Oncternal Therapeutics, Inc. (ONCT) Q4 2021 Earnings Call Transcript

Oncternal Therapeutics, Inc. (ONCT -2.51%)
Q4 2021 Earnings Call
Mar 10, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Oncternal Therapeutics, Inc. Q4 2021 financial results conference call. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Richard Vincent, CFO of Oncternal Therapeutics, Inc.

Please go ahead, sir.

Rich Vincent -- Rich Vincent

Thank you, Peter. 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 CMO, Dr.

Salim Yazji. Today's call includes a business update and discussion of our 2021 fourth quarter and full year financial results, which will be followed by Q&A. Today's press release and a replay of today's 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 2021 earlier today.

Please note that certain information discussed on today's call 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, the timing of initiation of our preclinical and clinical studies, the potential for our ZILO-301 study to support a BLA submission, the timing of planned interim data updates and the timing of our regulatory filings and submissions. 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, 2021.

This call contains time-sensitive information that is accurate only as of the date of this live broadcast. March 10, 2022. We undertake no obligation to revise or update any forward-looking statements to reflect the events or circumstances occurring after the date of this 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 advancing a diversified and robust product pipeline with clinical and preclinical product candidates that target cancers with unmet medical need. During the fourth quarter of 2021, we made significant progress in the development of our entire pipeline, including zilovertamab, our investigational, potentially first-in-class humanized monoclonal antibody that binds with high affinity to a biologically important epitope on ROR1, otherwise known as receptor-tyrosine kinase-like Orphan Receptor 1. We reached consensus with the FDA on the design and key elements of our planned global phase three study, ZILO-301, designed to treat patients with relapsed or refractory mantle cell lymphoma with zilovertamab in combination with ibrutinib, and we also received positive feedback from the agency on the key elements of our zilovertamab development program.

We expect to initiate the phase three study in the second quarter of 2022. Our commitment to this study and the positive developments on the regulatory front were all supported by clinical data from our ongoing phase one/two clinical trial of zilovertamab plus ibrutinib for patients with MCL or CLL with efficacy and safety data that are encouraging compared to historical results with ibrutinib alone. Our CMO, Salim Yazji, will summarize these exciting clinical results in a moment. We also made progress in our cell therapy program.

We selected ONCT-808 an autologous CAR-T targeting ROR1 as our lead candidate. The lentivirus manufacturing campaign is progressing to plan at Lentigen and we have very encouraging results for the number of expanded T cells, the CAR expression and the T cell phenotype for the potential GMP, CAR T cell generation process development program. We had a very productive pre-IND meeting with the FDA and IND enabling preclinical work is on track for a mid-2022 IND submission. Salim will also discuss the planned clinical development plan for our lead candidate.

Research collaborations with cellularity and with the Karolinska Institutet continue to generate supportive data for our next-generation off-the-shelf ROR1-based cell therapies. We are also very excited about ONCT-534, our lead candidate, androgen receptor or AR inhibitor. At our R&D Day in January, we presented detail about ONCT-534's novel mechanism of action as a dual action androgen receptor inhibitor, or DAARI, D A A R I, which also induces degradation of the androgen receptor. Our DAARI appear to be highly differentiated as we believe they interact with both the N-terminal domain or NTD and the ligand binding domain, or LBD of the AR, inducing AR inhibition and degradation.

Preclinical data presented at the AACR-NCI-EORTC Virtual International Conference on molecular targets show that ONCT-534 exerts antitumor activity in clinically relevant prostate cancer models, including those with AR amplification, enzalutamide-resistant or that express androgen receptor splice variants such as AR-V7. These data suggest that ONCT-534 could play an important role in addressing unmet needs for prostate cancer patients with advanced treatment-resistant disease. Finally, we presented interim clinical data from the ongoing phase one/two study of ONCT-216, our investigational targeted small molecule inhibitor of the E26 transformation-specific, or ETS, family of oncoproteins at the CTOS 2021 Virtual Annual Meeting. Two patients with relapsed/refractory Ewing sarcoma, continue to enjoy durable complete responses, including one patient who had a CR for 24 months on treatment and continues to have no evidence of disease off treatment after several months.

