Q3 2023 Aptose Biosciences Inc Earnings Call
Good afternoon. My name is hope and I will be your conference operator today.
I'd like to welcome everyone to the <unk> Biosciences conference call for the third quarter ended September 30th 2023 at this time all participants are in a listen only mode.
After the Speakers' remarks, there will be a question and answer session.
If you'd like to ask a question. During this time you will need to press star one one on your telephone you will then hear an automated message advising that your hand, just raised if you would like to withdraw your question. Please press star one one again.
Thank you as a reminder, this conference call maybe recorded.
I'd now like to introduce MS. Suzanne Hatcher Paulo.
Please go ahead.
You hope good afternoon, and welcome to the <unk> Biosciences conference call to discuss financial and operational results for the third quarter ended September 32023 earlier today I pledged issued a press release relating to these financial results news release as well as related SEC filings are festival in apoptosis website joining.
On today's call are Dr. William Rice, Chairman, President and CEO, Dr. Rafael de Hart Senior Vice President Chief Medical Officer, and Mr. Fletcher Payne Senior Vice President and Chief Financial Officer before we proceed I would like to remind everyone that certain statements made during this call will include forward looking statements within the meaning of U S and Canadian.
Securities laws forward looking statements reflect after this current expectations regarding future events. They are not guarantees of performance and it is possible that actual results and performance could differ materially from these stated expectations. They involve known and unknown risks uncertainties and assumptions that may cause actual results performance and achievements.
To differ materially from those expressed to learn more about these risks and uncertainties. Please read the risk factors set forth in absolutes. Its most recent annual report on Form 10-K, and S E T and theater filings all forward looking statements made during this call speak only as of the date. They are made I've talked undertakes no obligation to revise or update the statements to reflect.
Selected events or circumstances. After the date of this call except as required by law. We encourage you to refer todays press to today's press release and the 10-Q for additional information and disclosures regarding today's announcements I will now turn the call over to Dr. Right.
Thank you Susan.
Welcome everyone to our call the third quarter ended September 32023.
First want to remind everyone that earlier this year, we knew we had an impressive lead agent.
Well the treatment of patients with AML.
So it had a limited cash run way to develop it strategically.
Strategically, we avoided any punitive financings and any potential warrant overhang, rather we extended the cash runway with an aftermarket or ATM facility.
The committed equity facility and through an investment by our partner Hanmi Pharmaceuticals.
This was designed to give us breathing room and time to collect.
Critical data what does that mean.
To drive improved financing terms and potential collaborations.
We then undertook activate expansion troll to understand.
Malaysian activity.
<unk> identified relapsed or refractory AML population with unmet needs.
Who are particularly sensitive to our test.
Plus burnet o'clock or.
Dan Doublet therapy.
We learned that Testbed as a single agent at our 80 milligram recommended phase two dose is highly active and patients die.
Well see our CRH rates of 42% across all evaluable patients, 60% in <unk> mutated patients and nearly 30% and flip three ballpark patients demonstrating potent single agent activity across a breadth of patients.
We also observed that as we dose escalated above 80 milligrams to higher dose levels of just as a single agent.
Response rates unexpectedly dropped initially.
Initially we were unsure of what was driving this difference.
After careful analysis, we learned that the patients entering the higher dose levels of 120 milligrams and above represented entirely different patient population.
At the point in time, when we transitioned above the 80 milligram dose suddenly more than 80% of the patients coming onto our trial had failed prior therapy with magnetics.
And these gen failure AML patients are known to be far less responsive to salvage therapy.
The van failure patients continued to respond.
Single agent.
At a lower response rate so that mystery was solved.
But more importantly, this rapidly emerging been failure population revealed a unique opportunity for test bed.
That's the cost targets that resistance mechanisms employed by email to become resistant to Vanadic lax, which includes mutations in <unk>, three chip, Jack and Ras pathway <unk> and.
And increases in Mcl one expression.
Thanks, Ben resistance mechanisms play directly into the targeting capabilities a testbed nib.
And suggested just betting may re sensitize van den failure patients <unk>.
