Q4 2022 MEI Pharma Inc Earnings Call

Good afternoon and welcome to the MAI-Pharma 2022 Fiscal Year-End Conference Call. Please be advised that the call is being recorded at the company's request.

At this time, I would like to turn the call over to David Walzy, MEI Senior Vice President in Corporate Affairs. Please go ahead.

Thank you and good afternoon everyone and thank you for joining us today. After the market closed today, we followed our Form 10-K for the fiscal year ended June 30, 2022 with the Securities and Exchange Commission and issued our financial results and corporate highlights press release, both of which are available on our website at www.meifarma.com.

On our call today, we will provide a summary of financials from the fiscal year ended June 30, 2022, and then review progress in our programs and business over the last year. We will then open the call to your questions.

Before we get started, I want to call your attention to the fact that this conference call may contain certain forward-looking statements within the meeting of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in its forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties as discussed in our SEC filings, including our most recent annual report on Form 10-K filed earlier today.

A replay of this call will be available on our website soon after its conclusion. I'd now like to introduce you to our speakers for today. With me are Dan Gold, our President and Chief Executive Officer, and Brian Drasba, our Chief Financial Officer. Additionally, David Erso, our Chief Operating Officer and General Counsel, as well as Richard Gali, our Chief Medical Officer, are also with us today. Brian will start with a summary of our financial results before Dan shares remarks reviewing the year and commenting on coming quarters.

After that, we open the line for your questions. I'll now turn the call over to Brian . Thank you, David. I'll provide a brief overview of our financial results. For more detailed information regarding our financial results, I invite you to review our Form 10-K filed earlier today.

I'm pleased to report that we finished our fiscal year 2022 with about $153 million in cash, cash equivalents and short-term investments with no outstanding debt.

For the year ended June 30, 2022, our net cash used in operations was $48.7 million compared to $52.4 million for 2021, the decrease primarily related to changes in working capital.

Research and development expenses were $85.6 million through the year end of June 30, 2022, compared to $69.4 million in the prior year. The increase was primarily related to increased development costs associated with Xandellisib, increased drug manufacturing costs, and increased consulting fees to support our clinical trial activities.

General and administrative expenses were $30.5 million for the year ended June 30, 2022, compared to $24.4 million for 2021.

The increase primarily related to increased personnel costs, professional services costs, and general corporate overhead expenses incurred during the year.

MEI recognized revenues of $40.7 million for the year ended compared to $34.8 million in 2021. The increase in revenue related to increased reimbursement of expenses from Piawakiren due to research and development activity related to Xandlicit.

Net loss was $54.5 million, or $0.44 per share for the year ended June 30, 2022, compared to a net loss of $41.3 million, or $0.37 per share for 2021.

We had 133,152,045 shares of common stock outstanding at the end of June 30, 2022, compared with 112,614,643 shares as of June 30, 2021.

Our adjusted net loss for the year ended June 30, 2022, excluding non-cash expenses related to changes in the fair value of our warrants, a non-GAAP measure, was $75.2 million compared to an adjusted net loss of $59.4 million for 2021. With that, I'll turn the call over to Dan.

Thanks Brian , and thanks everyone for joining us this afternoon. I hope you all had an enjoyable summer.

This past fiscal year was marked by several key events in our LEADS and ELISA program, starting with the announcement of the first patient dosed in our global phase 3 coastal study.

Shortly thereafter, we were very excited to report top-line data from the Phase II Tidal Study, demonstrating a 70.3% overall response rate in follicular lymphoma patients with at least two prior lines of therapy.

about half of which obtained a complete remission.

On the safety and tolerability side, at the data cutoff date, the discontinuation rate due to any adverse event in title was 9.9 percent.

Notably, grade three adverse events of special interest tended to occur in the first three cycles, which coincides with the period of daily continuous dosing in our intermittent dosing regimen.

Recall, patients are administered Zandalizib once daily for two 28-day cycles as a response induction regimen, followed thereafter by once daily dosing for the first seven days of each subsequent 28-day cycle.

We now look forward to reporting complete title data at an upcoming medical meeting.

