Cellectar Biosciences, Inc. (NASDAQ:CLRB) Q3 2023 Earnings Call Transcript

Cellectar Biosciences, Inc. (NASDAQ:CLRB) Q3 2023 Earnings Call Transcript November 2, 2023

Operator: Good morning, and welcome to Cellectar Biosciences Third Quarter 2023 Update Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Monique Kosse of LifeSci Advisors. Please go ahead.

Monique Kosse: Thank you, operator, and welcome, everyone. This morning, Cellectar issued a press release providing a corporate update. You may access that release on the company’s website under the Investors tab. With us today are Jim Caruso, President and CEO of Cellectar; Chad Kolean, Chief Financial Officer; Jarrod Longcor, Chief Operating Officer; Shane Lea, Chief Commercial Officer; and Andrei Shustov, VP Medical. Following our prepared remarks, we will open the call for a Q&A session. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to Cellectar’s expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties that could differ materially from those forecast due to the impact of many factors beyond the control of Cellectar. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the cautionary notes set forth in today’s press release as well as the risk factors set forth in Cellectar’s annual report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements.

Now I would like to turn the call over to Jim Caruso, President and Chief Executive Officer of Cellectar. Jim?

James Caruso: Thank you, Monique, and good morning, everyone. It is my pleasure to welcome you to our conference call highlighted by this morning’s announcement that top line data from our CLOVER-WaM pivotal study in Waldenstrom macroglobulinemia is planned to be announced the week of January 8, 2024 during the JP Morgan Healthcare Conference. We continue to collect and evaluate patient data from our pivotal trial and view this announcement as a potentially transformational event for the company. And as such, merits increased awareness and an attentive audience, which the JP Morgan Healthcare Conference will certainly provide. As previously discussed, our operations team has been engaged in the development of our NDA filing, which we plan to submit in the March or Q2 2024 time frame.

Assuming a priority review based on Iopofosine’s fast track designation, a 6-month FDA review targets the potential approval of Iopofosine in Q4 2024. Later in this call, Shane Lea will provide a summary of our commercial launch activities in preparation for our planned Q4 2024 U.S. launch. While the company priority remains focused on the FDA approval and commercial launch of Iopofosine for WM, in parallel, we continue to evaluate Iopofosine for relapsed/refractory primary central nervous system lymphoma and salvage therapy multiple myeloma in our ongoing Phase IIa clinical study. In addition, we look forward to announcing the first planned enrolled patient in our Phase Ib in pediatric high-grade glioma. On the financial front, we recently completed a successful PIPE led by Rosalind Advisors with participation from an excellent group of new and existing institutional investors, including AIGH Capital, ADAR1, Second Line, Nantahala Capital and AuGC, among others.

The PIPE is expected to provide more than $100 million in funding to fully support our strategic plan into mid-2025, including Iopofosine I-131 development and commercialization, our research and development plans across the entirety of our platform, and supports our transition to a commercial biotech company. Over the past quarter, we added 2 key executives to our commercial leadership team to prepare for the potential marketing of Iopofosine. We further strengthened our global intellectual property portfolio with the addition of 4 new patents and secured PRIME designation in Europe for Iopofosine in relapsed/refractory WM. We view this designation as a significant achievement. PRIME designation is granted to less than 1 in 4 applicants and is designed to expedite the achievement of marketing authorization in the EU.

The remainder of our call today will consist of a brief financial update by Chad; a commercial summary from Shane; and a WM market landscape review by Andrei. I will close with a brief WM-specific summary, and then we will then open the call for Q&A. I’ll now hand it over to Chad for a brief review of our financials. Chad?

