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Edited Transcript of GTXI earnings conference call or presentation 7-Nov-19 10:00pm GMT

Q3 2019 Oncternal Therapeutics Inc Earnings Call

MEMPHIS Nov 28, 2019 (Thomson StreetEvents) -- Edited Transcript of Oncternal Therapeutics Inc earnings conference call or presentation Thursday, November 7, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Frank J. Hsu

Oncternal Therapeutics, Inc. - Chief Medical Officer

* James B. Breitmeyer

Oncternal Therapeutics, Inc. - President, CEO & Director

* Richard G. Vincent

Oncternal Therapeutics, Inc. - CFO

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Conference Call Participants

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* Hartaj Singh

Oppenheimer & Co. Inc., Research Division - Research Analyst

* Kumaraguru Raja

Brookline Capital Markets, LLC, Research Division - Director & Senior Biotechnology Analyst

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Presentation

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Operator [1]

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Greetings, and welcome to the Oncternal Therapeutics third quarter earnings and business update call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce Richard Vincent, CFO. Thank you. Please begin.

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Richard G. Vincent, Oncternal Therapeutics, Inc. - CFO [2]

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Thank you, operator. Good afternoon, everyone, and thanks for joining us. I'd like to welcome you to our third quarter 2019 financial results and business update conference call. Joining me on the call this afternoon include our President and CEO, Dr. James Breitmeyer; and our Chief Medical Officer, Dr. Frank Hsu. Today's call will begin with a business update followed by a discussion of our third quarter 2019 results and a wrap-up with a Q&A.

Please note that today's quarterly press release is available on the Investor Relations section of Oncternal's website. Tomorrow, we plan to file our quarterly report on Form 10-Q for the quarter ended September 30, 2019. Our filings and a replay of this call will be available on the Investors section of our website at www.oncternal.com, for at least the next 30 days.

Please note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that we will be making forward-looking statements during this call about future events, such as our business and product development strategies and future financial and operating performance. Our company's actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business.

These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in our financial results press release and SEC filings, including our Form 10-Q for the quarter ended September 30, 2019. This conference call contains time-sensitive information about -- information that is accurate only as of the date of this live broadcast, November 7, 2019. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances occurring after the date of this conference call.

With that, let me turn things over to our CEO, Jim Breitmeyer.

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James B. Breitmeyer, Oncternal Therapeutics, Inc. - President, CEO & Director [3]

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Thank you, Rich, and good afternoon, everyone. We have a lot of ground to cover today, and I'm going to jump right in with a summary of our progress and key accomplishments during the last several months and a look ahead at upcoming milestones.

To start, I'd like to emphasize our commitment to developing novel cancer treatments for patients with cancer that have critical unmet medical needs. We are advancing a robust product pipeline with clinical and preclinical product candidates that target several cancer indications. Our development efforts are focused on untapped biological pathways implicated in cancer genesis or progression.

We achieved a number of key clinical milestones during the last quarter that we believe set the table for an important fourth quarter and allow us to build momentum into 2020. Our Chief Medical Officer, Frank Hsu, will discuss some of the details of our achievements during the third quarter. But first, I'll touch on the high notes.

Our lead product cirmtuzumab is an investigational monoclonal antibody designed to inhibit the ROR1 pathway. In August, we opened a randomized Phase II clinical trial combining cirmtuzumab with ibrutinib in patients with chronic lymphocytic leukemia or CLL. The decision to open the Phase II portion of this ongoing Phase I/II clinical trial was based on favorable interim outcomes from the dose-finding and dose-confirming cohorts of this clinical trial.

In October, we opened a Phase Ib dose-confirming expansion cohort of our clinical trial of cirmtuzumab combined with ibrutinib in patients with mantle cell lymphoma or MCL. This was also based on favorable interim results from the dose-finding cohort of the study. We are excited about the potential of cirmtuzumab for the treatment of patients with ROR1-expressing cancers, including CLL, MCL, breast cancer and other cancers.

Concerning our other clinical candidate. In September, we announced the presentation of a case study of a patient with Ewing sarcoma who was treated in our Phase I clinical trial of TK216, our investigational ETS oncoprotein inhibitor. The patient who had relapsed/refractory metastatic Ewing sarcoma achieved a deep objective response following treatment with 2 cycles of TK216 given as a single agent. We are also exploring potential future applications of TK216 as a targeted therapy for other cancers with ETS alterations, such as AML and prostate cancer.

