Q4 2021 Oncolytics Biotech Inc Earnings Call

Good afternoon, and welcome to oncology biotech <unk> fourth quarter 2021 conference call. All participants are now in listen only mode. There will be a question and answer session. At the end of this call. Please be advised that this call is being recorded at the comp.

These request and I would like to turn the call over to Jon Patton Director of Investor Relations and Communications. Please go ahead Sir.

Thank you operator, and good afternoon, everyone.

Earlier today <unk> issued a press release, providing recent operational highlights and financial results for the fourth quarter and full year 2021 replay of today's call will be available on the events and presentations section of the analytics website approximately two hours after its completion.

Remarks from company management, we will open the call for Q&A.

As a reminder, various remarks made during this call contain certain forward looking statements relating to our business prospects and the development and commercialization telerate rent.

Any statements regarding our focused strategy and objectives I belief as to the potential actions Tel Aviv requisite cancer therapeutics.

<unk> aims expectations and anticipated benefits of our current.

And pending clinical trials plans and expectations regarding a potential registrational study plans regarding the expansion of the <unk> market.

Potential plans for collaborations with industry leaders financial runway.

Statements related to anticipated development. The company's business. These statements are based on management's current expectations and beliefs and are subject to a number of factors, which involve known and unknown risks delays uncertainties and other factors not under the company's control.

Cause actual results performance or achievements of the company to be materially different results performance or expectations implied by these forward looking statements.

Any forward looking statements, which Colin codecs expresses an expectation or belief as to future results such expectations or beliefs are expressed in good faith at least a reasonable basis, but there can be no assurance that the statements or expectation or belief will be achieved. These factors include results for current or pending clinical trials risks associated with electric.

Pretty protection.

Projections actions by regulatory agencies and other factors detailed in the company's filings with SEDAR and the SEC on critics does not undertake any obligation to update these forward looking statements, except as required by applicable ops now I will turn the call over to Dr. Matt Coffey, President and Chief Executive Officer upon clinics biotech that.

Thanks, Sean and thanks to all who are joining us today to discuss our fourth quarter and corporate update.

Now in addition to John I'm joined by Tom Harmon, Our Chief Medical Officer, Andrew Do you Gotta Doro, our global head of business development, and Kirk Lusk, our Chief Financial Officer.

I'm pleased to say that we had a very strong 2021 and have continued to build on our momentum in the early part of 2022.

If you've not had a chance I would encourage our investors to read the letter to shareholders that we distributed a press release on January 11.

In it we walk you through why what we saw in 2021 insignificant and why we're excited about 2022 and our upcoming milestones.

Advancing towards potential value inflection points across our pipeline with a strong historical foundational data set but demonstrates <unk> ability to deliver a statistically significant survival benefits as was shown in a randomized phase two metastatic breast cancer trial.

Generate a profound and concerted innate and adaptive anticancer immune response, and synergize with multiple oncology treatments.

Now the most significant of our expected 2022 milestones as the top line data announcement from bracelet, one a randomized phase II trial evaluating <unk> in combination with checkpoint inhibition in HR positive <unk> negative metastatic breast cancer.

Bracelet, one is being conducted with collaboration with Pfizer and Merck Serono and is designed to expand upon our prior positive phase II results in this indication by generating critical data requested by the FDA in a global pharma collaborators.

Data that confirms the overall survival benefit we saw in R&D 2014, which served to Derisk, our lead breast cancer program and broader pipeline and we believe that data represents the last major step on pellets paths to a registrational breast cancer study.

As we work towards this data readout, we intend to begin discussing our plans for a registrational study with the FDA and other regulators. So that we can advance the programs with efficiency.

Tom will be speaking more about bracelet, one in our lead breast cancer program and debt I will say now that the trial remains on track for full enrollment in late Q1 early Q2 with topline data in Q4, assuming no or limited impact from COVID-19.

Beyond our lead program <unk> ability to generate an innate and adaptive immune response, thereby weakening tumor defense mechanisms continues to spur collaborations with industry leaders in academia.

These collaborations include those underlying our ongoing trials in triple negative breast and gastrointestinal cancers.

