Plus Therapeutics, Inc. (NASDAQ:PSTV) Q4 2023 Earnings Call Transcript

Plus Therapeutics, Inc. (NASDAQ:PSTV) Q4 2023 Earnings Call Transcript March 5, 2024

Plus Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.7, expectations were $-0.78. PSTV isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2023 Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. 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 and 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, Victor. 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 and discuss our 2023 full year financial results. And right upfront, apologies for the hoarseness in my voice as I come back from the flu. Joining me for the call today are Mr. Andrew Sims, our Chief Financial Officer; and Dr. Norman LaFrance, our Chief Medical Officer. I’ll begin the call this afternoon by reviewing our recent clinical and regulatory progress with a focus on the fourth quarter, and then turn the call over to Andrew to review our financials and Dr. LaFrance then will be joining us for Q&A. Let me begin with the updates on our two lead CNS cancer programs.

I think we’re in an enviable position in the development of rhenium obisbemeda drug, in that with the recent progress we have made in LM. This effectively means we have two promising lead clinical programs for LM and recurrent GBM. Our ReSPECT-LM Phase 1/2 dose escalation trial of a single administration of rhenium obisbemeda for LM continues to show positive safety and efficacy signals and is making very good progress. In November 2023 at the Society for Neurooncology Meeting, or SNO, we presented results from the [technical difficulty], we showed that 13 patients with LM received a single intraventricular dose of rhenium obisbemeda between 6.6 escalating up to 44 millicuries through an indwelling Ommaya reservoir. No DLTs were observed and the maximum feasible dose was not reached.

The majority of adverse events were mild, 64% Grade 1 or moderate 27% Grade 2. And overall critical organ radiation doses were low. Rhenium obisbemeda circulated throughout the CSF space by one hour following administration and persisted in the CSF for up to seven days, again, with a single administration. CSF [technical difficulty] decreased by up to 91% following rhenium obisbemeda treatment, and the mean reduction was 53%. Seven of 13 treated patients remained alive at the time of reporting, with a median overall survival of 10 months for patients in the first three cohorts. That’s cohorts one, two, three. Enrollment is on track to finish the Phase 1 single administration dose escalation trial by year-end 2024 and also along the way to determine a recommended Phase 2 dose for a single administration Phase 2/3 trial.

This assumes complete enrollment through cohort 7 and currently, we anticipate that cohort 7 is likely the max dose. Cohort 4 just completed was the fastest enrollment of all the cohorts to date and cohort 5 is now enrolling. I can tell you that for both the neuro-oncology community at sites, enthusiasm remains very high for this trial, and we have recently onboarded five new clinical trial sites. Later this year, our plan is to meet with the FDA and discuss the potential Phase 2/3 pivotal trial design, assuming the dataset remains positive and continue tolerated development approach focusing on metastatic breast cancer for which we have orphan designation. This would be for a single administration of rhenium obisbemeda. The trial size endpoints and other key trial elements will be discussed later on in the year, but we anticipate substantial financial support for this trial through our award.

In terms of LM data, we anticipate presenting interim safety and feasibility data from the ReSPECT-LM trial at the SNO/ASCO CNS Cancer Conference in August of 2024 and likely updating that for the full Phase 1 at the SNO Annual Meeting in November 2024. We are also currently working to expand the LM trial to accommodate multiple doses to maximize disease impact in the long term. As an aside, patients are requesting additional treatments of rhenium obisbemeda following their first administration in our current trial, so we are increasingly treating more patients with additional doses under compassionate use protocol, which anecdotally seems to be going well from both a safety perspective and the clinical impact, both of which are being closely followed.

We have developed a proposed approach for a multiple dose expansion and anticipate meeting with the FDA in 2024 with the goal of enrollment beginning for dosing expansion in early 2025, if not before. Now let’s switch gears a bit, but still within the LM discussion. Please recall that we acquired rights to a highly specific sensitive cerebrospinal fluid tumor cell testing technology in September of 2023. We remain exceptionally encouraged by this test. But as you may recall, the prior company had very significant financial and operating issues. Our rationale for acquiring this was that because it could, A, double the market size for our LM therapeutic because of its significant diagnostic sensitivity improvement over standard-of-care but also it allows for longitudinal disease assessment that is otherwise very difficult or impossible to do with the current standard-of-care in testing.