And that the us patent of banana exports, that's been Dublin may effectively treat this patient population in critical need of new therapies.
And indeed now we have learned that the tough spin doublet is clearly active in the relapsed or refractory Gen failure AML patients.
In August of this year, we released our first data from 10 Evaluable patients that have received the test been doublet none of you.
Great.
<unk> failures.
The composite complete remission or CR rate was 44% among the van failure patients whether they were <unk> three mutated work with three ballpark.
That was impressive and we continue to enroll these been failure patients onto the tests and double it.
We then released our second data cut in September.
Roughly the same composite CR rates among 15 evaluable patients these data and generated tremendous investigator enthusiasm to place additional patients on the test and Dublin.
By the time, we reached our planned presentation at the European School of Hematology Conference last week, we had expected a total of up to 30 patients who have been dosed with a test in Dublin.
But we actually had dosed 49 patients with a doublet.
As of our data cut on October 23rd.
Be clear many of these patients were very early in their course of treatment just two to six weeks ended the treatment in many cases.
The composite CR rate at this point in time, what these early patients was about 29%.
Additional partial responses or Prs that emerged early early for an overall.
Response rate of 48%.
Those <unk> are not yet yards and are not counted in the composite CR rate. They are noteworthy for example, one patient entered the trial with a bone marrow blast count of 82% and dropped quickly to 7% after receiving the Tesla in Dublin, that's a dramatic reduction in disease burden, but not quite below <unk>.
5% in the bone marrow blasts. So it scored as a PR, we will continue to treat and watch set of patients with the hope that many of these responses will mature to <unk> overtime.
In fact.
For all ongoing patients on the trial, we will continue to collect response maturation data and duration of response data.
And to highlight our ability to execute this trough where approximately two quarters ahead of our expected enrollment rates in the <unk> trial.
And that will allow us to watch for maturation of responses and extended duration of response data earlier than we had expected.
To wrap up this trial up to two quarters earlier than we had expected.
So what we do with our findings.
First just sets us on the Registrational path with the test been doublet and relapsed refractory then failure AML patients.
Both the <unk> mutated and put through wild type patients.
And that Registrational study could begin in the second half of 2024.
They provide an accelerated approval pathway.
Data with a testbed doublet or segue us into the Testbed nib Burnet o'clock, a decidedly triplet pilot study in frontline newly diagnosed AML patients.
That study is planned to begin the first half of 2024 and the findings could then support a tustin upper muffling agent Registrational trial in frontline AML.
<unk> demonstrated potent activity across diverse AML groups with adverse mutations.
A favorable safety and Tolerability profile.
As convenient as a once daily oral tablet.
Mechanistically targets, the Burnet o'clock resistance mechanism.
An ideal drug for frontline combination therapy and for combination therapy in the relapsed or refractory AML populations, particularly for the emerging wave of patients who failed <unk>.
In addition, the same properties.
And its action on AML patients are leading us to include the treatment of patients with higher risk Mds and CML and our trials going forward.
We now are leveraging our clinical findings and plans to support financing and collaboration discussions while we have no announcements to make and can make no commitments. In these regards we clearly are pursuing pursuing these past.
I now want to turn the call over to Dr. Bejar, Our Chief Medical Officer, and resident Kols for his insights and comments on our latest data right.
Thank you Bill I first want to highlight our latest news, we announced last week that clinical data or to spend at our test has been selected for an oral presentation at the ash meeting in December which will be given by our lead investigator. Dr novel, daughter of the MD Anderson Cancer Center, Dr. David will present data from <unk> ongoing phase <unk> trial to spend them in relapsed refractory.
Treat patients with acute myeloid leukemia or really pleased by this recognition for our esteemed colleagues and look forward to sharing the after the data in this forum.
And Bill mentioned just over a week ago during the European School can metallurgy meeting on email or Esa, which we reviewed all the data to date from an October 23 data cut from the test after the trial, we're not going to go through a full data rehash here, we'll make this competition but.