We continue to explore optimizing the ONCT-216 treatment regimen for patients with Ewing's sarcoma and are currently enrolling a new cohort of patients being treated with single-agent ONCT-216 using an intensified dosing schedule. Let me now turn over to Oncternal's CMO, Dr. Salim Yazji.

Salim Yazji -- Chief Medical Officer

Thank you, Jim. Good afternoon, everyone. As a reminder, our recently announced phase three study, ZILO-301, were randomized patients with relapsed or refractory MCL who have only had stable disease or reach a partial response after receiving four months of ibrutinib monotherapy. And we randomized them to receive either blinded zilovertamab or placebo plus ibrutinib.

This study may provide two potential approvals. First, an escalated approval based on overall response rate, or ORR, plus duration of response, or DOR, and second, a regular FDA approval based on progression-free survival or PFS as a primary input. Additionally, we are planning to conduct ZILO-302, an open-label companion study of zilovertamab plus ibrutinib for patients who have progressive disease during the ibrutinib monotherapy running of study ZILO-301 and results of this study could support a third label indication. This innovative study design may support both an accelerated approvals and final approval in single study.

We plan to randomize roughly 250 patients, and we currently expect to reach the accelerated approval or our endpoint in as early as two years after the initial patient is enrolled. And the final approval, PFS endpoint in as early as three years after enrolling the first patient. We are now in the final study ramp-up phase. We have selected a global CRO to support the operational execution and we expected to initiate the study in the second quarter of this year.

As Jim mentioned, we are entering this late clinical stage supported by very encouraging data from our ongoing phase one/two clinical trial of zilovertamab in combination with ibrutinib. The CIRLL study as presented at the ASH meeting in December 2021, has an overall response rate of 81% and a CR rate of 35% for patients with MCL treated with zilovertamab plus ibrutinib, which is compared favorably to the historical ORR of 66% and 20% for ibrutinib monotherapy, respectively. Median PFS of 35.9 months for MCL patients with a median follow-up of 14.4 months, which also compares favorably to the historical PFS of 12.8 months for ibrutinib monotherapy. The CLL data were also very encouraging with the landmark PFS of 100% at 36 months for CLL patients who had previously received one or two prior lines of therapy, which compares favorably to historical ibrutinib monotherapy of PFS of around 75% at 36 months.

The combination of zilovertamab and ibrutinib continues to be well tolerated with a safety profile consistent with or improved compared with historical data for ibrutinib monotherapy. For example, in patients with MCL, grade three and four, neutrophil decrease was documented in only 9.7% of the patients with zilovertamab plus ibrutinib compared to 29% of ibrutinib lower from its registrational study. Regarding ONCT-808, the lead candidates of our autologous ROR1 targeting CAR-T program, we had productive pre-IND meeting with the FDA, and we are on track to submit our IND in the middle of this year. We also recently established a very experienced cell therapy scientific advisory board and are close to selecting major academic centers at the clinical sites.

Our proposed first-in-human study will enroll patients with relapsed or refractory hematologic malignancy, including those who have failed CD19 CAR-T cell therapy. I will now turn the call over to our CFO, Rich Vincent, to review our financial results and upcoming milestones.

Rich Vincent -- Rich Vincent

Thank you, Salim. Our grant revenue is derived from a California Institute for Regenerative Medicine, or CIRM, grant the board and two research and development grants from the National Institute of Health or NIH. In October 2017, CIRM awarded an $18.3 million grant to researchers at the UC San Diego School of Medicine to advance our ZILO study. We are conducting a study in collaboration with UC San Diego and expect to receive approximately $14.4 million in development milestones under research supports throughout the award period that expires in the first quarter of 2022.

