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Edited Transcript of SLRX.OQ earnings conference call or presentation 11-Nov-20 9:30pm GMT

·19 min read

Q3 2020 Salarius Pharmaceuticals Inc Earnings Call BOSTON Nov 12, 2020 (Thomson StreetEvents) -- Edited Transcript of Salarius Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 11, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Jason Rando Tiberend Strategic Advisor - Executive Vice President & Chief Operating Officer * David Arthur Salarius Pharmaceuticals - Director and CEO * Mark Rosenblum Salarius Pharmaceuticals - Chief Financial Officer * Daniela Santiesteban Salarius Pharmaceuticals - Director of Research and Business Development ================================================================================ Conference Call Participants ================================================================================ * Aydin Huseynov Benchmark Company - Analyst * Hunter Diamond Diamond Equity Research - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by and welcome to the Q3 2020 Salarius Pharmaceuticals Earnings webcast and conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. (Operator Instructions) I would now like to hand the conference over to your speaker today to Mr. Jason Rando, Tiberend Strategic Advisor. Thank you. Please go ahead, Sir. -------------------------------------------------------------------------------- Jason Rando, Tiberend Strategic Advisor - Executive Vice President & Chief Operating Officer [2] -------------------------------------------------------------------------------- Good afternoon, everyone, and thanks for joining today's 2020 third quarter financial and corporate results call. Earlier this afternoon, Salarius Pharmaceuticals issued a press release detailing its financial results for three months ended September 30th 2020, which we encourage listeners to read. The press release can be found in the news section of salariuspharma.com. Salarius will also file a 10Q tomorrow morning before market open. And the 10Q will be available on salariespharm.com and sec.gov. Before beginning today's call, I would like to make the following statement. Today, we will be making forward-looking statements about future expectations, plans, events, and circumstances, including statements about our strategy, future operations, the development of our lead investigational drug candidate, seclidemstat, including statements related to study results and our expectations regarding our capital allocation and cash resources. These statements are based on current expectations and you should not place undue reliance on these statements. Actual results may differ materially due to our risk and uncertainties, including those detailed and the risk factor section of Salarius Pharmaceuticals 10Q filed with the SEC and other filings we make with the SEC from time to time. Salarius Pharmaceuticals disclaims any obligations to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise. Joining on today's call is David Arthur, Director and CEO of Salarius Pharmaceuticals, who will provide an update on Salarius's corporate and clinical achievements during the third quarter and its vision for the future, and Mark Rosenblum, CFO, will review Salarius's third quarter 2020 financial results. David, go ahead. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [3] -------------------------------------------------------------------------------- Thank you, Jason, and thank you to everyone joining our conference call this afternoon, including all of you joining for the first time. 2020 continues to be an exciting year for Salarius. And events during the third quarter illustrate a significant progress Salarius has made, affirming our growth strategy and highlighting the opportunity that seclidemstat offers as a potential treatment for pediatric cancers, solid tumors and other cancers. For those of you participating for the first time, let me take a moment to describe Salarius. In a nutshell, we are developing new medicines for patients who need them the most. Salarius is a clinical stage biopharmaceutical company developing potential treatments for children and adults with pediatric cancer, solid tumors and other cancers. We are currently treating patients with our investigational new oral drug seclidemstat in two clinical trials to explore its potential as a treatment for multiple types of cancers. Our lead clinical program is Ewing sarcoma, a rare and devastating bone and soft tissue pediatric cancer, which is the second most common tumor among children and adolescents. Patients diagnosed with metastatic Ewing sarcoma or cancer that has already spread at the time of diagnosis have five-year survival rates between only 18% and 30%. The prognosis for patients with recurrent Ewing sarcoma is particularly poor. The five-year survival after a recurrence of Ewing is approximately 10% to 15%. And unfortunately, the median age of diagnosis of patients with Ewing is only 15 years of age. As a potential twice daily oral treatment that is not a cytotoxic agent, meaning seclidemstat is not chemotherapy, seclidemstat represents a potential breakthrough -- a breakthrough in the treatment