Onconova Therapeutics, Inc.'s (ONTX) CEO Steve Fruchtman on Q3 2021 Earning Conference Call - Earnings Call Transcript

Nov. 11, 2021 8:24 PM ETOnconova Therapeutics, Inc. (ONTX)
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Onconova Therapeutics, Inc. (NASDAQ:ONTX)

Q3 Earnings Conference Call

November 11, 2021, 16:30 PM ET

Company Participants

Steve Fruchtman – CEO

Mark Guerin – CFO

Mark Gelder – Chief Medical Officer

Avi Oler – Senior Vice President

Steve Cosenza – Senior Scientist

Conference Call Participants

Dr. Charles Zhu – Guggenheim Securities

Matt – H.C. Wainwright

Robert LeBoyer – NOBLE Capital

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics Third Quarter 2021 Financial Results and Business Update Conference Call. At this time. All participants are in a listen-only mode. Following management's prepared remarks, we will hold a Q&A session. [Operator Instructions]. As a reminder, this call is being recorded today, 11th of November 2021. At this time, I would like to turn the call over to Avi Oler, Senior Vice President of Corporate Development and General Counsel.

Avi Oler

Thank you. Good afternoon, everyone and welcome to Onconova 's Third Quarter 2021 Financial Results in Business Update Conference Call. Earlier this afternoon, we issued a press release reporting our quarterly financial results and business progress. If you have not yet seen this press release, it is available in the investors and media section of our website at www.onconova.com. On today's call, you'll first hear from our President and CEO, Dr. Steve Fruchtman, who will give a high-level overview on our recent progress and future outlook. Our Chief Medical Officer, Dr. Mark Gelder, will then provide a more detailed update on our recent clinical and scientific progress, before handing it up to Mark Guerin, our Chief Financial Officer, to review our third quarter financial results.

Following these formal remarks, we will then finish the call with a question-and-answer session. Before passing the call off to Steve, I'd like to remind everyone that statements made by management during this conference call will include forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially.

Forward-looking statements speak only as of the date they are made as the underlying facts and circumstances may change. Except as required by law, Onconova disclaims any obligation to update these forward-looking statements to reflect future information events or circumstances. For more information on forward-looking statements, please review the disclaimer in today's press release and the risk factors in the Company's SEC filings. With that, it is my pleasure to turn the call over to Steve.

Steve Fruchtman

Thank you, Avi. Good afternoon, everyone. And thank you for joining us. And we hope you are all remaining safe, amid an ongoing but improving pandemic here in the U.S. Before we begin, we would like to say a very special thanks to a group of very special people on this Veterans Day we say thank you to all who serve to keep us safe and risk their own well-being in doing so. Thank you so much. I am pleased to update you on the progress at Onconova Therapeutics. Since our last earnings call, we have made progress across our pipeline and have achieved key milestones. We also believe our progress during the third quarter has on us on track to achieve additional milestone across our pipeline. In our lead program, evaluate ON 123300, which we recently renamed NARAZACICLIB.

We continue to enroll patients in 2 complementary, Phase 1 trials in the U.S. and in China. As a reminder, NARAZACICLIB is a novel multi-kinase inhibitor targeting CDK4/6, an additional kinase involved in tumor genesis, including ARK5, which is reported to be involved in cancer cell survival and the mechanisms of how cancer cells metastasize. The 2 Phase I trials are evaluating different administration schemes for NARAZACICLIB, both of which are based on the administration schemes of CDK4/6 inhibitors that are already approved to treat common receptor positive, HER2-negative metastatic breast cancer. We plan to use the results of our trials to determine [Indiscernible] recommending [Indiscernible] dose and we remain on track to do this in the first half of 2022.