We believe that talent acquisition is critical to the achievement of our product development objectives. In August and September, we announced the appointments of Frank Hsu, MD as Chief Medical Officer. Also, Rajesh Krishnan, Ph. D. as Senior VP, CMC and Manufacturing; and Gunnar Kaufmann, Ph. D. as Chief Scientific Officer, and finally, Igor Bilinsky, Ph. D. as Chief Business Officer. I am just thrilled with the team we have built and excited at the opportunity to advance our pipeline programs with such capable individuals.

Looking ahead, there are several upcoming milestones that I'd like to highlight. We will present additional interim data from our ongoing Phase I/II clinical trial of cirmtuzumab in combination with ibrutinib in patients with CLL or MCL at the American Society of Hematology or ASH Annual Meeting in December. We also plan to present interim data from our ongoing Phase I clinical trial of TK216 in patients with Ewing sarcoma at the Connective Tissue Oncology Society, or CTOS, Annual Meeting later this month. We also anticipate selecting a candidate CAR-T construct for treating patients with hematologic cancers expressing ROR1 in the first half of 2020.

With that, I'd like to turn it over to our Chief Medical Officer, Frank Hsu, for a more detailed review of our pipeline.

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [4]

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Thank you, Jim. We've made solid progress during the short time since I joined Oncternal in August. I'd like to complement this team for their hard work and commitment and for the collaboration I've witnessed since joining the company. I'm very excited about the company's pipeline opportunities, and I'm going to spend the next few minutes taking you through a more in-depth look at our product candidates.

Our lead clinical program is cirmtuzumab. It's a monoclonal antibody designed to inhibit the ROR1 pathway, which we also call the ROR1 pathway, which is currently in a Phase I/II clinical trial in combination with ibrutinib for patients with CLL or MCL. We believe that the ROR1 is an important target because it’s implicated in cancer genesis, disease progression and treatment resistance. Ibrutinib has become a standard of care for patients with these diseases. However, complete responses or CRs have been uncommon in patients treated with ibrutinib alone. Therefore, we believe that an agent that complements ibrutinib to increase the number of patients achieving a CR without significant nanotoxicity may provide a meaningful clinical benefit.

In August, we announced the opening of enrollment for our randomized Phase II clinical trial of cirmtuzumab combined with ibrutinib in patients with CLL. The decision to open the Phase II portion of the Phase I/II study was based on favorable outcomes from the dose-finding and the dose-confirming cohorts of this study. The interim objective response rate was 100% for the first 9 patients with CLL with a valuable data who received a recommended dosing regimen and who had completed 12 weeks of the combination treatment. We continue to see a well-tolerated safety profile, which is consistent with that reported for ibrutinib alone.

Last month, we announced the opening of enrollment in the Phase Ib expansion of our Phase I/II clinical trial of cirmtuzumab combined with ibrutinib in patients with mantle cell lymphoma. The decision to open the expansion cohort was based on favorable interim results from the dose-finding cohort of the trial, which indicated that this combination was well tolerated, again with the safety profile, consistent with that reported for ibrutinib alone. Complete responses were observed in 2 patients who had previously received and failed multiple regimens prior to participating on this trial. One patient had received an autologous transplant and an allogeneic transplant. The other had received an autologous transplant and CAR-T therapy. The first complete response has already been sustained for a period of 12 months.

Now cirmtuzumab is also being studied in the Phase I investigator-sponsored clinical trial in combination with paclitaxel for the treatment of patients with HER2-negative metastatic or locally advanced unresectable breast cancer. We expect that the interim data from the study will be presented at a scientific conference later this year.

I'm switching gears. Our second clinical program is TK216. The first investigational -- which is the first investigational small molecule to enter the clinic that is designed to inhibit the biologic activity of ETS-family transcription factor oncoproteins in a variety of tumor types. Our lead indication for this compound is relapsed/refractory Ewing sarcoma, a rare pediatric bone cancer with limited treatment options after first scientific therapy. Nearly all cases of Ewing sarcoma expressed an oncogenic ETS fusion proteins as targeted by TK216.

