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Oncternal Therapeutics, Inc. (ONCT) Q4 2020 Earnings Call Transcript

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ONCT earnings call for the period ending December 31, 2020.

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Oncternal Therapeutics, Inc. (ONCT -5.65%)
Q4 2020 Earnings Call
Mar 11, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Oncternal Therapeutics, Inc. fourth-quarter 2020 financial results call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Vincent, chief financial officer of Oncternal Therapeutics.

Thank you, sir. You may begin.

Rich Vincent -- Chief Financial Officer

Thank you, Victor. Good afternoon, everyone, and thank you for joining us today. Joining me on the call this afternoon are our president and CEO, Dr. James Breitmeyer; and our acting chief medical officer, Dr.

Edwina Baskin-Bey, who has been working with us as a consultant for the past several months. We welcome all of you. Today's call includes a business update and discussion of our 2020 fourth-quarter and full-year financial results, which will be followed by Q&A. Today's press release and a replay of today's earnings call will be available on the investor relations section of Oncternal's website for at least the next 30 days.

We filed our 10-K for the full-year 2020 earlier today. Please note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We will be making forward-looking statements during this call about future events, such as our business and product development strategies and future financial and operating performance. Our actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business.

These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in today's press release and our SEC filings, including our Form 10-K for the full year ended December 31, 2020. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 11, 2021. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances occurring after the date of this conference call. With that, it's my pleasure to hand the call over to our CEO, Dr.

Jim Breitmeyer.

Jim Breitmeyer -- Chief Executive Officer

Thank you, Rich, and good afternoon, everyone. At Oncternal, we are committed to developing novel treatments for patients with cancer who have critical unmet medical needs. We are advancing a robust product pipeline with clinical and preclinical product candidates to target several such cancer indications. Our development efforts focus on biological pathways implicated in cancer genesis and/or progression.

During the fourth quarter of 2020, we further advanced the development of cirmtuzumab, our investigational, potentially first-in-class humanized monoclonal antibody that binds with high affinity to a biologically important epitope on ROR1 or receptor-tyrosine kinase-like Orphan Receptor 1. We have been working on the ROR1 target in several cancer indications for a number of years. At the end of 2020, two major acquisitions took place involving companies who were developing drugs targeting ROR1 with the Merck & Co. acquisition of VelosBio Inc.

and the Boehringer Ingelheim acquisition of NBE-Therapeutics. The VLS-101 antibody drug conjugate was initially developed at Oncternal and spun out to VelosBio, and it incorporates the cirmtuzumab antibody. These events certainly raised the general awareness of ROR1 as an interesting cancer target. In December 2020, we provided a data update from the ongoing Phase 1, 2 clinical trial of cirmtuzumab in combination with ibrutinib at the American Society of Hematology, or ASH, 2020 Virtual Annual Meeting.

The data from 15 evaluable patients with relapsed or refractory mantle cell lymphoma, or MCL, showed a 47% complete response rate and 87% overall best objective response rate, or ORR, which is an improvement from the 83% ORR we had previously reported at ASCO 2020. Six patients or 40% achieved a partial response, or PR, and two patients had stable disease for a total best clinical benefit rate of 100%. Additionally, median progression-free survival, or PFS, had not yet been reached after a median follow-up of over 12 months, with a 95% confidence interval above 17.5 months. The combination of cirmtuzumab plus ibrutinib continues to be well tolerated with no significant adverse events above those reported for ibrutinib treatment alone.

As a point of reference for these results, historical data published for 370 patients with relapsed/refractory mantle cell lymphoma from three clinical trials who were treated with single-agent ibrutinib showed an objective response rate of 66% and complete response rate of 20% with a median PFS of 12.8 months. I would like to highlight that this published PFS 95% confidence intervals for single-agent ibrutinib was between eight and a half and 16.5 months. And in fact, it does not overlap with the PFS confidence interval for the cirmtuzumab plus ibrutinib combination that we presented at ASH 2020, which was above 17.5 months, a quite encouraging finding. Based on these interim clinical results, we are in a dialogue with the U.S.