Chad Kolean : Thank you, Jim. Let me start by noting that I will be providing certain key information regarding our financial results for the quarter that were included in our press release this morning. We expect to file our 10-Q for the third quarter next week. Research and development expenses for the quarter ended September 30, 2023, were $7.3 million compared to $5.4 million in the same period last year. R&D increased as we accelerated our enrollment in our WM pivotal trial as well as initiating activities for our pediatric study in high-grade gliomas into a Phase Ib and expanding the central nervous system lymphoma cohort of our Phase IIa basket trial in hematologic malignancies. G&A expense for the third quarter of 2023 was $2.1 million, a slight reduction from the third quarter of 2022.

Modest increases in personnel and other administrative fees were more than offset by reduced professional services expenditures. Cash and cash equivalents for the third quarter ended September 30, 2023, was $19.0 million, which includes the net proceeds from our recently completed PIPE transaction. The company expects total gross proceeds of $102.9 million from the PIPE based upon achievement of certain milestones. The company believes its current cash on hand is adequate to fund budgeted expenditures into the second quarter of 2024. Now I’ll turn the call over to our Chief Commercial Officer, Shane Lea.

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Shane Lea : Thank you, Chad, and good morning, everyone. I’m excited to provide an update on our commercial planning activities as we’ve made considerable progress in preparation for the potential quarter 4, 2024 launch of Iopofosine in Waldenstrom macroglobulinemia. WM can have a significant impact on the quality of life of patients and their families. WM is a form of indolent non-Hodgkin’s lymphoma with an estimated U.S. prevalence of 26,000 patients. Patients are concentrated geographically and approximately 50% are managed in the community setting and about 50% in the academic setting. Today, approximately 80% of WM patients are receiving active therapy and chart data demonstrates that 78% of all WM patients will receive third-line treatment.

Our market research also suggests that half of third-line patients not receiving therapy will consider new treatment options as they become available. Currently, treatment options are extremely limited beyond second-line therapy and they typically achieve poor major response rates with no complete responses reported. BTKi therapies require continuous treatment, which means that the medication must be taken daily, potentially creating toxicity, compliance and financial burden for patients. Based on our assessments, we believe there is a significant opportunity for Iopofosine to improve and expand treatment in a substantial concentrated, prevalent patient population by potentially providing improved major response rates and complete responses with a fixed dosing schedule versus continuous therapy.

Additional survey information received from WM treaters highlights the significant opportunity for new treatment options with improved efficacy. High treatment exposure to approved therapies, significant refractory disease, apathy resulting from limited FDA-approved options and the need for novel MOAs with improved efficacy were key issues cited by WM treaters. We believe Iopofosine’s product profile will address these issues by providing a new targeted MOA and the potential for increased efficacy across all genotypes, including complete responses with meaningful progression-free survival. Importantly, third-party market sizing research commissioned by Cellectar suggests a strong market opportunity with a third line or greater addressable population of approximately 4,300 patients.

Of these, there are approximately 988 patients who have received 2 prior therapies and are not currently on active treatment. This indicates that these patients have exhausted the limited FDA-approved therapies and experienced disease progression or treatment toxicity, which means there are no proven options and only salvage therapies available for next line of treatment, creating a rapidly available market expansion opportunity. In addition, there is an annual incidence of 900 patients moving into the third line. To summarize, the market WM represents in underserved patient population is highly scalable and concentrated, which will support orphan drug pricing and allow for an efficient go-to-market infrastructure. Our commercialization planning priorities will be focused on 4 key areas, which will include building smart data and commercial capabilities; second, advancing Iopofosine positioning and awareness; third, optimizing the radiotherapy buy process; and fourth, planning for effective payer access reimbursement for Iopofosine.

As we engage in executing these priorities, we will utilize external customer focus to provide the best experience for Iopofosine with key stakeholders. To that end, we recently announced a strategic collaboration with Florida Cancer Specialists to advance patient care and further define U.S. WM treatment landscape through evaluation of the 1,000-plus WM patients currently being managed within their system. This is the first of planned community-based cancer care network collaborations for Cellectar to facilitate future patient access and to optimize the patient experience and clinical success with Iopofosine. We believe the potential approval of Iopofosine in relapsed/refractory WM will provide a much needed option, enabling more patients to be treated in the community setting.

