Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q1 2023 Earnings Call Transcript

Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q1 2023 Earnings Call Transcript May 4, 2023

Operator: Greetings, and welcome to the Oncternal Therapeutics First Quarter 2023 Financial Results Call. As a reminder, this conference will be recorded. I would now like to turn the conference over to your host, Richard Vincent, Chief Financial Officer.

Richard Vincent : Thank you, Joe. Good afternoon, everyone, and thank you for joining us today. Joining me on the call this afternoon are our President and CEO, Dr. James Breitmeyer, and our CMO, Dr. Salim Yazji. Today’s call includes the business update and discussion of our first quarter ended March 31, 2023 financial results that were filed earlier today, which will be followed by Q&A. Today’s press release and a replay of today’s call will be available on the Investor Relations section of Oncternal’s website for at least the next 30 days. Please note that certain information discussed on today’s call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We will be making forward looking statements during this call about future events such as our business and product development strategies, the timing of initiation of our pre-clinical and clinical studies, the timing of planned interim data updates, the timing of our regulatory filings and our cash runway.

Our actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business. These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in today’s press release and our SEC filings, including our Form 10-Q filed today and previously filed Form 10-K for full year ended December 31, 2022. This call contains time sensitive information that is accurate only as of the date of this live broadcast, May 4, 2023. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances occurring after the date of this call. With that, it is my pleasure to hand the call over to our CEO, Dr. Jim Breitmeyer.

James Breitmeyer: Thank you, Rich, and good afternoon, everyone. At Oncternal, we are advancing a focused and robust product pipeline with clinical and preclinical product candidates that target cancers for patients with unmet medical need. We recently announced a strategic reprioritization to focus on advancing our ROR1 targeting cell therapy on 808 and our novel dual acting AR inhibitor on 534 towards significant clinical catalysts within the next 12 to 18 months. At the same time, on April 3, we decided to close both our Phase 1/2 and Phase 3 studies of Zilovertamab in combination with ibrutinib due to major shifts in the Bruton’s tyrosine kinase inhibitor landscape, which was followed by an announcement by our partner of their plans to withdraw ibrutinib’s FDA accelerated approval in mantle cell lymphoma.

This decision allowed us to extend our expected cash runway into 2025 and reinforces our mission to address important unmet needs for patients with hematologic malignancies and prostate cancer. Looking to the future, we are very excited about the clinical potential of our ROR1 targeting autologous CAR T on 808, which is being investigated in a recently initiated Phase 1/2 clinical trial. On 808 leverages our extensive clinical experience with Zilovertamab, which was found to be safe in several Phase 1 and 2 studies. Specificity for tumor cells is also driven by data from clinical testing of Zilovertamab and antibody drug conjugate, using the same targeting antibody, which is shown that ROR1 can be targeted without unwanted off-tumor, on-target activity.

Our preclinical models show robust and specific cytotoxic activity of ONCT-808 against ROR1 expressing cells from multiple tumor types. Our manufacturing process is reproducible, scalable, and only 8 days in duration. As previously guided, we expect our initial clinical data readout in late 2023 with additional clinical data readouts in 2024. Our ONCT-808-101 Phase 1/2 study will enroll patients with relapse to refractory aggressive B-cell lymphoma, including those who have failed previous CD-19 CAR T therapy. In Phase 1, increasing doses of ONCT-808 CAR T-cells will be evaluated to help us determine the recommended Phase 2 dose. Using a standard three plus three dose escalation design. The starting dose will be 1x expressing T-cells per kilogram and this dose has potential to exert anti-tumor effects considering that other CAR T products can be effective at similar doses.

Phase 2 of the study will investigate the recommended Phase 2 dose using Simon 2-Stage design, which will help us to further evaluate the safety and efficacy of ONCT-808. As a reminder, patients who have failed CD19 treatment have extreme unmet medical need with little likelihood of responding to the next treatment and median progression-free survival of only 3 months and overall survival of only 5 months. We are also very enthusiastic about our novel and first in-class dual action androgen receptor inhibitor, ONCT-534, which both inhibits AR activity and induces its degradation. We have now concluded IND enabling studies and we are assembling the IND and are on track for submitting it in mid-2023. Preclinical models suggest activity directed to both the N-terminal and Ligand binding domains of the AR.

