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Calithera Biosciences Inc (NASDAQ:CALA)
Q2 2020 Earnings Call
Aug 10, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Calithera Second Quarter Earnings Call.

[Operator Instructions] I would now like to hand the conference over to your speaker, Jennifer McNealey. Please go ahead.

Jennifer McNealey -- Vice President of Investor Relations and Strategy

Thank you, Sydney. Good afternoon, everyone. Welcome to our second quarter 2020 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; Keith Orford, Chief Medical Officer; and Stephanie Wong, SVP of Finance. We have issued our press release and it could be accessed through our website at calithera.com.

Before we begin, I would like to remind you that today's discussion will include statements about our future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Security Litigations Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those in the risk factors discussed in the Risk Factors section of our quarterly report on Form 10-Q filed with the SEC.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Please note that this call is being recorded.

And with that, I'll turn the call over to Susan.

Susan M. Molineaux -- Founder, President & Chief Executive Officer

Thanks, Jennifer, and good afternoon, everyone. Thank you for joining us today on our second quarter 2020 conference call. On behalf of the entire team, I'd like to say we hope that you and your families remain healthy while the world addresses the challenges of the COVID-19 pandemic. After a number of months working from home, we can say that we have transitioned smoothly to the new work environment and are prepared to maintain this work schedule into the coming months.

At the same time, we have reopened our labs and have been able to maintain a safe environment for those workers who have returned to the office. We want to thank all of our employees who have done an extraordinary job of maintaining a high level of professionalism, productivity, and dedication at work, while balancing it with all the personal challenges that COVID-19 brings. We're both appreciative and proud of our entire team.

We continued our positive momentum from 2019 into the first half of 2020, further strengthening our cash position and advancing our key clinical development programs. At Calithera, we're building an integrated biotechnology company that develops novel, small molecule, oncometabolism drugs. Drugs that are targeting tumor and immune cell metabolism pathways for the treatment of cancer and other diseases.

By building a pipeline of novel therapeutic product candidates, we're creating multiple opportunities to positively impact clinical outcomes for patients and drive development programs toward commercialization. We're the first company to take a selective glutaminase inhibitor into the clinic and the first to demonstrate clinical activity in cancer patients, including proof-of-concept for the activity of telaglenastat in renal cell carcinoma in our randomized ENTRATA trial.

CANTATA a trial with registration potential in renal cell carcinoma patients is fully enrolled with top line data expected in late fourth quarter 2020 or early first quarter 2021. This moves us a step closer to becoming a commercial biotechnology company and we are focused on laying out the infrastructure and plans needed for a successful future.

We're developing telaglenastat broadly and have continued progress toward initiating a randomized trial in first-line non-small cell lung cancer patients to harboring genetic mutations in KEAP1 or NRF2. Study sites are now open for enrollment in the KEAPSAKE trial and we expect to be enrolling patients in the near-term.

Our partnered arginase inhibitor program is ongoing with Incyte where we have a number of clinical trials evaluating CB-1158 for the treatment of cancer. Arginase inhibitors also have potential in the treatment of cystic fibrosis. Accordingly, we selected CB-280, a unique oral arginase inhibitor for the treatment of this patient population.

And in this quarter, we're pleased to report that we have advanced our arginase inhibitors CB-280 into a Phase Ib clinical study in cystic fibrosis patients. We have a broad pipeline and a productive R&D team. We remain focused on producing novel drug candidates with the potential to be highly differentiated new therapies in areas of unmet need.

And with that, I will pass the call over to Keith for additional details on our clinical programs.

Keith Orford -- Chief Medical Officer

Thank you, Susan. Let's begin with a more detailed update on telaglenastat, our glutaminase inhibitor and our most advanced product candidate. We're currently focused on forging a clinical and potentially commercial path for telaglenastat in renal cell carcinoma.

