Onconova Therapeutics, Inc. (NASDAQ:ONTX) Q2 2023 Earnings Call Transcript

Onconova Therapeutics, Inc. (NASDAQ:ONTX) Q2 2023 Earnings Call Transcript August 10, 2023

Onconova Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.2, expectations were $-0.29.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics Second Quarter [Technical Difficulty]

Dr. Steve Fruchtman: Sarah, excuse me, you are coming in and out and I don’t know if other people hear. You coming in and out.

Operator: Thank you. Let me restart. Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics Second Quarter 2023 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. following management’s prepared remarks, we will hold a question-and-answer session. Operator As a reminder, this call is being recorded today, August 10, 2023. At this time, I would like to turn the call over to Bruce Mackle of LifeSci Advisors. Go ahead.

Bruce Mackle: Thank you, Operator. And welcome everyone to Onconova’s second quarter 2023 financial results and business update conference call. Earlier this afternoon, Onconova issued a press release reporting its financial results and business progress. If you have not yet seen this press release, it is available in the Investors and Media section of the company’s website at www.onconova.com. Following my introduction, we will hear from Onconova’s President and CEO, Dr. Steve Fruchtman; Consultant Chief Medical Officer, Dr. Victor Moyo; and Chief Operating Officer and Chief Financial Officer, Mark Guerin. Onconova’s VP of Regulatory Affairs and Quality Assurance, Fred Frullo, will also be available during the Q&A session following the prepared remarks.

Before we begin, I would like to remind everyone that statements made during this conference call will include forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involves risks 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. For more information on forward-looking statements, please review the disclaimer in today’s press release and the risk factors in the company’s SEC filings.

With that, I will now turn the call over to Onconova’s President and CEO, Dr. Steve Fruchtman.

Dr. Steve Fruchtman: Thank you, Bruce, and thanks to all our investors and analysts who are listening today. As you know, Onconova is dedicated to developing novel differentiated therapies for patients with cancer that act by targeting some of the most important pathways that enable cancer cells to grow. We are very encouraged about the outlook for our two lead programs involving narazaciclib, a differentiated multi-kinase CDK4/6 inhibitor, targeting proteins involved in resistant pathways and rigosertib a cell-signaling inhibitor. Over the last quarter, we have worked diligently to advance the development of both programs in multiple company and investigator-sponsored Phase I and Phase II trials. Data from these studies will guide the clinical and regulatory strategy for each product candidate.

Over the course of the quarter, we have also presented encouraging preclinical data on each program at several very prestigious medical meetings, including the AACR and ASCO meetings. Presentation of these data affirms the value proposition the narazaciclib and rigosertib, and recognition by rigorous preclinical and clinical scientific community is warranting the data from these important presentations. In addition, we opened an important and constructive dialogue with the FDA, related to the requirements for a regulatory path for rigosertib for an approval in the ultra-rare indication of RDEB-associated squamous cell carcinoma. Looking ahead to the rest of 2023 and early 2024, for narazaciclib, we will be focused on defining the monotherapy, daily Phase II dose and advancing the program into one or more randomized studies.

For rigosertib, we will be focused on mapping out a registrational study plan to discuss with the agency, RDEB-associated squamous cell carcinoma based on the very impressive clinical responses that have been seen in previously refractory patients and presented at major medical meetings. We also continue to support the ongoing investigator sponsored checkpoint inhibitor combination studies with rigosertib in KRAS mutated non-small cell lung cancer and advanced malignant melanoma. Importantly, the KRAS mutation in non-small cell lung cancer in malignant melanoma. Importantly, the KRAS non-small cell lung cancer and advanced lung cancer trial welcomes refractory patients with any KRAS mutation. And the clinical data support our hypothesis that responses should be seen no matter that KRAS mutation present.

