GlycoMimetics (GLYC) Q1 2022 Earnings Call Transcript

GlycoMimetics (GLYC 1.94%)
Q1 2022 Earnings Call
Apr 28, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and thank you for joining the GlycoMimetics call. [Operator instructions]. I'd now like to turn the call over to Shari Annes of investor relations group of GlycoMimetics. Please go ahead.

Shari Annes -- Investor Relations

Good morning. Today, we will review our accomplishments and financial results for the quarter ended March 31, 2022. The press release we issued this morning is available on the company's website at www.glycomimetics.com under the investors tab. This call is being recorded.

A dial-in phone replay will be available for 24 hours after the close of the call. The webcast replay will also be available for 30 days in the investor relations section of the company's website. Joining me on the call today from GlycoMimetics are Harout Semerjian, chief executive officer; Brian Hahn, chief financial officer; and Armand Girard, chief business officer. We'll start today's call with comments from Harout.

Brian will follow to provide an overview of the company's financial position. We'll then open the call for Q&A. I'd like to remind you that today's call will include forward-looking statements based on current expectations. Forward-looking statements on this call may include, but are not limited to, statements about the company's product candidates, uproleselan, GMI-1687, and other pipeline programs; along with statements about expectations regarding our operations, cash position, and data from preclinical studies or clinical trials, as well as planned or potential future development, regulatory interactions or submissions, and potential commercialization activities or strategic collaborations.

Such statements represent management's judgment and intention as of today and involve assumptions, risks and uncertainties. GlycoMimetics undertakes no obligation to update or revise any forward-looking statement. For information concerning the risk factors that could affect the company, please refer to GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics website. I'll now turn the call over to Harout.

Harout Semerjian -- Chief Executive Officer

Thank you, Shari, and good morning, everyone. In our year-end call eight weeks ago, we shared our outlook and strategy for the year ahead. We have provided updates on both our regulatory and commercial readiness activities, all designed to advance GlycoMimetics and our lead program, uproleselan, with a focus toward commercialization. Our highest priority today is collecting and confirming the data from the 70 sites in the U.S., Europe, Canada, and Australia that enrolled a total of 388 patients in our phase 3 registrational trial in relapsed refractory AML.

This is an ongoing effort that will position us to move quickly to data analysis, top line readout, and subsequent regulatory submissions once the overall survival event trigger is achieved. Today, we are updating the projected timing of the event trigger for our top line data readout. As our phase 3 data matures, we continue to track events in real time. Based on current projections, we now anticipate reaching our overall survival event trigger in mid-2023, with top line data disclosure shortly thereafter.

Our plan is to provide updates with even more precision on the timing of this milestone. We're confident that uproleselan will prove to be an ideal combination with standard chemotherapy. It is highly differentiated and has a mechanism of action that is complementary to the salvage therapies used today. Importantly, by targeting extrinsic factors of drug resistance in the bone marrow microenvironment, uproleselan is molecularly, cytogenetically, and treatment regimen agnostic.

The clinical and research communities are taking note. Several of the key opinion leaders shared perspectives on uproleselan and its potential role in treating AML patients in recent medical education programs. In parallel, we have launched a comprehensive effort to prepare for uproleselan's anticipated market entry. This effort is currently focused on scientific communications that will be central to educating the AML community on the role of targeting extrinsic factors of chemoresistance.

Some of these materials can be now viewed on our website. As you know, uproleselan is also being evaluated in the frontline AML setting by the National Cancer Institute. You will recall that the phase 2 portion of this phase 2, 3 trial enrolled its last patient last November as well. As per protocol, the NCI has suspended enrollment in anticipation of its planned interim analysis.

When the outcome of the NCI's event-free survival analysis of the phase 2 data is communicated to us, we will issue a press release. Under the terms of our partnership with the NCI, we will be able to access the NCI's data in the newly diagnosed setting for regulatory purposes. In addition to advancing two registrational-stage programs, we have several investigator-sponsored trials currently evaluating uproleselan's potential in additional indications. We continue to collaborate with the principal investigators of these trials.

