Oncternal Therapeutics Q4 2023 Earnings Call Transcript

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March 7, 2024

There are 6 speakers on the call.

Operator

Greetings, and welcome to Turnell's 4th Quarter 2023 Financial Results Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Vincent, Chief Financial Officer.

Operator

Thank you, Richard. You may begin.

Speaker 1

Thank you, Alicia. Good afternoon, everyone, and thank you for joining us today. Joining me on the call this afternoon are our President and CEO, Doctor. James Reitmeier and our CMO, Doctor. Celine Yazgi.

Speaker 1

Today's call includes a business update and discussion of our results for the Q4 and full year 20 23. Our 10 ks for the full year 2023 was filed earlier today. Today's press release and a replay of today's call will be available on the Investor Relations section of O'Connor's website for at least the next 30 days. 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 our clinical studies, planned interim data updates, regulatory filings and our cash runway.

Speaker 1

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 ks for the full year ended December 31, 2023, as filed today. This call contains time sensitive information that is accurate only as the date of the slide broadcast, March 7, 2024. We undertake no obligation to revise or update any forward looking statements to reflect events or circumstances occurring after the date of this call. With that, it is my pleasure to hand the call over to our CEO, Doctor.

Speaker 1

Jim Breitmeier.

Speaker 2

Thank you, Rich, and good afternoon, everyone. At Nocturnal, we are advancing 2 1st in class clinical programs targeting cancers for patients with significant unmet medical needs. We continue to be excited about the potential of ONC 534 and its novel mechanism of action, which may address a significant unmet need for advanced prostate cancer patients who progress after currently approved AR pathway inhibitor therapy and before they move into more aggressive treatment options such as chemotherapy or radioligand therapy. Earlier this year, we announced that 4 patients with metastatic castrate resistant prostate cancer had been enrolled into our Phase onetwo dose escalation dose expansion study of ONT-five thirty four. We have been able to dose escalate as planned without unexpected dose limiting toxicities and the 3rd dosing cohort of 100 and 60 milligrams of ONC-five thirty four is now fully enrolled.

Speaker 2

We plan to announce an initial clinical data update for this program late next quarter. With respect to ONT-eight zero eight, our ROR-one targeting autologous CAR T, we released initial clinical data in December from Phase onetwo study ONCT 808-1 101 in patients with relapsed or refractory aggressive B cell lymphoma, including patients who have failed previous CD19 CAR T therapy. We saw an encouraging response signal at the initial dose of CAR T cells per kilogram with 2 of the 3 patients achieving complete metabolic response and the 3rd achieving a partial response as of the December 4 cutoff date. Common adverse events in this dosing cohort included decreased blood counts, pneumonia and Grade onetwo cytokine release syndrome or CRS. The first patient treated at the dose level of 3x10 to the 6 CAR T cells per kilogram, an 80 year old with bulky disease who had received 4 previous lines of therapy, including CD19 CAR T, experienced a fatal serious adverse event consistent with CRS and immune effector cell associated neurotoxicity syndrome.

Speaker 2

This patient's autopsy showed no histological evidence of his lymphoma, despite the fact that there were 2 large tumor masses present prior to treatment with ONC-eight zero eight. As a result of this unfortunate event and in alignment with the FDA, we decided to implement additional protocol changes that include modified eligibility criteria, additional screening for adult infection and testing lower doses of ONC-eight zero eight. We believe these changes will help us further ensure patient safety as we investigate the optimal dose of ONC-eight zero eight for patients with advanced B cell lymphoma, including patients who have relapsed after CD19 CAR T treatment. We expect to report updated clinical results, including from this new dosing schedule for ONT-eight zero eight in mid-twenty 24. Overall, our 2 clinical programs, ONK-five thirty four and ONK-eight zero eight are advancing and we are looking forward to potential significant value inflection points for the company from both programs in the near term.

Speaker 2

With this, I now turn the call over to our CFO, Rich Vinson.

Speaker 1

Rich? Thank you, Jim. Our revenue is currently derived from research and development grants received from the NIH. Our grant revenue was $300,000 for the Q4 ended December 31, 2023 $800,000 for the full year 2023. Our total operating expenses for the 4th quarter were $9,900,000 which included $2,200,000 in non cash stock based compensation expense.

