Q4 2019 Earnings Call

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Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.

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After the speaker presentation, there will be a question answer session.

That's the question during the session you want me to press Star one on your telephone.

Please be advised to today's conference is being recorded if you require any further assistance. Please press star Zero I would now only thing in the conference over to your Speaker Mr. Wilson, <unk>, Chief Financial Officer, and senior Vice President.

Corporate development. Please go ahead.

Welcome everyone and thank you for joining us with me today, our Dayton misspelled interim Chief Executive Officer, Judy Cox, Chief Scientific Officer, Executive Vice President research and development and par hair.

Senior Vice President commercial.

David will review recent corporate events, Judy will provide more details on our pipeline and I will provide a brief financial overview of fourth quarter 2019, We we'll then open the call for questions for which we will all be available.

Before we begin.

And 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 that.

These forward looking statements are qualified by important factors set forth in today's press release and the company's filings with the yes.

C C, which could cause actual results to differ materially from those in such forward looking statements.

Information discussed on todays call is accurate as of today and we do not intend to update with that let me turn the call over to date.

Thanks really good afternoon, and thank you for joining us.

We've made significant progress in 2019, as we work to build value across our product portfolio for backup burdening, our non covalent BTK inhibitor. We were in the seventh cohort in the things one be dose escalation portion of the trial. We're on track to complete this portion of the trial in the second quarter.

We continue doing.

Dance SNS by 10, our first in class PDK one inhibitor.

A quick with an eye indeed filing targeted by the ended this year.

And lastly, we have new partners developing Tak 580, a pan RAF inhibitor and those are oxen, a total of two inhibitor brand now for which we retained downstream economic interest.

The other 2019.

34.6 million in cash sufficient to advance our portfolio through important milestones.

For Buck the burden of we continue to see a very favorable safety profile combined with evidence of clinical activity in patients with and without BT Casey 0.1 mutations.

In the 300 milligram cohort, we saw continued improvement of tumor burden.

Doctrine and its CLL patients still one study and now in cycle eight.

We will complete first response assessment for the war hundred milligram cohort. This month and expect to have initial response assessments for the 500 milligram cohort in the second quarter.

We are prepared to begin the phase two trial once we have identified the recommended dose however, we launched.

The phase two after seeing a sufficient efficacy signal, we look forward to evaluating data from Cowen six and seven in the near feature to determine next steps.

I will turn the call over to Judy in a bit to provide further detail on our pipeline at the board D.. So I would like to highlight the recent progress made with our proprietary PDK one inhibitor SNS 510.

You're generating encouraging data on this program.

In October we presented preclinical data showing exciting activity hematologic and solid tumor cancer models at the Triple meeting the HCR NCR right you are Tc conference.

This month, we received encouraging results from an in vitro combination study, indicating that SNS 510.

Can combine synergistically with several drug classes.

We are completing I, India, enabling studies for us and that's 510 with a target to find one I'd be by the end of 2020.

Beyond back the burden of it and that's an EPS by 10, we're also creating value in our product pipeline through partnerships. We are pleased that both tech Fiveeighty and rose rocks and are now license.

The two companies excited about the potential these drugs and before the watching that the development progress as the licensing agreements generated revenue for the company, adding to our cash balance while improving our focus on our proprietary pipeline assets.

With that I will turn the call over did you need to go into more detail on a current clinical progress. Thanks.

Mm.

We are currently in the seventh Copart other studies when do you trials that could bring them currently eight patients on treatment across three cohorts 300, 405 hundred milligram.

Yes, we see continued evidence of clinical benefit and we'll have data on sponsor assessment from a 400.

Ground cohorts this month.

The 500 milligram cohort next quarter.

In December it actually presented data showing that stable disease has been answered in 305 patients in that 300 milligram cohort.

As of today, one CLL patients on study in cycle age from this cohort with a 47%.

It's actually became a burden after second scan improving from their initial 41% reduction there he parameters have normalized.

Another thing from a 300 milligram cohort.

Heavily pre treated marginal zone lymphoma patients with nine car lines of therapy completed eight cycles before coming off study.

Due to disease progression.

Okay, Great and then has been very well tolerated and a higher dose levels and we have not seen any grade three or higher drug related adverse events.

Our two by 60 milligrams a day, we have seen incrementally increasing exposure and decreases inside of concerning consistent.

And cohorts fix a 400 milligram cohort enrolling more patients three with CLL and one would be alby yeah.

Yeah, I was not a valuable due to disease progression during cycle one.

Three CLL patients remain on treatment and we saw for their first response assessment.

There will be available later this month.

In California, seven that's 500 milligram cohort all [laughter] patients how clear the safety evaluation period.

CLL patients are off treatment with disease progression and for patients who now on treatment, including two were CLL and two with mantle cell.

Lymphoma.

Thanks first response assessment in the second quarter for these patients.

And is this on patients are being evaluated for the cohort.

Got to Britain, and they also have potential as human cancer T cell engager therapy by virtue of urban school and if there's not a beauty care I Teekay Nonclinical studies.

