Newtown Aug 13, 2020 (Thomson StreetEvents) -- Edited Transcript of Onconova Therapeutics Inc earnings conference call or presentation Wednesday, August 12, 2020 at 8:30:00pm GMT

* Abraham N. Oler

Onconova Therapeutics, Inc. - Senior VP of Corporate Development & General Counsel

Onconova Therapeutics, Inc. - CFO

Onconova Therapeutics, Inc. - Chief Medical Officer and Senior VP of Research & Development

* Steven M. Fruchtman

Onconova Therapeutics, Inc. - CEO, President & Director

Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

Good afternoon, and welcome to Onconova Therapeutics corporate update and 2Q 2020 financial results conference Call. (Operator Instructions) As a reminder, this call may be recorded. At this time, I would like to turn the call over to Avi Oler, Senior Vice President of Corporate Development and General Counsel.

Abraham N. Oler, Onconova Therapeutics, Inc. - Senior VP of Corporate Development & General Counsel [2]

Thank you, operator. Good afternoon, and welcome to Onconova's second quarter 2020 corporate update and financial results conference call. Earlier this afternoon, we issued a press release outlining our financial results and business progress during the quarter. If you have not seen this press release, it is available on the Investor Relations page of our website at http://www.onconova.com. On today's call, Dr. Steve Fruchtman, President and CEO, will discuss the company's recent highlights and anticipated clinical and business milestones. After Steve completes his opening remarks, Mark Guerin, our Chief Financial Officer, will review second quarter financial results. Following Mark's report, we will move to the Q&A portion of the call, which will be joined by Dr. Rick Woodman, our Chief Medical Officer. Lastly, Steve will come back with some final comments and a review of our upcoming milestones.

Before we begin, I remind everyone that statements made today during this conference call will include forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risk and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made, as the underlying facts and circumstances may change. Except as required by law, Onconova disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. Please see the forward-looking statements disclaimer in the press release issued this afternoon and the risk factors in the company's current and future filings with the SEC.

With that, it is now my pleasure to turn the call over to Steve.

Thank you, Avi. Good afternoon, everyone, and thank you for joining today's call. First, as the COVID pandemic continues to evolve in the U.S. and abroad, we wish all safety and good health to you and your love ones. We remain committed to executing our goals with INSPIRE and beyond. We remain focused on INSPIRE data readout and we'll speak more about the COVID pandemic shortly. Onconova has had a productive second quarter and exited the quarter carrying a significant momentum into the second half of 2020. As previously indicated, our pivotal Phase III INSPIRE trial recently achieved required number of survival events to allow for data analysis, and we anticipate top line data readout by the end of September. COVID has made access to hospitals and clinics more difficult, so data verification of key dates such as survival and the most recent clinical encounters are more difficult to verify, but verify, we must and we shall. Following top line data readout, we expect to present more detailed data at a major medical meeting later this year. The meeting to be identified based on time lines. Of note, most, if not all, major medical meetings are now virtual. To shorten the time lines for our anticipated new drug application or NDA submission to the FDA, we have already begun NDA preparation prior to data readout. We are working also with regulatory consultancy experts on our NDA document for the U.S. FDA for both the clinical and manufacturing modules of the NDA as well as on the marketing authorization application, or MAA, document for the European Medicines Agency. We anticipate that this initial work will put us in a position to expedite our health authority applications when data becomes available. As part of this process, our clinical team under Rick Woodman's leadership is preparing for a pediatric investigational plan, or PIP, an important component of the MAA. We are also advancing our plans to be ready for commercialization, including the recent announcement of the election of a commercial expert, Ms. Terri Shoemaker, to our Board of Directors. Terri carry was instrumental in the successful commercialization of azacitidine, the most commonly used hypomethyl agent in the world for high-risk MDS.

As you recall, INSPIRE is an open-label, randomized, controlled, international study designed to determine the efficacy, safety and tolerability of single agent intravenous rigosertib in the treatment of patients with second-line, high-risk MDS. Patients in this study are less than 82 years of age and have progressed or relapsed or failed to respond to previous treatment with the standard of care, a hypomethylating agent, also called an HMA. The study randomized patients to receive either rigosertib with best support of care or the physician's choice of therapy with support of care. The primary endpoint of this study is overall survival of all randomized patients in the intent-to-treat population. There is a second opportunity for an FDA approval, which is the sequential analysis of the overall survival of the very high-risk MDS subs as defined by the revised International Prognostic Scoring System. Should intravenous rigosertib demonstrate a survival advantage compared to physician's choice of therapy on the INSPIRE trial in a statistically significant manner, we believe rigosertib could be a major advance for high-risk, second-line MDS patients with a novel mechanism of action. Hopefully, broader and additional novel indications will follow.