In the third quarter of 2021, the NIH awarded the company two research and development grants for up $2.2 million to support preclinical activities for the company's ONCT-534 and ONCT-216 programs, including $0.7 million payable to sub-awardees. Our grant revenue was $0.6 million for the fourth quarter ended December 31, 2021, and $4.3 million for the full year 2021. Our total operating expenses for the fourth quarter ending December 31, 2021, were $8.6 million with $1.7 million in noncash stock-based compensation expense and were $35.7 million for the full year 2021 with $5.9 million in noncash stock-based compensation expense. In the fourth quarter, research and development expenses totaled $6 million and general and administrative expenses totaled $2.6 million.

For the full year 2021, research and development expenses totaled $24.1 million and general and administrative expenses totaled $11.6 million. Loss for the fourth quarter was $8.1 million for a loss of 0.16 or $0.16 per share, basic and diluted. For the full year ended December 31, 2021, our net loss was $31.3 million or a loss of $0.64 per share basic and diluted. As of December 31, 2021, we had $90.8 million in cash and cash equivalents and no debt.

We believe these funds will be sufficient to support our operations into mid-2023. We have and will continue to manage expenses carefully and will explore all potential sources of capital to enable us to reach our milestones. As of December 31, 2021, we had 49.4 million shares of common stock outstanding. With respect to upcoming milestones for our zilovertamab program, we expect to initiate the global registrational phase three study, ZILO-301, in the second quarter of 2022.

We expect to report an interim clinical data update for patients with MCL and CLL treated with zilovertamab plus ibrutinib from our ongoing CIRLL study in the second quarter of 2022. We also expect to have a phase 1b investigator-sponsored trial of zilovertamab plus docetaxel initiated for patients with metastatic castration-resistant prostate cancer in mid-2022. On the cell therapy front, we plan to spend our first IND for ONCT-808, our autologous ROR1, CAR T cell therapy candidate in mid-2022. For ONCT-534, our lead DAARI product candidate, we expect to initiate IND-enabling GLP toxicology studies and GMP manufacturing in the second quarter of 2022.

For ONCT-216, we expect to report updated interim clinical data for patients with Ewing's sarcoma treated in the dose intensified expansion cohort in the fourth quarter of 2022. Now, I will turn the call back over to Jim.

Jim Breitmeyer -- Chief Executive Officer

Thank you, Rich. We are pleased with the progress in 2021 and look forward to multiple catalysts in 2022, especially the initiation of our global phase three zilovertamab study and also submitting our ROR1 CAR-T IND application, as well as advancing our DAARI program toward the clinic. Our strong balance sheet will help us navigate this historically challenging macro environment. We plan to focus our resources on areas of high unmet patient need where we believe our product candidates can make the greatest difference for patients.

Thank you for joining us today, and we look forward to updating you for the remainder of 2022. With that, I will turn things back to Peter for the Q&A portion of this afternoon's call.

Questions & Answers:

Operator

[Operator instructions] Our first question is from Hartaj Singh with Oppenheimer. Please go ahead.

Hartaj Singh -- Oppenheimer and Company -- Analyst

Great. Thank you, peter. Just a couple of questions, Jim and team, and thanks for the updates. One is just for ONCT-808, the ROR1, CAR-T, what could clinical trials there look like with these sorts of the basket trials, monotherapy combo with ibrutinib? And then what specifically are the learnings from the zilovertamab and MCL and CLL studies that kind of help you designing those CAR-T trials? And I just got a couple of quick follow-ups.

Jim Breitmeyer -- Chief Executive Officer

Thank you, Hartaj. I'll start with the second question. And so, we're moving into the CAR-T clinical trials with an increased sense of confidence that we're capable of targeting ROR1 specifically and as such that the CAR-Ts are expected to primarily interact with tumor cells, and we're hoping to see a minimal cross reactivity with normal adult tissues, which may offer -- will mainly to an acceptable safety program. We are also continuing to learn that ROR1 is important in large numbers of hematologic malignancies, which is where we'll do that first clinical trial.

I'll turn it over to Salim to ask -- to answer your question about the general shape of the phase one study for the 808 ROR1, CAR-T.

