Q3 2019 Earnings Call

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Now I'd like to hand, the conference over to your speaker today, Jennifer Mcnealey VP of Investor Relations. Thank you. Please go ahead ma'am.

Thank you Chris Good afternoon, everyone welcome to our third quarter 2019 conference call.

Joining me today, our Susan Molineaux, or founder President and CEO , Keith or for Chief Medical Officer, and stuff anyone senior Vice President Finance.

Issued a press release and it can be accessed our website <unk> dot com.

Before we begin I'd like to remind you that today's discussion will include statements about future expectations plans and prospects that constitute forward looking statements.

For purposes of a safe Harbor provisions on at a private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including does and the risk factors discussed in the risk factor section of our quarterly report on 10-Q filed with the FCC.

In addition, any forward looking statements represent our views only as of today it should not be relied upon as representing our views of any subsequent date Oh, we may elect to update you heard looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views changed. Please note that this call is being recorded and with that I'll turn the call ever to Susan.

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

Well it there we are building an integrated biotechnology company that develop novel small molecule onco metabolism drunk drugs that are targeting tumor in immune cell metabolism pathways for the treatment of cancer and other diseases.

By building a pipeline of novel therapeutic product candidates, we are creating multiple opportunities to positively impact clinical outcomes for patients and drive development programs towards commercialization.

We are the first company to take a selective glutaminase inhibitor into the clinic and the first to demonstrate clinical activity in cancer patients.

Based on the compelling results for the and try to study in renal cell carcinoma, which we presented at the European Society for medical oncology, where as my meeting in September . We believe we have demonstrated proof of concept for the treatment of renal cell carcinoma.

We have now fully enrolled to tell Glenn if that can cut at trial study with registration potential in renal cell carcinoma patients. This moves us a step closer to becoming a commercial biotechnology company.

We are pleased with the enrollment of can Tata ahead of schedule and we are grateful to the investigators in patients who helped us exceed our enrollment goal.

We're on track to report topline efficacy and safety data from the trial in the second half of 2020 .

In parallel we are making the necessary investments in key areas such as regulatory quality in manufacturing to ensure access for patients and a successful product launch. It tells on the status of crude.

Our archon Ace inhibitor I NCB easier 0115 days or on Friday is the first archon ace inhibitor to enter the clinic Archenemies isn't immunosuppressive inside expressed by immune cells in the tumor micro environment at the ASCO meeting the first efficacy data for this compound were presented in an oral session.

In this study we were evaluating 11 58, as a monotherapy and in combination with Pembrolizumab a PD one inhibitor.

We're pleased that we observed responses in microsatellite stable for M.S.S. colorectal carcinoma disease that has been shown historically to be virtually unresponsive to PD, one and PDL one inhibitor.

We're pleased with the pockets of this program as we seek to develop a first in class product for patients with multiple types of solid tumors.

[laughter] beyond Calgon, if that an 11 58, we have a broad pipeline and a productive R&D team. We remain focused on producing novel drug candidates with the potential to be highly differentiated new therapies in the areas of unmet need.

This quarter, we announced a new program targeting I O four I, one oh for I. One is an enzyme with fan, allowing oxidise activity, primarily expressed by tumor cells and antigen presenting cells and produces hydrogen peroxide, which has an inhibitor of T cell function.

Oh for I want expression has been correlated with poor outcomes in several tumor type has the potential role in immune invasion and may decrease the ability of checkpoint therapy to stimulate and anti tumor response.

I never thought I O four I want expression is elevated in multiple tumor types, but particularly high expression in ovarian and b cell tumors.

We have developed an investigational first in class potent and orally bioavailable <unk> for a one inhibitor.

Preclinical data were presented at the society for immunotherapy of cancer or city last weekend and demonstrated that our novel small molecule inhibitor of I before I, one had single agent to antitumor activity in Syngeneic mouse tumor model and I've missed the activity of checkpoint inhibitors were excited for this new target and look forward to updating you.

On the progress of this program.

Also with the 50 meeting we presented preclinical data on C. B seven away, our oral small molecule cdseventy three inhibitor.

Cdseventy three isn't as I'm, it synthesizing see immuno suppressive agent adenosine and its overexpressed in multiple tumor type.

We remain interested in the adenosine pathway and our timing for entering clinical development will depend in part on partnership discussions that are ongoing.

With that I will pass the call over to Keith for an update on clinical program [noise].

Thank you Susan let's begin with a more detailed update on told us that are glutaminase inhibitor and our most advanced product candidate.

