Onconova Therapeutics, Inc. (NASDAQ:ONTX) Q3 2023 Earnings Call Transcript

Onconova Therapeutics, Inc. (NASDAQ:ONTX) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Ladies and gentlemen, thank you for standing by. Welcome to Onconova Therapeutics Third Quarter 2023 Financial Results and Business Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, November 14, 2023. At this time, I would like to turn the call over to Bruce Mackle of LifeSci Advisors.

Bruce Mackle: Thank you, Operator. And welcome everyone to Onconova’s third 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; Chief Medical Officer, Dr. Victor Moyo; and Chief Operating Officer and Chief Financial Officer, Mark Guerin. Onconova’s VP of Global Medical Affairs & Research and Development, Meena Arora will also be available during the Q&A session following the prepared remarks.

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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.

Steve Fruchtman: Thanks Bruce, and thanks to everyone who is joining us today for this call. I’ll open by saying that Onconova has made excellent progress in the third quarter of 2023. During the call today, our Chief Medical Officer, Dr. Victor Moyo; and our Chief Operating Officer and Chief Financial Officer, Mark Guerin, and I will provide you with an update on our lead program, narazaciclib. Review the data from our recent scientific presentation. Outline our upcoming milestones. Provide a brief update on the legal assertive development program. Summarize our third quarter financial results and outlook on our cash runway, and finally, and of course, importantly, open the call for your questions. As you know, our mission remains to develop novel proprietary products for patients with hard-to-treat cancer and with an unmet medical need.

Starting with our lead program, our internal efforts are dedicated to the basic preparations for narazaciclib, our proprietary protein kinase inhibitor of CDK4/6 as well as other kinase and so for cell growth and DNA synthesis. The CDK4/6 class of inhibitory drugs has changed the face of cancer care in several indications, particularly in hormone receptor-positive, HER2-negative metastatic breast cancer. Narazaciclib was designed by [indiscernible] scientists as a potent next generation entrance into this multi-billion dollar drug class. In addition to its multi-kinase activity, we believe that as a cycle it may be differentiated from the other approved CDK4/6 inhibitors because of the potential for an improved tolerability profile and based on our preclinical studies, improved efficacy as well.

The ability to target – to act on targets beyond CDK4/6 may lower the risk of drug resistance based by other CDK4/6 inhibitors. Our expansive preclinical studies have helped to define narazaciclib ability to impact on additional vital targets involved in cell signaling and cancer survival, including the proteins ARK5, also known as [NUAC1], CSF1R, and BUB1. All important in how cancer establishes its presence in sites of metastatic disease as well as proliferation of the cancer cells. We have selected low-grade endometrial cancer to be our lead registration indication for narazaciclib in combination with the hormone therapy, letrozole. We believe this is the right choice in endometrial cancer for two main reasons. Number one, the proposed registrational trial has a high technical and regulatory success – probability of success.

Publication of positive studies with other CDK4/6 inhibitors and letrozole combinations and compendia data indicating off-label use support the potential for a high probability of technical success. These data and the lack of an approved label underscore the unmet medical need and support the potential for high regulatory success. The second reason is the initial data from our dose ranging studies suggest that narazaciclib has the potential to be safer than the other indicated CDK4/6 approved inhibitors with a wide dosing window that supports an excellent therapeutic index. Note that during our call today, we may use the acronym LGEEC to describe this indication in endometrial cancer. To be registrational trial ready, we plan to, one, complete the dose escalation segment of our Phase 1 and 2 programs and define a recommended Phase 2 dose for RP2D.

Secondly, engage with the FDA on the pivotal trial design under construction. Number three, work with key external clinical experts on the design and conduct of this trial, including the Gynecologic Oncology Group or GOG, and the European Network for Gynecologic Oncology Trials or ENGOT. Our plan is to conduct the registration trial as part of our ongoing collaboration with both of these very prestigious groups. We intend to provide more information on each of these steps over the next few quarters. As you know, there are three early stage studies underway in the narazaciclib program, including monotherapy and combination trials. Given narazaciclib’s multi-kinase mechanism of action, we have conducted our dose escalation studies very carefully.

