Q1 2021 ZIOPHARM Oncology Inc Earnings Call

Thank you for standing by and this is the conference operator, welcome to the XIAFLEX them Oncology, Inc. First quarter 2021 earnings conference call. As a reminder, all participants are in there.

And only mode and the conference is being recorded.

The presentation, there will be and opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.

Should you need assistance during the conference call you may signal and operator by a question Star and zero.

I would now like to turn the conference over to Adam Levy Executive Vice President Investor Relations and corporate Communications. Please go ahead.

Thank you operator, good afternoon, and welcome to the XIAFLEX and oncology conference call and webcast to review results for the first quarter ended March 31st 2021.

This afternoon, we filed our 10-Q and issued our financial news release, both of which are available and the investors section of our website diaphragm dotcom.

For informational purposes, we have also posted a set of Powerpoint slides to accompany today's commentary.

These slides can also be found on our website and the investors section.

During this call the company will make a number of forward looking statements, including statements regarding the potential therapeutic candidates and our development pipeline regulatory status financial information and business trends.

And looking statements are subject to numerous risks and uncertainties as described in our 10-K and 10-Q filings and within other filings that we may make with the SEC from time to time.

And.

And our call today, we have Heidi Hagen interim Chief Executive Officer, who will present, a brief corporate summary, and financial overview and.

Dr. Rafael a buffer chief Medical officer, who will present, an update on our clinical programs.

In addition, we are joined by Joe Buck, our EVP of operations and strategy and G M of gene therapy.

L. A day Groot, our EVP and GM of cell therapy.

And James one our executive Chairman.

All of whom will be part of the Q&A, which we will open up after the formal remarks, I Heidi and Raffaele.

And to get started I'll turn the call over to Heidi Hagen Heidi. Please go ahead.

Thank you Adam and welcome everyone I am pleased to provide and update on our progress this quarter.

The first quarter was one of focus and execution as we emphasize building shareholder value over the long term I would like to give an overview of several achievements and moves we've made reflecting this focus as we prioritize our portfolio strategically guided by capital allocation.

During the first quarter. The first patient was infused and the CD 19 R. P M.

Car T phase one trial being conducted by our joint venture partner eat and by yourself and.

We look forward to providing updates on this important trial and the second half of the year.

We made meaningful progress expanding our infrastructure during the quarter, we completed construction of our cell therapy, GMP facility and will be qualifying and validating the facility over the summer.

This will be followed by qualifying the process and the facility and adding the facility to the TCR I N D to supplement our CMO partners capabilities with our own GMP manufacturing for the TCR phase one trial at MD Anderson.

This will allow the company to control our own destiny and expand patient capacity as we continue to progress our TCR T work.

We have made the difficult decision announced today to accelerate and complete the wind down of our existing IL 12 clinical trials.

We have not taken this decision lightly but the management team and board agree that capital and resources can be better deployed elsewhere.

We remain open to partnerships and continue to believe and the potential benefits of this experimental therapy in.

In addition, as we explore nextgen technologies, we have begun evaluating synergies between our IL 12 program and cell therapy programs.

Yeah.

We anticipate a small number of layoffs through the end of 2021 associated with the closure of the existing IL 12 program.

These reductions represent approximately 15% of our total head count we will be reallocating capital and human resources to support our growing TCR clinical program over the remainder of the year.

Also we anticipate the closure of the CD 19, RPM car T. Allogenic phase one trial, our focus and our investor focus should be on our car T program and Taiwan being conducted by our joint venture partner eat and by yourself.

We ended quarter, one with cash of $100.1 million, giving us a runway until late quarter, two a 'twenty 'twenty two and management believes this could be further extended.

Management and the board are working diligently and smartly to define the best approach for future capital needs.

And we have discussed previously we are committed to shareholder value as we consider and implement our capital raising approach we will have more to say on this in the near term.

Other details on our financial performance during the first quarter can be found in our press release and 10-Q, both of which were issued earlier today.