We are currently focused on forging a clinical and potentially commercial path for told when a stat in renal cell carcinoma.

In the quarter, we announced completion of enrollment of cantata a global randomized double blind trial of told when a stat in combination with Cabozantinib in second and third line RCC patients.

Can Tata enrolled 445 patients ahead of schedule demonstrating the significant unmet need for advanced RCC patients in the second and third line setting.

Can Tata is designed to evaluate the efficacy and safety of told when a stat in combination with cabozantinib versus placebo plus cat Cabozantinib and clear so RCC patients who have previously received one or two prior lines of therapy, including at least one prior anti angiogenic agent or the Ipilimumab nivolumab.

Combination.

[noise] patients are being randomized in a one to one ratio to either telecom monistat, plus cabozantinib or placebo plus cut presenting them.

Patients were stratified by I.M.D.C. risk category.

Category and prior treatment with anti PD, one PDL one therapy.

The primary endpoint is progression free survival by independent review overall survival will be assessed as a key secondary endpoint.

Trial has the potential to serve as a registration trial and we remain on track to report topline results of can Tata and the second line of second half of 2020.

The and try to data were presented at ESMO in Barcelona in September .

Trotta is a small randomized double blind trial, which was designed as a proof of concept study to evaluate the efficacy and safety Upto monistat in combination with Everolimus.

To summarize the results presented the trial enrolled 69 advanced clear cell RCC patients who had been previously treated with at least two prior lines of systemic therapy and cleaning at least one that Jeff receptor targeted tyrosine kinase inhibitor.

Patients were randomized to either told Monistat, plus everolimus or placebo plus everolimus.

The primary endpoint is investigator assessed progression free survival overall survival as a secondary endpoint.

The statistical design reflected the studies the small study size and was appropriate for a proof of concept phase of phase two study.

The patients enrolled were heavily pretreated poor prognosis population with a meeting a three prior lines of therapy for advanced metastatic disease, including 70% with two or more prior to Capesize and 88% having received prior PD, one or PDL one therapy.

When added to Everolimus told Monistat doubled the median PFS to 3.8 months as compared to 1.9 months forever, if I Miss alone and reduce the risk of disease progression or death by 36% for hazard ratio of 0.64 with a P value of 0.0791 sided.

The secondary endpoint of overall survival is not yet mature.

We believe the and try to trial demonstrates proof of concept for talk a lot of stat in the treatment of RCC.

Late last year, we announced two new clinical trial collaborations to evaluate pfizer's CDK for six inhibitor polycyclic also known as I brands and the PARP inhibitor Teluss Opera also known as tells that each in combination with Calitheras Glutaminase inhibitor held monistat.

Each of these combination protocols are now open enrolling patients into the dose escalation cohorts.

We also believe told us that has the potential to be developed in patients with nerf to keep one mutations.

Multiple in vivo preclinical models have demonstrated that activation of this pathway through a loss of function keep one mutation or a gain of function nerf to mutation accelerates Timur formation and spread.

In addition to making tumor models more aggressive the activation of the nerve to keep one pathway and these models also makes them sensitive to the inhibition of glutaminase activity by told Monistat.

And then she I sponsored study testing. This hypothesis is currently ongoing in solid tumors.

Recently presented clinical data demonstrate that activation of this pathway either through the loss of keep on function or activation of nerve to.

Results in very poor outcomes in non small cell lung cancer patients receiving frontline standard of care chemotherapy or chemo immunotherapy.

Based on these recently presented data and the unmet need in this population, we're designing a randomized phase two trial in lung cancer patients, which we expect to begin in the first half of 2020.

Next the opportunities program.

I NCB zero Zero 11, 58 also known as 11 58 is an investigational first in class.

Oncology metabolic chip checkpoint inhibitor targeting argenis and immunosuppressive enzyme secreted by myeloid derived suppressor cells, where MBS sees to block T cell activation and tumors.

I live in 58 is being developed within sight.

In a co development co commercialization collaboration.

The 11 50 data were presented at ESMO in September .

In this study 11, 58 is being evaluated as monotherapy and combination with pembrolizumab across eight cohorts of patients with different types of metastatic or locally advanced cancers, not amenable to local therapy.

A dose escalation with monotherapy to find the recommended phase two dose of 11 58 was followed by expansion in three cohorts non small cell lung cancer colorectal cancer and a basket of solid tumors.

Following a dose escalation of 11 58 in combination with Pembro eight cohorts were expanded.

For enrolled patient populations that were PD, one naive and for enrolled patient population separate PD, one refractory PD one refractory patients had to be on a checkpoint inhibitor based therapy and failing to derive benefit at the time of study entry, which means that they had active disease progression or prolonged stable disease, but that a response.