It was very encouraging to see that the title data are consistent with the data from our previous Phase I experience, which was just published this July in the Lancet Oncology.

Should that consistency carry forward to patients administered Xandilizib plus Rituxan from the Phase 1B experience to patients being evaluated in coastal, we have the potential to provide a highly differentiated chemotherapy-free regimen to patients that should provide significant benefit to patients.

Following our announcement of the title data in December , we successfully completed a follow-on offering raising gross proceeds in excess of $50 million to support our current programs during a rather turbulent time in the financial markets.

With the addition of this raise, we now estimate we have sufficient cash to fund operations for about two years.

Despite a good start to the year, our success was tempered by the changes at the FDA relating to its approach to the type of study designs required for potential accelerated approval under...

21 CFR Part 314500, Subpart H.

The change in approach to accelerated approvals was first communicated to MEI in March of 2022 meeting with the FDA and then expanded upon publicly communicated during an ODAC meeting this past April . At the ODAC meeting, the FDA communicated a change in position regarding the benefit and risk assessment of PI3 kinase inhibitors due to a class-associated toxicity concern.

stating they would no longer consider granting accelerated approval based solely on single-arm studies.

Subsequently, the FDA communicated a new initiative they call Project Frontrunner.

replacing its longstanding approach to accelerated approvals generally.

This new initiative follows decades where the FDA granted accelerated approvals based on single-arm studies to open early access to new cancer drugs generally for patients who've already tried several other regimens, including a number of PI3 kinase inhibitors.

In brief, under Project Front Runner, the FDA has communicated its intent to consider support for accelerated approval of cancer drugs based on data from randomized studies, rendering data generated from single-arm studies such as Tidal generally insufficient in the eyes of the FDA to adequately assess risk and benefit, and thus support an accelerated approval marketing authorization.

Accordingly, in our meeting with the FDA earlier this year, the agency discouraged a submission based on the Phase II single-armed tidal study and emphasized that MEI and our partner Kiwa Karen continue our efforts with the ongoing randomized Phase III coastal study as planned.

As announced in March and in line with the FDA's recommendation, the companies do not plan to submit an FDA marketing application based solely on the single arm Phase II title data.

The meeting earlier this year with the FDA was the first instance that the agency indicated that data from TIDAL would not be sufficient to support an accelerated approval.

While the agency essentially closed the opportunity for submission based on the Phase II title study, it did emphasize that the companies continue their efforts to evaluate Sandalissa in the ongoing randomized Phase III coastal study.

In addition, while the agency has stated that the safety of our 60 milligram intermittent dosing schedule appears reasonable, as recommended, we will continue our efforts to further support the current dose and regimen as we continue to evaluate our existing data and consider any other additional efforts as appropriate to ensure we address any questions concerning the selection of our current sandalissa dose and schedule.

As to Coastal, you may recall, this is a randomized phase three study comparing Zandalizib plus rituximab or anti-CD20 to standard of care chemoimmunotherapy.

in patients with relapsed or refractory follicular or marginal zone lymphomas who have received one or more prior lines of therapy.

Coastal is intended to support marketing applications in the US and globally with our partner, Kewakiren. The first patient, as I mentioned, was dosed last August .

The study now has over 135 sites activated worldwide, and while COVID has impacted the study and sites have closed in response to the war in the Ukraine, we are continuing to add new sites to meet our objective of completing enrollment by the end of the year 2024.

These efforts are at the forefront of our corporate focus, although various factors may impact our timelines and could push expected completion beyond the 2024 timeline.

With its pharmacological properties differentiating it from other PI3 kinase inhibitors that have been evaluated previously.

We believe Zandalizib may be ideally suited to be used eventually, both as monotherapy or in combination with other important treatment modalities in various B-cell malignancies.

Thus, in addition to our ongoing efforts to treat patients with follicular and marginal zone lymphoma, we are also evaluating Zandalizib in patients with CLL.

MCL and DL BCL in combination with Venetoclax, a BCL-2 inhibitor plus anti-CD-20, xanabrutinib, a BTK inhibitor, and rCHOP, respectively.