Salim Yazji -- Chief Medical Officer

Yes. Thanks, Jim. So we're planning actually to do first-in-human CAR-T, which is -- I think in the dose escalation phase, we'll try to not mix patient population, who specifically probably going to be in lymphoma. But once we reach the therapeutic dose and recommended phase two dose, this is where we will start to some expansion in different indications.

Does that answer the question, Hartaj?

Hartaj Singh -- Oppenheimer and Company -- Analyst

Yes. Thank you. That helps a lot. But I just want to be clear, so I might have missed that.

You will include a broad range of patients in the initial cohorts, or will that happen when you get into the expansion part of the CAR-T trial?

Salim Yazji -- Chief Medical Officer

Yes, the plan is when we get to the expansion because I think -- was usually CAR-T FDA wants you to have a very specific safety population and the dose escalation not to have a like mix group.

Jim Breitmeyer -- Chief Executive Officer

Let me add that we do think that lymphoma is an acceptable small basket, I guess, for the initial clinical trial of population.

Hartaj Singh -- Oppenheimer and Company -- Analyst

Great. And then, just would you be using any kind of ibrutinib or any other one of the small molecules in combining? Or that also will you wait to do that if you're going to do that in -- when you get the expansion part of the trial?

Jim Breitmeyer -- Chief Executive Officer

We'll study the CAR-T alone initially so that we're sure we have a clear picture of its safety profile by itself, and then we'll consider augmenting with additional factors later.

Hartaj Singh -- Oppenheimer and Company -- Analyst

Great. Thank you, jim. And then, last question is just on the Ewing sarcoma project. The 216, you've got the two really nice complete responses, one for more than 24 months.

When we get to the latter part of this year and you're looking for that high dose data. What is the kind of the hurdle you're looking for in order to continue on with the project, I mean, what would you like to see in order to go to next steps. And thank you for all the questions.

Jim Breitmeyer -- Chief Executive Officer

Sure, Hartaj. And I'll take your last question as well. So we're looking for an indication that the true response rate to TK216 is around at least 20%, and that would be a partial response and complete responders.

Hartaj Singh -- Oppenheimer and Company -- Analyst

Great. Thank you, Jim.

Operator

Thank you. Our next question is from Carl Byrnes with Northland Capital Markets. Please go ahead.

Carl Byrnes -- Northland Securities -- Analyst

Great. Thanks for the question and congratulations on the progress. How do you see R&D spending ramping up throughout 2022, considering the initiation of the ZILO trials and also, obviously, the other R&D programs that are ongoing? Thanks.

Jim Breitmeyer -- Chief Executive Officer

Rich?

Rich Vincent -- Rich Vincent

Sure. So as we mentioned, we ended 2021 was about $91 million in cash and cash equivalents with no debt on the books, a decrease of just under $7 million for the fourth quarter. While we do not provide guidance on our quarterly or annual cash burn, we do anticipate that our current cash resources are sufficient to fund our planned operations into mid-2023.

Carl Byrnes -- Northland Securities -- Analyst

Got it. Thanks.

Operator

Thank you. Our next question is from Kaveri Pohlman with BTIG. Please go ahead.

Kaveri Pohlman -- BTIG -- Analyst

Good afternoon, and thanks for the update. My first question is for 534. The drug binds both the end terminal and ligand binding domain, but how stable is the binding in the absence of the ligand binding domain because a lot of area includes the LBD, and does CAR-T bind at the same ligand binding domain site where zilovertamab bind.

Jim Breitmeyer -- Chief Executive Officer

Kaveri, this is Jim. Those are both good questions. So we are seeing very satisfying activity both in vitro and in vivo in models of prostate cancer that have lost the binding, the ligand binding domain. So we do believe that the in-terminal binding is sufficient to inhibit prostate cancer.

On the ligand binding domain side, it does appear to bind differently than enzalutamide because we are seeing activity in enzalutamide-resistant strains or lines of prostate cancer.