Regarding our search for a permanent Chief Executive Officer, The board seeks and individual who can continue to drive execution and deliver success for all our stakeholders.

I am pleased to report that the board has made good progress on identifying a strong initial set of candidates.

We will continue to update you on this as it progresses.

Before I turn the call over to Rafael a I want to remind investors that we will hold our annual shareholder meeting on May 19th this will be a virtual meeting and we look forward to shareholder participation as we continue to execute on our strategy.

With that I will now turn the call over to our Chief Medical Officer, Dr. Rafael a buffer raffaele.

Thank you Heidi.

Begin and are we saying how pleased we were to have had the chance to share a detailed overview our cell therapy programs.

During our R&D day in March.

So from that event are posted on our website.

Given the deep dive about that advance it today, yeah, we provide a very brief update.

And at ACR annual meeting last quarter, and we presented a poster highlighting work evaluating the ability of the non <unk> beauty transposon Transposase gene transfer system to redirect the 50 CCD of T cells, still where P 63, Akira Neo antigens and <unk>.

You characterize David Salt on engineered TCR T cell populations for specific T. C D and function. These data give us increased confidence and our TCR neo antigen work and the posted and abstract are available on our website.

Dementia and the difficult decision. The company has made to accelerated and wind down of the existing IL 12 clinical program. We will continue to monitor and report back at the appropriate time on the patients already enrolled.

And our CD 19, rapid personalized manufacture a car T trials and day one.

We were pleased either by yourselves announced first patient dose using our RPM technology. These trial is progressing and we are and.

See page shedding data and the second half or DCF.

It is important to know the advantages of our system that we believe have the potential would you say that differentiate us and new space. For example patients that it's used two days after trial, so it'll be kind of genetic material into the patient T cells.

Turning to our TCR Library Tayo, our internal team is making good progress and we are pleased to average Yang day clearance in the first quarter we.

We have now focused on stream silver TVD on baas with their manufacturing site and on the clinical and that wrong and that site. We continue to anticipate treating patients and the second half of Bcf.

As we have previously guided we would expect the first data and these trial to readout in 2020 two.

And our pre clinical research area, we continue to explore a variety of next generation enhancements to our TCR technology, notably the inclusion and the membrane bound IL 15 and to pursue the in licensing of additional TCR library to expand Itchy day, both patient population.

We have provided and updated pipeline slide that reflects our ongoing progress in the materials posted today as it residents with that I will now open the call for questions operator.

Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll share atone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.

We will cause for a moment as callers join the queue.

Okay.

The first question is from at least your young from Cantor Fitzgerald. Please go ahead.

Hi, Thanks for taking my question and congrats on the progress.

This is neena on for EPS.

As you prepare to start the company Library, TCR T trial and in solid tumors.

What are the remaining steps to get that study up and running and.

And at MD, Anderson or a clinical trial is running relatively uniformly in light of COVID-19.

Thanks, Nina let me maybe.

And maybe ask Raffaele and early to comment on that one.

Yeah. So thank you. Thank you for the question and so I can't tell you that we are moving forward, whether it would be we would hope and actually a big Brian.

Fairly soon and that Indiana.

And the the worst of the COVID-19 that possibly beyond that and that's what we hope and.

And M D and there too long.

Got it and enrolling patients have this be the deletes, a pre COVID-19, so where coffee and we're gonna roll your eyes to be able to announce area right and the year AR and the Q3.

Amy do you were not something.

Sure. Thank you. So the two remaining steps then to really and and which is always the focus of our team are able to complete the final manufacturing qualification batches at our contract manufacturer and.

And preparation for opening the trial and being able to do that clinical production and then as Raphael is sad and identifying patients. So those are the two major focal points of the team and those activities are moving.

Moving along nicely and give us confidence that we'll be able to enroll patients by the end of the year as we projected.

And I like to add that we started the prescreening process already orbit patient CT based right.