Finally, in an effort to leverage the immunomodulatory properties of Zandalizib, we are also evaluating potential opportunities in combination with other hematologic treatment modalities, as well as in combinations in solid tumor settings.

Beyond the San Elisa program, we also share data updates from our two clinical stage programs, as well as at various medical conferences over the past 12 months.

With respect to Boracyclib, our orally available CDK9 and MYC modulating drug candidate.

We reported data from the phase one study demonstrating the identification of a well-tolerated dose and regimen, as well as data demonstrating initial efficacy signals. We look forward to updating you on that progress.

from the combination phase of this study, which is now open to enrollment, where we will add Verusoclip to Venetoclax in patients with relapsed refractory AML, and then subsequently in patients with B-cell malignancies.

With respect to the ME344 program, we reported preclinical data at our medical meeting demonstrating that our candidates enhance the anti-leukemic activity also of venetoclax against AML cells, including venetoclax-resistant AML.

While we may consider further exploring applications for ME344 in hematologic cancer, our current efforts are focused on solid tumors. Specifically, the ME344 program will be advancing into the next phase in development in the next few quarters to evaluate our candidate plus the VEGF inhibitor Bevacin.

of Astin in patients with relapse and refractory colorectal cancer.

From the corporate perspective over the course of this last year, we strengthened our team with some key hires, including Ann Preece as Chief People Officer, Yamara Gomez as Senior Vice President, Quality, and Alejandro Ricard as Senior Vice President, Clinical Development.

Additionally, we added Sujay Kango to the board who provides significant commercial and industry experience.

Together with Kiewa Kiran, we remain committed to the ultimate potential of Zandalizib to address important medical needs as a single agent or in combination with other therapies to provide physicians and their patients important new treatment options.

While the FDA's sudden change in approach is undoubtedly a disappointing factor to our plans, it's important to realize that our clinical program continues to deliver a consistent and positive data set that suggests the opportunity to ultimately have a very strong clinical profile and supports our investment in this program. I am confident, given the knowledge and experience of the team here at MEI and our partner Kiwa Karen, along with our healthy cash position, that we will be able to provide a consistent

that we have set a good course for getting Xandelisib to patients and building value for our shareholders.

As we advance the Xandalissa program in general and in particular coastal over the coming quarters we look forward to providing updates as follows.

We plan to provide an update on the complete title data likely at the upcoming medical meeting by the end of the calendar year.

Additionally, we look forward to dosing the first patients in the choral study, evaluating Sandalissa plus rituximab and Venatoclax in patients with relapsed CLL.

And we look forward to the potential for certain additional investigator-initiated studies to accompany the already ongoing investigator study of valuing Xandelisib plus RCHOP in firstline DLBCL.

On the Verusoclip front, we plan to share an update on the Phase I program, in particular, on the combination with Venetoclax and patients with AML, probably toward the end of the next calendar year. For the ME344 program, we look forward to initiating the Phase I-B study, evaluating the combination with Avastin in relapsed colorectal cancer patients.

in the first quarter of the calendar 2023, and sharing initial data in or around the year-end.

In summary, we've achieved multiple successes over the last year.

and I am proud of the progress across our pipeline.

While the FDA's adoption of Project Front Runner outlined the new requirements for accelerated approval necessitates a reconfiguration of our Xandilisa program, I think our ultimate success and the value we can deliver to our shareholders can best be measured by how we approach and overcome obstacles to achieving our mission to improve outcomes for patients with cancer through our efforts to develop and commercialize novel best-in-class therapies.

I'll now ask the operator to provide the instructions for asking questions and then open the call for Q&A.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

To withdraw your question, please press star then 2.

At this time, we will pause momentarily to assemble our roster.

And our first question will come from Stephen Wiley of STIFL. Please go ahead.

Yeah, good afternoon, guys. Thanks for taking the questions. So people may be asking, you know,

I think last time...

we had had a conference call there was you know some suggestion that you and KIWA were going to try to engage FDA surrounding a potentially expeditious path to approval that may not necessarily be accelerated but might allow for some data submission I guess ahead of a primary endpoint so is it safe to say now kind of post this project front-runner mandate that FDA has pushed out since those comments were made that

it's more likely than not that we see a final primary endpoint read on coastal.

