Q2 2021 Oncolytics Biotech Inc Earnings Call
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Good morning, and welcome to your uncle It takes the second quote each went into 'twenty 1 topic skull all.
The bids.
The only mode there'll be a question and answer session at the end of this call. Please be advised that this call is being recorded at the company's request.
I would now like to turn the call over to each of pattern director of Investor Relations and Communications. Please go ahead. Thank you operator, and good morning, everyone earlier today <unk> issued a press release, providing financial results and corporate updates for the second quarter of 2021, a replay of today's call will be available on the events and presentations section of the Uncleared ex website.
The 2 hours after its completion.
After of action Company management, we will open the call for Q&A as a reminder of various remarks made during this call contain certain forward looking statements relating to the company's business prospects and the development and commercialization of the TV direct billing statements regarding the company's focus strategy and objectives, the companys beliefs as to the potential and mode of action of Calgary Rep.
Of the cancer therapeutic the design aims and anticipated benefits of the company's current and pending clinical trials, our plans for collaborations and other business development activities, our financial position and runway and other statements related to the anticipated development and the company's business. These statements are based on management's current expectations and beliefs.
So a number of factors, which involve known and unknown risks delays uncertainties and other factors not under the company's control that may cause actual results performance or achievements of the company to be materially different from the results performance or expectations implied by these forward looking statements and then of course.
The King statement, which companies expresses an expectation or belief as to future results set the expectations or beliefs are expressed in good faith and belief that the reasonable basis, but there can be no assurance that these statements of expectation or belief will be achieved. These factors include results of current and pending clinical trials risks associated with the intellectual property protection and financial projections.
Actions by regulatory agencies and those other factors detailed in the company's filings with SEDAR and the SEC of close.
Does not undertake any obligation to update these forward looking statements, except as required by applicable laws now I will turn the call of your Dr. Matt Coffey, President and Chief Executive Officer upon clinics biotech Matt.
Thanks, John and thanks to all of listening for joining us on the call today to discuss our second quarter 2021 corporate update.
In addition to John I'm joined by Tom Heinemann of global head of clinical development and operations.
Andrew do you got of Darrow, our global head of business development, and Kirk look Chief Financial Officer.
We recently wrapped up of highly productive quarter during which we achieved key clinical and scientific milestone that of advanced our lead breast cancer program towards registration and further positioned pell ought to have a broad impact across multiple indications.
Chief among these milestones of the completion of 2 critical cohorts in aware 1 with data showing that we achieved the trial's primary endpoint.
This positive result represents both validation of our hypothesis and of major advancement for our lead breast cancer program.
<unk> was designed to answer key questions that were posed by regulators and partners regarding the survival benefit observed in the <unk> 13, our prior phase III study that showed a near doubling of overall survival with tolerant of rep treatment in HR positive <unk> negative metastatic breast cancer patients and I'm pleased to say it did just that.
It is accomplishing that goal.
Looking ahead.
<unk> is now on a clear path towards the Registrational study in HR positive <unk> negative breast cancer.
The last major task, we need to accomplish before advancing to our study is the completion of our ongoing phase III trial bracelet 1.
Tom will speak a bit more about bracelet and the debt, but I am pleased to say.
Now all of that the trial remains on track the full enrollment in the fourth quarter.
Now before I hand, it off to Tom to provide some more details on our recent clinical and scientific accomplishments.
To take a moment to emphasize some of the broader implications of the exciting aware 1 data we've seen to date.
These data have shown us the appellate is acting the us fundamentally different mechanism of action.
So net of a typical alkalotic virus.
Rather than killing cancer cells will be the lightest pella is primarily acting as an immuno therapeutic agent that trains of immune cells to fight cancer, while simultaneously, enabling their success by weakening tumor defense mechanisms.
This is an exciting and critically important finding.
It clearly differentiates <unk> from other oncologic viruses by positioning it to be an enabling technology for a wide range of immuno therapeutic agents across multiple classes such as checkpoint inhibitors.
Car T cell therapy and by specific antibodies.