Okay.

Okay. Thank you.

Yeah.

The next question is from Chris Howerton from Jefferies. Please go ahead.

Hey, there. Thanks, so much for taking the questions.

So I guess for the you know.

As you think about.

The wind down of the activities of the IL 12 program.

What can we expect and in terms of some of the changes if any to the R&D line there.

And.

I guess over time basically what what should we look like over the next of the year.

The rest of this year excuse me.

The second question I have is just maybe just a clarification. So you know what exactly is the C. R. O now that is manufacturing.

Sales for the TCR T program, and and doing the qualifying and how is that different than the facility.

Houston so thanks.

Thanks, Chris maybe Heidi you want to take the first one and then Rafael you. The second the first question Heidi was on the <unk>.

Our outlook for R&D spend given the.

IL 12 shutdown.

Yes. Thank you for the question and so as we have discussed before we're really pivoting and focusing on our cell therapy programs and very much. Our TCR program. So we are focused on getting our manufacturing up and and going in and appropriately ready to dose the first patient as Rafael.

Ali I kind of stated some of the steps to getting towards that from a clinical perspective, and so we're really looking towards moving our capital allocation and that direction and and expanding it at a speed that we feel like will will enable us to really.

Tests that platform and look for quickly. So you can expect that that's where you know R&D focus will be going forward, which has been consistent with what we've talked about in the past just an opportunity now to take some of that other capital allocation. We've had in the past and focus and put it towards that program at this point.

And you know I.

I guess, Ross Aly and L. A do you want to comment on our CMO and our GMP manufacturing for the question.

Yeah. So firstly, we are not disclosing beside the name of HCA mall.

What I can say is that that wasn't there not a manufacturer and a GPU is gonna be supplementing day CMO. So do we.

We have.

Doubleclick.

Right.

And that will enable us to really think about how we wanted to expand and and do you know future at work and in TCR speak a foreign into 2020. Two so it gives us a lot of optionality hiring two strains and manufacturing.

Okay.

And and maybe if I could just add a clarification. So obviously there'll be opex put towards the programs I. As you described but is there any significant capital expenditures that we should expect or is that basically done at this point for your facility.

And the majority are now cause I think ventures.

Thank you Ali.

Yeah. So that is now complete so we have completed the construction and installation of equipment and net Heidi outlined and her summary earlier, we are marching through the qualification of the facility and AR and the fact that it wont be required for demonstrating that we can performed the process.

Quite the clinical trial.

So just to maybe ask the question very plainly there's no more capital expenditures expected for the facility are meaningful ones at this point.

Yeah.

I would say for the capacity that we're talking about now which would be for a phase. One trial. You know we will look towards as we move hopefully moving the TCR program, Florida and the future years, we would obviously be expanding into phase two and pastry and so we may have opportunity at that point, and we will expand and expect to expand our capacity further.

But at this point and we're very comfortable with and the capacity you have between our CMO partner and our facility that we have built thus far and and all of the med to qualify.

Got it okay, alright, that's very clear thank you very much.

Thanks, Chris.

The next question is from David Novak of Raymond James. Please go ahead.

Good afternoon, and thanks for taking my question just one from me on the auto car T program.

Could you guys help us frame up expectation sort of preliminary look we're expecting in the back half of this year and based on current enrollment rate since March could you speak broadly to something like patient numbers or maybe timing of disclosure and legacy ash a reasonable quorum for this data and anything you can help in terms of just framing.

That expectation.

Our expectation would be helpful. Thanks, and I'll leave it there.

Thanks, David Raso Ali do you want to comment on that and then.

Sure sure.

Color.

Sure.

So I'd say it actually got the R&D day, just dictation.

Dictation and that's two five.

Two six patients by the end of the year now is the right place I might be it depends how many patients we have I believe the boom Bob got share the submission deadline.

And it will be a good fit I'm not sure we're going to make it put actually that's all I can say, but the.

