Q3 2020 TRACON Pharmaceuticals Inc Earnings Call

[music] good day, ladies and gentlemen, and welcome to trade <unk> Pharmaceuticals third quarter 2020 earnings Conference call.

At this time, all callers are in listen only mode.

The speakers prepared remarks, we will conduct a question answer session.

Sometimes be given at that time.

During today's call, we'll be making certain forward looking statements.

Any statements regarding expected timing of clinical trials and results.

Regulatory activities future.

Future expenses and cash runway and our development plans and strategy. These.

These statements are subject to various risks.

Never described in our filings made with the students and exchange Commission, including our annual report on form 10-K.

Here and it said that does the first 2019 and subsequent quarterly reports on form 10-Q.

You are cautioned not to place undue reliance on these forward looking statements.

We disclaim any obligation to update such statements.

Now I'd like to turn the call over to Dr. tall, Stewart, President CEO of trickle Pharmaceuticals Dr. door.

Thank you for joining trade kind of third quarter 2020 financial results and business update call.

I'll begin with an update on our pipeline and then review our recent activity.

Following that Scott Brown, our Chief Accounting Officer.

Review, our financial results for the three and nine months ended September 32020.

Finally, we will conclude by taking your questions.

Our development efforts continue to center on the pivotal and the Star trial, which is designed to our people have been before about the sarcoma subtypes.

Again differentiate fleet or more pick sarcoma or U P. EPS.

And mixer, Barbara sarcoma and Oh.

During the third quarter, we received FDA clearance at the end, but your trial protocol.

We expect to enroll multiple patients before the end of this year.

As a reminder, and before Matt is the potential best in class PD, one checkpoint inhibitor, which may confer additional clinical benefit.

Virtue of it's convenient and rapid subcutaneous route of administration.

Yes. So trial includes two cohorts.

You should teach.

One cohort will receive a single agent and before that.

And the second cohort will receive and before that in combination with Yervoy.

Second checkpoint inhibitor targeting to see Chile, four receptor that is marketed by BMS.

The trial will enroll patients with U.P.S. and MFS your progress on one or two prior lines of treatment and have not received prior checkpoint inhibitor therapy.

The primary endpoint in both cohorts is objective response rate by resist.

As confirmed by blinded independent Central review with duration of response being a key secondary endpoints.

And each cohort the demonstration nine out of 80 objective responses were at 11.25% objective response rate confirmed by independent Radiographic review.

That's fine for lumber sponsored satisfied the primary objective of the study.

Which is due statistic, we exclude the known 4% response rate they're treated the only approved treatment for refractory U.P.S. and M.S. EPS.

To reiterate unfortunately, the waterproof treatment refractory U.P.S. and M.S.S. as only a 4% objective response rate.

This is a clear example of an indication with a high unmet clinical need.

We are studying the sarcoma subtypes of U.S. and MFS, because they are responsive to checkpoint inhibition.

Based on data presented at ASCO 2019, and ask through 2020.

Yes, 2020 investigators from the alliance for clinical trials and oncology reported an impressive 29% confirmed objective response rate in patients with highly refractory U.P.S. receive talk to you in combination with Yervoy.

These data build upon data presented at ASCO 2019, showing that single agent Keytruda demonstrated a 23% response rate in highly refractory U P S and MFS patients.

The infrastructure I was designed on the basis of activity reported for PD, one and PDL, one antibody as single agent.

And in combination with Yervoy in soft tissue sarcoma subtypes of U.P.S. and MFS.

The activity of Keytruda in our people and U P S and MFS is clear.

Our target product profile based on data for these checkpoint inhibitors in sarcoma.

Is to achieve a 15% response rate within before map as a single agent.

And a 30% response rate with them before map combined with Yervoy.

Provide data to gain if the approval of end before map as a single agent.

And also in combination with Yervoy.

The dual arm design of our study provides for risk mitigation should combination treatment required for a robust responses.

Notably the M.S. executed a similar dual cohort clinical trial strategy for Opdivo in MSR colorectal cancer.