In October 2019, we announced completion of enrollment of CANTATA, a global, randomized, double-blind trial of telaglenastat in combination with cabozantinib in second and third line RCC patients. CANTATA enrolled 444 patients ahead of schedule, demonstrating the significant unmet need for advanced RCC patients in the second and third-line setting.

CANTATA is designed to evaluate the efficacy and safety of telaglenastat in combination with cabozantinib versus placebo plus cabozantinib in clear-cell RCC patients who have previously received one or two prior lines of therapy, including at least one prior anti-angiogenic agent or the ipilimumab nivolumab combination.

Patients were randomized in a one-to-one ratio to either telaglenastat plus cabozantinib or placebo plus cabozantinib. Patients are stratified by IMDC risk category and prior treatment with anti-PD-1/PD-L1 therapies. The primary endpoint is progression free survival by independent review. Overall survival will be assessed as a key secondary endpoint.

The primary endpoint is PFS. In light of delays associated with COVID-19 and pending further developments in the ongoing pandemic, we expect to report top line data in late fourth quarter or early first quarter 2021. We also believe telaglenastat has the potential to be developed in patients with KEAP1/NRF2 mutations.

Mutations in the KEAP1/NRF2 pathway which occur in an estimated 20% of non-small cell lung cancer patients are associated with aggressive tumor growth. Recently presented clinical data demonstrate that activation of this pathway, either to the loss of KEAP1 function or activation of NRF2 are associated with poor clinical outcomes among patients with non-small cell lung cancer receiving frontline standard-of-care chemo immunotherapy.

Preclinical models have shown that activation of the KEAP1/NRF2 pathway makes tumors dependent on glutaminase activity for growth and survival, making these tumors exquisitely sensitive to inhibition of glutaminase activity by telaglenastat.

The double-blind telaglenastat trial known as KEAPSAKE is open for enrollment and will enroll approximately 120 patients, eligible patients will be newly diagnosed with Stage 4 non-squamous, non-small cell lung cancer with tumors that have the KEAP1 or NRF2 mutations.

Patients will be randomized to receive telaglenastat or placebo in combination with pembrolizumab, carboplatin and pemetrexed. The study will evaluate the safety and investigator-assessed PFS of telaglenastat plus the standard-of-care chemo immunotherapy regimen.

Given the previously reported challenges associated with opening new clinical studies during the current stage of the COVID-19 pandemic, we expect to enroll the first patients in this quarter pending further developments in the COVID-19 situation. We plan to present interim data from this trial in 2021.

In addition, an NCI sponsored trial evaluating single agent telaglenastat in patients with solid tumors that had mutations in the KEAP/NRF pathway is currently ongoing. The study will evaluate patients with KEAP1 or NRF2 mutations as well as other mutations, including NF1 and LKB1. We are also conducting two exploratory Phase Ib/II trials in collaboration with Pfizer, combining telaglenastat with TALZENNA and with IBRANCE.

In March 2019, we initiated a Phase I/II trial of a combination of telaglenastat plus TALZENNA in patients with solid tumors, including the expansion cohorts in RCC and triple negative breast cancer. Dose escalation has been successfully completed. Following preliminary dose expansion, we're no longer developing this combination.

In July 2019, we initiated a Phase I/II trial of the combination of telaglenastat plus IBRANCE in patients with solid tumors, including expansion cohorts in KRAS-mutated colorectal cancer and KRAS-mutated non-small cell lung cancer. Dose escalation has been completed and dose expansion cohorts are, once again, enrolling following a temporary pause due to the COVID-19 situation.

We recently announced the initiation of the first clinical trial to evaluate our novel arginase inhibitor in cystic fibrosis. The depletion of arginine in cystic fibrosis patients by the enzyme arginase results in reduced production of nitric oxide, a key antimicrobial and bronchodilator. Therefore, arginase inhibitors have potential in the treatment of cystic fibrosis and we have selected CB-280 a unique oral arginase inhibitor for the treatment of cystic fibrosis. It is a novel arginase inhibitor which is solely owned by Calithera.

