Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q2 2023 Earnings Call Transcript

Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q2 2023 Earnings Call Transcript August 10, 2023

Operator: Greetings and welcome to the Oncternal Second Quarter 2023 Financial Results Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference will be recorded. And it is now my pleasure to introduce to you Richard Vincent, CFO. Thank you, Richard. You may begin.

Richard Vincent: Thank you, John. 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 second quarter ended June 30, 2023 financial results that were filed earlier today. 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, August 10, 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.

Jim?

James Breitmeyer: Thank you, Rich and good afternoon everyone. At Oncternal, we are now advancing two clinical stage programs, targeting cancers for patients with significant unmet medical needs. Last week, Oncternal announced that we received a Study may Proceed Letter from the US FDA for the Phase 1/2 dose escalation study of ONCT-534 for patients with advanced prostate cancer. FDA’s review of the IND application was completed before the standard 30-day review period, and our study startup activities are tracking ahead of schedule. With that, we expect to initiate our study in the third quarter and expect our initial clinical data readout in the first half of 2024. We are very excited to bring ONCT-534 to patients suffering from advanced prostate cancer soon.

As a reminder, our preclinical study results suggest that ONCT-534 is active against the most common androgen receptor aberrations that drive tumor resistance to currently approved AR signaling inhibitors such as XTANDI or ZYTIGA. Our CMO, Salim Yazji will provide more details about the study design and ramp up plans in a moment. With respect to our ROR1 targeting autologous CAR T ONCT-808, we are very pleased to report that the first patients have now been dosed and that enrollment is meeting or surpassing our expectations. We believe ONCT-808 may be a best-in-class ROR1 CAR targeting CAR T as it builds on our extensive clinical experience with Zilovertamab, which was found to be safe in several Phase 1 and 2 studies. Preclinical models show robust and specific cytotoxic activity of ONCT-808 against ROR1 expressing cells from multiple tumor types.

Clinical manufacturing runs completed to-date continue to support our thesis that our manufacturing process is robust, reproducible, scalable, and shorter than several approved CAR T therapies. We continue to expect to announce some initial clinical data in late 2023 with additional clinical data readouts in 2024. Let me now turn the call over to Oncternal’s CMO, Salim Yazji, to expand on our clinical plans for ONCT-534 and our progress with ONCT-808. Salim?

Salim Yazji: Thank you, Jim. Good afternoon, everyone. As Jim mentioned, now we announced that our IND for ONCT-534 is active. We are working diligently to bring on ONCT-534 to patients as fast as possible. Study ONCT-534-101 is a Phase 1/2 dose escalation study that will enroll patients with metastatic castration-resistant prostate cancer with progressive disease that have relapsed or are refractory to next-generation androgen receptor signaling inhibitor, including enzalutamide or abiraterone. The dose escalation will use the baseline optimal interval or beyond design, which is an effective statistical method to optimally and quickly identify the maximum tolerated dose or MTD. Once the MTD is identified, the study will roll into a Phase 2 Simon 2-Stage design to evaluate the safety and efficacy of ONCT-534 at two dose levels.

The ramp up to the study start is well underway. And we have already selected the clinical sites that will support initial dose finding portion of the study. The potential of ONCT-534 to address a significant unmet need for patients with relapsed/refractory metastatic prostate cancer has been appreciated by top KOLs and academic institution in the US and Europe. And we are excited to be working with them to advance the clinical investigation of our novel product candidate. Based on this progress, we now expect to initiate the study in the third quarter of 2023 and expect to report initial data in the first half of 2024. Now, switching gears into our ROR1 targeting CAR T. We recently treated our first patient in the study, ONCT-808-101, Phase 1/2 study for patients with relapsed/refractory aggressive B-cell lymphoma, including those who have failed previous CD-19 CAR T therapy.

As a reminder, patients who have failed CD-19 treatment have extreme unmet medical need with a little likelihood of responding to their next treatment and very short median progression-free survival and overall survival. Overall, we are very pleased with the rate of enrollment and look forward to discussing pulmonary data by the end of this year. With this, I now turn the call to our CFO, Rich Vincent. Rich?