While Victor will summarize the status of these studies based on the clinical and biological target engagement and acceptable overall safety we are observing, we have decided to dose escalate to at least one more dosing cohort to fully evaluate the safety profile of narazaciclib and achieve the optimal recommended Phase 2 dose. As a result of the Phase 1/2 program for narazaciclib, they continue into the first quarter of 2024. We believe this is very good news for total program, because it underscores the potential for narazaciclib to have a differentiated safety profile and a wide therapeutic index. Changing gears, I would like to touch briefly on our second program that is rigosertib. As you know, in keeping with our focus on capital efficiency, we have been exploring the clinical utility of rigosertib through a series of signal-finding, investigator-sponsored trials focused on solid tumor indications driven by rigosertib impact on one of two mechanisms.

The first is the PLK1 pathway involved in squamous cell carcinoma complicating recessive dystrophic epidermolysis bullosa, and the second mutated KRAS protein seen in KRAS mutated non-small cell lung cancer in combination with checkpoint inhibitors. As outlined in our second quarter call, we are focused on mapping out a registration study plan for the ultra-rare indication of RDEB-associated squamous cell carcinoma. Note that we will define that as RDEB-associated SCC in this call. We selected this to be the lead registrational indication based on the very impressive clinical responses we have seen to-date in previously refractory patients and with the significant unmet medical need for this desperate patient population. As you know, we had a Type B meeting with the FDA in June.

Based on this meeting and feedback from the agency, and as outlined in our second quarter call, we intend to develop a protocol for a registration of trial out for following interactions with the rare disease group at FDA in pursuit of an orphan designation for RDEB-associated squamous cell. We plan to provide an update on next steps in the first half of 2024. Looking ahead to the rest of this year and into 2024, we are focusing on achieving the following milestones. In the narazaciclib, we intend to one continue the dose escalation segment of the Phase 1/2 program, which will bring us and which, may bring us into the first quarter of 2024, so we can add at least one more dosing cohort to this study. Number two, provide a readout in the narazaciclib safety and pharmacology in the first half of 2024 once we have completed the dose escalation studies.

Number three, provide an update on our registration trial readiness over the next couple of quarters, including the definition of the recommended Phase 2 dose, our engagement with the FDA and the federal trial design and obtaining rare disease indication, orphan disease indication, and I’ll work with internal external clinical experts, including the GOG and ENGOT. Achievement of these milestones will also enable us to establish a solid foundation to expand the program to include other indications, such as breast cancer and ovarian cancer. For rigosertib, as I just noted in the first half of 2024, we continue to plan to provide an update on the next steps to obtain orphan drug designation and for the registration program. Before I hand the call over, I would like to warmly congratulate Victor, formally taking on the role of Chief Medical Officer, and warmly welcome Meena Arora as Vice President of Global Medical Affairs, Research and development.

Victor and I previously worked together at J&J, where he was instrumental in getting approval for some of the most revolutionary and impactful drugs in both supportive care and hematology oncology. Both of them are accomplished experts in their fields and bring significant and wide depth of experience in drug development. I believe Victor’s extensive track record as a clinical researcher in drug development in oncology and me and his unique medical affairs expertise in rare diseases and oncology will be instrumental to the company’s success as we prepare the clinical plan and regulatory strategy for narazaciclib and rigosertib. Now, I would like to turn the call over to Victor to provide some more details on the narazaciclib program. Victor?

Victor Moyo: Thank you, Steve, and good afternoon, everyone. Today, I’d like to provide you with an update on the narazaciclib Phase 1/2 program and touch briefly on our recent and upcoming medical meeting presentation. Starting with narazaciclib, as you may recall, there are three studies in the Phase 1/2 program in advanced solid tumors in patients. There’s a Phase 1 monotherapy dose escalation study underway with our partner HanX in China is a Phase 1 monotherapy dose escalation study underway at three centers in the U.S. A Phase 1/2 combination dose escalation and dose expansion study, which is underway at six centers in the United States. This study is evaluating the combination of increasing narazaciclib doses and a fixed 2.5 milligram per day dose of the widely prescribed anti-estrogen agent, letrozole.

