Q2 2019 Earnings Call
Ladies and gentlemen, please standby your conference call will begin momentarily.
Hello, and welcome to sale decks Therapeutics, midyear 2000, or 19 conference call.
At this time all participants are in a listen only mode.
Later, we will conduct a question and answer session and instructions will follow with their time.
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As a reminder, this conference is being recorded.
I would now like to introduce your host for today's call. Sarah Cavanaugh, you may begin.
Thank you good afternoon.
With me on the call today are Anthony Marucci, co founder President and CEO of Celldex Therapeutics Dr. T were killer co founder Executive Vice President and Chief Scientific Officer Dr. Murdo. He chose <unk> Senior Vice President of regulatory Affairs, San Martin Senior Vice President and Chief Financial Officer, a new to our team Dr., Diane Young senior Vice President and Chief Medical Officer.
Before we begin our discussion I would like to mention that today's speakers will be making forward looking statements such statements reflect on current views with respect to future events and are based on assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward looking statements.
Certain of the factors that might cause celldex is actual results to differ materially from those in the forward. Looking statements include those set forth under the heading risk factors and management's discussion and analysis of financial condition and results of operation and sell those with annual report on Form 10-K quarterly reports on Form 10-Q , and its current reports on form 8-K as well as those described in Celldexs with other filings with the SEC and its press releases.
All forward looking statements are expressly qualified in their entirety by this cautionary notice you should carefully review all of these factors and be aware that there may be other factors that could cause. These differences. These forward looking statements are based on information plans and estimates as of this call Celldex does not promise to update any forward looking statements to reflect changes in underlying assumptions or factors, new information future events or other changes.
Please be advised that the question and answer period will be held at the close of the call I would now like to turn the call over to Anthony.
Thank you Sarah good afternoon, and thank you for joining us.
We made excellent progress in the first half of the year and look forward to providing you with thorough update on our programs. This afternoon.
As you look at the business overall, our pipeline remains strong and well diversified.
We have two programs advancing nicely in the clinic.
Third poised to enter clinical development before year end and the fourth lined up for 2020.
We also made an important hire to summer that we believe will further strengthen our clinical development efforts and support the continued progress of our product pipeline.
Dr. Diane Young has joined the Celtics team as a senior Vice President and Chief Medical Officer.
Hi, I am as a medical oncologists and has led to clinical and cross functional research and development teams responsible for the global development of numerous novel therapies from phase one through successful product registrations.
Most recently by and served as Chief Medical Officer of Gtx, Inc.
A public biopharmaceutical company focused on developing drugs that target nuclear hormone receptors.
Previously Diane spent 13 years at Novartis oncology.
In senior leadership roles in global clinical development and medical Affairs.
As the head of oncology clinical development. She directed the clinical programs, leading to successful regulatory approvals for more than a dozen and if theres an important oncology drugs.
Prior to Novartis, Diane held senior leadership positions in clinical development at the R.W. Johnson's pharmaceutical Research Institute of Jay Jay.
As well as Hoffmann Laroche and Sandoz.
We are very pleased to have Diane on our team she will join us at both medical and Investor conferences. This fall.
Im sure our shareholders will enjoy meeting her at these venues.
We continue to strengthen our balance sheet to extend and direct our financial resources to the advancement of the program as we believe can bring the most value to both patients and shareholders.
In direct support of this in June we decided to consolidate our Massachusetts laboratory and manufacturing facilities.
The lease for the Needham, Massachusetts facility will not be renewed.
And most functions and employees will be integrated into the Companys full river manufacturing facilities.
We estimate that this consolidation along with a reduction in the square footage of our Hampton, New Jersey facility executed earlier this year.
Will decrease our facility footprint by over 35% and we will save us over $3.5 million annually starting in the second half of 2020.
With that I'd like to turns will review of our pipeline.
I'm going to start with an update of the CVX 11, 40, CBX or 159 in our preclinical programs.
Then I'm going to ask Dr., Margo Tiv, Chelsea, our senior VP of regulatory affairs to provide an update on Cdx 3379.