Both of which recently reported interim updates that further demonstrate the favorable safety profile of pillar checkpoint inhibitor combinations.

These positive updates are notable because the lack of toxicity in these large indication provides additional opportunities to expand the potential market of pellet checkpoint inhibitor combinations.

The opportunity for expanding beyond checkpoint inhibitors has been evidenced in data we reported during the 2021 year.

Promising combination therapy data readouts involving car T bi specific antibodies harp and CDK <unk> inhibitors are evidence of pellet differentiated and broadly applicable mechanism of action.

We believe leveraging Palo Verde, a rep in this fashion could address unmet needs across the spectrum of target indications and we expect to report clinical update supporting this hypothesis in both multiple myeloma Gi and glioblastoma at upcoming conferences.

Looking ahead, we plan to utilize the partnership strategy to pursue the multitude of market and business development opportunities offered by <unk> and its potential to act as an immunotherapy backbone.

This will allow us to operate efficiently as we devote our primary focus and resources towards the announcement of Palo Verde, a rep to registration in HR positive <unk> negative metastatic breast cancer.

With that I'll now hand, it off to our Chief Medical Officer, Tom Vitamin <unk> should also congratulate on his well deserved recent promotion to provide a bit more detail on bracelet, one and our recent highlights.

Thanks, Matt and thanks to all those listening on the call today.

As a reminder, bracelet, one and our early stage breast cancer study where one.

Were designed to achieve three crucial objectives put forward by regulators and our pharma partners. After seeing the results of <unk> III. The randomized phase II study that showed a near doubling of overall survival in metastatic HR positive <unk> negative breast cancer patients treated with Paclitaxel combined with Palo <unk>.

These objectives were to first confirm that pellet rear rep works through an immuno therapeutic mechanism of action. This would indicate that it stimulates long lasting anti cancer effects and explains a survival benefit seen in R&D to one three.

Determine whether palo <unk> synergizes with immune checkpoint inhibitors.

This could lead to an enhancement of the survival benefit seen in IMT, two and three in breast cancer patients and could also potentially provide more effective treatment options for patients with many other types of cancer.

And third determined of changes in peripheral blood T cell populations could potentially serve as a novel blood based biomarker to predict patient responses to <unk> therapy.

This could improve our chances of success in future studies by evolving the selection of patients most likely to benefit from therapies that include <unk>.

Now on past earnings calls, we detailed data from aware one first two cohorts, which exclusively enrolled patients with each with the HR positive <unk> negative breast cancer subtype. These.

These data showed that aware one met its primary endpoint with <unk> reversing immunosuppressive tumor microenvironment.

And generating an expanding T cell clones and up regulate PD lone expression.

It led to increases in cell til score and tumor infiltration of CDA positive T cells to metrics that are known to correlate with improved clinical outcomes.

Additionally, we found that several of these positive effects were enhanced with the checkpoint inhibitor was combined with pellet.

And the changes in peripheral blood T cell populations correlated with cell til score and tumor infiltrating CDA T cells.

Taken together these promising findings indicate that we are well on our way to achieving the three key objectives I mentioned earlier.

Clearly show the Tele Rep hasn't immunologic mechanism of action and demonstrated synergy with checkpoint blockade.

Moreover, they indicate the changes in peripheral blood T cell populations they service a predictive biomarker.

With these objectives in mind.

We designed bracelet one study that is very similar to <unk>, two and three with two notable exceptions first bracelet, one exclusively enrolls HR positive <unk> negative metastatic breast cancer patients. The population that demonstrated the most pronounced overall survival benefit in R&D to entry.

And second in addition to having steady arms.

Waiting Paclitaxel alone and Paclitaxel plus Telerik bracelet. One also includes a third study arm, which paclitaxel peloria revpar combined with Pfizer and Merck <unk> anti PDL, one checkpoint inhibitor <unk>.

We are pleased with the progress being made and bracelet, one and we expect to complete enrollment later this month or early in the second quarter.

Approximately 16 weeks after enrollment is concluded the final patient scans required for assessment of the study's primary endpoint will be completed.