The update on this test is that we have successfully implemented the test back into our ReSPECT-LM trial, losing only a few patients in cohort 4 as of February 2024. The diagnostic work is being conducted in conjunction with our partner, K2bio in Houston. The assay uses proprietary technology and a broad panel of 18 monoclonal antibodies largely geared towards various adenocarcinomas and melanoma. Working with K2, we can perform the test in a cost-effective manner for our trials and leverage existing grant funding for support. We are in the process of assessing whether broadening the test commercially beyond our trials and our current partnership with K2 is indeed viable. But overall, we continue to think this potential exciting new upside opportunity is great for the company.

Now finally, the ReSPECT-LM Phase 1 program continues to be funded in part through CPRIT, the state of Texas through a three-year $17.6 million product development research award. That continues to go very well. And in September, we received a planned $1.9 million payment followed by a $3.3 million payment this past December as part of the grant contract. To date, we have received approximately $7 million from CPRIT, and we anticipate receiving an additional $6.9 million throughout 2024. And I think Andrew will provide more detail on the CPRIT grant revenue in a moment. Now an update on our ReSPECT-GBM trial of a single dose of rhenium obisbemeda given via convection-enhanced delivery to patients with recurrent glioblastoma or GBM. ReSPECT-GBM continues to enroll patients, and we are actively adding new clinical trial sites.

Until recently, we have been limited in terms of trial sites based on the NCI NIH grant funding award, which has substantially supported this trial through the principal investigator, Dr. Andrew Brenner and the University of Texas. Going forward, in 2024, we will expand trial sites, more efficiently interface with sites and provide broader and more direct corporate support for the trial. We are incredibly grateful for the five-year support from the NCI University of Texas and the trial PI, up to this point, as we take the ball and move the trial from Phase 2 to a pivotal trial. We anticipate adding a total of five to eight new sites this year, which is currently ongoing, and we think that’s going to provide a strong starting basis for a pivotal trial commencing in 2025.

The impact of those sites of enrollment will be felt in the latter part of 2024, and we hope to complete Phase 2 enrollment in late 2024 or early 2025. Last November, we presented initial positive safety and feasibility data from the Phase 2 ReSPECT-GBM trial at the SNO meeting last November. As a reminder, the primary endpoint of that Phase 2 is to assess overall survival following a single dose of rhenium obisbemeda in recurrent GBM and compare that to standard-of-care. In summary, that data showed median overall survival in the 15 patients from the Phase 2 study treated at that time was 13 months median overall survival, 13 months versus approximately eight months for the standard of care, and nine of the 15 patients remained alive at the time of the analysis.

Median progression-free survival was 11 months compared to bevacizumab, which is 3.4 months. Rhenium obisbemeda continues to demonstrate a very favorable safety profile despite delivering up to 20x the dose of radiation that is typically delivered by external beam radiation therapy for GBM, and that’s typically around 35 gray and we’ve gone up to 740 gray and the mean dose we’re giving now is about 300 to 350 gray. In 13 of 15 patients or 86% of patients have thus far met the empirically derived rhenium obisbemeda dosing target threshold that we’ve established in Phase 1 and in preclinical studies of greater than 100 gray average absorbed dose to the tumor in greater than 70% tumor coverage. The Phase 2 trial performance in terms of median overall survival will be controlled in the Phase 2 using real-world data generated in conjunction with our partner metadata who has a sizable database in GBM in a history of using that successfully in GBM trials with the FDA.

Scientist in a lab working on a research project, focusing on biotechnology and healthcare advancements.

