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Edited Transcript of ONTX earnings conference call or presentation 13-Nov-18 2:00pm GMT

Q3 2018 Onconova Therapeutics Inc Earnings Call

Newtown Nov 16, 2018 (Thomson StreetEvents) -- Edited Transcript of Onconova Therapeutics Inc earnings conference call or presentation Tuesday, November 13, 2018 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Mark Patrick Guerin

Onconova Therapeutics, Inc. - CFO

* Ramesh Kumar

Onconova Therapeutics, Inc. - Co-Founder, CEO & Director

* Steven M. Fruchtman

Onconova Therapeutics, Inc. - Chief Medical Officer & President

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Conference Call Participants

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* Yale Jen

Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst

* Jason Wesly McCarthy

Maxim Group LLC, Research Division - Senior MD

* Joseph Pantginis

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Onconova Therapeutics Third Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference may be recorded.

I'd now like to introduce your host for today's conference, Dr. Ramesh Kumar, CEO. Sir, please go ahead.

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [2]

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Thank you, Liz. Good morning, everyone, and welcome to our Third Quarter 2018 Results Call. Joining me from our management team are Dr. Steve Fruchtman, our President; Mark Guerin, CFO; and Dr. Richard Woodman, who recently joined the company as Chief Medical Officer.

The third quarter was marked by achievement of many important objectives, enabling us to advance our programs toward value-inflection milestones in 2018 and 2019. These include enhancement of our intellectual property position for rigosertib by expanding the geographical coverage of our patents and extending patent protection in the USA to 2037; acceptance of 4 abstracts for presentations relating to rigosertib at the 60th American Society of Hematology Annual Meeting & Exposition in San Diego, California taking place from December 1 through 4, 2018; our novel CDK4/6+ ARK5 inhibitor, ON 123300, is at an advanced pre-IND stage and moving toward an IND in 2019. This program is being developed with HanX Biopharmaceuticals, our partner in China; and we are pleased to further strengthen our senior leadership team with the appointment of Dr. Rick Woodman as Chief Medical Oofficer. Rick was most recently with Novartis, where he served as Senior Vice President and Head of U.S. Oncology Clinical Development and Medical Affairs. We are very pleased that Rick has joined Onconova, and we look forward to his valuable contributions toward the continued development of rigosertib.

Together with our strengthened balance sheet, these recent developments position our programs to many near-term value-inflection points and business development.

And now I'll turn the call over to Steve for a further discussion of the excellent progress we are making in our clinical development programs. Steve?

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [3]

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Thank you very much, Ramesh. At Onconova, we continue to be very excited about our differentiated pipeline and the strong progress we are making in our ongoing clinical trial programs that are advancing very nicely toward important inflection points. These programs include our lead clinical program, the Phase III INSPIRE pivotal trial with intravenous rigosertib for high-risk second-line patients with Myelodysplastic Syndromes, also known as MDS, who have failed to respond to, or progressed while on, hypomethylating agents, such as azacitidine or decitabine.

In January of 2018, we announced the completion of a pre-planned interim safety and efficacy analysis leading to an increase in the sample size for the ongoing pivotal Phase III INSPIRE trial. We expect to complete full accrual through this trial and provide top-line data in the second half of 2019.

We have 2 rigosertib clinical programs, one with intravenous rigosertib and the second with oral rigosertib to address the unmet medical needs of high-risk MDS patients. The INSPIRE trial with intravenous rigosertib is ongoing, and the Phase II combination trial of oral rigosertib with injectable azacitidine will be presented at the upcoming American Society of Hematology meeting, which is also referred to as ASH.

The combination trial is in patients with high-risk front-line MDS patients and includes both HMA-naïve as well as patients who are refractory to HMA or azacitidine therapy. The synopsis for this proposed pivotal Phase III trial to follow the combination Phase II trial to be presented at ASH will be in high-risk patients with MDS and has been reviewed with the U.S. and ex U.S. health authorities. And we have agreed on the trial design and a composite response endpoint.

We plan to conduct this pivotal Phase III trial under a Special Protocol Assessment, or SPA, to be filed by the end of this year, 2018. This filing will be followed by a similar submission in Europe and Japan, the latter by our partner in Japan and Korea, SymBio. After the SPA negotiation process is completed, the pivotal Phase III trial for the combination product for front-line HMA-naïve higher-risk MDS patients may be initiated, pending financing or business development activities.

