Calithera Biosciences (CALA) Q4 2021 Earnings Call Transcript

Calithera Biosciences (CALA -37.50%)
Q4 2021 Earnings Call
Mar 31, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by and welcome to Calithera Biosciences' fourth quarter 2021 earnings call. [Operator instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's call is being recorded. [Operator instructions] I would now like to hand the call over to Stephanie Wong, chief financial officer.

Please go ahead.

Stephanie Wong -- Chief Financial Officer

Thank you, operator. Good afternoon, everyone. Welcome to our fourth quarter and full year 2021 conference call. Joining me today are Susan Molineaux, founder, president, and CEO; and Emil Kuriakose, chief medical officer.

Earlier this afternoon, we issued a press release, which included an overview of our fourth quarter and full year 2021 financial and operational results, which can 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 Securities Litigation 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 discussed in the risk factors section of our periodic filings 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 Molineaux -- Founder, President and Chief Executive Officer

Thanks, Stephanie. Good afternoon, everyone, and thank you for joining us for today's conference call. 2021 was a transformational year at Calithera as we took several critical steps to transition the company's focus and core programs to developing therapies for biomarker-specific patient populations while continuing to leverage the company's deep expertise in clinical development for targeted small molecule cancer therapies. In October, we announced the acquisition of two clinical-stage assets from Takeda: mivavotinib and sapanisertib.

Mivavotinib is a spleen tyrosine kinase, or SYK, inhibitor that targets the constitutively activated B-cell receptor pathway in diffuse large B-cell lymphoma and other non-Hodgkin's lymphoma. In completed phase 1 and 2 clinical trials, mivavotinib showed promising single-agent responses, with deep and durable activity in unselected patients with DLBCL. Our initial development will be in ABC, or activated B-cell, DLBCL, where BCR signaling and SYK activation are central drivers. Mivavotinib showed a substantially higher response rate in ABC compared to GCB DLBCL, with a 53% ORR, or overall response rate, in ABC, compared to a 22% ORR in GCB.

DLBCL in a retrospective analysis of completed trials had this data and, in addition, recent preclinical studies have shown enhanced SYK activity and sensitivity to SYK inhibition in DLBCL and other non-Hodgkin's lymphoma, harboring mutations in MYD88 and/or CD79. They comprise a distinct genetic subset as ABC DLBCL is known to have poor outcomes with standard of care therapy. Approximately 50% of all ABC DLBCL tumors have one or both of these mutations. Mivavotinib has the potential to be the first-to-market therapy for patients with a genetically defined subset of DLBCL.

The compelling single-agent overall response rate in ABC DLBCL and potential for further enrichment of single-agent activity in a genetically defined subset of ABC DLBCL with MYD88 or CD79 mutations, we believe, provides a well-defined, efficient development path to potential a single-agent accelerated approval in these populations. Sapanisertib is a dual mTORC1/2 inhibitor that targets a key survival mechanism in KEAP1 or NRF2 mutated tumors. Sapanisertib has demonstrated promising single-agent activity in patients with relapsed or refractory NRF2 mutated squamous nonsmall cell lung cancer. It is a differentiated molecule from other mTOR inhibitors and is the only inhibitor to have strong single-agent activity in NRF2 mutated squamous nonsmall cell lung cancer xenograft.

NRF2 mutations occur in approximately 15% of squamous nonsmall cell lung cancer and confer a poorer prognosis for these patients. We believe sapanisertib has the potential to address a substantial, underserved patient population and has the potential to be the first treatment for NRF2 mutated squamous nonsmall cell lung cancer. We plan to initiate phase 2 studies of both sapanisertib and mivavotinib in the first half of 2022. We also presented data from our phase 1b trial of CB-280 for the treatment of cystic fibrosis at the North American Cystic Fibrosis Conference in November of last year.

The data showed that CB-280 was well-tolerated, demonstrated linear pharmacokinetics, and showed complete and continuous target inhibition in plasma at doses at or above 100 milligrams. CB-280 also demonstrated robust pharmacodynamic effects, with rapid and significant dose-proportional increases in plasma arginine, a key driver of nitric oxide production. Enrollment and analysis of all four cohorts is now complete, and evaluation of next steps is ongoing. Turning to our preclinical pipeline, we have continued to advance our internally discovered preclinical pipeline of synthetic lethality target.

VPS4A and VPS4B are paralog team, and loss of one or the other paralog in cancer cells is synthetically lethal. Our VPS4 program is the most advanced synthetic lethality program we have, and we recently announced that we will be presenting a poster on the discovery of novel VPS4A small molecule inhibitors at the upcoming AACR meeting in April. I will pass the call over to Emil now to go into additional details on our clinical program. We're excited to realize the potential of mivavotinib and sapanisertib in biomarker-defined populations.