Once the results of the scans are available we will compile and analyze the data and then discuss these results with the relevant parties as we continue to plan for our next steps on the path to registration considering all of this we anticipate announcing the topline results of the trial in the fourth quarter of this year.

I'd now like to take a minute to set the stage for what to expect from the bracelet one study.

Data from earlier studies give us some insight into what to expect from both the Paclitaxel alone and Paclitaxel plus pellet rear wrap arms of the study.

However, now.

Just on the aware one study results, we have a much clearer understanding of the immunologic effects of having Palo <unk>, including increasing PD lone expression and the infiltration of CDA positive T cells into tumors.

Moreover, the aware one study provided extensive insights into the potentially beneficial immunologic effects of combining <unk> with a checkpoint inhibitor <unk>.

These include reversing the immunosuppressive nature of the tumor microenvironment and enhancing the development of potentially protective innate and adaptive immune responses.

The <unk> III study gave us a clear reason to expect that the addition of <unk> to chemotherapy may benefit in metastatic breast cancer patients now based on the aware one results. We are hopeful that the synergistic effects of adding a checkpoint inhibitor tele rep will further benefit patients in the bracelet one study.

In addition to collecting data on overall response rate and survival.

We are also collecting progression free survival safety and biomarker data from the bracelet one study.

I should note however that we do not plan to present, the entirety of the bracelet one results during the anticipated fourth quarter announcement, and then we expect to present additional updates at medical meetings in 2023, including updates on PFS and overall survival. Additionally, I should point out that due to the size of the bracelet, one trial, which is expected to enroll a total of 40.

Eight patients it is not powered to detect statistically significant differences in overall response rates between the study groups. Therefore, we will be evaluating numerical differences between bracelet. One study groups to support the statistically significant survival benefits previously observed in <unk>, two and three and to inform the design of the phase.

III study.

We thus few bracelet one it's the last major step in <unk> path to a registration study and believe the anticipated Q4 data announcement represents a major potential inflection point for the company.

Now that I've provided you with a refresh of our aware one program and an overview of our bracelet. One study I'll hand, it off to Andrew to speak a bit more about our partnership strategy as far as our broader business development efforts Andrew.

Thanks, Tom and thanks to all who have joined us on today's call.

I'd first like to touch on some of the recent progress in our Irene and goblet trials, which are examples of how we're collaborating with industry leaders to develop Hillary of rap in combination with checkpoint inhibitors and expand its potential therapeutic impact.

As you May recall Irene is a phase two trial evaluating <unk> in combination with insights PD, one checkpoint inhibitor <unk> in metastatic triple negative breast cancer at the most recent San Antonio breast cancer Symposium in December we were pleased to report that the combination was well tolerated in each of the five patients enrolled at that point in the trial the trial.

Remains ongoing and we look forward to its continued progress.

We also recently provided positive safety update from our phase <unk> trial, which is a valued palo rare wrap in combination with roche's PD L. One inhibitor at Taser laser mab in patients with advanced or metastatic pancreatic.

<unk> cancers.

We were pleased to report in February than an independent review of the trials pancreatic cancer safety Brennen noted no toxicity concerns and that the data safety monitoring Board recommended the trial proceed as planned.

The trial also includes a safety run in for its third line metastatic colorectal cancer cohort, which remains ongoing with an update expected in the first half of the new year.

Now one point I'd like to emphasize how Irene and goblet taken similar approach to try and address the pressing unmet need.

While checkpoint inhibitors have been commercially successful less than one five patients respond to these therapies due to several different resistance mechanisms that can be addressed by far Europe's clinically demonstrated immuno therapeutic effects.

Mentioned earlier, Hello, rare epic shown the ability to remodel the tumor microenvironment, causing PDL one upregulation. In addition to increasing CDA positive cells and memory T cells.

Outcomes like these are appealing to industry leaders, because Palo Europe has demonstrated it can increase the proportion of patients eligible for therapies like checkpoint inhibitors and increase the benefit derived from combination therapies.

The ultimate goal is to secure a global clinical and commercialization partnership and past deals have typically been preceded by research collaboration similar to the trials, Tom and I have discussed on this call.