We share a goal of publishing their findings at major medical meetings as the data matures. I would now like to comment on the progress we have made with GMI-1687 in sickle cell disease. I'm pleased to report that the IND-enabling program for GMI-1687 has been completed. GMI-1687 demonstrated no safety concerns from GLP 28-day toxicity studies in two different theses.

The standard battery of IND-enabling studies of GMI-1687 also showed no safety concerns. We have received pre-IND guidance from the FDA that will be incorporated into our submission. And we have manufactured GMP drug product that is now on stability to support its use in first-in-human clinical study. We remain on track to file the IND in the first half of this year to evaluate the compound in sickle cell disease patients with acute VOC as the lead indication.

Filing the IND represents an important milestone for positioning GMI-1687 for partnerships. I remind everyone that there remains no FDA-approved therapy for the treatment of acute vaso-occlusive crisis in sickle cell patients as of today. With uproleselan now in late-stage development; our third asset, GMI-1687, about to enter the clinic; and the declared orally bioavailable lead candidate in the galectin-3 program, we have created a pipeline of assets to accelerate our transformation to a commercially focused organization. Consistent with this journey, last week, we reduced our headcount by approximately 20%.

The reductions were largely in the early stage research and chemistry departments, while we maintained our key expertise and institutional knowledge to support our development efforts. We greatly appreciate the efforts of our colleagues who helped produce a rich pipeline of future opportunities. By streamlining basic research, we now have greater flexibility to invest in activities that will advance uproleselan's commercialization efforts. Brian, I'll now turn it over to you to provide an overview on our financial results.

Brian Hahn -- Chief Financial Officer

Thank you, Harout. As of March 31, 2022, GlycoMimetics had cash and cash equivalents of $76.5 million, as compared to $90.3 million as of December 31, 2021. The company's research and development expenses decreased to $9.6 million for the quarter ended March 31, 2022, as compared to $11.1 million for the same period in 2021. The decreased expenses were primarily due to lower clinical trial and development costs related to our ongoing global phase 3 clinical trial of uproleselan in individuals with relapsed, refractory AML as patient enrollment ended in November 2021.

The decrease was partially offset by higher manufacturing expenses for uproleselan validation batches. The company's general and administrative expenses increased to $5.1 million for the quarter ended March 31, 2022, as compared to $4.2 million for the first quarter of 2021, primarily due to commercialization start-up expenses for uproleselan and higher patent fees. I'd now like to turn the call back to Harout.

Harout Semerjian -- Chief Executive Officer

Thank you, Brian. So to conclude, we believe uproleselan has the potential to transform outcomes in AML patients by achieving deeper, more durable remissions; higher rates of MRD negativity, and by bridging more patients to a successful stem cell transplant. This is a novel approach to AML chemoresistance not addressed by existing therapies. However, I'd like to stress that the opportunity here at GlycoMimetics extends well beyond AML.

The E-selectin ligands and other glycans are now known to play important roles in cancer, inflammatory disease, and fibrosis. Over the years, we have generated a pipeline of active drugs positioned to serve as the foundation of future therapeutic breakthroughs. The time is now to demonstrate its full clinical potential. I'd now like to open the line for Q&A.

Operator?

Questions & Answers:

Operator

[Operator instructions]. Your first question comes from the line of Ed White with H.C. Wainwright. Your line is open.

Ed White -- H.C. Wainwright -- Analyst

Good morning. Thanks for taking my questions. So just a couple of questions on upro to start. Could you give us an update perhaps on your thoughts on the timing to submission following the top line data, such as what CMC work you're doing right now, etc.? And also with the hiring of a chief commercial officer, I just wanted to get your thoughts on the market.

And maybe you can give us some idea of your initial sales strategy.