Assessing these sectors that could <unk> in combination with car T therapy, our ongoing.

Hi, Brian, Yes, which also inhibits became I teekay has shown improve clinical outcomes for car T therapy. They all teams pacing clinically and the combination I agree.

With the bi specific T cell engagers 19 on them.

I didn't have activity in Nonclinical studies, I see okay, some samples exceed them.

Turning to ask next 510 upholstery presented in October highlighted data showing that humans presentations are the leasing <unk> CDK anti aging when particularly sensitive to 510.

Decay and today mutations in the lesions are associated with many different cancer type.

We also profile the compound and teach out in combination with other age and in cancer cell lines and learned that as an aside can exhibit synergistic activity when combined with inhibitors as you can take four six.

Hey, Robert G., well see or do you feel too and breast cancer care estimate and lymphoma cell line.

We are progressing Ethnocide hand, TV I'd be anything program.

Hi discussion with care allows me to sign or clinical plan for both solid tumor in hematologic malignancy.

I will now kinda tolerance away three financially so.

Thank you Judy.

In the fourth quarter, we delivered solid progress on that could bruton and us enough 510, well operating within our budget loss from operations for the quarter was $5.4 million and.

For the year, it was 23.3 million compared to 25.7 million Fourq 2018.

Total cash used in operating activities was 22.2 million for 2019 compared to 24.4 million for 2018.

At the end of 2019 cash cash equivalents in marketable securities totaled 34.6 million, including 5.5 million in restricted cash.

As Steve mentioned, we also signed agreements with new partners to develop both toxicity and Bowser oxygen.

In December we consented to Takeda Oncologys assignment of our agreement covering the Pan RAF inhibitor Tak 582 venture backed startup dot therapeutics, one or dot one.

Coincident with the transaction, so nieces and dot one entered into a new agreement covering Tak 580 under.

Remit dot one paid Sudanese it's an upfront fee of 2 million and agreed to pay up to $57 million, an additional pre commercial milestone payments plus royalties on future sales of Tak 580.

Also in December we licensed goes Roxon to de Novo bio pharma.

Privately held bio pharma company with a biomarker approach to development.

Under the terms of the agreement we received 8.2 million dollar upfront payment and are eligible to receive up to 57 million in regulatory and commercial milestones plus double digit royalties on future sales.

Those are awesome.

With that let's open the call to your questions operator.

Thank you as a reminder to ask a question you want me to press Star one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the culinary roster.

My first question comes from.

Hi thing with Oppenheimer. Please go ahead.

Great. Thank you. Thanks for the question then and good progress I'm just a couple of questions. On my end. You know you had mentioned that there were additional patients being evaluated from a 500 milligram be I'd core cohort, but you had screen.

So.

And I think you'd mentioned there were four still left is that I think there's six lots right for each cohort. So are you just gonna be able to add to more at that war or have you. So amended the protocol to be able to have more piece.

Thanks Archives good question so.

Our investigators me call me questions that we put additional patients on same question that they said basically that they had patients who required treatment and more interested in the protocol and our safety Review Committee allowed us.

Hmm I consider these patients and so essentially where over enrolling the cohort.

Great.

I could Judy Judy also any thought I know that you're Gonna argued said David you mentioned that you know the dose escalation part of this study will be all should be over by the second quarter up this year Uh huh.

Does that include any thoughts of media, maybe a protocol amendment to go to higher doses or you think 500 milligram be ideas, you know affair test to see upper limit for back a bit better in terms of truck.

Yeah, well look at the data in its totality and it's something that we can consider.

Great. Okay also.

In terms all core to think about the next steps you know from the phase one a or b to escalation into and you're going to expansion just Judy and not the whole you know dose expansion study, but let's just say.

Going forward from the second quarter towards the end of this here can you just walk us through broadly what are the stuff that you expect to happen you know assuming you Paul so the dose escalation a part of the study or how do you see the dose expansion sort of playing out in terms of number of sites patients Oh, you know types of patients just.

Probably if you can kind of just respond back book for the recipe for 2020.

Yeah. So at asked in December we presented our phase two study design.

And the total number of patients that are planned for that study on is 120 patients.

And there.

Our different cohorts.

Looking at Haitian relaxing, some BTK inhibitor therapy with and without the sea freight one indication.

And then a cohort of patients.

That our intolerant to prior covalent BTK.

Her therapy.

Got it understood understood and then the last question for me, it's just want to fast 510.

No I know Judy you had mentioned that you'd be looking out at spoken solid tumors and liquid tumors. So just any thoughts. So should we expect sort of combination studies write off to begin or.

You do the classic sort of phase one in healthy volunteers and then going sees one be slosh to install the course liquid tumors Romano versus combo, just any initial thoughts there.

Surrendered beginning stages of Flushing out or our clinical development plan and typically you would start I'm not.

Necessarily with a healthy subjects study that would monotherapy that them I would read it into combination therapies. So we're still as I mentioned developing our plan and.

But do you expect to execute studies in both hematologic and solid tumor malignancy.

Great and just on my last question just took those are the the various mechanism of action that you synergize with is there anyone that sticks out more than others.