But I just wanted to clarify some key points addressed the misperceptions and answer some of the questions that we've been getting over the last week or so if you did not listen to our Esa to call I encourage you to do so and you can access it on our website under the events tab.
Patrick David joined US on E. S. H call last week as an internationally recognized expert in the development of clinical therapeutics for AML, including combination therapies. It was extremely helpful to get his impressions of the ongoing needs in AML and how to spend it could help address them.
One of the things we discussed is the changing AML patient population and emerging needs in the AML treatment landscape. The vast majority of U S and U.
U S based AML patients entering clinical trials now.
And were failed by Minerva coax at some point in the course of their disease.
In a rapidly trial the percentage of U S based patients who have failed <unk> has grown to about 90%. Thanks.
This leaves a patient population with highly resistant mutation patterns and dismal response rates to salvage therapy with CR rates often in the single digits, where they're treated with monotherapy where drug combinations.
This extremely challenging patient population with a rapidly emerging medical need is but all of this we're trying to develop AML treatment relapsed refractory populations are up against we're seeing an entirely different group of patients and drugs that were developed just a few years ago.
Indeed, what we're seeing in the after the expansion trial. The majority of patients have failed prior therapy with <unk> and have found mutated flit three AML.
Ah patient population and that accounts for an estimated 70% of AML cases, and with few or no effective treatment options being able to potentially target the larger fleets and mutated patient population and to do so safely is a key differentiator participate in it.
And for people, who shake their heads because theres so much going on in AML and it's difficult to determine the potential winners in this space. It is important to note that the spend is differentiated by its clinical activity in the split three unmitigated population.
So.
The positive data, we've generated Jessica patterning, which includes responses in that phase III, <unk> mutated or wild type AML makes it that much more exciting.
And there is a room for many other AML drugs in development to AML, an extremely heterogeneous disease with broadly resistant mutation patterns and it will take.
Nation therapies of drugs targeting different kinases, other pathways to manage the disease across different populations.
As we get into a review of our data highlights I wanted to get a quick explanation of what we mean by Evaluable patients as it is defined in our protocol briefly we consider evaluable any patient that has reached their second response assessment at the end of cycle, one or has had an objective response at their first response assessment.
Participants discontinued treatment for disease progression after that first reassessment or in fact considered evaluable.
Patients, who dumped undergo response assessment or have stable disease with less than one cycle of treatment are considered not evaluable protectively genotype.
Currently about 85% of our study participants are considered evaluable by the end of cycle one, but we also have several ongoing patients that have not yet reached this milestone and will do so in the coming weeks.
For example in it.
The latest data cut was 31 evaluable patients out of the 49 patients dosed with the customer and doublet. Many have very recently entered the trial and have only just finished one cycle of treatment with <unk>.
Having been dosed in September and October with many patients pending about utility assessment in the next two to three weeks.
Data reported Esa are therefore early and we expect more of that response is needed to continue to mature.
You will have more evaluable patients over time, including next month at Ash, when we'll provide another update.
A quick note on patient enrollment as of today more than 150 patients had been treated with this statement.
91 patients have received <unk> as a single agent.
And as Bill said, we had anticipated dosing up to 30 patients with test spend by the ESA 2023 conference. However, due to the investigator enthusiasm we ended up with more than 49 patients as of October 23, and patients continue being enrolled.
Now, let's talk about the safety profile and the most recent data cut from October 23, the favorable safety profile remained consistent for tests and test then treated relapsed refractory AML patients with no new or unexpected safety signals noted we've reviewed the safety profile just by the Boston. So I'll keep it brief here in short this bedroom continues.
To avoid many of the political toxicities observed with other agents, including Flit three D. H, one and two and Menin inhibitors, such as Q T. C prolongation differentiation syndrome, and elevations in muscle enzymes like CDK that it related to treatment. We have not observed these as a clinical concern in our treatment.
Some quick highlights of the data we presented at <unk> meeting regarding to spend them as a single agent.
<unk> as a single agent was well tolerated and highly active among relapsed or refractory AML patients with a diversity of genotype.
Test single agent delivered a 42% and 60% see our primary interest rates across all patients and across lithium mutated patients respectively.
