Q2 2023 Rain Oncology Inc Earnings Call

Good afternoon, ladies and gentlemen, and welcome to the rain Oncology, Inc. Second quarter 2023 earnings Conference call.

At this time all lines are in listen only mode and following the presentation, we will conduct.

A question and answer session. If at any time during the call. Your acquire immediate assistance. Please press star zero for the operator.

This call is being recorded on Thursday August 10, 2023, I would now like to turn the conference call over to Mr. Dan Ferry of lifestyle Advisors. Please go ahead.

Thank you operator, and good afternoon, everyone.

With me today on the phone is Avenue Schlocky, Chief Executive officer of rate oncology, and Nelson Cabot's, one acting SVP of finance.

Following the call Dr. Robert Doble, Chief Scientific Officer, and Chief Medical Officer will be joining our Venetian Nelson for a short Q&A.

Earlier today rain issued a news release announcing the Companys results for the second quarter of 2023.

Copies of this news release and our SEC filings can be found in the investors section of our website.

Full details on updates from the quarter can be found in our news release and 10-Q issued today.

Before we begin I would like to remind you that statements made during this conference call.

That are not historical facts are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

These forward looking statements are based upon <unk> current expectations and involve assumptions that may never materialize or may prove to be incorrect.

Actual results could differ materially from those anticipated in such forward looking statements as a result of various risks and uncertainties as described in <unk>. Most recent quarterly reports on Form 10-Q and annual report.

On Form 10-K filed with the Securities and Exchange Commission.

Other efficacy filings.

All forward looking statements made during this conference call are based on management's assumptions and estimates as of today August 10, 2023 rein undertakes no obligation to update such statements to reflect events that occur or.

Circumstances that exist after today, except as required by law.

That I'd like to turn the call over to Avnet, So lucky CEO of rain oncology.

<unk>.

Thank you Dan and thanks to everyone for joining us for our second quarter 2023 earnings call.

The second quarter was an important time edwina oncology, because we provided the topline data readout on our phase III Global Registrational trial for <unk>, our oral small molecule inhibitor of the <unk> 253 complex, indeed, differentiated LIFO sarcoma or Didi lts.

We reported at the Phase III trial for <unk> did not meet its primary endpoint.

We also announced that we would suspend the enrollment of our second clinical study the mantra to study we have begun the process of closing down launch issue.

Well, we feel is very clear activity from the <unk> study, we do not feel its monotherapy activity rises to a level sufficient for registrational purposes enclosure. This study will ensure we remain judicious with our use of capital.

We hope to present final data from the mantra phase III study and updated data from the mantra to phase two study of <unk> and MGM to amplified solid tumor patients in the fourth quarter of this year.

We note the mantra <unk> presentation will reflect a significant number of additional patients beyond what was presented last year. We continue to believe that reactivating P. 53 is an important therapeutic strategy to add to the armamentarium of anti cancer therapies.

At rain, we're proud that we were able to move as quickly as we get to test the hypothesis in a robust trial as we did for our global Phase III study. Despite the results not being what we had hoped.

Given these topline data for <unk>, we determined that range will be best positioned to achieve its business objectives by taking action to streamline operations, we prioritize its activities and implemented certain cost saving measures, including a reduction in force.

To implement those actions very quickly, resulting in substantial moderation of cash burn that will be apparent in the third quarter and beyond.

Looking forward. We believe there are exciting opportunities ahead. It is no surprise, it's a challenging climate and biotech over the last few years has resulted in a number of interesting programs companies and technologies being under financed and often without strong cross departmental leadership.

Corporate development team has been rapidly reviewing an extraordinary number of actionable opportunities to license or acquire clinical stage programs and technologies that may allow <unk> to continue to try to make a difference for cancer patients.

Although we won't comment on progress under diligence there are a number of opportunities that could be a great fit for rate with fascinating technology and novel therapeutic strategies for patients who will update investors when appropriate on how we intend to push forward to add value for our shareholders.

Let me now hand, it over to Nelson to batch one to discuss our financials Nelson.