By focusing on well-characterized genetic vulnerabilities, with molecules that have already shown single-agent activity, we believe we will be able to generate phase 2 data with targeted, efficient study designs. We planned to share data from these studies by the first quarter of 2023.

Emil Kuriakose -- Chief Medical Officer

Thank you, Susan. I'd like to start today by providing some additional detail around our planned phase 2 trials of mivavotinib in patients with relapsed/refractory ABC DLBCL with and without MYD88 or CD79b mutations, as well as sapanisertib in patients with relapsed/refractory NRF2 mutated squamous nonsmall cell lung cancer. Starting with mivavotinib, we plan to initiate a phase 2 trial in relapsed or refractory non-GCB DLBCL as defined by the Hans algorithm, which captures all ABC DLBCL. And we will enrich for MYD88 and CD79b mutated tumors using liquid NGS testing.

Patients will be randomized to either a standard dosing schedule with 100 milligrams Q daily or an induction dosing schedule, which is 120 milligrams Q daily for 14 days, followed by 80 milligrams Q daily. Efficacy data from this study could position the company to initiate a registrational study, which would potentially enroll cohorts comprised of patients with non-GCB DLBCL and/or MYD88/CD79b mutated DLBCL. With the primary endpoint of overall response rate, such a study would target an accelerated approval pathway for mivavotinib as a single agent in these biomarker-defined subsets. We plan to rapidly pursue combination strategies with novel and/or standard of care therapies to further extend development into earlier lines of therapy in DLBCL.

Additional paths for monotherapy and combination development include Waldenstrom's macroglobulinemia and other indolent lymphomas where mivavotinib has shown compelling single-agent responses in previously completed trials. Now, turning to sapanisertib, we plan to initiate a phase 2 study of the sapanisertib monotherapy in patients with NRF2 mutated squamous nonsmall cell lung cancer, harboring either wildtype or mutated NRF2 as detected by next-generation sequencing. This study will strengthen the existing data on sapanisertib as a monotherapy in patients with squamous nonsmall cell lung cancer with the NRF2 mutation and also evaluate its activity in NRF2 wildtype squamous nonsmall cell lung cancer. The objectives of this phase 2a study will be dose refinement and confirmation of the selective activity in NRF2 mutated tumors compared to wildtype tumors in order to validate NRF2 mutations as a selection biomarker.

We believe that if phase 2a is successful, it would enable us to initiate phase 2b, which could be a registrational study in NRF2 mutated squamous nonsmall cell lung cancer. Subsequent development in squamous nonsmall cell lung cancer could involve monotherapy and/or combinations with standard of care therapies in earlier lines of treatment within the biomarker-defined populations, including both NRF2 and KEAP1 mutant tumors. NRF2 and KEAP1 mutations have been detected across several tumor types, providing additional indications for development of sapanisertib as monotherapy and in combination beyond squamous nonsmall cell lung cancer. So, with that summary, I'll pass it over to Stephanie for an update on our financials.

Stephanie Wong -- Chief Financial Officer

Thank you, Emil, and good afternoon, everyone. Detailed financial results were included in today's press release. I will briefly review our results on this call. Our cash and cash equivalents totaled 59.5 million at December 31, 2021, which we expect, together with proceeds from our recently priced $10 million public offering, will be sufficient to meet our operating plan through the second quarter of 2023.

R&D expenses for the full year 2021 were 53.4 million, compared to 71 million in the prior year. The decrease was primarily due to the telaglenastat program. R&D expenses for the fourth quarter 2021 were 13.7 million, compared to 17.1 million for the same period last year. R&D expenses related to asset acquisition for the full year 2021 were 50.9 million due to our acquisition of sapanisertib and mivavotinib in the fourth quarter, which was comprised of a cash payment of $10 million and 40.9 million attributed to the value of the preferred stock we issued.

G&A expenses for the full year 2021 were 20.9 million, compared to 20.4 million in the prior year. G&A expenses for the fourth quarter of 2021 were 4.6 million, compared to 5.6 million for the same period last year. Net loss for three months and year ended December 31, 2021, was 69.2 million and 115.1 million, respectively. And with that, I will now return the call back over to Susan.

Susan Molineaux -- Founder, President and Chief Executive Officer

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

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Jonathan Chang of SVB Leerink. Your line is open.

Jonathan Chang -- SVB Leerink Partners -- Analyst

Hi, guys. Thanks for taking my questions. First question, can you provide more color on the status of the planned phase 2 studies for mivavotinib and sapanisertib? What are the remaining steps to get those studies started?

