Onconova Therapeutics, Inc. (NASDAQ:ONTX) Q1 2023 Earnings Call Transcript May 15, 2023

Onconova Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.28, expectations were $-0.3.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Onconova Therapeutics First Quarter 2023 Financial Results and Business Update Conference Call. At this time, all participants are in listen-only mode. Following management’s prepared remarks, we will hold a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded today, May 15, 2023. At this time, I would like to turn the call over to Bruce Mackle of LifeSci Advisors. Please go ahead, Bruce.

Bruce Mackle: Thank you, operator, and welcome, everyone, to Onconova’s first quarter 2023 financial results and business update conference call. Earlier this afternoon, Onconova issued a press release reporting its financial results and business progress. If you have not yet seen this press release, it is available in the Investors & Media section of the Company’s website at onconova.com. Following my introduction, we will hear from Onconova’s President and CEO, Dr. Steve Fruchtman; Interim Chief Medical Officer; Dr. Michael Saunders; and Chief Operating Officer and Chief Financial Officer, Mark Guerin. Onconova’s VP of Regulatory Affairs and Quality Assurance, Fred Frullo, will also be available during the Q&A session following the prepared remarks.

Before we begin, I would like to remind everyone that statements made during this conference call will include forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made as the underlying facts and circumstances may change. Except as required by law, Onconova disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. For more information on forward-looking statements, please review the disclaimer in today’s press release and the risk factors in the Company’s SEC filings.

With that, I will now turn the call over to Onconova’s President and CEO, Dr. Steve Fruchtman.

Steven Fruchtman: Thanks, Bruce, and thanks to all for listening. Before we provide our update, I’d like to take a moment to remember our late Chief Medical Officer, Dr. Mark Gelder. Mark made many valuable contributions to Onconova and had a very distinguished career as a biomedical innovator and oncologist, dedicated advancing the care of patients with female reproductive cancers. We continue to work tirelessly to honor his memory through the advancement of our clinical programs, endometrial and other cancers. And we are immensely grateful for the time we got to spend together. In addition to a colleague, we lost a friend and a very good man. Although big shoes to fill, Dr. Michael Saunders, our Interim Chief Medical Officer, is an amazing clinical scientist with a remarkable track record of success in developing some of our most innovative therapeutics for patients with advanced cancer.

I want to thank Michael for his efforts during these very difficult past few weeks. For our update today, we will focus primarily on two topics. The first will be the progress of our ongoing Phase I/IIa trial of narazaciclib combined with letrozole in low-grade endometrioid endometrial cancer, which, as announced this week, had the first patient dosed on the study. The second point will be our planned regulatory interactions around rigosertib’s Phase II program in RDEB or recessive dystrophic epidermolysis bullosa associated squamous cell carcinoma, which were the subject of a FDA Type B meeting request. These developed highlight, what was a very productive quarter for Onconova. For those interested in details on our progress in our additional clinical and preclinical programs, I encourage you to see our recent press releases detailing key meetings, where our science is presented, including our earnings release issued earlier today.

With that, I’ll introduce our Interim Chief Medical Officer, Dr. Michael Saunders. As I stated, but it is worth repeating Michael is a deeply experienced drug developer with extensive knowledge of our programs, thanks to his work as a consultant to Onconova for over the past two-plus years. Prior to this, his most recent role was as Executive Director of Drug Safety and Pharmacovigilance for Array BioPharma and Pfizer. Michael, please go ahead with the update.

Michael Saunders: Thank you for that very kind introduction, Steve. I’ll begin my portion of today’s call by reporting that narazaciclib has continued to display an acceptable safety profile in the Phase I monotherapy trial evaluating a continuous daily dosing schedule in participants with solid tumors. Patients are on the 240-milligram cohort, and as we dose escalate, we are starting to see the effects of CDK 4/6 inhibition on bone marrow function, telling us we are engaging our targets, but without seeing any clinically meaningful cases of neutropenia or diarrhea, which are dose-limiting toxicities associated with the FDA-approved CDK 4/6 inhibitors among additional toxicity seen with agents targeting a variety of CDK pathways.

These findings suggest narazaciclib may overcome these safety and tolerability shortcomings of these agents and indicate the Phase I program has accomplished its objective of providing the information needed to confidently advance our program to the next stage of development, which we already initiated in the trial of narazaciclib in combination with letrozole in endometrial cancer. Thus, during the next stage, we will evaluate the safety and efficacy of narazaciclib-based combinations in specific indications. For those familiar with our plans, the first indication we are targeting is recurrent low-grade endometrioid endometrial cancer or LGEEC. Last week, the first patient was dosed in a Phase I/IIa trial in this indication, which is on track for a preliminary data readout in the fourth quarter of this year.