And in fact, responses are now reported and appeared to be KRAS agnostic to the effects of rigosertib in combination with nivolumab. Before we dive into the details for each program, I would like to introduce to you Onconova’s Consulting Chief Medical Officer, Dr. Victor Moyo. It is an honor to have such a fine global health professional, physician and successful clinical researcher join Onconova, following the untimely passing of our late Chief Medical Officer, Dr. Mark Gelder and the extraordinary service of our Interim Chief Medical Officer, Dr. Michael Saunders. We thank Michael for his service to Onconova and to the patients with advanced cancers entering our trials under his leadership. Michael will remain as a consultant to the company.

Victor has hit the ground running and is already making an important contribution to Onconova’s clinical development efforts. Victor brings a great depth of experience from his three decades of work in clinical research, including more than 15 years in the biotech industry. He has held responsible leadership roles and lead programs at the Centocor Ortho Biotech, subsidiary of J&J., Merrimack Pharmaceuticals, as well as other emerging startups. I personally have known Victor for more than 15 years, working with him and we were together at Ortho Biotech and he was leading the erythropoietin alpha trial in myelodysplastic syndrome, as well as the DOXIL trial in advanced ovarian cancer. Obviously, both these drugs are approved and erythropoietin alpha as a multibillion-dollar franchise for Ortho Biotech.

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It is with great confidence that I and we welcome Victor warmly to the Onconova team. For our update today, we will focus primarily on two topics. Starting with our CDK4/6 inhibitor, narazaciclib, the first topic would be the progress of our efforts to define a recommended Phase II dose or RP2D. Worldwide sales of the top six drugs in this class topped $6 billion in 2020, driven by their ability to improve progression-free survival. We believe that narazaciclib has the potential to be a differentiated entrance — entrant into this market based on an improved safety profile, and importantly, the lower risk of the development of resistant by totally targeting protein involved in these resistant pathways. Our efforts over the last year have been dedicated to completing a Phase I program and defining the recommended Phase II dose to support evaluation of a combination trial with narazaciclib and letrozole with registrational intent.

The clinical program includes two Phase I monotherapy studies in patients with solid tumors and one Phase I/II dose escalation trial in combination with letrozole in patients with low-grade endometrioid endometrial cancer, also known as LGEEC. Patients continue to be entered onto the trials and we anticipate reporting topline results from these studies, including the safety, pharmacology and selection of a recommended Phase II dose in the fourth quarter of this year. We will use this information to define and initiate additional combination narazaciclib studies in other indications once the dose is identified. Based on the progress seen to-date, we anticipate initiating a randomized trial in LGEEC in the first half of 2024. Moving on to rigosertib.

The second topic will be related to the development of a registrational plan for rigosertib. As you may know, we had a Type B meeting with the FDA towards the end of June. Based on this constructive meeting and feedback from the agency and the impressive clinical responses in these previously refractory patients with a tremendous unmet medical need, we have seen and presented at major medical meetings our clinical data. We intend to develop a protocol for a potential registrational trial with rigosertib in patients with RDEB-associated squamous cell carcinoma. We will provide an update on next steps in the first half of 2024. With that overview and introduction, I will invite Victor to give you more insight and take you through the latest updates on both narazaciclib and rigosertib.

Victor?

Dr. Victor Moyo: Thanks for the introduction, Steve. I am very excited to join Onconova and believe that our two assets have the potential to improve the care of people with cancer. So I will start by providing you with an update on narazaciclib. We believe that narazaciclib has the potential to improve care even more than other CDK4/6 inhibitors because of its unique attributes. Number one, it has a differentiated safety profile with potentially less myelosuppression and neutropenia than the other drugs in this class. Number two, we have already demonstrated and feel confident that narazaciclib can be administered once daily and every day. Thus, there is no need for a drug holiday to permit bone marrow recovery that is required by other CD4/6K inhibitors and which may meet replication of cancer cells.

Number three, it inhibits multiple kinases. This activity could contribute to enhanced tumor growth inhibition and overcome immunosuppression in the tumor microenvironment. And thus, this overcomes the development of treatment resistance. During our first quarter call, we reported observations from the Phase I study of patients with solid tumors that indicated that at a continuous daily dosing schedule of 240 milligrams narazaciclib achieved target engagement with an acceptable safety profile. We also reported the initiation of the first Phase I/II study evaluating the combination of narazaciclib and letrozole in patients with recurrent low-grade endometrioid endometrial cancer abbreviated LGEEC and we reported positive preclinical data at AACR 2023 that demonstrated that narazaciclib can be effectively synergistically combined with other agents and in additional indications.