Emil Kuriakose -- Chief Medical Officer

Yes. Hi, Jonathan. I can answer that. So, the study activation is proceeding really well.

We have -- essentially, we're parallel tracking both the transfer of these programs from Takeda, as well as the study start-up process over, you know, the last several months. Both are progressing very smoothly. Both are complete. And we have -- essentially, the transfer process, as well as regulatory reviews of both studies, has been completed and were well underway to get the sites activated.

So, it's really just straight-ahead shot through this site activation and patient enrollment, which is why we're still guiding to the data in 1Q '23.

Jonathan Chang -- SVB Leerink Partners -- Analyst

Got it. And second question, just following up on your -- on the last part of your comment. Can you discuss reasons for confidence in the clinical execution of both of these programs such that data for both will be available by first quarter '23? Thank you.

Emil Kuriakose -- Chief Medical Officer

Sure. Yeah. And that confidence really arises from the fact that these are very, very clean biomarker-defined subpopulations, which are well characterized. And these patients, in terms of their -- the clinician's knowledge of their genetic or their biomarker status, is well known.

Specifically, with regard to the squamous lung cancer and NRF2 mutant subset, all these patients get tumor sequencing in the front line. And so, in terms of identifying patients for the relapsed/refractory study, we're working with sites that have very robust, curated local databases, NGS databases for their patients that can allow for rapid identification of both mutant and wildtype patients. And we are leveraging our prior experience running the KEAPSAKE trial and including relationships with the various, you know, NGS vendors and infrastructure that we developed in that study to really hit the ground running. So, that gives us a lot of confidence in terms of getting to that.

With mivavotinib, it's a similar story. ABC DLBCL is a distinction that is known from diagnosis onwards. And so, in terms of finding these patients, it's well known from their clinical history whether they fit, you know, non-GCB/ABC label. And the fact that we're using liquid NGS, again, to enrich for MYD88/CD79b mutant patients, again, from a timing and efficiency standpoint, allow for rapid identification of those patients as well.

We're working with very well-experienced sites in terms of lymphoma physicians who have either already used the drug in previous studies and very large centers where they know we have high volumes of patients that are also characterized genetically at the local level. So, the selection of sites in both studies was streamlined in order to make sure that we had a high yield of patients from every site that we picked.

Jonathan Chang -- SVB Leerink Partners -- Analyst

Got it. Thanks for taking the questions.

Emil Kuriakose -- Chief Medical Officer

Sure.

Operator

Thank you. Our next question comes from Roger Song of Jefferies. Your question, please.

Roger Song -- Jefferies -- Analyst

Great. Thank you. Maybe just to quickly follow up on these two phase 2 trials. In the initial data in 1Q, what should we expect, kind of how much data we're going to see from that initial readouts? Also, what kind of data -- the phase 2 data ultimately will trigger you to move forward into the registrational trial, as you mentioned?

Emil Kuriakose -- Chief Medical Officer

Right. So, the -- you know, the benefit we have here is that both of these molecules already have preexisting data showing that they're both clearly active as a single agent. And we know the numbers with regards to response rates in those prior studies that gave us the confidence to get them in the first place. I mean, in terms of the fact that this is an overall response endpoint study that's open-label and we'll be seeing the data in real time give us a lot of flexibility in terms of, you know, the types of data that we'll see.

So, I think in terms of the fact that this is rapid to the times of responses for both molecules, specifically in mivavotinib, you know, that responses tend to happen very quickly, within the first one to two cycles. And the same thing was actually seen for sapanisertib in previous studies. So, the time from a patient enrolling to meaningful efficacy data for each patient is pretty short. And so, with that being said and given that the numerator in terms of ORR is already fairly high, especially for the lymphoma and the DLBCL setting, give us a lot of confidence that we could have a meaningful data set by the first quarter of '23.

Roger Song -- Jefferies -- Analyst

Got it. OK. Maybe just quickly switch on the CB-280. So, you have finished the full cohort and doing the data analysis.

Would you announce the data this year and what could be the path forward as you evaluate the next steps for this compound?

Emil Kuriakose -- Chief Medical Officer

Right. So, with that molecule, again, the dose escalation was completed. In terms of the data from the final cohort, we analyzed that the trends that we saw and reported on in the first three dose levels with regard to pharmacodynamic effects, arginine increases, as well as trends in FeNO and FEV1, were essentially maintained in that final dose level. So, again, the overall trends continue to stay consistent.

And definitely, we -- there is the option to present that data at a later time point. We're continuing discussions with our advisors in the Cystic Fibrosis Foundation, as well as the third-party development network in terms of how these data could best inform the design of a potential, you know, phase 2 dose-finding type study. And those discussions are ongoing right now.

