Q4 2019 Earnings Call

Ladies and gentlemen, thank you for standing by welcome to the calendar.

This fourth quarter 2019 earnings conference call.

Final participants' lines are in Alere only mode [laughter]. After the speakers presentation, there will be a question and answer session.

To ask a question during the session you'll need to press star one on your telephone please be advised to today's conference maybe recorded.

Require any further assist please press star zero.

Now I'd like to hand, the conference over your speaker today Ms. Jennifer Mcnealey. Thank you. Please go ahead.

Thank you Daniel Good afternoon, everyone welcome to our fourth quarter in Euro 2019 conference call.

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

We've issued a press release and it can be accessed via our website <unk> dot com.

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

They harbor provisions under the private Security Litigation Reform Act that 1995.

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

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

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

At Cowen Era, we are building an integrated biotechnology company at develop novel small molecule uncommon capitalism drugs drugs that are targeting tumor and immune cell knit tops metabolism pathways for the treatment of cancer and other diseases.

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

We are the first company to take a selective glutaminase inhibitor into the clinic.

I can demonstrate clinical activity in cancer patients.

Based on the compelling results for the Encata trial in advanced renal cell carcinoma, which presented at the European Society for medical oncology or ESMO meeting in September 2019, we believe we've demonstrated crude concept for the activity of tell Glenda staff in renal cell carcinoma.

We have now fully enrolled to tell what Glenn if that can Tata trial study with registration potential in renal cell carcinoma patients.

[laughter] step closer to becoming a commercial biotechnology company.

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

We are of course closely monitoring the developments related to run the virus outbreak and its potential impact on calithera and specifically the can Tata trial.

You know it is a fluid situation, making it difficult to determine the exact impacts on the conduct of arc couldn't Tata clinical trial.

But that said, we do not anticipate any major challenges we're treatment interruption for our patients.

Based on what we know today, we remain confident we can meet our time for top line data in late third quarter for the fourth quarter of this year.

This quarter, we also made progress towards initiating a randomized trial in first line non small cell lung cancer patients harboring genetic mutation in there or keep.

Recent clinical data indicate that activation of the nerf keep pathway results very poor clinical outcomes.

Demonstrating that there remains a significant unmet need in this population.

We are on track to initiate this trial in the first half of the year, what's the potential for interim data in 2021.

Our originated inhibitor I, NCB 0011, Friday or one months Ivy its the first arginase inhibitor to enter the clinic.

Our tenacious in immuno suppressive enzyme expressed by immune cells in the tumor micro environment.

Yes, no meeting in September 2019 for efficacy data for just compound were presented demonstrating activity and providing proof of concept for arch nascent ambition for the treatment of cancer.

We're pleased with the progress of this program SBC to develop a first in class product for patients with multiple types of solid tumor.

Last year, we completed a phase one trial in healthy volunteers for our wholly owned arch nascent hepatitis C. B to 80, because the treatment of patients with cystic fibrosis.

Phase one be trial in people with cystic fibrosis is on track to start enrollment in the first half with a year.

Beyond our three clinical stage programs, 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 areas of unmet need.

Our most advanced preclinical stage program are in our in immuno oncology, we have promising preclinical data with CB Stefano Aerie, our oral small molecule inhibitor cdseventy three but at this time, we've chosen to de prioritize development of this program and we do not have plans to advance he'd be Stefano.

Right into clinical trials this year.

Meanwhile, we are continuing preclinical studies with our small molecule inhibitor of Iowa for I won a novel target involved in tumor immunosuppression.

And with that I'll pass the call over to keep for additional details on our clinical programs.

Thank you Susan.

Let's begin with a more detailed Athena told us that are who termination inhibitor and our most advanced front I can.

We're currently focused on forging clinical and potentially commercial path for told Monistat in renal cell carcinoma.

In the quarter, we announced completion of enrollment and Tata a global randomized double blind trial Telotristat in combination with kind of is happening in second and third line RCC patients and how to enroll 444 patients had a schedule demonstrating the significant unmet need for advanced RCC patients.

And the second and third line setting.

Hi, designed to evaluate the efficacy and safety and soundness that in combination with cabin happening versus placebo plus cap is happening in clear cell RCC patients.

Obviously received one or two prior lines of therapy, including at least one prior anti angiogenic agent or.

Mmm Nivolumab combination.

Patients were randomized in a one to one ratio to either told us that it's Kevin that and then more placebos Kevin.

Patients for stratified by and D.C. risk category and prior treatment with anti PD, one PDL one therapies.

The primary endpoint is progression free survival by independent review overall survival. These assets a key secondary endpoint.