The colorectal monotherapy and MSS colorectal combo cohorts advanced to Simon stage, two and data on both cohorts were presented at ESMO.

The PD, one PD L. One naive head and neck cohort.

He has also advanced the stage two Anzac is actively enrolling.

As the colorectal cohorts, where the most mature at time of data cut up there with the focus of the presentation.

First the combination colorectal data.

Among 43 responsive valuable MSS colorectal patients who had received a median of three prior therapies.

Three patients achieved a confirmed partial response the response rate of 7% compares favorably to the historical overall response rate of zero to 1% in second and third line MSS CRC patients treated with checkpoint inhibitor therapies.

Two of the three responders were ongoing at the time of data cut off with the duration of response of 2.4, plus and seven plus months respectively.

The third respond or had a duration of response of 6.7 months.

The six month PFS rate for the cohort was 20%, which compares favorably to six month PFS rates observed in patients treated with single agent checkpoint inhibitors.

We were also pleased to see increases in total intra tumoral CD a positive cells. Following treatment with 11, 58, plus pembrolizumab and MSS colorectal cancer patients with the increases occurring most notably among those patients that derive clinical benefit.

Now the monotherapy results 11, 58 inhibited plasma originates activity at all doses and induced dose related increases in plasma Argentine including a mean threefold increase at the recommended phase two dose of 100 milligrams be I'd.

Among 33 response, a valuable MSS colorectal cancer patients.

One patient treated with Elevenfifty alone achieved a confirmed partial response lasting seven months and one patient achieved stable disease lasting seven months both of these patients progress on their immediately preceding lineup therapy and less than six months.

The overall disease control rate for the monotherapy MSS CRC cohort was 27%.

A second ongoing clinical trial is evaluating 11 58 in combination with three different chemotherapy regimens FOLFOX, Jim said, it means as patton or paclitaxel in patients with ovarian endometrial colorectal gastroesophageal and believe we attract cancers.

An additional trial in multiple myeloma patients.

Treating patients with 11 58, plus there are two map or dare to map alone is also ongoing.

We're pleased with the progress of this program and we continue and we look forward to additional data updates from the 11 58 program in the future.

We're also developing an origination inhibitor outside of oncology.

Maybe to 80 is a novel Arginase inhibitor in the development in development for the treatment of cystic fibrosis.

Under our collaboration agreement with insight, we retain worldwide rights to develop argenis inhibitors in specific non oncology rare disease indications, including cystic fibrosis.

Our generics has been proposed to be critical in the pathophysiology of cystic fibrosis and several other non oncology diseases.

CF patients have neutrophil infiltrates and their lungs, and these neutrophil secrete high levels of Argenis, Hi, Argenis activity depletes, Argentine which in turn depletes nitric oxide.

Nitric oxide ore Eno is known to have potent anti microbial activity and has been shown to improve lung function when administered to CF patients.

We hypothesize that inhibition of Argenis with CB to 80 can restore normal arginine and ano levels and improve lung function in CF patients a concept that is supported by previous proof of concept.

Clinical trials.

Earlier in the year, we initiated a phase one clinical trial. This first in human phase one trial evaluating safety Tolerability and pharmacokinetic profile of oral CB to 80 in healthy volunteers is now successfully complete.

Phase one be clinical study in CF patients, which is expected to start enrollment in the first half of 2020, well test multiple doses of CB to 80 compared to placebo in approximately 30 adult CF patients to determine a safe dose range for CBT Radian CF patients.

Patients with any CSAPR mutational status will be eligible for the study.

Patients will receive suit CB to 80 or placebo for 14 days lung function as well as sputum microbes will be evaluated.

Dose finding expansion of this study is planned in which additional cohorts of patients.

We will receive different doses of CB to 80 or placebo for 28 days in order to select to the optimal dose of CBT waiting.

For the entire study patients will continue their existing therapies for CF, including CF tier CF GR modulators.

With that I'll pass it over to Stephanie for an update on our financials.

Thank you Keith and good afternoon, everyone detailed financial results for the third quarter 2019 were included in today's press release I will be fillings, we view our results.

Careless era ended the quarter well capitalized following our secondary offering where we raised gross proceeds of 50 million. We believe our cash position enables us to drive a clinical program to meaningful value inflection point.

Cash and investments were 133.6 million at September Thirtyth 2090.

