Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q4 2022 Earnings Call Transcript

Oncternal Therapeutics, Inc. (NASDAQ:ONCT) Q4 2022 Earnings Call Transcript March 9, 2023

Operator: Greetings and welcome to the Oncternal Therapeutics, Inc. Fourth Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. And as a reminder, this conference is being recorded. 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 results for the fourth quarter and full-year 2022, 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. We filed our 10-K for the full-year 2022 earlier today. 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 submissions 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-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, March 9, 2022. 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 everybody. In Oncternal, we are advancing a focused and robust product pipeline with clinical and late stage preclinical product candidates that target cancers for patients with unmet medical needs. In 2022, we transitioned Oncternal into a multiproduct clinical stage company with the initiation of our Phase 3 study ZILO-301 in mantle cell lymphoma and the initiation of our Phase 1/2 dose escalation study of ONCT-808, our autologous CAR T product targeting ROR1 in advanced B cell malignancies. Our third product, ONCT-534, our dual action androgen receptor inhibitor is completing IND enabling studies and we expect it to become our third clinical product later this year. Zilovertamab continued to demonstrate encouraging clinical activity in our Phase 1 study in MCL and CLL.

The data presented in December at the American Society of Hematology Annual Meeting were encouraging and continue to improve over prior reporting. The results in relapsed refractory MCL patients further validated our Phase 3 rationale with efficacy and safety data that compare favorably to historical results with Ibrutinib alone. The data in CLL patients with TP53 mutation or 17p deletion treated with Ibrutinib and Zilovertamab are particularly encouraging with a landmark PFS of 100% at 42 months, and it’s difficult to treat population. On the corporate front, we continue our focus on execution as we remain vigilant regarding our cash and resource usage, and we estimate we can fund our operations into the first quarter of 2024 with funds currently available.

Let me now turn the call over to Oncternal’s Chief Medical Officer, Salim Yazji to discuss the status of our pipeline programs, Salim?

Salim Yazji: Thank you, Jim. Good afternoon, everyone. The rollout of our Phase 3 Study ZILO-301 is now well underway. We continue to activate sites around the world, and the feedback we are receiving from investigators on those sites supports our thesis that there is a high unmet medical need in patients with mantle cell lymphoma that is relapse after the first line of therapy. We presented exciting data from our Phase 1/2 trial of Zilovertamab in combination with Ibrutinib at the ASH meeting in December. We reported an overall response rate of 89% for patients with MCL treated with Zilovertamab plus Ibrutinib, which continued to improve from prior reporting and compares favorably to the historical overall response rate of 66% for ibrutinib monotherapy.

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The complete response rate also continued to improve to a 43% for MCL patients treated with the combination. The medium PFS has not been reached for relapsed refractory MCL patients with TP53 mutation treated with Zilovertamab plus Ibrutinib. With a landmark of PFS approximately 85% at 15 months, which is compared favorably to historical Ibrutinib monotherapy for these patient populations with a medium PFS of four months, further strengthening our beliefs that we can achieve rapid and deep responses in this area of high unmet medical needs. The data presented for CLL patients with deletion 17p or T53 mutation are also very encouraging. We demonstrated landmark PFS of 100% at 42 months and patients treated with the combination, which compares favorably to the recent data update from the ALPINE study which it showed landmark PFS of 55.7% at 24 months for Ibrutinib monotherapy and 77.6% at 24 months for Zanubrutinib monotherapy and this difficult to treat CLL subpopulation.

As you may know, mutation of the TP53 gene is the most commonly acquired mutation in cancer, including hematological malignancies TP53 aberration are associated with markedly decreased survival and predict inadequate therapeutic response, those being among the most — among the strongest predictive and prognostic factor guiding treatment decision in CLL and MCL. The combination of Zilovertamab and Ibrutinib continued to be well tolerated with the safety profile consistent with or improved compared with the historical data for Ibrutinib monotherapy. Now let me turn to ONCT-808, our autologous CAR T targeting role one. In January of this year, we obtained our first IRB approval for our Phase 1/2 study in advanced hematological malignancies, and we expect to share initial data by the end of 2023.