Harout Semerjian -- Chief Executive Officer

Thanks, Ed, for your questions. So the way we're thinking of this, Ed, is we have a great opportunity now to prepare ourselves as data matures, so that once that event trigger happens, within a few weeks, we're able to communicate the top line data. And as part of our breakthrough therapy designation, we have ongoing discussions with the agency anyway, so that we want to make sure that we bring that forward fast. If -- just to remind everyone, once data matures and that is positive, that means, for a segment of patients that have not had any true innovation for more than 30 years, and that segment is the relapsed, refractory patient population fit for chemotherapy, that I'm sure everybody will be very motivated for us to move forward.

So that, we're planning from now, by using our time proactively, to make sure we're cutting time on the back end. 2Now the second part of your question regarding -- from a commercialization strategy, although it's too early to kind of talk about the overall strategy from a commercialization perspective. But think of this. There are 20,000 patients in the U.S.

who are diagnosed with AML every year and 12,000 of them die every year. And in the 60% of the patient population that is deemed fit for chemotherapy, there really hasn't been much advances in the relapsed, refractory population, which is about 8,000 patients of that. So from that perspective, you can imagine there's going to be a lot of ramp -- pent-up demand given that it's not a competitive market. A lot of people have tried to bring in therapies in this area.

And unfortunately for patients, that has not really been working out. And the last of them was the Rafael Pharma asset. So we're very excited to have a shot of bringing in a new therapy for these patients. It's 8,000 to start with in the relapse, refractory, more if you take the front line as well.

So we're making sure that people are educated from now on the mechanism of action because the mechanism of action is quite novel. This extrinsic chemoresistance is quite novel and complementary. So we'll use that time from that perspective. So it's first education and then really ramp up to really focus on that high unmet medical need.

I hope I answered your question.

Ed White -- H.C. Wainwright -- Analyst

Yes. Thanks, Harout. And maybe a question for Brian. You had mentioned the reduced headcount of 20% last week. How should we be thinking about operating expenses going forward for 2022? Is the impact mostly in R&D? And also if you can give us your thoughts on your cash runway.

Thank you.

Brian Hahn -- Chief Financial Officer

Thanks, Ed. I think previously, we guided to about a $60 million spend for 2022. The reduction is several million from the headcount reduction. But we'll continue to be laser-focused on where we spend our resources.

So I would say that 2022, maybe a slight reduction in some of those spend. And constantly reviewing to make sure where we actually are spending our money. With that, current cash on hand gets us into the third quarter of 2023.

Ed White -- H.C. Wainwright -- Analyst

Great. Thanks, Brian.

Operator

Your next question comes from the line of Boris Peaker with Cowen. Your line is open.

Boris Peaker -- Cowen and Company -- Analyst

Great. My first question is on the NCI study. Could you comment on the time line when you think we'll get the data from the phase 2 part of the study? And the second component. Do you know what's required, kind of what the threshold is, in order to commence the phase 2 part?

Harout Semerjian -- Chief Executive Officer

Sure, Boris. Maybe I'll -- before I pass it to Armand. We're very excited about that partnership. We've been having ongoing dialogue with the NCI and Armand is leading that effort.

So do you want to comment on this, Armand?

Armand Girard -- Chief Business Officer

Yes. Boris. So the phase 2 component is event-based. It's event-free survival.

We don't get details with regards to the specifics of when that analysis is going to be conducted. So the way the trial runs is they've completed enrollment November of last year. The enrollment is suspended for the time period at which they're waiting for the data to mature and when they conduct the actual analysis. When the analysis is done, they will communicate the outcome to us.

And then we also have -- they will also transfer the data to us confidentially to support our regulatory submissions. With regards to the decision points, there's basically two of them. What they're trying to show is that if the combination arm of upro plus seven and three achieves a hazard ratio of better than 0.831, then the study will proceed as promising into phase 3. And if the hazard ratio is better than 0.64, that's what they would classify as overwhelming efficacy.