ONCT-534 is active against preclinical models of the most common forms of resistance to standard — current standard of care AR directed therapies including AR amplification, LBD mutations and AR splice variants that are constituently active even though lacking the LBD. Phase 1/2 clinical trial in patients with metastatic castration resistant prostate cancer who are resistant to AR inhibitor treatment is expected to open shortly after the IND is cleared. We expect to present initial clinical results in mid-2024. Let me now turn the call back to Oncternal CFO, Rich Vincent.

Richard Vincent: Thank you, Jim. Our revenue is currently derived from research and development grants from the NIH. Our grant revenue was 0.2 million for the first quarter ended March 31, 2023. Our total operating expenses for the first quarter were 12.3 million, including 1.9 million in non-cash stock-based compensation expense. Research and development expenses totaled 9 million, and general and administrative expenses totaled 3.3 million. Net loss for the first quarter was 11.5 million for a loss of $0.20 per share basic and diluted. As of March 31, 2023, we had approximately 58.7 million shares of common stock outstanding and 54.3 million in cash and investments and no debt. We believe these funds will be sufficient to fund our operations into 2025.

With respect to upcoming milestones to recap again, we remain on track for ONCT-808, our ROR1 autologous CAR-T, we expect to report initial clinical data by the end of 2023 with additional data readouts in 2024. For ONCT-534, our late DAARI product candidate, we expect to submit an IND to the USFDA in mid-2023 and we expect to initiate our Phase 1/2 study in the second half of 2023 and to present initial clinical data in the first half of 2024. Now I will turn the call back over to Jim.

James Breitmeyer: Thank you, Rich. We are very enthusiastic to be focusing our efforts on these 2 programs for patients with lymphoma and prostate cancer who have such high unmet medical need where we believe our product candidates can make the greatest difference for patients. With that, I will turn things back to Joe for the Q&A portion of this afternoon’s call.

Q&A Session

Operator: Our first question comes from the line of Hartaj Singh with Oppenheimer.

Hartaj Singh: Thanks for the updates, Jim and team, and again those are very hard decisions I’m sure you had to make, and make the company a little bit stronger going forward in this environment. A couple of questions. One is, just on the experience you’ve had with Zilovertamab the antibody of course, you have had experience with Zilovertamab before Merck bought that ADC. But how does experience with the binder of that antibody help you with rare ROR with ONCT-808? And then in terms of how that helps you in your dosing profile going forward for the trials you’re initiating. How does that help? And I just got a couple of quick follow-up after that.

James Breitmeyer: Sure. Hartaj. So, Zilovertamab is the binding domains of Zilovertamab are what we’re using as the targeting moeity on the CAR T. So we do know now from treating a lot of patients with the whole antibody that we can target a ROR1 using an antibody targeting exactly that way with a very encouraging and safe toxicity profile. Another thing that this, that Zilovertamab offers is if a patient is getting into trouble with excessive activation of T-cells that we could infuse the Zilovertamab antibody and we’ve shown in vitro that that can cool off the cytotoxic reaction. And so we think that it might be able to serve as an emergency off switch. And then, the relevance of the ADC experience since it’s also using Zilovertamab is that the toxicities with that ADC were typical for that class MMAE antibody drug conjugates without any apparent toxicity suggesting that other organs were damaged through ROR1 targeting.

Hartaj Singh: Great, Jim, thank you. And then just in terms of what’s the dosing level you’re going to start at, if you can — just do a little bit give us some specificity there, and then again having a binder on your CAR T that you’ve already had experience with through the antibody. How does that help you as you go through your dose titration phase of your trial?

James Breitmeyer: So, we proposed to the FDA and they agreed that we would start at 1 million car expressing cells per kilogram. So that means for an average, uh, adult that we’d be giving 60 million or 70 million CAR T. The reason that’s exciting for us is that there are CAR T out there where that kind of a dose is associated with substantial efficacy. We also proposed to escalate with a fairly quick escalation scheme. And so we will be moving up in doses every time based on three plus three rules, which you’re familiar with. And so, the increasing doses will be monitored by a safety review committee who will make the decision to move from one dose to the next. And so we’re starting at a good dose. That’s what’s exciting about it. And then we will move up and find the right dose during Phase 1.