Kaveri Pohlman -- BTIG -- Analyst

Got it. And for zilovertamab, do you see an opportunity in EGFR-mutated, non-small cell lung cancer patients. I believe there have been some studies that have shown shorter survival benefit with TKI in patients who overexpress ROR1?

Jim Breitmeyer -- Chief Executive Officer

Yes. We've noticed those data as well. And we're doing some preclinical work in lung cancer right now, particularly intriguing result that we are pursuing is a publication suggesting that lung cancer cells that have become resistant to osimertinib might be resensitized to osimertinib treatment by inhibiting ROR1. And that, of course, is a very important clinical problem in the lung cancer arena right now.

Kaveri Pohlman -- BTIG -- Analyst

Yeah, that's very helpful. Thank you. And maybe the last one on the breast cancer IST studies. So for HR-positive or TNBC or HER2-negative breast cancer, how do you think about the changing treatment landscape with recent progress made by ADCs and any insight you can provide on your development strategy?

Jim Breitmeyer -- Chief Executive Officer

Thank you, Kaveri. So in breast cancer, the work -- the clinical work that's been done so far has been through investigator-sponsored studies. And we have noted that that landscape is becoming increasingly complicated. Now, that's fantastic news for patients with breast cancer, but it makes it a complicated arena for a small company.

And we're also aware that breast cancer trials would have to be quite large and long in duration. And so, you'll notice that when we are stating that we are emphasizing hematologic malignancies in prostate cancer that breast cancer is no longer on the list as one of our prioritized indications.

Kaveri Pohlman -- BTIG -- Analyst

Got it. That makes sense. Thanks for taking my questions.

Jim Breitmeyer -- Chief Executive Officer

Thank you for the good question.

Operator

Our next question is from Robert Burns with H.C. Wainwright. Please go ahead.

Robert Burns -- H.C. Wainwright -- Analyst

Hey, guys. Thanks for taking my questions and congrats on the updates. I've got three, if I may. So with regard to ZILO-301, specifically announced say, I'm sort of curious to get your thoughts around what you think the delta would have to be for accelerated approval between those two arms, ibrutinib plus ZILO versus ibrutinib plus placebo.

Any thoughts around that.

Jim Breitmeyer -- Chief Executive Officer

Salim?

Salim Yazji -- Chief Medical Officer

Yes. So we have -- actually, our statistician looked into this very carefully. And we have a very statistical significant delta. I mean, I think we can say it could be anywhere additional 60% or 70% of what you see in the control arm.

Robert Burns -- H.C. Wainwright -- Analyst

OK. And next question, with regard to ZILO-302, Obviously, that's an open-label companion study. How are you thinking about that potential study for potential movement into that space post progression on ibrutinib?

Salim Yazji -- Chief Medical Officer

Yes. So...

Jim Breitmeyer -- Chief Executive Officer

We do -- go ahead.

Salim Yazji -- Chief Medical Officer

Sorry, Jim. So actually, as you know, those patient population have a huge unmet medical need, and we believe any response there, if you'll be able to rescue those patients. it could be very meaningful, especially after progressing on BTK.

Robert Burns -- H.C. Wainwright -- Analyst

OK. Last one for me with regard to 808. So I know you're going to be doing the IND submission by the middle of this year and then you're planning a phase one trial, which is predominantly going to be in hematological malignancies, but I would assume that you would -- the next step would then be solid tumors. Can you provide some clarity around sort of times when you think you might initiate a solid tumor program and whether you would institute a biomarker sort of threshold with regard to ROR1 expression and what that sort of cutoff could potentially look like?

Jim Breitmeyer -- Chief Executive Officer

Yes. That's -- you squeezed in three questions there in your third question. So we will investigate solid tumor indications with the 808 system. But as you know, it is a straightforward autologous CAR-T with the same features as successful CD19 CAR-T, but it doesn't have any enhanced features that would make it particularly applicable to solid tumors.

