Panbela Therapeutics, Inc. (NASDAQ:PBLA) Q1 2023 Earnings Call Transcript

Panbela Therapeutics, Inc. (NASDAQ:PBLA) Q1 2023 Earnings Call Transcript May 7, 2023

Operator: Good day, and welcome to the Panbela Therapeutics first-quarter 2023 earnings call. . It is now my pleasure to turn the floor over to your host, Mr. James Carbonara. Sir, the floor is yours.

James Carbonara: Thank you, operator. With me on the call are Jennifer Simpson, Chief Executive Officer; and to Sue Horvath, Chief Financial Officer. Before I turn the call over to Dr. Simpson, please note that statements made on this call that are not historical facts may be forward-looking statements. Significant risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements are detailed in the company’s annual report on Form 10-K and supplemented by subsequently filed quarterly reports on Form 10-Q as well as in other reports that the company has filed with the SEC. Any forward-looking statements made on this call are made only as of today’s date, and the company does not undertake any obligation to update or supplement any such statements to reflect subsequent developments. Now I would like to turn the call over to Jennifer Simpson, CEO of Panbela. Jennifer, please proceed.

Jennifer Simpson: Thank you, James, and thank you, everyone, for joining. I will begin the call with a review of our clinical development program, recent accomplishments, and upcoming milestones. Sue will then follow with a review of the financial results, and then we will open it up for Q&A. Starting with our Phase III program, I’d like to begin with our ASPIRE global clinical trial in first-line treatment of metastatic pancreatic cancer. ASPIRE is a global randomized, double-blind, placebo-controlled clinical trial to evaluate ivospemin or SBP-101 in combination with gemcitabine and nab-paclitaxel in patients with untreated metastatic pancreatic ductal adenocarcinoma. We continue global enrollment and are focused on the country and site initiations for the ASPIRE trial as we aim to have the full complement of sites on board by the middle of this year.

Having all three regions, Asia Pacific, Europe, and North America enrolling, with the recent release that South Korea enrolled its first patient, it’s highly encouraging as we continue to advance the trial with the interim analysis expected in early 2024. Additionally, in January, the European Medicines Agency or EMA’s Committee for Orphan Medicinal Products issued the adoption of commission-implementing decision relating to the designation of ivospemin as an orphan medicinal product in combination with gemcitabine and nab-paclitaxel in patients with metastatic pancreatic ductal adenocarcinoma. Medicines that meet the EMA’s orphan designation criteria may qualify for financial and regulatory incentives, including a 10-year period of marketing exclusivity in the EU after product approval, product assistance from the EMA at reduced fees during the product development phase, and access to centralized marketing authorization.

Turning to familial adenomatous polyposis or FAP, in April, we learned that we will gain the North American rights to develop and commercialize Flynpovi, which is the combination of eflornithine and sulindac in patients with FAP as a result of the pending termination of the licensing agreement between Cancer Prevention Pharmaceuticals or CPP and One-Two Therapeutics Assets Limited. Panbela is now positioned to take a lead on designing the global trial protocol and presenting it to the Federal Drug Administration or FDA and the EMA for agreement on the registration pathway. By leveraging Panbela’s extensive experience with FAP and in designing global registration trials, the team can develop a high-quality trial protocol that meets the standards of regulatory agencies and is designed to efficiently and effectively demonstrate the potential safety and efficacy of Flynpovi in the treatment of FAP.

This approach will help achieve global regulatory approval and a successful launch of Flynpovi in the global market. We expect this new registration trial will focus on FAP patients who have intact lower gastrointestinal anatomy and will build upon the positive result results from the FAP-310 trial that were published in the New England Journal of Medicine by Burke et al. in 2020, and Disease of the Colon and Rectum by Balaguer et al. in 2022. That study showed 100% risk reduction in the need for surgery in patients with an intact lower gastrointestinal anatomy with Flynpovi versus eflornithine or sulindac alone. We believe the FAP-310 trial data is compelling, and the new registration trial could lead to the approval of Flynpovi. Since there are currently no approved drug therapies for the treatment of FAP, this therapeutic option has the potential to impact this urgent unmet global need for patients with FAP.

We are confident that the new FAP registration trial will have the potential to provide a non-surgical treatment option in both physicians and their patients with FAP. Panbela is committed to working collaboratively with the FDA, EMA, and the FAP community to advance this program and to ultimately provide a new treatment option for FAP patients. We are excited to regain the worldwide rights to Flynpovi for FAP patients and believe our internal expertise, experience with health authorities, relationship with FAP experts throughout the US and Europe, and our commitment to FAP patients and their families in combination with the positive results from the prior FAP-310 trial, this gives a solid foundation for designing and executing a successful registration trial that has the potential to impact patients with FAP globally.