So we believe LGEEC is an ideal first indication for narazaciclib. Comparing the data suggests that off-label combination use of CDK4/6 inhibitors and letrozole improved progression-free survival in recurring LGEEC. However, these regimens appeared to be negatively impacted by issues of safety, tolerability and treatment resistance, creating an unmet need for new therapies. In addition, beyond inhibiting CDK4/6, narazaciclib uniquely targets a protein called BUB1. Over expression of BUB1 is linked to poor outcomes in tumors, including breast and endometrial cancer. Together, the compendia data and BUB1 action support the potential for narazaciclib to make a positive impact on LGEEC and other indications. Looking into 2024, we intend to begin at least one additional combination study of narazaciclib and letrozole in a different indication and we will provide additional details once a clinical protocol is finalized.

Next, I’d like to speak about our plans to define a registrational path for rigosertib. We have been evaluating the clinical potential for this compound as a single agent in the ultra-rare lead indication of RDEB-associated squamous cell carcinoma and separately in combination with checkpoint inhibitors. During our first quarter call, we reported a data presented at the ISID, International Society of Investigative Dermatology and the International Epidermolysis Bullosa Symposium, showing that patients with refractory RDEB-associated squamous cell carcinoma achieved complete cause clinical responses of all the cancers lesion — skin lesions. We also observed that patients treated with either IV or oral rigosertib experience durable responses and that rigosertib had been well tolerated with no additional toxicities in this new important indication.

The enormous interest from the international experts in the disease supports our enthusiasm to continue to develop rigosertib for this indication. I will point out that RDEB-associated squamous cell carcinoma is a very high mortality and there are no effective therapeutic options. Patients with RDEB could develop the associated squamous cell carcinoma has a 50% mortality within two and half years and is the most — and this is the most common cause of death in this patient. Because of this high and urgent unmet need, we requested and completed a Type B meeting with FDA in June. As Steve mentioned, the meeting was constructive, and based on our discussions, our goal is to develop a protocol for a registrational trial and discuss the strategy with FDA and their review.

Notably, rigosertib’s results in RDEB-associated squamous cell carcinoma may have positive read through into more prevalent indications as a key driver of the disease is PLK1, a kinase that is overexpressed in other cancers and potently inhibited by rigosertib. We continue to collaborate Pangea Biomed, an AI company to identify biomarkers that could predict a response to rigosertib. In addition, we continue to evaluate the potential to combine rigosertib in combination with checkpoint inhibitors through two investigational sponsored studies or IST. The first IST is being conducted by investigators at the Icahn School of Medicine at Mount Sinai in New York. This Phase I/II study is evaluating the combination of rigosertib and nivolumab in patients with KRAS-mutated non-small cell lung cancer who have failed prior therapy with a PD-1 checkpoint inhibitor.

As reported last quarter, based on encouraging efficacy data and acceptable safety data, the protocol was amended to allow further dose escalation of rigosertib. Patient accrual is intended to be complete at the end of the year. We would expect the investigators to provide an update of the trial in 2024. The second Phase II IST is being conducted at Vanderbilt University and initiated enrollment in May. This time on two-stage design is evaluating rigosertib in combination with KEYTRUDA in patients with refractory metastatic melanoma. And with that, I will conclude my portion of the call and hand it over to Mark.

Mark Guerin: Thank you, Victor. Onconova closed the second quarter of 2023 with cash and cash equivalents of $29.7 million, compared to $38.8 million as of December 31, 2022. Based on our current projections, we believe that our cash position will be sufficient to fund our ongoing clinical trials and business into the second quarter of 2024. Research and development expenses for the second quarter of 2023 were $2.5 million, compared to $2 million for the same period in 2022. General and administrative expenses for the second quarter of 2023 were $2.2 million. This compares with $2.1 million for the same period in 2022. Net loss for the second quarter of 2023 was $4.3 million or $0.20 per share on 21 million weighted shares outstanding.