Moreover has served as the medical lead for this program to date.
Sam Martin our CFO will then review the financials before we open the call to your questions.
Cdx 11, 40 is a fully human antibody targeted CD 40, a key activator of immune response, which is found on juice dendritic cells macrophages b cells and several cancer types.
Post Cdforty agonist antibodies have shown encouraging results in early clinical studies.
However, systemic toxicity associated with broad CD 40 activation as limited their dosing.
We selected CVX delivered 40 based on its unique properties relative to the other cdforty agonist antibodies.
It binds to the CD 40 receptor in a manner that results in a linear non dose dependent agonist activity.
Which may allow for higher systemic dosing.
And better tumor penetration at the optimal agonists levels.
CVX 11, 40 does not require cross linking through FC receptor interactions for its agonist activity.
Allowing more consistent and controlled immune cell activation.
Also CVX deliver 40 does not interfere with the natural activation of CD 40 by a slight gain which may further potentially a local immune responses.
Finally, Cdx 11, 40 had a strong safety profile, while demonstrating potent immune activation in our preclinical studies.
The ongoing phase one trial is a multi dose dose escalation study of Cdx 11, 40 in patients with locally advanced recurrent or metastatic solid tumors and b cell lymphomas.
The study also includes a separate dose escalation arm of Cdx 11 40.
In combination with Cdx 301.
Cdx 301 is a potent dendritic cell growth factor that increases the number of these important cells, which are a key target for ccxone hundred 40.
An important goal of this study is to achieve dosing levels of CVX 11, 40 that will provide good systemic exposure without dose limiting toxicity.
To this end we have made excellent progress completing all eight cohorts in the monotherapy dose escalation arm.
Importantly, based on biomarker data CVX 11, 40 is demonstrating strong biological activity associated with CD 40 activation.
Currently we are adding additional patients at the three highest dose levels to provide additional data in the selection of our recommended phase two dose as we await completion of the dose escalation.
And the combination arm of the study.
With Cdx 11, 40 in Frio, one combination we are nearing the clip nearing the close of the BLT window for the fourth of six potential cohorts at the 0.72 milligrams per kilogram.
And assuming successful clearance the 1.5 milligram per kilogram combination cohort should open shortly.
Overall, we are pleased with the data to date, which have shown that cdx deliver 40 can be safely administered at doses that celldex believes will support good tissue and tumor penetration and a dose is significantly higher than most other potent agonist targeting CD 40.
Our next step is to add an additional onto the study that will include the combination of a PD one inhibitor with CVX deliver 40.
This cohort is important as will be both enhancing the immune system with CVX, delivering 40 and releasing the break on the immune system with the introduction of the checkpoint inhibitor.
We are also exploring future combination opportunities chemotherapy radiation therapy and Celtics his phone CD 27 agonist monoclonal antibody morally Lou Matt.
We are excited about the 11 40 program and his clinical potential.
We presented data from this study at HCR in early April and hopeful hope to present, an update at the city meeting in November .
Before year end, we will also initiate a phase one study of Cdx Paul 159.
Our kids antagonist antibody program in healthy subjects.
CVX own Fivenine is a re engineered variant of Cdx one fivea.
Okay. This is a key regulator of mast cells, and preclinical and clinical data with Cdx 158 demonstrated robust inhibition of mast cell activity and decreased mast cell numbers supporting the concept that targeting kit within antagonist antibody and modestly mast cell activity and potentially provide clinical benefit and mast cell related diseases.
CVX Olin Fivenine was redesigned to ablate FC receptor interactions and effector functions and approve its safety profile.
While preserving full kit inhibitory activity.
In addition, cxo on Fivenine was modified to provide extended half life following administration.
This phase one study is designed to evaluate the safety profile.
Pharmacokinetics and pharmacodynamics of single ascending doses of Ccxone hundred Fivenine in healthy subjects.
Following completion of the study we plan to further study CVX on Fivenine in chronic idiopathic urticaria or see you.
Cu presents as edgy hives angioedema or both.
For at least six weeks without a specific trigger.
