Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q3 2023 Earnings Call Transcript

Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q3 2023 Earnings Call Transcript November 9, 2023

Oncternal Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.17 EPS, expectations were $-0.15.

Operator: Greetings and welcome to Oncternal Therapeutics third-quarter 2023 financial results conference call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Richard Vincent, Chief Financial Officer. Please go ahead.

Richard Vincent: Thank you, Rob. 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 a business update and discussion of our third quarter ended September 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 preclinical 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 our previously filed Form 10-K for the full year ended December 31, 2022. This call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 9, 2023. Oncternal undertakes 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 now advancing two first-in-class clinical programs targeting cancers for patients with significant unmet medical need. In October 2023, we dosed our first patient in our Phase 1/2 dose escalation study of ONCT-534, our novel dual-action androgen receptor [Technical Difficulty] Hello?

Richard Vincent: Hello. Yeah, you’re back.

A biotechnologist in a lab coat overseeing the production of a protein-based therapeutic drug.

James Breitmeyer: Okay. Thank you. I apologize, everybody, I’m calling in internationally. ONCT-534 for patients with metastatic castrate resistant prostate cancer, who have progressed after treatment with approved AR pathway inhibitors. In October, we also received fast track designation from FDA, further supporting our belief that ONCT-534 may be an important therapeutic alternative for patients with advanced prostate cancer. We expect our initial clinical data readout in the first half of 2024. With respect to ONCT-808, our ROR1 targeting autologous CAR T program, we continue to execute on enrollment of the Phase one two study in aggressive B-cell non-Hodgkin’s lymphoma patients. We have now dosed the first few patients and plan to announce initial clinical data in December this year with additional clinical readouts in 2024.

The manufacturing process is delivering large numbers of high-quality CAR expressing T cells and may offer reduced vein-to-vein times. Overall, we are delivering on our plan to advance our two clinical programs, 534 and 808, through potential significant value inflection points by the first half of 2024, all while maintaining our cash runway guidance into 2025. With that, I’d like to now turn the call to Oncternal CMO, Salim Yazji, to expand on our clinical progress with 534 and 808. Salim?

Salim Yazji: Thank you, Jim. As Jim mentioned, we are excited to have dosed our first patients in the study of ONCT-534-101. In Phase 1/2 dose escalation study that enrolling patients with metastatic castration resistant prostate cancer was progressive disease that have relapsed or are refractory to prior androgen receptor pathway inhibitors such as enzalutamide or abiraterone. Based on preclinical studies and its novel mechanism of action, we believe that ONCT-534 can provide an important treatment alternative to disease patients by addressing a key tumor escape mechanism that results in resistant to current fully available AR pathway inhibitors, including AR mutation, AR amplification, and splice variants, such as AR-V7. Enrollment is advancing according to plan and we continue to expect to report initial data in the first half of 2024.

In September, we announced the establishment of our prostate cancer scientific advisory board, which includes distinguished academic and industry leaders in the prostate cancer field such as Professor Johann de Bono from the ICR in London; Dr. Matthew Smith from Mass General; and Dr. Evan Yu from the Fred Hutch. We look forward to working with our SAB to develop our future clinical and registrational strategy for ONCT-534. With respect to ONCT-808, our autologous ROR1 targeting CAR T, we continued to dose patients in the dose escalation portion of our study. ONCT-808-101, a Phase 1/2 study for patients with relapse or refractory progressive — aggressive B-cell lymphoma, including those who have failed previous CD19 CAR T therapies. We have seen encouraging expansion and persistence of CAR expressing T-cells in the study which has been demonstrated to be positively correlated with clinical response in previous CD19 CAR T studies.

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 $0.2 million for the third quarter ended September 30, 2023. Our total operating expenses for the third quarter were $10.6 million, including $1.7 million in noncash stock-based compensation expense. Research and development expenses totaled $7.5 million, and general and administrative expenses totaled $3.1 million. Interest income for the quarter was $0.5 million. Net loss for the third quarter was $9.9 million, for a loss of 17% — $0.17 per share, basic and diluted. As of September 30, 2023, we had 59 million shares of common stock outstanding, $40.3 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, we remain on track. For ONCT-808, our ROR1 autologous CAR T, we expect to report initial clinical data in December 2023, with additional data readouts in 2024. For ONCT-534, our lead product candidate, we expect to present initial clinical data in the first half of 2024. Now, I will turn the call back over to Jim. Jim?