Then that would be a signal that we would act on.

Boris Peaker -- Cowen and Company -- Analyst

But it sounds like you don't have an estimate of timing of when we should see that data at this point.

Harout Semerjian -- Chief Executive Officer

Yes. The NCI has not communicated that, Boris. We've heard different versions, but it would be more rumors than anything else. As Armand said, once they're ready, they will communicate to us.

I mean, it would be typical to think that an EFS primary endpoint trial should theoretically read faster than OS. But again, that would be more of guesstimating rather than having official communication from them.

Boris Peaker -- Cowen and Company -- Analyst

Got it. Thank you very much for taking my question.

Operator

Your next question comes from the line of Roger Song from Jefferies. Your line is open.

Roger Song -- Jefferies -- Analyst

Great. So first one, also about the upro phase 3. So can you just comment on what drives this midyear projection for the event triggering? Like enrollment or the event so far? Also, can you comment on the current drop-out rate or event rates? Is that kind of in line with your previous expectation?

Harout Semerjian -- Chief Executive Officer

Yes. Thanks, Roger. So the things that we have disclosed, I mean, as you know, the start -- the trial started in November '18 and ended in November '21. So over a three-year period, we have enrolled 388 patients.

And the study is an overall survival, event-driven. So what drives it is events. The more we have events toward the prespecified number, the faster the data event trigger would happen. The way I think about it is, once we're seeing midyear 2023, you look at last patient enrolled is November 2021, and event trigger is estimated at the middle of 2023.

That's like, what, 18 months, 19 months period. What drives it is events. If we have faster events, we have a faster trigger. If we have slower events, we have a slower trigger time line.

And as I've mentioned a couple of times before, I'd rather be in a situation where there is slower events. Obviously, it puts more pressure on getting data out there, but that means that patients are living longer. Now obviously, with the right caveats of we don't know which arm they're on, we don't have access to anything other than the pool data. But that's kind of what's driving it is, when you have those events, you put them into a statistical model.

And we've run this several times now, it's indicating at this point toward a midyear 2023.

Roger Song -- Jefferies -- Analyst

Got it. That's helpful. OK. So -- and regarding the early pipeline with the recent kind of reduction, what would be the development plan for the other couple of early stage pipeline, like the 1359 and galectin-3 inhibitors?

Harout Semerjian -- Chief Executive Officer

Yes. So just to reiterate what we said. The reduction in headcount has been predominantly in the early research, discovery part of the organization. And in fact, we're looking at the later stage or the development part, medical affairs part to be enhanced over time.

It doesn't have any impact on those, Roger. Because typically, a lot of the biotechs will have one lead asset, and that's it. We have one lead asset. We have 1359 that was in clinic.

Now 1687, we're filing an IND so that can be ready for clinic. And then we have galectin-3, where we declared eight  weeks ago the orally bioavailable lead asset of 2093. So we already have four assets to really advance. And the whole point, what we wanted to do, is to really keep the institutional knowledge of glycobiology because we believe that is really the differentiating factor for us versus other players out there.

We've honed this over the last 18 years. But to do additional work in chemistry and early development at this point, that's kind of what we paused, and we're really pivoting toward a commercialization focus, meaning more development, medical affairs, education activities. And we can always go back and ramp up that department as we advance uproleselan because of the fact that we're keeping that institutional knowledge in-house, Roger. So we've been very deliberate about how we go about doing it.

As you know, biotechs have to make choices, especially these days. But we're in a position where we already have four assets we're looking at. And we believe we have the team that can advance them over the next 12, 18 months until data maturity with uproleselan.

Roger Song -- Jefferies -- Analyst

Got it. Yes. That's helpful. Yes, glad to see you still keep the bulk of the pipeline.

OK. So maybe just a last quick one. In terms of the burn rate and the cash runway guidance, I remember last time, you said that covered this upro pivotal study, CMC, and IND-enabling studies for 1687. Just want to confirm, for the 1687 phase 1 that's mostly just waiting -- seeking for partnership.