This study has been conducted in patients with LGEEC and other gynecological tumors who are undergoing second and third line treatment. As of November 13, 2023, we have dosed about 30 patients across the entire Phase 1/2 program. In the U.S. Phase 1 monotherapy study, we are dosing patients in the seventh cohort at 280 milligrams per day. In the Phase 1/2 combination study, we are starting the second cohort at 200 milligrams per day of narazaciclib with 2.5 milligrams per day of letrozole and have identified patients who could enroll on the next cohort. Based on the data we have observed to-date, we have three important initial observations. Number 1, narazaciclib is safe and well tolerated to-date. I’d like to make two points about the emerging safety characteristics of narazaciclib.

First, based on the initial safety data, pharmacokinetic studies, it may be possible to dose narazaciclib once daily without the need for time off during treatment. This is important because it may address the need for a three-week on and one-week off dosing strategy that is required for bone marrow recovery following treatment with the most commonly prescribed CDK 4/6 inhibitors. We believe this is an important potential feature of narazaciclib, because the requirement for a three weeks on, one week off dosing strategy may also permit tumor cell proliferation in between dosing. Secondly, initial data from our dosing study suggests that narazaciclib may be able to avoid the difficult adverse event of diarrhea. We believe that these two distinctive characteristics may enable a wide dosing window that supports an excellent therapeutic index for narazaciclib.

Number two, we’re seeing target engagement based on the observation of Grade 1 and 2 neutropenia in patients receiving a dose of at least 120 milligrams per day. Number three, we’re seeing biological target engagement based on the results of the thymidine kinase assay at doses of 200 milligrams and above. As indicated by Steve, based on the good target engagement and overall safety that we are observing, we believe that it would be reasonable to dose escalate to at least one more dosing cohort in order to fully explore the safety profile of narazaciclib and to enable us to achieve the optimal recommended Phase 2 dose. This will extend the Phase 1/2 program for narazaciclib into the first quarter. I would like to echo Steve’s comment that our decision to add at least one more dosing cohort to the dose escalation study is very good news for the program because it underscores the potential for narazaciclib to have a differentiated safety profile and wide therapeutic index.

We expect to provide a readout on safety and pharmacology in the first half of 2024, once we’ve completed the dose escalation study. This approach will help define the optimal recommended Phase 2 dose, and we believe it is also in keeping with the FDA guidance from project optimal for dose optimization prior to approval. Also in the third quarter there were two medical meeting presentations related to our programs. This included presentation – number one of clinical data affirming the potential for rigosertib in RDEB-associated squamous cell carcinoma, which was made by our colleagues from the University Hospital in Salzburg, Austria and Thomas Jefferson in Philadelphia. These data were presented as a late breaker at the European Academy of Dermatology and Venerology or EADV.

The second presentation of promising preclinical data in combination with the – of narazaciclib in combination with ibrutinib in the treatment of sensitive and resistant mantle cell lymphoma cell line was given at the European MCL or Mantle cell lymphoma annual meeting. Each of these presentations underscore the biology and activity for narazaciclib cyclin and rigosertib. Looking ahead to December, we plan to present two additional preclinical abstracts. The first one is at San Antonio at the Breast Cancer Symposium, often called SABCS. One of our collaborators will present a poster titled narazaciclib differentiated targets and kinase inhibitory activity contribute to the enhanced inhibition of tumor growth in preclinical models. We have a second presentation at the American Society for Hematology or ASH where our collaborators will present a poster titled narazaciclib, a differentiated CDK4/6 antagonist, prolongs cell cycle arrest and metabolic reprogramming enabling restoration of ibrutinib sensitivity in BTKI resistance mantle cell lymphoma.

We will share more of these abstracts in the coming weeks. In closing, I am optimistic about our programs, our progress and the outlook for rigosertib and narazaciclib in 2024. For rigosertib, the promising activity that we have observed in RDEB-associated squamous cell cancer is distinct and could address a critical medical need for this ultra-rare condition. This data plus its unique activity on Plk1 and KRAS pathways make rigosertib a very interesting anti-cancer agent. Now that we have better defined the indications where we believe will be more likely to be successful based on this mechanism of action and studying cancers where these targets can be engaged by rigosertib. For narazaciclib, CDK4/6 inhibitors have substantially changed the face of cancer for the better.

