MEI Pharma, Inc. (NASDAQ:MEIP) Q4 2023 Earnings Call Transcript

MEI Pharma, Inc. (NASDAQ:MEIP) Q4 2023 Earnings Call Transcript September 26, 2023

MEI Pharma, Inc. beats earnings expectations. Reported EPS is $-2.4, expectations were $-3.25.

Operator: Good day and welcome to the MEI Fiscal Year-End Earnings Call. My name is Gary and I will be the conference facilitator today. All participants will be in a listen-only mode. After today’s prepared remarks, there will be an opportunity to ask questions. [Operator Instructions] Please note today’s event is being recorded. I would now like to turn the conference over to David Walsey, Senior Vice President of Corporate Affairs at MEI Pharma. Please go ahead, sir.

David Walsey: Thank you, Gary. Hello, and thank you for joining the MEI Pharma conference call today. My name is David Walsey, and I’m Senior Vice President of Corporate Affairs for MEI. With me today on the call from MEI are David Urso, President and Chief Executive Officer; Jay File, Chief Financial Officer; and Dr. Richard Ghalie, Chief Medical Officer. Before turning the call over to David for opening remarks, I’d like to remind you that during today’s call, we’ll be making forward-looking statements. Certain information contained in this communication that are not historical in nature are forward-looking statements in the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the potential safety, efficacy, and regulatory and clinical progress of our product candidates, including the anticipated timing for the initiation of clinical trials and the release of clinical trial data and our expectations surrounding potential regulatory submissions, approvals and timing thereof, our business strategy and plans, the sufficiency of our cash, cash equivalents and short-term investments to fund our operations.

You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management’s current expectations and are subject to a number of risks and uncertainties, including but not limited to, our failure to successfully commercialize our product candidates, the availability or appropriateness of utilizing the FDA’s accelerated approval pathway for our product candidates, final data from our preclinical studies and completed clinical trials may differ materially from reported interim data from ongoing studies and trials, costs and delays in the development and/or FDA approval or the failure to obtain such approval of our product candidates, uncertainties or differences in interpretation in the clinical trial results, uncertainty regarding the impact of rising inflation and the increase in interest rates as a result, potential economic downturn, activist investors, our inability to maintain or enter into and the risks resulting from our dependence upon collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales, and distribution of any product, competitive factors, our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business, our inability to operate our business without infringing the patents and property proprietary rights of others, general economic conditions, the failure of any products to gain market acceptance, our inability to obtain any additional required financing, technological changes, government regulation, changes in industry practice, and one-time events.

We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements. Under US law, a new drug cannot be marketed until it has been investigated in clinical studies and approved by the FDA as being safe and effective for the intended use. With that, I’ll now turn the call over to David Urso.

David Urso: Thank you, David, and thank you all for joining us today. On today’s call, I’ll make some opening remarks and then turn the call over to Richard Ghalie, our Chief Medical Officer, to review our programs. Jay File, our Chief Financial Officer, will then provide some brief financial comments before moving to Q&A. Before getting started, I want to welcome Jay. He was just appointed our CFO as of August 1st, so this is his first earnings call at MEI, and we’re very happy to have him on the team. With that said, I’ll make a brief statement regarding the termination of the merger agreement with Infinity Pharmaceuticals before moving on to review our business. Regarding that proposed transaction, while we believe the potential upside of the Infinity merger was compelling for MEI stockholders, we value the perspective of our stockholders.

With the proposed transaction behind us, we’re committed to pursuing our two promising clinical stage programs as a standalone company. Looking ahead over the next few quarters, we see important opportunities in the continued progress of our two clinical stage oncology programs, voruciclib and ME-344. I would like to use this call to provide an update on the status of these programs and why we’re optimistic about their potential. Both of our assets represent novel mechanisms of action. Voruciclib is an oral CDK9 inhibitor and ME-344 is a mitochondrial inhibitor that inhibits the OXPHOS pathway. We’re investigating the potential of these compounds to overcome resistance mechanisms to standard of care therapies. The BCL2 inhibitor, venetoclax for voruciclib, and the VEGF inhibitor, bevacizumab, in the case of ME-344.