As a reminder, the ONCT-808 Phase 1/2 trial will be a three plus three dose escalation study in patients with aggressive B cell lymphoma, including those that have failed prior CAR T treatment, and both safety and efficacy results will be taken into account to select the recommended Phase 2 dose. After the initial dose escalation, additional dose exploration and evidence of antitumor activity will be evaluated in the expansion cohorts, and we expect to be able to provide an initial update on key efficacy, safety and PK results. Finally, with respect to ONCT-534, our novel dual action androgen receptor inhibitor, we are glad to report that we received helpful feedback from the FDA from our pre-IND meeting in December. And we are now completing the final IND enabling studies.

Our plan is to submit an IND in the mid-2023 and initiate a Phase 1/2 dose escalation study in metastatic resistant prostate cancer patients shortly thereafter. I will now turn the call over to our CFO, Rich Vincent to review our financial results and upcoming milestones, Rich?

Richard Vincent: Thank you, Salim. Our revenue is currently derived from two research and development grants from the National Institutes of Health, or NIH. Our grant revenue was $0.2 million for the fourth quarter ended December 31, 2022 and $1.5 million for the full-year 2022. Our total operating expenses for the fourth quarter ended December 31, ’22 were $12.1 million, including $1.8 million in non-cash stock based compensation expense. Total operating expenses for the full-year 2022 were $46.4 million, including $7.4 million in non-cash stock based compensation expense. In the fourth quarter, research and development expenses totaled $8.8 million and general and administrative expenses totaled $3.3 million. For the full-year 2022, research and development expenses totaled $33 million and general and administrative expenses totaled $13.5 million.

Net loss for the fourth quarter was $11.4 million for a loss of $0.20 per share basic and diluted. For the full-year 2022, our net loss was $44.2 million for loss of $0.84 per share basic and diluted. As of December 31, 2022, we have $63.7 million in cash, cash equivalents and short-term investments, and we had no debt. We believe these funds will be sufficient to support our operations into the first quarter of 2024. We have and will continue to manage expenses carefully, and we’ll explore all potential sources of capital to enable us to reach value driving milestones. As of December 31, 2022, we have 57.5 million common shares outstanding. With respect to upcoming milestones for our Zilovertamab program, we continue to open sites outside the U.S. for our global clinical registrational Phase 3 study ZILO-301, and for ONCT-808, our autologous ROR1 CAR T cell therapy.

We plan to report initial clinical data from our Phase 1/2 study in patients with aggressive B cell lymphoma late in 2023 and for ONCT-534, our DAARI product candidate, we expect to submit an IND to the USFDA in mid-2023. With that, I will turn the call back over to Jim.

James Breitmeyer: Thank you, Rich. We are excited to have several programs in clinical development that can make a difference to patients suffering from hematologic malignancies and prostate cancer. 2023 will be a year of execution with the continued rollout of our Phase 3 study ZILO-301, the initial data readout of our ONCT-808 ROR1 CAR T study, and the study initiation of our novel AR inhibitor ONCT-534. We will continue to use our capital and resources thoughtfully and efficiently as we advanced our focused pipeline towards significant value inflection points. Thank you for joining us today, and we look forward to updating you throughout the year. With that, I will turn things back to John for the Q&A portion of this afternoon’s call.

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Q&A Session

Operator: Thank you, sir. And we will now be conducting a question-and-answer session. . And our first question comes from the line of Hartaj Singh with Oppenheimer. Please proceed with your question.