No. It's it's early days and I think we're quite encouraged by the data that we saw develop further.

Data sets of course.

Following up on the in vitro studies with Invivo studies, but we were encouraged to see.

Basically what you would expect.

On T.K. mechanism, we thought we signed a combination studies in vitro.

Great. Thank you all the questions looking for to.

Good morning.

Thanks, Rick.

Thank you. Your next question comes from Jim Birchenough with Wells Fargo. Please go ahead.

Hi, guys. Thanks for taking the questions and just follow up on her tosses questions.

So I guess first just.

Dave you mentioned, a you'd only need.

Forward into a phase two if you saw an adequate efficacy signal. So could you maybe say you know.

Prospectively, what are you looking for in the patients that are at the higher dose cohorts what level of activity do you want to see could you maybe some give us some parameters or how you how you're thinking about that.

And then thanks, Jim Yeah, so we'd like to see it we'd like to see.

He multiple partial responses because it to move forward so more than what we've seen but no really this is the phase one part the true profile will be flushed out in the phase two.

And then just Judy alluded to it so maybe a question for Judy, but as you've gone from cohort five to six and seven.

You, you've given see men levels before through cohorts one to five could you give those for core six and seven and if not could you maybe give a sense of if it's still ask going up in a linear fashion and are you also seeing.

Increases and see fell three and CCL for <unk> as.

As you were seeing what the dose escalation from cohort one to five.

So I'll give more complete PK data when we have the response assessment data.

Certainly from the 400 milligram cohort.

And then as far as a key many times what we're seeing is consistent with what we saw.

And a 300 milligram cohort.

So consistent increase or consistent chemo kind levels.

20 Soc and.

[laughter] decreases in the important sorry.

I'm sorry, yes, so consistent increases.

And then just one final one have you seen in cohorts six and seven any evidence lymphocytosis as an end early indicator of <unk> activity.

No we haven't commented on that in the past and.

And so I don't think at.

At this point in time, we're prepared to comment on it.

No yeah, I think though.

So what I can say.

Oh, Yeah, Jim we've really been focused on you know the data I mean, the data is it's it's.

Well, we presented and so we started stop looking.

It early indicators really in and then just focused on the data and we're going out of the clinical data on the 400 milligram cohort. This this month and and then soon thereafter, the 500 milligram cohort.

And just on that how how would you fall or we can it here, but at the time or you're going to reserve that.

Data for the 400 milligram dose.

Cohort two of medical meeting given the focus on on seeing a PR. If you saw one would we hear about it.

Yeah, no we're going to definitely provide the data as as we receive it and so what would we do plan to share this month and we'll find out an appropriate way to do so yeah and similarly with the 500.

You know I don't think we're going to be waiting for us for a medical meeting, we're going to want to get that data out to folks.

Okay, great. Thanks for taking the questions.

Thanks. Thank you as a reminder, ladies and gentlemen, if you'd like to ask a question. Please press Star then one our next question will come from Marc Frahm with Cowen. Please.

Go ahead.

Hey, Thanks for taking my questions.

Maybe just a follow up a little bit on in the earlier questions.

Any information to provide us on kind of them baseline mutational status of some of these patients that.

You may have been given to you and that's part of the enrollment.

Or are they all are the CLL patients.

Once you see 40 onest positive to their plc gamma mutations.

Yeah. So I can tell you that in the 400 milligram cohort.

I just see on occasion, one had <unk> mutation.

And in the 500.

I'm cohort.

We have a one hasten.

With that.

Communications and sea freight onesie freight one asking I see freight one arm occasion.

Okay, Great things and then maybe for Willy.

This was the cash bounce it kind of where the cash runway is.

And what kind of what's.

Assumed in there in terms of I guess potentially progressing that Britain, and you're getting 510 into that.

Sure so the.

The cash balance at the end of the year as we said it was 34.6, we do have a restricted cash.

On a 5.5, so the usable cash is essentially 29.1.

And if you think about the cash used in operating activities.

In 2019, it was 22 million in 2018, it was 24 million so order of magnitude.

For our historical activities.

You can get a sense for the cash burn.

That being said in this fourth quarter, we did benefit from the 2 million dollar upfront payment from the Tak 580 license.

Without that taking into account operating.

Fans for the fourth quarter was 7.4 million. So we're not giving specific guidance in terms of runway, but we do have the financing to get through this dose escalation.

And some new SMS 510 forward and to some extent our spend is.

A little self regulating.

In that as long as were in the dose escalation and in the I N D preparatory activities phase.

We're likely to have a cash burn in that six to seven and a half range and it's only after we moved to the phase two that.

Burn would expect to go up.

Okay, great. Thanks for answering.

Thanks Mark.

Thank you I'm showing no further questions in the queue. At this time I would now like to turn the call back over to management for any further remarks.

Thank you everyone for participating in our call today, we believe that.

And it has demonstrated good safety in early signs of activity in a very sick patient population, we look forward to providing details on the 400 milligram response assessment later this month and a further clinical data in the second quarter. Thank you good afternoon.

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

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