Plus Therapeutics, Inc. (NASDAQ:PSTV) Q2 2023 Earnings Call Transcript

Plus Therapeutics, Inc. (NASDAQ:PSTV) Q2 2023 Earnings Call Transcript August 14, 2023

Plus Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.59 EPS, expectations were $1.91.

Operator: Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Second Quarter 2023 Results Conference Call. Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics’ future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Plus Therapeutics’ annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Plus Therapeutics advises you to review these risk factors in considering such statements.

Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics’ President and Chief Executive Officer. Sir, you may begin.

Marc Hedrick: Thank you, Abigail. Good afternoon, everyone, and thank you once again for taking the time to join us today as we provide an overview of recent business highlights to discuss our 2023 second quarter financial results. Joining me for the call today is Dr. Norman LaFrance, our Chief Medical Officer; and Mr. Andrew Sims, our Chief Financial Officer. I’ll begin the call by reviewing our recent clinical and regulatory progress with a focus on the second quarter and then turn the call over to Andrew to review our financials, and Norman will then be joining us for Q&A. I’ll begin with updates on our two lead CNS cancer programs. First, an update on our ReSPECT-LM trial for patients with leptomeningeal metastases or LM.

In Q2, we completed enrollment in the Phase I Part A that’s cohorts 1 through 3. And as is called for in the protocol, we reviewed the safety data with the FDA and they approved us to continue the Part B of the Phase I, specifically dose escalation from cohorts 4 and beyond until a DLT is observed. At the SNO/ASCO CNS Cancer Conference last week in San Francisco, we reported the results from our ReSPECT-LM Phase I Part A trial. Recall that we’ve treated 10 patients with a single administration, except for 1 patient that received a second treatment off trial under compassionate use. And as mentioned, that was in 3 dose escalation cohorts. Thus far, we found that rhenium obisbemeda circulated fully in the CSF space within minutes of injection and remain concentrated in the CSF space for at least 7 days following administration.

Critical organs outside the central nervous system, including blood, spleen and liver showed de minimis absorbed radiation doses well below critical safety levels. In contrast, target organs in the [Audio Gap] spinal CSF showed linear increases in absorbed dose that correlated with administered dose. In Part A, we dosed from 6.6 millicuries up to 26.4 millicuries, and we achieved absorbed doses of up to 102 gray to the ventricles and cranial subarachnoid space. So to summarize the dosing or dose imagery findings, the radiation is clearly getting to the target organs and the off-target effects thus far are minimal through Cohort 3. In terms of safety, consistent with the low off-target absorbed doses, no dose-limiting toxicities have been observed.

Furthermore, the overall safety profile was favorable approximately 83% of adverse events were mild or moderate, and the majority were not related to treatment. The favorable safety profile provided a basis for moving forward into Part B of Phase I. However, we’ve also assessed whether there were disease target effects by measuring tumor cell counts, survival and symptomatic improvement. Recently, a highly specific and sensitive CSF tumor cell and enumeration technology called CNSide assay has been approved, and we are employing it in the RESPECT LM trial. In our view, the technology is a significant advance in CSF tumor assessment over standard of care. In Part A, we found that tumor cell counts trended lower immediately after treatment and were sustained through day 28 post treatment.

At 28 days, tumor cell counts were reduced on average of 53% and up to 91% over preoperative baseline. And then generally, we noted a rebound in tumor cell counts at 56 days. Our view is that effective therapies in the management of LM such as potentially rhenium obisbemeda can disrupt the care of LM but the addition of a reliable tumor cell and enumeration technology can magnify that therapeutic and commercial impact. Current means of LM diagnosis, specifically the triad of imaging, clinical symptomatology and CSF analysis of cells. We use now the old stalwarts of protein glucose and cytology, both lack sensitivity and specificity. Specifically, tumor cell and enumeration may allow earlier diagnosis, diagnosis of subclinical cases and LM is about 2x to 4x underdiagnosed and then support decisions on redosing patients through their treatment course.