FDA, the Food and Drug Administration, to seek guidance on a potential accelerated approval pathway for cirmtuzumab plus ibrutinib in patients with relapsed/refractory MCL, and we'll provide further updates after we have received guidance from the FDA. Additionally, at ASH, we presented data on 56 evaluable patients with chronic lymphocytic leukemia, or CLL, 49 of whom were treated with the cirmtuzumab plus ibrutinib combination. We reported an overall best objective response rate of 92%, including one patient who achieved a complete response. In addition, four patients had stable disease for a total clinical benefit rate of 100%.

Median PFS was not reached for the 19 patients with treatment-naive CLL after a median follow-up of 16.5 months, while patients with relapsed/refractory CLL had a median PFS of 29.5 months after a median follow-up of 17 months. We expect to provide additional data from the ongoing Phase 1, 2 trial in patients treated with a combination of cirmtuzumab and ibrutinib in both MCL and CLL in the second quarter of 2021. Please note that the FDA granted the company orphan drug designations for cirmtuzumab for treatment of MCL and for treatment of CLL. Separately, patient enrollment continues in the Phase 1b investigator-sponsored study of cirmtuzumab plus paclitaxel in patients with HER2-negative breast cancer being run at UC San Diego.

Previously presented results showed an objective response rate of 57% with no new or accentuated adverse events compared to the known safety profile of paclitaxel alone. We expect additional clinical data from this trial to be available in the second quarter of 2021. We have also been making progress to accelerate Oncternal's investigational ROR1-targeting CAR-T cell therapy program. In January, we announced that the company has entered into a research and development collaboration with the Karolinska Institute in Stockholm, Sweden, designed to advance novel ROR1-targeting CAR-T and CAR-NK cell therapies from the laboratory toward the clinic.

In addition, we announced an agreement with Lentigen Technology to manufacture lentiviral vectors to support and accelerate Oncternal's investigational ROR1-targeting CAR-T cell therapy program. These agreements are in addition to our existing collaboration with UC San Diego under a grant from the California Institute for Regenerative Medicine, as well as a partnership with Shanghai Pharma. We are tremendously excited by the potential of cell therapies targeting ROR1, which may allow the selective targeting of tumor cells that express ROR1 while relatively sparing healthy tissues. Our goal is to initiate a first-in-human study of ROR1-targeting CAR-T cell therapy in China in the second half of 2021.

We also advanced the development of TK216, our investigational, potentially first-in-class, targeted small-molecule inhibitor of the E26 transformation specific, or ETS, family of oncoproteins. In the fourth quarter of 2020, we provided a clinical data update for the ongoing Phase 1, 2 clinical trial of TK216 for patients with relapsed/refractory Ewing sarcoma. The data were presented at the Connective Tissue Oncology Society meeting, CTOS, which was held virtually in 2020. Patients entering the trial had previously been treated with a median of three and as many as eight prior lines of systemic therapy.

The CTOS presentation included interim data for 23 evaluable patients treated at the recommended Phase 2 dose as of the October 16, 2020, efficacy cutoff date. Two of the 23 patients or 9% treated at the randomized Phase 2 dose achieved a complete response, which included one surgical CR. Both patients achieving their CRs remain on treatment with no evidence of disease at over one and a half years on study and over eight months on the study. The best objective response rate was 9%.

Eight additional patients treated at the randomized recommended Phase 2 dose had stable disease for a disease control rate, that is CR, partial response or SD, of 43%. The TK216 treatment was generally well tolerated with dose-limiting toxicity of manageable myelosuppression and no obvious off-target toxicity. The continuing durability of the two complete responses in these patients who had advanced and heavily pretreated relapsed/refractory Ewing sarcoma is quite encouraging, along with the increased number of patients experiencing stable disease. Recruitment in this Phase 1, 2 Ewing sarcoma expansion cohort is ongoing, and we expect to provide another update from this trial of TK216 in the second quarter of 2021.