As a reminder, and for those who may be new to the Onconova story, MDS is a very complex disease of bone marrow-failure syndromes associated with the infiltration of the bone marrow with leukemia cells and is most often seen in elderly patients. Up to 30% of patients with high-risk MDS may advance to acute leukemia, typically AML, which is why, and the reason they are designated as high-risk MDS patients. The patients who transform to AML are refractory to hypomethylating agents as well as standard induction chemotherapy, and typically, unfortunately, succumb to their underlying disease. There are no approved products in the world for high-risk MDS patients who fail a hypomethylating agent, which is the current standard of care for high-risk MDS. Thus, rigosertib has the potential to address this critical unmet medical need.

We have also conducted a Phase II trial with oral rigosertib in lower-risk MDS patients. The data were most recently presented at the 2017 ASH meeting. This trial focused on low-risk MDS patients who are red cell-transfusion dependent. Similar to high-risk MDS patients, low-risk MDS patients also suffer from inadequate bone marrow function and are typically, unfortunately, unable to produce adequate numbers of circulating [blood]. But they have a lower risk of transforming to acute leukemia than those with high-risk disease and thus the lower-risk MDS designation.

There are more than 10,000 lower-risk MDS patients in the U.S., and these patients also have a tremendous unmet medical need due to their need for transfusional support, and we hope to address this need. Our therapeutic goal is improving their bone marrow function, and ideally, making these patients either red cell transfusion independent or reduce their need for transfusional support.

We have continued to actively participate in and present at major MDS conferences across the globe on our ongoing trials. Following the interim analysis of the pivotal INSPIRE Phase III trial, we reported results across our MDS pipeline. We presented initial Phase II safety data from the expansion study of oral higher-dose rigosertib in combination with azacitidine in patients with MDS at the recent Sixth International Bone Marrow Failure Disease Symposium in March of 2018. We previously presented efficacy data at ASH with this combination. And the data demonstrated an encouraging overall response rate of 76%, 62% in patients following HMA failure and 85% response in HMA-naïve= patients.

As Ramesh already mentioned, we were pleased to have 4 abstracts related to rigosertib accepted for presentation at the upcoming 60th American Society of Hematology meeting. Dr. Shyamala Navada of the Icahn School of Medicine at Mount Sinai Hospital in New York, on behalf of all of her coinvestigators, will present updated efficacy and safety data from the Phase II combination trial of oral rigosertib plus azacitidine. Additional presentations at ASH will highlight the PK/PD and safety clinical data from patients treated with this combination, as well as a punitive biomarker to predict responses to rigosertib will also be presented.

As we make progress with our key rigosertib trials in adult MDS, and as I mentioned, we await the results from our funded collaboration under a CRADA with the National Cancer Institute, or NCI, in pediatric cancer-associated RASopathy in children born with the RAS mutation. The NCI is conducting PK/PD and dose-escalation studies in preclinical models to prepare for dosing of pediatric patients with single agent rigosertib. A clinical trial protocol concept has been developed and is under review at the NCI. Based on NCI guidance, we expect the first pediatric patient to be put on study in the first half of 2019.

Regarding one of the RASopathies, juvenile myelomonocytic leukemia, or JMML, also referred to as pediatric MDS, the National Cancer Institute intends to conduct a Phase I trial with rigosertib as part of a collaborative initiative with Onconova for the treatment of JMML and other oncological RAS-driven genomic pathway diseases.

As I mentioned, we have a cooperative research and development agreement, or CRADA, with the NCI, and a clinical protocol is under their review. We anticipate this trial will start in the first half of 2019. In addition, preclinical models of JMML are being studied at the University of California at San Francisco, an expert center in the studies of JMML, and is being funded by the Leukemia & Lymphoma Society.

We also have a number of investigator-initiated studies. A study for patients with myeloproliferative neoplasms, or MPNs, where the bone marrow makes too many circulating blood cells, is being conducted at MD Anderson Cancer Center. And the second study on RAS-driven rare squamous cell carcinoma of the skin is being run at centers of excellence in Europe with expertise in this rare condition. Additional combination studies with rigosertib in solid tumors are under consideration.