We completed a Phase I, single-ascending dose trials to evaluate the safety, tolerability and pharmacokinetic profile of oral CB-280 in healthy volunteers. In July 2020, we initiated a Phase Ib clinical trial in adult patients with cystic fibrosis and chronic airway infection.

The randomized double-blind placebo controlled dose escalation trial will evaluate multiple ascending doses of CB-280 dosed orally, twice daily for 14 days compared to placebo in up to 32 adult CF patients to determine a safe dose range for CB-280. We're pleased with the enrollment to date, given the challenging and unpredictable effects of COVID.

Our partnered arginase inhibitor program is INCB001158. It's an investigational first-in-class immuno-oncology metabolic checkpoint inhibitor targeting arginase, an immunosuppressive enzyme secreted by myeloid-derived suppressor cells or MDSCs to block T-cell activation in tumors. 1158 is being developed with Incyte in a co-development, co-commercialization collaboration.

1158 is being evaluated as monotherapy as well as in combination with pembrolizumab across eight cohorts of patients with different types of metastatic or locally advanced cancers not amenable to local therapy. Enrolment is now complete in the trial with monotherapy and PD-1 combination cohorts and we continue to evaluate and follow patients enrolled in these cohorts.

The second ongoing clinical trial is evaluating 1158 in combination with three chemotherapy regimens, FOLFOX, gemcitabine/cisplatin or paclitaxel in patients with ovarian, endometrial, colorectal, gastroesophageal and biliary tract cancers. An additional trial in multiple myeloma patients treating patients with 1158 plus daratumumab or daratumumab alone is also ongoing.

We're pleased with the overall progress of the 1158 program and we look forward to additional data updates from the 1158 program in the future.

With that, I'll pass it over to Stephanie for an update on our financials.

Stephanie Wong -- Senior Vice President of Finance and Secretary

Thank you, Keith, and good afternoon, everyone. Detailed financial results for the second quarter 2020 were included in today's press release. I will briefly review our results on this call. Calithera remains well capitalized. Our cash, cash equivalents and investments were $154.1 million at June 30, 2020.

In April, we completed a public offering of 5,750,000 shares of common stock for net proceeds of approximately $33.5 million. We believe our cash position enables us to drive the clinical programs to meaningful value inflection point. R&D expenses were $15.7 million for the quarter-ended June 30th, 2020 compared to $20.9 million for the same-period prior-year. The decrease was due to a $2.4 million decrease in telaglenastat program, a $1.9 million decrease in the INCB001158 program, and a $1.2 million decrease in investments in early stage research programs, offset by $0.2 million increase in the CB-280 program.

G&A expenses were $5.1 million for the quarter ended June 30th, 2020 compared with $4.0 million for the same period prior-year. The increase was related to a $0.9 million increase in higher personnel related and facility costs and $0.2 million in higher professional services.

Interest and other income net was $0.4 million for the three months ended June 30th, 2020 compared to $0.8 million for the same-period prior-year. Net loss for the three-months ended June 30th 2020 was $20.4 million or $0.29 per share.

And with that, I will now return the call back over to Susan.

Susan M. Molineaux -- Founder, President & Chief Executive Officer

Thank you, Stephanie. And with that, operator, we're happy to open the line for questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Jonathan Chang with SVB Leerink. Your line is open.

Jonathan Chang -- Leerink Partners -- Analyst

Hi, thanks for taking my questions. First question, can you provide any more color on the slight shift to the projected CANTATA data readout timeline? I guess what specifically has changed from the May guidance of 4Q?

Keith Orford -- Chief Medical Officer

Yes. So while, we are making steady progress toward bringing in the data and reporting top line results, there have been some COVID relating -- COVID related timing delays in bringing in the results in various geographies. So while we've taken steps to mitigate the impact of COVID, the situation is not fully in our control.

And so there is some potential for delay beyond December and that's why we've made that that slight shift. That said, we're confident in the rate of progress we're making and looking forward to presenting the data either late this quarter or early next quarter.