We are also conducting preclinical work on other ETS-driven tumors and expect additional data in the second quarter of 2021. In the fourth quarter of 2020, Oncternal significantly strengthened its balance sheet, raising an aggregate $109 million in gross proceeds from two underwritten offerings. This is expected to support our operations into 2023. I will now turn the call over to Rich Vincent, our CFO, to review our financial results.

Rich Vincent -- Chief Financial Officer

Thank you, Jim. In October 2017, CIRM awarded an $18.3 million grant to the researchers at the UC San Diego School of Medicine to advance our Phase 1, 2 clinical trial evaluating cirmtuzumab in combination with ibrutinib for the treatment of patients with B-cell lymphoid malignancies, including MCL and CLL. We are conducting this study in collaboration with UC San Diego and expect to receive approximately $14 million in development milestones under research sub-awards throughout the award period. In conjunction with this award, our grant revenue was $1.6 million for the fourth quarter ended December 31, 2020, and $3.4 million for the full-year 2020.

Our total operating expenses for the quarter ended December 31, 2020, were $4.5 million and were $20.9 million for the full-year 2020. Research and development expenses in the fourth quarter totaled $3 million, and general and administrative expenses totaled $1.5 million. For the full-year 2020, we spent $12.5 million on R&D expenses and $8.5 million on G&A expenses. Net loss for the fourth quarter was $2.6 million or a loss of $0.09 per share, basic and diluted.

For the full-year 2020, our net loss was $17.2 million or $0.85 per share, basic and diluted. As of December 31, 2020, we had $116.7 million in cash and cash equivalents, which includes the $109 million in gross proceeds raised in the fourth quarter of 2020. As Jim mentioned, we believe these funds will be sufficient to support our operations into 2023. As of December 31, 2020, we had 48.8 million shares of common stock outstanding.

Now I will turn the call over to Edwina.

Edwina Baskin-Bey -- Acting Chief Medical Officer

Thank you, Rich. I've been working with Oncternal as a consultant for several months, and I'm delighted to continue to support the team as chief medical officer. I would now like to highlight the upcoming milestones that we expect to reach over the next several months. We expect to present a clinical data update from our ongoing Phase 1, 2 trial of cirmtuzumab plus ibrutinib for patients with MCL and CLL in the second quarter of 2021.

We also expect the clinical data update to be available from the Phase 1b investigator-sponsored study of cirmtuzumab plus paclitaxel in patients with HER2-negative breast cancer in the second quarter of 2021. We further expect preclinical data in additional ROR1-expressing tumors in the second quarter of 2021. We target treating the first patient with our ROR1 CAR-T cell therapy in the second half of 2021, and that's in collaboration with Shanghai Pharma. We expect to present a clinical data update from our ongoing Phase 1, 2 trial of TK216 for patients with relapsed or refractory Ewing sarcoma in the second quarter of 2021 and preclinical data in additional ETS-driven tumors in the same time frame.

Now I will turn the call back to our CEO, Dr. Jim Breitmeyer.

Jim Breitmeyer -- Chief Executive Officer

Thank you. Thank you very much. So first of all, Edwina, it's a delight to have you working with us as CMO. We're very happy to have you as part of the team.

In closing, Oncternal has a strong balance sheet and multiple potential catalysts in 2021, as well as a clear priority of deploying our financial and operating resources toward promising product candidates in rare and underserved cancers. We look forward to updating you during the remainder of 2020. With that, I will turn things back to Victor for the Q&A portion of this afternoon's call.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from Carl Byrnes with Northland Securities. Please proceed with your question.

Carl Byrnes -- Northland Securities -- Analyst

Great. Thanks for the questions, and congratulations on the progress. Jim, regarding the interactions with the FDA for potential accelerated pathway approval for cirm plus ibrutinib for MCL, is that something that you think might be possible that we'd see this year? Or would that be more of a 2022 potential event? And then, I have a follow-up as well. Thanks.

Jim Breitmeyer -- Chief Executive Officer

Thank you for the question, Carl. As you know, the FDA is difficult to predict. But if we can complete our discussions and negotiations with them relatively quickly, we might be in a position to announce a regulatory path forward during this calendar year. Time will tell, though.