In summary, there are many important ongoing activities related to the advancement of both intravenous and oral rigosertib programs in MDS, which are moving following toward impactful milestones for Onconova in the near term. We will remain focused on these programs while also looking to enhance the potential of rigosertib in additional indications and combinations through collaborations and partnerships.

With that, I thank you, and I will turn the call over to Mark Guerin, our Chief Financial Officer, for a discussion of our financial results for the quarter. Mark?

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Mark Patrick Guerin, Onconova Therapeutics, Inc. - CFO [4]

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Thanks, Steve, and good morning, everyone. Net loss was $5.3 million for the third quarter ended September 30, 2018, compared to a net loss of $7 million for the third quarter ended September 30 of 2017.

Our research and development expenses were $4 million for the third quarter of 2018 compared to $5.1 million for the 2017 period. General and administrative expenses were $1.7 million for the third quarter of 2018 and for the third quarter of 2017.

Our net loss was $14.8 million for the 9 months ended September 30, 2018, compared to a net loss of $17.9 million for the comparable 2017 period. At the end of the quarter, cash and cash equivalents totaled $22.4 million compared to $4 million at December 31, 2017. We believe that our cash and cash equivalents of $22.4 million at the end of September will take us into the fourth quarter of 2019 based on our current plans and projections.

That completes my financial review, I will now hand the call back to Ramesh for his closing remarks. Ramesh?

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [5]

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Thanks, Mark and Steve, and welcome, Rick, to Onconova. As you can see, we have many rapidly advancing programs and we expect to report both incremental data in 2018 and 2019, and pivotal Phase III data in 2019. Our near-term pipeline program objectives include: Finalizing the Phase III protocol under ASPA for oral rigosertib in combination with azacitidine in first-line, high-risk MDS; starting the RASopathy clinical trial; and advancing our novel CDK-directed compound to the clinic in partnership with HanX.

Our most important objective remains completion of the INSPIRE trial and the expected data readout in the second half of 2019. Key to our strategy is initiating additional collaborations and geographic licensing agreements for our entire pipeline, bringing resources and new opportunities for regaining value. We hope to report on the results of these efforts in the coming months. We also look forward to continuing our track record of quality publications and scientific presentations to announce results of our ongoing and completed studies.

With our cash on hand, regained NASDAQ compliance and multiple late-stage, clinical-stage programs, we remain confident we will reach key clinical milestones and advance business opportunities for our entire pipeline over the next 12 to 18 months. Steve, Mark, Ric, and I look forward to keeping you appraised of key developments.

With that, I would like to open the call for questions. Liz?

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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 Jason McCarthy with Maxim Group.

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Jason Wesly McCarthy, Maxim Group LLC, Research Division - Senior MD [2]

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So related to the INSPIRE study, without giving too much away, could you go into a little bit more detail on the trial progress in terms of enrollment and the number of events that have occurred thus far?

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [3]

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Thanks, Jason. Steve will address that.

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [4]

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Thanks, Jason. So, based on our monthly accrual, which has been quite consistent, and we are very pleased with it, we anticipate full accrual of the INSPIRE trial second half of 2019. And we also anticipate, because of the unfortunate short life expectancies of these patients, that pivotal data, which is going to be based on survival, as you may recall, 288 death events, we anticipate full accrual and overall survival to be quite linked. So, we anticipate pivotal data towards the second half, perhaps the latter half of 2019.

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Jason Wesly McCarthy, Maxim Group LLC, Research Division - Senior MD [5]

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Okay. And then -- as a follow-up, as we approach that pivotal data, could you talk about how many of the major centers are involved with the INSPIRE study or other rigosertib programs?

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [6]

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So regarding the INSPIRE trial, we have -- it's a global trial, as you know. And we have over 150 clinical sites and centers of excellence across the globe. The major MDS centers of excellence in the U.S, Europe, Australia, Israel, so it is our global trial with many sites continuing to accrue. Regarding the combination Phase II trial, Jason, we'd note that trial has rapidly accrued. We were able to have full accrual just in the U.S., and again, at centers of excellence in the U.S. as well. In addition, of course, the INSPIRE trial is being done with our corporate partner in Japan through SymBio.