That resulted in about People's approval as a single agent and in combination with Yervoy and both approvals would based on objective response rate.

We expect and before you have to be as active as keytruda enough people in sarcoma based on data presented at ASCO 2020, which was updated at the Chinese Society of clinical oncology meeting this September.

These data showed the activity of single agent and before Matt is similar to that of Keytruda and Opdivo in a well defined patient population.

Single agent and reform have demonstrated a 32% confirmed objective response rate and 39 patients with M.S. I like colorectal cancer field three approved chemotherapy.

Before affirmative.

Sally quietly Henry notes he can.

Impressively. The sluggish response was nearly identical to the 28% confirmed objective response rate reported for Opdivo in the Checkmate 142 trial.

And the 33% confirmed objective response rate reported for Keytruda in the keynote 164 trial.

Each of these trout, similarly enrolled I must say high colorectal cancer patients defined by a genetic test infield those same three standard of care chemotherapy.

From a safety standpoint, and before Matt has been shown to cause typical immune related toxicities like rash.

With that I wrote ism and liver inflammation at rates and severity typically seen with checkpoint inhibitors. However.

However.

Before Matt is a rapid subcutaneous injection that avoids the need for an infusion.

And as expected there have been no cases of infusion related reactions.

Additionally.

The overall safety profile than before map in the more than 700 treated patients indicates a lower frequency of Newman I, just and collided compared intravenously administered checkpoint inhibitors.

And before that as rapid subcutaneous route of administration of cheap low variability in serum levels without the peak concentration affects annuity intravenously administered checkpoint inhibitors.

This potential safety advantage for the accommodation, then reformate and Yervoy could be a key differentiator in comparison to the combination of the above Tivo and Yervoy.

One additional potential bands and the format is based on the fact that infrastructure enroll patients who have progressed phone only one or two prior lines of treatment.

Which makes them potentially that's refractory then you P.S. and M., if that's patients who enrolled in the single agent Keytruda, where.

Well, the Opdivo plus Yervoy combination trials.

In contrast, those patients receive two three or four lines of prior therapy and in some cases up to six.

Collectively we believe these data and try political differences bode well for the sort study.

Given the 4% objective response rate a boat trip, we believe end before Matt combined with Yervoy could provide a transformative new standard of care for refractory sarcoma patients.

Moreover, the response rate or first line chemotherapy in sarcoma is only 17% provide.

Providing the rationale for advancing the combination and before map and Yervoy into first line treatment based on expected clinical response.

Given the unmet clinical need physicians are motivated to advance and before inter frac for U.P.S. and MFS patients.

As well you've learned that physicians are motivated to participate in the investor trial due to the unique convenience have been pull much rapid subcutaneous dosing.

Especially in this time of COVID-19.

For reference and before that can be dosed in less than 30 seconds and a volume of less than two milliliters.

Without requiring the use of high run days for another adjutant.

That is not much different than a midstream a flu shot.

We recently opened several of the approximately 25 and research sites, which represent top U.S. clinical cancer centers further.

Furthermore, we have at least one site initiation visits scheduled during each of the next four weeks, we expected, though several patients before the end of the year.

From a financial perspective, we estimate the cost of conducting this pivotal trial using Trey Cowan Euro independent product development platform, including paying for Yervoy will be approximately $15 million that will be spent over the next eight to 10 quarters.

We expect six near term and before we pull them out milestones this year in 2021 or 2022.

First we anticipate dosing multiple patients in the end Bossart trial before the end of the year.

Second.

We anticipate submitting early response assessment data to the EPS in the first half of next year as part of our orphan drug designation application.

Third.

We intend to report recommendations by the independent data monitoring committee for an interim safety evaluation expected in the first half of 2021.

Fourth we expect the availability of interim data around the time, asking 2021, which could serve as the basis for breakthrough designation.

Fifth we anticipate reporting final response assessment data in 2022.

And six assuming positive data submitted bewley for accelerated approval that if approved could allow for product launch in the U.S. in 2023.