Jonathan Chang -- Leerink Partners -- Analyst

Got it. So it sounds like it's more of a data collection COVID-19 impact, is that correct, especially given completion of enrollment last year? Okay.

Keith Orford -- Chief Medical Officer

Yes, that's right, Jonathan, yes, exactly.

Jonathan Chang -- Leerink Partners -- Analyst

Got it. Second question, can you discuss the reasons for discontinuing the telaglenastat plus PARP combination? Also, are there any plans to present these data in the future?

Keith Orford -- Chief Medical Officer

Yes. So the PARP inhibitor combination was discontinued on the basis of a predefined efficacy threshold that wasn't met. And the full-dose of the combination drugs were well tolerated. So there was no safety or tolerability issues, but we did set a robust efficacy threshold that wasn't met.

Jonathan Chang -- Leerink Partners -- Analyst

Got it. Thanks for taking the questions.

Keith Orford -- Chief Medical Officer

Yes, thank you.

Operator

Thank you. And our next question comes from Mohit Bansal of Citi. Your line is open.

Mohit Bansal -- Citigroup -- Analyst

Sorry, I was on mute. Thanks for taking my question. So basically, just wanted to know a little bit more on the PARP trial combination discontinuation. So just trying to understand this for other combinations you're testing. So what is your bar, when you are going into dose-expansion phase for you to move forward or not move forward to make that decision, what exactly are you looking at and can you just talk a little bit more about that from the CDK point of view as well because that would probably be coming soon.

Keith Orford -- Chief Medical Officer

Yeah, hi Mohit. Yeah, so the bars that are written the protocols are based on standard efficacy outcomes and they tend to be either response rate or clinical benefit rate. And we try to look at, what we think are, first of all, better than the expectations for the combination therapy. And in this case PARP inhibitors don't have significant activity in the indications of interest at least in the -- particularly with RCC. And -- so that's what drives it as well as what's clinically relevant.

So we're trying to both be kind of a historical background as well as achieve something that would be meaningful clinically. And it's usually for these type of single arm studies either response rate or in some cases clinical benefit rate.

Mohit Bansal -- Citigroup -- Analyst

Got it, helpful. Thank you very much, Keith.

Keith Orford -- Chief Medical Officer

Thank you.

Operator

Thank you. And our next question comes from Matt Phipps with William Blair. Your line is open.

Matt Phipps -- William Blair -- Analyst

Hi, thanks for taking my questions. First, can you just explain, is there a set criteria for the interim analysis in the KEAPSAKE study? Is there any DSMB to provide any utility analysis or is it just a certain number of patients reaching -- getting scans and I guess duration of response?

Keith Orford -- Chief Medical Officer

Yes. So there -- while there is a monitoring committee, the interim itself is not a -- like an efficacy or futility analysis per se in the sense of meeting a bar, it's going to be run at a certain number of patients and provides an interim look at the data gives us the opportunity to respond, potentially engage or kick-off additional activities on the basis of those data.

Matt Phipps -- William Blair -- Analyst

All right, thanks, Keith. And in the CANTATA trial, you guys have tried to be a little flexible in allowing local center CT scans to collect all that data. Is there any risk in just kind of variability of a CT scan? If one was conducted at -- conducted at a different centers? Is there any way to account for that kind of variability in the analysis with the trial?

Keith Orford -- Chief Medical Officer

Yes, so that's a good question, Matt. And I think, if we go back historically, there was more risk of that, when CT scanners have more variability in terms of their quality, but there are specifications that we require in terms of how the CT scans are performed, in terms of the thickness of the slices that are done and so forth, that helps to minimize those risks. So there is, I would say, it's something to be aware of it. But it's not particularly concerning, again, given the improved technology that most of the world are working with relative to maybe 20 or 30 years ago.

Matt Phipps -- William Blair -- Analyst

All right, thanks Keith.

Keith Orford -- Chief Medical Officer

Thanks Matt.