The ongoing advancement of each program is based on non-clinical, and in the case of ME-344, clinical data supporting proof of principle for their respective combinations. We chose these combination approaches based on clear hypotheses to address known resistance mechanisms of each standard of care therapy, clear medical need, and significant commercial opportunities. We’re working with some of the leading oncologists in the country in both of our clinical studies, and we’re pleased with their level of engagement and interest in our programs. We expect data readouts from each program in the coming months. With respect to voruciclib, as previously reported, we’ve seen promising data from our ongoing Phase I study. Recall that voruciclib as a selective CDK9 inhibitor regulates the transcription of MCL-1 and through that mechanism holds the potential to address a known venetoclax resistance mechanism.

The ongoing Phase I study is evaluating voruciclib as a single agent and in combination with venetoclax, which is standard of care in AML and used in other hematologic malignancies as well. Richard will provide more detail shortly, but in brief, voruciclib alone and in combination with venetoclax has been generally well tolerated in the Phase 1 study to date with no significant myelosuppression in patients with B-cell malignancies or AML. The results further demonstrate encouraging early clinical activity in heavily pre-treated patients that progressed on venetoclax who were administered voruciclib monotherapy and at the initial dose level in combination with venetoclax. The planned voruciclib data readout in early 2024 is expected to include data from the dose-ascending cohorts in the Phase 1 study evaluating voruciclib plus venetoclax in patients with AML.

Here are some of the leading KOLs we’re working with. We’re pleased with how the study is enrolling. As for ME-344, we’re pursuing a novel approach to cancer therapy with a combination of ME-344, an OXPHOS inhibitor that inhibits the production of ATP and mitochondria, and bevacizumab, a VEGF inhibitor which inhibits the production of ATP through glycolysis to deprive cancer cells of the energy needed to proliferate. Bevacizumab is an established standard of care in multiple solid tumors, including colorectal cancer. Our ongoing Phase 1b study is evaluating metastatic colorectal cancer patients with ME-344 plus bevacizumab. This novel approach to treatment has also generated enthusiasm among our investigators in the ongoing study. In earlier clinical studies, ME-344 was generally well tolerated at the dose we’re currently investigating, and there was evidence of clinical activity as a single agent.

We had a first look at the potential for this combination in a 42-patient controlled window of opportunity clinical study in HER2 negative breast cancer patients waiting for mastectomy. Richard will discuss the decrease in the proliferation and biomarker Ki67 observed in that study. We expect that the ME-344 data readout planned in the first half of 2024 will include initial safety and efficacy data from the first 20 patient cohort in the Phase 1b study evaluating ME-344 in combination with bevacizumab in patients with metastatic colorectal cancer. We believe that the potential value of both programs is notable given that the addressable market opportunities for voruciclib in combination with venetoclax and ME-344 in combination with bevacizumab are significant.

Venetoclax is currently used across AML, CLL, and double-hit DLBCL and generated approximately $2 billion in 2022 worldwide sales. Venetoclax sales are continuing to grow and are expected to generate $3.4 billion by 2028. Avastin and bevacizumab biosimilars are used to treat a variety of cancers, including colorectal cancer and ovarian cancer. 2022 worldwide Avastin and bevacizumab biosimilar sales reached $2 billion in 2022 and are expected to grow to $3.3 billion by 2028. In short, MEI’s pipeline is promising and presents substantial opportunity for delivering novel therapeutics for patients and creation — and value creation for MEI stockholders. Both voruciclib and ME-344 have the potential in combination with current standards of care therapies to overcome known resistance mechanisms and improve patient outcomes.

Each program is supported by non-clinical and in the case of ME-344, clinical data demonstrating anti-tumor activity and mechanistic proof of concept for the combinations being evaluated. We anticipate reporting data for voruciclib early in calendar 2024 and in the first half of 2024 for ME-344. We look forward to these data readouts and the next steps these data will inform. I’ll now turn the call over to Richard Ghalie, our Chief Medical Officer, to provide additional details on our pipeline. Following Richard’s remarks, Jay File, our Chief Financial Officer, will provide a brief financial overview before moving to Q&A.