The trial was designed with registration 10, new remain on track to report topline results from China in late third quarter fourth quarter 2020.

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

Multiple nvvault preclinical models have demonstrated that activation of this pathway through a loss of function keep one mutation weren't getting a function nurturing mutation accelerates tumor formation and sprint.

In addition to make sure models aggressive activation of the nurse you keep one pathway.

Also makes insensitive to the inhibition of good Chamonix activity I told one stat.

And as he I sponsored trial evaluating single agent told when is that in patients with solid tumors that have nerf Q4 key point mutations is currently ongoing.

Recently presented clinical data have demonstrated that activation of the keep one or two pathway.

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 at this population we've designed a randomized trial in lung cancer patients, which we expect to begin in the first half of 2020.

The study will evaluate telephonics sat in combination with standard of care therapy.

Email plus pembro.

In approximately 121st line metastatic non squamous lung cancer patients with tumors that harbor mutations in either keep one ordinary too.

The study will include an initial safety running period.

And co primary endpoints or safety and investigators that progression free survival.

An interim analysis plan and 2021.

Next the Archdiocese program I actually be zero zero them 58 also known as <unk> is an investigational first in class immuno oncology metabolic checkpoint inhibitor targeting Arsenal and immunosuppressive enzyme it created by myeloid derived suppressor cells or Mds fees to block.

T cell activation in tumors.

I'm 58 is being developed with insight in a co development co commercialization collaborate collaboration.

And then it is being evaluated as monotherapy as wells in combination with pembrolizumab across eight cohorts of patients with different types of metastatic or locally advanced cancer is not a minimal tomotherapy.

The first data from this study were presented at ESMO.

In September 2019.

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

Following a dose escalation Olin 58 in combination with Pembro eight cohorts for expansion.

Were enrolled patient populations that were PD, one Nike and for enroll patient populations that were PD one refractory.

Can you Wanna refractory patients had to be honest checkpoint inhibitor based therapy and failing to derive benefit at the time of study entry, which means that they had active disease progression for prolonged stable disease without a response.

The colorectal monotherapy and MSS colorectal combo course 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 a combo cohort also has also advanced stage two and is actively enrolling.

As the colorectal cohorts were the most mature at the time of data cut off.

It was a focus and the presentation.

Responses were observed in both the combination and monotherapy cohorts.

We were also pleased to see increases in total intra tumoral CDH positive cells following treatment with Elevenfifty, Ambarellas, Matt and MSS colorectal cancer patients.

The increase is occurring most notably among those patients that derive clinical benefit.

We believe this provides proof of concept for origination admissions in the treatment of cancer.

A second ongoing clinical trial is evaluating 58 in combination with three different chemotherapy regimen or Fox.

Jim cited being says flatten and paclitaxel in patients with ovarian endometrial colorectal gastroesophageal and biliary tract cancers and additional trial in multiple myeloma patients.

Treating patients with 11, 58 bus dare to man or Dare to map alone is also on going.

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

We're also developing in arsonists inhibitor outside of oncology.

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

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

Yes, it's impossible to play a role at the pathophysiology of cystic fibrosis as well as several other non oncology diseases.

CF patients have neutrophil infiltration their lungs, and these neutrophils decree high levels of Argenis IR kinase activity to fleet surging, which in turn defeats nitric oxide.

Nitric oxide ore and as potent anti microbial activity and examiners and now has been shown to improve lung function when miss administered to CF patients.

Besides that inhibition of ours Naismith CV to 80 can restore normal margin and old level and improved lung function in CF patients concept that is supported by previous proof of concept and trials.

The phase one clinical trial to evaluate the safety Tolerability and I think profile of oral CV to energy in healthy volunteers has been successfully completed.

A phase one clinical trial in CF patients, which is expected to start enrollment in the first half of 2020, well test multiple doses of CV to 80 compared to placebo and approximately 30 adult CF patients to determine a safe dose range for CP to 80.

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

Patients will receive CV to 84 placebo for 14 days lung function and overproduction and speed of microbes will be evaluated.

The dose finding expansion of the studies planned in which this cohorts of patients will receive different doses of CV to 80 or placebo for 28 days in order to select the optimal dose as you'd be too.

For the entire study patients will continue their existing CF.

Existing therapies for CF.

Including CFTR modulators.

We plan to present data from this trial in 2021.

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

Thank you Keith and good afternoon, everyone feel financial results for the fourth quarter nearing 29 team.

Given today's press release I will briefly review our results on this call.

Calendar ended the year, well capitalized or cash in investments were 157.4 million at December 31, 29 team and we expect to your life 75 to 85 million in 2020, we believe our cash position enables us to drive a clinical program to meaningful value inflection point.