Beyond our lead program, recently reported encouraging data from the investigator-initiated Phase I/IIA trial additional kinase, evaluating rigosertib in combination with the PD-1 checkpoint inhibitor nivolumab. In patients with advanced KRAS mutated non-small cell lung cancer. These results, which Dr. Gelder we'll discuss in greater detail, support the potential anti-cancer activity of the Rigosertib Nivolumab combination differentiates Rigosertib from other [Indiscernible] pathway modulators that only target a particular KRAS mutation and suggests that Rigosertib may augment the efficacy of checkpoint inhibitors. We believe these findings not only bode well for the continued clinical development of Rigosertib in combination with checkpoint inhibition in KRAS mutated non-small cell lung cancer, but may potentially have broad implications across several high unmet indications such as advanced melanoma.

For those of you who are interested in learning more about these data, I strongly encourage you to view the replay of our webinar announcing the data, which featured expert perspectives from the trial's principal investigator, Dr. Raj Veluswamy, of the Mount Sinai Medical Center in New York and Dr. Scott Antonia, Professor of Medicine at the Duke Cancer Institute and the Director of its Center for Cancer Immunotherapy. This webinar can be found on the events and presentations page of our website. We also continued to make progress in our investigator-initiated study evaluating rigosertib in recessive dystrophic epidermolysis bullosa or RDEB. Complicated by squamous cell carcinoma of the skin.

This is a very rare and tragic condition with a high unmet medical need. RDEB is invariably staple as there are no curative therapies available and immune oncology agents, which are the current standard of care. The squamous cell carcinoma has yielded disappointing results. Dr. Gelder, we'll speak more about the disease and ongoing trial in a few moments. The progress made in our clinical programs during the third quarter ultimately enabled us to achieve notable milestones and we then strengthened our Balance Sheet with $21 million in gross proceeds from an equity financing. We plan to use the proceeds from this financing to support the continued development of our pipeline and to potentially drive its expansion through the in-licensing of an additional complementary product candidate. With that, I'll now hand the call over to Dr. Gelder to provide you with more details on our critical programs and development strategy. Mark.

Mark Gelder

Thank you, Steve and thanks, once again to all of you who have joined us today. I'll begin today with an update on the status of our lead neuralgia cycle programs. As some of you may know, NARAZACICLIB formerly known as ON 123300, simultaneously inhibits both the cell cycle and cellular metabolism through CDK and our respective. This differentiates NARAZACICLIB from currently approved CDK4/6 inhibitors and positions it as a potential treatment for patients that are refractory or have become resistant to these agents.

This may be significant as CDK4/6 inhibitors generate more than $6 billion in worldwide sales in 2019 alone. [Indiscernible] NARAZACICLIB was shown to inhibit the growth of a number of cancer cell lines, including breast cancer, that are resistant to Palbociclib, which is the most widely prescribe CDK4/6 inhibitor. NARAZACICLIB also inhibit CDK4, more potently than Palbociclib and exhibited improved on-target toxicity in in - vivo preclinical studies, as Evidence I decrease in neutropenia. We believe that, NARAZACICLIB 's potent kinase inhibition profile, and potentially improved safety profile, may ultimately provide strong anticancer activity and facilitate continuous daily dosage in patients.

This would provide another important point of differentiation between NARAZACICLIB and the currently approved CDK4/6 inhibitors, such as Palbociclib and ribociclib. These agents are prescribing in combination with an [Indiscernible] in a 3-week on 1-week of treatment schedule due to issues tolerability, including side effects relating to neutropenia or low white blood cell counts. The hope is that NARAZACICLIB's safety and efficacy profile will initially position it as a novel treatment option for CDK4/6 inhibitor refractory patient, while also providing it with an opportunity to move to first-line therapy in the future. We are evaluating a continuous oral daily dosing schedule, in our ongoing Phase 1 study in the U.S.

This multi-center trial, seeks to enroll patients with advanced cancers, including, but not limited to Hormone Receptor+, HER2 - metastatic breast cancer, who are refractory to or progressing on currently approved CDK4/6 inhibitors. Today, we have completed enrollment in the first cohort, 40 milligrams orally once a day. And are currently enrolling patients in the second cohort at 80 milligrams orally once a day. In parallel with our U.S. Phase I study, we are also advancing a Phase I study in China in collaboration with our partner HanX Biopharmaceuticals. This trial was designed to complement our U.S. study by evaluating a 3-week on 1-week off dosing schedule of oral narazaciclib.