So this is -- we believe that to move into the solid tumor space that something in addition to the vanilla CAR-T is necessary. And so, we're looking in parallel at adding additional features to the 808 platform. But at the same time, we are looking at off-the-shelf alternatives such as pluripotent stem cell-based CAR-T or CAR NK. And in those cases, from the beginning, we're looking at incorporating additional features into the cell therapy that would be designed to give us a better chance in the solid tumor environment.

Robert Burns -- H.C. Wainwright -- Analyst

Awesome. Thanks for those updates, guys.

Jim Breitmeyer -- Chief Executive Officer

All right. Thank you, Robert.

Operator

Our last question is from Kumaraguru Raja with Brookline Capital Markets. Please go ahead.

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

Hi. I'm Shubhendu calling in for Kumar. Thanks for the update. Now, with regards to the ONCT-534 program in prostate cancer.

Do you plan to also test the drug in other AR driven indications like AR positive breast cancer or in non-oncology indications that over overexpress AR. Also, in addition to the IND-enabling studies, what can you share more about the program?

Jim Breitmeyer -- Chief Executive Officer

Yes. Thank you for the question and give our best to Kumar. I'm sure he's having a busy day.

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

Yeah. Thank you.

Jim Breitmeyer -- Chief Executive Officer

OK. Thank you. So we do have some interesting indications that the way that ONCT-534 inhibits the androgen receptor might be applicable in a non-oncology indication called Kennedy's disease, which is a severe form of neuromuscular degeneration that's related to aberrations in the androgen receptor. And the -- what I can say about the rest of the preclinical program is that it's moving along very nicely.

We have a formulation identified, we are just gearing up right now to start the toxicology studies and the behavior of the 534 molecules up to this point is what we would hope to see for a successful small molecule early development program.

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

Thank you. That is useful. What is the expectation of the safety and side effect profile on ONCT-534 when you compare it to, say, hormone therapies that decrease androgen levels or block androgen action in prostate cancer?

Jim Breitmeyer -- Chief Executive Officer

So since we haven't done toxicology studies, yet this is a theoretical answer. But I would say our first assumption would be that many of the toxicities would be similar to a drug like enzalutamide. There's one thing that we are excited about and that is that some of the androgen antagonists have been associated with seizure activity as a side effect. And we were delighted to find that ONCT-534 does not cross the blood-brain barrier.

So we have a theoretical possibility of having a lower seizure risk.

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

OK, great. And finally, I was just wondering if you could speak on the research collaboration, the ongoing collaboration with Karolinska Institutet for the cell therapies. And when can we expect updates on that front?

Jim Breitmeyer -- Chief Executive Officer

Thank you. The collaboration is going well. In fact, we are having two of our collaborators are traveling all the way from Sweden to San Diego next week and we're going to have our first face-to-face meeting with them in a year and a half, looking forward to it. And so, the Karolinska, of course, is where the natural killer cell was discovered, and a lot of its early characterization was done.

And there is a very exciting consortium of companies and academic organizations that collaborate together through the Karolinska to make advances in cell therapy, and we were delighted that Oncternal was invited to join into that consortium. So I think that you can expect to see results from the 534 preclinical program at some point over the course of this year as it is on track for an IND in midyear.

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

Great. Thanks for taking my question. 

Jim Breitmeyer -- Chief Executive Officer

All right.

Operator

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Dr. Breitmeyer for closing remarks.

Jim Breitmeyer -- Chief Executive Officer

Well, let me close by thanking all of you for your time and attention. We particularly appreciate the excellent questions and the opportunity to interact with the questioners on the call today. So I thank all of you, and we look forward to updating you again in about a quarter.

Operator

[Operator signoff]

Duration: 46 minutes

Call participants:

Rich Vincent -- Rich Vincent

Jim Breitmeyer -- Chief Executive Officer

Salim Yazji -- Chief Medical Officer

Hartaj Singh -- Oppenheimer and Company -- Analyst

Carl Byrnes -- Northland Securities -- Analyst

Kaveri Pohlman -- BTIG -- Analyst

Robert Burns -- H.C. Wainwright -- Analyst

Shubhendu Senroy -- Brookline Capital Markets -- Analyst

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