Richard Ghalie: Thank you, David. And I’ll begin first by discussing voruciclib, a selective oral CDK9 inhibitor drug candidate. The mechanism of action of voruciclib is depicted in this cartoon. Voruciclib blocks the transcription of MCL-1 and MYC at the pol II level DNA transcription. In addition, voruciclib block the stabilize — includes the stabilization of the MYC protein which has a downstream effect on that pathway. In a moment I will give more detail to the meaning of these two targets. Voruciclib has a favorable PK and PD profile that allow its use orally because it’s bioavailable. It is selective to CDK9 compared to other CDK, as shown on the table to the right, with a more binding affinity and longer resonance time for CDK9 compared to the other CDK.

In addition, voruciclib had more selectivity to CDKs compared to other kinase. Voruciclib is potent with an IC50 ranging from 0.2 to 1.7 micromolar in a variety of cell lines tested and interestingly it concentrates in tumors over plasma, which is relevant in patients with solid tumors or lymphoid malignancies with tumors. Now let’s focus on the two targets of interest. The protein MCL-1, it is known that its increase is associated with poor prognosis in patients with acute myeloid leukemia or AML and in a variety of B-cell malignancies. In addition, upregulation of MCL-1 is an established mechanism of resistance to venetoclax. As venetoclax inhibits BCL-2, it can lead to stabilization of MCL-1, leading to resistance to venetoclax over time.

Independently and separately, we also know that MYC is overexpressed in a variety of cancers and tend to be associated with poor prognosis. In addition, the MYC pathway includes KRAS mutation, which will be relevant for the discussion about the potential role of voruciclib. Let’s begin first on the aspect of inhibition of MCL-1. As mentioned, it is relevant for AML and B-cell malignancies and as a way to address venetoclax resistance. MEI focused its initial development in hematologic malignancy beginning with AML. The reason we selected AML is because venetoclax-based therapies are standard of care and approved in elderly patients who are unfit to receive intensive chemotherapy. In the NCCN guidelines, it’s been established also as the standard of care in a variety of market research, including the one cited on the right.

In addition, ongoing studies are being conducted to establish the role of venetoclax as part of the standard of care in chemotherapy-eligible patients. Our hypothesis is voruciclib combined to venetoclax has the potential to restore sensitivity to venetoclax and therefore improve durability of response. This slide summarizes the non-clinical data that support the combination of voruciclib and venetoclax in AML. This is a murine xenograft model. In panel A, it shows suppression of MCL level. In panel B, it shows that either agent alone has activity in AML, but the combination is synergistic with further increase in apoptosis level. And that corresponds to an improvement in survival in the model depicted here in AML. We have similar data with a combination with venetoclax and CLL and diffuse large cell lymphoma models.

Now moving to describe the Phase 1 study. This is a typical Phase 1 dose escalation expansion study in patients with relapsed refractory AML and B-cell malignancy in the first stage, which is the monotherapy dose escalation, and in patients with relapsed and refractory AML for the combination with venetoclax stage. As for Phase 1 studies, its endpoints consist of safety, pharmacokinetic. We are also collecting sample for biologic correlate, primarily to look at DHC profiling and MCL-1 expression, as well as molecular mutation analysis. And we will also collect, of course, activity data. The monotherapy dose escalation component has been completed with 40 patients enrolled, and we are now currently enrolling in the combination with venetoclax group and patient with AML.

As mentioned, this is a two-stage component. First, a dose escalation going from 50 milligrams every other day upward. And as of now, we have completed enrollment at the 150 milligram dose level. Once a dose that is confirmed to have well tolerance as well as evidence of activity, then we will proceed to expansion cohort. Currently there is one contemplated and additional expansion cohort will be discussed with the FDA. In total, the study will enroll over 100 patients with hematologic malignancies, including approximately 70 patients in the combination with venetoclax. This is a brief summary of the data observed in the [indiscernible] escalation. Primary data was presented at the ASH 2021, and additional data and final data was presented at some subsequent scientific meeting.