Beyond our progress with INSPIRE, a highlight of the quarter was the initiation of an investigator-initiated Phase I/II trial of oral rigosertib plus the immune checkpoint inhibitor, nivolumab, in advanced metastatic KRAS positive lung adenocarcinoma. Over half of non-small cell lung cancers are classified at lung adenocarcinoma. And of these, the largest subset has a KRAS mutation as the predominant genetic driver. Given their utility in multiple cancer setting, checkpoint inhibitors are among the world's top-selling pharmaceutical products. And continue to obtain FDA approval for broader indications. In our view, this makes our novel combination approach with rigosertib a potentially meaningful option to pursue in lung cancer. We hope this will offer patients who have progressed on first-line therapy, a second-line approach. We are also initiating studies in other RAF pathway-driven cancers as part of our investigator-initiated development program.

Onconova has also recently featured pipeline developments in multiple venues. At the European Hematology Association's virtual conference in June, we announced updated aggregated baseline genomic data for HMA failure patients screened and entered into the INSPIRE trial. Briefly, the presentation show that RAF pathway mutations in these higher-risk MDS patients were observed more frequently in patients who progressed on HMA therapy as defined by the international working group's definition of progression compared to those who failed to respond to HMA therapy. In fact, in this study, patients with mutations of the RAF pathway had a higher likelihood of progression on hypomethylating agents than those with TP53 mutations, a well-recognized genomic abnormality predicting for progression in a number of cancers. We believe this is informative to the potential role of RAF targeting agents such as rigosertib. And to our knowledge, this mutational analysis is among the largest such databases to be collected. Patients on the rigosertib and physician's choice arms will have repeat analysis of their genomic status performed as part of the INSPIRE trial.

Following the close of the second quarter, Onconova also announced a publication of Phase I data with the combination of oral rigosertib plus azacitidine and higher-risk MDS and AML in the journal, Leukemia Research. A key strategy emerging in the treatment of MDS is the identification of safe and effective combination, particularly those involving oral agents. We anticipate meeting with the FDA in conjunction with the pivotal data readout from the INSPIRE trial for alignment with the agency on a registration trial for the combination of oral rigosertib plus azacytidine and HMA-naive, high-risk MDS. We look forward to these interactions with the agency. In the journal, Molecular Cell, we also announced the publication of additional preclinical data, supporting rigosertib's mechanism of action as a RAS-targeted anticancer therapy. Onconova believes this data sheds light on the ability of rigosertib to modulate the RAS pathway.

We also disclosed that we have embarked on early preclinical work exploring legal service potential in COVID-19. The background for this is as follows: these preclinical studies follow a presentation at ASH in 2019, suggesting the ability of rigosertib to upregulate viral defense pathways such as interferon. It is hypothesized that the immune system may play a role in the pathogenesis of MDS and immune modulation has been studied in MDS. More recent preclinical studies conducted with rigosertib demonstrated impressive inhibition of SARS-CoV-2 replication in vero cells when compared to controls, and provide the company with optimism that further research in humans infected with SARS-CoV-2 is warranted. In late July, Onconova announced that it has applied to the National Institute of Allergy and Infectious Diseases, or NIAID; and also to BARDA, the Biomed Advanced Research and Development Authority, to seek funding and to participate in therapeutic trials under the NIH umbrella to conduct human studies with rigosertib. We caution that our work in COVID-19 is very early, and the need for therapeutics and effective vaccines is evolving rapidly as the pandemic continues in various geographies across the globe. Hence, we cannot predict what the outcome of our efforts will be. We hope to provide greater clarity sometime during the second half of this year. In addition to the U.S., we have the rights to rigosertib in Europe and China and other key markets around the world. Beyond rigosertib, ON 13300 (sic) [ON 123300] is our first-in-class inhibitor of CDK4/6 and ARK5. We believe ON 123300 has the potential to treat numerous cancers, including refractory metastatic breast cancer, where CDK4/6 inhibitors are already commercially available. CDK inhibitors have emerged as promising products and compounds targeting very large cancer indications such as hormone receptor positive metastatic breast cancer. Due to its unique targeting of ARK5 as well as CDK4 and 6, we believe ON123300 could overcome many of the existing product's limitations, potentially making it suitable for certain cancers that may not be responsible -- responsive, sorry, to the current generation of CDK4/6 inhibitors. If successful, we believe this product candidate could address this very large market opportunity. We maintain global rights for ON 123300 outside of China. Our partner in China for this compound is HanX Biopharmaceuticals. HanX funded the Chinese IND-enabling studies. The Chinese IND was approved in January 2020 by the Chinese health authorities. We anticipate a Phase I study may begin in China in the second half of 2020. We also intend for the Chinese IND-enabling studies to comply with FDA regulations. To the U.S., we plan to file a U.S. IND in the fourth quarter of 2020.