In summary, we have made excellent progress with our WM market assessments and associated commercial planning while optimizing resource allocation. As described, we have completed the market sizing assessments and remain thoughtful and deliberate in the execution of staffing plans. Brand development work has been initiated, along with the construction of our smart data capabilities, which will support our cost-efficient go-to-market model designed to quickly capture the WM opportunity. Based on our ongoing evaluation of the WM market and customer feedback on Iopofosine’s potential profile, we remain optimistic that Iopofosine may play a meaningful role in the treatment of WM and in patient quality of life. For the reasons previously described, WM represents a significant commercial opportunity, including the sizable patient population, limited existing treatment options, orphan disease pricing and Iopofosine’s novel product profile.

We remain committed to supporting WM patients, and we’ll continue to move forward with a strong sense of urgency and purpose. If approved, we believe Iopofosine will be an important new treatment option and represents a potential paradigm shift for relapsed/refractory patients requiring treatment for WM. I will now hand it over to Dr. Shustov for a clinical update. Andrei?

Andrei Shustov: Thank you, Shane. Good morning, everyone. Over the next few minutes, I will provide a brief overview of WM’s clinical features and the current treatment landscape as well as the patient population that might benefit from treatment with Iopofosine I-131. Waldenstrom macroglobulinemia is a neoplasm of small-b lymphocytes, plasmacytoid lymphocytes and plasma cells, usually involving bone marrow and sometimes lymph nodes and spleen. It is characterized by slow indolent growth, but eventually the crowding of the bone marrow results in cytopenias and suppression of the immune system, raising the risk of infection. It is further characterized by uncontrolled production of IgM monoclonal protein, not dissimilar for multiple myeloma, that by itself presents risk of significant morbidity.

WM remains incurable despite currently available therapies. Therefore, all patients will ultimately receive an initial therapy and subsequently progress through all available salvage options over the course of the disease. A typical patient with WM is diagnosed between 63 and 68 years of age. For the patient population in the United States, this generally means that patients are of retirement age and quality of life and duration of therapy become critical factors in selecting initial and subsequent therapies. The choice of therapy for WM is dictated by both patient and disease characteristics. From a patient characteristic standpoint, younger patients at the time of diagnosis may be able to tolerate more aggressive and toxic therapies. However, given disease epidemiology, most patients are not candidates for such aggressive treatment approaches and would strongly prefer novel agents with a favorable toxicity profile.

Duration of therapy is also an important factor in treatment decisions with short duration therapy strongly preferred for many reasons, including extended treatment for intervals and improvement in quality of life. From a disease characteristic standpoint, 2 genetic markers, MYD88 and CXCR4 have been linked to inherent resistance and effect treatment choice and outcome. The MYD88 mutation is present in most WM patients and appears to correlate with improved responses to therapy. As such, patients harboring this mutation would typically receive a combination treatment in frontline that includes BTKi therapy. And if not used in frontline, a BTKi is likely to be the first subsequent treatment options for relapsed or refractory disease. Conversely, patients with unmutated or wild-type MYD88 profile are more likely to be resistant to therapy and much less likely to respond to BTKi therapy.

These patients will be offered chemotherapy or chemo immunotherapy in the frontline and/or relapsed setting. In either case, once patients progress through chemotherapy and BTKi lines of treatment, options are very limited with no approved therapies. BTKi inhibitor therapy has emerged as the most frequently utilized treatment platform for both newly diagnosed and second-line relapsed/refractory patients. BTKi’s exploit the dependency of cancer B lymphocytes on continuous BCR stimulation. Two BTKi agents have been approved for the treatment of WM. Although BTKi therapy typically lacks the acute high toxicity of chemotherapy agents in combinations, it does have its own activity and adverse event limitations. First, in combination or as monotherapy, BTKi therapy rarely leads to attainment of complete remission.