The efficacy of these immuno therapeutic agents is often limited by the tumors defense mechanisms, mainly the immunosuppressive tumor microenvironment or <unk>.
We're 1 showed us the pillar has the ability to reverse immunosuppressive <unk> and the airport address critical unmet needs in multiple indications.
Based on the stability, we are working towards the long term goal of developing pella as sort of immunotherapy backbone that can enable the success of a wide range of agents across multiple indications.
As we do this we are committed to preserving our primary focus of resources on the advancement of our lead breast cancer program towards the registration study.
We also plenty of Canadian leveraging collaborations with industry leaders in academia to efficiently execute on our stated clinical milestones outside of our lead breast cancer program, such as Irene and Gaba trials evaluating <unk> in combination with checkpoint inhibitors.
Lastly, we plan to selectively leverage partnership opportunities to broaden the pellets business development potential and further its development as an immunotherapy backbone for agents beyond checkpoint inhibitors.
This strategy will allow us to achieve an optimal risk benefit balance as we work towards advancing registration HR positive <unk> negative metastatic breast cancer and expand <unk> market potential of each of a variety of highly prevalent indications.
With that I'll now hand, it off to Tom to begin taking in a bit more detail about our work over the last several months of allowed us to generate positive momentum and make sustained progress towards these goals Tom.
Thanks, Matt and thanks to all of those listening on the call today.
It's been a very exciting past few months of Onkelinx achieved multiple clinical and scientific milestones.
Importantly, we have been working to advance our clinical programs.
Turning ourselves for a steady cadence of upcoming catalysts.
And our lead breast cancer program, we reported data at ACR from all patients.
<unk> first 2 cohorts, which examined the effects of the calorie of rep treatment with or without anti PDL, 1 checkpoint inhibitor therapy.
Patients with HR positive <unk> negative breast cancer.
The valuation of these cohorts is the.
The core objectives of aware 1 is the HR positive <unk> negative breast cancer is the subtyping, which we saw the most pronounced survival benefit in <unk> and it is also the subtype, we intend to evaluate in the future Registrational study.
As Matt alluded to earlier the purpose of aware 1 was to build on the IND 2 of 3 results and advance pillory of rep towards the Registrational study by answering 2 key questions.
Posed by partners and regulators first.
Does Palo Verde of Rep, having immuno therapeutic effect as was suggested by the survival benefit in <unk>, III, which became apparent about 10 or 12 months after the start of treatment.
And second is the synergy between <unk> and checkpoint inhibitors in breast cancer in other words.
Since the addition of the checkpoint inhibitor enhanced pillar of your reps efficacy and the ability to induce anti cancer immune responses.
To answer these questions, we utilized paired biopsies to collect data on T cell infiltration into tumors.
<unk> expression of PDL, 1 and sell till score, which is aware of one's primary endpoint and the measure of tumor cellular <unk> and inflammation that.
That is significantly correlated with event free and overall survival in breast cancer.
Excitingly the data showed that aware when the second cohort which included pellet.
And checkpoint blockade therapy the <unk>.
The study's primary endpoint with 60% of patients showing an increase in cell til score greater than 30%.
In cohort, 1 which did not include the checkpoint inhibitor. We also saw increased sell through of scores and 6 of 10 patients after treatment.
Now there are 2 important things to note regarding these data.
First the <unk> score is the continuous variable thus any increase in cell til score is expected to be associated with an improvement in the treatment of outcomes of patients.
For example, if someone who is running a 100 meter dash.
Any increase in speed will improve the runners outcome, regardless of the magnitude of net increase in speed.
And second.
The fact that we saw more robust tumor responses in cohort 2.
By <unk> score.
Its both positive and in line with our hypothesis going into the study.
Specifically this confirms the Palo Verde of Rep and checkpoint inhibitors.
Act Synergistically to provide an enhanced immuno therapeutic effect.
This is an exciting finding it becomes even more significant when considered in light of the impressive survival benefit observed in <unk> III.
In patients treated only with Delaware and chemotherapy.
The aware 1 results suggests that we will see improved efficacy when adding a checkpoint inhibitor, which bodes well for bracelet, 1 and our other clinical studies evaluating combinations that include <unk> and checkpoint inhibitors.