Speaker 1

Total operating expenses for the full year were $42,500,000 which included $7,500,000 in non cash stock based compensation expense. In the 4th quarter, research and development expenses totaled $6,700,000 and general and administrative expenses totaled $3,200,000 For the full year, research and development expenses totaled $29,800,000 and general and administrative expenses totaled $12,700,000 Net loss for the Q4 was $9,200,000 for a loss of $3.11 per share basic and diluted. For the full year, our net loss was $39,500,000 for a loss of $13.43 per share basic and diluted. As of December 31, 2023, we had 2,900,000 shares of common stock outstanding with 34,300,000 and short term investments and no debt. We believe these funds will be sufficient to fund our operations into the Q1 of 2025.

Speaker 1

With respect to upcoming milestones, we remain on track. BRONC-five thirty four, our lead DARI product candidate, we expect to present initial clinical data late in Q2 of 2024 with additional data readouts in the Q4 of 2024.

Operator

For

Speaker 1

ONCK-eight zero eight, our RAR-one autologous CAR T, we expect to report a clinical data update mid-twenty 24 with additional data readouts in the Q4 of 2024. Now, I will turn the call back over to Jim.

Speaker 2

Thanks, Rich. So with that, I think we are ready to take questions. Alicia, if you could see if open up the floor for questions.

Operator

Of course. We will now be conducting a question and answer session. Thank you. Our first question comes from the line of Carl Byrnes with Northland Capital Markets. Please proceed with your question.

Speaker 3

Thanks for the question and congratulations on your progress. I was just wondering if when you have the update in the late Q2 on program 534, is that going to be data through the 160 milligram dose? And then when would you expect to begin dosing the 300 milligram cohort? And then I have a follow-up as well. Thanks.

Speaker 2

Sure, Carl. Thank you for the question. So, of course, progress of clinical trials is difficult to predict with accuracy. But we are hopeful that we'll be able to we'll be speaking about both the 160 milligram dose and the 300 milligram dose by the end of the second quarter.

Speaker 3

Great. That's very helpful. And then moving over to 808, in terms of the specifics of eligibility criteria, I know you mentioned screening for infection and then also the new dosing schedule. Have you provided an update on what that new dosing schedule is? Obviously, it's going to be probably somewhere significantly below 1 to the power of 10 to 6.

Speaker 3

Is that like are we starting at like 0.25 and then escalating from there? Thanks.

Speaker 2

Thank you, Carl. And that's exactly right. The Selim, do you want to discuss the new dosing schedule?

Speaker 4

Sure. So, Karl, the dosing schedule will start with 0.3x106 and then the next dose level will be 0.6 times 10 to the 6. And then, will be 1. And then based on the results, the SRC can decide if they want to do anything between 13. And because we have an SRC that's actually making those dosing decisions.

Speaker 4

And the SRC is the PIs who are enrolling in the study as well as an independent academic physician who's treating patients with CAR T and company physicians.

Operator

Thank you. Our next question comes from the line of Hartaj Singh with Oppenheimer. Please proceed with your question.

Speaker 5

Great. Thank you. Thank you for the questions. I've got a couple. One is maybe to just dig in a little bit to the questions earlier about ONC-five thirty four.

Speaker 5

In some calls we've done with key opinion leaders, they have indicated that there's a high unmet need for such a mechanism of action in the area of metastatic castrate resistant prostate cancer. Rich, Jim, if you can just kind of give us an idea of what that market size looks like And what would be the TAM potentially even in terms of pricing because there is some genericization in the market? Just any thoughts there? And I got a couple of quick follow ups.

Speaker 2

Sure, Harktaj. Thank you for the question. So there's 2 we've been penciling in 2 different market sizing options. The first would be if we if it is a drug that is used in patients who have failed who have metastatic disease and have failed an available 1 or more available androgen receptor pathway inhibitors. And we do believe that there is a potential for a sales potential of $1,000,000,000 or near $1,000,000,000 But as you know, unlike some other drugs that are in development and are focused on mutations of the androgen receptor, ONC-five thirty four is also very active against cancers expressing the native androgen receptor.

Speaker 2

So that means that it has the potential to move into earlier lines of therapy such as hormone sensitive prostate cancer. And so as you can imagine with that kind of indication, there's a multibillion dollar potential.

Speaker 5

Yes, Jim. That's very, very helpful. And then the other question is just going back to 808. I know that the last time we had talked on our healthcare conference, actually just a few weeks ago, the Oppenheimer Healthcare Conference, you had indicated that you're getting the amendments through IRBs. When could we start seeing patients being recruited into the 808 trial?

Speaker 5

I know you've already set the timelines for the next data updates, but just any thoughts there?