Hartaj Singh: Jim, and sorry, last question for me is your initial data readout by the end of the year. I know we’re always asking for more as analysts, but if you can just give us the contours of what that looks like. I mean, you think you could have a few patients, 5 to 10 patients, more than 10 patients, and then what are you looking for response and some duration or just response? Any thoughts there?

James Breitmeyer: Sure, Hartaj. So, for this year, two patients and initial or response, and early duration. So, it would — it’s not likely to be much more than that. As you know, FDA is wants to be conservative in the early going in a clinical trial. And so, they’ve asked us to have 30 days between each patient that is treated.

Operator: Our next question comes from the line of Carl Byrnes with Northland Capital Markets.

Carl Byrnes : I think, most of my questions have been answered here, but just going back to 808, if I recall correctly, the subjects of one and two, they are eligible for bridging therapy in those segments. Is that correct?

James Breitmeyer: Yes, that’s correct, Carl. And but with our — and bridging therapy is sometimes needed when there’s a long period of time where patients are waiting to get their CAR-T product. So one of the things we are very enthusiastic about is that our CAR-T manufacturing goes pretty quickly. It’s an 8 day manufacturing process. And so we’re hoping that our patients are most likely to need bridging therapy.

Operator: Our next question comes from the line of Li Watsek with Cantor Fitzgerald.

Rosemary Li: This is Rosemary Li on fro Li Watsek. Just firstly about on 808, could you give us a sense of how enrollment is tracking and where you might be in terms of dose escalation? And then 434, would you be able to guide anything about the bar of success for the Phase 1 portion?

James Breitmeyer: So, we’re not going to talk specifically about enrolled numbers but we do believe, as Hartaj asked, that we’ll have data on a few patients by the end of the year. Salim, would you — Salim Yazji, our CMO can answer the question about the bar for prostate cancer in Phase 1.

Salim Yazji: Yes, I think what we are trying to do here, specifically in the Phase 1, and we’re using very well-known Boeing design to get to the therapeutic dose as fast as possible. So in the Phase 1, I think PSA reduction is — this is what we’re looking for as a primary marker for anti-tumor activities. And I think this is what we’ll be looking for. Of course, we’re going to look into other surrogate markers, including PFS and others. Got it. Thank you.

Richard Vincent: Yes, and I’ll add Rose, that the patients will have failed standard of care androgen receptor signalling inhibitors like enzalutamide and abiraterone. And so a hormone based treatment for patients after that yields a very, very low response rates probably in the 15% range. So if we see something in the 30% to 40% range for these patients with advanced disease, we’ll be very happy.

Operator: Our next question comes from the line of Kemp Dolliver with Brookline Capital Markets.

Kemp Dolliver: Question about Zilovertamab and potentially pivoting it toward the other BTKs based on additional preclinical work. I know it’s only been about a month, but do you have any further thoughts on that process and how it shakes out and the priorities of the pipeline at this point?

James Breitmeyer: Yes, good question, Kemp. So of course, the decision by AbbVie to withdraw its FDA accelerated approval of ibrutinib for mantle cell lymphoma was a blow to our plan for registration in that indication with ibrutinib. And so we are talking to other VTK inhibitor companies and there is some interest here. And we are of course interested in generating additional data. We do believe that Zilovertamab will be synergistic with all of the approved BTK inhibitors, and mechanistically at least expect it to be synergistic with others that are still in earlier stages of development. So, short answer is that we’re keenly interested in another BTK inhibitor as a potential, path forward.

Richard Vincent: And I guess it’s too early to give any thoughts on the timetable.

Operator: Thank you. Ladies and gentlemen, there are no further questions at this time. I’d like to turn the call back to Jim Breitmeyer for any closing remarks.

James Breitmeyer: Thank you all for your time and attention today. We look forward to reporting our initial clinical data for ONCT-808, our ROR1 targeting autologous CAR T in patients with lymphoma who have failed CD-19 CAR T treatment, and ONCT-534 are novel first-in-class dual action AR inhibitor for metastatic castrate resistant prostate cancer patients who are refractory to current AR inhibitor therapy. Thanks again for joining us, and we look forward to updating you during upcoming medical and banking conferences.

Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.