of select pediatric cancers. With that as a backdrop, let's now talk about the third quarter. There were several important events that provided bookends to what has been an active three plus months for Salarius. In July, we welcomed Dr. Nadeem Mirza as our Senior Vice President of Clinical Development. Since his hire, Dr. Mirza has been instrumental in advancing our clinical programs in Ewing sarcoma and solid tumors as well as identifying potential opportunities to grow our seclidemstat pipeline. In this regard, in July, we announced plans to expand our ongoing Ewing clinical trial to include patients with sarcomas that share a similar biology to Ewing sarcoma. As part of that announcement, we highlighted a refractory Ewing sarcoma patient who was treated with seclidemstat for six months and demonstrated a reduction of over 80% in the prospectively defined target lesions. Target lesions generally represent a patient's largest measurable tumors. We believe this is a remarkable result, given the extreme challenges of the disease and the fact that this patient was treated with single agent seclidemstat therapy. Meaning, this patient receive no other anti-cancer treatment while taking seclidemstat. While we recognize this is only a single patient, we believe it demonstrates drug activity in a patient with treatment resistant Ewing sarcoma in a trial primarily designed to demonstrate safety, not efficacy. The momentum from these advances provided Salarius an opportunity to initiate and then complete in August a $6.2 million public offering. We are now applying these capital resources and the resources we continue to receive from the Cancer Prevention Research Institute of Texas to progressing our seclidemstat development program. I'd like to now discuss the development program as well as the ongoing clinical trials in a bit more detail later. But at this time, I'd like to turn the call over to Mark Rosenblum for a brief review of Salarius' third quarter financial report. Mark, please go ahead. -------------------------------------------------------------------------------- Mark Rosenblum, Salarius Pharmaceuticals - Chief Financial Officer [4] -------------------------------------------------------------------------------- Thank you, David. For the three-month period ended September 30th 2020, Salarius reported a net loss of $1.7 million or $0.10 per basic and diluted share compared to a net loss of $2.6 million or $0.73 per basic and diluted share for the same period in 2019. The loss before other income for the three-months ended September 30th decreased by $2 million compared to the loss for the same period last year, which we primarily due to a $2.2 million decrease in general and administrative expenses which more than offset the increase of $0.7 million in research and development expenses. Increased research and development costs resulted from increased overall clinical trial expenses and seclidemstat manufacturing costs. The decrease in general and administrative expenses resulted from the absence of cost related to Salarius' one-time transformation into a public company during 2019, which did not reoccur in the current period. In early August this year, Salarius completed a $6.2 million underwritten public offering of our common stock. We intend to use the proceeds from the offering to fund ongoing operations and the expansion of the Ewing sarcoma clinical trials to include other Ewing-related sarcomas. As of September 30th this year, total cash, cash equivalents and restricted cash was $9.6 million compared with $3.7 million at yearend 2019. This does not, however, accurately reflect the extent of the financial resources available to Salarius. One of the genuinely interesting and we believe underappreciated aspects of the Salarius story is our ability to access non-dilutive capital. In 2016, Salarius received an $18.7 million grant from the Cancer Prevention and Research Institute of Texas, which we call CPRIT, of which we have $6.5 million available under the CPRIT contract subject to meeting certain requirements and approvals. On top of that, we have received non-dilutive funding from the National Pediatric Cancer Foundation to help fund our Ewing sarcoma clinical trials. With these various funding sources, we believe Salarius has the financial resources to advance our Ewing sarcoma and advanced solid tumor clinical programs into the second half of 2021. With that, I would like to return the call to David. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [5] -------------------------------------------------------------------------------- Thank you, Mark. As we've discussed, our goal is to maximize the potential of seclidemstat, by bringing hope to patients and their families facing limited treatment options, all the while, creating and building shareholder value. Looking forward through the end of 2020 and into 2021 and beyond, we expect to not only advance our current clinical programs in Ewing sarcoma and solid tumors but also explore opportunities where seclidemstat could address other underserved cancers. As highlighted earlier in the call, in July, we announced plans to expand enrollment in the Ewing sarcoma clinical trial to include several additional sarcomas that share a similar gene rearrangement to Ewing sarcoma. These additional sarcomas are also known as Ewing-related sarcomas. These Ewing-related sarcomas of interest include myxoid liposarcoma, desmoplasic small round cell tumors, and other sarcomas that share a similar biology to Ewing sarcoma. This expansion allows us to now treat up to 50 patients with Ewing and Ewing-related sarcomas with the Phase 2 recommended dose of seclidemstat. We and our clinical investigators are excited about the potential to treat these additional patients who are seeking new treatment options. Also during the third quarter, Salarius completed much of the work necessary to begin additional clinical trials. And we look forward to announcing these trials in the near future. One area of interest we have previously discussed is the use of seclidemstat in combination with immuno-oncology therapies, specifically checkpoint inhibitors. Checkpoint inhibitors are a class of immunotherapy treatment designed to unleash a patient's immune system attack on cancer cells. However, these drugs, these checkpoint inhibitors, do not work in all cancer patients or in all cancer types. In addition, patients that do show an initial response can become resistant to checkpoint inhibitor treatment and experience a return of the disease, commonly known as a disease relapse. Interestingly, data from pre-clinical studies conducted by The Translational Genomics Research Institute in Pheonix, Arizona and published in the peer-reviewed journal PLOS ONE demonstrated the potential of using seclidemstat in combination with checkpoint inhibitors to overcome cancer's ability to hide from the patient's immune system, which prevents checkpoint inhibitors from attacking the cancer. In simple terms seclidemstat may turn tumors concealed from a patient's immune system called cold tumors into hot tumors or tumors the immune system is able to identify and infiltrate. These now hot tumors could then respond to treatment of checkpoint inhibitors. This approach provides a significant opportunity for seclidemstat because it could be used to treat patients with a wide variety of cancers that are currently unresponsive to checkpoint inhibitors. As previously mentioned, Ewing sarcoma and solid tumors remain our most advanced development programs. Both clinical trials are designed as open-labels dose-finding trials with primary objectives to characterize the pharmacokinetics and safety profile of seclidemstat and to establish the drug's Maximum Tolerated Dose or MTD. Reaching MTD is an important milestone in both of these trials as it will allow us to establish the dosing regimen for the Phase 2 dose expansion arms of the trials, which is where we will treat up to 50 patients with Ewing and Ewing-related sarcomas. Salarius is on track to establish MTD and in the first quarter next year in treating the Phase 2 dose expansion patients in the expansion portion of the Ewing and now, Ewing-related sarcoma trial. So far, early clinical results and clinical observations ion our two clinical programs have been encouraging. Data supports twice daily dosing and we have observed drug concentration levels in humans or in our patients at or above where we noted efficacy in pre-clinical cell and animal studies. This dosing data is a significant achievement as it confirms our ability to treat patients with a twice daily oral regimen, and that the regimen can achieve the drug levels in humans where we observed efficacy in animal models. Also, as noted earlier, a patient with Ewing sarcoma who was treated with seclidemstat for six months after failing standard of care therapy saw an 80% decrease in the size of their prospectively identified target lesions, which as I mentioned are generally the patient's largest measurable tumors. We believe this patient data and other clinical observations from both clinical trials demonstrate preliminary drug activity, and when coupled with pre-clinical data, support our decision to expand the Phase 2 dose expansion phase of the Ewing sarcoma trial to include these patients with Ewing-related sarcomas. In addition, the ongoing solid tumor clinical trial is providing an opportunity to investigate the potential of seclidemstat in treating larger market cancers such as prostate, breast or ovarian cancers while also helping identify tumors where seclidemstat may show increased likelihood of activity. In all, the progress that we have made since the beginning of the year and certainly and specifically over the past three months is substantial. These accomplishments have in turn positioned Salarius for growth on several fronts over the next several quarters. With that, I will now open the call to your questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you, sir. (Operator Instructions). Your first question comes from the line of Aydin Huseynov from Benchmark. Please go ahead. -------------------------------------------------------------------------------- Aydin Huseynov, Benchmark Company - Analyst [2] -------------------------------------------------------------------------------- Hi. Thank you for taking my question. I have one question regarding immunotherapy combinational trials. I recently saw a clinical trial with the combination of, I think, seclidemstat with pembrolizumab for gynecological cancer. Could you comment on that? Thank you. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [3] -------------------------------------------------------------------------------- Aydin, good to hear from you. Thanks for the question. I am aware of that study listed on ClinicalTrials.gov but, unfortunately, at this moment I cannot comment on trials that Salarius has not publicly announced. So, I apologize but I'm going to have to not answer that question, but I would encourage you to monitor our press releases and our public communications as we hope to announce further information in the near future. -------------------------------------------------------------------------------- Aydin Huseynov, Benchmark Company - Analyst [4] -------------------------------------------------------------------------------- Sure. Sure. Thanks for that. And for the hematological trials, could you comment what indications you might pursue and kind of the reasons why you would pursue them and whether you are planning to release any pre-clinical data. Thank you. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [5] -------------------------------------------------------------------------------- I'd be happy to. And what I'd like to do is introduce Dr. Daniela Santiesteban also with Salarius. Daniela, are you on the line? -------------------------------------------------------------------------------- Daniela Santiesteban, Salarius Pharmaceuticals - Director of Research and Business Development [6] -------------------------------------------------------------------------------- Hi, David. Yes, I'm here and can answer Aydin's question. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [7] -------------------------------------------------------------------------------- Please do. Thank you. -------------------------------------------------------------------------------- Daniela Santiesteban, Salarius Pharmaceuticals - Director of Research and Business Development [8] -------------------------------------------------------------------------------- Hey, Aydin. Good to talk to you again. In regards to what [hem] indications we're interested in pursuing, we hadn't announced specifically the indications that we'd like to pursue in a clinical trial, but we have shown pre-clinical data in a variety of myeloproliferative diseases including AML and MDS. And some of this data is available on our overview deck on our website. The idea behind these is that these [hem] malignancies have a differentiation block where LSD1 is involved and seclidemstat can help release that differentiation block to treat a variety of [hem] malignancies. But we hope to announce more information on a clinical program in the next few months. -------------------------------------------------------------------------------- Aydin Huseynov, Benchmark Company - Analyst [9] -------------------------------------------------------------------------------- Thank you. Thank you very much, Daniela. And the last question I have is regarding the enrollment of Phase 1 solid tumor study Phase 1. Could you provide any update how the enrollment is going of this trial? -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [10] -------------------------------------------------------------------------------- Happy to, Aydin. The solid tumor study is continuing to enroll patients. One of the things we've been pleased about is the fact that while COVID has affected all aspects of our personal and business lives, our clinical trials both Ewing sarcoma and advanced solid tumors have remained open at our clinical trial sites due in a large part to the fact that both of these studies are prioritized very highly by our investigators as they are enrolling patients who have failed all existing standard of care treatments. So, we are incredibly fortunate and I feel very fortunate that we've been able to continue to enroll. So, patients are continuing to enroll in advanced solid tumor study. We are continuing to escalate the dose. And as we have reported in many of our communications, we hope to achieve Maximum Tolerated Dose in the advanced solid tumor study in the near future. -------------------------------------------------------------------------------- Aydin Huseynov, Benchmark Company - Analyst [11] -------------------------------------------------------------------------------- All right. Thanks for this, appreciate it. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- Thank you. Our next question comes from the line of Hunter Diamond from Diamond Equity Research. Please go ahead. -------------------------------------------------------------------------------- Hunter Diamond, Diamond Equity Research - Analyst [13] -------------------------------------------------------------------------------- Hi, everyone. Congratulations on the quarter. So, just I have two quick questions. So, one was on the timeline related to some of the trials. I know we have the Ewing data obviously. And then in the latest deck they talked about in Q4 the hematologic trial and the immunotherapy trials. Are those still looking to be Q4 events or could those sort of move into Q1 2021? -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [14] -------------------------------------------------------------------------------- So, Hunter, thanks for the question. Good to hear from you. As I mentioned in the earnings discussion, in the third quarter, we completed a tremendous amount of the work necessary to initiate additional clinical studies. And as we've discussed and disclosed in our previous information and is available on our corporate deck, we're targeting immuno-oncology and hematologic cancer trials. I will share with you that I believe -- as I said we completed much if not all the necessary work to make this happen and I believe that the announcements from Salarius are going to occur in the near future. And as Aydin brought up, HonorHealth and TGen has actually placed on ClinicalTrials.gov a study that involves seclidemstat. I'm just not yet in a position to be able to comment on it. So, I think you can know that we're moving forward pretty quickly on all of these fronts and we're very, very excited to get into the clinic in these indications so stay tuned and we hope to get some additional information out to you in the very near future. -------------------------------------------------------------------------------- Hunter Diamond, Diamond Equity Research - Analyst [15] -------------------------------------------------------------------------------- Okay. Perfect. Appreciate the update on that. My second question is obviously epigenetics as you're well aware is a super hot area. And there may be are some opportunities I would think out of universities or other assets that may be you could acquire given you have non-dilutive funding and potentially could raise additional capital if there was a good asset to acquire. Is that something that's sort of on the company's radar or is that -- has been thought about or are you more focused sort of on the existing trials? -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [16] -------------------------------------------------------------------------------- I'm you're asking a great question. And we currently feel very good about our seclidemstat program. We are advancing in solid tumors. We are advancing in Ewing sarcoma. We've expanded to include Ewing-related sarcoma. Both you and Aydin have asked about the additional clinical studies that we hope to be able to formalize and announce in the very near future. So, I say this because I always want to make sure that any comments I make about possible business development interest is not taken negatively, I mean, we could not be happier with how we're moving forward with seclidemstat. Having said that, as a biotechnology company with an infrastructure capable of advancing clinical candidates through IND-Enabling studies and submitting investigational new drug applications to the FDA and getting drugs into the clinic and implementing clinical trials, our ability to identify additional drugs and bring them into Salarius and advance them and create additional shareholder value is something we're always considering. And if you come across good candidates, please don't hesitate to send them our way. -------------------------------------------------------------------------------- Hunter Diamond, Diamond Equity Research - Analyst [17] -------------------------------------------------------------------------------- Sure, absolutely. And I will do that. Okay. Perfect. That's all I have in terms of questions and congratulations on the quarter. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [18] -------------------------------------------------------------------------------- Thank you. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- Thank you. So, we have a question from the line of Wangzhi Li Ladenburg. Please go ahead. Wangzhi, your line is open. (Operator Instructions). I show no further questions in the queue at this time. I'm sorry. Actually, I do show no further questions in the queue at this time. I'd like to turn the call over to Mr. David Arthur, Director and CEO for closing remarks. -------------------------------------------------------------------------------- David Arthur, Salarius Pharmaceuticals - Director and CEO [20] -------------------------------------------------------------------------------- Thank you. As we've discussed today, Salarius is on -- I believe Salarius is on strong footing operationally, developmentally and financially and we're working extremely hard to maintain our momentum. And I feel very good about the momentum we currently have. I'd like to thank our employees for their dedication and loyalty. And as always, I want to thank our stakeholders for their continued support as we work to bring hope to patients and their families battling these devastating cancers that we believe are well-suited for treatment with seclidemstat. I appreciate your time and attention and I appreciate all of you who are new to Salarius and called in today. And I'd like to extend my sincerest wishes and good health to all. Take care and be safe. Thank you. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.