Speaker 2

Absolutely. So, we are very encouraged that our treating physicians, our principal investigators are very eager to get patients into the study. And in fact, several patients have been identified with that the investigators want to get on the study. And so they are doing everything that they can at their sites to expedite the approval of the amended study so that their patients can be treated. So we're optimistic that it's not going to take too long.

Speaker 5

Great, great. Thank you, Jim. And then last question is, just looking at your OpEx burn, Rich, you came in pretty decent bit, 10% below what we were expecting. I know the Q4 generally tends to be a little on the heavy side. And you've already given your guidance for your cash runway into next year.

Speaker 5

But just what are the reasons that your R and D was it seems to be almost $1,000,000 less than what we were expecting and then is that the way to think about it sort of going forward also?

Speaker 1

We believe that the primary reason that the Q4 came in under is because we were wrapping up the Zillow 301 program and we actually did that very efficiently earlier than planned and we brought a lot of the work in house kind of in the Q3 timeframe and we were able to keep those costs down very significantly compared to what the original forecast looked like. So I think the majority of the Zillow three zero one costs are clearly behind us and that really holds true for a good chunk of the Zillow program costs even for the Phase onetwo study. We're really winding that down and treating the last patients there earlier this year.

Speaker 5

Got it. So I mean, would the $9,000,000 to $10,000,000 cash burn per quarter be realistic basically through the next few quarters?

Speaker 1

Well, keep in mind that the $9,000,000 to $10,000,000 included roughly $2,000,000 plus of non cash stock based compensation expense. So it's closer to the $7,500,000 to $9,000,000 range as enrollment ticks up.

Speaker 4

Yes. Great.

Speaker 5

Thank you, Jim. Thank you, Rich.

Speaker 4

Thanks for

Speaker 5

all the questions.

Speaker 2

Thank you, Hartaj.

Operator

Thank you. Our next question comes from the line of Ken Dolliver with Brookline Capital Markets. Please proceed with your question.

Speaker 3

Great. Thank you. Couple of questions regarding 808. So just to be clear on how the program will proceed. So you've dosed 3 patients at the 1x106 dose.

Speaker 3

You're going to go down to the 1st dose cohort and then move up to the second. And it sounds like you will dose at the initial dose a second time such that if you do 3 patients each, you will you potentially at a minimum would have 12 patients before deciding whether you should go up to a higher dose?

Speaker 2

Salane? Yes. So I mean, actually, this is

Speaker 4

why I said earlier, we will evaluate the 0.3x10 to the 6 and 0.6, which is the 2 new cohorts that we added first before we decide if we want to go again into 1 or we want to do an intermediate dose above 1 and between 13. And that will be decided by the SRC, as I said earlier. Because as you know, the 1 was well tolerated and we moved into the next cohort. So I think based on what we're going to see from the 0.3 and 0.6, it will be decided if we're going to add more patients into 1 or do an intermediate dose between 13.

Speaker 3

Okay. And what's the reason for potentially dosing at 1 again? Is it because are the protocol changes significant enough that the data wouldn't be comparable?

Speaker 4

No. And that's why I said the SRC will meet and will decide. And the only reason probably will be there if we start seeing some toxicity at 0.6 and then we will may want to add more patients into 1. I mean, I think there's multiple reason to do that. But I mean, I cannot predict what we're going to see, but it's all going to be depending on what the data would tell us from the 2 new cohorts.

Speaker 3

Okay. That's fine. And with regard to the approvals that are remaining, are you awaiting IRB approvals or FDA?

Speaker 4

No, we have actually got agreement with the FDA about the protocol changes and actually everything was submitted to the IRB, and we're just waiting some of the logistical things at the site to be done as a last things to be before we initiate the enrollment again. Okay.

Speaker 3

Got it. And Richard, it sounds like there will be a small amount of expenses for zolivertumab in 2024, but we're probably talking about a 6 digit number or less. Is that a fair assumption?

Speaker 1

Rich? That's close.

Speaker 3

Okay, great. Thank you.

Speaker 2

Thank you, Cam. Thank you.

Operator

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

Speaker 2

Thank you, Alicia. We continue to advance our 2 clinical programs towards significant clinical data inflection points by mid year, while reiterating our cash runway guidance into 2025. We are excited to be advancing the clinical development of novel pathways in areas with very high unmet medical need, specifically patients with metastatic castrate resistant prostate cancer, harboring androgen receptor mutations and splice variants and patients with aggressive B cell lymphoma who are relapsed refractory or unable to obtain CD19 CAR T therapy. With that, thank you for joining us today and we look forward to updating you throughout the year. Alicia?

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
Oncternal Therapeutics Q4 2023
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