I'm pleased that we've already received Orphan Drug Designation and Fast Track status from FDA for this program. We are evaluating TK216 as a single agent and in combination with vincristine in a Phase I clinical trial for patients with Ewing sarcoma.

We are very encouraged by the recently reported first sustained clinical response to TK216 as a single agent in a patient with this devastating disease. This novel target agent is also potentially applicable to a number of other malignancies, which we continue to explore in preclinical studies.

Our third program is a ROR1-targeted CAR-T therapy, which is in preclinical development in collaboration with the University of California San Diego. This research has been supported by a grant from the California Institute for Regenerative Medicine or CIRM. CAR-T therapies use T cells that have been engineered to bind and engage a specific target on cancer cells in an effort to direct the patient's own immune system to react against them. We believe that ROR1 is a very attractive target for CAR-T therapy due to its expression across a wide variety of common blood cancers and solid tumors.

The ROR1-targeting component of CAR-T uses a fragment of our cirmtuzumab antibody but that's designed to bind to cancer cells with high affinity, but not to recognize most normal human tissues. As Jim mentioned, our objective is to select the CAR-T construct for further development against heme malignancies in the first half of next year. Overall, we are pleased with the solid progress we're seeing across our entire pipeline.

And with that, I'll turn it over to our Chief Financial Officer, Rich Vincent to review our third quarter financial results.

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Richard G. Vincent, Oncternal Therapeutics, Inc. - CFO [5]

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Thank you, Frank. Grant revenue was $0.5 million for the third quarter of 2019. Our grant revenue is derived from a sub-award under a grant from CIRM to UC San Diego to advance our Phase I/II clinical trial of cirmtuzumab in patients with CLL or MCL. Our total operating expenses for the third quarter were $5.5 million, consisting of research and development expenses totaling $3.1 million and general and administrative expenses totaling $2.4 million.

We recorded a net loss of $4.9 million for the third quarter of 2019 or $0.32 per share basic and diluted. As of September 30, 2019, we had a cash and cash equivalents balance of $23.1 million. We expect that our existing cash and cash equivalents will be sufficient to fund our cash requirements through the second quarter of 2020. As of September 30, 2019, we had approximately 15.4 million shares of common stock outstanding.

With that, I'll turn things back to the operator for the Q&A portion of this afternoon's call.

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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 Hartaj Singh with Oppenheimer & Co.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [2]

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Congratulations on the sustained progression in building out the team. Gentlemen, just a couple of quick questions. With the Phase II, you're seeing 100% responses, will we see at ASH? Is that a combination of PRs and stable disease or PRs and CRs? Just any kind of -- I know that you want to wait for ASH for that, but just any kind of color around that? And then what's the hurdle rate for regulators in terms of if you have this Phase II, how large will it kind of be? I mean is there any way to get a sort of accelerated approval type of study going in what seems like frontline CLL here? And then I got a couple of questions on the MCL and TK216.

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [3]

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So this is Frank Hsu. As mentioned, we will be -- and as you probably have seen, we will be presenting at ASH in December. As I mentioned, this information will be updated at that upcoming meeting and we can't comment due to the embargo beyond that. With regard to the data that has been previously reported that was objective responses, so meaning CRs and PRs. And we hope to have more data or expect to have more data that we'll present and update at ASH.

Second was an accelerated approval option. That, of course, is something which we are examining and we will continue to examine as more data comes in.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [4]

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Got it. Frank, is -- does the approval for acalabrutinib change your thinking or you're going to sort of preferably go with ibrutinib in this Phase II and future trials?

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [5]

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Well, our current study is designed specifically with ibrutinib. We have a wonderful collaboration with Pharmacyclics for supplying ibrutinib as you're probably already well aware and if we were to make any changes in the future that will be based on additional data that we look at in the future and examine. So -- but at this time, I don't think I can comment on anything. It's just an ongoing evaluation.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [6]

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Got it. And then will you present data at ASH on the MCL, the 2 patients who had the CRs or where can we see that sort of in-depth data there? And what is the thinking behind sort of -- can you go to a Phase II or accelerate approval there also? Because this seems to be a later line of therapy kind of trial, which I would imagine regulators are more amenable to, to an accelerated approval there?