And among in the Evaluable the naive patient population treated at 80 milligrams the recommended phase two dose for <unk>.
Spending demonstrate a 29% CRC a great footprint.
And mutated or wild type patients at this 80 milligram RPT Ddos.
This unlocks the potential for <unk> to treat an additional 70% to 75% of the AML population without the <unk> three mutation is not currently addressed by any approved tyrosine kinase inhibitor.
To spend a single agent response rates compare favorably to guilt ridden matched patient populations details on its interesting comparisons are presented in our slide deck from the meeting which is available on our website.
Let's turn to the doublet data in.
In addition to the safety and efficacy to state that we reported at ESA two <unk>. We also presented a poster that Werent mentioned.
I mentioned here.
Suspend it directly targets pathways involved in van resistance by shutting down these pathways to spending appears to clinically we sensitize prior van failure patients <unk> or overall response rates with the test then doublet includes several recent preliminary responses and as of last week. We had just 49 patients 31 of whom were Evaluable to date Tina.
That's the heater interest has led to this increased breed of enrollment and we expect to report on additional patients at Ash in December.
Patients showed an overall response rate of 48% at 15 out of the 31 Evaluable patients.
81% or 25 out of 31 patients prior to <unk>.
Yes.
4% overall response rate was observed in this van failure population.
Is it 60% overall response rate in the <unk> mutant population and a 43 overall response rate in the fleet and mutated population as I mentioned, let's see.
Patients are early in a course of treatment having initiated dosing in the past two to six weeks. We do expect these responses to mature over time.
Our experience with the test when debit will inform how best to carry out the triple combination with a test.
<unk> in the frontline setting.
In the near term, we continue to collect data to demonstrate that the debate is active in patients who are private aircrafts exposure, both with and without this with <unk> mutation.
And to meet and share with potential partners, how we might be able to position to spend it for frontline triplet therapy and maintenance therapy and move to spending had been asked us onto a clear path for success Indeed.
Indeed.
<unk> with its proven breadth of activity and safety profile may address the most sizable markets in AML, we are developing and as such the interest and suspended our potential partners continues to grow and we are engaged in multiple productive discussions because they spend it looks like large biotech or big pharma drug.
Therefore, we endeavor to designer patient crews to meet the needs of helped us meet the needs of regulatory agencies and to meet the desires of potential partners.
We look forward to sharing more at the upcoming Ash conference and we were very pleased the test's clinical data was recognized in selected for an oral presentation by Dr. Dobber. We are also planning on releasing our next set of updated data.
Right.
As Dr. <unk> described in the question and answer session.
After a clinical update call E S. H, the safety and efficacy data that we're seeing with the state of Connecticut that combination is very encouraging and suggest that cost may effectively treat a growing number of N failures that were seeing a relapsed refractory AML.
We're now looking forward to moving <unk> forward into <unk> is a Saturday and triplet for the treatment of frontline newly diagnosed AML patients.
Safety profile is key here and we believe they would have the potential to be the ideal drug for combination therapy in AML, both in the frontline and in the relapsed refractory setting.
So.
Timely markdowns.
Ladies and open label trial, we will report data when available at appropriate forums.
We discussed in our last call.
And expanding to more mature dataset, particularly for the doublet arm at Ash in December.
So during the fourth quarter this year.
To provide additional color around our risk three complaints with expected.
Okay.
Thanks.
These conferences and earnings calls.
Considering petrobras.
Now I'd like to turn the call over to Mark it.
For an update.
Financial metrics.
Great.
Yeah.
Yeah.
Okay.
Yeah.
Well over one for some reason were able or unable to hear Fletcher so I'm going to jump in at this point, but I apologize.
I'd like to start by noting that a discharge comments in this call additional information may be found in today's press release and the 10-Q.
Yes.
Okay.
As discussed in our financial statements of the company plans to raise additional funds to fund business operations. During the 2023, we used the 2022 ATM facility for 2023 committed equity facility.
Hanmi subscription agreement.