Research and development expenses were 17.2 million for the third quarter 2019, compared to 16.4 million for the same period in 2018. The increased from 20 team to 29 team was primarily due to the telecom program, including for the can Tata trial, which completed in a moment in the third quarter.

General and administrative expenses were 3.9 million for the third quarter 2019, compared to 3.1 million. Thanks, Gary in 2018.

Increase in 0.8 million, primarily related to higher professional services and better car.

Net loss for the third quarter, 2019 was 20.3 million or 13 cents per share.

I will now we turn the call back over to Steven.

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

Thank you.

And as a reminder to ask a question you will need to press star one on your telephone.

To withdraw your question. Please press the pound key.

Please stand by what we compared to Q1 a roster.

And our first question comes from Milan, Jonathan Chang with SVB Leerink. Your line is now open.

Hi, guys. Thanks for taking my questions.

First question in the prepared remarks, I thought I heard something on the business development front I was this in reference to CB 708 did I hear that correctly and can you elaborate on this.

Oh, we just mentioned that.

Clinical trial timeline for TV seven away will be dependent in part on on ongoing conversations with partners.

Got it any color you can add too.

I guess, what a potential partnership.

Right it looks like.

You guys are a interested in getting from a potential partner.

I think you can rest for there and our partnership with insight and we were very happy to share clinical development costs, nor does it take our archenemies compound into cancer patients and we feel that a program targeting cdseventy three he has some of the similar aspects and.

Benefit from a partner at this point.

Got it a second question on the and try to study.

When could we see a survival update.

Yes, so the.

As we've talked about before those data are not yet mature and we'll continue to to follow those data and provide an update when its available and just historically, what we've done as to kind of given announcement on that when when it's been accepted into us into a.

Meeting and we.

We would expect that to happen.

Sometime in 2020.

Got it thanks for taking my questions.

Yes.

Thank you and our next question comes from the line of Mohit Bansal with Citi. Your line is now open.

Hi, this change a lot from ahead.

Well in for season based on your comments that enrollment for Contardo was ahead of schedule can you maybe share how the pace or cadence events have trended, thus far or maybe what are the puts and takes for data to the entailed in threeq versus Fourq you next year.

So this is an event driven trial. So after the last patient is in which happened obviously in third quarter I'm, We're just counting events and so I'm missing a certain number of events to then go ahead and analyze the data. So we can't give guidance more than the second half.

This next year, because its event driven and we don't know what that pace of events will be.

So this is a trial designs that covers that NAV as that control arm and while the populations have changed since then because of new therapies I can just comment that the historical PFS for Cabozantinib alone in second Pete Second line patients were primarily second line patients was set.

1.4 months and and that's an anchoring number but we cannot predict what the comment that NIM PFS will be in our current population.

Accurately because again therapies have changed in the population has moved.

Thanks, you that Ive, one more for Keith maybe.

Keith I was looking to the slide deck that was other came on October and it looks like you guys compared cdeight levels in responders for 1158, but have you guys also taking a look at T cell exhaustion markers like increase Tim three or lag three levels couple of studies of linked higher Tim three with non response.

Yeah, that's a great question so.

To date, our our biomarker program is really focused on.

On CD eight positivity, we don't have a more extensive group, although actually theres.

Interest in looking at.

More exhaustively at a number of markers maybe using multi color.

Immunofluorescence. So those are things that are in in a in the plan to do but we havent done today.

Thanks Thats it for me.

Great.

Thank you and our next question comes on line of Matt fits with William Blair. Your line is now.

Good afternoon. Thanks, taking my question so instead on the.

If you keep one mutation trial, you mentioned a randomized phase two starting next year, but can you give details on the children's that.

Second line is that versus chemo, what's the.

Any additional.

Terms on you guys have yet.

Yes, so the the design is.

We'll be announced one where when we've actually.

We announced the opening of the sizable we can give more detail at this point I think it's it's worth noting though that just looking at the data that had been presented in terms of the prognosis prognosis for these patients receiving product standard of care therapy as early as front line. They do very very poorly so one could well could imagine a study as early as.

Front line.

Given given that those poor outcomes, but thats something we can provide more detail on when the study is.

You know is opened.

Let's keep the you guys CNN data from that ensure that study.

No that data is that studies just getting started so we don't have any data at this point.

Keith also on the 280 do you have any kind of.

Data move preclinical or so not a oral therapies, some systemic small molecules having enough concentration like out the long about the OEM. How do you look at the when you're trying to support those which.

The efficient.

Right, yes, so from our preclinical data I mean, we the drug is.

Highly soluble and distributes well within within the animals. So we have every reason to expect that we won't be able to achieve.

