idea is to really, as part of our breakthrough designation, to closely collaborate with the agency. At this point, there are no issues regarding CMC. We're just advancing it based on the guidance that we get from the agency as part of our ongoing dialogue. And of course, our next area of thinking about is how do we make sure that we have our commercial batches in track for a potential commercialization.

Zegbeh Jallah

And then in terms of the timing likely between when the data reads out and the NDA filing, any comment on what that time line would look like? I guess we're just trying to estimate when the NDA could potentially be found.

Harout Semerjian

Yes. No, I appreciate that, Zegbeh. So as you know, regarding the top line readout, that really is event-driven. And we wanted to make sure in this forum we give guidance on whatever we know, which is, at this point, it will be after year-end 2022. What that will involve afterwards is really making sure that we're preparing for the NDA. Some of those steps actually, we're taking it from now, making sure that we have a VP of Regulatory in place, somebody who has had that experience, having the external partnership and collaborations in place, advancing on some of these things in parallel so that, when the time comes, we're able to turn that into an NDA submission as fast as possible, given the guidance from what other companies do. So we plan to really move into that direction as fast as possible after the top line readout.

Zegbeh Jallah

And then another follow-up there on the commercial aspect. Just kind of thinking, with your background, is there anything that you might be doing from a commercial perspective? You also mentioned bringing on Bruce. So I was just wondering what are your thoughts there. The stock is under pressure. And what do you think you guys could really do there?

Harout Semerjian

Yes. Obviously, Zegbeh, a part of where we are - I mean, until now, we've been very focused on getting trial enrollment. And our Phase III, I mean, remember, this is our first Phase III that we run it. We're the sponsors. So we're very excited about where we have achieved the - this almost full enrollment milestone. And now is the time to pivot to really thinking about commercialization. And commercialization thinking is really about positioning, how do we ensure we get our rightful position in the marketplace? How do we ensure that we have the right education efforts going on? How do we ensure that we are really pricing it appropriately when the time comes?

So really maximizing the opportunity depending on where the data readout comes positive, be it in the relapsed/refractory or in the de novo or potentially both. So these are discussions that we believe we need to have from now, and that's why we brought in Bruce to work with us to really think about some of these areas as we speak.

As you can appreciate, these are not conversations we can have last minute. We can adjust it after the top line readout, but we got to anticipate some of these scenarios, and that's what we plan to do within 2022.

Zegbeh Jallah

And then the last one here for me is just about 1359. I think you might still be trying to figure out what indications to kind of pursue with the study that you'll be running. But if you can comment on that, that would be great. And then lastly, for the investigator-sponsored studies for upro, is it the assumption that something similar to 1359 will be done, meaning quickly trying to figure out the dose and efficacy signal and then transition that into a study being run by GlycoMimetics?

Harout Semerjian

Yes. Regarding 1359, I mean, in general, what we're doing as well is doing 2 things, Zegbeh. One is really advancing uproleselan, making sure that we don't miss a beat in moving it forward to a potential commercialization route, at the same time, expanding our rich platform to ensure that we have certain milestones that we are hitting across 1359, across 1687 and across Galectin-3.

Particularly for 1359, we have what we needed from the study that was initiated at Duke. So now it's really time to say, "Okay, where do we take it from an indication perspective?" So that's something I want to make sure that we're thoughtful about it and when we're thinking about what - where are the maximum potential opportunities. And do we do it ourselves? Do we partner? All these are things which are on the table at this point. So we don't want to take off anything off the table. So that's regarding 1359.

Regarding your second part of the question on the ISTs and potentially turning them into GlycoMimetics-sponsors trial, I think it's just too early to tell at this point. What we really appreciate over the last few months is, in the space of AML, not only do we have 2 registration-grade trials going on, but there are 3 - and actually 4 ISTs looking at uproleselan across different parameters within AML or time to transplant. So we're very excited about those. Let's see what the data says, and then we will get back to the community as to what potential next steps would be. So we're looking forward as well to seeing some of that data in 2022.

Operator

[Operator Instructions]. Your next question comes from the line of Roger Song.

Jiale Song

A lot of questions have been asked. Maybe just two quick ones from me. So the first one is related to the upro IST study, understanding you potentially will have data in 2022 before the Phase II and the Phase III pivotal study by you and the NCI. Just curious, how should the investor view those IST data if it's available before those pivotal data? Any readthrough you would like to see from those IST data to your pivotal data?

Harout Semerjian

Yes, we'll have Eric maybe give a bit more color, Roger. Yes.

Eric Feldman

Yes. Roger, I mean, those ISTs really enable us to expand the indications for uproleselan in a sense that we're targeting different subpopulations of AML. So for example, the one that we add uproleselan to the backbone of the hypomethylane agent plus venetoclax, that one is really exciting because we can see that we will be able to deepen the responses to treatment in that populations. HMA venetoclax is very active, but you don't get a lot of MRD negative responses. And therefore, the durability is not so great.

And what we saw in our Phase I/II in the relapse study was that we do get these deep responses when you add uproleselan. And so if we see that we're deepening the response in that HMA venetoclax unfit population, that would be additional evidence that uproleselan as targeting extrinsic resistance is a clear important path to have to target.

And the other one is the MD Anderson IST where we're adding it to a backbone chemotherapy in patients with this treated secondary AML, which is an emerging - a larger group of patients as more patients with MDS get azacitidine for their MDS and then evolve to AML. That's a particularly bad group of patients. And so if we see higher response rates than what would be expected, that again would be further evidence that uproleselan is adding benefit. So I think those are important ISTs, and we'll see as the data emerges when we will be able to share it.

Harout Semerjian

Yes. I mean, in a way, Roger, I mean to think about all of these ISTs will give us further information on what we - you said in the beginning that we believe that drug combinations targeting both the tumor intrinsic and microenvironment extrinsic pathways in AML will be essential for further success in this area. So those are all different shots at goal that will inform us with further insights.

Jiale Song

Got it. Yes, that's very helpful. Maybe just one last one from me is understanding - I think Brian has said the cash runway into first half of 2023 and your pivotal study data coming after 2022 year-end. Just curious how flexible is the cash runway? Would like to kind of accommodate the pivotal AML readout.

Brian Hahn

Roger, as we stated earlier, there's a lot of levers within the budget. We're still only 50 employees. So fixed expense is still relatively low. So with the $102 million we have on hand right now, the burn rate will drop a little bit. So there is some movement, some levers we can pull within that budget to help extend that cash runway.

Harout Semerjian

Thank you, Roger. And of course, I mean, that's one thing I appreciate about GlycoMimetics when I joined is that nimbleness of the operations. And as I also mentioned the potential partnerships, that these are areas we're discussing since all 3 of the assets, in addition to the - besides uproleselan - are all things that are generating interest. So we'll see with time. But between the nimbleness internally and the external interest, those are positive levers for our cash runway.

Operator

Excuse me, presenters, there are no more phone questions. Harout, back to you.

Harout Semerjian

Thank you. So to conclude, there is significant momentum behind uproleselan from a clinical, CMC, regulatory and now commercialization perspective, which gets us exciting about the full potential of uproleselan in helping AML patients. Our platform continues to be a productive engine with good advancements on our 3 additional assets, GMI-1687, GMI-1359 and our Galectin-3 program.

In the next several weeks, we'll be at 2 conferences both virtually and in person. I look forward to the one-on-one meetings that will be scheduled to introduce myself and, of course, to further discuss our progress and outlook. Thank you very much, everyone, for joining us today.

Operator

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