There is consistent positive clinical data on the class in endometrial cancer. In addition to target engagement, our program is showing acceptable initial safety which could give narazaciclib a unique profile. Based on our expansive large preclinical studies, we have defined a multi-kinase profile that could result in differentiated activity and the potential for broader clinical utility. These features are a cornerstone of my enthusiasm and optimism for narazaciclib. With that, I will conclude my portion of the call and hand it off to Mark.

Mark Guerin: Thanks very much Victor and good afternoon everyone. Onconova closed the third quarter of 2023 with cash and cash equivalents of $25.2 million compared to $38.8 million as of December 31, 2022. Based on our current projections, we believe our current cash position will be sufficient to fund our ongoing clinical trials and business operations into the third quarter of 2024. Research and development expenses for the third quarter of 2023 were $2.5 million compared to $3.6 million for the same period in 2022. General and administrative expenses for the third quarter of 2023 were $2.7 million and this compares with $2.1 million for the same period in 2022. Net loss for the third quarter of 2023 was $4.7 million or $0.23 per share on 21 million weighted average shares outstanding.

This compares with a net loss for the third quarter of 2022 of $5.4 million or $0.26 per share on 20.9 million weighted average shares outstanding. The change in net loss for the third quarter of 2023 compared with the same period in 2022 was primarily a result of the timing of manufacturing batch production and clinical trial expenses, partially offset by higher general and administrative costs related to our AGM in the 2023 period. From a corporate development perspective, we continue to actively engage in a range of discussions related to partnering opportunities to support the progression of our programs. With my financial review complete, I’ll now hand the call back to Steve for his concluding remarks.

Steve Fruchtman: Thank you, Mark. In closing, we are enthusiastic about the excellent progress that has been made for both narazaciclib and rigosertib in the third quarter. We look forward to building on that progress as we wrap up 2023 and begin the new year. Looking ahead, we are focused on achieving the following milestones. For our differentiated multi-kinase inhibitor narazaciclib, we intend to, one, present two abstracts at the December important medical meetings. Two, continue the dose escalation segment of the Phase 1/2 program, which may bring us into the first quarter of 2024. Three, provide a readout on the narazaciclib safety and pharmacology in the first half of 2024. Four, provide an update on our Phase 3 readiness over the next couple of quarters, including definition of our recommended Phase 2 dose, our engagement with the FDA on the pivotal trial design, and plans to work to continue our work with external clinical experts, including the Gynecologic Oncology Group, GOG, and the European Network for Gynecologic Oncology Trials, ENGOT.

Our plan is to conduct a registration trial as part of our ongoing collaboration with both of these groups. These milestones will provide a strong foundation for the next steps for narazaciclib and LGEEC with added potential indications including breast cancer, ovarian cancer, and mantle cell lymphoma. For rigosertib, our program has utilized an investigator-sponsored trial strategy with several solid tumor indications underway. Our main effort here is to remain focused on RDEB-associated squamous cell carcinoma and we continue to plan to provide update on the next steps to obtain orphan drug designation and a registration program in the first half of 2024. In closing, I want to recognize the diligence and dedicated work of our management team, employees, partners, and investigators.

And most important as well as the brave and dedicated patients, who participate in our clinical trials and the investment of the investment community for the support of Onconova and our very important work. We look forward to updating you on our continued progress. With that, we begin today’s question and answer session. Operator?

Operator: [Operator Instructions] Our first question comes from the line of Charles Zhu from Guggenheim Partners. Your line is now open.

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Q&A Session

Edouard Mullarky: Hi, everyone. This is Edouard on for Charles Zhu at Guggenheim. Maybe I have to start off with just a question on how the narazaciclib plus letrozole combination, how that trial is tracking, and maybe when we could see initial efficacy data I think you talked about in the past for a data update at 4Q, 2023. So I’m just wondering how you’re thinking about that now?

Steve Fruchtman: Sure. Victor, would you like to take that?