Our positive cell til results were.
Were further supported by additional data from of where ones first 2 cohorts.
These data show the <unk> treat of treatment resulted in replication of Palo Verde of wrapping a high proportion of cancer cells and average of 11 fold increase in anti cancer CDA positive T cells within tumors.
The generation of presumptive anti viral and anti tumor T cell clones.
That may mediate both initial tumor cell, killing and long lasting anti cancer immune memory.
The correlation between T cell <unk> and sell tilled score, which supports the potential use of <unk> as a treatment biomarker.
A more favorable CD 8 T reg of ratio, indicating of less immunosuppressive tumor microenvironment and the weakening of tumor of defense mechanisms.
And dramatic Upregulation of PD lone expression of tumor tissue.
Which resulted in the conversion of some tumors from PDL, 1 negative to PD lone positive.
Importantly, many of these desirable effects were enhanced with the addition of checkpoint blockade therapy to <unk>.
Collectively these results represent a critical milestone for both of our lead breast cancer program and our broader pipeline.
In particular, they confirmed <unk> immunologic mechanism of faction answering the first key question posed earlier and they also show that we are well on our way to answering the second key question by demonstrating the synergy between <unk> and checkpoint inhibition.
Fortunately this validates our broader clinical development strategy.
Finally, the aware 1 data also support the clinical utility of T cell <unk> as a predictive biomarker.
Which may allow us to identify patients who are most likely to respond to therapy and improve our chances of success in the future Registrational study.
Looking forward. These positive aware 1 data of our lead breast cancer program rapidly progressing down the path towards a registrational study.
I mentioned, the next and final major step on this path.
<unk> of bracelet, 1 which continues to advance as planned.
As a reminder breaks from once design was developed in collaboration with Pfizer and Merck Serono to support the overall clinical benefit observed in the <unk> III study and the investigate T cell carnality.
The clinical biomarker.
Its design is essentially identical to that of <unk> with 2 key exceptions first it is exclusively enrolling HR positive <unk> negative breast cancer patients.
Which is the population of which we saw the most pronounced overall survival benefit in <unk> 2 and 3.
And second it.
It includes an additional study arm to evaluate the safety and efficacy of Palo Verde of Rep, and combination with Pfizer and Merck Serono is anti PD lone checkpoint inhibitor of NCR.
We're particularly excited about this study arm given the aware 1 data showing synergy between <unk> and anti PD lone therapy.
Overall, I'm thrilled with the progress <unk> has made to date.
This trial has continued to rapidly advance since dosing its first patient in June 2020.
Despite the challenges that were posed by the pandemic.
In fact, we remain on track to complete enrollment by the end of the year.
The progress we've made on recent 1 is <unk>.
Both of my highly talented colleagues at uncle Index.
Well as to our investigators and partners of pre cog of the world renowned organization that is managing the study as we look ahead I am confident that this group will keep us on track to advance Palo Verde of ramp towards regulatory approval in HR positive <unk> negative breast cancer, while simultaneously positioning us to take advantage of calibrate reps potentially.
Central.
The additional cancer indications.
Now shifting gears I would like to briefly talk about 1 of these additional indications pancreatic cancer at.
At the most recent Astro meeting in June we presented some promising clinical and biomarker data demonstrating proof of concept for of Pelerine revenue checkpoint inhibitor combination therapy.
In this indication.
These data were from a phase II trial evaluating <unk> in combination with the PD, 1 inhibitor <unk> and.
Pancreatic adenocarcinoma the.
Patients from the trial at all progressed after first line treatment, making this an extremely challenging study population.
Another notable facet of the study's design.
Once the patients were given the <unk> <unk> combination in the absence of chemotherapy.
This provided a more direct look at the combination of anti cancer activity and the allow.
Good us to assess <unk> potential to overcome the immunosuppressive <unk> that often limit the efficacy of checkpoint inhibitors in pancreatic and other Gi cancers.
Now despite the advanced nature of disease, and the enrolled patients and rigorous design. This study showed a 42%.