In parallel our corporate partners really medicines in Alabama oncology are conducting multiple clinical trials, including two pivotal trials.

In China in additional indications.

And we expect them to submit and before my full approval and I must say high colorectal cancer in China. This year.

We recently received the results of the third party market assessing the trick on commissions.

The analysis concluded that end Biffle map, it's FDR fruitful Fractor U P S and MFS.

Generate peak annual revenue of approximately $200 million in the U.S., assuming parity pricing to Keytruda, we're up to you though.

The adoption rate is forecasted to be relatively rapid using wonderful them EPS target product profile, which was based on the clinical results that I discussed earlier in my remarks.

And importantly, the very high unmet clinical need in this setting.

And before mats sales revenue could increase further if treatment through label expansion or Compendia listing.

Two other refractory sarcoma subtype that have been shown to be responsive to checkpoint inhibition.

Such as angiosarcoma.

I'll be able to sell parts arkoma and differentiated Michael sarcoma.

Which are market assessment study indicated could generate an additional $100 million in peak annual revenue in the U.S.

For a total of $300 million, we combine with you he has an MFS okay.

Of course, our goal is to expand the use of vendor format into the first line setting and the edge even setting in many other sarcoma subtype that could substantially increased sales revenue.

In this regard you're currently discussing potential trials I'll, then dupilumab with Anthracycline chemotherapy.

And then full map with BC kit inhibitor and gastrointestinal stromal tumor that may be funded by third parties.

Well in the pool that was our most advanced product candidate, we continue to progress three other clinical stage assets.

CRC wanted to our second clinical stage asset is a novel small molecule inhibitor of the DNA based excision repair pathway that is intended to reverse resistance is certainly chemotherapeutics.

The npis supporting for ongoing phase, one or phase two trials that are focused on patients with mesothelioma.

Non small cell lung cancer.

In addition, our academic collaborators continue to evaluate biomarkers in tumor specimens from Glioblastoma patients treated and they completed phase two trial.

And in tumor specimens from patients and ongoing Trc, one or two trials.

With the goal of identifying a protein or gene expression profile the correlates with clinical response.

We expect tiers, one or two to continue to advance the npis sponsorship in two indications.

We anticipate further develop in lung cancer in combination with chemotherapy and radiation therapy based.

Based on data presented at ASCO 2020, showing that Trc, one or two in combination chemo radiation resulted in a 100% response rate in 15 patients with non squamous non small cell lung cancer.

Putting in three patients who had a complete response to treatment.

These data compare favorably to prior trials of chemo radiation therapy in advanced non small cell lung cancer.

The proclaim clinical trial reported an objective response rate of 36%.

And the Pacific clinical trial reported an objective response rate of 51%.

In non squamous non small cell lung cancer patients using Olympus is platinum in thoracic radiation without trc, one or two.

We also expect further development in Glioblastoma based on data showing that Trc, one or two in combination with Cerminara resulted endurable survival in glioblastoma patients previously treated with Temodar and radiation therapy.

Importantly, these prolong survival Teddy survivors had a unique biomarker expression profile.

Notably in October two years, one or two was granted orphan drug designation by the FDA in malignant glioma that includes glioblastoma.

We'll now move on to Trc to 53 afraid to ready assets.

Based on preclinical data, indicating at Trc to 53 is as active is expanding in prostate cancer cell lines and in patient derived xenograft models.

We believe there is an opportunity for this product candidate to be developed and commercialized in countries, where prostate cancer patients generally do not have ready access to expanding.

We continue to pursue and out licensing process.

And out licensing process to identify a corporate partner to develop and commercialize Trc to 53 with our primary focus being greater China.

Our fourth clinical stage asset is the C.D. 73 antibody TG fourth year nine also known as TJ you fight.

That we're evaluating in a phase one dose escalation study as a single agent and in combination with the centric.

We're developing TD four three or nine in collaboration with I met Biopharma to one of our two strategic agreements with them.

Whereby we are responsible for the regulatory and clinical development of TJ fourth United in the U.S. and Europe.