To-date, the HanX trial has fully enrolled the third dose cohort at 120 milligrams orally once a day. The study is currently enrolling the fourth dose cohort at 160 milligrams orally once a day. No cases of grade 3 or higher neutropenia or other dose limiting toxicity have been seen to-date in either trial. Together, we expect findings from the complementary trials in the U.S. and China to inform the recommended Phase 2 dose and treatment regimen for future trials, including a Phase 2 basket study that will enroll patients with several different types of cancer. Based on pre -clinical models, one type for cancer, we intend to enroll includes the Hormone Receptor+ HER2-negative metastatic breast cancer patients who are resistant to the approved second-generation CDK4/6 inhibitors.

We expect to initiate this trial in the second half of next year. Beyond our planned basket study, we also expect the findings from our ongoing Phase 1 program to inform the design of one or more additional clinical trials that will evaluate the safety and efficacy of narazaciclib in combination with other anti-cancer agents. The specific plans around these trials are currently under development and will be shared once they have been finalized. Moving on, I'd now like to discuss our investigator-initiated programs evaluating rigosertib, our RAS pathway modulator, which continues to make exciting progress.

Our last earnings call, we discussed recently published pre -clinical data that demonstrated the ability of rigosertib to synergize with checkpoint inhibitors by reversing the immuno -suppressive tumor microenvironment through the upregulation of novel antigens, such as CD40 on cancer cells. In September, we then reported very encouraging preliminary clinical data suggesting that the observed pre -clinical synergy between rigosertib in checkpoint inhibition may translate to patients and potentially provide meaningful clinical benefits. These data were from the Phase I/IIA investigator-initiated trial evaluating rigosertib in combination with the PD-1 checkpoint inhibitor nivolumab in patients with advanced KRAS mutated non-small cell lung cancer.

I'll provide a short recap of this encouraging data now, which is topical, given that November is lung cancer awareness month. Results from the trials preliminary readout showed that 2 out of 7 evaluable patients achieved a resist defined partial response, with other patients showing stable disease, which gives objective response and disease control rates of 29% and 43% respectively. In addition, the study doublet of rigosertib and nivolumab was well-tolerated and the maximum tolerated dose of the doublet was not reached. Taking a closer look at the study design and data, there are several key points that have generated a high level of enthusiasm from key opinion leaders and would speak to just how encouraging these initial findings are. The first point is related to the patient population enrolled in the study.

These patients were extensively pre -treated with 9/12 having failed at least 2 prior lines of therapy, and all enrolled patients failed at least 1 line of prior therapy with a PD-1 checkpoint enabled. This is significant as PD-1 is the target of nivolumab, which was administered in combination with rigosertib. The fact that we were able to achieve responses in patients who previously failed therapy targeting the PD-1 checkpoints by combining an anti-PD-1 therapy with rigosertib, provides encouraging evidence of rigosertib's ability to synergistically combine with checkpoint inhibitors and augment their efficacy in KRAS mutative cancers. This is important, as KRAS mutations are predominant genetic driver of non-small cell lung cancer and there is currently a lack of effective treatment options for these patients who failed to adequately respond to checkpoint inhibitor therapy.

A second key finding, from the preliminary data readout that I would like to highlight, is related to the underlying varied KRAS mutations of patients achieving a partial response or stable disease, each of which was different. This speaks to rigosertib mechanism of action, which is not specific to a particular KRAS variant, such as G12C. This provides an important point of differentiation between rigosertib and other RAS pathway modulator s targeting particular KRAS variants such as G12C and potentially positions rigosertib to be more broadly applicable. Lastly, I should note that, the observed radiographic responses we're seen in both the lung or the primary tumor site and at multiple metastatic sites, which are the major cause of death for these patients.

