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Edited Transcript of SNSS.OQ earnings conference call or presentation 16-Nov-20 9:30pm GMT

·10 min read

Q3 2020 Sunesis Pharmaceuticals Inc Earnings Call SOUTH SAN FRANCISCO Nov 16, 2020 (Thomson StreetEvents) -- Edited Transcript of Sunesis Pharmaceuticals Inc earnings conference call or presentation Monday, November 16, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Dayton Misfeldt Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director * Judith A. Fox Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development * Parvinder S. Hyare Sunesis Pharmaceuticals, Inc. - SVP of Commercial ================================================================================ Conference Call Participants ================================================================================ * Ernie Rodriguez * Justin Alexander Kim Oppenheimer & Co. Inc., Research Division - Associate * Nicholas M. Abbott Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Welcome to Sunesis Pharmaceuticals Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference may be recorded. (Operator Instructions) I would now like to turn the conference over to Par Hyare, Senior Vice President, Commercial. Please go ahead, sir. -------------------------------------------------------------------------------- Parvinder S. Hyare, Sunesis Pharmaceuticals, Inc. - SVP of Commercial [2] -------------------------------------------------------------------------------- Thank you. Welcome, everyone, and thank you for joining us today. With me on the call today are Dayton Misfeldt, Interim CEO; Judy Fox, Chief Scientific Officer, EVP of Research and Development. Dayton will start by reviewing recent corporate events and will provide a brief financial overview of the third quarter of 2020. We will then open the call for questions. Before we begin, let me remind you that during today's conference call, we will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's press release and the company's filing with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. Information discussed on today's call is accurate as of today, and we do not intend to update. With that, I will turn the call over to Dayton. -------------------------------------------------------------------------------- Dayton Misfeldt, Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director [3] -------------------------------------------------------------------------------- Thanks, Par. Good afternoon, and thank you for joining us. This quarter, our primary focus has been the review of our strategic alternatives for the company as we are committed to finding a value-generating path for the future. This is our #1 priority right now. We have engaged MTS Health Partners to assist in this process. As announced in July, these potential transactions could include asset in-licensing, partnering and mergers and acquisitions. We do not plan on providing specific updates on these efforts unless our Board of Directors has approved a transaction or otherwise determined that further disclosure is appropriate. We are also continuing to build value in our internal and partnered programs, including development of our first-in-class PDK1 inhibitor, SNS-510, in IND-enabling studies and investigating the best path forward for vecabrutinib. In October, we presented preclinical data on our first-in-class PDK1 inhibitor, SNS-510. We observed synergies in the preclinical study support a potential role of PDK1 inhibition to reverse resistance and/or improve activity of inhibitors of CDK4/6 in breast cancer, Bcl2 in lymphoma and the KRAS G12C mutated cancers. Combination studies and mouse models are needed to validate these in-vitro findings. We also shared further characterization of SNS-510 in vivo, demonstrating antitumor activity in a CDKN2A-deleted MEK-activated DLBCL mouse xenograft model. Additional promising data from investigator-sponsored research is beginning to emerge as well, which we anticipate being presented at a medical meeting in the first half of next year. We continue to profile the drug and work to address expected PI3K inhibitor toxicities through dose regimen optimization strategies. For our noncovalent BTK inhibitor, vecabrutinib, we are assessing the best path forward, which may include partnering the program. As a reminder, earlier in the year, we made the decision to not advance vecabrutinib into the planned Phase II portion of the Phase Ib/II trial in adults with BTK inhibitor-resistant relapsed/refractory CLL. Vecabrutinib exhibited an excellent safety profile and showed clinical activity, although this was insufficient to support advancing to Phase II in BTK inhibitor-resistant disease. Further investigation for vecabrutinib could include BTK inhibitor-naïve or ITK-driven indications as well as use in combination with other therapies. We also have 2 partner programs, our pan-Raf inhibitor, DAY101, formerly TAK-580, partnered with Day One Biopharmaceuticals; and vosaroxin partnered with Denovo Biopharma. We are excited to have both of these companies -- both of these programs advancing in the hands of these capable partners. Emerging clinical data from DAY101 will be presented at the Society of Neuro-Oncology Annual Meeting this month. And we look forward to this program making a positive impact for pediatric patients. We remain a lean and focused company operating efficiently to achieve our objectives. In July, we announced a reduction in workforce of approximately 30% of our headcount to rightsize the company. We also raised $12.6 million in net proceeds from an equity offering in the third quarter and repaid our outstanding debt. These steps are intended to provide us with sufficient capital through most of 2021, which brings me to the review of financial results. Cash used in operating activities was $15.8 million for the 9 months ended September 30, 2020, as compared to $18.4 million for the same period in 2019, resulting primarily from the net loss of $16.8 million, partially offset by adjustments for noncash items of $1.1 million. We ended the third quarter with $26 million in cash, cash equivalents and restricted cash as compared to $34.6 million as of December 31, 2019. We look forward to providing you with updates over the coming months. With that, let's open the call to your questions. Operator? