Calithera Biosciences Inc

F:2CB

Earnings Call Transcript 2022-Q3

[Operator]

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Calithera Biosciences Third Quarter 2022 Earnings Conference Call. [Operator Instructions].

At this time, I would like to turn the conference over to Ms. Stephanie Wong. Ma'am, please begin.

[Stephanie Wong, CFO & Secretary]

Thank you, operator. Good afternoon, everyone, and welcome to our third quarter 2022 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 third quarter 2022 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 and 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, CEO, President & Director]

Thanks, Stephanie. Good afternoon, everyone, and thank you for joining us for today's conference call. Last quarter, we announced the initiations and enrollment of the first patient in our Phase II clinical trial of mivavotinib in relapsed/refractory non-GCB diffuse large B-cell lymphoma, or DLBCL, and sapanisertib in relapsed/refractory NRF2-mutated squamous non-small cell lung cancer.

While patient enrollment is progressing, there have been site activation delays that have affected both trials. These delays have caused enrollment to fall behind our anticipated time lines and as a result, we do not expect initial data to be available until mid-2023 compared with our earlier projection of Q1.

Also, based on our current operating plans, we believe we have sufficient cash to fund our operations into the second quarter of 2023. In order to extend our cash runway, we are evaluating all options for our programs, including strategic collaboration, core licensing agreements and are actively considering the sale of certain programs. We continue to believe strongly in the potential of sapanisertib and mivavotinib in their respective target patient populations and are committed to taking all steps possible to allow for their continued clinical development so that we can bring these therapies to patients.

As we announced last month, sapanisertib was granted FDA's Fast Track designation for the treatment of adult patients with unresectable or metastatic squamous non-small cell lung cancer, about which Emil will go into further detail shortly.

This designation provides us the ability to engage in more frequent dialogue with the FDA, which we believe will be important as we continue the clinical program.

It will also give us the opportunity to submit our marketing application on a rolling basis with the potential for priority review. We look forward to working with the agency as we continue to advance this much-needed treatment for a patient population who have typically not benefited from the standard of care due to the mutational status of their tumors. With that said, I will pass the call over to Emil to provide additional details on our programs.

[Emil Kuriakose, Chief Medical Officer]

Thank you, Susan. Starting with our sapanisertib program in September, we presented a trial-in-progress poster detailing the design of our Phase II clinical trial in relapsed/refractory NRF2 or NFE2L2-mutated squamous non-small cell lung cancer.

As a reminder, the sapanisertib study is an open-label monotherapy study in which patients with -- in patients with non-small cell lung cancer whose disease is progressed on or after platinum doublet chemotherapy and immunotherapy. The study is evaluating 2 doses of sapanisertib, 2 milligrams twice daily and 3 milligrams once daily in patients with squamous non-small cell lung cancer harboring either wild type or mutated NRF2 as detected by next-generation sequencing.

The objectives of the study are to refine dosing and confirms sapanisertib selective activity in NRF2-mutant tumors compared to wild type. The trial's primary endpoints are investigator-assessed overall response rate and safety while secondary endpoints include duration of response, PFS and OS. We believe that the data from this study could position sapanisertib for registration-enabling trial.

We're excited to have received Fast Track designation for sapanisertib. One of the advantages of Fast Track designation is that it allows for earlier and more frequent communication with the FDA. We plan to utilize this benefit as we plan our next steps for this sapanisertib program, including a path to potential registration.

Now turning to mivavotinib. We are conducting a monotherapy study in patients with relapsed/refractory non-GCB DLBCL. We're planning to enroll approximately 50 patients with and without MYD88 or CD79b mutation. Patients are being randomized into 1 of 2 cohorts, continuous dosing at 100 milligrams q. daily and an induction dosing schedule of 120 milligrams q. daily for 14 days, followed by 80 milligrams q. daily beginning on day 15.

The objectives of the study are to confirm previously observed single-agent activity of mivavotinib in these patients, determine activity in DLBCL patients harboring MYD88 and/or CD79b mutations and refined dosing and dose in these patients. MYD88 CD79b mutation step is being determined using ctDNA-based liquid next-generation sequencing after randomization.