Collectively, the preliminary data from this Phase I/IIA study, together with the pre -clinical data we discussed on our last earnings call, suggests that rigosertib may synergize with checkpoint inhibition and that rigosertib checkpoint inhibitor combinations may be applicable not only KRAS mutated, non-small cell lung cancer, but to other indications where PD-1 or PD-L1 inhibitors are the standard care, such as melanoma. Looking ahead, the Phase 1/2A, non-small cell lung cancer trial, continues to enroll patients as part of the expansion phase at the highest dose of oral rigosertib as defined in the protocol. We, and the principal investigator intend to complete the trial protocol an anticipate opening additional -- anticipate reporting additional data from the study in 2022.

In parallel, an additional study that will allow for further dose escalation is also under consideration since the maximum tolerated dose of the rigosertib nivolumab doublet was not reached in the ongoing trials dose escalation phase, which has been completed. Based on the data from these two trials, we hope to identify the doublets recommended Phase II dose, and better inform its clinical development. Beyond the investigator-initiated KRAS mutated non-small cell lung cancer trial, we intend to further leverage the immunotherapeutic effects of rigosertib through a separate investigator-initiated study evaluating rigosertib in combination with A PD-1 checkpoint inhibitor in advanced recurrent malignant melanoma.

This trial is supported by both the encouraging preliminary data from the non-small cell lung cancer trial and by the preclinical melanoma studies that were featured in the peer-reviewed publication out of Vanderbilt, that we discussed on our last call. We, and the investigators are currently finalizing protocol for this trial, it will be submitted to the FDA and expect that, it will be initiated in the first half of 2022. Moving on, I'd like to speak very briefly about the investigator-initiated trial evaluating rigosertib monotherapy in advanced squamous cell carcinoma associated with recessive dystrophic epidermolysis bullosa, or RDEB. As Steve mentioned, this is an ultra-rare condition with an extremely high unmet medical need, as it is invariably fatal. This caused by a loss expression of key protein collagen 7, which causes extreme skin fragility and chronic wound formation.

Over time, many patients develop squamous cell carcinoma with the over-expression of Polo-Like Kinase 1 or PLK1. The scientific rationale for the ongoing trial of rigosertib in this indication, which was suggested by a leading expert on RDEB comes from the drug screens that identified rigosertib as the most potent inhibitor of Polo-Like Kinase 1 or PLK1 testing. We've seen promising evidence of rigosertib's clinical activity in this indication to-date and plan to provide additional updates on the trials data as it matures, as well as at a medical meeting in the upcoming months. Finally, before handing off the call to Mark Guerin to talk about our financials, I'd like to reemphasize one point.

While we are of course, very interested in the outcomes of the ongoing investigator-initiated studies and plan to continue evaluating opportunities, to potentially initiate additional studies of this nature, we remain committed to preserving our primary focus and resources on NARAZACICLIB. We believe this strategy, is the best way to ensure the efficient advancement of our lead programs while positioning us to generate value, to rigosertib 's continued development in high unmet need indications. And with that, I will turn the call over to Mark Guerin for a discussion of our Q3 financial results. Mark.

Mark Guerin

Thanks, Mark. And good afternoon, everyone. I'll begin with a quick review of our third quarter expenses and then I'll discuss our cash position and cash runway. Research and development expenses for the third quarter of 2021 were $1.8 million and this compares with $4.2 million for the third quarter of 2020. The decrease was primarily related to higher expenses related to the inspire study in the 2020 period. General and administrative expenses for the third quarter of 2021 were $2.3 million, and this compares with $2.1 million for the third quarter of 2020. The increase was primarily related to expenses for investor relations, proxy solicitation, and fees related to our AGMs and special meeting by proxy in 2021.

We reported a net loss for the third quarter of 2021 of 3.5 million or $0.22 per share on 16 million weighted average shares outstanding as compared with a net loss for the third quarter of 2020 of $6.2 million or $0.52 per share on $12.1 million weighted shares outstanding. Cash and cash equivalents as of September 30th, 2021 were $59.4 million versus $19 million as of December 31, 2020. Our average quarterly operating cash burn in 2021 has been $4.3 million. We believe that our cash position will be sufficient to fund our ongoing clinical trials and business operations through the achievement of significant milestones, including pursuing corporate development opportunities and should be sufficient for more than 2 years. This completes my financial review. I'll now turn the call back to Steve.