That compares with a net loss for the second quarter of 2022 of $4 million or $0.19 per share on 20.9 million weighted shares outstanding. The increase in net loss for the second quarter of 2023 compared with 2022 was primarily a result of narazaciclib clinical development and manufacturing expenses in the 2023 period. With my financial overview complete, I will now hand the call back to Steve for his concluding remarks.

Dr. Steve Fruchtman: Thanks to both, Mark and Victor, for that review. In conclusion, we are very optimistic about the outlook of our two lead compounds, because of the promising clinical observations, safety signals and supporting preclinical data, along with our strategy for eventual health authority approval for our compounds. For narazaciclib, we believe the CDK4/6 compound and the potential to provide differentiated efficacy and safety based on reduced bone marrow toxicity, a wider kinase of addition pattern and an improved administration scheme. To-date, we have seen target engagement and the development of mild neutropenia, which permits a once-per-day dosing regimen, without the need for a drug [inaudible] that permits bone marrow recovery, but may also permit cancer cells to proliferate.

We expect to report topline results from our Phase I monotherapy and Phase I/II combination study with letrozole in the fourth quarter of this year. The readout will include safety, pharmacokinetics and the definition of a recommended Phase II dose. Looking ahead, 2024, we plan to advance the narazaciclib, letrozole combination into a randomized trial in patients with low-grade endometrioid endometrial cancer in the first half of 2024. We intend to leverage the results of the preclinical studies presented in the second quarter to define further combination studies with letrozole or other compounds in an additional indication. For rigosertib, we continue to believe that rigosertib’s unique mechanism of action on cell signaling pathways, including KRAS mutations combined with an acceptable safety profile, could position it as an attractive anticancer agent.

We had a constructive Type B meeting with the FDA for the discussion of rigosertib monotherapy in the lead ultra-rare indication of RDEB complicated by squamous cell carcinoma. Based on that meeting, we plan to design a registrational trial and I will look to provide an update on next steps after continued dialogue with the agency in the first half of 2024. In addition, we continue to believe that rigosertib has the potential to act synergistically with checkpoint inhibitors to enhance response rates and overcome checkpoint inhibitor resistance. We have been using an IST strategy to evaluate this approach. Two studies are thus underway, evaluating rigosertib with checkpoint inhibitors in patients with melanoma and KRAS mutated refractory non-small cell lung cancer.

While enrollment in the melanoma study started quite recently, enrollment in the lung cancer study is expected to be completed at the end of this year and the investigators can provide an update on the trial in 2024. In closing, I want to thank our management team, employees, partners and investigators, as well as the brave and dedicated patients who participate in our experimental clinical trials and the investment community for your support of our efforts to bring new medical entities to patients at Onconova. We look forward to providing you ongoing updates on the company’s progress. With that, we will begin today’s Q&A session. Operator?

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Q&A Session

Operator: [Operator Instructions] Our first question comes from Charles Zhu with Guggenheim.

Edouard Mullarky: Hi, guys. This is Edouard on for Charles. Thank you for taking our question. I mean maybe a first question on the narazaciclib monotherapy dose escalation. I am just kind of wondering what remains to be done for you to establish an RP2D. It sounded like on the past call that you are getting pretty close? Are you still enrolling patients, have you cleared another dose cohort? Just kind of what’s the status there? And then as a follow-up question on the combination with letrozole for LGEEC. Just any color there on how recruitment, how that trial is going? Thank you.

Dr. Steve Fruchtman: So, the first question, we are currently, I think, we have mentioned this in the past at 240 milligrams every day for these patients and we are in the middle of expanding that cohort. It’s hard to predict that, as you know, depends on the number of DLTs, if no additional DLTs has seen and the next cohort will be at 280 milligrams. So we believe we are close based on target engagement of a PD-1 marker that shows us whether or not cells are proliferating and proliferation marker is evidence that cells are not proliferating at this current dose of narazaciclib. We are also seeing mild neutropenia, which we could have expected. So based on those two observations, we believe we are getting closer. But how close is sometimes hard to predict.