The primary endpoints of the study are safety overall response rate as determined by independent radiology review with secondary endpoints, including duration of response, progression-free survival and complete response rate.

Given the major unmet medical need in third line plus DLBCL, we believe that the data from this study, if positive, could be the basis for the initiation of a registrational trial targeting accelerated approval. And with that, I'll pass it over to Stephanie for an update on our financials.

[Stephanie Wong, CFO & Secretary]

Thank you, Emil. An overview our financial results were included in today's press release. I will briefly review our results on this call. Our cash and cash equivalents totaled $34.1 million at September 30, 2022, which we expect will be sufficient to meet our current operating plan into the second quarter of 2023.

As Susan mentioned, we are currently evaluating all options for our programs in order to extend our cash runway. R&D expenses for the third quarter 2022 were $6.5 million compared to $11.6 million in the same period last year. The decrease was primarily related to decreases in telaglenastat, CB-280 in early-stage research programs, partially offset by increases in the sapanisertib and mivavotinib program. G&A expenses for the third quarter of 2022 were $3.0 million compared to $6.3 million in the same period last year. The decrease was primarily due to decreased personnel-related costs and legal expenses. Net loss for the 3 months ended September 30, 2022, was $9.8 million. And with that, I will now return the call back over to Susan.

[Susan Molineaux, Founder, CEO, President & Director]

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

[Operator]

[Operator Instructions]. Our first question or comment comes from the line of Roger Song from Jefferies.

[Jiale Song, Jefferies]

Just a few quick ones from us. So the first one is the -- maybe, Susan, you can elaborate on the enrollment and how confident you are you will have to pay by next year and how to improve the enrollment given the environment? And also the follow-up question related to the timeline as well as given you're considering all options for your pipeline and how much this partnership discussion were depending on the Phase II data you're about to read out.

[Susan Molineaux, Founder, CEO, President & Director]

Thanks, Roger. I can comment, and then I will pass it along to Emil for some more specific comments. So in general, we, again, do not expect our current data to be available until mid-2023, and that will be our initial clinical data on both sapanisertib and mivavotinib. We are experiencing site activation delays. We expect investigators once they're open to be enrolling patients on both of these trials.

We believe in our drugs, and we believe that we are just up against some operational issues at the clinical site. So we feel comfortable that we will have the initial clinical data by mid-2023. We do not -- the -- we do not need to have that Phase II initial data to continue exploring options for increasing our cash runway. There are things we can do today to increase our cash runway and then we would expect Phase II initial data for both programs in mid-2023.

[Jiale Song, Jefferies]

Got it. Yes, I'm not sure if Emil have additional comments, but that's good.

[Emil Kuriakose, Chief Medical Officer]

Sorry, Roger, I was on mute, I didn't realize. Yes. I mean just -- I don't have much additional comments but understanding that, I mean, essentially, the main thing that happened over the last -- there was really activation delays in some of the sites owing to mostly several reasons, but including post-pandemic staffing shortages at several sites. I think that's been recognized as a pretty widespread issue. And so several sites that were projected to activate in Q3 are actually activating this quarter. which is hence the reason for the delay in our enrollment. But as Susan said, once these sites are up and running, we expect them to put patients on.

[Jiale Song, Jefferies]

Got it. Okay. Great. In the -- and also you do have the similar earlier pipeline. Maybe just summarize to us outside of those 2 new clinical pipeline, what else pipeline and particularly for the VPS4 program, which is pretty promising and what's the status for that program as well.

[Susan Molineaux, Founder, CEO, President & Director]

The status of the VPS4 program is, as we stated before, it's moving forward, and we will be able to update on that program. Forget if you were asking about other programs. That's our preclinical pipeline and VPS4.

[Operator]

Our next question or comment comes from the line of Swayampakula Ramakanth from H.C. Wainwright.

[Swayampakula Ramakanth, H.C. Wainwright & Co.]

This is RK from H.C. Wainwright. So I -- from your commentary, you said that you have multiple options at hand to bring in. I'm guessing these are all nondilutive forms of cash. So to the extent you can, can you give us a flavor of what sort of things you're thinking of from your commentary, at least, it looks like you want to keep -- you're not talking about the 2 clinical programs at this point. So does that mean VPS4 is in play in terms of relationship, the collaboration of some sort are even out-licensing. Is that what we should understand?