This likely represents the inability of BTKi drugs to achieve meaningful disease volume reduction. In other words, responses mostly represent suppression of IgM secretion by tumor cells rather than tumor cell apoptosis. Further, patients with tumors that have MYD88 wild-type have a significantly lower chance of retaining a response and if a response is achieved, will experience a shorter duration of response. It is important to note that approximately 30% of patients are ineligible or inappropriate for BTKi therapy based on toxicity and intolerance due to cardiac arrhythmia’s, diarrhea, neutropenia, infections or fatigue. Chemotherapy has its own limitations. Given high acute toxicity and long-term sequela, many elderly patients with WM will not be candidates for combination chemotherapies, either at the time of initial diagnosis or disease relapse.

Chemotherapy is not applicable to a significant proportion of patients due to development of resistance, poor tolerance and has a significant impact on quality of life of patients with this incurable malignancy. This brief review underscores the high clinical need for WM patients after failure or intolerance of limited available therapies. It is our belief that Iopofosine I-131 product profile will provide a novel and meaningful treatment option for patients suffering from WM. I should also mention that Iopofosine provides a new and unique mechanism of action. Specifically, by targeting I-131 to tumor cells, it exploits powerful ionizing radiation energy, resulting in DNA damage and eventual apoptosis. As a disease modifying cytotoxic agent, Iopofosine I-131 has a potential to achieve significant tumor reduction and complete remission in patients whose disease is refractory to all available treatment options.

Importantly, Iopofosine I-131 presents as a fully — is a truly fixed duration therapy with just 4 doses administered over a course of 2 cycles, which is in sharp contrast to existing treatment options, including BTKi’s which are required to be administered every day until the patient can no longer tolerate a drug or experience disease progression. Iopofosine is administered as an outpatient therapy. You have likely seen the results from our Phase IIa clinical study, which are impressive and served as a basis for further evaluation of Iopofosine I-131 in Waldenstrom macroglobulinemia. As presented in this slide, 100% or 6 out of 6 patients with highly refractory WM and a median of 3 prior lines of therapy achieved an overall response and 5 out of 6 patients achieved major responses.

It is especially noteworthy that 1 out of 6 patients achieved complete remission with single-agent Iopofosine I-131 therapy after failure of all prior treatments. Response to Iopofosine was independent of mutational landscape as depicted at the bottom of the graph. Importantly, the duration of response was clinically meaningful beyond 20 months and compares favorably to all available options in this population. As you’re aware, these initial results facilitated the development of a global registrational trial of Iopofosine I-131 in patients with relapsed/refractory WM as depicted on this slide. The target enrollment for the study is 50 WM patients who received at least 2 prior lines of therapy, which may or may not have included a BTKi. Eligible patients are treated with 2 cycles of single-agent Iopofosine I-131 in outpatient setting, each cycle consisting of infusions on day 1 and 15 and approximately day 57 and 71.

There is no continuous therapy, maintenance or consolidation after completion of the second cycle. Responses are measured on a weekly basis to accurately identify time to response and time to best response. The primary endpoint of the study is major response rate with a 20% threshold achieving statistical significance. Secondary endpoints of this study include duration of response, overall response rate and overall survival. After completion of therapy, patients enter long-term safety follow-up. As Jim stated earlier in the call, we look forward to announcing top line data results. I hope that you share in our excitement regarding this announcement and the potential of Iopofosine for treatment of WM patients. I will now turn the call back over to Jim.

James Caruso: Okay. Thank you, Andrei. So to summarize the Iopofosine WM milestone, time and events, we plan to announce top line data the week of January 8 during the JP Morgan Healthcare Conference. Following top line data, we plan to submit an NDA to the FDA as early as March or in the second quarter of 2024. Based on Iopofosine’s WM fast track designation, we will submit, in parallel, a priority review application. If accepted, we anticipate a 6-month FDA review of our NDA. Assuming approval in the fourth quarter of 2024, we would subsequently initiate the commercial launch. With that, I will now turn the call over to the operator to manage the Q&A portion of our call. Operator?