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [7]

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Well, I can't comment about what the regulators might envision or think about this at this time. But certainly, as mentioned, these are relapsed/refractory patients that are being enrolled to our study. We will have an update at ASH and we'll be able to comment more -- in more depth at that time. There is additional data in the press release that we submitted just a few weeks ago. And on the opening on October 3, which is the opening of the expansion portion of the Phase I/II study for mantle cell.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [8]

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Great. And my last question is just on the preclinical CAR-T, what's the hurdle rate? CAR-T, there just seems to be a tremendous amount of work going on in this area, preclinical and clinical, autologous through companies and medical institutions. What's the hurdle rate? What would you like to see preclinically in order to advance the candidate into clinical testing because I imagine CAR-T is a nontrivial, from a financial perspective, endeavor for any company.

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James B. Breitmeyer, Oncternal Therapeutics, Inc. - President, CEO & Director [9]

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Hartaj, thank you for the question. This is Jim. We certainly are following the extremely exciting CAR-T landscape carefully, and we do think that there is substantial potential benefit to be derived from developing a CAR-T directed against ROR1. The -- as we fill out our preclinical package, we'll have more thoughts about what exactly the clinical indication and the niche would be for an additional entry into the CAR-T market.

One thing to consider is that the CD19 malignancies generally express ROR1. And so an interesting potential indication that we're examining is patients who have been treated with a CD19 CAR-T or even ADC and then -- and who have relapsed in a manner that they can no longer be retreated using CD19 because of, say, loss of CD19 antigen, which has been described pretty frequently. So we do believe that many of those patients will express ROR1 and could be candidates for our ROR1 CAR-T.

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Operator [10]

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Our next question comes from the line of Kumar Raja with Brookline Capital Markets.

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Kumaraguru Raja, Brookline Capital Markets, LLC, Research Division - Director & Senior Biotechnology Analyst [11]

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Maybe first on the HER2-negative breast cancer. Obviously, you see 75% expression of ROR1 in breast cancer. How does that compare to the -- in HER2-negative breast cancer? And also, how many patients have been treated so far in the Phase I trial? And will that data be at the SABCS conference? And also in terms of the dosing, what are your expectation in terms of a solid tumor versus hematological indications? What differences do you expect to see there? Do you think you need to have a higher dose in the solid cancers?

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [12]

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Well, let me see if I can address most of your questions here. So we can't comment tremendously on the progress and the study because it is an IST. And as an investigator-sponsored trial, it will be up to that investigator to present that. So these are investigators from the UC San Diego, who we fully expect to present at a conference at the end of this year. We hope to be able to make more comments about that in the near future. But at this point in time, we are unable to.

And fortunately, that also plays into our ability to discuss how many patients have been dosed and how that dosing might have been going with their patients at this point in time. With regard to dosing in solid cancers versus heme, our assumption based on the PK is that it's -- it will likely be very similar, if not the same. And it is something which we are continuing to monitor, and we'll make recommendations based on continued information that we receive from each of these studies.

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Kumaraguru Raja, Brookline Capital Markets, LLC, Research Division - Director & Senior Biotechnology Analyst [13]

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And in terms of the data being presented at this CTOS, what can you share with -- regarding to the data that will be presented there?

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Frank J. Hsu, Oncternal Therapeutics, Inc. - Chief Medical Officer [14]

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Well, CTOS or the Connective Tissue Oncology Society, will be -- is primarily on many disorders of connective tissue or sarcomas. So we will be presenting our data that has to do with our TK216 program. This is a meeting which is upcoming next week, and we haven't really put out any release at this point in time but we will be -- expect to be doing so shortly. So unfortunately again, I apologize, but I can't comment anything further than that at the moment.

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Operator [15]

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Thank you. We have reached the end of our question-and-answer session. Allow me to hand the floor back over to Richard Vincent for closing remarks.

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Richard G. Vincent, Oncternal Therapeutics, Inc. - CFO [16]

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Great. Thank you, operator. In closing, we have a well-defined work plan ahead of us with a clear priority of deploying our financial and operating resources to advance our product candidates in multiple indications. We look forward to updating you in the months ahead.

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Operator [17]

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Thank you. This will conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.