Not kind of included in your current cash runway guidance, right?

Harout Semerjian -- Chief Executive Officer

Correct. Yes. So what we're doing with 1687, Roger, is really advancing the IND. We believe that filing an IND and getting notice for safe to proceed in humans is going to be a very important milestone.

That can -- then, we will be more open to partnership discussions. And of course, when we're talking partnerships, it's just not about the funding of the clinical trial, but also like-minded people who can bring in expertise and who believe, like us, that the vaso-occlusive crisis of sickle cell patients remains a very high unmet medical need that we want to tackle. So yes, that is not in the cash runway at this point beyond the IND filing for 1687.

Roger Song -- Jefferies -- Analyst

Got it. Thank you. That's it for us. Thank you.

Operator

Your next question comes from the line of Zegbeh Jallah with ROTH Capital Partners. Your line is open.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

The first one I think is probably just a follow-up to the last one that we just had for 1687. Was just kind of curious there about how you're thinking about the partnership. I know you just had a reduction in your team. And so I was wondering, do you anticipate looking for something with cash upfront or more on the back end? And if it was coming up on the upfront, you would think that you could use that toward perhaps maintaining your team, or additional capital toward accelerating commercial plans for upro?

Harout Semerjian -- Chief Executive Officer

Yes. Thanks, Zegbeh. Nice to catch up again. So I mean, partnerships, we're flexible from a partnership perspective, open to different ideas.

As long as -- where we're not flexible is on the thinking that we want to really address the vaso-occlusive crisis of sickle cell patients. So that's kind of where we really feel passionately about it. And we want to have a like-minded partner who can advance. Obviously, funding will be important, but also this direction is also as important.

Is the cashing upfront? Is it afterwards? We're open to it. Obviously, the more cash would be upfront, and we're going to have to give value on the back end and so on and so forth. So we will evaluate these carefully as they mature. But the idea is that we believe it has to be a credible partner in terms of vision as a first starting point.

And Armand, do you want to comment? I mean, you meet many of --

Armand Girard -- Chief Business Officer

So Z, I would say right off the bat, the stage of the asset matters. If it was a preclinical asset; typically those deals are more back ended. But having an IND is a significant derisking and also value-creating event for GlycoMimetics. And this compound is 1,000-fold more potent than uproleselan.

And while we always expected a clean tox profile, showing it, demonstrating it, is an important fact; along with the making of the drug product and having it on stability and ready to go in the clinic. So we think we're in a very strong position. There has always been interest in this program. But having the IND and that safe to proceed, go, from the FDA is going to be valuable to us, but also very valuable to a prospective partner.

And we think that should translate into deal terms.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

And have you seen the data, even from rivipansel? Even though it's a different program, I think it provides sufficient proof of concept. And now you're just using a different delivery method. But that's really interesting. And I think another question that I wanted to ask is just about upro.

As we try to estimate when we could see the data, I thought maybe it would be helpful for you to remind folks on what you think the standard of care agents should provide in terms of EFS in the newly diagnosed setting or in terms of OS in the relapsed, refractory setting.

Harout Semerjian -- Chief Executive Officer

Do you want to address the newly diagnosed setting?

Armand Girard -- Chief Business Officer

Yes. So the question, Z, was just what is the expectation with regards to what we're trying to be? Is that what you're trying to get at?

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Yes. So what is the standard care agents actually going to get you? And then, I guess, we'll be looking for anything beyond that.

Armand Girard -- Chief Business Officer

Yes. So with regards to the frontline setting on EFS, you'd expect something around seven months, best case. And so what we're trying to show is something in excess of 11-plus.