Thank you Anthony before I proceed and providing updates but its national results for three months ended June 32023.

I would like to invite Q3 quarterly report in Form 10-Q filed today for more details.

For the three months ended June 32023 re reported a net loss of $22 1 million as compared to a net loss of $17 6 million for the same period in 2022.

The increase was primarily related to clinical trial costs for our phase III trial.

Jim read market fastest trial, not just to <unk> personal costs.

General and administrative expenses were $5 4 million for the three months ended June 32003, as compared to $2 5 million, Chris and carried into 2020.

The increase was primarily due to higher cost associated with launch preparation in anticipation of commercial launch denniston license sarcoma personnel legal and outside consulting and accounting and audit fees.

In May 2023, we announced a reduction in our workforce in connection with desert for utilization of the company's clinical strategy designed to optimize company resources.

We recorded restructuring charges of $2 8 million and the statements of operations for three months ended June 32023 comprised of $2 $8 million cash severance vulnerable and related employee benefits and taxes, the affected employees as well as 37% of stock based compensation expense related to <unk>.

Option with expectation.

Total non cash stock based compensation expense were approximately <unk> 8 million for the three months ended June 32023, as compared to $1 4 million for <unk>.

Sure.

As of June 32023 range at $86 3 million cash cash equivalents and short term investments.

<unk> anticipates that as part of our cash position, both O'brien runway into year end.

In the absence of a corporate transaction as project connect.

As of June 30 plants, one is free reign had approximately $36 4 million shares of common stock outstanding.

Let me now turn it back to avenues.

Thanks, Nelson with that I will turn it over to the operator to take any questions operator.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone.

You'll hear a three pronged acknowledging your request and your questions will be pulled in the yogurt received.

Should you wish to decline from the polling process. Please press the star followed by the two and if you are using a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.

And your first question comes from.

Michael Schmidt from Guggenheim. Please go ahead.

Hey, good afternoon. This Vijay on for Michael Thanks for taking our questions at maybe a quick one on the potential new opportunities you guys are reviewing.

How many I know you can't talk about.

Much on it a bit maybe on a high level can you talk about what modality are you more interesting interesting at this moment.

Hi, Jay Thanks for the question certainly we've had a very high level, we're trying to be opportunistic.

Cross a multitude of opportunities I think.

We have certainly been approached with.

It's a variety of precision oncology strategies, but across both small molecule and large molecule approaches.

So that's what we have certainly been been reviewing so far.

I won't comment more broadly than that.

Okay.

Okay. That's very helpful. Thank you.

Thank you.

Your next question comes from.

Yeah Joe.

From Citi. Please go ahead.

Hi, guys. This is Oscar Cabrera comfort Ralph Thanks for taking my questions.

I, just I guess I wanted to ask about the future of melanoma data at <unk> at this point.

Is it more or less on the shelf at this point for the foreseeable future or are there plans in the background that youre thinking about and then my second question was I recall in the past you had a rad 52 asset in which you have in development I'm. Just wondering if you have any thoughts on that asset and maybe there's a world in which you reactivate that program. Thanks.

Hi, Ashwin. Thanks, I can we can be brief here. So there are no plans at the current time for Miller, dermatology and Theres certainly no intention for deploying capital to support no dermatome today and.

And same for the Rad 52 program, we are not we're not moving that forward and we stopped all investment.

Over a year ago.

Okay understood.

Last question for me I guess, what's embedded in your cash runway guidance at this point it doesn't sound like it includes any considerations for any potential bill you might do so just curious what thoughts on that right now.

Yeah.

Sure I'll start that and then I'll ask Nelson to to follow up with any additional detail. So in AR and the cash runway guidance. We are certainly reflecting the closure of the existing studies that we had alluded to.

And maintenance survey of a lean organization that we think is sufficient for for developing multiple earlier stage clinical programs.

Nelson Julia any additional comments.

Yes, I just want to highlight that.

Seek about cash runway.

Through the end of 2026.

It does not incorporate.

Additional corporate transaction as well as additional financings.

To highlight that in the second half of this year 2023.