Capital, we continue to use these methods to raise capital and we are also actively evaluating other options to raise capital including debt.
Kodiak issuance and corporate collaborations.
Lastly, we continue to evaluate ways to reduce operational expenses.
Based on current operations the company expects a cash on hand plus available capital.
<unk> agreement permitted equinix.
The ATM ATM facility provides the company with sufficient resources to fund planned company operations, including research and development through March of 2024.
I would direct you.
He will also review the Companys risk factors and the discussion in the going concern footnote in our 10-Q.
Now, let's review the third quarter of 2023 financials, we continue our disciplined financial management of our operations and prioritization of our investment and investment in our clinical program.
We ended the third quarter of 2023, but approximately $17 7 million.
Cash cash equivalents and investments.
The decrease of approximately $5 6 million as compared to June 32020.
The $5 6 million decrease in cash and investments as of.
Result of the use of funds for the activate study and operating expenses, which was offset by an increase in cash from financing activities.
On a cumulative basis through September 32023, the company has raised a total of $6 1 million.
$3 million from the Hanmi subscription agreement.
One 9 million gross proceeds from the 2022, ATM Dolby and $1 2 million gross proceeds through 2023 committed equity building.
During the quarter. The net loss was approximately $11 4 million translating into approximately $1.76 per share law first loss per share.
Compared to $9 $89 8 million loss or 159.
$1 59 loss per share from the same period in 2022.
As of November nine 2023.
$7 million 806923 common shares outstanding.
References to loss per share and shares outstanding have been presented to reflect the one for 15 reverse stock split completed on June six 2023.
As seen in the income statement, we had no revenues during the first nine months of 2023.
Research and development expenses were approximately $8 $3 million for the quarter.
<unk> to $6 $6 million during the same quarter of 2020.
Program cost per test.
8 million for the three months ended September 32023, compared to $3 million for the three months ended September 32022.
Our program cost per test.
In the current period represent the enrollment of patients in our <unk> clinical trial clinical materials.
The volunteer trial, but when completed and other expenses.
Graham Cross cost per lot acceptance for.
Our $648000 for the three months ended September 32023, and decreased by approximately $742000 compared to one 4 million for the three months ended September 32022.
Primarily due to lower clinical trial costs and <unk>.
Lower manufacturing costs as a result of the current G III formulation, which required less API or active pharmaceutical ingredient and.
Population.
G&A expenses were $3 $4 million for the quarter compared to $3 5 million from the same quarter of 2022.
The decrease was primarily due to lower stock based compensation, partially offset by increased salary expenses and higher professional fees.
Pete.
We now would like to open the call for questions and please feel free.
Free to pose questions to any of us. So operator, if you could please introduce the questions.
Thank you.
At this time I would like to remind everyone. If you'd like to ask a question. During this time you would need to press star one one on your telephone you will then hear an automated message advising that your hand is right. If you would like to withdraw your question. Please press star one one again.
Please one moment, while we compile our Q&A roster.
Our first question comes from John Newman with Canaccord Genuity Your line.
Yes.
Hi, guys. Thanks for taking my question.
Noise in the background.
I'm just curious.
Just curious here.
I know that earlier in the study.
There were a lot of patients that were doing very well.
I suspect nib and those patients were able to go to transplant.
I'm curious if the mechanism by which that can occur is the same so our physicians still able to sort of <unk>.
Whatever call that they believe is in the patients best interest to say this patient should go to transplant or is there anything different about the study at this point in time, especially for the doublet. Thanks, Okay. So John.
The earlier patients you were talking about were on the single agent Testbed Nib and now we're primarily talking about the tuck in Dublin, and I'm going to ask Dr. Bejar to address that please sure. Yes, I think I understand the question. So you're correct that we had several patients go to transplant and the single agent portion of the study and the rules haven't changed.
<unk> can continue to do whatever is in the best interest at the patient and we would encourage them to take their patients to transplant. It but it is an option, we're hoping that the ability to reduce their blast count and reduce their disease burden might allow more patients to go to transplant than would otherwise, but as we said in the call. It is still early so as decisions about transplant are likely not made yet and many of these patients that are.