Yeah, hi Steve.

I guess I was following you right up to the end of the question. I think that our plan

I mean, if you recall the Project Frontrunner, the FDA has said that they are still willing to entertain accelerated approval as an example based on randomized data, and then the final primary endpoint is full approval. We are continuing efforts to pursue this dialogue with the FDA to really understand what Project Frontrunner is intended, and whether the randomized data from the Coastal Study could be used.

on this very issue.

Okay, and then maybe just as a follow-up, I know one of the other FDA mandates here is Project Optimus, and I believe you had received some feedback regarding the agency's desire to maybe see some additional dose exploration work. So is that something that you guys plan on initiating here at some point? Can you maybe just speak to how you plan on addressing some of those FDA concerns slash feedback?

Yeah, that's a really important and a very apropos question, Steve, thanks for asking. So, you know, just to, if you recall, we have done dose exploration in the program. We did start at a dose of 60 milligrams, which was much lower than what we were counseled to do, based on our animal safety data. We went up by 60s to 120s and 180s. And...

without seeing any change in safety signals, and importantly, no change in efficacy signals. So we dropped back down to 60.

Further, then, as we continue to study on the continuous and noted the toxicity profile following continuous doses, we in fact cut the dose again by 75% by moving to the intermittent dosing schedule. So we do think that we have addressed a number of the FDA's concern. However, as we've learned from the ODAC and from subsequent FDA postings that the FDA is very concerned about the balance between efficacy and safety, it isn't just.

some of the other PI3 kinases that are given on a daily dosing, that you cannot achieve this balance unless you get to a non-efficacious dose. But with the intermittent dosing, we think we may be able to achieve it. So that's our first goal is to evaluate that data and if need be, we can then consider other potential ways of doing some quicker studies and just making that final point in patients. But our first goal is to.

please go ahead.

Hi, guys. Thanks for taking my question. I know the focus is going to be on Xanalesto for the call. But do you know if the ring Jeremy Bush says that represented Xanalesto elDanestas,

Can you help me understand the cadence of News Flow outside of that regarding your pipeline, including your...

as well as other products, help us understand what we can look at over the next 12 months to see as catalysts for the company.

Yeah, that's a great question, Robin. Thanks for asking it. So as we mentioned, I will just say the Boracyclid program, because it is in a reasonable abstinence refractory, AML especially, and the B cell malignancies, it was deeply impacted by COVID. But it's definitely on track as we reported. We've completed the dose escalation. It's monotherapy as requested by the FDA.

We reported that data at ASCO or at ASH, yeah. And we're now, we have an agreement with the FDA on the protocol. The protocol is now at IRBs and we expect it to be enrolling patients very shortly in AML patients first. So our hope is that there is a lot of, there appears to be a lot of interest in the AML community on this particular combination.

So we're hoping that the enrollment, the dose escalation enrollment with the NataClax will go rapidly and we definitely look forward to being able to at least report some initial data from that in the coming year. I think the important issue to point out about these CDK9 inhibitors is there has been historically a significant amount of marrow toxicity, which combined with NataClax is probably not a good recipe. We have never seen that.

to any significant degree with voracyclib. So the question, I think it's gonna be a little hard to tease out at AML because it is a marrow disease and treating with meningoclax, but certainly, we will start to get some information if these two drugs play well together, and hopefully we'll start to see some signals of activity as well. So for that program, I think that's really the going to be the one that we're focusing on is looking at the pro.

help us interpret the dose and schedule that we're using in these studies. So I think in the coming year we'll have a lot of information on Boracyclib, especially in combination with the manatee clax. And then with 344...

We're finally at the point now we have a great group that we're working with. Essentially a cooperative group that does a lot of early studies in this case in particular in

third-line colorectal. Everything is set to go and so we're really hopeful that we'll get those patients started in the first quarter next month next year.

and

Presumably, that should go pretty quickly because these patients are there and there's not a lot of good available treatment with them. So I think it's going to be a very data-rich year for us with our pipeline as well as Zandalizab and some of the other studies that we hope to be rolling out in the near future.