Next.

I'd now like to provide another update on the additional progress made since our Q3 call with that light and archive our partners working to develop and commercialize Paul rare Rep in China, Hong Kong, Macau, Singapore, South Korea and Taiwan.

In October <unk> dosed, the first patient they are bridging safety trial evaluating the safety tolerability and preliminary efficacy of Palo <unk> Paclitaxel combination therapy.

Chinese patients with advanced or metastatic breast cancer.

This trial follows the design that so much of the Palo Europe , Paclitaxel cohort and 90 213 now.

Now in January Adlai announced that they had advanced a second dose escalation cohort of the trial.

This is significant because the second dose cohort is equivalent to what was administered to patients to 90, 213, which showed a near doubling of survival in metastatic HR positive <unk> negative breast cancer patients.

Initiation of this cohort is an important step that reflects a positive safety findings from the trials first dose escalation cohort where no toxicity concerns were noted.

The ultimate goal of the bridging trial is to satisfy Chinese safety requirements, and thereby accelerate Paulo rear apps development and advice principal jurisdiction.

Subsequent studies will include data from <unk>, three and bracelet, one in future regulatory submissions and trial design decisions.

From these studies and regulatory requirements from the Chinese authorities will dictate what a phase III study will entail as the phase III design has not yet been determined.

Results from bracelet, one will factor heavily when considering whether a checkpoint inhibitor will be included in our phase III study in China.

Hello rewrites advancement in these jurisdictions is significant as China alone has the world's second largest pharmaceutical market with rapid growth expected over the coming years.

By leveraging our partnership with Adlai, we have position ourselves to capitalize on the significant market opportunity with minimal risk and clinical costs.

Finally, before I hand, the call over to Kirk.

Like to reiterate a point, Matt made earlier regarding our efforts to develop <unk> as an enabling technology for therapeutic agents beyond checkpoint inhibitors.

Sufficiently pursue this call we're seeking high quality partners to lead this development pathway and assume its associated costs.

We are supported and these efforts by emerging preclinical data in our clinical results demonstrating <unk> ability to reverse immuno suppressive tumor microenvironment and recruit cancer fighting T cells into tumors.

These have led to collaborations biotechnology companies and key opinion leaders at Premier academic institutions.

And as I have discussed positive safety Readouts for T N B C and gastrointestinal cancer.

So Palo Europe dose escalation in breast cancer today.

Like to take a moment to remind our investors that pellet favorable safety profile is an important factor when we have discussions with new and existing Biopharma partners.

Being able to provide clinical safety data across multiple indications and tumor targets. In addition to combinations of multiple oncology therapies broadens, our addressable market opportunity for Palo Europe .

As such it shows the pharma world that Paolo here. It really does have the potential to be an immunotherapy backbone since it is so versatile.

While we are eager to see data from these collaborative efforts generate we remain steadfastly committed to preserving the company's primary focus on our lead breast cancer program and the execution of our stated clinical objectives.

Our relationships with distinguished collaborators such as Roche.

Pfizer Merck Serono BMS insight in Atlanta Archive helps you maintain this focus and should serve us well as we work to execute on our goals.

We look forward to the continued maturation of these relationships, which together with our talented team and robust dataset leave us well positioned for sustained success.

With that I'll turn the call over to Kirk look our CFO to discuss our financial results for the fourth quarter.

Thanks, Andrew and good afternoon, everyone. It's my pleasure to report that <unk> remains well capitalized as we advance our lead breast cancer program towards a registrational study and execute on additional clinical and corporate objectives.

We ended 2021 with cash and cash equivalents of $41 $3 million.

<unk> to $31 2 million at the end of 2020.

Based on our current projections, we expect our current cash resources to provide a financial runway into 2023, taking us through bracelet ones topline data announcements and additional clinical readouts.

Our operating expenses for the fourth quarter of 2021 were $3 $8 million remaining relatively consistent with the fourth quarter of 2020 operating expenses of $4 million.

For the full year 2021, our operating expenses were $13 3 million compared to $12 5 million for the prior year.

This change largely related to a rise in public company costs, including an increase in our directors and officers insurance premiums and an increase in our investor relations activities.