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Jason Wesly McCarthy, Maxim Group LLC, Research Division - Senior MD [7]

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All right. And just as we approach the IND -- and this one's the last quick one, could you just talk a little bit more about the opportunity presented with the CDK program?

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [8]

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Yes, good question. As you know, CDK is probably one of the most exciting new targets to emerge in the last 5 years or so. And we all know that very big companies, including Pfizer, Novartis and Lilly, have compounds in the market. One's since 3 years, the others, for about a year or so. And everyone believes that this will address many, many solid tumors. Our data suggests that our molecule make go beyond solid tumors into multiple myeloma and other T- and B-cell malignancies, certain gastric cancers. And that belief is based on data suggesting that the inhibition of ARK5, ARK5, opens the door to many other targeted mechanism-driven, biomarker-driven investigations. So in short, this program is moving forward towards an IND. And we expect, in collaboration with HanX, our partner in China, to file IND. We'll file in the U.S. and Europe and they will file in China, and we will do a pretty expansive Phase I study, including a diversity of patient types. And we hope to give you updates on the progress of the IND as well as the further details of the Phase I early next year.

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Operator [9]

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Our next question comes from Joe Pantginis with H.C. Wainwright.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [10]

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Couple of questions if you don't mind. So I know you probably can't say too much about the design of the upcoming Phase II -- I'm sorry, Phase III oral study because you're in the iterative process with the FDA regarding the SPA. But was just curious if you have any broad strokes with regard to the potential size, and if there is any potential adaptive design to the study.

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [11]

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So we have discussed, based on the preliminary data, Joe, which, again, will be updated at the upcoming ASH meeting, but we have already interacted with the FDA and EMA based on the preliminary data of the combination trial. We have an agreement what that trial will look like. It's going to be for patients who are treatment- and HMA-naïve with high-risk MDS. The trial will consist of placebo-controlled blinded trial of oral rigosertib plus azacitidine versus oral placebo plus azacitidine. And the endpoint will be a composite response endpoint, based on the most recent discussions with the agencies, of complete response and partial response based on IWG. The size of the trial will have to continue to be discussed with the agency based on the clinical benefit, but that will be part of the SPA negotiation.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [12]

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That's helpful, Steve. And then, just curious, because obviously, it's an early stage program, but very promising with regard to the potential patient benefit in these pediatric patients for the RASopathies. And I know this is a very broad stroke type of question and looking deep into the future, but what a potential regulatory path might look like in these pediatric ultra-orphans?

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [13]

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Joe, that's a great question. So these children are unfortunately desperately ill. None of the typical standard therapies work. They also try, like the adults, azacitidine and hydroxy urea and these children need to have an allogeneic stem cell transplant. But as you know, that can be difficult to identify. So, we'd like rigosertib to be studied again in collaboration with the NCI for JMML. Some of the endpoints will be control of the hyperleukocytosis these patients have, a high white count. They have enormous livers and spleens. And if you look at how Jakafi was approved in myeloproliferative disease neoplasms, it was basically symptomatic improvement and a reduction in the size of the spleen, so one of the endpoints to be discussed with the help of the health authorities would be symptomatic improvement and reduction in the size of the spleen. So, endpoints to be discussed with the health authority would be symptomatic improvement, control of the blood count, control of the enormous livers and spleens and also as a bridge to transplant. For patients and children who have already been transplanted, unfortunately, the relapse rate is very high. The other approach will be, post-transplant, to explore the possibility of rigosertib for clinical benefits for these children. But obviously, we need to first conduct a trial at the NCI and then interact with the health authorities to get an approval pathway. But those are some of the possible ways of approaching the answer to your question, Joe.

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Operator [14]

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(Operator Instructions) Our next question comes from Yale Jen with Laidlaw.

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Yale Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [15]

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Just a little bit follow-up with what Joe just asked and maybe just expand a little bit. You mentioned that the -- it is a composite endpoint for the of the Phase III study and you also mentioned that CRR and PR, which is sort of fall into the ORR endpoint. So, is there any other just sort of general aspect will be incorporated into this composite endpoints?