Research and development expenses were 76.3 million in 20, <unk> compared to six Hometeam, though I mean team. The increased from 20 to 29 team was primarily in the telegraph that program, including for can Tata trial will be complete an aluminum 29, Dean I didn't really means that the program research and development.

This is for the fourth quarter 29 team were 17.9 million compared to 17 million from seems here.

General and administrative expenses were 16.6 million 2019, compared to 13.3 million in 2018 increased from 20 to 29 team was primarily related to higher professional services costs, mainly mainly for legal and accounting services and higher personnel related costs primarily from high.

Your headcount.

General and administrative expenses.

<unk> was 4.6 million compared to 3.2 million.

Last year.

Interest and other income that was Threenine 29 team compared with 2.6 million in 20 <unk> interest in other income that with a fourth quarter 2019, and 20 <unk> was 0.7 million.

Net loss for the quarter and it does.

For the quarter in at December 31, 2019 with 21.79.

With that I will now we turn the call back over this season.

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

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

Oh your question press the pound key please standby, while we compile the Q and a roster.

Our first question comes from well hit awful with Citi. Your line is now open.

Hi, guys. This is actually James on from of it.

Got a question about the lung trial and the liquid biopsy to identify the nerf to keep one patients.

Our the biased results limits you just binary outlets I guess as it is it just positive negative for nerve to keep when activation or is there some sort of.

Quantitative output that can help track changes in the I guess levels of nerve to keep one or the amount of circulating tumor cells.

Yes, Hi, James Great question. So no. It's not just a binary outcome or result on these on the assay. So well we'll get the results first of all for a number of other.

<unk> mutation status across it all you know all the genes in the panel, but also it'll be a quantitative results and we will be following or or or taking samples. During the study that would allow us to do just what you're talking about following circulating free drink DNA level somewhat from potential risk.

Ron.

Awesome and then.

That's just like a quick second question.

Maybe a bit early but you guys talked about being once that being one step closer to be a commercial company, but can you talk about some of the biggest early planning or strategies around telesat for RCC.

For commercialization Weve been starting to put a whole plan in place for a potential launch I'm asking do we have fast track status and so if the can touted data a at top line were positive we would move towards.

Filing and submitting in theory, and with again potential for priority review and on those timelines we've been readying the company for a whole set of pre commercial activities and we have started some of them prior to seemed a topline results but of course a lot more activity.

So occur after we see topline results as they are positive.

Awesome. Thanks, guys.

Thank you.

Our next question comes from Jonathan Chang with STB Leerink. Your line is now open.

Hi, Thanks for taking my questions.

First question you find your guidance around their contact or read out slightly.

Two late Threeq to Fourq you from second half previously any color on the more granular timeline it sounded like it's not corner bars.

No. That's it's really just the fact that as the data.

Mature as we as we analyze the data we can get we're able to tighten up our guidance essentially so so it's really just based on you know what we've seen in terms of event rates and allows us to protect a little more accurately.

Got it right second question on their lung cancer study can you talk about your expectations for enrollment and what investors should expect regarding the nature of the interim data 2021.

In terms of enrollment.

So we have.

Taken the our efforts to open the study into and to Operationalize. The study include I'm. A few specific things that are meant to optimize enrollment into accelerate enrollment given that we're looking at a subset of patients in the frontline setting which is a significant proportion.

In the order of 20% of patients and non squamous patients. So it's a significant population, but obviously, we still need to screen and then only enroll those patients that screen positively so.

For those purposes, we put in a into place liquid biopsy that we will make available to all sites to screen patients in order to make the study attractive and also just to facilitate finding these patients on a timely basis prior to.

Starting their frontline therapy. So that's one element is that weve, making this.

The liquid biopsy available secondly, we are going to open.

A significant number of sites in order to be able to identify these these patients. So we are aggressively identifying and opening sites for the purposes of keeping enrollment.

At a rapid pace so.

There is an initial safety run in as we mentioned so enrollment will well go until we've demonstrated that the regimen, a safe, which we expect well be and then it will be open to you know to full enrollment.

You know the expectation is that that will allow us to.

Get to our interim analysis, which is.

It's going to be on.

Approximately half the patients a little bit under half the patients I'm <unk>. When we have results from those patients will be able to do an interim analysis.

And we expect that would be in in 2021.

Got it and then just lastly on your cash position or any color on how we should be thinking about right away and burn at 2020.

I'm sure Jonathan we don't really guide to cash runway, but our cash guidance. We see this year 75 to 85 million and say we ended the year at 157.

It's time to pick here when you yeah.