Carl Byrnes -- Northland Securities -- Analyst

Great. I was thinking, assuming that the data that we expect -- or you expect to present in the second quarter is compelling, that would certainly help with those conversations, I would imagine. Just, and then, a follow-up, unrelated, do you have any feel, and this is more of a question for Richard, with respect to the timing of the CIRM grant recognition throughout 2021 and what the total R&D spend may be for the year? Thanks.

Rich Vincent -- Chief Financial Officer

Thanks, Carl. As you know, we have not been historically providing and don't plan to provide any specific quarterly or annual guidance on our spend or on the grant revenue on an annual basis. I would state that with the $14 million in total sub-award proceeds, we have about five quarters left under that sub-award. We expect these studies -- the study portion to be completed relative to the grant requirements by March of 2022.

Carl Byrnes -- Northland Securities -- Analyst

Great. Thanks a lot.

Operator

Thank you. Our next question comes from Shivendu Seneroy with Brookline Capital Markets. Please proceed with your question.

Unknown speaker

I'm Shivendu on behalf of Kumar Raja from Brookline. I really appreciate the business update. Thank you. Just a couple of questions.

Now given the initial results with solid cancers with cirmtuzumab, are you planning to further explore the drug for liquid hematologic malignancies? Thank you.

Jim Breitmeyer -- Chief Executive Officer

Thank you for the question, Shivendu. The answer is yes. And so we are -- one of the compelling things about ROR1 is it's expressed on both hematological malignancies and solid tumors. Diffuse large B-cell lymphoma, or DLBCL, is one cancer that we haven't started working on yet, and we are interested in it and are doing some preclinical work.

Unknown speaker

OK, thank you. Just one more general question regarding enrollment for the ongoing trials, as well as these expansion cohorts that are planned. Could you just give a flavor of how that is going? Given the pandemic, are there any difficulties? Or it's all, like, it's all OK, it's going well?

Jim Breitmeyer -- Chief Executive Officer

Yes. So of course, like every biotech company, we were -- we wanted to make sure that our clinical programs remained robust despite the COVID pandemic, and I'm happy to say that they have. In particular, enrollment of Ewing sarcoma patients remained quite strong. And in fact, enrollment during the pandemic was higher than it was prior to the pandemic.

We believe that has been driven by these strong results that we were pleased to announce, including the complete responses. Mantle cell lymphoma enrollment has slowed down a bit. And it's easy to imagine that because patients with MCL are older. They have comorbid diseases, and they're exactly those patients that might be at risk of developing severe COVID if they did catch it.

And so the -- there is a certain reluctance to travel to the medical center for MCL patients. However, we have continued to enroll, and we will be announcing results on additional patients above those that we last updated you on at the ASH meeting.

Unknown speaker

Great. Thank you. Just one last one. With regards to the exciting collaboration with Karolinska Institute, I was just wondering if there are any more recent updates on that front?

Jim Breitmeyer -- Chief Executive Officer

So what I can say is that that collaboration is active. We're doing work together, exchanging information and materials. And I think, as you know, that Karolinska has particular depth in the natural killer space. In fact, NK cells were discovered there.

And they have developed very deep experience and expertise with both T cell and NK-based cellular immunotherapy. So it is active and moving along. We look forward to finding opportunities to keep you updated about our CAR-T program over the course of the year because we think that it's really one of the most important things that we are doing right now, and we're emphasizing accelerating that program.

Unknown speaker

Great. Thank you so much for taking my questions.

Operator

Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing remarks.

Jim Breitmeyer -- Chief Executive Officer

So everybody, thank you very much for joining us on our quarterly update call today. We appreciate your attention and your interest in Oncternal, and we look forward to staying in touch with you over the course of this year. With that, we will sign off. Thank you.

Operator

[Operator signoff]

Duration: 27 minutes

Call participants:

Rich Vincent -- Chief Financial Officer

Jim Breitmeyer -- Chief Executive Officer

Edwina Baskin-Bey -- Acting Chief Medical Officer

Carl Byrnes -- Northland Securities -- Analyst

Unknown speaker

All earnings call transcripts

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