Sufficient exposure I think it's worth noting.

That in patients CF patients, who were treated with high levels of oral or IB Argentine there were.

Positive effects on lung function as well as on I know production.

In that setting.

And so.

In that case at least argentines able to get into the right place and we would expect.

CB to 80 won't be as well.

Thanks Keith.

Thanks, Matt.

Thank you when our next question comes from the line of Jim Merchant off with Wells Fargo Securities. Your line is now open.

Good afternoon, its nikin for Jim the softening.

Just just a quick one on.

Ken.

It is there any opportunity for an interim review now that the trial is fully enrolled.

Yes, no hynek Weve. This study was designed without an interim given the speed of enrollment in the timeline for the for the read out there was really no opportunity for an interim to impact for example, further enrollment so.

So the first read of the data will be when top topline results in the second half of 2020.

Okay. Thank you and then I notice ash, there's going to be data from India. The MD Anderson group, who tend to Glenn is that in India.

No just looking at the abstract clearly the gate or critic what posted.

How do you think of these data.

To the data support continued development in Mds.

Yeah, you, we think the data very interesting and.

Those are data that we.

Continue to discuss with them through the collaboration.

So no plans at this point.

Two we have nothing to announce at this time, but we do agree that the data are very very interesting.

Okay.

And then I had a question on long this early this summer to trial.

Combining kilograms and then some notes have been PGS all.

You take cancers do you have any.

Insight into potential timing on data from that trial and in can you just to educate us and multi overlap between each ethanol mutations and keep one mutations.

So in terms of the timing.

Fortunately.

Kept a great mechanism.

In order to generate data through in collaboration with Sci, but the timing is something thats out of our control so.

We expect from what we've heard that it will enroll at a reasonable rate, but it's something that it's tough for us to provide any real guidance around.

In terms of the mutations they can coexist or they can.

The coincident, but they're not I would say that the nerve keep mutations tend to be somewhat less frequent any jeff our mutant patients. So I wouldn't I wouldn't expect that that would be a great source of data.

To kind of provide insight into the nerve keep hypothesis, but I mean, it's there there has been a recent publication that.

Did you have far mutant.

Patients do.

Poorly their prognosis is core if they also have activation of that pathway. So it does happen and it does continue to look like a poor prognosis factor, but the frequency is somewhat less than you would expect by chance.

Okay. Thank you and then moving to Olympic It if I may I believe the ESMO meeting good indicated that the squamous cell head and neck.

So.

Keith the target to in the Simon two stage.

When do you think you'll be able to present data from that has and that kind of cool.

Yes, so that that cohort has moved to stage choose who had passed the first bar, which was to go from stage one stage too and that continues to enroll currently so.

I think the timing for presenting this data is hard to say, we'll want to let the data mature to a reasonable extent, particularly with an Io therapy will want to see the durability those data.

So.

But but we expect to be able to present those data at some point in collaboration with insight.

Okay.

And then on on the much settling stable sales season ticket indicated really.

Given the level of activity, probably need a biomarker to move forward distant been any progress on thoughts about what that plant mark I might be.

Right. So yet given the you know what we've seen so far we think it's encouraging.

Evidence of activity.

But I think for a true development path, we would need to.

Really be able to a better identified the subset of patients that are that are driving value, we're likely to derive value.

Those those efforts or remain ongoing so nothing to report at this point in terms of.

The development of a new biomarker, but that certainly in active.

You know active project.

Okay, great. Thank you very much.

Yes. Thank you.

Thank you and our last question comes from Atlanta, Sean came with H.C. Wainwright. Your line is now open.

Hi, Thanks for taking my question. This is Sean for arcade H.C. Wainwright.

Just a quick quick one regarding R&D expense I noticed that deal was about 18% decline in R&D expense for this quarter compared to second quarter.

19 would you say DC is more of on like temporary decline considering you guys aren't planning like clinical studies next year.

Hi time, thanks for the question I can't you know, we haven't really commented on trends from quarter to quarter I can tie that in March we give cash guidance of 75 to 85 million and that contemplated the can totter momentum 40, 445 patients. So what you're seeing is that.

I'm.

Not not really something specific that it can comment on but the cash guidance.

Something that we.

Okay.

I remind you.

Okay. That's good enough that's all for now thank you.

Thank you and this concludes today's question and answer session I would now like to turn the call back to Jennifer Mcnealey for any closing remarks.

Thank you, Chris and thank you all for joining us today and have a great evening and feel free to reach out tossed with follow up questions. If you have anything that we didnt cover today. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.