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Edited Transcript of CALA earnings conference call or presentation 9-May-19 9:00pm GMT

Q1 2019 Calithera Biosciences Inc Earnings Call

SOUTH SAN FRANCISCO May 24, 2019 (Thomson StreetEvents) -- Edited Transcript of Calithera Biosciences Inc earnings conference call or presentation Thursday, May 9, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jennifer McNealey

Calithera Biosciences, Inc. - VP of IR & Strategy

* Keith Orford

Calithera Biosciences, Inc. - Chief Medical Officer

* Stephanie Wong

Calithera Biosciences, Inc. - Senior VP of Finance & Secretary

* Susan M. Molineaux

Calithera Biosciences, Inc. - Co-Founder, CEO, President & Director

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Conference Call Participants

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* John Christopher Barrett

SVB Leerink LLC, Research Division - Associate

* Matthew Christopher Phipps

William Blair & Company L.L.C., Research Division - Analyst

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Presentation

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Operator [1]

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Hello, and welcome to the Calithera Biosciences Q1 2019 Earnings Conference Call. (Operator Instructions)

I would now like to introduce your host for today's call, Jennifer McNealey. You may begin.

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Jennifer McNealey, Calithera Biosciences, Inc. - VP of IR & Strategy [2]

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Thank you, Tonda. Good afternoon, everyone. Welcome to our first quarter 2019 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; Keith Orford, Chief Medical Officer; and Stephanie Wong, Senior Vice President of Finance. We have issued our press release and it can be accessed through our website at calithera.com.

Before we begin, I would like to remind you that today's discussion will include statements about our future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those risk factors discussed in the Risk Factors section of our quarterly report on Form 10-Q filed with the SEC.

In addition, any forward-looking statements represent our views only as of today and should not be replied (sic) [relied] upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Please note that this call is being recorded.

And with that, I'll turn the call over to Susan.

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Susan M. Molineaux, Calithera Biosciences, Inc. - Co-Founder, CEO, President & Director [3]

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Thanks, Jennifer, and good afternoon, everyone. Thank you for joining us today on our first quarter 2019 conference call.

At Calithera, we are building an integrated biotechnology company that develops novel small molecule oncometabolism drugs, drugs that are targeting tumor and immune cell metabolism pathways for the treatment of cancer and other diseases. By building a pipeline of novel therapeutic product candidates, we are creating multiple opportunities to positively impact clinical outcomes for patients and drive development programs towards commercialization.

This year, we expect to achieve multiple key milestones in our clinical development program and have several data readouts, including top line results of the ENTRATA trial midyear and with our partner, Incyte, data from the 1158 program in the second half of the year.

In the first quarter, we have also made great strides in our earlier-stage programs, advancing our cystic fibrosis program into the clinic and presenting preclinical treatment on our CD73 inhibitor, which is poised to enter the clinic by year-end.

We continue to advance our program for telaglenastat, also known as CB-839, for the treatment of renal cell carcinoma or RCC. And in parallel, we are conducting earlier-stage clinical studies outside of RCC.

We completed enrollment of the randomized ENTRATA trial comparing the combination of telaglenastat plus everolimus versus placebo plus everolimus for the treatment of patients with late-stage RCC.

We also continue to enroll our global randomized CANTATA trial, comparing the combination of telaglenastat and cabozantinib versus placebo plus cabozantinib in earlier-stage patients with RCC.

And we broadened our clinical development program for telaglenastat to 2 new clinical trial collaborations with Pfizer.

Our internal drug discovery team continues to produce novel drug candidates with the potential to be highly differentiated new therapies in areas of unmet needs.

Our 2 new internally discovered novel small molecule drug candidates are both entering clinical development in 2019. The first one is CB-280, an oral arginase inhibitor for the treatment of cystic fibrosis, which is already in Phase I study. And the second one is CB-708, an oral small molecule CD73 inhibitor for the treatment of cancer.

As our programs move forward in development, we look forward to a number of important milestones in 2019. For telaglenastat, the ENTRATA trial is fully enrolled and we expect to report top line data in mid-2019. And we also plan to enroll the CANTATA trial, a Phase II randomized trial with approximately 400 patients by year-end.