James Breitmeyer: Thank you, Rich. We are very pleased with the recent progress in our two clinical programs, while reiterating our cash runway guidance into 2025. We are excited to be advancing the clinical development of novel pathways in areas with very high unmet medical need, such as CD19 relapses in aggressive lymphoma and metastatic castrate resistant prostate cancer, harboring AR mutations and splice variants. Thank you for joining us today, and we look forward to updating you during upcoming medical and banking conferences. With that, I will turn things back to Rob for the Q&A portion of this afternoon’s call.

Operator: [Operator Instructions]. Our first question is from Carl Byrnes with Northland Capital Markets.

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Q&A Session

Carl Byrnes: Thanks for the questions and also, congratulations on your progress. I’m wondering if you can provide a little more detail with respect to the velocity of patient recruitment in the 534 dose escalation study. And this is obviously considering the urgent unmet medical need indication, and I have a follow-up.

James Breitmeyer: Go ahead, Salim.

Salim Yazji: Yeah. As you know, we designed the study based on the design, which has allowed us to move forward with the first two cohorts, was only one patient each if there is no toxicity or side effect during those cohorts. So far, I think the enrollment and everything goes as expected.

James Breitmeyer: And Carl, there are a lot of these patients out there.

Carl Byrnes: Yeah. And that’s where I was going. It seems like you have these trials as you progress and advance, they should be relatively easy, to populate and enroll.

James Breitmeyer: We hope so. You never know. But what we’re finding is that both studies, the investigators are enthusiastic and the number of patients who are in their systems with these kinds of unmet need seem to be ample for good enrollment pattern.

Carl Byrnes: Excellent. And then just shifting gears a little bit on 808. If you have any thoughts there in terms of a potential efficacy signal with the data readout in December, considering dose level being relatively close to recommended Phase 2 doses of other CAR T therapies? Thanks.

James Breitmeyer: Yeah. I’ll take that one, Salim. I think that as you probably know, with aggressive lymphoma, responses to CAR T [Technical Difficulty].

Carl Byrnes: I’m sorry, Jim, I think you broke up a bit.

James Breitmeyer: Yeah, I did. I’m sorry. Can you hear me better now?

Carl Byrnes: Yes.

James Breitmeyer: Okay. I just switched phones. So given that other CAR T programs have shown that complete responses can develop quickly, we’re optimistic that we may have some efficacy to talk about in December.

Carl Byrnes: Great. Again, congratulations on the progress.

Operator: Our next question comes from Hartaj Singh with Oppenheimer & Co.

Hartaj Singh: Great. Thank you, and thanks for the couple of questions. And really nice updates. Things are moving along pretty quickly, Jim and team. I guess some , just one question there is following up on the previous questions. What would you like to see, whether it’s dose level one, two, or three, a minimum amount of efficacy in order to move forward? And then when you do move forward, you’re thinking about dose expansion, what are you thinking in terms of what would be an acceptable durability that you’d like to see as you resolve these patients onwards? And then on the other program with 534, again, just a similar question, you’re going to have a lot of data being presented there, early stage, what should we be looking for that signals to us that you’re getting close to a sort of a move into dose expansion from the dose escalation?

Salim Yazji: Jim, do you want me to take this one? Okay. Hartaj, I think I could start actually, while Jim is probably publishing the connection. As you know, we are really dealing with very sick patients, especially patients who are often relapsed from prior CD19 CAR T. Unfortunately, these patients, the progression-free survival and overall survival is very short, which is usually in months, not even in years. What we would expect, we would expect to see some objective response and also durability of response. And that’s a big question. What will be good as a durable response in those patient populations that already failed prior CAR T? I think it’s a very objective question, and we need to still see some of that data and evaluate it because usually median progression-free survival, there is no more than three months currently and the survival rate is no more than six months.