The significant reduction in cash runway.

Got it thanks very much.

Thank you and your next question comes from Joe Catanzaro from Piper Sandler. Please go ahead.

Hey, guys I just had one.

Quick question actually on Melo, Devin handle I appreciate that.

That won't be moving forward with that program at all I'm wondering if.

Since you've had more time to digest, the manta trial, whether you've been able to sort of hone in on.

Any potential reasons as to why Miller Demeton underperformed the previous data you had generated in DD Lps. Thanks.

Okay.

Hi, Joe Thanks for the question. This is Bob <unk>. So I think without question, we'll refer you to our upcoming planned presentations in the fourth quarter at a medical conference.

Yeah.

Okay got it thank you.

Thank you Andy.

Your next question comes from Sam <unk>.

From <unk> capital. Please go ahead.

Hey, everyone on Shaw on for Sam Thanks for taking our question.

One question I had is basically as youre looking into these licensing and bringing other assets is there sort of a sweet spot of deals youre looking for in terms of stage of development or deal structure and so forth.

Sure first of all thanks for the question Sam our onshore I think what we would comment there is we want to be able to leverage our clinical organization and again I think the expertise the team demonstrated through the mantra mantra two studies, we think is exemplary.

So clinical stages is an important attribute of.

Where we're looking.

And I'll leave the comments there.

Yes.

Great. Thank you that makes sense.

Thank you.

And your next question comes from Greg Savannah from.

Mizuho Securities. Please go ahead.

On for Greg.

Just a question for me how do you weigh the Plusses and minuses between starting essentially a new almost like a new type of rain oncology with our new app versus other corporate option like Apple pencil reverse merger or with some public or private company.

Hi, Thanks for the question. It's a great question. So the way that we approach that is to take a look at the attractiveness of the options that were presented the options that we find in the action ability of those opportunities and if we can find an avenue that we think we can add value to.

That's when it becomes more attractive and one of the other alternatives.

So we are certainly looking at all of those avenues and in the absence of of an investable option with our existing cash resources and even our personnel.

Other options become available but at the current time I think with my comments on the call.

This is a unique time in biotech, where where there is a multitude of opportunities that are available to companies and our current position.

Got it thank you.

Thank you.

Ladies and gentlemen, just as a reminder, so do you have a question. Please press star followed by the one.

And your next question comes from Mitchell Kapoor from H C. W. Please go ahead.

Hi team hope, you're doing well and thanks for taking the questions.

First of all I just wanted to ask about the just broadly the options on the table, obviously you mentioned.

A new precision oncology therapy.

New Tech talent and technology platform I wanted to learn a little bit more about what youre thinking about a technology platform what could that look like what broadly does that mean and then.

How many assets might you in licenses there kind of a limit there and then is there a hope for how long that could take.

All great questions Michel Thanks for the question.

We're not going to respond in any meaningful depth to any of those.

Those questions.

We wanted to leave it's sufficiently brought at this point until they reach a point, where it warrants further articulation Czech Republic.

We will provide his commentary when we can but but now is not the appropriate tend to provide that color.

Thank you.

Okay understood and maybe this is a question for Nelson I just wanted to ask a finance question. So as expense hedge changed to kind of moderate the cash burn what kind of broadly can we see for the next few quarters in terms of SG&A and R&D and the absence of any kind of transaction.

Thanks Michelle.

The cash burn expense in Q3 onwards is going to be significantly.

Lower <unk>.

<unk> seen in the first.

June quarter actually this year in the prior year.

I don't want to go through the details of this but do you expect the runway is really low.

Is there runway into 2000 $20 million from the first requires a this year.

Okay, great. Thank you guys.

Thank you.

Thank you and there are no further questions at this time avenues you May continue your conference.

Thank you operator, we look forward to keeping everyone abreast of our plans once our forward plan has been certified thank you.

Yeah.

Ladies and gentlemen, this concludes your conference call for today, we thank you very much for participating and assay. You. Please disconnect your lines have a great day.

Goodbye.

The conference is no longer being recorded.