Recurrent LGEEC was chosen as narazaciclib’s first target indication because it marries a clear need for improved therapies with what we believe is a high probability of technical and regulatory success. Based on compendia listings, patients with recurrent LGEEC are currently treated off-label with letrozole, combined with one of the CDK 4/6 inhibitors, palbociclib, ribociclib, or abemaciclib, which are approved only for the treatment of hormone receptor-positive, HER2-negative breast cancer. While these compendia listings are based on the results of both single arm trials in a randomized study that demonstrated improved clinical benefit based on the improvement in progression-free survival with the combination of letrozole and palbociclib versus letrozole alone, it’s clear that the off-label combinations currently employed are marked by shortcomings related to safety, tolerability, and treatment resistance.

We believe narazaciclib has a high probability of technical and regulatory success in LGEEC because like palbociclib, ribociclib and abemaciclib, it inhibits CDK 4 and CDK 6 with high potency. However, in addition, we also potently target a novel protein BUB1. The overexpression of BUB1 has been correlated with poor outcomes in certain cancers, including breast and endometrial cancer. This data was presented at the recent AACR Meeting in Orlando. Therefore, the narazaciclib, letrozole combination targets endometrial cancers with a mechanism of action for which clinical proof-of-concept has been demonstrated. It is worth repeating that in addition to targeting CDK 4 and 6, narazaciclib inhibits kinases not targeted by the aforementioned and commercially available agents.

These include a variety of important kinases such as the previously mentioned BUB1, which also – which was shown in a presentation at AACR last month to be associated with poor survival and a key subtype of endometrial cancer. Narazaciclib’s ability to target these additional kinases, such as CSF1R and ARK5, together with the clinical safety findings to-date I referenced earlier, fuel our belief that a narazaciclib, letrozole combination can provide LGEEC patients with a much improved treatment option. Beyond LGEEC, we continue to evaluate opportunities for combination studies of narazaciclib and additional indications and presented data at AACR last month that provide evidence of its potential to combine synergistically with a variety of therapeutic agents and additional indications.

We expect to begin at least one additional combination study of narazaciclib by the end of the year and we will provide additional details once a clinical protocol is finalized. Next, I’d like to speak about rigosertib’s investigator sponsored Phase II program in advanced squamous cell carcinoma complicating recessive dystrophic epidermolysis bullosa or RDEB-associated SCC as it is often referred to. The most recent data from this program show that both initial and evaluable patients achieving complete clinical responses of all cancerous skin lesions. The responses are durable. We are seeing with either intravenous or oral rigosertib administration and rigosertib has been well-tolerated with no additional toxicities in this subset of cancer patients with an unusual defect of having genomic mutations of collagen VII.

This data was presented last week at the International Society of Investigational Dermatology Meeting with enormous interest from the international experts in the disease. Excitingly, new additional patients were identified at the meeting to be consolidated onto or considered onto study entry. These patients are ultra rare and we are very pleased to have identified additional patients whom we hope rigosertib will be as helpful to as with the patients already treated to date. While these data are only from two patients, it’s important to realize that RDEB-associated SCC is an ultra rare disease with extraordinarily high unmet need. The cumulative risk of death is tragically 70% by the age of 45. Once recurrent metastatic squamous cancer occurs following surgery, it is almost always invariably fatal with no effective treatment options.

Because of this high and urgent unmet need, we believe the most prudent next step for the program is to discuss our early findings with regulators to determine the optimal most expeditious path towards an NDA filing and potential approval. In this regard, we have requested a Type B Meeting with FDA. Based on regulatory timelines associated with the Type B Meeting, we expect to provide an update on rigosertib’s regulatory pathway and RDEB-associated SCC in the third quarter after we have completed the Type B Meeting and received written feedback. Notably, rigosertib’s results in RDEB-associated SCC may have positive read-through into more prevalent indications as a key driver of the disease is PLK1, a kinase that is overexpressed in other cancers and is potently inhibited by rigosertib.

To further explore this possibility, we recently began collaborating with Pangea Biomed to use their proprietary tumor intelligence platform to identify biomarkers that should predict patient response to rigosertib. This platform makes predictions by evaluating in vitro preclinical and clinical datasets to build genetic social networks that reveal tumor vulnerabilities to specialize to specified therapies. These analyses are focused both on rigosertib’s ability to inhibit PLK1, as well as the other pathways targeted by its multifaceted mechanism of action. The results of these collaborative analyses may then form an artificial intelligence-driven precision medicine approach toward selectively identifying additional indications and biomarkers for rigosertib’s potential efficacy evaluation.