Operator

Thank you. And our next question comes from Biren Amin with Jefferies, your line is open.

Biren Amin -- Jefferies LLC -- Analyst

Yes, hi. Thanks for taking my questions, maybe on KEAPSAKE, with the trial starting in Q3 of this year and interim data in 2021, how much data do you think you'll have at that interim readout that would, I guess, inform or give you information on next steps forward?

Keith Orford -- Chief Medical Officer

Yes. So hi, the -- so we're -- the study, as you know is a 120 patients and we would expect to have a little bit under half of -- have some level of maturity on a little bit -- under half of those patients, so probably in the range of 50 patients with some degree of maturity. So that's the target for the interim.

Biren Amin -- Jefferies LLC -- Analyst

And how much follow-up would you require before reading -- before conducting an interim on those 50 patients?

Keith Orford -- Chief Medical Officer

So, we would like to have at least a couple of scans on those patients. These are as you know, that would be driven by expectations for the control arm and how long you expect these patients to what the PFS is expected to be like. And we're, again, based on historical data which we've talked about, I think four months is a reasonable timeframe to expect as a median PFS. So that sort of drives the duration and follow-up, some four to six months would give us a good feel for the data.

Biren Amin -- Jefferies LLC -- Analyst

Great, thanks for taking my questions.

Keith Orford -- Chief Medical Officer

Yes.

Operator

Thank you. And our next question comes from Jim Birchenough with Wells Fargo. Your line is open.

Nick Abbott -- Wells Fargo -- Analyst

Good afternoon. It's Nick on for Jim this afternoon. Just going back to the Pfizer combination trial. So the IBRANCE and telaglenastat trial is continuing in expansion. So does this mean that it has passed its predefined efficacy threshold for early analysis? Or is it just running a little bit behind and is yet to reach that stage?

Keith Orford -- Chief Medical Officer

This study started a little bit -- hi Nick, this study started a little bit later than the other one and it was a couple of months behind in terms of when it started, and then actually, the dose installation because of the nature of the combination had a couple of extra levels to it. And then COVID hit, so it's just running a little behind the other studies.

Nick Abbott -- Wells Fargo -- Analyst

Thanks Keith. And then, going back to the 1158 trials. So I know that ClinicalTrials.gov has both the checkpoint inhibitor and the chemotherapy trials now close to enrollment. But the numbers that were enrolled although substantial were less than anticipated, so 264 versus 424 and 149 versus 249. Why was that?

Keith Orford -- Chief Medical Officer

Yes, so those -- the numbers that are in ClinicalTrials.gov are always, or at least the way we do it, is to include the highest possible enrollment assuming every cohort is maximally enrolled, including both expansion cohorts and so forth. So we sort of maxed that number out, when we put it into there.

So it would be surprising for us to ever really enroll the full number because we've assumed everything fully enrolled including for example in Simon 2 Stage design, every cohort goes to Simon -- the second stage of the Simon 2 Stage. So, it just reflects that you know not -- we didn't maxed out every element of this study.

Nick Abbott -- Wells Fargo -- Analyst

Okay. And I seem to recall and I'm not sure if it was ESMO or after that, previous versions of the slide, I think it's currently Slide 27 in the deck, where MSS colorectal was shaded out. I thought squamous had a neck that was shaded out. I seemed to recall that one past a Simon 2-stage, but that's no longer shaded in the current deck. So did I get that wrong or there's been some sort of reversal here?

Keith Orford -- Chief Medical Officer

So, there's no intentional reversal there. I can't speak to the shading. I can't -- I don't exactly remember. But you are right to remember that we talked about that at the ESMO presentation that the head and neck cohort had passed on to Stage 2 of the cohort and that is continuing to enroll, and we have not provided updates there. But there is no change in the slide deck or there's no intentional change in the slide deck to reflect a change in the status of that cohort.

Nick Abbott -- Wells Fargo -- Analyst

Okay. And then -- so, would we be expecting to get some updates on this trial later on this year or is that something for 2021?