Multiple episodes can play out over years or even decades.
The prevalence of Cie EU is estimated to be 0.5% to 1% of the total population or up to two 3.2 million cases in the United States.
About 50% of patients with CIA you achieve symptomatic control, but then if the means and Luca trains receptor agonist such as solar.
And GE inhibitor provides relief for roughly half of the remaining anti histamine Luca trying in refractory patients.
Consequently, there is need for more.
Effective later line therapies.
We believe targeting kit with Cdx 159 represents a unique strategy in diseases involving mast cells, such as CEO you.
We hope to present, the scientific rationale and supportive data for all of our development strategy and see how are you.
At a medical meeting this fall and will continue to keep you updated on this program.
Before I hand, the call over to Margo to discuss seat Cdx 3379, I want to touch on our preclinical pipeline, which had a strong showing at a CR in the second quarter.
CVX 527, our first by specific antibody program combined CD 27 mediated cell activation with PD one blockade.
We have developed CVX 527 from our proprietary highly active anti PDL, one and CD 27, human antibodies and demonstrated the bi specific to be more potent.
And the combination of the individual antibodies in preclinical models.
CVX 527 provide celldex with its own PD, one pathway inhibitor with potentially broader activity and sets us up for unique combinations within our own pipeline.
We are currently initiating manufacturing activities for Cdx by 27 to support denying the targeted for 2020.
We have also been making significant progress on developing lead candidates targeting the receptor tyrosine kinases, tyro, three axle and murchie K collectively known as the Tams.
These receptors have been gaining importance in the immunotherapy field due to their role as checkpoint molecules on macrophages dendritic cells and other immune cells, where they can negatively regulate the anti tumor immunity.
We recently presented our progress on lead antibody characterizations for all three receptors had a CR.
The antibodies targeting to tyro, three axl and Merck K., all promote activation of human macrophages and dendritic cells and we look forward to moving these candidates towards development activities.
With that overview I will ask Margo to discuss the progress we've made with Cdx 3379 market.
Thank you Anthony.
Cdx 3379 is a monoclonal antibody that targets are between which is also called Herthree.
Erbbthree is found on tumor cells, and a variety of cancers, including head and neck thyroid Brett mountain gastric cancers as well as melanoma.
Implicated in cancer cell growth and survival as well as resistance to targeted therapy.
Uniquely among irby, we targeted antibody.
And the 379 blocks are between into an inactive stain blocking its interactions with like in.
Excellent.
With other.
Family members that are necessary Erbbthree signaling. In addition, Cdx 3.79 is engineered to have an extended half life and enhancing the product profile.
We are conducting a phase two study of Cdx 3379 in combination with Erbitux generic named HITOX and add in patients with a texan that resistant advanced HPV negative head and neck squamous cell carcinoma lift previously been treated with PD one checkpoint inhibitor.
These patients have extremely limited treatment options and a particularly poor prognosis.
In addition to the ongoing phase two study Cdx 3379, and Eddie into other clinical trial that included patients with head and neck cancer Weve been served intriguing clinical activity in a number of patients with head and neck cancer across these three study emerging data from an exploratory biomarker analyses across the Cdx 3379 clinical development program suggested that this anti tumor activity maybe associated with genetic mutations in specific team.
Thank you Julie Baumann at the University of Arizona Cancer Center and investigator in the Phase two study presented interim results in the Cdx 3379 clinical program and the biomarker analyses at the Ash annual meeting in Chicago.
First let me give you a quick overview of the phase two interim steady results and then we will dive into the biomarker analysis.
In this study the Texan that is dosed weekly and Cdx 3379 is administered once every three weeks.
Treatment continues into disease progression or intolerant and the assessments occur every six weeks.
Using this Simon two stage design at first stage of the study was designed to enroll 13 patients and if at least one patient achieved a partial or complete response enrollment progress in the second stage. This objective with net.
15 patients were enrolled in state one of the study the patients had a median of three prior cancer therapies with a range of two to six.
All patients had received prior checkpoint treatments and 14% to 15% tax and that the factory.