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We plan to advance this program while maintaining our current cash burn and will evaluate opportunities to maximize the value of this asset. Finally, we move to the Phase III double-blind placebo-controlled trial of Flynpovi to prevent recurrence of high-risk adenomas and second primary colorectal cancers in patients with Stage 0 to 3 colorectal cancer. This trial, known as the PACES trial, is funded by the National Cancer Institute or NCI in collaboration with the Southwest Oncology Group, also known as SWOG, and we look forward to a futility analysis in the first half of 2023. Moving to Phase II studies, first, there is an ongoing trial in relapsed/refractory neuroblastoma utilizing eflornithine sachets. This trial is funded through the Children’s Oncology Group or COG and the NCI.

We also enrolled our first patient in a Phase II double-blind randomized study to evaluate CPP-1X-T or eflornithine tablets for recent-onset type 1 diabetes. We are excited to have the first patient enrolled in the Phase II trial for CPP-1X-T led by Indiana University School of Medicine and funded by the Juvenile Diabetes Research Foundation or JDRF, the leading global organization advancing life-changing breakthroughs for type 1 diabetes. There are some 1.45 million Americans living with type 1 diabetes in the US, and there is approximately $16 billion in type 1 diabetes associated healthcare expenditures and lost income annually. We are excited for the opportunity to test and validate our therapy in type 1 diabetes and the potential of this Phase II trial to provide better treatment options for this patient population.

Additionally, we recently announced that abstracts about CPP-1X research, also known as DFMO or eflornithine, have been accepted for poster presentations at the Immunology of Diabetes Society or IDS meeting, which will be held May 23 through 27, 2023; and at the Endocrine Society Meeting, which will be held June 15 through 18, 2023. In Phase I development, we have three programs that will be starting. First, eflornithine sachets will be evaluated in combination with KEYTRUDA in the STK11 mutation population of non-small cell lung cancer. Our second Phase I program, which is scheduled to begin this year, will focus on the evaluation of ivospemin in the platinum-resistant ovarian cancer population. We recently presented a poster titled: Evaluating the efficacy of spermine analogue ivospemin, SBP-101, in combination with chemotherapy in ovarian cancer at the American Association for Clinical Research or AACR meeting April 14 through 19 of this year.

The poster highlights the efficacy of SBP-101 in combination with the standard-of-care chemotherapy agents used to treat platinum-resistant ovarian cancer. Treatment with gemcitabine, topotecan, and doxorubicin have been shown to significantly increase the in vitro toxicity of SBP-101 in both cisplatin-sensitive as well as the cisplatin-resistant ovarian cancer cell line. Paclitaxel and docetaxel have been shown to not have any added benefit in vitro to SBP-101 alone. Utilizing the VDID8+ murine ovarian cancer model, the efficacy of SBP-101 in combination with either gemcitabine, topotecan, or doxorubicin was evaluated. Gemcitabine and topotecan alone had little effect on the overall survival of the mice, whereas either SBP-101 or doxorubicin treatment alone significantly increased median mouse survival time.

The addition of SBP-101 improved the survival of mice treated with any of the three current — any of the three chemotherapeutics. The SBP-101 and doxorubicin combination might have the greatest survival time with a 265% increase in median survival compared to untreated animals. Additionally, combining DFMO or eflornithine with ivospemin in vitro resulted in a cooperative anti-proliferative response. DFMO has been shown to be well tolerated and can influence immune cells to promote a more immune-friendly tumor microenvironment. Future experiments will evaluate the effect of adding DFMO to ivospemin treatment as well as the influence on immune cells within the tumor microenvironment. The poster concludes that the treatment of mice containing VDID8+ ovarian cancer with SBP-101 in combination with doxorubicin significantly prolonged survival and decreased overall tumor burden.

Future studies will be designed to evaluate the effects of SBP-101 in combination with other polyamine metabolism modulators as well as with immune modulators. The results suggest that SBP-101 in common with doxorubicin may have a role in the clinical management of ovarian cancer, in particular, the platinum-resistant population where few options exist. These studies are the basis for moving into a clinical trial program in ovarian cancer with the goal of developing effective novel therapeutics in combination with standard of care for patients with unmet medical needs. The work reflects the company’s ongoing collaboration with Johns Hopkins University School of Medicine. To that end, in April, we announced a new research agreement with the Johns Hopkins University School of Medicine.

The collaboration is intended to expand the development of Panbela’s investigative agents, ivospemin and eflornithine, including activity in models of ovarian and other cancer types, further evaluations into mechanism of action, and potential combination of ivospemin with eflornithine and standard-of-care agents. Last, we are continuing to work with the key opinion leaders to finalize the neoadjuvant pancreatic cancer investigator-initiated protocol and obtain the necessary institutional approvals to open this trial in the first half of this year. To recap the milestones, as we continue to execute our development programs, we anticipate the opening of the non-small cell lung cancer STK11 Phase I trial; futility analysis from the SWOG colon cancer risk-reduction trial; the opening of a neoadjuvant trial and the ovarian cancer trial; agreement of the FDA and EMA on a registration protocol for FAP; Phase I non-small cell lung cancer data in the second half of this year, which will inform the Phase II portion of the non-small cell lung cancer trial, which we hope to have open by year end; final data from the Phase I program in both first-line metastatic pancreatic cancer as well as early onset type 1 diabetes; and finally, the interim analysis of the ASPIRE trial in early 2024.