Roger Song -- Jefferies -- Analyst

Got it. Thank you. Thank you for taking the question.

Emil Kuriakose -- Chief Medical Officer

Thanks, Roger.

Operator

Thanks. Thank you. [Operator instructions] Our next question comes from Arthur He of H.C. Wainwright.

Please go ahead.

Arthur He -- H.C. Wainwright and Company -- Analyst

Hey, good afternoon, everyone. This is Arthur in for RK. So, I just want to follow up on those two phase 2 studies you guys are going to initiate. Could you repeat the optimization of dosing regimen for mivavotinib? And I wonder, is a similar dose optimization strategy going to apply to the sapanisertib, you know, for this study?

Emil Kuriakose -- Chief Medical Officer

Yeah. So, great question. So, yes, both studies do have an element of dose refinement included. For mivavotinib, again, the fact that both these molecules have had extensive dose schedule work done previously through Takeda's studies gave us a really good starting point.

And this is really more of a fine-tuning, especially because we're going in a biomarker-defined population. So, from mivavotinib, the two dose levels, the 100 milligrams Q day is the previously established recommended phase 2 dose from prior dose-escalation expansion trial. We see an opportunity to explore a further dosing strategy, specifically an induction dosing strategy, and that's really taking advantage of the molecules' PK properties, and we bet it has, you know, pretty long half life, it has a very high volume of distribution. And considering that we based on our analysis of this molecule, it has a tendency to accumulate in tissue, and specifically tumor in large concentrations.

That gives you an opportunity to evaluate a strategy where you get a large bolus of drug in quickly in these aggressive tumors to get rapid disease control. And once you get to a response, back off to its still active but more tolerable long-term dosing strategy to maintain that response. And this is not unusual in the context of lymphoma. Specifically, other approved drugs use a very similar approach.

So, we wanted to explore that, you know, taking advantage of the fact that the molecules' properties already make it amenable to evaluating that. For sapanisertib, it's a similar sort of fine-tuning that we're doing. The three milligram Q day dose is the dose that was previously studied and actually showed the efficacy signal in NRF2 mutant screened patients, again, based on the molecules' PK properties, namely a shorter half-life with, you know, a toxic profile where we know that more of the GI toxicities are more [Inaudible] related and that you might be able to get to a higher cumulative exposure by using a lower b.i.d dose schedule, namely two b.i.d could get you improved efficacy with the -- maintaining the very good tolerability profile that we already see at three milligrams Q daily dose. So, those are the rationales for why we're doing what we're doing with regard to dose refinement.

But again, we think that it's -- because it's a fine-tuning and not repeating, for example, a full dose escalation, it can happen very quickly and in parallel with getting the efficacy data.

Arthur He -- H.C. Wainwright and Company -- Analyst

Thank you. I think it's really helpful. And so, I -- for your new VPS4A inhibitor program, could you give us more color on regarding the prevalence of the VPS4B deletion in different cancer type? And also, how soon can we expect this program advancing to the clinic? Thank you.

Emil Kuriakose -- Chief Medical Officer

I could give you the prevalence. So, in the homozygous deletion of VPS4B occurs in 1% to 3% of all found tumors. Our heterozygous deletion is much more prevalent and a higher incidence, approximately two-thirds of specifically colorectal cancer and pancreatic cancer, the heterozygous deletions. And there's evidence to show that the dependence -- the increased dependence on VPS4A is still high in the heterozygous deletions of VPS4B, giving you a substantial opportunity to evaluate a very large, you know, set of tumors in a large subset of colorectal and pancreatic.

I'm going to let Susan answer your second part of your question.

Susan Molineaux -- Founder, President and Chief Executive Officer

Well, we're presenting our early data at AACR next week, and we do have a VPS4 inhibitor, and we're moving those molecules forward. So, we're in lead optimization, and we hope to continue to advance this program and can give you future guidance on when we might be in the clinic.

Arthur He -- H.C. Wainwright and Company -- Analyst

Awesome. Thank you for taking my question.

Susan Molineaux -- Founder, President and Chief Executive Officer

Sure.

Operator

Thank you. At this time, I'd like to turn the call over to Susan Molineaux for closing remarks. Ma'am.

Susan Molineaux -- Founder, President and Chief Executive Officer

Thank you. And thanks to all for joining us today, and have a good evening.

Operator

[Operator signoff]

Duration: 26 minutes

Call participants:

Stephanie Wong -- Chief Financial Officer

Susan Molineaux -- Founder, President and Chief Executive Officer

Emil Kuriakose -- Chief Medical Officer

Jonathan Chang -- SVB Leerink Partners -- Analyst

Roger Song -- Jefferies -- Analyst

Arthur He -- H.C. Wainwright and Company -- Analyst

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