Victor Moyo: Yes, thank you for that question. Right now, we are still in the process of dose escalation as both Steve and I mentioned. We are seeing a wider therapeutic index requiring us to go to higher doses, before we go into expansion mode. We’re going to expansion mode. So this study will extend into 2024 as a result as well, along with the monotherapy study.

Steve Fruchtman: And just to add to what Victor said, I want to remind everybody that the approved CDK4/6 inhibitors were approved not on response, but a prolongation of progression-free survival and overall survival. The reason for that is CDK4/6 inhibitors are not cytotoxic drugs. They don’t cause response. They prevent tumor proliferation, thus improvement hopefully in PFS and overall survival, which we anticipate seeing in our registration track.

Edouard Mullarky: Great. And maybe just a follow-up question if I can. On the monotherapy dose escalation, it sounds like you have both the neutropenia and the thymidine kinase assay. I guess, how much room, based on at least the PKPD characterization, do you think you have to keep escalating? Do you think you still have sufficient room to gain efficacy by escalating further or how are you thinking about that?

Steve Fruchtman: Victor?

Victor Moyo: Yes. Ultimately, to make a decision of whether we’ve reached an optimal dose for the Phase 2, we would look at a combination of the safety and the PK characteristics, as well as the pharmacodynamic studies. You do point – out that since we might not see the same degree of neutropenia and diarrhea as some of the other CD4K inhibitors, we will be focusing on data coming from the PK, including the tolerability, of course, but as well as pharmacodynamics.

Steve Fruchtman: We have had to expand the last couple of cohorts. Usually, when you see that, it would suggest that we are close to reaching what might be really the optimal dose or the maximum tolerated dose.

Operator: Our next question comes from the line of Ahu Demir from Ladenburg Thalmann. Please go ahead.

Ahu Demir: Good afternoon, team. Thank you for taking my questions and providing helpful updates. I have three questions on narazaciclib and if I have time, I’ll ask one more on our RDEB program. My first question has two portions. The first one is, how many patients are we expecting to see data from the safety portion of the study? The second part of the question is following up on Edouard’s question. When do we expect to see any efficacy data and given your comments on the PFS versus response rate, when would you envision the data would mature to show any clinical activity on the PFS?

Steve Fruchtman: I’ll give Victor a rest and take the second part of your question first, if I may, I hope. So, without a control arm, you know, the PFS, let’s say, palbo and letrozole in breast cancer in 8.3 months. We’re not going to wait 8.3 months to see what the PFS will be on this Phase 1 study. The purpose of the Phase 1 is to just clearly establish what the recommended Phase 2 dose should be, and thus what the dose for registration trial ultimately will be. And if our PFS is 12 months or 8 months or 10 months, whatever it may be, it’s very hard to interpret that way without a control arm in this patient population. So the goal is really to just determine what the dose of narazaciclib will be in combination with letrozole for registration trial, which clearly will have a control arm, and thus be able to compare the combination of narazaciclib plus letrozole PFS to what the control arm that the FDA will tell us that they accept.

So, we really may see some efficacy data if there is a response. And again, these are not cytotoxic drugs, but sometimes you will see tumor shrinkage, but more likely, register more likely, registration trial will be determined by both PFS and overall response, overall survival, sorry, PFS and overall survival rather than response data. And I don’t remember the first part of your question, Ahu. I don’t know if I answered it. Would you like to repeat it?

Ahu Demir: This was helpful. The first part was the safety portion of the study. How many patients? What are we going to see? Are we going to see any target engagement and other analysis as well?

Steve Fruchtman: Okay, Victor, I think you’ve had enough of a rest. So could you take that, please?

Victor Moyo: Yes, the phase, the dose escalation portion will be, is driven by, of course, the number of cohorts that we ultimately enroll. So that is a variable number and we give an approximation of where we might end up. The Phase 2 portion is slated to enroll up to 30 patients in that Phase 2a portion.

Ahu Demir: Thank you, Victor. My next question is on the safety profile. So having no, not much or not high impact diarrhea or neutropenia is new. And the information that you mentioned, taking the one week off portion in the clinical setting is also new information. What are the steps you need to take to remove that one week portion off? What are the discussions like with the agency? How are you going to move forward with that part?