In total, 40 patients were enrolled, all heavily pre-treated with a median of three prior therapy ranging from one to up to eight therapies in one patient. Two of those schedules were evaluated initially daily continuously in 16 patients. And we have at that time pivoted to evaluate voruciclib on a 14 days on, 14 days off therapy in a 28 day cycle. And the reason for this pivot is because we have seen in the daily dosing two patients pneumonitis that we felt were confounded by patient having developed differentiation syndrome, seen in AML patients receiving target therapy, as well as prior allogeneic transplant with [indiscernible] disease. When we switched to the two weeks on, two weeks off schedule, we were able to dose escalate up to 200 milligrams without seeing DLTs. We stopped those escalation not because of safety reasons, but because we wanted to start pivoting to the combination with venetoclax, our target combination regimen.

With the monotherapy, we have seen patients having evidence of anti-tumor activity, including one patient with AML who has a morphology leukemia-free state achieved, and five of 10 patients with AML at the 200 milligram dose who have stable disease. Importantly, we have seen in our collaborative laboratory studies done with collaboration at academic centers, a decrease in MCL-1 and MYC using a single-cell RNA sequencing from three patients with CLL and two patients with AML. So overall, voruciclib as a monotherapy at a dose of up to 200 milligram on a 14 days on, 14 days off schedule, was well tolerated, had no DLT, we did not see drug-related neutropenia, we did not see Grade 3 or higher drug-related toxicity, and no patients were discontinued due to drug-related toxicity.

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As mentioned, we are now enrolling in the venetoclax combination. Up to now, we have not seen DLTs. The PK analysis of the earlier dose level do not show drug-drug interactions, and we are seeing evidence of clinical activity at the low dose evaluated today, manifested by a reduce in transfusions, improved counts, response observed in some patients, and over 85% of the patients continuing beyond cycle 1 of the DLT windows. Keep in mind, this is observed in patients who have been heavily pretreated with a medium of two prior therapy, including venetoclax. Now let’s turn the focus to the recycling effect on MYC. As mentioned, MYC is over expressed in a variety of cancers and tend to be associated with poor prognosis. There is no current treatment approved for MYC mutated tumors.

CDK9 inhibition lead to reduce transcription of MYC and stabilization, thus can have a potential treatment effect. We have clinical data from initial studies conducted in patients with solid tumors by the prior sponsor. Two studies were conducted, one using a two weeks on, one week off schedule, and the other one using a daily continuously schedule. Relevant to the discussion today is in the daily continuous schedule study, samples were obtained from 25 patients with a variety of solid tumors and tested on a 10 gene biomarker with a sample obtained at baseline and with each subsequent course of therapy. We have seen a decrease in c-MYC expression in 60% of the patients tested in that study. And here are shown only two illustrative examples of two patients.

Circled are the MYC gene that were evaluated showing a decrease in MYC over time with each course of therapy. At MEI, we have further expanded the evaluation of that effect on MYC and KRAS by evaluating a number of cell lines listed here, including colorectal cancer and other tumors, that had a variety of KRAS mutations, G12C, but also others. And shown to the panel to the right is a dose response relationship between voruciclib dose and suppression of tumor growth in three different cell lines with different KRAS mutations. And lastly, and of interest, is combination of voruciclib with the KRAS inhibitor, sotorasib. This experiment was conducted in a pancreatic tumor cell model. This is intralesional infusion of one or a combination of drugs.

And the readout is shown to the panel to the right where we see two type of analysis. One is the standard pathology with an HA staining that shows the control arm, either agent alone, and to the bottom right panel, the combination, showing evidence of cell death, pyknotic cells, and also in the fluorescent staining, an increased number of cells dying. So that is my summary for the voruciclib program. Now I’m turning to the description of ME-344, a mitochondrial inhibitor drug candidate. This is a very interesting and novel mechanism of action where the inhibition on the mitochondria is a dual effect. One, on OXPHOS, and two, on purine synthesis, reminding that purine synthesis is made at the surface of mitochondrial cells. The relevance of that mechanism is illustrated in the panel to the right, which I will simplify by saying that mitochondria generate ATP, which are essential for producing energy for cells, and that is done through the OXPHOS pathway.