Hartaj Singh: Great, thank you. And thanks for the questions and really nice update, Jim and team. I have a couple of questions on Zilovertamab and then one I’ll follow up with ONCT-808, on Zilovertamab, Jim or Salim, can you just talk a little bit about the scientific rationale behind why you’re seeing this TP53 efficacy in combination with Ibrutinib and then how do you seek to kind of translate that into potential clinical trials? Maybe in CLL or where exactly are you there? And then with ONCT-808, the second question is what could a potential read out look like at the end of the year, we’ve got other autologous therapies not necessarily in B cell NHL, but just what do you expect to show us by the end of the year, if that data does read out, then and I just have a quick P&L follow-up question after that. Thank you.

James Breitmeyer: Thank you for the question, Hartaj. And I’ll take the first one. So our TP53 finding, it’s one of those really fun and exciting things that happens in drug development where we’ve gone from bench to bedside and now we’re going back from the bedside to the bench to dive into what the mechanism of action is between TP53 ROR1 and the BTK inhibitors. At this point, we do believe that there is a common pathway between these three systems and that we don’t know what it is yet. We are performing research in several laboratories for it right now. And what’s particularly exciting is that, as you know, TP53 is prognostically important not just in hematologic malignancies, but in a wide variety of solid tumors with unmet medical need as well. So this might open up a whole fresh area of clinical research for Zilovertamab and ROR1 inhibition. So I’ll let Salim speak about how it could translate into potential clinical trials in the malignancies?

Salim Yazji: Yes, thanks, Jim. So I mean as Jim said, we really are having very encouraging clinical data with regards to the TP53 and CLL, TP53 deletion 17p and for patients who are specifically relapsed refractory I mean as they go through multiple line of therapy, they could be acquiring more of TP53 mutation and deletion 17p in CLL. So we actually are thinking if we’re going to go in that route, to maybe combine that with the BTKi as a physician choice and to see the effect of the combination versus monotherapy.

Hartaj Singh: And Salim, just one question before if you can answer about what the ROR1, CAR T results could look like later this year, just generally speaking, but just specific question is, is TP53 in your experience in conversations with regulators or KOLS, TP53 mutations and clinical trials aimed at this specific patients with this kind of mutation, do regulators view that as sort of a higher bar for therapies meaning that potentially having accelerated approval type potential, or study approval, or we just don’t know yet?

Salim Yazji: We haven’t talked to the regulator or specifically FDA or other health authority about the T53 specifically, but we’re planning to do that. I think there’s a huge unmet medical need there. And because of that, I think we are very excited and believe that regulatory agency will be actually giving us good advice on how we would be able to go in that path.

Hartaj Singh: Yes, great. And then if you can just give us a quick update on what the ROR1 CAR T results could look like at the end of the year, just sort of a broad perspective?

Salim Yazji: Go ahead, Jim.

James Breitmeyer: No, that’s fine. Salim, go ahead.

Salim Yazji: No, I just want to say it’s just like, probably we are starting our trial in a very good those that could be therapeutic even in an early cohort. We don’t know yet, but we would expect to give at least an early safety and maybe some hints of efficacy by end of 2023. So it all depends, how actually high the dose is and how therapeutic it is, and also how many patients we can enroll by the end of the year. Jim, please go ahead.

James Breitmeyer: No, Salim, that’s exactly what I would have said. And Hartaj, you said you had one other question.

Hartaj Singh: Yes, thank you, Jim. Just P&L, Rich, your spend — OpEx in this quarter was very much in line with what we were expecting. Usually fourth quarters tend to be a little bit heavy. Just any thoughts on I mean, you’ve given us an idea of where your cash run rate goes till, but can you just give us any idea as to how OpEx kind of trends over the next two to four quarters, roughly?

Richard Vincent: So Hartaj, historically we have not provided guidance on a prospective basis. Historically, we’ve burned about $12 million in the third quarter. We’ve burned about $4 million in the fourth quarter ’22. And as stated, we have $63 million in the bank that we believe will get us into the first quarter 2024. So we definitely expect things to ramp-up. We’ve got the ZILO-301 program, ONCT-808 is pulling up real time, and with hopefully, the IND activities on the 534 program, we’ll be nearing the clinic by the end of 2023 there as well. So spend will definitely be ramping up sequentially as we go quarter-by-quarter.