Just started the study at all or at least a couple of two two months.
John Thank you for your question is there anything else.
It does that does answer my question. Thank you. Thank you Joe.
Yeah.
One moment for our next question.
Our next question comes from Gregory <unk> with RBC capital markets. Your line is now open.
Hi, Bill and team, it's a niche on for Greg Congrats on the quarter and thanks for taking my questions. Just firstly on the expansion into high risk Mds in CML for to spurt nib.
Aspects of the data to date give confidence on this sort of this expansion opportunity how should we be thinking about mechanistic overlap and then just when thinking about this.
Progress progression and development for <unk>, how should we be thinking about resource allocation and any considerations for collaborative opportunities in these ventures. Congrats on the progress and thanks again, alright, so I'm going to ask Dr. Bejar to address the first part of that that fits right into his expertise and high risk Mds.
Correct.
Yeah. Thanks for that question.
So the higher risk Mds patients, particularly those patients that have increased blast in the bone marrow that are just shy of that email threshold, a very similar pathophysiology and unfortunately very similar outcomes to patients with Frank AML in fact, the ICC. The D. Contractual classification Consortium Committee recently re designated these patients with more than 10% glass has been.
Mds slash AML because of the shared physiology and outcome, what we observed in our study that we have several flit three and mutated patients that have very M. D. S. Like mutation patterns mutations in things like spicing factors genes like ASX of one types of mutations that we associate with AML with mildly displacement related changes. So this is a clinical rationale for.
Pending the treatment of disbanded into this very anl like Mds population.
<unk> also share some of these pathophysiology features but also had a very proliferated phenotype with regard to the monocytes that give the disease. Its name and we think that the particular axis of activity for testbed might be particularly favorable in that patient population, we don't want to.
Exclude them from this potential benefit so we know that there aren't that many of them out there and we hope that we get a few of our trials, we can at least explore the activity and this really.
Underserved patient population.
Okay I'll take on the next part so regarding the Mds patients as Dr. <unk> said there is a need there is also a great deal of ops.
Larger farmers large bore tech companies, who are interested in seeing data on those patients because it can represent a large commercial opportunity of regarding the resource allocation currently reforming.
Ben the doublet study with patients as Ive said those patients been accruing very rapidly and we expect to be able to tie up that that trial.
<unk> one <unk> two orders two quarters earlier than expected. So in terms of our next top priorities for how we're going to allocate the resources. The next one is the next top priority is the triplet.
The ban.
The test been HMA triplet, it's the pilot study and say, 20% to 40 patients. There is tremendous interest in driving this drug to the frontline newly diagnosed patients and we'd like to get data there as quickly as possible. The next priority than would be the Mds AML patients again tremendous interest from a variety of.
Additional resources outside of our company that are interested in that patient population.
And that then we would look to the Registrational trial that could then start to first we began the doublet.
So that way the tustin in the relapsed refractory patients who have failed <unk> previously and then after that would be the triplet registration trough with the triplet and frontline newly diagnosed patients. So a niche. Thanks for the question did that answer it.
Yes, great. Thanks, so much for the color okay. Thanks for being here today.
Again, if you'd like to ask a question. Please press star one one on your telephone.
I'm currently showing no further questions I will now turn the call back to back to Dr. Rice for closing remarks, okay. Thank you. So much hope also want to thank everyone for joining us. This afternoon. As you can tell we're really excited about the growing body of safety and efficacy data on <unk>.
And the <unk> combination in these very difficult to treat patient populations with AML, we believe <unk> could improve on the standard of care for AML patients that are currently in perfectly served by current therapies.
As always we thank our patients investigators and employees for their important role in this effort. Our clinical team has been key in ramping up enrollment in the activate trial collecting data for our latest datacom continue to recognize them for their execution. We appreciate our shareholders and analysts who continue to support us and we look forward to keeping you update.
On our progress I want to thank all of you and have a wonderful. Thank you bye bye.
Thank you ladies and gentlemen that concludes today's conference you may all disconnect and have a wonderful day.
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