For 1158, we and our partner, Incyte, expect to present data at a medical meeting in the second half of 2019. For CB-280, we achieved our goal of initiating a Phase I trial in the first quarter of 2019 and look forward to additional updates on this program. And for CB-708, at AACR, we presented preclinical abstract data describing CB-708. We believe there is increasing interest among the scientific community in the adenosine pathway and we expect to initiate a Phase I trial in 2019.

And with that, I will pass the call over to Keith for an update on clinical programs.

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [4]

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Thank you, Susan. Let's begin with a more detailed update on telaglenastat, our glutaminase inhibitor and our most advanced product candidate. We are currently focused on forging a clinical commercial path for telaglenastat in renal cell carcinoma.

The program includes 2 randomized clinical trials of telaglenastat for the treatment of RCC. The Phase II ENTRATA trial of telaglenastat in combination with everolimus in late-line patients recently completed enrollment. This randomized double-blind trial, which is designed to evaluate the efficacy and safety of telaglenastat in combination with everolimus, enrolled 69 late-line clear cell RCC patients who had been previously treated with at least 2 prior lines of systemic therapy, including a VEGF receptor-targeted tyrosine kinase inhibitor. Patients are being randomized in a 2:1 ratio to either telaglenastat plus everolimus or placebo plus everolimus. The primary endpoint is progression-free survival. Overall survival will be assessed as a secondary endpoint. The multi-center study is being conducted at sites in the United States. We anticipate we will reach the primary endpoint analysis and report top line results including key safety and efficacy data in mid-2019.

We are also actively enrolling CANTATA, a global trial of telaglenastat in combination with cabozantinib in the second- and third-line RCC patients. CANTATA is a randomized, placebo-controlled trial in approximately 400 patients and has registration potential. It is designed to evaluate the efficacy and safety of telaglenastat in combination with cabozantinib versus placebo plus cabozantinib in clear cell RCC patients, who have previously received 1 or 2 prior lines of therapy, including at least 1 prior anti-angiogenic agent or the ipilimumab-nivolumab combination. Patients are being randomized in a 1:1 ratio to either telaglenastat plus cabozantinib or placebo plus cabozantinib.

Patients will be stratified by IMDC risk category and prior treatment with anti-PD-1, PD-L1 therapy. The primary endpoint is progression-free survival by independent review. Overall survival will be assessed as a key secondary endpoint.

We believe our oral presentation at the 2019 ASCO GU meeting in February, in which we demonstrated a 50% response rate among 10 clear cell patients, provide strong scientific rationale for the CANTATA trial.

Late last year, we announced 2 new clinical trial collaborations to evaluate Pfizer's CDK4/6 inhibitor palbociclib, also known as IBRANCE, and the PARP inhibitor talazoparib, also known as TALZENNA, each in combination with Calithera's glutaminase inhibitor telaglenastat. Preclinical data suggests that telaglenastat synergizes with PARP inhibitors to impair DNA synthesis, enhance DNA damage and block cancer cell proliferation.

We recently initiated a Phase I/II clinical trial of the combination of telaglenastat plus talazoparib in patients with RCC and TNBC. The trial will evaluate the potential of telaglenastat to sensitize tumors to talazoparib in patients regardless of mutations in the BRCA gene.

Telaglenastat also synergizes with CDK4/6 inhibitors by enhancing cell cycle arrest and blocking cancer cell proliferation. This quarter, we plan to initiate a Phase I/II clinical trial of the combination of telaglenastat plus palbociclib in patients with KRAS-mutated colorectal cancer, or CRC, and patients with KRAS-mutated nonsmall cell lung cancer, or NSCLC.

Next, the arginase program. INCB001158, also known as 1158, is an investigational first-in-class immuno-oncology metabolic checkpoint inhibitor targeting arginase, an immunosuppressive enzyme secreted by myeloid-derived suppressor cells, or MDSCs, to block T cell activation in tumors.

