GT Biopharma, Inc. Q2 FY2021 Earnings Call

Greetings and welcome to the GT Biopharma Second Quarter 2021 Conference Call. All participants are currently in a listen-only mode. Following the formal presentation, we'll open the call up for a question-and-answer session. At this time, I'd like to turn the conference call over to David Castaneda, Investor Relations for the company. Thank you. You may proceed.

Thank you, operator. Good morning, everyone and welcome to GT Biopharma’s second quarter 2021 conference call. Earlier this morning, we issued a press release summarizing the company's second quarter 2021 corporate updates that management will discuss on the call today. You can access the press release by going to the News & Media section and then the Press Releases page on our website at gtbiopharma.com. GT Biopharma’s following presentation and ensuing question-and-answer session will include statements that are or may be deemed forward-looking statements. In some cases, you can identify forward-looking statements by terminology including anticipates, believes, can, continue, could, estimates, expects, intend, may, plan, potential, predicts, should, will, would or negative thereof, other variations thereof or other comparable terminology. We operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. As a result, it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You are cautioned not to place undue reliance upon such forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We drafted our Annual Report on Form 10-K for the year ended December 31, 2020, our subsequent current reports on Form 8-K, our quarterly report on Form 10-Q for the quarter ended March 31, 2021, and our other filings with the Securities and Exchange Commission. Any forward-looking statement included in this presentation speaks only as of the date hereof. Except as required by law, we do not undertake any obligation to update or revise or to publicly announce any update or revision to any of the forward-looking statements, whether as a result of new information, future events, or any other reason after the date of this presentation. For all forward-looking statements, we claim the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Nothing in this presentation or discussion shall be deemed an offer to purchase or sell the company's securities. Now, I'd like to turn the call over to Tony Cataldo, Chairman and CEO of GT Biopharma. Tony?

Yes. Thank you, David. Good morning, everyone, and thank you for joining us, as this is GT Biopharma’s first scheduled conference call. I want to thank the investment community for paying attention to the progress that GT Biopharma has demonstrated in the first half of this year. Additionally, I want to thank my entire staff for their due diligence, hard work, and the contributions they have made for an amazing first half of the year. The last fiscal quarter has been marked with numerous events and milestones, reflecting tremendous success for the company. We were added to the Russell 2000, the Chicago Options Exchange, and now have enough money to execute the company's business plans for the next couple of years, approximately $40 million. We also completed our new sponsored research agreement with the University of Minnesota, headed by the TriKE creator, Dr. Jeffrey Miller and his team at the University of Minnesota. This will further enhance our advancement of the TriKE platform, adding more value to GT’s expanding portfolio. Our GTB-3550 TriKE clinical trial continues to show safety and clinical results and remains well-tolerated with patients who have, for all intents and purposes, been written off. The TriKE clinical data has shown that it is remarkably effective at activating patients' own NK cells, creating persistence of NK cells, proliferation of NK cells, and making NK cells serial killers of cancer cells. Unlike our competitors, we don't need ex-vivo outside manufacturing of NK cells or combination drug therapies to supplement our product. Everything that TriKE does is inside the body. The TriKE stands alone in the field of NK cell technology companies as a true monotherapy. Additionally, the TriKE is a toolkit for other NK cell therapies. We had data that shows GT will continue to update the investment community as events unfold as well as significant corporate development milestones. I often indicate to existing and prospective investors and analysts that I believe that it is the data and not the CEO that speaks most meaningfully to the merit and potential in GT Biopharma. As such, I will now turn the call over to Martin Schroeder, our Chief Technical Officer; and Dr. Greg Berk, our Chief Medical Officer, who will recap the impressive and encouraging data we observed and reported in recent months. We will close out the call with the Q&A session. To reiterate, I'm exceedingly pleased with our advancement over the last quarter as clearly evidenced by our continued share price appreciation. And with that, I'll gladly pass this call over to Martin Schroeder. Martin, take it away.