That's helpful. One other big, broad question. I don't want to take up too much time in the call if people have questions. This is the last five minutes of the call, so please users, please to take yourvan out

You know, you bring up two points. Number one, the FDA.

Do you think there are more changes in how they view development for drugs in this space?

Because you're probably one of the few companies that have given that much color and you actually are in the midst of it. And second,

When you think about small molecule development in the face of the new requirements for the government with only nine years, what are you hearing from people who might want to collaborate about the struggles or thought processes and how you actually do that? How you, instead of going short, first line versus, or early line versus later line, are you seeing that as well with your partners? Yes. Okay.

That's a very packed question. I think the first is about the space specifically. I mean, clearly, many of us have dialed into the ODAC presentation, FDA's presentation. It is interesting that even though there is concerns and they're absolutely valid concerns, we think that XandALystib solves a lot of the problems that the previous...

entrance had, but nonetheless there is certainly that concern at the FDA. The FDA still has not formally pulled any of the former approvals. The two companies did voluntarily pull their accelerated approvals.

But certainly the other entrants that have been on the market are still on the market.

So I'm not necessary, I mean I think there is a heightened concern because the FDA was seeing signals that it didn't like with different drugs of the same class.

we've always emphasized that we are actually not part of the chemical class of all the other entrants, nor do we use our drug in a way that the others do based on our dose and schedule. So we're hopeful that the FDA will evaluate us as any other drug rather than as a member of a class. And that's what we, alluding to Steve's question, that's what we hope to gain some clarity with.

the agency at the appropriate time. In general, I think that the FDA is laying down some new ground that they're encouraging sponsors to.

think about moving up in line of therapy, but in a randomized fashion, especially with combinations. I think it's gonna take a lot of time for all of us, and we have, all three of our pipeline are small molecules. So it is gonna take some rethinking about,

clinical design and how to satisfy the new mandates without making these studies take so long. Especially, you know, the field that we're playing in with at least folliculates, it's basically an orphan disease to some extent.

getting patients and doing big studies that are being required. It does provide some challenges, but it's what we signed up for, so we just have to learn how to accommodate the agency's needs.

Okay, great. Thanks for the tough questions, but we'll all be listening. Thanks.

The next question comes from Yale Jen of Laidlaw & Co. Please go ahead.

Good afternoon and thanks for taking the questions. I'm just going to start with a question.

housekeeping one

that since the last quarter.

The top line number is quite different from the previous three

Starting the new fiscal year, is there any sort of suggestion or guidance for what we are looking for for the remaining fiscal year 23?

I'm sorry, Yale. I'm not quite sure what you mean, the top line, the cash number?

No, I mean the revenue number.

This quarter compared to the previous three quarters is significantly lower, actually the negative. Here is what kind of quarterly top line in general we should think about for fiscal 23.

Yeah, I mean, you know, in large part the revenue reporting is really a function of our reimbursements, our cost sharing with KKC. So as the

clinical activity ramps up or slows, it's just reflected, it's more of an accounting treatment than anything else. I mean, we did have a few milestone payments that came in, which I don't think are counted as revenue. So the revenue is really more of a reflection of the reimbursements in the way that the agreement is set up with KKC. So I think it's pretty much straight, it may fluctuate.

with other venues we could think about? Well, I think that, you know, ASH is always a very appropriate meeting for us, especially for the patient population that we treat. So I think that it's...

quite reasonable to expect that it would, you know, if the committee deems it warranted and a value that we would like to be able to report the final top-line data at a meeting like Ash, yeah.

And then maybe the last one tuck it in here is for the Gil Khoury who prescribe Dr. Patricia Phrowis PhD and I'll

update or any thoughts, anything you can review regarding the patient enrollment status or situations at this point.

Yeah, well, I mean, in general, we don't usually give numbers, enrollment, and I won't right now. That's why, as we've said in the past, we don't usually give numbers.

The most critical thing you can do early in a clinical trial, especially of this size and magnitude, is get your sites open and initiated so they can start screening and treating patients. That's where all of our efforts.

or the majority of our efforts have been over this past year. As I mentioned, we're now open in over 135 sites all over the world essentially, or almost. And we continue to open new sites. Hopefully that'll come to an end at some point soon, but we do continue to open more sites and...

so that our trajectory of enrollment will continue to grow and will meet our objective of completing in 24.