Finally, in terms of survival as of today, 5 of the 10 treated patients in the Phase I Part A are live and the median overall survival is at 10 months. This compares favorably with the published overall survival rates of approximately 3 to 9 months observed with standard of care. As a note, as part of the SNO/ASCO meeting in San Francisco in which the Phase I data was presented, plus co-hosted a KOL Roundtable with Dr. Justin Walt, which also included 2 ReSPECT LM investigators, Dr. Andrew Brenner from the University of Texas Health Sciences at San Antonio and Dr. Priya Kumthekar from the Neurology and Medicine Department at Northwestern University’s Feinberg School of Medicine. This KOL Roundtable is available for replay on our website about an hour.

During the KOL roundtable, Dr. Brenner and Kumthekar provided a comprehensive discussion about the ongoing ReSPECT-LM Phase I/IIa dose escalation clinical trial with emphasis on epidemiology, diagnosis, safety and tolerability, dosing and efficacy. We urge everyone that’s interested to watch the webinar for a deeper look at LM and the ReSPECT to clinical trial findings thus far. In terms of next steps for LM, the clinical development plan is to continue to dose escalate to the maximum tolerated dose and in parallel expand the Phase I dose escalation trial to explore multiple dosing. This approach is critical to enhancing the potential for the clinical benefit of rhenium obisbemeda in these patients, which will require further FDA discussions.

As mentioned, we did treat in Part A1 patient with a second dose of rhenium obisbemeda outside the trial under compassionate use, and that patient continues to do quite well and is over a year out from her initial treatment. Now with respect to our called ReSPECT GBM for patients with recurrent glioblastoma or GBM, we continue to enroll both our active Phase I and Phase II trials. Our Phase I now has enrolled 4 patients in cohort 8 with tumor sizes being treated in that with greater than 20 milliliters. And they were treated with an administered radiation dose of 41.5 millicuries in a treatment volume of 16.4 milliliters. We have now successfully used up to 5 catheters per treatment in multiple patients and no DLTs have thus far been observed.

We plan to treat 6 total patients in this cohort. In case it’s the last cohort but we will also assess whether to continue dose escalation or make other dosing changes with an eye toward any potential amendments we might deem to make in the Phase II protocol. Our Phase II continues to enroll patients with tumor sizes of 20 ccs or less using an administered radiation dose of 22.3 millicuries in a treatment volume of 8.8 milliliters. We remain on track to complete Phase II enrollment by the end of 2024. In order to continue to meet our clinical trial enrollment goals, we have expanded our internal clinical team, including adding a VP of Clinical Operations and also adding additional select CROs to support the trials. The impact of these decisions are already being felt and will become increasingly more apparent as we end 2023 and go into 2024 and beyond.

As the ReSPECT GBM trials or open-label trials, we are analyzing the data in an ongoing manner in our [Technical Difficulty] GBM data readouts going forward. First, we intend to publish the Phase I data of equal to 21 patients in peer-reviewed literature, and that’s in process. Second, we continue to evaluate the feasibility, safety and efficacy in the ongoing Phase I trial. The extended Phase I trial is evaluating the safety at these higher dosages and volumes, as mentioned and the impact of these higher doses and volumes on RNL distribution and tumor coverage. And then also finally, on the effects on large tumors. And I think it should be obvious from some of the data I mentioned before in terms of volume administered dose that we’re really pushing the limits in terms of what’s achievable in convection enhanced delivery in the brain in terms of targeted radiation and volume.

And that data will be presented at Society for Neuro-Oncology Meeting in November. Third, we continue to periodically assess the actively enrolling Phase II alone and in a pooled fashion with representative data from the Phase I, and that data will also be presented at the SNO meeting in November. Fourth, we have recently reported top-line data from a propensity matched real-world data analysis of recurrent GBM patients receiving either bevacizumab or convection-enhanced delivery. That data will be used as a real-world control comparator arm for the Phase I and Phase II trials and also for regulatory purposes, including as it relates to potential pivotal trial design. More detailed data will be presented on the real-world propensity MAT trial at SNO in 2023 as well.

I think we have 5 posters or presentations at SNO this year. In terms of the GBM program in general, we continue to demonstrate feasibility and safety without dose-limiting toxicities and promising efficacy signals as we presented before. One thing I just wanted to highlight beyond the safety profile is what we’ve observed relating to the dose response data, specifically the correlation between overall survival and both increasing radiation absorbed dose to the tumor and increasing percent coverage of the tumor volume. In summary, we have learned that for each 100 gray increase in total dose and distribution volume the risk of death decreases by 45.6%. And for each 10% increase in the ratio of treated to total tumor volume, the risk of death decreases by 66.9%, with neither a threshold for either.