And now I'd like to turn the call over to Mark Guerin, our Chief Financial Officer, for a discussion of our financial results for second quarter 2020. Mark?

--------------------------------------------------------------------------------

Mark Patrick Guerin, Onconova Therapeutics, Inc. - CFO [4]

--------------------------------------------------------------------------------

Thanks, Steve, and good afternoon, everyone. First, as a reminder, early this month, Onconova received a letter from NASDAQ stock market stating that it had regained compliance with the minimum bid price requirement of the NASDAQ listing rule 555-082 because its common stock had a minimum closing price of at least $1 per share for a minimum of 10 consecutive business days.

Our cash and cash equivalents as of June 30, 2020, totaled $27.2 million compared to $22.7 million as of December 31, 2019. Common stock warrant exercises since our financing transactions in November and December 2019 have added $9.8 million to our balance sheet since January 1, 2020. And as of August 12, 2020, we have 183,568,267 common shares outstanding. Additionally, of the almost -- of the warrants outstanding as of June 30, 2020, over 80% of them were in the money as of August 12. Based on our current projections, we expect that our cash and equivalents will be sufficient to fund ongoing trials and operations into the fourth quarter of 2021. Our net loss was $7.4 million for the quarter ended June 30, 2020, compared to $3.6 million for the comparable period in 2019. Research and development expenses were $4.8 million for the quarter ended June 30, 2020, and $3.9 million for the comparable period in 2019. General and administrative expenses were $2.6 million for the quarter ended June 30, 2020, and $1.8 million for the comparable period in 2019. Our operating cash burn in the second quarter of 2020 was approximately $5.4 million. This completes my financial review.

I'll now turn the call back to Steve.

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [5]

--------------------------------------------------------------------------------

Thank you so much, Mark. With that, we'd like to open the call for questions. After the questions and answers, I'll finish with some closing comments. Operator, please open the Q&A session.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from the line of Joe Pantginis from H.C. Wainwright.

--------------------------------------------------------------------------------

Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [2]

--------------------------------------------------------------------------------

First, I'd like to ask about your initial comments about the data verification process for the study. What do you think are the real rate-limiting steps now, either COVID related or unrelated? And then secondly, with that, I think this is more of a what-if question, do you have any visibility now with regard to any potential patients lost due to COVID that might impact the statistics? And have you had any discussions with the FDA about this and they have put out a recent public guidance a couple of months ago about being a little more amenable to adjusting statistical plans due to COVID.

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [3]

--------------------------------------------------------------------------------

Joe, thanks for that question, and I'll ask Rick to please provide the answers.

--------------------------------------------------------------------------------

Richard Charles Woodman, Onconova Therapeutics, Inc. - Chief Medical Officer and Senior VP of Research & Development [4]

--------------------------------------------------------------------------------

Thank you, Steve, and thank you, Joe. So all along, the biggest challenge that we observed with our study related to COVID was access to documents and -- at the sites. And this is not necessarily physically being able to get to sites, but even having remote monitoring opportunities. We have been able to overcome almost all of those difficulties and challenges. Now we are still in database lock, and so we are continuing to clean data and monitor and source data verify. But to date, it's gone very well. And I think it's in part, the understanding by the sites regarding where we are in the life cycle of the study and the importance of this data to the outcome of the study and to this disease. We have not lost any patients due to COVID at this time. The commonest challenge we see is that patients are -- have symptoms suggestive of COVID and then undergo testing and then report to us the results, negative or positive.

--------------------------------------------------------------------------------

Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [5]

--------------------------------------------------------------------------------

Got it. And as things continually get more exciting for you guys coming into the data, I guess I'll ask the question at this point, again, and I know I do ask this a lot about what you feel is outstanding with regard to the oral study ahead of your upcoming FDA meeting?

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [6]

--------------------------------------------------------------------------------

Well, I think the primary challenges are related to the unique adaptive design we're proposing to the FDA and that will require some discussion between us and the agency. I think that the timing of INSPIRE, if positive, could very much support their interest in an adaptive study design that has an expedient execution and conduct with oral rigosertib.