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [16]

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Well, there all -- there's always secondary endpoints as well. But the primary endpoint we anticipate will be CR plus PR, but as per the International Working Group criteria for response. But there are other endpoints in that IWG, including marrow CR, including hematological improvement of platelets, red cells and white cells. So, marrow function improvement will be a secondary endpoint. Time to leukemia transformation, because again, these are all high-risk MDS patients and there will be a significant rate of leukemic transformation, and thus, that will be a secondary endpoint as well. And typically, a secondary endpoint will most likely will also be survival. So those the multitude of endpoints we anticipate the agency will want us to look at in that pivotal Phase III trial.

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Yale Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [17]

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And based on the timeline, do you have some projection as when the SPA might be sort of granted?

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Steven M. Fruchtman, Onconova Therapeutics, Inc. - Chief Medical Officer & President [18]

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Well, we -- our plan is to submit the full protocol and the SPA by the end of December, the end of 2018. And typically, it takes about 90 days, 3 months, for those interactions with the agency to be finalized. So, some time first quarter of 2019, we anticipate that, based on funding, we'll be able to initiate the trial.

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Yale Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [19]

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Okay, great. And then maybe just one more question here, which is about the 123300. And this is actually comes from an investor who ask us regarding, could you give us a little bit more detailed in terms, the compound itself regarding, for example, PK, half-life and some other aspects? So, they can better sort of thoughts or handicap of the future development of this compound.

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [20]

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Yale, up to the point we did our agreement with HanX, the compound has been internally developed through collaborations and there are about 15 publications regarding every aspect, chemistry all the way to PK/PD, available. And we can share some of those with you or they may be available on our website. So very briefly, this a small molecule drug, oral delivery. Obviously, we're hoping that it is once a day, but that remains to be established in Phase I studies. The drug is of the same potency as Palbociclib or Kisqali or Verzenio as far as CDK4 and CDK6 are concerned. But when you look at the new target we have defined, ARK5, all these other compounds don't hit that target and we are nanomolar-potent against ARK5. So, our compound is distinguished by 3 properties: One, the ARK5 angle; number two, single agent activity; and number 3, activity in preclinical models seen in RB-negative situations. You know, Yale, that RB negative is not compatible with the first-generation CDK4 compounds. As a matter of fact, palbociclib resistance has been linked to RB-negative. So, we are hopeful that our drug has enough differentiation, enough superior activity which can be established in Phase I studies. Hope that answers your question.

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Yale Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [21]

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Absolutely. That's a lot of details.

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Operator [22]

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(Operator Instructions) I'm showing no further -- we do have a question from the line of Howard Grant.

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Unidentified Participant [23]

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This is regarding the poster for the oral combo Phase II upcoming at ASH. And I was wondering if you could comment and provide perhaps a little color on what appear to be high discontinuation rates.

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [24]

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Could you repeat where is the data coming from and what particular study you are referring to?

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Unidentified Participant [25]

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Yes, on the upcoming poster that you will be presenting at ASH for the oral combo Phase II, the expanded data, it appeared to have a somewhat high discontinuation rate. And I was wondering if you could comment on this.

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [26]

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It's probably not appropriate. As you know, ASH imposes an embargo. And reading an abstract is usually not getting complete information. I recommend you attend the oral session if you are in San Diego on December 1. Or we will do a press release with more details following the presentation. So, because of the embargo rules, we are not able to give you more data or discuss the data in the abstract today.

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Operator [27]

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I'm showing no further questions in queue at this time. I'd like to turn the call back to management for closing remarks.

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Ramesh Kumar, Onconova Therapeutics, Inc. - Co-Founder, CEO & Director [28]

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Thank you, Liz. I thank all the attendees today and my colleagues, Steve, Mark and Rick, for participating in this update. And we are available for the analyst to follow-ups throughout the day and tomorrow. Thank you again and have a great day.

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Operator [29]

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Ladies and gentlemen, thank you for participation in today's conference. This concludes the program, and you may now disconnect. Everyone have a great day.

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Editor [30]

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Please note that today's remarks include forward-looking statements and that actual results could differ materially from those projected or implied in our forward-looking statements.

For a description of important factors that could cause actual results to differ, we refer you to the forward-looking statements in the Company's SEC filings.