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question is from Justin Kim with Oppenheimer & Co. -------------------------------------------------------------------------------- Justin Alexander Kim, Oppenheimer & Co. Inc., Research Division - Associate [2] -------------------------------------------------------------------------------- Just two from us. The first one is, could you elaborate a little bit for us on maybe the timing? And when you might receive greater clarity around strategic alternatives? And any sort of additional corporate steps forward? -------------------------------------------------------------------------------- Dayton Misfeldt, Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director [3] -------------------------------------------------------------------------------- Yes. Thanks, Justin. We're not providing any specific updates on the process, but we will do so if our Board approves a transaction or determines that other further disclosure is appropriate. Not providing any additional updates. -------------------------------------------------------------------------------- Justin Alexander Kim, Oppenheimer & Co. Inc., Research Division - Associate [4] -------------------------------------------------------------------------------- Okay. Understood. And then maybe just on the PDK1 front. Could you just detail for us what sort of ongoing IND-enabling studies are currently running? And what are sort of planned? When we might see any updates from those? And just broadly speaking, as you think about the early clinical development program, how do you think about identifying sort of the target indication or indications? I know you mentioned several in the opening remarks, but just wondering how -- what might make the determination as to which ones might be first investigated over others? -------------------------------------------------------------------------------- Dayton Misfeldt, Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director [5] -------------------------------------------------------------------------------- Yes. I'll have Judy answer this. Thanks, Justin. -------------------------------------------------------------------------------- Judith A. Fox, Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development [6] -------------------------------------------------------------------------------- Thanks, Justin. We're evaluating SNS-510 in nonclinical studies to better understand the therapeutic index through dose regimen optimization. And then as far as thinking about clinical indications, I think I've mentioned before that CDKN2A appears to be a marker sensitivity to SNS-510, and there are also different cancers that overexpress PDK1. And so our initial clinical program, what we're thinking of is initiating a study in patients that have the CDKN2A aberrations, and out of that proceed into expansion in different indications, most likely in combination, but with the potential to do a single agent. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- Our next question comes from Jim Birchenough with Wells Fargo. -------------------------------------------------------------------------------- Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [8] -------------------------------------------------------------------------------- Sorry, it's Nick on for Jim. In terms of the data you presented at the triple meeting, what was the reception for -- from potential collaborators, both academic and industrial? -------------------------------------------------------------------------------- Judith A. Fox, Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development [9] -------------------------------------------------------------------------------- I think it's hard to completely understand that from a virtual meeting, but I would say that investigators remain extremely interested in inhibitors of this pathway and in 510. -------------------------------------------------------------------------------- Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [10] -------------------------------------------------------------------------------- And you sort of alluded to combination therapy, what is the priority for combination therapy in your mind? -------------------------------------------------------------------------------- Judith A. Fox, Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development [11] -------------------------------------------------------------------------------- I think that it's a good place for us to get to as quickly as possible. For example, as you know in breast cancers, typically, agents are given in combination with anti-estrogens. And then we're also -- we'll be leveraging the data, different data that will be coming out of our ISRs. And as I mentioned, we hope to have presentation of some of these data in the first half of next year. -------------------------------------------------------------------------------- Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [12] -------------------------------------------------------------------------------- And Dave may have mentioned this in his introduction, is the IND filing still planned for the first half of next year? -------------------------------------------------------------------------------- Judith A. Fox, Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development [13] -------------------------------------------------------------------------------- So I think as we complete our studies, we'll make a data-driven decision about the timing of the IND. -------------------------------------------------------------------------------- Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [14] -------------------------------------------------------------------------------- Okay. And then just last one for me, obviously, some of the data you presented at the triple meeting used approved drugs, other data did not. So have you entered into any discussions with potential collaborator for, say, KRAS G12C inhibitor? -------------------------------------------------------------------------------- Judith A. Fox, Sunesis Pharmaceuticals, Inc. - Chief Scientific Officer and Executive VP of Research & Development [15] -------------------------------------------------------------------------------- Not at this time. -------------------------------------------------------------------------------- Operator [16] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from Ernie Rodriguez with Cowen. -------------------------------------------------------------------------------- Ernie Rodriguez, [17] -------------------------------------------------------------------------------- Just regarding your cash runway, you mentioned up to most of 2021, what does that guidance include in terms of the clinical development and plans for PDK1 inhibitor? -------------------------------------------------------------------------------- Dayton Misfeldt, Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director [18] -------------------------------------------------------------------------------- Yes. No, no. Thanks for the question. As Judy just mentioned, we're continuing to do work non-clinically on the PDK1 program. This gives us the runway to get -- to further characterize that compound. And as we get more data, we can provide further guidance on the upcoming milestones. But as you highlight, we do, with $26 million in cash as of the end of the third quarter, do have good runway moving forward. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- And sir, I'm not showing any further questions in the queue. You may proceed with final remarks. -------------------------------------------------------------------------------- Dayton Misfeldt, Sunesis Pharmaceuticals, Inc. - Principal Financial Officer, Secretary, Interim CEO & Director [20] -------------------------------------------------------------------------------- Well, thank you, everyone, for participating on our call today. Please stay healthy and well, and we look forward to providing future updates. Good afternoon. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you, ladies and gentlemen, for participating in today's program. This concludes the conference. You may now disconnect.