Research and development expenses for the fourth quarter of 2021 were $3 7 million compared to $4 1 million for the same period last year.

This change was largely due to a decline in our aware one related expenses as a large majority of patient enrollment occurred back in 2020.

As well our manufacturing related expenses were lower given we completed a product fill back in the fourth quarter of 2020.

Now this was partly offset by higher R&D compensation related expenses as we continue to invest in and support our expanding clinical development program.

Research and development expenses of $12 $9 million for the full year 2021 and 2020.

Now for 2021 in addition to our continued investment in our clinical program and our R&D team. We also increased our translational science activities. This year, focusing on car T therapy and by specific antibody opportunities.

This was offset by lower manufacturing activities as we had sufficient product supply from the production runs and product builds completed in 2020, lower intellectual property costs due to the lapsing of patents in certain jurisdictions and foreign exchange fluctuations.

The net loss for the fourth quarter of 2021, the $7 $8 million compared to $9 three for the fourth quarter of 2020 equating to a net loss of <unk> 14 per share for the 2021 period compared to 21 per share for the prior period.

The net loss for the full year 2021 was $26 3 million compared to $22 5 million for 2020, equating to a net loss of 49 cents per share for 2021, and a net loss of <unk> 56 per share for 2020.

Now with that I'll hand, it back to Matt Matt.

Thank you Karen.

Yahoo family is continuing to work hard to drive our programs forward.

Our pharma partners are continuing to provide world class input and guidance and our investigators and collaborators continue to share our vision for the opportunity presented by <unk> mechanism of action for which we are extremely grateful.

We would also like to thank and acknowledge our clinical trial patients and their families for their participation in our studies and in their fight against this terrible disease.

Lastly, I would like to thank our investors, who provide us with the ability to pursue these inspiring names.

<unk> cannot have it down to where it is without all of these stakeholders contributions.

Looking towards the future we have a truly unique immuno therapeutic agent that has provided us with exciting clinical data and continues attracting interest from significant global collaborators.

Immuno therapeutic effects can be seen across multiple indications and in combination with an array of oncology treatments.

We believe these effects could have a profound positive impact on the quality of life of cancer patients worldwide and in turn provide a broad commercial opportunity of which we have only begun to scratch the surface.

We will continue to further Palo Verde reps clinical development as there are significant opportunities worthy of pursuit, we will still preserve our primary focus on breast cancer, while selectively engaging partners and collaborators to progress our efforts in other areas.

Advancing our lead breast cancer program towards a Registrational study is important to our team as it provides a meaningful foundation, which we can build upon to unlock additional value in other indications.

The clinical data from aware one alone has brought a substantial insights about how <unk> can be leveraged in many clinical settings by effectively harnessing the patients own immune response against their disease.

These learnings are crucial and advancing pillar as a world class immunotherapy.

Continuing to add to that data goes a long way to expanding the potential value of this company.

We had several critical milestones ahead of us in the coming weeks and throughout the year. These upcoming catalysts are highlighted by bracelet, one anticipated topline data readout in Q4, which represents the last major clinical staff on palace path to a registrational breast cancer study.

We also expect to report a multiple myeloma study update early results from our <unk> program and additional clinical data in glioblastoma at upcoming conferences.

As we move towards these catalysts, we are doing so with a strong team that has consistently executed amid an ever evolving pandemic.

I believe their experience and expertise together with the strong clinical and preclinical data set supporting our pipeline leave us well positioned to generate shareholder value, while working towards our ultimate goal of improving the lives of cancer patients.

With that I'd like to open the lines to take some questions operator.

Thank you, Sir ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your Touchtone phone you will then hear <unk> prompt acknowledging your request and if you would like to withdraw your question simply press Star followed by two and if you're using a speaker phone. Please lift the handset before pressing.

Keith. Please go ahead and press Star one now if you do have a question.

And your first question will be from Patrick Tokyo.

Wainwright. Please go ahead.

Hi, Good afternoon. This is Jason Shea on for Patrick and My first question is for the bracelet study can you tell us what political like see within their phase III data readout for <unk>.