Disease control range. This encouraging result indicates the strong anti cancer activity of the tolerance of Rep. Kimberly as you map combination of.
Additionally, biomarker data showed that patients achieving disease control at increased activation of anti cancer CDA positive T cells in.
In the peripheral blood and reduced levels of pro tumor T Reg cells, and both the peripheral blood and the tumor compared to patients with progressive disease.
The association between treatment induced anti cancer immune responses and.
And the improved tumor control together with data showing increased tumor infiltration of anti cancer immune cells following treatment.
Further demonstrates calorie of reps underlying immunologic mechanism of action and validates our strategy of combining it with checkpoint inhibition.
Finally, the safety data from this study continue to support <unk> outstanding safety profile.
Collectively these findings which are consistent with the results of the aware 1 study.
Alright, <unk> broad applicability and support its continued evaluation and combination with checkpoint inhibitors in pancreatic and other gastrointestinal cancers.
In order to pursue Palo Verde ex development in gastrointestinal cancers.
We are leveraging collaborations with industry leaders and academia, namely Roche and aio of leading academic cooperative medical oncology group based in Germany. This allows us to preserve our primary focus on and devote the necessary resources to our lead breast cancer program.
Now to speak a bit more about these collaborations and our business development efforts ill hand, it off to Andrew Andrew.
Thanks, Tom and thanks to all of that joined Us on today's call.
As Tom mentioned, we are leveraging collaborations of erosion of IL 2 free.
Develop palo <unk> in combination with checkpoint inhibition in pancreatic and other Gi cancers.
We are doing this through our phase <unk> trial, which is designed to evaluate <unk> plus of roche's anti PDL, 1 checkpoint inhibitor to centric from patients with metastatic pancreatic.
Metastatic colorectal advanced cancers.
We continue to make progress and goblet and recently received approval from regulators in Germany.
Now that we have the blessing of the German regulators from the study manager Aio, we of open the trial for enrollment and are working with sites to commence enrollment as soon as possible.
Goblet cells that is representative of the broader strategy, we're executing quick span Palo <unk> potential therapeutic impact by focusing its development and highly prevalent indications beyond our lead HR positive <unk> negative breast cancer program.
The strategy is represented by additional ongoing trials, including Irene.
Which is our phase II study evaluating <unk> in combination with insights anti PD, 1 checkpoint inhibitor rent of found the map on triple negative breast cancer.
And by our ongoing study with BMS evaluating Palo <unk> Opdivo combination therapy.
In multiple myeloma.
These collaborative trials leverage the growing interest from large pharma and biotech companies and improving the efficacy of checkpoint inhibitors.
Such interest is driven by a large commercial opportunity and the high unmet need at the.
The checkpoint inhibitor market is expected to reach $55 billion by 2025.
Less than 1 in 5 patients responding to these therapies.
The low response rates of checkpoint inhibitors of due to several different resistance mechanisms that can be addressed by the immuno therapeutic effects pillow rear apples, demonstrating the aware 1 and other clinical trials.
This leaves us well positioned as we execute on our BD strategy and work towards the goal of securing of global clinical and commercialization partnership.
We are taking of proven approach in pursuit of this goal as past deals have typically been preceded by research collaborations that are similar to those non which we're currently engaged.
Now before I hand, it off the correct I'd like to take a moment to speak about our BD strategy as it pertains to the development of <unk> as an enabling technology for additional immuno therapeutic agents beyond checkpoint inhibitors.
In order to execute on this call we aimed to identify high quality partners that will take the lead on this development pathway and assumed the research responsibilities and costs associated with it.
These efforts are bolstered by preclinical data showing that <unk> synergistically combines with agents such as car T cell and by specific antibodies as well as park and CDK <unk> inhibitors, which were the subject of separate poster presentations at the ACR in April.
The stems from Palo <unk> ability of train immune cells to fight cancer and weekend tumor defense mechanisms.
By reversing immuno suppressive Tms.
While these preclinical data and potential opportunities are exciting I should emphasize that our primary focus remains on our lead breast cancer program and the execution of our stated clinical objectives.