In the Phase 1, with metadata, we conducted two real-world data trials in our GBM and one versus bevacizumab monotherapy and another versus other convection-enhanced delivery trials that were propensity matched to our Phase 1 data. In those two trials in terms of median overall survival, that was aligned with the recent meta-analysis showing current standard-of-care in recurrent GBM in terms of median overall survival is approximately eight months. And so currently, we view that as an effective clinical hurdle rate, if you will, in a Phase 2 and in a pivotal. So comparing our Phase 2 data as it stands to – as of November of last year versus real-world data, that’s the last time we reported data, a median overall survival, as a reminder, was 13 months, which is 63% better than current standard-of-care which is bevacizumab monotherapy, for example, that has – carries an overall survival of approximately eight months.

Also, I’d like to highlight another presentation of our imaging data that was also presented at the same meeting in November by the trial PI. Imaging is an important secondary endpoint in the trial, supporting the overall survival signal. It has until recently been difficult to assess because pseudo progression has been commonly noted in patients that are receiving such a high dose of radiation, namely 10x to 20x over EBRT. It was a very technical presentation and can be found on our website, but the bottom line is that using advanced imaging techniques beyond standard MRI and T1 T2-weighted images, using things such as relative cerebral blood volume, treatment response assessment maps and fit books, we can increasingly, if not reliably delineate pseudoprogression from progression as well as better understand patterns of recurrence, and we think this is going to help ensure that we are able to more rapidly develop and improve upon this novel new therapy for GBM, but also adapted for primary GBM and other brain cancers in children and adults.

And related to that point above, I thought it might be useful for me to take a couple of minutes and do a little bit of a forward-looking reframe of this GBM development program that we’ve been working on and look at it in sort of a unique way based on what we’ve learned over the last over three years of development. In my view, what we’ve developed is not – it’s not ideal to think about this as sort of a pure-play GBM drug therapeutic per se. But rather, I think it’s more accurate to think about this as a novel targeted radiotherapeutic delivery ecosystem that can overcome not just the limitations of external beam radiation therapy, which is the mainstay of GBM therapy. In other words, we’ve increased by 10x to 20x the amount of absorbed radiation dose over EBRT.

But when you couple that with the state-of-the-art imaging, the custom treatment planning with specific software that’s now available, the neuronavigational technology and convection-enhanced delivery catheters that are optimized, we can also overcome the limitations of blood brain barrier that makes drugging GBM a very challenging matter and also overcome the limitations of the aggressive local invasiveness that is well known with GBM, which makes complete surgical resection almost impossible. So given the safety margins that we have seen thus far, with only a single administration of the radiotherapeutic drug and using the convection-delivery modality, we see tremendous opportunity and potential in both improving upon the standard-of-care in radiation delivery for GBM, which is EBRT in general but also improve upon current standard approaches for recurrent GBM such as surgery and chemotherapeutics and then expanding into other CNS tumor types of the brain parenchyma.

And I’m happy to discuss this more in the Q&A session. Now in terms of data, we anticipate an update at SNO in November 2024. We also intend to meet with the FDA in 2024, both on the GBM pivotal trial design and to obtain FDA IND approval to begin enrollment of the ReSPECT pediatric brain cancer trial for children with high-grade glioma and ependymoma. To meet our clinical goal of being in pivotal trials in 2025 with rhenium obisbemeda drug, we are focused in 2024 to expand our GMP manufacturing relationships, such that we have two fully validated manufacturers that can support primary drug supply, backup drug supply, scale-up activities and all foreseeable commercial demand forecast. So relatedly, we are working to build in redundancy in all supply chain intermediaries, including radioisotope target and radiation services.

We think rhenium is an exciting new clinically relevant radioisotope and interest in that is very high. We are currently on track to meet both of these important drug production supply objectives. In terms of building out the pipeline, we are focusing on two discrete areas. Our new radiotherapeutic, which is rhenium nanoliposome biodegradable alginate microsphere long term, but we call it RNL BAM and building on our organizational expertise and success in obtaining nondilutive grant funding. First, as it relates to RNL BAM, as a reminder, this is a next-generation radioembolic device as it’s now designated by the FDA as of last year, which is designed to treat a variety of solid organ tumors. As the FDA path is now resolved, we are analyzing key device design attributes that we think will ensure this is an attractive product for both liver cancer and other cancers, and we’ll provide more updates as that develops over the year.