Like how would this proceed to your phase III pivotal study thank.

Thank you.

I'll start Matt Tommy how are you doing.

Ed.

Hi, Dan.

Well, we very much thanks.

So it should fall in line with the learnings of where one what what we know from bracelet teeth.

<unk> as we saw a survival advantage.

And at that point, it was presumably due to the immuno therapy aspects of the product aware, one really to speak to you know the virus itself, causing a pro inflammatory bandwidth remodeling of the tumor microenvironment and the checkpoint inhibitor, leading to enhanced inflammation and enhancing the quality.

Which led to better sell sell scores, which should in turn lead to better outcomes in terms of PFS and OS we would very much hope to see something similar in a bracelet with.

Outcomes being improved from Paclitaxel alone linked to Paclitaxel plus virus.

And again, we would like to see an improvement by the addition of a checkpoint blockade now those are wishes.

Certainly aware one exceeded our expectations bracelet, not given a formal readout, yet but will do so in Q4 with that I'll, let the more knowledgeable Tom Heinemann join in to see what his thoughts are on this.

Yes, Thank you Matt.

I mean to be honest I don't have any real new insights I think.

Mapped express that.

Perfectly and that is we do have some sense.

From the previous two or three study what to expect with the Paclitaxel alone arm in the Paclitaxel plus pellet Ria Revpar and we expect and hope based on the aware one data to see an additional immunologic effect, leading to clinical benefit from the addition of a checkpoint inhibitor.

And as the data come in we look forward to being able to.

Sure those data towards the end of this year.

Yeah.

And then Ken just a follow up question is are there plans in terms of progressing with Pfizer or any of your collaborators for.

<unk> for the phase III pivotal study or will Onkelinx kind of proceed alone.

Again, that's a great question.

We think there is multiple opportunities beyond breast cancer I mean, obviously, we're very excited about the goblet program. We're excited by what we're doing in heme malignancies that other other things like like GBM.

With the collaborations and co development agreements, we have right now we have brought some of the world's best and brightest pharmaceutical companies together to collaborate with us so what.

What we'd like to see is some competitive tension between the parties.

The goal of the data becomes available as the aware and bracelet data becomes available we would like to obviously bring in one of these world class leaders, who contributed already to continue contributing into phase III for breast cancer, but we would look to hopefully expand that into other indications. So that we're not looking at a binary.

And the phase III environment, we would like to have multiple phase III programs at play and again.

We would like to see that done and potential with a partner so that'd be less dilutive to existing shareholders. But also so that we can move slightly through the regulatory approvals and I think Mister.

Mr. <unk> I would like to join in here for a second as well Andrew do you want to.

Just wanted to remind everybody as you probably know from prior calls.

From the time, we provide the report to Pfizer and Merck Serono the collateral.

Collaborators on bracelet, they have 90 days to evaluate the data on their own.

They may or may not need 90 days, where they may need more than 90 days, but come day 91, we do have a number of other top 20 oncology companies that have expressed an interest in abrasive data so.

We would want to get that data to those companies as well and then of course as Matt mentioned, we've got the goblet data that should be maturing in parallel to some degree and so we want to make sure we leverage both what's available from goblet as well as bracelet and the prior final datasets from <unk> and.

Aware to have really a critical mass with which to try and bring more than one company to the table.

Okay, great. Thank you.

I can just squeeze in one last question.

And this is more just in terms of the current events has alkaloids felt any disruption in their clinical trials since the beginning of the war in Ukraine and.

How does that really impact anything with David with your clinical trials out in China or in Asia area.

No not at all.

Okay.

Fortunately, we're not running anything in eastern Europe , we may not be able to be is a resounding yes.

Our breast cancers programs are all in the U S. What we're doing.

God, let us all in Germany, but we've been unaffected.

Okay, alright, great. Thanks, so much.

At this time right.

As a reminder, ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your Touchtone phone.

And at this time, we have no further questions I would like to turn the call back over to Dr. Coffey.

Well, thanks again, everyone for joining us on the call. We look forward to our continued progress and we'll keep everyone updated along the way thanks, everyone.

Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.

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