Notable clinical activity was observed in this refractory treatment population where treatment options are very limited, including a durable complete response that continues in over a year that patient continues to receive treatment.
And an unconfirmed partial response in the patient would not receive tax net.
47% of the patients experienced stable disease as their overall best response.
Including the unconfirmed partial responder and a clinical benefit rate of 29% was observed.
The combination of Cdx 3379, with the types and that was generally associated with the expected on target mediated adverse event of diarrhea and rash.
The clinical activity was notable in this difficult to treat patient population and was similar to the experience and served in head and neck patients from our previous studies.
Understanding that a biomarker enrichment strategy could change the standard of care for these patients. We perform next generation sequencing on tumor sample and 18 patients with head and neck cancer treated with Cdx 3379 across the three clinical studies.
In total this dataset included four patients in the clinical responses, including two durable complete responses the patient with over a year and a patient with 8.3 months in a citizen that refractory patients treated with the combination of Cdx retreats, M&A financing tax and AD.
The unconfirmed partial response in a citizen that naive patients.
And an exceptional partial response with greater than 92% tumor shrinkage and a previously untreated patient received two doses of Cdx 3379 monotherapy.
It also included eight patients with stable disease, and or tumor shrinkage and six patients with progressive disease.
We found that across the Cdx 3379 program and we mutations in specific team, including fat, one and not one not two and number three that were associated the clinical activity.
In head and neck cancer. These genes may function is tumor suppressors genes that normally prevent uncontrolled cell growth.
Inactivating mutations infat, one and not exchange occurring the sizable subset of HPV negative head and neck tumors with 32% containing infat, one and 26 cents contain fat two mutations.
Specifically in the exploratory analyses presented at ASCO.
Seven patients were identified as having that one mutated tumors and four of these patients demonstrated a clinical response three of which were confirmed.
For three of the four clinical responses occurred in patients who had not one two or three mutation.
And if you note all patients who experienced clinical benefit seven of the total 18 hedge that one and or that one too and or not one two or three mutations.
Finally, we also observe that all four clinical responses occurred in patients with a primary tumor site of oral cavity.
We discussed these interim results from our clinical investigators and there was significant enthusiasm for exploring these findings in a larger setting.
As a result, we have expanded our current phase two study will enroll up to 45 patients, including at least 15 with Batman mutation.
To evaluate the clinical utility of these biomarkers for future patient selection.
Enrollment is ongoing.
We are also conducting preclinical studies investigating the association of Cdx 3379 sensitivity and Inactivating mutations at that one and not change.
As Dr. Baumann said it escalated presentation. These data well early are provocative and suggest the potential for a biomarker enrichment strategy that could change the standard of care for these patients.
We look forward to obtaining additional data in this ongoing study to more fully elucidate the potential here.
With that I will turn the call over to Sam to review the financials Sam.
Thank you Margo.
All the following share and per share amounts reflect the one for 15 reverse stock split which became effective February eight 2019.
For the second quarter of 2019, net loss was $11.8 million or 84 cents per share compared to a net loss of $16.4 million or one dollar and 67 cents per share for the second quarter of 2018.
Net loss for the six months ended June 32019 was $29 million or $2.21 per share compared to a $134.5 million or $14.01 per share for the comparable period in 2018.
During the first quarter of 2018, we recorded $109.7 million in one time goodwill and intangible assets noncash impairment expenses.
Research and development expenses were $21.2 million for the six months ended June 32019, compared to $43.3 million for the comparable period in 2018.
General and administrative expenses were $8.8 million for the six months ended June 32019, compared to $11.2 million for the comparable period in 2018.
As of June 32019, we reported cash cash equivalents and marketable securities of $81.3 million.
We expect that our cash cash equivalents and marketable securities at June 32019, compared combined with the anticipated proceeds from future sales of common stock under our cancer agreement are sufficient to meet estimated working capital requirements and fund planned operations through 2020.
At June 32019, we had 14.8 million shares outstanding.
I will now turn the call over Anthony to close.
Thank you Sam Thank you Margo.