Harout Semerjian -- Chief Executive Officer

And then on the relapsed, refractory, Z, as you know, that has been quite stable for many, many years around that six months overall survival point, with transplant rates hovering around the 15%, 20%. Lately with some advances in transplantation techniques, that has inched a bit higher to more like 25%-ish. So that's kind of an area of focus for us, is getting patients to a deeper remission with the MRD negativity as the indicator. We've seen a 69% in our phase 2 data.

And as we know, MRD negativity, recently, there's been several publications that say that's a best indicator for how patients would do post-transplantation.   So we're trying to beat obviously that six months overall survival, but really how, by getting deeper remissions by MRD negativity, by bridging more patients to transplantation. That's why our phase 3 has not been censored for transplant, and we're pleased with those directions. And all that hopefully would translate into a longer overall survival. So we're eagerly waiting for that data to come in so that we can see what's happening.

But that's the plan, that's what we're trying to beat.

Armand Girard -- Chief Business Officer

And I would add, Z, that the NCI trial is not censored for transplant either. So transplant is a good outcome for us. So with the EFS, that's either failure to get a response, relapse or death. But if they get transplanted, which we hope they do, that's not going to be censored at the time that, that occurs.

That's a good outcome.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Really help in that additional color around the non-censoring. Was really good as people try to estimate when we could actually see the data. And then the last one here is just a combo question. I think the first part is just an update on your galectin-3 program.

I know you've mentioned plans to kind of partner that, so I was just wondering where you are with that effort. Again, I think folks will just be interested in kind of understanding potential for additional cash coming in from any of these partnerships. And then the last one is just on GMI-1359. Again, what are the plans there? Are you planning to move this forward? Are you going to put any additional capital into this program? Or are you also maybe considering partnering as well?

Harout Semerjian -- Chief Executive Officer

So let me address your last question first, and then I'll ask Armand to weigh on your first question. So on the 1359, Z, I mean, obviously, we've -- eight weeks ago, when we announced that we have closed the Duke trial, the phase 1, given that we have seen activity on both the CXCR4 and the E-selectin component. So we're very pleased with that, that's why we closed that trial. And then now we're more into strategic options for 1359, to be honest.

Because where we are is we got to make some choices, that we have gotten it to a point where it's ready for a next phase, but we got to kind of think of our cash runway, and we're really doubling down on uproleselan and 1687, accelerating it toward an IND. And of course, on the galectin-3 as well, before I hand it to Armand for comment. We've also, eight weeks ago, announced the -- now we declared an orally bioavailable dose. So maybe, Armand, can you give us some color, if any, over there?

Armand Girard -- Chief Business Officer

Yes. No. Listen, I think that what we wanted to get to is having an oral compound. Galectin-3 plays a significant role in diseases like NASH, like cardiac fibrosis, idiopathic pulmonary fibrosis, as well as some cancer settings.

And the data is very strong in those arenas. But having an oral compound was a significant breakthrough for us. We are in full partnering discussion mode on GMI-2093. And the goal is to get to a point of having a research collaboration and option agreement with a partner.

And those activities are ongoing as we speak, Z.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thank you. Very impressed with the progress. Congrats. 

Operator

[Operator instructions]. As there are no more questions in the queue, I would like to turn the microphone back to Mr. Semerjian.

Harout Semerjian -- Chief Executive Officer

Thank you. And I would like to thank all of you for your time and attention. In May and June, we're planning to be in two different investment conferences in person, at H.C. Wainwright's Global Investment Conference in Miami, at the Jefferies Healthcare Conference in New York City.

So we look forward to our one-on-ones that can be scheduled and to updating you on our progress and outlook. Once again, thank you so much for joining our call, and have a great day.

Operator

[Operator signoff]

Duration: 37 minutes

Call participants:

Shari Annes -- Investor Relations

Harout Semerjian -- Chief Executive Officer

Brian Hahn -- Chief Financial Officer

Ed White -- H.C. Wainwright -- Analyst

Boris Peaker -- Cowen and Company -- Analyst

Armand Girard -- Chief Business Officer

Roger Song -- Jefferies -- Analyst

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

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