Both have very low p values, and this provides us with gathering confidence that there is indeed a meaningful treatment effect. Now in terms of our planned pediatric brain cancer trial, we have formally responded to the FDA request for additional safety data from adults. And assuming no new request, we anticipate IND approval and then moving forward with our pediatric brain cancer trial in the second half of 2023. As mentioned in the past, management’s practice is to rely heavily on grants or other third-party funding through Phase II for each active program. We currently have a number of grant submissions in excess of $1 million under review, including 2 specifically dedicated brain cancer program. Our second radio therapeutic drug is making steady regulatory and development [Technical Difficulty].

We recently received feedback from the FDA on our pre request for designation. The question is whether that drug will be deemed a device, a drug or a combination product. Specifically, the FDA notified us that the BAM radio embolic product will be regulated as a device, primarily by CDRH. This is consistent with the 2 generation 1 products that are now on the market that collectively share a market opportunity of about $1.3 billion. Obviously, the benefits of this device-based approach would be that there are established regulatory reimbursement pathways already out there and potential speed to market. In terms of drug production and manufacturing, we continue to expand and shore up existing supply agreements and work to build in supply chain redundancy, including as it relates to isotope availability.

For example, we recently contracted with Piramal Pharma Solutions that produce additional CGMP liposome intermediate products to meet the forecasted increase in demand for Rhenium -186 obisbemeda for ongoing and planned clinical trials. Our view is that where we should be today in terms of our supply chain, and we are executing on a longer-term plan to stay ahead of the curve as we move our radiotherapeutic products closer to market. With that summary on our clinical development programs and other important company updates, I’ll turn the floor over to our Chief Financial Officer, Andrew Sims, who will review the financials. Andrew?

Andrew Sims: Thank you, Marc. Good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the 2023 second quarter ended June 30, 2023. First, regarding the balance sheet. As of June 30, 2023, cash and cash equivalents were $10.9 million compared to $18.1 million as of December 31, 2022. In addition, this month, we were notified as CPRIT released approximately $1.9 million in additional cash anticipated to flow to the company’s balance sheet in August. As a reminder, the company benefits from both a 3 million NIH award for the ReSPECT-GBM clinical trial through Phase II and a $17.6 million award from CPRIT with to ReSPECT-LM trial through Phase II. Going forward in years 2 and 3, Grant funding is forecast to be $6.7 million and $7.1 million, respectively, likely split into 2 or more advanced payments each year.

Furthermore, the company has discretionary or stockholder-approved access to capital from its ATM and equity line of credit of at least $49 million. Now on the income statement, the company recognized $1.9 million of grant revenue in the second quarter of 2023, which represents CPRIT share of costs incurred to fund a portion of our LM clinical program. Total operating expenses for the second quarter of 2023 was $3.3 million compared to total operating expenses of $5.1 million for the same period the prior year. The decrease is due primarily to the company completing one-off investments in the GMP development of the company’s lead drug Rhenium 186 obisbemeda in Q3 2022. In addition, we incurred lower legal and professional fees in 2023 versus the prior year.

Interest expense decreased from $181,000 for the second quarter of 2022 and to $112,000 for the second quarter of 2023. This decrease reflects the continued principal paydown on the company’s Oxford debt. Net loss for the quarter of 2023 was $1.5 million or $0.59 per share compared to a net loss of $5.3 million or $3.56 per share for the same period of the prior year. And now I’ll turn it back to you, Marc.

Marc Hedrick: Thank you, Andrew. Before we move on to Q&A, let me provide some guidance on anticipated milestones through the remainder of the year. We are on track to initiate the Phase I Part B of the ReSPECT LM trial in the second half of this year, and we plan to expand dosing to multiple doses for each patient. More to come on that. We also published the ReSPECT GBM Phase I data and provide a comprehensive trial update at the Society for Neuro-Oncology Meeting in November 2023. We are on track to initiate the Phase I ReSPECT pediatric brain cancer trial for pediatric patients with ependymoma and high-grade glioma in the second half of 2023. We intend to finalize the device designation for our BAM product and expand our activities accordingly.