Richard Vincent: Thank you, Salim. Our revenue is currently derived from research and development grants received from the NIH. Our grant revenue was $0.1 million for the second quarter ended June 30, 2023. Our total operating expenses for the second quarter were $9.7 million, including $1.7 million in non-cash stock-based compensation expense. That represents a $2.5 million decrease from our total cash operating expenses of approximately $10.8 million for the first quarter of 2023. That represents an efficient wind down of the activities resulting from our reprioritization initiative that we announced on April 3rd, 2023. Research and development expenses totaled $6.6 million and general and administrative expenses totaled $3.1 million.

Interest income for the quarter was $0.6 million. Net loss for the second quarter was $9 million or a loss of $0.15 per share basic and dilutive. As of June 30, 2023, we had approximately 58.7 million shares of common stock outstanding, 45.5 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, 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 now expect to initiate our Phase 1/2 study in the third quarter 2023, ahead of schedule 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 pleased with the recent progress as we continue to execute on our plan to achieve significant clinical catalysts for our two lead programs, while retaining our cash runway into 2025. With that, I will turn things back to John for the Q&A portion of this afternoon’s call.

Q&A Session

Operator: Thank you sir. We will now be conducting a question-and-answer session. [Operator Instructions] And the first question comes from the line of Carl Byrnes with Northland Capital Markets. Please proceed with your question.

Carl Byrnes: Thanks for the question and congratulations on the progress. With respect to 534, do you see a potential for early PSA reduction signal in the Phase 1 portion of the study? I mean, this is obviously considering the MTDs will determine incident — it will be determined using the incidence of the ELTs with, I think, a timeframe of 28 or so days? And then I have a follow-on question.

James Breitmeyer: So, Karl, yes, we do think that a PSA signal is possible. And we are — the eligibility criteria were designed to enrich for patients whose disease remained androgen-dependent — androgen receptor dependent and the mechanism of action would include inhibiting PSA as an early biomarker.

Carl Byrnes: Excellent. And similarly, with 808 and considering the dosing there in the study is close to, if not, consistent with recommended Phase 2 dosing of other CAR T therapeutics, do you see a potential for early efficacy signal in that initial data?

James Breitmeyer: Salim, do you want to take that one?

Salim Yazji: Yes, sure. Yes. I mean, I think we would expect to have an early signal as well. I mean, as you know, those patients are very hard to treat and after failing — especially after failing CD-19 — prior CD-19 CAR T, we would expect actually to have an early signal and also we would like to see a duration of response will be actually something that we are very kind of like looking forward to.

Carl Byrnes: Great. Thanks. Congratulations again.

Salim Yazji: Thank you.

James Breitmeyer: Thank you.

Operator: And the next question comes from the line of Hartaj Singh with Oppenheimer & Company. Please proceed with your question.

Hartaj Singh: Great. Thank you. Thanks for all the updates and I got a couple of questions. One is just on 808 following on the previous question. If I look on clinicaltrials.gov, you’ve got B cell NHL patients MCL and then various types of LBCL patients in there. On your expansion, you’re already indicating MCL and I guess, LBCL. Zilovertamab, I believe, showed a pretty good — really good signal with MCL. So, just building on the previous question, I mean, you’re close to recommended Phase 2 dose starting off, can you just kind of walk us through what your dose escalation look like? And then I imagine would those be MCL patients would be seeing? And I just got a follow-up question after this.

James Breitmeyer: Salim?

Salim Yazji: Yes. So, Hartaj, I think what we’re trying to do, I mean, in the beginning, when the dose escalation, we are actually accepting all aggressive lymphoma in the dose escalation. However, in the expansion, I think we would like to have separate like MCL, DLBCL and other aggressive lymphoma type. As of now, we’re only going with two indications, which is the MCL and DLBCL. So, — what was the other question Hartaj?

Hartaj Singh: Yes. And just a follow-up to that, Salim, which is that — since this is a CAR T and you’re going in with your knowledge of Zilovertamab at a higher dose, I mean in terms of just DLTs, should we just expect something analogous to what we’ve seen with CAR Ts previously, CRS and other kinds of toxicity?

Salim Yazji: Well, — yes, go ahead.

James Breitmeyer: I can take that Salim. So, Hartaj, as I’m sure you know, the — in most CAR T programs, there’s not a — there’s not as distinct of a dose response curve as there are with other kinds of molecular entities because the ultimate efficacy has to do with the quality of the CAR T cells and how robustly they expand in the patient and target the tumor. We have — the type of CAR T construct and process that we’re doing is one that would be expected to see some cytokine release syndrome, for example. But our investigators tell us that you need to see some CRS if your CAR T is doing what you want it to.