We may be at the dose limiting toxicity at 240, in which case, the recommended Phase II dose would be 200 or we may have to expand to another cohort 280 milligrams and we anticipate knowing this in the next few months. The second question, Edouard, was what?

Edouard Mullarky: Thanks for that color. Yes. Maybe just on the letrozole combo, just how enrollment is going, how that — any color on progress on that combination trial?

Dr. Steve Fruchtman: Yeah. Right. So that trial is open at a number of sites across the country, including NYU, MDN and some of the others. It took a while you get accrual going. We believe we had to amend the trial. Our eligibility criteria was a bit strict and we decided, the key thing about this trial is to get the dose of the combination of narazaciclib and letrozole. So based on an amendment, we believe accrual should increase, and we anticipate, again, before the end of this year, which has always been our prediction that the combination of the monotherapy trial and the trial specifically studying our LGEEC that we will have the recommended Phase II dose of the combination of narazaciclib and letrozole before the end of this year. Did that answer your question.

Operator: Our next question comes from Ahu Demir from Ladenburg Thalmann.

Ahu Demir: Good afternoon. Thank you for taking my question and congrats on the progress in this quarter. Victor, also, congrats on taking the full-time position as a CMO. I have two questions, one on the narazaciclib. Could you comment on the letrozole combination for endometrial cancer in terms of the safety signals? Are there any overlapping safety signals and anything that you could actually highlight for us?

Dr. Steve Fruchtman: Sure. So I will take that, Ahu. We are mostly focused on finishing the monotherapy trial with single agent narazaciclib, but I will explain to you a why and it has to do exactly with your question. All of the CDK4/6 inhibitors are combined with antiestrogens typically letrozole or palbociclib [ph] and we plan to do that as well. And there is no core toxicity between the narazaciclib as a CDK — multi-kinase CDK4/6 inhibitor and an antiestrogen. So we anticipate the combination will be safe. We will have a few patients on the trial, but the key thing will be to show the safety of the combination, which will permit us to open a randomized trial in early 2024. So the combination of the monotherapy trial and this study specifically in low-grade endometrial cancer with letrozole.

I think those two studies, which should be finished by the end of this year, which will lead into a randomized trial in low-grade endometrioid endometrial cancer and that’s our goal.

Ahu Demir: Thank you, Steve. And the follow-up question would be in the solid tumor narazaciclib trial, are there any indications that’s dominating the enrollment, any particular indications will be more data on?

Dr. Steve Fruchtman: I didn’t catch that. You were asking about the monotherapy trial. What type of cancers are being put on to that? Was that your question or could you repeat it?

Ahu Demir: Yes. I mean — that is correct. In solid tumor narazaciclib trial, what indications are you enrolling and also any of the indications that you see more numbers of patients enrolling in the trial that we will see more data from those indications?

Dr. Steve Fruchtman: So the monotherapy trial is open to all end-stage cancers and is very variable. There’s no one type of cancer that dominates. It’s the typical end-stage patients that could include lung cancer, prostate cancer, bladder cancer, ovarian cancer. So it’s very diffuse and there’s no single indication that dominates. So I don’t think other than safety, Ahu, I don’t anticipate and we don’t expect to have any efficacy signals. The patients are very diverse regarding their indications and their cancers. The goal like most Phase I studies is just to establish a recommended Phase II dose and I think the endometrial cancer study, it’s up and running at the same time to combine recommended Phase II dose of monotherapy of narazaciclib with letrozole as the kind of the safety of the combination, which I already said, we anticipate it will be completely safe, just like it is with the competing CDK and the approved CDK4/6 inhibitors and we don’t anticipate any toxicity issues on letrozole is going to be added to the recommended Phase II dose generated from the monotherapy trial.

Ahu Demir: Thank you, Steve. Very helpful.

Operator: Our next question comes from Joe from H.C. Wainwright.