He is going to be right. After the rush Berg and I can meet critical and Greg.

And we got something right.

Yeah.

I don't really have anything further to add and thank you covered it.

Thanks, Yeah. Thank you.

Okay.

Thanks, David anything else.

That's it for me thanks, so much.

Okay.

The next question is from Yale Jen from Laidlaw and company. Please go ahead.

Yeah.

Good afternoon, and thanks for taking the questions.

In terms of allogeneic.

Car T that you're going to close down.

Was that what the net so a potential possibility would that be all licensed or other alternatives.

And I think as we've discussed and Heidi Yeah, Sorry go ahead Adam.

And we discussed I think and some of the releases and and what we've put out today is really we're asking folks to focus on our auto khaki trial, where we're really putting a lot of effort to look at the phase one there.

And so the clothing of that trial, we feel like it's just one step in terms of us focusing towards that and you know that leaves us options and considerations for the future, but we really are putting most of our effort in that direction.

Okay, and maybe just one more.

Question here, which.

Could you update us in terms of the status of the library at this point.

Is there any more targets has been added to the library since the last time day R&D day.

And what those might be.

Okay.

Lee do you want to talk about the library.

Sure.

So as we outlined and R&D day, we started our AMD with the 60.

Six of our most promising tcr's and commit to that to the FDA and the trial will be initiated with the TCR, but we also.

As we outlined have and licensed a number of P. C ours.

From a from the NCI and.

So I think it's well over 40 TCR is against 18 different targets and so we are working through these.

And these are evaluation of those those TCR and selecting which one do you want to add to the IMD next and are actively working towards that goal and.

And we anticipate doing that through the year.

Okay, great. Thanks appreciate it.

Thanks Yale.

The next question is from Thomas Flaten of Lake Street Capital markets. Please go ahead.

Great. Thanks, and thanks for taking the questions.

Just to follow up on the Autocar. There was some preliminary data presented on six patients from the compassionate use and investigator initiated.

Activity going on in Asia is there any do you have any updates on that and the outcomes of those patients are there more patients added is there anything you will be sharing and the near term with respect to how those patients are fairing.

Okay.

Thanks.

Thanks, Thomas James do you want to do you want to provide some comments on that.

Sure Thomas.

And monitor patients.

At the moment.

We're working through some of the.

Philosophy with some of the changes.

The law related to data and information on COVID-19.

Net income law there somewhere.

And so setting up the.

Domestic legal structure.

To address that.

It shows sort of that we need.

And have any new data and information on the patient share with you.

Great and then with respect to clinical trial enrollment it sounds like things are up and running it at M. D Anderson and any update on what's going on over and NCI and and how things are looking for the TCR study over there.

Hi, D. Do you want to comment on NCI, and then Raffaele rally can add.

Sure and.

So you know as we I think we stated before we don't control that facility or the patient enrollment there and you know our and great supporter of Dr. Rosenberg and but you know theres still I think working on their technical issues to bring and their facility back in and and and do the work. There. So we continue to talk with them.

And advise but its and really outside the bounds of our process and and our protocol and and our technical.

Side of it so it really resides within them and we expect them and hope that they will be coming up soon with patients and are manufacturing today and in the future, but it is outside of our concerns.

Okay.

Lee anything you want to add on that and that NCI.

And so the only thing I'll add is just and that we have said before and that's the issues that are going on at the NCI with regard to.

And the trials being suspended.

Really unrelated to our own technology and so yeah, we're in close collaboration and and speaking with them regularly.

But we're really not at Liberty to discuss the details of those and.

And we're hopeful to to move that forward.

Yeah.

Great. Thanks for taking the questions, but I appreciate it.

Thanks Thomas.

This concludes the question and answer session I would like to turn the conference back over to Heidi Hagen for any closing remarks.

We really want to thank everyone for joining us today, and we look forward to speaking with you again at our next quarterly call have a great day, and and wish everybody well.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

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