Hartaj Singh: Yes. That makes sense, Jim. Really makes — I mean, that makes a lot of sense. And then — the end of the year, the data would be just a safety update or we’d see some clinical potential efficacy kind of data also potentially?

James Breitmeyer: Salim?

Salim Yazji: Yes. So, Hartaj, we would expect to see pulmonary data even including some efficacy data by the end of the year, yes.

Hartaj Singh: Great. Thank you. Thanks for all the questions.

James Breitmeyer: Thank you.

Operator: And the next question comes from the line of Li Watsek with Cantor Fitzgerald. Please proceed with your question.

Rosemary Li: Hi there. This is Rosemary on for Li. Thanks so much for taking our questions. Just a general one first about 534, can you talk a bit about the change in landscape in prostate cancer treatment and how you think 534 could eventually fit in?

James Breitmeyer: Happy to Rosemary, and thank you for standing in today. So, we believe that the part of the landscape where we’re sitting is one that has very significant unmet medical need. The androgen receptor signaling inhibitors, enzalutamide, darolutamide, apalutamide, and abiraterone are core therapy and standard-of-care for virtually every patient in the early portion of treating metastatic disease. And at the time that patients become resistant to those agents, some of them become androgen receptor independent and that’s not who we’re targeting, but a very large proportion of them remain androgen receptor dependent, but resistant to standard AR signaling inhibitors. And so that’s a large population, and it’s in that space between hormone therapies and chemotherapy or radiotherapy, which have much more toxicity.

So, we think it fits perfectly there to begin with. However, we’re also showing — 534 also has very robust activity with patients who have a native or unmutated androgen receptor and interestingly, have very strong activity in rodent models where the animals were not castrated. And so that is an unusually strong type of activity in the presence of normal testosterone levels that suggest that once we’ve shown activity in late-stage disease, that there is a clear pathway to move forward into earlier-stage advanced prostate cancer.

Rosemary Li: Got it. Great. Thank you. That was really helpful. And maybe just one quick one on 808. So, — do you have an estimation for maybe how many patients you could be presented by your data update? I know it’s going to be really soon after first patient in, but–?

James Breitmeyer: Salim?

Salim Yazji: Yes. So, you’re talking about when we’re going to present it by the end of the year. Is that what you talk about?

James Breitmeyer: Yes, how many 808 patients?

Salim Yazji: Yes. So, probably would be at least three patients with a different time to follow-up.

Rosemary Li: Great. Thank you so much.

James Breitmeyer: Thank you, Rosemary.

Operator: And the next question comes from the line of Kemp Dolliver with Brookline Capital Markets. Please proceed with your question.

Kemp Dolliver: Hi, thank you. Just quickly to be — sure I understand the landscape with 534. Jim, are you saying that you’re thinking this would come in between — after first-line therapy, but before chemotherapy?

James Breitmeyer: Exactly, Kemp.

Kemp Dolliver: Okay.

James Breitmeyer: Now, as you know, there are — some people are using, say, enzalutamide plus docetaxel as the first treatment for metastatic disease, but this agent would still be suitable after that regimen as well.

Kemp Dolliver: Got it. And what percentage of the patient population do you think would fall into this target that you’ve set out?

James Breitmeyer: Well, we’re — that’s something that we’re going to learn in the clinical trial. And we do think that after failing enzalutamide or abiraterone that somewhere between one-third and two-thirds of the patients remain androgen receptor dependent.

Kemp Dolliver: Got it. Thank you.

Operator: There are no further questions at this time. And I would like to turn the floor back over to Dr. Breitmeyer for any closing comments.

James Breitmeyer: Thank you, John, and thank you, everybody, who listened and for the excellent questions and discussions. We now have two active clinical programs both of which are moving well and both of which will have data in the near-term. The entire team is excited to be bringing new potential therapy to patients with advanced and refractory aggressive lymphoma and to patients with advanced and refractory prostate cancer. And hopefully, we will be addressing their high unmet medical need. With that, thank you for joining us today, and we look forward to updating you during upcoming medical and banking conferences.

Operator: Ladies and gentlemen, that does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.