Operator: [Operator Instructions]. Our first question comes from Jonathan Aschoff of ROTH MKM.

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Q&A Session

Jonathan Aschoff: Thanks for all that detail. I was curious, what extent of commercial infrastructure will you need to build out sales, marketing hires, commercial manufacturing, headcount and cost? What kind of expense are you looking at for the U.S.?

James Caruso: Jonathan, first of all, thanks for your participation, also thanks for the question. And it’s obviously the right question. Before I turn over to Shane to provide some greater detail around this, I will say that as we approach our commercial launch, we’re really going to use smart data sets to assist in our targeting and resource allocation. We believe that will help us certainly from a cost effectiveness perspective to provide an OpEx that is typically and traditionally significantly lower than what you would typically see with an oncology launch. And this space, in particular, works to this based on the scalable nature of this approach. So with that, let me turn it over to Shane to provide some detail.

Shane Lea: Yes. Thanks, Jim, and thanks, Jonathan, for the question. So obviously, very important as we think about how to strategically build out our go-to-market model. As highlighted, related to the disease itself, remember, this is a concentrated disease, geographically. And so I think that’s going to afford us the opportunity leveraging smart data to build out a very efficient go-to-market model, which would exist and continue poking the field across various functions, both medical sales liaisons, health care hematology specialists, we’d have standard — normal marketing functions. Some functions, we’ll be able to outsource those capabilities to maximize efficiency. And so being that it’s concentrated, being that we’re going to leverage smart data, it will give us the opportunity to be very pointed into the focus in what we call our fast-to-market accounts.

These are accounts which have a high WM claims profile and they have radiotherapeutic capabilities. So we believe that essentially represents 40% to 50% of the market opportunity.

James Caruso: And that, Jonathan, is — from an OpEx perspective, I think it’s fair to build into your model, approximately $25 million on an annual basis to support the full commercial infrastructure.

Jonathan Aschoff: Okay. That is an answer. So what would it take in terms of clinical data to get multiple myeloma on the NCCN compendia and how much of that data have you already generated?

James Caruso: Before I turn that over to Andrei, as you know, part of our Phase IIa, we continue to enroll highly relapsed/refractory multiple myeloma patients. I know you’re familiar with our data set to date and quite frankly, across the board, in a variety of different subtypes within the multiple myeloma patient type, we range from 40% to 60% in terms of responses. And the most recently, that post BCMA data that we presented at ASH last year, where we had a 50% response rate in a very difficult-to-treat patient population, where quite frankly, there are very limited to few options available. And I’ll let Andrei talk to his thinking about how we take advantage of, I guess, NCCN guidelines, as we think about the utilization of multiple myeloma post the approval of WM.

Andrei Shustov: Thank you, Jim. This is certainly a very important question. And as Jim stated, we are very encouraged with our accumulating data of Iopofosine activity in multiple myeloma, multiple subset patients, including triple, quadruple, penta-refractory and those with post-BCMA relapse of the disease. The challenge, as understandable that we are mitigating, is rapidly evolving field of multiple myeloma and optionality for patients with this disease and continuously added new treatments. We are in close talks in collaboration with KOLs in the field to identify the appropriate niches for Iopofosine. We are confident that novel mechanisms of action and the advantages of short duration of therapy, as mentioned for WM, will also be a benefit for patients with WM.

So our current strategy is to continue enrichment of highly refractory patients in our study. The study continues to enroll patients to identify specific population for which Iopofosine treatment will be most appropriate. The study is continuing enrollment. We’re enriching our subsets. And over the next year or so, we will continue our development and decision-making regarding proper positioning for NCCN guidelines.