As we move forward, we plan to continue leveraging our relationships with our distinguished collaborating with Roche.
Pfizer, Merck Serono, BMS insight and <unk>.
Pain and optimal risk benefit balance as we work to execute on our goals we.
We're very pleased with the progress we have made to date and are confident that our talented team and Palo <unk> robust dataset has us poised for continued success.
With that I'll turn the call over to Kirk look our CFO to discuss our financial results for the second quarter correct.
Thanks, Andrew and good morning, everyone.
I am pleased to report that <unk> remains in the strong financial position as we continue to advance Palo Europe towards towards the Registrational study and execute on additional clinical and corporate objectives.
Our cash and cash equivalents as of June 32021 was $58 million compared to $31.2 million at the end of fiscal 2020.
This included net proceeds from financing activities of $33.4 million, mainly from our aftermarket facility and I'm pleased to report our financial runway of key consideration for institutional investment extends into 2023.
Our operating expenses for the second quarter of 2021 were $3.5 million compared to $3 million in the second quarter of 2020.
This change was largely due to higher investor relations activities. This past quarter and the continued impact from last year's increase in directors and officers of insurance premiums.
So we minimize the effect of these increases through lower professional service fees.
Research and development expenses for the second quarter of 2021 were $3.2 million compared to $2.5 million for the same period last year.
This change was due to increased clinical trial expenses as we progress our ongoing studies, including direct patient costs for a bracelet 1 in aware 1 studies as well as incurring trial initiation activities for our Goblin study.
Accordingly, we incurred higher R&D compensation related expenses in support of our expanded clinical program.
Our manufacturing expenses were lower in the second quarter of 2021% compared to the same period last year. As 2020 included start up costs related to a cgmp production run.
With that the net loss for the second quarter of 2021 was $7.2 million.
Compared to $6.8 million from the second quarter of 2020, which.
Which equated to a net loss of <unk> 13 per share for the the 2021 period and the net loss of <unk> 17 per share for the 2020 period.
With that I'll hand, it back to Matt Matt.
Thank you Kurt.
Before we move on to the Q&A at the first like to say, how proud I am of the Alcoholics team.
When the pandemic began almost a year and a half ago.
The immediately adapted some of the challenges posed to keep the company and our clinical programs on track.
They continue to build on this momentum every months and thanks to these efforts in.
Clinically demonstrated the immuno therapeutic effects of <unk> of our rep, which augment checkpoint blockade on are the cornerstone for multiple oncology treatments.
Their hard work has also left us poised to achieve a steady stream of value creating milestones including.
The dosing of the first patient in our goblet study.
The reporting of the final aware, 1 biomarker data from cohorts, 1 and 2 which is expected in the second half.
Completion of the bracelet 1 enrollment.
In the interim safety update prior range.
And the reporting of interim safety data from our multiple myeloma trial evaluating <unk> in combination with the policy.
<unk> Opdivo, which is expected in the fourth quarter.
Moving forward the talent and dedication consistently displayed by the Iconix team gives me confidence that we will continue to build on our positive momentum as we work towards these milestones.
This will allow us to continue generating value for our shareholders as we work towards our ultimate goal of improving the lives of cancer patients.
With that I'd now like to open the lines to take some questions operator.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have any questions. Please press star followed by 1 on your Jets Jonestown Youll hear from acknowledging the request and your questions will be bold in the order of the RAC.
Should you wish the decline from the falling prices.
<unk> followed by <unk>.
Using the speaker phone please lift your handset before pressing any keys 1 moment for your first question. The first question comes from John <unk> with Canaccord. John. Please go ahead.
Hi, guys. Thanks for taking the question.
Just wondered on the price of that study, Matt if you could sort of walk us through what.
I see there.
The 4 proceeding to share.
The study and then just in terms of the pivotal study designs just kind of curious as to how youre thinking about that.
At the moment thanks.
Thanks for the question John.
What aware of is teaching us is that we with or without checkpoint blockade get a pro inflammatory events.
And this is why we think we see these long survival tails.
Breast cancer program and our pain program.