Okay great, thanks a lot and best of luck going forward.

Thank you, Yale.

Once again, if you would like to ask a question, please press star then 1.

And our next question will come from Nick Abbott of Wells Fargo. Please go ahead.

Oh good afternoon, thanks for taking the other questions. First one Dan, when do you expect Kiowa to report data from the Japanese phase 2 trial of Zandalizib in advanced lymphoma and is the intention for Kiowa still to submit these data for full approval?

Right, Nick. Hi. I don't believe that Kiawah has...

previously publicly stated what their plan was for announcing the data. I believe that the enrollment is completed and they're doing their assessments. Their intent in running that study was to seek a full approval.

I don't know that they even have an accelerated approval mechanism, but their intent was always to......

to seek a full approval in Japan. I'm not sure exactly what their timelines are for doing that now, but I think that we should know.

and not too long what their intentions are, but they operate in a different way than we do here. And so all we know is that, to your question, is that is their intent is to file.

When they ran that study was to file for full approval and to...

for full approval and to.

do it when they're ready. I guess is the best way of saying it. Okay. It says, you know, in clinicaltrials.gov, you know, they completed an accrual last October , 61 patients. So it's a reasonably-sized trial. And, you know, they're sort of going to have 12 months of follow-up data here in the fourth quarter. Correct. Yeah. Yeah.

And then, I know you said you were in discussion with FDA. Have you?

made a proposal to FDA on revising coastal...

revising the statistical analysis plan for Coastal or is that something you're still working on?

Right. So, you know, again, I don't, typically we don't like to, you know, discuss in depth what our operationally, how we approach our discussions with the FDA. It just, you know, to be, give you a little color. It's not a.

It's not as straightforward as it might appear because as we know one of the concerns that the FDA has raised in general but in particular about this class

is mortality. And they acknowledge that these are rare events, so how one does the statistical analysis around that, and the penalties one may pay for taking a look or not, it's very complicated. We've spent a lot of time with statisticians and former FDA consultants really trying to get our arms around all the issues so that we can have the most meaningful discussion with the FDA as possible.

there was this recent peer-reviewed publication to use a PA3K-delta-inhibitive-neoadjuvant therapy in the clinic in head and neck cancer. They saw Treg depletion, which is what they were obviously using the drug for, but it was too toxic, dosing continuously. And so part of the publication was also on preclinical data using intermittent dosing. So what do you think of these data? How interested is the NEI?

have faculty appointments here in La Jolla, so we know them. We were actually very heartened because I think it sort of supported our thesis that continuous dosing is going to be too toxic, especially as they pointed out in patients who are less heavily pretreated in their head and neck experience.

and for them to see that intermittent dosing seems to be really important. I think that was very heartening to us. And I think as we have said previously, we have done a fair bit of preclinical work on dosing and scheduling.

in combination with PD-1 antibodies, for example, in models where CTLA-4 or Tregs appear to be important in solid tumor setting. And we do feel that with the known property of Delta and its importance in regulatory T cells,

could be taken advantage of, or with an appropriate scheduling.

as a way of very surgically inhibiting Tregs in solid tumor setting, as well as in B-cell malignancy settings. So I think that we're very interested in this. As I said, we know this group very well. And I think, you know, for now, I'll just say, you know, stay tuned. This is on our radar, obviously. We don't wanna lose focus about coastal, but certainly we do think that there is significant opportunities to be had by exploring the immunoregulatory aspect.

PI3 delta expression because it is important in multiple different facets, in Tregs and in homing and microenvironments. We think that...

very analogous to the sort of linolenamide situation where it's really an immunomodulator. We really do want to explore the possibility of taking advantage of...

of Xandalisa in that respect.

Thanks, Tan. Okay, thanks Tan.

Thank you, Nick.

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

Thank you. And thank you all again for the time you spent with us today. We do look forward to continuing to share our progress as we advance all of our programs. And we wish you the best for the rest of the day and your coming weekend. All the best.

The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.

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