1158 is being developed with Incyte in a co-development, co-commercialization collaboration. The program is progressing well and is actively enrolling 2 1158 trials. The first trial is evaluating 1158 as a monotherapy and in combination with pembrolizumab. The second trial is evaluating 1158 in combination with each of 3 chemotherapy regimens; FOLFOX, gemcitabine/cisplatin or paclitaxel. Primary endpoints include safety and objective response rate. We and our partner, Incyte, plan to present solid tumor data at a medical meeting in the second half of 2019.

CB-280 is a novel arginase inhibitor in development for the treatment of cystic fibrosis. Under our collaboration agreement with Incyte, we retained worldwide rights to develop arginase inhibitors in specific nononcology rare disease indications, including cystic fibrosis. Arginase has been proposed to be critical in the pathophysiology of cystic fibrosis and several other nononcology diseases.

CF patients have neutrophil infiltrates in their lungs and these neutrophils secrete high levels of arginase. High arginase activity depletes arginine, which in turn depletes nitric oxide. Nitric oxide, or NO, is known to have potent antimicrobial activity and has been shown to improve lung function when administered to CF patients.

We hypothesized that inhibition of arginase with CB-280 can restore normal arginine and NO levels and improve lung function in CF patients.

In February, we announced that we filed an IND application for CB-280 with the U.S. FDA and initiated a phase I clinical trial. This first-in-human Phase I trial, which we plan to complete this year is evaluating the safety, tolerability and pharmacokinetic profile of oral CB-280 in healthy volunteers.

Our next oncometabolism drug candidate is CB-708, an orally bioavailable small molecule inhibitor of CD73, an enzyme in the immunosuppressive adenosine pathway. CD73 suppresses immune activation by converting extracellular ATP into adenosine.

CB-280, a potent oral inhibitor of CD73, has both single-agent activity and activity in combination with anti-PD-1 and standard chemotherapy in preclinical animal models. We plan to initiate clinical studies for CB-280 in 2019.

And with that, I will pass it over to Stephanie for an update on our financials.

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Stephanie Wong, Calithera Biosciences, Inc. - Senior VP of Finance & Secretary [5]

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Thank you, Keith, and good afternoon, everyone. Detailed financial results for the first quarter of 2019 were included in today's press release. I will briefly review our results on this call.

Calithera ended the quarter well capitalized, which enables us to drive our clinical programs to meaningful value inflection points.

Cash and investments were $117 million at March 31, 2019. R&D expenses were $20.2 million for the quarter compared with $15.5 million prior year. The increase of $4.7 million was primarily due to a $2.3 million increase in the telaglenastat program, including our Phase II CANTATA trial, an increase of $1.1 million in the 1158 program, an increase of $1.0 million in the CB-280 program as well as investment in early-stage research.

G&A expenses were $4.2 million for the quarter compared with $3.5 million prior year. The increase of $0.7 million was related to higher personnel-related costs and professional services costs. Net loss from operations for the 3 months ended March 31, 2019, was $23.7 million or $0.61 per share.

And with that, I will now return the call back over to Susan.

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Susan M. Molineaux, Calithera Biosciences, Inc. - Co-Founder, CEO, President & Director [6]

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Thank you, Stephanie. And with that, operator, we're happy to open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Jonathan Chang with SVB Leerink.

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John Christopher Barrett, SVB Leerink LLC, Research Division - Associate [2]

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This is John Barrett on for Jonathan. Could you provide any additional color on the updated timing for ENTRATA?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [3]

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Sure. Yes. So as you noticed, we updated the guidance to mid-2019, which has really -- given that we're farther along, we have more information, we're able to just narrow that timing down from our original guidance. So no significant change, just really a narrowing of the guidance.

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John Christopher Barrett, SVB Leerink LLC, Research Division - Associate [4]

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Got you. How would -- second question is how should we be thinking about the implications of ENTRATA data that you are now expecting in mid-2019 on the CANTATA study?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [5]

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So ENTRATA, as we mentioned, is a randomized study, our first randomized study. It will be our first randomized data in RCC patients. And it's in combination with everolimus. It will be -- as -- and as you know, CANTATA study is also in RCC. So it will be our first data in RCC patients. There are differences and there are similarities between the 2. We have preclinical data that suggests similar mechanisms of synergy. But obviously, the design of the study is different enough in terms of patient population and line of therapy than a direct read through is not obvious, but -- yes, I will leave it there.