And are entitled to receive escalating portions of non royalty and royalty payments. It's imad elects to license TJ fourth your nine to a third party in any region outside of China, Macau or Taiwan.

We anticipate completing dose escalation from this phase one trial before the end of the year.

During the third quarter, we raised a total of approximately $60 million at market prices and woke them, new dedicated healthcare funds to our shareholder base.

This was accomplished through multiple transactions.

In late August we executed two private placements.

The first private placement with Opel I capital, whereby they purchased approximately 3.1 million shares of common stock.

Or in lieu of common stock pre funded warrants to purchase common stock.

For aggregate gross proceeds of approximately $5 million.

Shortly thereafter, oversupply and Watermill asset management collectively purchased approximately 3 million shares of common stock.

Or in lieu of common stock pre funded warrants to purchase common stock.

Aggregate gross proceeds of approximately $5 million.

Earlier in the third quarter, we utilize our existing equity line of credit with aspire capital to raise approximately $6 million.

Selectively we expect that these transactions will extend our cash runway well past the expected interim analysis for the pivotal and boost our trial and into 2022.

At this time.

Provide an update on our financials.

Thank you Charles and good afternoon, everyone.

Trey cancer research and development expenses were 1.8 million and 6 million for the three and nine months ended September Thirtyth 2020, respectively, compared to 3.1 million and $12.6 million for the comparable period of 2019.

The decrease was primarily attributable to lower manufacturing and clinical trial expenses related to the termination of the Trc one on five program in April of last year.

General and administrative expenses were 2.1 million and $6 million for the three and nine months ended September Thirtyth 2020, respectively, and 2.0 million and 5.9 million for the comparable periods of 2019.

Our net loss was 4 million and 12.5 million for the three and nine months ended September Thirtyth 2020, respectively, compared to $5.2 million and 18.7 million for the comparable periods of 2019.

Turning to the balance sheet at September Thirtyth, 2020, our cash and cash equivalents totaled 26.5 million compared to $14.5 million and 16.4 million at June Thirtyth 2020, and December 30, Onest 2019, respectively.

As Charles mentioned with the 10 million at the market investments from a blind Watermill asset management in Q3, we expect our current capital resources to be sufficient to fund our planned operations into 2022.

With that I will turn the call back over to Charles.

Thank you Scott.

To recap, we continue to execute our clinical development plan around or lead product candidate and Buffalo Matt.

And recently diversified or shareholder base by adding multiple dedicated health care reform.

We have recently opened several of the approximately 25 and the search sites.

At present top U.S. clinical cancer centers.

And expect to do several patients by the end of this year.

We believe the end to start trop provides multiple near term milestones and provides a potential fast to market opportunity.

To provide and before that to sarcoma patients insignificant need, but new therapy as expeditiously as possible.

Addressing this high unmet clinical need is clearly important to investigators and they are very enthusiastic about initiating the end the star trial.

Additionally, excited about Interfyl, that's convenient and rapid subcutaneous route of administration.

Importantly, we believe our existing capital will be sufficient to deliver the expected and berserk interim data in mid 2021.

Which could demonstrate the potential and before that to rapidly transform the standard of care for refractory sarcoma patients.

We look forward to providing further updates in the coming months and remain confident that we have the right strategy in place to deliver on our development and business plans for the benefit of patients and shareholders.

Thank you for your time and attention and we're now available to answer your questions.

Ladies and gentlemen, this let's ask a question. Please press Star then one on his touchtone telephone to move yourself from the queue press the pound cake.

Again, Thats star one to ask a question.

Our first question comes from Maury Raycroft with Jefferies. Your line is open.

If your telephones mutant please on mute.

Maury Raycroft with your telephones me hit please on mute.

Again to ask a question I suppose Star then one.

I'm not showing any additional questions. Let me turn the call back over to Mr. Brown and Mr. Thor funding.

Any further remarks.

We appreciate your time.

And look forward to discussing next quarter's results with you stay safe and have a great day. Thank you.

Ladies and gentlemen, this does conclude the conference you may now disconnect everyone have a great day.

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