All of our programs really.
What bracelet is really there to accomplish is largely.
By of chemical or immunological signals day to us what we're looking for that ratio between CD 8 T. Regs of CD 8 sort of the positive inflammatory cells T regs, but negative viral infections can cause boats.
So the cat antagonize each other but what we found from aware of the addition of the checkpoint blockade largely eliminated that T. Reg. So again, we're looking for this confirmation that we can skew the CDA T Reg balance.
We're planning for the phase 3 now and I think what we're really looking at is the addition of checkpoint blockade into our phase III program as well as the addition of our Biomarkers. Tom is there anything you'd like to add to my response.
Okay.
No Matt I think that's right I mean, we obviously want to look at the bracelet data as it comes in and be informed by the data but as.
I think the.
The expected and most likely scenario is exactly as you described.
Great. Thank you.
Mhm.
Thank you. Your next question comes from Patrick <unk> with HC Wainwright Patrick. Please go ahead.
Hi, Thanks. Good morning, I was just wondering on the aware 1.
Outcome with the final biomarker data.
The additional data.
Would you be expecting there could be generated kind of help you.
As you are forming the the pivotal trial design and then just regarding the Irene trial, the interim safety update.
There would be any day.
The additional signs of efficacy in this initial data or is that more of 2022 of them.
First the first question first with the aware 1 of where 1 is the treasure trove for us. It really is because we have so much tissue over a 3 week course, so a lot of the work that we're doing now is we're looking at next neighbor analysis, which.
What that does is using.
Appropriate labeling for immunological cells accounts herself it lets us see physically how the virus is drawing the.
The logical cells into the tumor of what we're hoping to see is those patients who had the highest <unk> score have the closest proximity of the inflammatory cells to the accounts ourselves.
And we have of getting these blips that really show you immunologically, what's happened out of cellular level. So that's 1 thing and what we're obviously, hoping to see of checkpoint blockade continues to restrict these T regs, while getting this positive CD of inflammatory event. We're also doing analysis.
At the molecular level, where we're actually looking for changes in gene expression to really see how this is being driven.
What pathways are being turned on as the interferon type 1 type 2.
Are we seeing 6 sale of 910 of 11 or are we seeing more of it in the presence of the checkpoint blockade and without.
So it really allows us to characterize exactly what's happening so that we can better.
The design.
Go forward treatments, because again, if we're activating the pathway in non responders.
Maybe we can use an inhibitor to that pathway to allow a greater response or if alternatively, if we're getting a very positive.
Pro inflammatory accumulation of signaling is there something we can use to make that even greater so it gives us a great deal of information and really decide how we want to move forward in breast cancer and beyond.
And I think maybe the beyond the the other thing what we're looking for here is to identify what's the difference between a responder in the non responder because we have.
<unk> seen these patients where they have been treated for 5 or 6 years.
And this is a very heavily pretreated patient population, where we have these unexpected survivors of where 1 will hopefully help us determine is why we had these extraordinary of responders.
Versus the Midland responders to non responders and that was really.
What the goal of where it was.
Now, where I think it points us in the direction to checkpoint blockade.
What we saw is the ability to transform non PD lone patients until undergrad PDL, 1 overexpression and that leads me into the Irene question IRA.
I read I think will largely be a safety update.
We'll negotiate obviously with the investigators but this is.
Ed.
A program that we're running with insight so we do have 2.
To maintain the confidentiality obligations under our contracts, but it'll be as fulsome as we can possibly make it. These investigators are obviously looking.
Enhanced enrollment expand the number of sites of the more information, we can share with our stakeholders the better it is for everyone but.
For San Antonio it'll definitely be of safety updates, we will see what we can negotiate in terms of additional information.
That's helpful. Thank you very much.
Patrick.
Thank you there are no further questions at this time Mr. Coffee you May proceed.
I just wanted to thank everyone for dialing in and participating and thank you for the questions and we look forward to moving this program for the thanks everybody.
Yeah.
Ladies and gentlemen. This concludes today's presentation. Thank you once again for your participation you may now disconnect.
Yeah.
Yes.