Im very pleased with our progress on both the CV EXL over 40, and the Cdx 3379 programs.
Importantly, we have advance these programs at a point that we should be able to answer key questions over the next six to 12 months on their clinical potential.
Expansion into additional combination cohorts with other key mechanism of actions will be important for CVX 11, 40, and those are well underway.
CVX 11, 40, Cdx 301 combination cohort is nearing completion of dose escalation.
Putting us in a good position to select the appropriate dose for additional combinations, including the PD one inhibitor combination that is planned Max.
We have amended the Cdx 3379 study to allow us to validate the potential for a bio market strategy and head and neck cancer, which would be a significant development for the field overall and are actively enrolling new patients with significant investigator support.
We also remain on track to initiate the phase one study of Cdx 159, before year end and two advanced by specific programs to the clinic next year.
We are pleased with the expanding breadth and depth of our pipeline.
And believe it will support significant news flow and meaningful inflection points in the coming months and 2020.
With that review, we will open the floor to questions operator.
Ladies and gentlemen at this time I would like to ask a question. Please press Star then the one key on your Touchtone telephone.
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One moment, while the questions queue up.
Our first question comes from the line of Joe Pantginis with HC Wainwright. Your line is open.
Hey, guys. Good afternoon. Thanks for taking the questions first I just wanted to focus on 11 40, if you don't mind, specifically the safety profile I don't know if my question, it's really apples to oranges, but do you feel that as part of your dose escalation for 11 40, you may be surpassed level, where you might have expected to see.
A safety signal that that might be related to others in the competitive landscape.
Sure TBR can you answer that question.
Sure Hi, Joe.
I don't know exactly what you mean by surpassed.
The levels.
We are certainly seeing the kinds of biological activity.
That are associated with CD 40 activation that have been reported.
In clinical trials by some of the other agonist antibodies.
This has generally increased somewhat with with our higher doses.
But we have not.
We have not reached the level, where any of these have become limiting from a safety or dose point of view.
So that's been very nice, while we see a clear.
Signals in terms of the cytokine and chemo kind responses immune activation that that we expect to see that has looks very good at the high dose levels.
Right. So, yes, just basically where where others have shown safety signal that there.
At their level set their own personal levels.
Correct.
Okay got it and then moving to the.
30 379 program.
Obviously, you're pursuing a very nice personalized medicine approach. So wanted to get a sense Im looking ahead, a bit here with regard to the fat one and documentation.
What kind of population sizes are you looking at or or maybe they did differently. The overall frequency of mutations in the general population, maybe just starting with head and neck or if you have any additional data and then with that.
Are you using more lab diagnostics at this point I know you said next generation sequencing, but are these something that can be translated commercially if it were to be approved from a diagnostic standpoint. Thanks.
Joe This is part of a.
As I mentioned earlier, when you look at head and neck tumor epidemiology. It appears that the fat one is seen in about a third of tumors and the nocs maybe a quarter.
The.
Current gain a typing of head and neck tumors is sort of evolving because there haven't been as many targeted therapies that the currently available genetic test at the good drugs to guide the patience to but we're going to do next generation sequencing on the current study to confirm.
Enlarge the sample for the early observations and then if we do confirm that that one is a good predictive biomarker, we're clearly going to collaborate with clinical diagnostic companies to help change the field, where you would be more inclined to test head neck tumors, because theres actual clinical information to be gleaned from that testing. So it's a two stage process really and we are actively pursuing enlarging our understanding of the statewide.
Got it no that's very helpful. I think I was.
Combining some of the comments you made with regard to what patients on the study had their particular mutation. So thanks, thanks for clarifying that.
All right. Thanks, guys appreciate it.
Thanks, Jim action.
Thank you.
I'm showing no further questions at this time I would now like to turn the call back over to Anthony Marucci for closing remarks.
Thank you operator, and thanks to everyone for joining US today, we appreciate your time and support as always we welcome your questions at any time.
Have a great day enjoy the rest of the summer.
Ladies and gentlemen that concludes today's call. Thank you for participating you may now disconnect everyone have a wonderful day.