Unidentified Analyst: This is Surendar [ph] on for Joe. Thanks for taking our questions. I have two questions. The first question for narazaciclib, are we expecting any initial efficacy data in the readouts anticipated in 4Q?

Dr. Steve Fruchtman: So I will take that one. So the CDK4/6 inhibitors and that’s a great question, by the way. These are very important questions. So the investment community and the analyst who probably already understand how these drugs work. These are not cytotoxic drugs. These class of drugs prevent tumor proliferation. And if you look at the approvals for the three health authority approved CDK4/6 inhibitors, they were all based on two endpoints. The first is progression-free survival and the second is overall survival. And the reason for that is because they are not cytotoxic, you do not see many responses. You may periodically see a response, but it’s probably in single digits. So the way these drugs work to improve patient’s lives by prolonging PFS and prolonging overall survival.

And thus, to really evaluate that intelligently, you need a control arm, but you could use historical controls by all means. We are really in a modern era. The way to do that is with the control arm to show improvement in either PFS or OS, and thus, once we established the recommended Phase II trial, the next hurdle will be to open a randomized trial in early 2024 in LGEEC and that is our plan and we remain on target for that plan.

Unidentified Analyst: Got it. Got it. And one more question for rigosertib in RDEB. I may have missed it, but if you could provide us an update on how many patients are still pending to be enrolled in the Phase II trial.

Dr. Steve Fruchtman: So this is — we have two international sites as ISTs participating in this trial. One at Thomas Jefferson in Philadelphia, where one of the world’s experts in RDEB squamous cell resides, Dr. Andrew South and also Dr. Johann Bauer in Austria. Those are two primary sites. Since the results of these trials have been presented, we now have requests to treat patients in Israel, in Chile and Paris, France, and we are doing it on a compassionate use approach. And in discussions with the agency — with the agency specifically, they asked us and we will transition the trials to an Onconova sponsored trial, and again, because these patients may appear anyway, we may have to do it as once a patient is identified anywhere in the world, because these are ultra-rare patients then we would open up a site or perhaps a patient can travel to one of the major medical centers that are expert in RDEB squamous cell.

So the responses have been reported at a major medical meeting. We have what we think is very impressive cutaneous complete remissions, a number of patients since those presentations are now also on the trial in the compassionate use approach. I believe there’s another patient more recently put on a trial at Thomas Jefferson, but those patients are too early for efficacy evaluation, but they continue on either oral or intravenous rigosertib and we look forward that the continuation of rigosertib see an efficacy signal in a larger number of patients. In the interim, we plan, as Victor said, to create a protocol to go back to the agency and get their buy-in on an Onconova sponsored trial, potentially in RDEB squamous cell carcinoma.

Unidentified Analyst: Thanks for clarifying, Steve, and thank you for the updates.

Dr. Steve Fruchtman: Pleasure, Surendar.

Operator: Our next question comes from Robert LeBoyer from Noble Capital Markets.

Robert LeBoyer: Good afternoon. And my question has to do with the melanoma trial going on at Vanderbilt. And I was wondering if you could give any additional details as to the number of patients or the progress that’s been made or any particular data points that might be ahead?

Dr. Steve Fruchtman: So we have not publicly stated how many patients are on that trial. I will mention that in the first cohort is enrolling and that first cohort is, I believe, almost completed. Maybe a little bit too early to evaluate efficacy, so it’s up to three patients at the next cohort. So far, there’s been no safety concerns and the next cohort, obviously, would be at a higher dose of rigosertib, but that trial in the malignant melanoma is quite early in its progress.

Robert LeBoyer: Okay. Thank you very much.

Operator: I am showing no further questions in the queue. At this time, I’d like to turn the call back to Steve for any closing remarks.

Dr. Steve Fruchtman: Thank you again, Operator, and thank all of you for participating in today’s call. We are pleased to be approaching important milestones as we mentioned, across our pipeline and look forward to providing additional updates as they are achieved. Thanks again for participating and for your excellent questions and have a wonderful evening. Thank you again.

Operator: Thank you all for participating in today’s call. This concludes today’s event. You may now disconnect.