Finally, in general, management has internal targets around portfolio and business development opportunities and additional nondilutive grant funding, both are progressing, and we will update on those when appropriate to do so. At this point, Abigail, I’ll now turn the call back over to you for Q&A.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Justin Walsh with Jones Trading.

Justin Walsh: Congrats on the progress. My first question, I’m wondering about your current thoughts about potentially approvable endpoints for LM in the context of the data you presented. Overall survival obviously could make sense, particularly given the 10-month median overall survival you saw in the first 10 patients but wondering if there are others you’re thinking about. And in particular, I’m kind of just thinking about like potential for using symptomatic changes given that we know some of the earlier radiopharmaceuticals were approved for bone pain palliation and prostate cancer.

Marc Hedrick: Hey, Justin, it’s Marc. I think at this point, it’s a bit too early to say definitively as you sort of hinted in your question. But beyond the gold standard of overall survival, I do think quality of life or symptomatic improvement are potentially approvable endpoints, we’ll be implementing and expanding a KOL metric in the trial, and there are some that are out there that would be appropriate. Relative response rates difficult because imaging can be difficult. And however, I think there might be an opportunity in terms of reducing CNS tumor cell count as I mentioned before. So I think that’s less likely. But I do think that, as you mentioned, KOL or symptomatic improvement are also possible endpoints. It certainly not primary endpoints would be secondary endpoints.

Justin Walsh: Got it. And then one more question. I’m just sort of wondering if you can comment on just some more broad thoughts on why LM is so underdiagnosed. And I guess, how much of that comes from the challenges of having effective diagnostics for it? And how many come from maybe the fact that there may be is not a lot out there that can currently be used to specifically treat LM. So just some thoughts on that. Maybe a little bit of a chicken and the egg thing that hopefully is being resolved with your work and some of the diagnostic stuff that’s going on. But just curious for your perspectives on that.

Marc Hedrick: Yes, it’s a good question. The mortality is high. Patients that are nontreated live 4 to 6 weeks in just a few months with treatment. So with better treatment, it’s likely the incidence will be higher. Patients will live longer and also with better primary tumor treatment, patients that can live longer as well. The 2x to 4x increased incidence is based on autopsy study. So I think there are a lot of subclinical infections that are out there. Patients may die of their primary disease, but they die their primary disease with CNS meds or some oftentimes, the imaging is poor, the CSF analysis is indeterminant and symptomatic pattern is not really clear. So they may have it. They may actually be symptomatic, but it’s very difficult to nail down the diagnosis, so they may have other issues.

So that’s why I think are we likely to have a near-term significant improvement in our ability to sort out the symptoms? Probably not. Are we likely to be — see kind of a near-term improvement in our ability to image these patients? Not so sure, doubtful. But I do think there’s a real possibility with a highly sensitive and specific CSF assay to evaluate patients that may be asymptomatic but that are at risk, triple-negative breast cancer patients that are asymptomatic with normal imaging and so forth. And pick it up early, and then there’s an opportunity for us if we have a treatment on the market to treat them early and then actually substantially prolonged survival in these patients. So that’s how I think about it. And that’s why I think the importance of tumor cell enumeration assay could be really valuable potentially in terms of a companion diagnostic as well at some point.

Justin Walsh: Got it. And maybe just a follow-up on that. That assay does it requires a lumbar puncture, right? Just wondering how much of a concern there is that might, I don’t know, limit patients wanting to get on board with that? Or do you think that by the time they get to the point where they have systematic LM that it could be pretty reasonable to get outpatient compliance there?

Marc Hedrick: Yes. Good point. So for patients that are suspected or been diagnosed with LM. Almost all of them have what’s called an Ommaya reservoir, which is a small subcutaneous port with a little pigtail coming off of it that goes into the ventricle that allows the physician real-time access, which is how our LM treatment is actually infused in the patient. But literally any point in time during the patient’s course, CSF could be sampled and tumor cell and enumeration perform. So once they have that in, it’s really a nonissue. In patients that are at risk but haven’t received a diagnosis lumbar puncture will generally be required because there’s no other way to get the CSF out. It’s a common part of the workup. But CSF analysis, the lumbar puncture is part of working up little kids with fevers oftentimes or patients that come in with neck stiffness and photophobia.