Steve Fruchtman

I'd like to thank both Marks for the thorough review you just heard. In summary, we have multiple key near-term milestones and value drivers ahead of us. And our lead Narazaciclib program, we expect our Phase 1 studies in the United States and China to continue progressing and anticipate selecting a recommended Phase 2 dose in the first half of next year. This would then be followed by the initiation of our Phase 2 basket trial, as Dr. Gelder described. Including indications, such as Hormone Receptor+, HER2 - metastatic breast cancer in the second half of 2022.

In rigosertib investigator-initiated program, we expect to report additional data from the ongoing KRAS mutated non-small cell lung cancer trial in 2022. We also expect an additional investigator-initiated study evaluating rigosertib in combination with a PD-1 inhibitor in advanced melanoma patients to begin in the first half of the next year. Finally, we continue to actively evaluate strategic licensing opportunities to enhance our product portfolio. As with all of our decisions, any decision on this front will be driven by [Indiscernible] science and the potential the clinical benefit [Indiscernible] indication with an unmet medical need. So, with that review of our clinical progress and our financial results, we'd like to open the call for questions. Operator.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] If you are using a speakerphone, please pick up your handset before entering your request. One moment please for the first question. And our first question is from Dr. Charles Zhu of Guggenheim Securities. Your line is open.

Dr. Charles Zhu

Good evening, guys. And thanks for taking my question. I had one on the narazaciclib. As you look towards potentially identifying a recommended Phase 2 doses, in the first half of next year. How and when are you guys thinking about disclosing these data? And given your potentially differentiated mechanism of action, how would you set expectations about that data? Thanks.

Steve Fruchtman

Thanks, Charles, And I'll ask Dr. Gelder to take that question. Mark.

Mark Gelder

Yeah. So, I think that the data will be disclosed initially at a medical meeting, followed by publication, but the data will be disclosed at the medical meeting. And in terms of the second question, I think that we have -- we are currently considering several different buckets or baskets for the basket trial i.e., tumors types to evaluate. And we're continuing to refine that list over time based on the kinase inhibition profile that we have with narazaciclib and will also be include to some degree by hints of activity or different signals that we see during the course of the Phase 1 study. And then we will, as that information gets further distilled and it becomes more set in stone, so to speak, than we will make that public. But Steve, I don't know if you want to comment further?

Steve Fruchtman

No, I think, as usual Mark was comprehensive of course. We were looking for signals in the Phase 1 efficacy trial, and once we create the bucket trial, which will probably be modeled narazaciclib, but we also be looking at the potential for combinations of narazaciclib be that was an anti-antigen, be that was an immuno-oncology drug, will be considering those approaches as well.

Dr. Charles Zhu

Understood. Thank you for taking my questions.

Steve Fruchtman

Thank you, Charles.

Operator

Thank you. And our next question is from Joe Pantginis of H.C. Wainwright. Your line is open.

Matt

Good evening, everyone. This is Matt on for Joe. Thanks for taking our question. So just quickly, we are wondering if and maybe what kind of in-licensing you guys might be looking at? And if any of that could be complementary to some of the current asset’s you guys are making some pretty great progress in pipeline?

Steve Fruchtman

Avi, would you like to answer Matt's question, please?

Avi Oler

Sure. Thanks for the question, Matt. And we're quite excited about our existing programs of narazaciclib and rigosertib. Dr. Gelder and Dr. Fruchtman between them [Indiscernible] have been a part of over a dozen oncology drug approvals. Excited about our existing programs. So, when we look that adding complementary program, as Dr. Fruchtman stated in his remarks, we are looking at what fits best in the portfolio as another shot on goal for further expanding the pipeline and look forward to updating our progress on that in the future.

Matt

Great, thanks. Totally makes sense. Thanks for taking our questions.