Second, as to the issue of grants. We currently have over $20 million in active awarded funding for our two lead programs in LM and GBM. In 2023, we filed for approximately $7 million in grant funding and plan to increase that to at least $10 million in 2024. As per our practice, we report on specific grant funding only when awarded. Now with that update, I’ll turn the call over to our CFO, Andrew Sims, who will review the financials. Andrew?

Andrew Sims: Thank you, Marc, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and year ended December 31, 2023. As of December 31, 2023, cash and cash equivalents were $8.6 million compared to $18.1 million as of December 31, 2022. We are projected to receive an additional $6.9 million in grant funding from CPRIT in 2024, with $3.3 million in the first half of 2024, and a balance of $3.6 million by the end of the year. In addition, as Marc mentioned, the company continues to benefit from grant awards of $3 million from the NIH to support the GBM trial through Phase 2. Based on the cash on hand and committed grant funding, our current balance sheet provides runway into the second half of 2025.

The company recognized $4.9 million of grant revenue during the year ended December 31, 2023, compared to $0.2 million in 2022, reflecting the progress made on the LM indication in 2023. We expect grant revenue will continue to increase during 2024 and the remaining term of the CPRIT grant through August 2025 as we plan to expand the LM clinical trial to add clinical sites and enroll additional patients. Total operating expenses for the year ended December 31, 2023 of $18.2 million compared to $19.7 million in the same period 2022. The decrease due to lower professional and legal expenses. Other income increased from $147,000 in 2022 to $400,000 in 2023 and fully offset interest expense. As a result of these changes, the net loss decreased by $6.9 million from $20.3 million in the year ended December 31, 2022, to $13.3 million in the year ended December 31, 2023.

And now I’ll turn it back to you, Marc.

Marc Hedrick: Great. Thank you, Andrew. Before we move on to Q&A, I’ll take a moment to provide guidance on selected key milestones anticipated over the next 12 months. First, we had safety and efficacy data from the Phase 1 ReSPECT-LM trial with the SNO/ASCO CNS meeting in August of 2024 and likely further update at the full-on SNO meeting in October 2024. We anticipate completing the Phase 1 trial in LM by the end of 2024, and we’re on track [technical difficulty] conjunction develop a Phase 2/3 pivotal trial design for breast cancer patients with LM in conjunction with the FDA. We will also be working with the FDA in 2024 to develop a multiple dosing approach to potentially further extend tumor impact of the rhenium obisbemeda and leptomeningeal patients.

In our GBM program, we intend to expand trial sites, as mentioned, and complete enrollment in the Phase 2 trial by late 2024 or early 2025 and in parallel finalized pivotal trial design planning with the FDA that’s partially done at this point. Pending IND clearance from the FDA, we intend to initiate the Phase 1 pediatric brain cancer trial for pediatric brain cancer patients. And we also plan to bolster our rhenium obisbemeda supply chain for commercial readiness in 2024 as well as complete device development optimization milestones for our next-generation radioembolic device, RNL BAM. Now with those key milestones, I’ll turn the call back over to Victor to introduce any questions we might have. Victor?

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Q&A Session

Operator: Thank you. [Operator Instructions] One moment for our first question. Our first question will come from the line of Justin Walsh from Jones Trading. Your line is open.

Justin Walsh: Hi. Thanks for taking the questions. You alluded to this, but I was wondering if you could provide some more color on the current availability of rhenium-186 and what it will take to scale up and meet potential clinical and then commercial demand?