Blocking the OXPHOS with ME-344 would lead to a decrease in ATP, source of energy, and eventually by a cascade of event to potentially cell death. Separately, purine biosynthesis is done, as I said, at the surface of mitochondria, which ME-344 can block. Purine are essential to cell proliferation, and blocking purine biosynthesis could lead to a decrease in cell growth and proliferation. This is a simple panel of over 200 cell lines that were tested for ME-344 activity in vitro. And as one can see, ME-344 is potent at the nanomolecular level in nearly all cell line tested except a few. MEI conducted two Phase 1 studies, one as a single agent dose escalation to determine the safety efficacy and PK. And that study led to the determination that recommended Phase 2 dose for further development is 10 milligram per kilogram.

The next study evaluating ME-344 with a chemotherapy topotecan in a couple of types of solid tumors. 48 patients enrolled in the study. Myelosuppression due to topotecan was observed. We had disease stabilization at 49% of the patients. However, MEI decided to pursue the development of ME-344 in a different direction on the basis of biology. However, before I go to that, this is a table summarizing the safety profile of ME-344 as a single agent in the Phase 1 study, pointing to the fact that neuropathy was seen only at doses higher than 10 milligrams per MYC kilogram was the dose limiting toxicity. It was not reported at lower doses. Now, let’s describe the new strategy that we would like to employ ME-344 in combination with the anti-angiogenic agents, primarily Avastin or bevacizumab.

This stands for a simple observation that when Avastin is administered to a patient, it blocks the glycolytic energy pathway, leading to effect on cell growth. However, cells are [Technical Difficulty] the ATP I mentioned earlier. Therefore, it is plausible that combining ME-344 [Technical Difficulty] So I’ll continue then. Combining ME-344 to block the mitochondrial energy and a VEGF inhibitor like Avastin would now have a possibility of synthetic lethality and therefore improving anti-tumor control. This hypothesis was tested initially in animal model of which I present two, one, a colorectal cancer model and, one, a breast cancer model using ME-344 in combination with oral VEGF inhibitor, nintedanib and regorafenib. And seen on this slide is a decrease in tumor growth for the combination compared to either agent alone and improved survival in colorectal model.

This led to a study by collaborate at the NCI Spain in Madrid, a multi-center study, a proof-of-concept study evaluating ME-344 and Bevacizumab in patients with breast cancer. The reason breast cancer was selected is because that is a window of opportunity for this type of mechanistic studies where patients between diagnosis and definite surgery has a period of time where the study could be conducted. It was a randomized control study in 41 patients. Group A received a bevacizumab with ME-344, just one cycle. And Group B received bevacizumab alone. The readout was a PET scan to look at tumor vascularization and tumor biopsy looking primarily at the biomarker of tumor proliferation called Ki67. Results are illustrated on this slide. Group A again is the combination of ME-344, a bevacizumab in green.

As you can see, looking at all patients enrolled in the study, there was a significant decrease of Ki67 compared to what observed with bevacizumab alone. Focusing now on the subset of patients in this study who had a tumor normalization vascular — vascularization normalization by PET, this effect is further enhanced. This led us to the decision now to proceed in a clinical trial with clinical readout, and we selected colorectal cancer as the first study to evaluate the combination because it’s an unmet need and Avastin is used in that study. So this is a Phase 1/2 to study in patient relapse colorectal cancer after failure of all standard therapy. Primary objective is progression free survival. Secondary objective are survival and safety. The study is conducted in separate cohort, beginning with cohort one, and using the same dose and schedule that was used in the breast cancer study.

20 patient will be enrolled, and the readout will be that four months after the patients — last patient is enrolled and considering the positive outcome is a PFS at four months of 20% or higher. Then that will lead to a evaluation of a second cohort and subsequent to a cohort to be discussed with the FDA. With that, I conclude the clinical update and will turn it to Jay File to talk about the financial overview.

Jay File: Thank you, Richard. As reported earlier today, as of June 30th, 2023, MEI had $100.7 million in cash, cash equivalents and short-term investments with no outstanding debt. We believe our cash balance is sufficient to fund operations for at least the next 12 months and through the reporting of clinical data readouts from the ongoing and planned voruciclib and ME-344 Phase 1 and Phase 1b clinical programs respectively. I look forward to any questions on the broader set of financial information reported earlier today during the Q&A portion of the call. I’ll turn now back to David.