[Susan Molineaux, Founder, CEO, President & Director]

I don't think we know enough at this point to make specific comments. We continue to evaluate all the options on our programs and that includes strategic collaborations or licensing agreements, and we are considering the sale of certain programs, but I can't give you more details on that at this time because we don't know.

[Swayampakula Ramakanth, H.C. Wainwright & Co.]

Okay. Fair enough. In terms of data coming up sometime in the first half of next year, how much data do you think you could have just in case you need to make an intelligent conversation about these 2 programs for a partnership situation?

[Susan Molineaux, Founder, CEO, President & Director]

I think that depends very much on the quality as well as the quantity of the data. As you know, these are open-label programs. They're in specific genetically defined populations of cancer patients. And it is -- because it's open-label, we can see the data, and we're looking for amount of data that would tell us definitively that we can move forward with these programs.

I mean, these are both drugs that already have demonstrated single-agent activity in the populations that we are testing in now. And this is really safety and dose refinement and just trying to get confirmation that the data looks the same as they did in prior studies. So I don't think there's a hard number you can put on it, but we would like confirmation for both these programs that as we expect, the drugs have single-agent activity in these specific populations.

[Operator]

Our next question comment comes from the line of Matthew Cowper from SVB Securities.

[Matthew Cowper, SVB Securities]

This is Matt Cowper on for Jonathan Chang. the question. It looks like if we hold OpEx flat for the next few quarters, you have runway into the third quarter of next year. I was just wondering if you could clarify what assumptions drive your runway guidance.

[Stephanie Wong, CFO & Secretary]

Matt, it's Stephanie. We don't typically disclose that level of detail. Can say, we have considered various scenarios and various options. And so we're exploring all of them for all the programs. and thinking about the right way to extend the cash runway.

[Operator]

Our next question or comment comes from the line of Aydin Huseynov from Ladenburg.

[Aydin Huseynov, Ladenburg Thalmann]

I just wanted to elaborate on a couple of questions that were asked before. So about the delays in both studies. Could you elaborate a little bit on these delays and just give us a better understanding whether this one unknowns in the beginning of the year? So how come we just know this just now, and these are not COVID-related delays, I assume and could be staffing, but how come we did know this in the beginning of the year?

[Emil Kuriakose, Chief Medical Officer]

Yes, I can answer that. Again, both of the -- I mean, the delays were really unexpected in the sense of the various reasons that it occurred across different sites. The projections from both the site level and our level in terms of overall activation times we're essentially progressing as planned and some several sites had sort of unexpected delays due to various reasons that, I guess, most of the common reason for is staffing issues that essentially were unpredictable and is known to be an issue that's still ongoing across the country. And so every site was different. But again, it was something that hit us, that got more realized around the last quarter in terms of their actual impact on the studies.

But again, the sites are activating. It's just that they were delayed by about a quarter in the majority of cases so that as they open up, we expect that the enrollment curve is going to get steeper.

[Aydin Huseynov, Ladenburg Thalmann]

Okay. Got it, Emil. And regarding the potential sale of 1 of the assets, could you tell us whether there is any sublicensing fee if you do the sublicensing agreement to Takeda or Millennium or whatever company was responsible for this in-licensing but you did that back in 2021?

[Stephanie Wong, CFO & Secretary]

Aydin, we wouldn't comment on the specifics of that since it would depend on the way a transaction is structured. So it's difficult to interpret. I can say that the agreement is filed publicly with the SEC. And so it's available including all the conditions for something like a sublicense.

[Aydin Huseynov, Ladenburg Thalmann]

Okay. All right. And last question is, would you consider sort of putting a pause on one of the trials in order to extend the cash runway if you don't find the suitable partner or collaborator?

[Stephanie Wong, CFO & Secretary]

We are evaluating all options for all our programs. And so I can't say anything specific about them, but that would be something that we would consider, in order to extend the cash runway.

[Operator]

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Ms. Molineaux for any closing remarks.

[Susan Molineaux, Founder, CEO, President & Director]

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

[Operator]

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.