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John Christopher Barrett, SVB Leerink LLC, Research Division - Associate [6]

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Great. One more, if I may. How are you thinking about the adenosine landscape post the recent data announcements from some competitors in the space?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [7]

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Yes. So -- at AACR, there was some encouraging data for the A2A receptor inhibitors and -- particularly in the prostate cancer space, so we saw that as very positive for the mechanism and for the pathway. And we maintain our enthusiasm and we think the rest of the field maintains considerable enthusiasm for the adenosine pathway.

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Operator [8]

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Our next question comes from the line of Matt Phipps with William Blair.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [9]

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Just to follow-up on the adenosine a little bit, is this something where you think you would try to accelerate development specifically in prostate cancer or renal cell where we have seen monotherapy activity with A2A inhibitors? And then, is there any reason to think that CD73 inhibition would not -- I mean may be different expression or somehow would be not correlated as far as seeing responses as the A2A receptors as far as tumor types go?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [10]

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Yes. So I think it will be definitely -- I mean our part of the -- I guess the benefit of not being first-in-class here is that we are able to learn from the folks that are in front of us. So we think we have a best-in-class molecule that's orally bioavailable and can provide continuous inhibition of the pathway and we can learn from those that are in front of us. So absolutely, we would expect to be able to increase the efficiency of development through learning from the other programs that are in front of us.

And then, yes, in terms of differences between CD73 and A2A receptor inhibition, we expect there to be a lot of overlap there in terms of where one would expect to see activity, but we can't assume 100% correlation between them. But certainly, activity that we see in that pathway is likely to be worth following up on.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [11]

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Keith, and then additionally, do you think there is added benefit by inhibiting both CD73 and A2A receptor? There's a number of those combination trials ongoing.

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [12]

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Yes. I think there's diversity of opinions on that. I can certainly see the rationale, particularly -- given some of the characteristics of the pathway inhibitors that exist, there may be utility and sort of hitting that pathway twice to ensure full inhibition.

On the other hand, one could imagine that a more potent or maybe a more active molecule might make it unnecessary to hit that pathway vertically. So I think it still remains an open question and one that is certainly still being debated. And you can see based on different sponsors' approaches to vertical inhibition, there isn't a uniformity or a consensus around that at this point.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [13]

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Yes. Got it. Okay. And then lastly, for the CB-280, do we get biomarker or PK/PD data from healthy volunteers this year? And are you going planning on initiating the CF patient trial this year as well? How quickly are these trials?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [14]

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Yes. So the -- as you know, with the dose escalation, the timing is hard to nail down precisely given that we have a certain number of dose levels planned, but you never know exactly how the timing will play out. So we do expect to be able to get that study completed this year. And we certainly will have access to PK and to some amount of PD data. I think PD -- it should be noted that PD in a healthy volunteer population is going to be different from a patient population, so clear interpretation of that is -- we'll see what we see when we generate the data.

In terms of the timeline, again, I think we do expect to complete that study this year and then the plan would be to move forward with the patient study soon after.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [15]

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And as far as then dosing, to try to get to your recommended dose, is it something where you're actually going to look for -- I believe it's like urea cycle disruption or -- I'm sorry, can't remember exactly what it was from the arginase program?

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [16]

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Orotic acid, yes.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [17]

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Yes. Yes.

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Keith Orford, Calithera Biosciences, Inc. - Chief Medical Officer [18]

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No. We'll certainly be monitoring that. I mean, as you know, orotic acid is a very early sign of -- that we're starting to impact the urea cycle, although the reason to follow it is that we can see that elevation well before clinically significant inhibition of the urea cycle. But we do plan on following that as well and that would inform dose selection to some extent, yes.

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Operator [19]

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I'm showing no further questions at this time. I would now like to turn the call back over to Jennifer McNealey for closing remarks.

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Jennifer McNealey, Calithera Biosciences, Inc. - VP of IR & Strategy [20]

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Thank you, Tonda, and thanks all for joining us today, and have a good evening.

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Operator [21]

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Ladies and gentlemen, that concludes today's conference. Thank you for participating. You may now disconnect. Everyone, have a wonderful day.