Marc Hedrick: Hi, Justin. It’s Marc. So, if you kind of model out, I think, in the near-term, near-to-intermediate term, 2024, 2025, 2026, being in pivotal trials and having a commercial-quality, Phase 3 quality drug, we can essentially scale from our current providers. So, we’re talking about maybe somewhere between five to eight doses a week, throughout the year that can be further scaled up, by adding more days to the week. So, what we’re really doing is, kind of looking at commercial assumptions based on GBM, which is a much smaller indication. As you know, it’s about 15,000 patients in the U.S. every year versus LM, which is a much bigger number of patients. So, that’s going to require, as mentioned, an additional GMP manufacturer.

So, we’ll have at least two GMP manufacturers that can meet the GMP manufacturing goals that, we’ve set for ourselves from a commercial perspective. That should, you know, we’re talking about now having five to 10 years of GMP supply from a manufacturing perspective. We also, we are also looking at increasing the radiation services provider, provided to a second provider as well, to make sure that radioisotope is, radioisotopic services is not a limiting in the overall supply chain. It’s not limiting now. We have plenty of upside and ability, to increase specific activity with our current provider. But kind of looking downstream, three to five years, we’d have to bring on additional radiation services. And then, in terms of the other supply intermediates, we really have those pretty well in place.

It’s really about building up backup supply agreements, and then risk mitigation through increasing shelf life and improving inventory.

Justin Walsh: Got it. Thanks. One more question from me. You’d mentioned that you’re still evaluating the long-term commercial potential of the CN side assay. I was just wondering if you’d share any initial thoughts about potential clinical utility of the assay outside of or, in addition to rhenium obisbemeda?

Marc Hedrick: Yes. Thanks, Justin. So, from, I’ll look at it, a few different levels. So, first, just from our trial, we see a step function improvement in diagnosis and also in disease management potential just in our patients, our small number of trials in our LM trial thus far. So, we see it firsthand, the value there. A kind of a second level, when we talk to clinical trial sites, which are the NCCN sites primarily in the U.S. And we talk to those principal investigators that are interested in our trial, they – this assay was off the market for a few months. There was really a big hole in there, from their perspective in their therapeutic and diagnostic armamentarium, not having that test. So, we, from their side to, from physicians and centers that weren’t even in our trial.

And then as we look at the magnitude of the under-diagnosis of LM. We think LM is probably two to four times underdiagnosed based on autopsy studies. When you sort of lump all those things together, it impacts us therapeutically, by significantly increasing the size of the market. And I know, Justin, you know this, but that’s a very significant potential increase in our ability, to treat patients and create value for shareholders. And then there’s also the opportunity to follow patients. So, if you’re following patients over months or years, you’re improving survival, this assay could be used as a potential surrogate biomarker, to determine when it’s appropriate to retreat patients. And that sort of further magnifies the commercial opportunity.

So, even though it’s a diagnostic opportunity, it impacts us by expanding the therapeutic market. But also as a standalone diagnostic opportunity. It’s actually very meaningful. We’re not interested really long-term in being in the diagnostic business per se, but it’s so closely aligned, with what we do therapeutically. And it’s a very unique opportunity in an unmet medical area that, we think it’s well worth going for it, from a commercial perspective. And that’s our goal.

Justin Walsh: Great. Thanks for taking the questions.

Marc Hedrick: Thanks, Justin.

Operator: Thank you. One moment for our next question. Our next question comes from Sean Lee from H.C. Wainwright. Your line is open.

Sean Lee: Good afternoon, guys, and thanks for taking my questions. I just have two quick ones. First, for the CNS side assay, you mentioned that it’s starting to be used, starting in the first quarter. So, will we start seeing more results based on that from, I guess, cohort 4 of the LM study?

Marc Hedrick: Hi, Sean. Yes, I think, yes, I want to be clear. So, yes, the test is actually up and running. We have all 18 monoclonals up and running. We have the microfluidics, the transporters up and running. We missed, more or less, we missed cohort 4 when the test was unavailable. We’re in cohort 5. And so, you’ll start seeing additional data from cohort 5 on. That’s our goal. So, absolutely, we’re looking forward to having that data again, as are the investigators, quite frankly.