Keith Orford -- Chief Medical Officer

That's a good question. As we have said in the past, this is a group -- a collaborative development effort and something we work on closely with our partners at Incyte. So once we're able to align on a strategy for the presentation, we will let you know what that timing looks like.

Nick Abbott -- Wells Fargo -- Analyst

Okay, great. Thank you very much.

Keith Orford -- Chief Medical Officer

Yes, thanks Nick.

Operator

Thank you. Our next question comes from Arthur He with H.C. Wainwright. Your line is open.

Arthur He -- H.C. Wainwright & Co. -- Analyst

Hey, good afternoon. Thanks for taking my question. This is Arthur for RK [Phonetic]. So I just had a question regarding the CB-280 program. Have you guys started to dosing the patient yet or just to initiate their site? And when could we expect some data updates from this program?

Keith Orford -- Chief Medical Officer

Yes, so we have started dosing patients. We have, we're enrolling the first cohort and that's in this sort of, I was going to say post-COVID but it's not exactly post-COVID. But during the pandemic, we're happy that we have been able to get this open and start enrolling. In terms of timing, this study has a dose escalation. So we will be going through various dose levels.

And then -- and we've included in addition to looking at safety, we've also included some markers of on target activity, including looking at arginine levels themselves, looking at nitric oxide, exhaled nitric oxide, we can look at the CFTR function itself through the sweat chloride test and as well as FEV1. So we will be able to generate some data along all of those endpoints. I think, most likely, that'll be a 2021 time frame for being able to present those data.

Arthur He -- H.C. Wainwright & Co. -- Analyst

Thanks for that, and just a follow-up on that. So just wondering what will be your guys' long-term strategy on this program. If you can provide some color on there, that'd be appreciated. Thank you.

Keith Orford -- Chief Medical Officer

Yes, when you say long-term strategy, so the plan for this program is to treat patients with cystic fibrosis. We can treat, as you know, this is not dependent on specific mutations, but all patients with cystic fibrosis would be eligible to receive the therapy and that's how we plan to develop it. So in sort of a mutation agnostic way, we would move on to randomized Phase II to identify the optimal dose to move forward then eventually into pivotal study.

So that's the general approach. We will combine with whatever therapies patients are currently receiving. So we would put it on top of any other therapies that patients are receiving, that would be mutation agnostic and we would go from here.

Arthur He -- H.C. Wainwright & Co. -- Analyst

So, are you assuming you guys tend to keep these asset as your own asset for a long-term, is that a reasonable assumption?

Susan M. Molineaux -- Founder, President & Chief Executive Officer

Yes, I think that is a reasonable assumption. We're fully prepared to continue on after this initial dose escalation and do the randomized Phase II and III studies that Keith just mentioned. In the future, we could certainly seek a partner but we're very comfortable continuing the clinical development on our own.

Arthur He -- H.C. Wainwright & Co. -- Analyst

Thank you very much, and congrats on the progress. Thank you.

Keith Orford -- Chief Medical Officer

Thank you.

Operator

Thank you. And I'm not showing any further questions at this time. I'd like to turn the call back to your speakers for any further remarks.

Jennifer McNealey -- Vice President of Investor Relations and Strategy

Thank you, Sydney and thanks all for joining us today and have a great evening everyone.

Operator

[Operator Closing Remarks]

Duration: 31 minutes

Call participants:

Jennifer McNealey -- Vice President of Investor Relations and Strategy

Susan M. Molineaux -- Founder, President & Chief Executive Officer

Keith Orford -- Chief Medical Officer

Stephanie Wong -- Senior Vice President of Finance and Secretary

Jonathan Chang -- Leerink Partners -- Analyst

Mohit Bansal -- Citigroup -- Analyst

Matt Phipps -- William Blair -- Analyst

Biren Amin -- Jefferies LLC -- Analyst

Nick Abbott -- Wells Fargo -- Analyst

Arthur He -- H.C. Wainwright & Co. -- Analyst

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