The last studies I’ll speak about today are two investigator-sponsored trials evaluating rigosertib in combination with checkpoint inhibition. The first of these studies I’ll mention is the Phase II trial evaluating rigosertib combined with KEYTRUDA in checkpoint blockade refractory metastatic melanoma. Enrollment recently opened in this study, which is being conducted in collaboration with investigators at Vanderbilt University Medical Center, who are sponsoring the trial and Merck is supplying KEYTRUDA. And lastly, I’ll provide a brief update on the Phase I/IIa trial of rigosertib combined with Bristol Meyer Squibb’s OPDIVO and KRAS-mutated non-small cell lung cancer patients who have failed prior therapy with PD1 checkpoint inhibition. This trial continues to recruit patients at the dose featured in our most recent data update on the trial, namely 560 milligrams twice daily for three weeks on and one week off, which was presented at ESMO last year and showed an encouraging signal of efficacy with a studied doublet across multiple KRAS mutations.

Based upon these results as well as an acceptable safety data from the trial to date, the protocol has been amended, so that we can assess further increasing the dose of rigosertib in the trial, which will lead to an enhanced efficacy signal as well as continued acceptable safety. We plan to present data on patients receiving the increased dose of rigosertib alongside a broader update from the trial. Taking into account the time needed to enroll patients on the higher dose, we now expect to report updated data from the trial in the second half of this year. With that, I’ll conclude my remarks and my portion of the call and hand it off to Mark.

Mark Guerin: Thank you, Mike. Onconova closed the first quarter of 2023 with cash and cash equivalents of $34.2 million compared to $38.8 million as of December 31, 2022. Based on our current projections, we believe that our cash position will be sufficient to fund our ongoing clinical trials and business operations, past key clinical and regulatory milestones and into the first quarter of 2024. Research and development expenses for the first quarter of 2023 were $4.1 million compared to $2 million for the first quarter of 2022. General and administrative expenses for the first quarter of 2023 were $2.1 million and this compares with $2.2 million for the first quarter of 2022. Net loss for the first quarter of 2023 was $5.8 million or $0.28 per share on 20.9 million weighted shares outstanding.

This compares with the net loss for the first quarter of 2022 of $4.1 million or $0.20 per share on 20.9 million weighted shares outstanding. The increase in net loss for the first quarter of 2023 compared to 2022 was primarily a result of narazaciclib clinical development and manufacturing expenses in the 2023 period. With my financial overview complete, I’ll now hand the call back to Steve for his concluding remarks.

Steven Fruchtman: Thanks, Mark. I’ll conclude by reminding listeners that we have seen remarkable efficacy data with rigosertib in RDEB squamous cell carcinoma and very encouraging data across various KRAS mutations and KRAS-mutated non-small cell lung cancer. Our progress has us on track to achieve several important clinical and regulatory milestones this year. These include: one, the first readout to establish the combination dose from our Phase I/IIa trial of narazaciclib combined with letrozole in endometrial cancer; two, an important regulatory update on rigosertib’s RDEB-associated squamous cell carcinoma program; and three, updated efficacy and safety data to include additional patients from the Phase I/IIa trial of rigosertib plus OPDIVO in non-small cell lung KRAS-mutated cancer.

We are on track for these milestones due to the hard work of our employees, partners and investigators, and mostly due to the bravery and dedication of our clinical trial participants. I thank each of these individuals for their important contributions. With that, we will begin today’s Q&A session. And operator, I will turn it over to you and thank you.

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Joe Pantginis of H. C. Wainwright. Please go ahead.

Operator: Thank you. Your next question comes from the line of Ahu Demir of Ladenburg. Please go ahead.

Operator: Thank you. Your next question comes from the line of Robert LeBoyer of Noble Capital Markets. Please go ahead.

Operator: I’m showing no further questions at this queue.

Operator: Go ahead, sir.

Operator: I’m showing no further questions in the queue. At this time, I’d like to turn the call back to the speakers for any closing remarks.

Steven Fruchtman: Well, thank you all for participating in today’s call. We are pleased to be approaching very important milestones across our pipeline and look forward to providing additional updates as they are achieved. Thanks, again, for participating, and have a great evening. Goodbye.

Operator: Ladies and gentlemen, thank you for your participation on today’s conference call. This concludes today’s event. You may now disconnect.