So in these patients that have oncologic primaries, who are at risk potentially of LM, a lumbar puncture is a very reasonable procedure to do those. And they’re frankly, very well tolerated.

Operator: Our next question comes from Sean Lee with H.C. Wainwright.

Sean Lee: My first question is on the recent LM results. I was wondering because you guys saw a linear trend with the administered dose to the absorbed dose. I was wondering any relationships you’ve seen so far between the absorbed dose and the decreases in tumor cell counts or relative survival.

Marc Hedrick: No. We haven’t. I think it’s still early. That’s something we’ll look as we get to the later cohorts. But I think we may, because there’s a nice linear relationship between administered and absorbed dose. So I think that’s definitely something we’re going to look for.

Sean Lee: My second question is also on that study. You mentioned that you’re going to be looking at repeat dosing for some of these patients. Would that be done under the context of a different study? Or would you be looking to expand this study protocol to include a separate repeat dosing cohort?

Marc Hedrick: I think that will be a pending — decision be pending discussion with the FDA. Our preference would be to incorporate the current protocol. I think that’s just simpler and more straightforward. I think based on what we’re seeing now with a single administration and look at the overall survival signal, even at low doses, but when you incorporate the safety profile and the reduction of tumor cell counts that we’ve seen, I think that it makes complete sense to continue to dose escalate to a maximum tolerated dose, but then add additional doses. And we’re working on that right now. So my guess is it will be part of the current trial, not a separate protocol.

Sean Lee: I see. Thanks. Then moving on to the GBM side. In the prepared remarks, you mentioned that the FDA alluded to be device and not a drug. So would you be looking at 510(k) de novo pathway for regulatory approval? Or would you be — is it going to be — what’s it called PMA?

Marc Hedrick: Yes, it’s a great question. Right now, it’s hard to say. I think a 510(k) pathway is possible. But I can’t say it’s likely. I think we just — this is got a new information. So we’ll need a bit more time to do our evaluation with our regulatory team. Obviously, if it’s a 510(k), that’s a pretty quick path to market. PMA be a bit longer. But either way, it is going to be a faster path than a drug-related pathway. So we’re parallel paths right now. Number one is to just the process now with the FDA is to do a pre-RFD evaluation and then submit your final RFD, which we’re in the process of doing that. And then in parallel we’re looking at the device-based regulatory opportunities, including 510(k) and PMA in parallel. And then once we have the final designation, then we’ll be ready to move.

Operator: [Operator Instructions] We have a question from the line of Edward Woo with Ascendiant Capital.

Edward Woo: My question is on the grants that you guys are working on. Is it only with CPRIT? Or are you guys doing stuff with NIH? And also because you guys already got a major contract from CPRIT. Does it make it easier for you to get future grants?

Marc Hedrick: Thanks for the question. There’s no prevention for us going back to CPRIT for additional grants. We know one company that has 3 CPRIT awards. So in some ways now that we understand the process, there are a little bit of economies of scale in terms of how to formulate these grants and go through the process and so forth. So it’s going to be both. We’re going back to CPRIT for additional grant opportunities. But we’re also going to the NIH and other sources of funding here in the U.S. So taking a broad approach, but following our internal mantra, I guess, which is we want to — before we start a new program, we want to have the funding to pay for it through Phase II in hand or nearly in hand. And so we think that there are opportunities for each new thing we bring forward, whether it’s the BAM program, [Technical Difficulty] to put funding in place so that once we have the asset, we’re ready to invest in it clinically or in some cases, preclinically, we have the capital to do so.

So it will be a mixture of both, and that definitely includes CPRIT.

Operator: Thank you. That concludes the question-and-answer session. At this time, I would like to turn it back to Dr. Marc Hedrick for closing remarks.

Marc Hedrick: Thank you, Abigail. Thank you to everyone that is tuned in, and we appreciate your interest in the company, and thank you for the questions. And please be sure to refer to our website, take a look at our KOL webinar that has been uploaded, and feel free to reach out to management if you have any questions. In the meantime, have a nice evening. Thank you.

Operator: Thank you all for your participation in today’s conference. This does conclude the program. You may now disconnect.