Thank you our next question comes from.

Thomas Romack Huh.

Your line is no.

Thank you.

Good afternoon ladies.

[music].

A couple of quick question.

Yes.

And in terms of.

See I sponsored study that Keith was referring to.

Could you give us a little bit of color.

Walked cancers. This it is being conducted.

And you know.

Anything on beat expectations on the data is positive.

No what sort of indications looks interesting no focused all the time takeover.

Run them.

Yes. So this is a study that's looking at actually couple of different mutations and nerf nerve to keep one or two vicki mutations, but it's identifying.

Patients with these specific mutations not limited by their histology. So it's essentially opened to solid patients with solid tumor any solid tumors that have.

Documented mutations.

In a nerve to keep one as well as as a few others as well so I'm. So it's not restricted by tumor type, it's really a signal seeking a study that would potentially.

Provide us with data that would support a development in any of these tumor types or even conceivably in a you know one and tissue agnostic approach, where we look for patients with those specific mutations.

And that could be in it as monotherapy or could be in combinations with standard therapies.

Okay, and the anything on that on the data expectations do you how would you.

Hi, it's difficult to predict the timing so see tap is moving along with the program and they've been a great partner or at least from that you know we've been review we've read to review the protocol, but obviously they run this study completely independently and and it's on their timeline. So we really can't.

Speak to that.

Okay.

Then on 11 to see can you give us some color as to when we could expect the next update from insight on this.

So so that study continues actually those studies theres multiple studies one on one study, which is our our study with Pembro Theres. The chemo combination study and then they also have their their myeloma study and it's in a study in Japanese patients. All these studies continue to enroll.

Given that this is a joint development collaboration.

We aren't able to to provide that guidance and the absence of I'm sort of it.

You are joined agreement on that so at this point no we're not able to provide further further color on them.

Okay.

Susan It's just it's a strategic question.

When you know I'm quite a few.

Oh the companies are going after the cdseventy three the targets and they're not really.

You know hardie through that phase one studies most of these folks to what's the reason for you to do Saturdays CBS I don't know eight.

[music].

Is that because it or is it something to do with science or is that something to do with resources.

It doesn't have anything to do with the science, we have a really potent and selective oral compound that inhibit cdseventy three where we're quite happy with the preclinical data and and toxicology data we've generated on the molecule right now.

The entire adenosine pathway being interrogated across multiple targets not just TV 73, and no definitive data appointing away as to what combination study when should lead to in which tumor type in order to move forward not only would be being.

Competitive landscape with other molecule and and companies who are ahead of us, but also the path would have to be quite broad and so I'm still open a two concept of going into the clinic. If we had resources from a partner to to help us, but right now honor roll.

We have a lot of other priorities on our other programs and critical that we would like to pursue.

Thank you thank you for that Susan.

I appreciate taking all my questions.

Thank you.

Sure.

Thank you. Our next question comes from Matt Fips with William Blair. Your line is now open.

Hi, Thanks for taking my questions keep I guess first on the lung cancer trial. How is this can you give us anything about how this is powered I mean, how much benefit do you need to see here on top of standard care, considering we know that these patients do so poorly with standard care.

And then.

In the previous upscale or trial, there was the worst non small cell lung cancer patients.

They were you know I guess.

Rescue previously another few one inhibitor I'd go back and look at any of those patients had any of the to keep limitations.

Just you know.

If there's anything you can go off of a I don't think it with the television.

Right. So in terms of the study design. So it's 120 patients as you as you mentioned the outcomes for these patients based on data that had been recently presented is quite core I'm. So even with a 120 patients receive isn't a huge study but it's.

It's also not not a small study we think we'll be able to see a reasonable increases not powered like a like a phase three so we're not talking about.

You know two sided alpha here for the design, having said that a of like a point point of five having said that me that with a significant or increase in benefit.

Then you wouldn't be talking about interesting statistics about source. We've tried to designed the study large enough. So that you know a home run you know would be would be a of interest, but but we would also be able to see a you know a reason sized.

Signal so lets you know <unk>.

You know two month benefit or better that would give us evidence to move forward into a subsequent a you know randomized study.

Got it and then anything on the those previous a total of so yes, you go long rest of it.

Right. So yes, so we didnt have patients on that study that that has the pathway activation through through mutations we haven't present that those data publicly but were you know, we're we're certainly aware of them.

And I'm hopeful.

We're part of our thinking as we as we plan to go forward with the current study and I think the plan at some point won't be to.

Present, those data as well.

Great. Thanks.

Oh, yes have shown recently, a new crisa slide in the back sort of has kind of some preclinical experiments on satellite but.