In summary, we have made tremendous progress in Q1 and year to date. We are excited to build stockholder value as we move ahead in 2023 and onward by executing against our milestones. I will stop here and turn it over to Sue to review the financials.

Sue Horvath: Thank you, Jennifer. General and administrative expenses were $1.4 million in the first quarter of 2023 compared to $1.8 million in the first quarter of 2022. The first quarter of 2022 spend was higher due to the CPP acquisition. Research and development expenses were $3.5 million in the first quarter of 2023 compared to $2.2 million in the first quarter of 2022. The increase is due primarily to the expected ramp up of spending on the ASPIRE clinical trial. On January 13, 2023, we effected a reverse stock split at a ratio of 1 for 40 shares of the company’s common stock. All share and per-share amounts of our common stock presented here and in our report, 10-Q, have been retroactively adjusted to reflect the 1 for 40 reverse stock split.

Net loss in the first quarter of 2023 was $5.1 million or $0.65 per diluted share compared to a net loss of $3.7 million or $10.91 per diluted share in the first quarter of 2022. Total cash was approximately $5.2 million. As of March 31, 2023. Total current assets were $7.8 million, and current liabilities were$ 9.7 million as of the end of the quarter. On March 31, 2023, total non-current assets consisting primarily of cash deposits held by our contract research organization was $8.6 million. During the quarter, we completed a public offering for gross proceeds of approximately $15 million. As a result of the CPP. acquisition, we added debt and accrued interest to our balance sheet. During the quarter ended March 31, 2023, a portion of the debt and accrued interest was paid.

A scheduled payment of $1 million plus accrued interest of approximately $295,000 was paid in the note with an original balance of $6.2 million. The principal balance now on this note is $5.2 million. Also, during the quarter, the company made a payment of $650,000 in principal and accrued interest of approximately $85,000 on a second note. This note has now been paid in full. Looking at the cap table, as of March 31, 2023, we had approximately 16.1 million common shares outstanding. And including shares reserved for options and warrants, we were at approximately 20.2 million shares. The shares’ reserved number includes all outstanding equity awards including stock options, which were held primarily by insiders and all warrants to purchase common stock.

Our cash used in operations for the quarter ended March 31, 2023, totaled approximately $9.8 million. Cash used in operations for the quarter included approximately $2 million in prepayments necessary to secure the supply of standard-of-care chemotherapy agents for the ASPIRE trial as well as payments made to obtain current balances with key vendors. As we have discussed, we anticipate that the ongoing cash used in operations will be between $5 million and $5.5 million per quarter and therefore are projecting that the current cash on hand will take us into very early Q3 of 2023. We will continue to focus our cash on those items in our plan, which will drive value for our stockholders such as the ASPIRE trial. Operator, can you please open the phone lines for Q&A and poll for questions?

Operator: Thank you. At this time, we will be conducting a question-and-answer session. . Jonathan Aschoff, Roth MKM.

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Q&A Session

Jonathan Aschoff: Thank you very much. Hi, guys. Good afternoon. I was wondering, for ASPIRE, are any new countries to be included for that trial, or will you just open additional sites in currently enrolling countries or stick with the sites you have?

Jennifer Simpson: Yes, hi, good afternoon, Jonathan. For the ASPIRE trial, all countries have been approved. We have two European countries that we are working to get the first site active, all with the intent of having that full complement of sites on board by roughly the middle of this year. So we’re making great progress.

Jonathan Aschoff: Okay, great. On FAP, can you tell us anything about securing partners for FAP?

Jennifer Simpson: Yes. So as we look at this, one of the things that we thought would be — put us in the best possible position is to secure the approval from both FDA and EMA on a global registration of protocol. I think that gives us much more sure footing as we look to see how we can best maximize that asset through collaborations, partnerships, et cetera. So that will be the first step, is to seek that advice. And as I mentioned in my comments, we have a great deal of expertise as well as the relationships with the FAP community, both patients and KOLs. So we feel pretty confident that we’ll be able to get this protocol together and through the regulatory bodies, hopefully very soon.

Jonathan Aschoff: Okay. That sounds like a good first step. Thank you. Thank you very much.

Jennifer Simpson: Absolutely.

Operator: Thank you. . Okay. We have no further questions in queue at this time. So this will conclude today’s conference. You may disconnect your lines at this time, and we thank you for your participation.