--------------------------------------------------------------------------------

Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [7]

--------------------------------------------------------------------------------

Good luck for this major thing coming up for you guys. Real exciting.

--------------------------------------------------------------------------------

Richard Charles Woodman, Onconova Therapeutics, Inc. - Chief Medical Officer and Senior VP of Research & Development [8]

--------------------------------------------------------------------------------

Thank you.

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [9]

--------------------------------------------------------------------------------

Thank you, Joe.

--------------------------------------------------------------------------------

Operator [10]

--------------------------------------------------------------------------------

Our next question comes from the line of Naureen Quibria from Maxim Group.

--------------------------------------------------------------------------------

Naureen Quibria, Maxim Group LLC, Research Division - Senior Equity Research Associate [11]

--------------------------------------------------------------------------------

Steven, congrats on the quarter. So I guess I want to start off with the KRAS study that's going on right now, obviously. So I was just wondering, it's an open-label study, do you have any idea if we'll have any updates this year on that? And then what kind of response rates would you -- would give you some confidence in terms of you feel there's activity in this tumor type? I know it's a long ways away, but I'm curious about that as well.

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [12]

--------------------------------------------------------------------------------

So thank you. And I just want to point out that this is a Phase I study, and I'll ask Rick to give -- offer the more details that we may have.

--------------------------------------------------------------------------------

Richard Charles Woodman, Onconova Therapeutics, Inc. - Chief Medical Officer and Senior VP of Research & Development [13]

--------------------------------------------------------------------------------

Thank you, Steve. So we're in the early phases of enrollment with this study. I think, obviously, with these studies, data can become available sooner than anticipated. Or conversely, take much longer than anticipated depending upon dosing and development DLTs. Because this is a Phase I study, Steve mentioned safety, DLT determination and determination of a recommended Phase II dose for the combination is the priority. I think like all Phase I studies, we are always excited about responses, but that is not what's going to determine the success of the study or the ability to proceed with other studies. It will be dosing and safety.

--------------------------------------------------------------------------------

Naureen Quibria, Maxim Group LLC, Research Division - Senior Equity Research Associate [14]

--------------------------------------------------------------------------------

Sure. That's helpful, actually. And then in terms of moving oral or looking at oral rigosertib in COVID, and you mentioned that you'd applied for a grant. I was just wondering what's the turnaround time for that. And, a, when will you know anything? And then in terms of the economics, is this just -- would it be sufficient for IND-enabling studies or actually for a clinical trial?

--------------------------------------------------------------------------------

Steven M. Fruchtman, Onconova Therapeutics, Inc. - CEO, President & Director [15]

--------------------------------------------------------------------------------

So I'll take that and thank you. So you mentioned oral rigosertib. So why we believe rigosertib should be studied in COVID disease is because we have oral and intravenous rigosertib. So as you know, there's different levels of disease with COVID infections, some relatively mild and some pent demand to pulmonary [cell]. So based on the inhibition of SARS-CoV-2 in cell culture systems. As you mentioned, we've applied for funding through the NIH federal mechanism of studying COVID disease. Early in the disease, ideally, it would be with oral rigosertib to see if it would prevent progression to pulmonary insufficiency for patients who have already reached, unfortunately, the stage of pulmonary insufficiency, requiring ventilatory support, that would be a group of patients who could be studied with intravenous rigosertib. Because the global pandemic is changing rapidly, it is unclear to us how NIH and the federal funding agencies will make decisions regarding both therapeutics and vaccines. We believe as long as the pandemic continues to rage, there is a great need for the development of additional efficacious therapeutics. So thus, we believe, based on the preclinical studies, we would like to participate in any clinical trials that the NIH may be considering for therapeutics. But clearly, the NIH is appropriately focused on the development of vaccines, and thus, it's unclear to us where NIH stands on the issue in question of the role of therapeutics during the pandemic and the role of vaccines. Any information we have going forward, we will be happy to share that with the investment community.

--------------------------------------------------------------------------------

Operator [16]

--------------------------------------------------------------------------------

Our next question comes from the line of Ahu Demir from NOBLE Capital.

--------------------------------------------------------------------------------

Ahu Demir, NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst [17]

--------------------------------------------------------------------------------

View post:
Edited Transcript of ONTX.OQ earnings conference call or presentation 12-Aug-20 8:30pm GMT - Yahoo Finance

Comments are closed.