Notably the keep one in cell lines.

There is most are very responsive there's a couple that arts and I guess is have you looked at those salons and see if there was an another mutation, but maybe it could be one that you want to watch out for us not predict your response I assume a lot of space. The other cell lines and patients who have multiple indications, but just kind of wondering if you're trying to tease out.

Well, maybe why some of those cell lines didnt appear to be as responses.

So we haven't done a lot of work on that but we have we have seen and that the one I think it was the lead sensitive cell line when analyzed for activation of that pathway did not activated as well as as other cell line. So while it does.

It did Harvard than mutation it Didnt Act and it didn't didn't show itself through its gene expression profile to have fully activated the pathway I think that's probably about as much as we can say there I don't know Susan if you have anything else there.

No that's true and I would also add that as part of our study we will be looking at the biopsies of patients and not just the actual mutational status of the patients who will be able to see who's looking at gene expression profile, whether those pathway. So we're really on or not so that's just one example, Adam.

Many cell lines, where we knew that they had an activating mutation and yet they didnt activate the pathway. We don't know specifically line that cell line, we know it's rare.

Well I'm confident we'll be able to delineate any patients that carried a mutation, but didnt actually play in our clinical study.

Yes that maybe gene expression profiles, where that could be immunohistochemistry for <unk> for certain anyways.

Yeah.

Okay, great. Thanks for taking the questions.

Yep. Thanks Huh.

Thank you. Our next question comes from Jim Birchenough with Wells Fargo Securities. Your line is no.

No.

Nick Nick on for Jim. This afternoon, just following up on the lung cancer trial until the Glenn is that.

No the protocol excludes patients who actionable mutations. So can you just talk about lumpy overlap is between.

Actionable mutations as well tell you must be 53.

In in that 20% of patients have the.

Awfully activity.

The mutation.

Trust.

Yes sure so.

So there is a so so.

Most of the patients who have keep activated do not have actionable mutations or there's sort of a.

They're not mutually exclusive but there's a reduced rate of actionable sort of Egypt far out type mutations in the in the keep mutant patients. So while you will find a overlap it's it's less common among the keep mutations to have actionable mutations.

And then in terms of the K Ras keep overlap.

Susan Correct me, if I'm wrong, but I think about it I think around a third of the keep mutations also have can't kras mutation. So there is definitely overlap there, but you know the actually it looks like the majority of patients do not have K RASK quite a significant proportion do.

Okay. Thank you and then the preclinical data suggest that whether okay Ross's personal no.

Those cells equally sensitive to telecom stuff.

Yeah. So there's the preclinical data are there's different theres in different models and different opinions on that but in general from our take on is that that.

Congrats is not necessary and then the clinical data suggests that the outcomes are not kinross dependent. So you don't have to be congrats being to have poor outcome. So yeah.

Our Arctic imitative that KRS is not a problem, but it's also not necessary in terms of the likelihood of response to contamination emission.

Okay.

And then I think the patients are going to be stratified based on.

Pick one or LTB would you expect that to account for 50% of these patients so would it be small fraction.

Yeah, the stick 11, L. Kb is a.

A significant proportion I'm trying to remember it might be in the same ranges as K Ross, it's probably around a third of the patients are likely to be I'm sick 11 meeting.

So and that's a range where you do why if it if it's 95% where it fits you know, 5%, it's actually not been important to stratify.

But you know when you're in that more intermediate range more relevant to stratify.

And then just this last one on the lung study so they've talked about the interim analysis, you know future. If you do see a profound benefit.

Do you have the opportunity do you think to expand this study for registration purposes or you'd have to since you closed study and started brand new study.

Yeah. So that we would think that there are all those options are possible. So we could either opened a new study or even just amend the current study.

No we would.

That pump at that point like we.

Select a specific acetate to scream for that all patients that we screen by but but we do think we could conceivably amend for weren't doing new study.

Most likely this is something we would talk through with FDA and get their input sure.

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And then and then just last one from me for the titles in our new brands combinations should we expect a safety data this year or some efficacy he does a toehold expansions.

Yeah. So the those studies are ongoing they are through getting through their there's dose escalation in into expansions. So.

We haven't guided specifically on timing around data presentation. So you know so I I would say it wouldn't be impossible, but we're definitely not guiding at this point to a two definitely during a presentation of the data this year.

Right.

Thank you very much and well miss each other they actually out this year. Unfortunately, yes, I guess so yeah.

Thanks. Thanks.

Thank you I'm not showing any further questions at this time I would now like to turn the call back over to Jennifer Mcnealey for any closing remarks.

Thank you Danielle and thanks, all for joining us and have a great evening.

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

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