Hartaj Singh: Great. Thank you, Rich, Jim, Salim, thank you all for the questions.

Richard Vincent: Thank you, Hartaj.

Operator: And our next question comes from the line of Carl Byrnes with Northland Capital Markets. Please proceed with your question.

Carl Byrnes: Great, thanks for the question and congratulations on your progress. I was wondering if you might be able to give us a little more commentary on the site activation for ZILO-301 in the U.S. and then what your expectations are in terms of site activation in Europe or outside of the United States for the balance of 2023? Thanks.

Salim Yazji: Sure.

James Breitmeyer: Go ahead, Salim.

Salim Yazji: Yes, I mean I think what we have did, we did actually contact a big number of sites not only in the U.S. but also outside of the U.S. And as you know, I mean due to the post-COVID situation as well as geopolitical situation that’s happening between Ukraine and Russia, we are not seeing, the sites are actually lining up as fast as we would like to, but I think we are going in the right direction there.

Carl Byrnes: Great, thank you. And then just a follow-up question on 808. At the end of the year, if you’re expecting maybe some preliminary efficacy and PK data, what would be a reasonable expectation in terms of progression, all things considered, when you would be able to identify recommended Phase 2 dose for that candidate 808, thanks.

Salim Yazji: So we’re actually — we are having dose escalation study, as I said earlier, it’s going to be three plus three design, and I think we’re having a multiple timepoint to check the efficacy of the CAR program. Once we evaluate this based on efficacy and safety, I think that’s where we need to decide what will be the recommended Phase 2 dose. So I mean it all depends what we see and when we see it. I think it’s very early on now to speculate, but we have a big hope that this can happen fast.

James Breitmeyer: And I’ll add one comment to Salim to that is, we have taken the FDA’s recommendations in Project Optimus to heart and study them very carefully. And we’re well aware that FDA is hoping to have new product development occur in a way that is more thoughtful about arriving at a Phase 2 and ultimately Phase 3 dose. So I would expect that and they’ve offered to be more communicative with early data here. And so we are building in the Project Optimus kind of thinking into both of our early stage programs, both 808 and 534.

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

Unidentified Analyst: Hi, this is Rosemary on for Li. Thank you so much for taking our questions. Just two for me, so firstly with ZILO and CLL with the TP53 mutations, how are you thinking about the next for this program? And then second for 534, could you talk a little bit about your potential Phase 1 trial design and how quickly you might be able to generate initial data? Thank you.

James Breitmeyer: Thanks, Rosemary. Your first question broke up a little bit. Could you repeat it?

Unidentified Analyst: Sorry, so for ZILO and CLL with TP53 mutations, how are you thinking about next steps for this program?

James Breitmeyer: Go ahead, Salim.

Salim Yazji: Yes, so we are evaluating all the aspects of the potential unmet medical need for patients with TP53 deletion 17p and CLL specifically. And as you may know, as patients goes into multiple line of therapy, I think they get to have much higher percentage of that mutation and it’s become very hard to treat and the prognostic factor for those patients is not optimal. So if we would like to do this, we would like to do this in combination with either one of the second generation BTKi’s or was a physician choice of a BTKi versus physician choice of the monotherapy in the second arm.

James Breitmeyer: And the 534 trial design.

Salim Yazji: Yes, and the 534 trial design, we’re using basic design which will get us actually to dose escalate faster if there’s no safety concern. So we’re hoping that that would get us into the therapeutic dose as soon as possible. And as Jim said, we are actually expanding into cohort to be in line with the Project Optimus that the FDA is promoting now to look into a recommended Phase 2 dose or actually two doses and then choosing one of them to go into the Phase 3.

Unidentified Analyst: Thank you.

Salim Yazji: You’re welcome.

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

James Breitmeyer: Thank you very much for joining us today for Oncternal’s earnings call. Enjoy your evening and we look forward to staying in touch with you. Good night.

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