Operator

Thank you. And our next question is from Dr. Robert LeBoyer of NOBLE Capital. Your line is open.

Robert LeBoyer

Good evening. Thank you for the great comprehensive summary of the products. In Dr. Gelder 's, summary of narazaciclib, there were some points about the comparison with palbociclib. Could you just clarify the differentiating factors and the different targets that you had discussed just briefly?

Steve Fruchtman

I will ask that to Gelder to take that, and also that to [Indiscernible] after Mark 's comments may want to add to that [Indiscernible] that cycle to add to the CDK for the [Indiscernible].

Mark Gelder

So, if we look at narazaciclib and we then look at palbociclib, and we look at the in vitro kinase inhibition profiles, in terms of the inhibition of CDK4 ON 123300 or NARAZACICLIB, is actually a little more potent than is palbo. If we look at CDK6, NARAZACICLIB is less potent than is palbo. And this may be the underlying cause or maybe responsible for the decrease in neutropenia that we have seen clinically in the mouse model when we compare narazaciclib or ON 123300. We'll have to see how this plays out in the Phase 1 study, the dose escalation study, we'll have to look carefully at the AE profile or safety profile, etc.

There are several other kinases that ON 123300 or narazaciclib hits that, either a palbociclib dosing, if at all, or it hits much more weekly or less potently based on the in Vitro Kinase profiles. But and these include things like, ARK5, FLT3, CDGFR, etc etc. So, there are -- when you look at them side by side, there are several kinases that we have activity against the palbo just does not. So, I'm not sure if this has answered your question or not. If not, I'm happy to try and expand a little bit further or Steve may want to expand further as well.

Steve Fruchtman

Actually, perhaps Steve Cosenza would like to add something based on our pre -clinical studies to date. Steve, do you have anything to add? Remarks? Comments?

Steve Cosenza

Sure. Thank you. That's a great question, Robert. The differentiating point based on in vitro data as Mark or Dr. Gelder had spoken to previously, is that of all the CDK4/6 inhibitors, ribociclib is the most specific and palbociclib is following the most specific and then you have abemaciclib and narazaciclib what's your both -- because they're multikinase neighbors. And on side-by-side testing, there are differences among those two, especially about a palbociclib. And we believe that's differentiating points can be found in those targets, both for efficacy and for toxicity profiles. In the published data that we have, you can see that so lines treated with palbociclib, versus 1-2-3 marrow sick of is that we induce apoptosis, we inhibit AKT mTOR pathways, which are important for tumor toast survival.

And these are not done, in probably [Indiscernible] infill. We induced a more set of toxic phenotypes of treating tumor cells. Whereas, PALBO and RIBO and ABE induce more of a sort of static. Abemaciclib, also induces a certain costing effect in certain tumor surliness, much like a 1, 2, 3 or narazaciclib. And again, we believe these are based on targets. However, amongst the 4, CDK4/6 inhibitors, we're only one of that induces -- inhibits. Not induced, but inhibits, ARK5. And ARK5 is a very interesting target. There are no known approved inhibitors for ARK5. However, this is a very important target for tumor cell survival, not so much to proliferation of [Indiscernible] but survival of tumor cells in a hypoxic condition. We believe this is a -- will be very beneficial as part of our mechanism of action.

Robert LeBoyer

Okay, great. You actually did answer the question. I was really interested in how narazaciclib compares in terms of the targets, the potency and the breadth of targets with the approved drugs. So, thank you very much.

Steve Cosenza

You're welcome. Thank you.

Operator

Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to the speakers for any closing remarks.

Steve Fruchtman

Thank you, Lori and to all our participants today. And thank you for participating in today's update call. We look forward to executing on our business plans and to keep you appraised of all of our progress. We appreciate your continued interest in our programs and your insightful questions. Thank you again. And have a lovely evening. We hope to interact with all of you again soon. Take care.

Operator

Ladies and gentlemen. Thank you for your participation on today's conference call. This concludes today's event, and you may now disconnect.

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