David Urso: Thanks, Jay. As you’ve heard today, I believe we have two exciting programs with expected data readouts beginning with voruciclib early in calendar 2024 and the first half of 2024 for ME-344. With the promising pipeline and capital to support our near-term development plans, we’re excited about the potential to create stockholder value and deliver improved therapeutic options for patients. Before we turn to Q&A, I’d like to briefly acknowledge that two of our stockholders, Anson and Cable Car, have initiated a consent solicitation process and separately submitted three Director candidates to stand for election at the company’s Annual Stockholder Meeting this year. We have had several conversations with Anson and Cable Car as part of ongoing efforts to resolve the situation and remain open to further discussions.

We will appropriately address the actions of these stockholders in due course. For the purposes of this earnings call, we’re here to discuss our programs and upcoming milestones. We ask that you please keep your questions to these topics. I’ll now ask the operator to provide the instructions for asking questions and then open the call for Q&A.

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Q&A Session

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Yale Jen with Laidlaw & Company. Please go ahead.

Yale Jen: Good afternoon, and thanks for taking the questions as well as providing a clear view of what’s happening currently. Maybe I start with housekeeping questions that you got about $100 million cash, and in the press release you suggested that you have a 12-month or maybe a little bit longer runway. Given that you are still in Phase 1/2 study, should we anticipate it to be a more conservative estimate or there’s additional thoughts behind that in terms of the runway? And I have some follow up as well.

David Urso: Thanks, Yale, this is David. I would say it’s — conservative in the sense that, we’ve got all the capital we need to do the Phase 1 programs as we’re currently — they’re currently planned and as we have some ideas about augmenting them. Going into Phase 2 is really data driven and so it’s really impossible to speculate about the next phase of development for these programs. So I think it’s an appropriate guidance in that respect.

Yale Jen: Okay, great.

David Urso: Like we said, it’s at least 12 months and covering the current work that we’re doing. So you could characterize it as being, I guess, somewhat conservative, but we did say at least 12 months.

Yale Jen: Sure. And maybe just in terms of, again, the housekeeping one, which is the top line, I understand the prior deals are completed. So should we anticipate there’s some top line coming just because of the amortization or we should anticipate that to be stopped, at least in the near term?

David Urso: I’m sorry, could you repeat? We were having a little bit of trouble following the question. Could you please repeat it?

Yale Jen: Sure. In terms of the top-line revenue that you have until this quarter, my question is would that continue for the subsequent fiscal year or simply these revenue numbers is just the amortization of the prior revenue received?

Richard Ghalie: Yeah, I mean all the revenue we’re recognizing is all KKC driven from our collaboration with them, so it’s not anticipated to continue into the future.

Yale Jen: Okay, maybe the last question here is in the clinical side of [voruciclib] (ph) Phase 1 data readout. What should we anticipate specifically in terms of, sort of, type of data? Would that, other than the safety, would that be PK? And would that be any biomarker or other aspect? Could you provide us a little bit of color on that?

Richard Ghalie: Yale, this is Richard. Yes, it will be a combination of safety data primarily since this is the primary endpoint of Phase 1 study. Perhaps, the recommended Phase 2 dose. There will be also PK data and biomarker analysis. All of them will be available.

Yale Jen: What specific — would you already have some biomarker in mind? If so, what that might be?

Richard Ghalie: Right. So I mentioned it when I presented the monotherapy dose escalation. The biomarkers that we are evaluating are the DHC profile, particularly MCL-1 expression. When looking at multiple molecular biomarkers such as MYC, and we will be looking at potentially other biomarkers that are relevant directly to the effect of CDK9 on the target.

Yale Jen: Okay. Okay, great. Yeah, I’ll get back to the queue and thanks for the color.

David Urso: I mean, I guess we could also say that just from a clinical perspective for the cohort 1 from ME-344, we will be looking at PFS and for the voruciclib expansion cohort that’s in our protocol right now, we’ll be looking at [OR] (ph), so those are just standard clinical endpoints for the two respective diseases.

Yale Jen: Actually, let me — If I can, maybe just follow up a little bit on that. You said that 20% or higher of the threshold for moving forward for the ME-344 study, cohort 1. What sort of — what are the factors determining that 20% was the number as the cutoff?