Thank you, Tony. Hello, everyone. To introduce ourselves for those who may not be familiar, GT Biopharma's main technology revolves around our unique TriKE platform, which stems from the groundbreaking research of Dr. Jeffrey Miller at the University of Minnesota. TriKE is intended to enhance the cancer-fighting capabilities of the patient's own natural killer cells without needing to add extra NK cell therapy. It is given to patients through infusion, and once it attaches to the patient's NK cells, TriKE instructs the NK cells to target specific tumor proteins or antigens found on the surface of cancer cells, resulting in the destruction of these cancer cells. Unlike other therapies, TriKE activated NK cells have the ability to target and eliminate multiple cancer cells powerfully and sequentially. So, what is TriKE? It consists of recombinant fusion proteins that can identify specific antigens present on cancer cells. These proteins can be engineered with great flexibility, allowing us to focus on different tumor antigens in hematologic malignancies, sarcomas, and solid tumors. TriKE does not need patient-specific customization, in contrast to cell therapies. Along with the strong clinical data being observed with GTB-3550 in a Phase I clinical trial, our pipeline features several other TriKE products targeting solid tumor cancers. Our clinical development pipeline includes candidates targeting PD-L1 positive, B7H3 positive, and two other types of solid tumors. These include lung, breast, ovarian, gastric, and prostate cancers, among others. The TriKE product candidates are currently in GMP manufacturing and scale-up as we prepare to file an Investigational Drug application with the US FDA for human evaluation. We are also advancing other TriKE product candidates at various stages of preclinical assessment. Now, I'll hand the call over to Greg Berk, our Chief Medical Officer, who will discuss the details of our GTB-3550 clinical program. Greg.

Thanks, Martin. The early preclinical and clinical evidence with our first candidate TriKE GTP-3550 for the treatment of relapsed refractory AML and MDS that was reported in the last fiscal quarter is very encouraging. We observe both a positive safety profile and an indication of biological activity as measured by blast cell reductions. At the 150 microgram dose level, we have one case of Grade 1 CRS, which was not a dose-limiting toxicity. There have been no other clinically significant toxicities observed. In fact, next week we are escalating to the next dose level, the 200 microgram cohort. To date, 12 patients have been treated in the GTB-3550 Phase I trial; patients five, seven, nine, and eleven experienced 33%, 61%, 63%, and 50% reduction in the CD33 positive bone marrow blast levels, respectively. 57% of patients treated between 25 and 150 micrograms experienced the reduction in the AML or MDS blast. Activation, proliferation, and persistence of functionally active NK cells occurred without the addition of supplemental NK cells. NK cell activation has been observed to increase early during treatment and is correlated with a proportional and overall increase of the absolute number of NK cells. Targeted delivery via NK cells through the 3550 TriKE showed preferential proliferation of NK cells with significantly less effect on CD8 positive and CD4 positive T cells. We also observed no CD16 shedding by patients' NK cells and saw enhanced HL60 AML target cell killing ex vivo. This data indicates that GTB-3550 rescues the patient's exhausted and inhibited endogenous NK cells, resulting in their activation, proliferation, and persistence. This early data indicates that GTB-3550 therapy demonstrates significant bone marrow level reductions in AML and MDS patients without the need for supplemental Autologous and Allogeneic stem cells. This Phase I trial is expected to conclude later this fall, and updated safety and efficacy data will be presented in an oral session at the ESMO conference in September. With that, I’d like to turn the call over to the operator to open up for Q&A. Thank you.

Ladies and gentlemen, we will now start the question-and-answer session. Our first question comes from Justin Walsh from B. Riley Securities. Please go ahead with your question.

Hi. Thanks for taking the questions. I have a couple. Starting off, can you provide any color on what we can expect to see at ESMO? How many patients, how long the follow-up, any details we can get?

Yes. Greg, you go ahead and answer that. But just to remind everybody, because we are speaking at a major conference, there are certain embargoes that we can't articulate until that conference. Go ahead, Greg.

Sure. Justin, at ESMO, which is on September 20 or around that time, we will present updated safety data, at least through 12 patients. We're literally dosing patient number 13 next week. So, we most likely won't have data for that patient at ESMO. So, it'll be up through 12 patients.

Got it. And maybe related to that. So, you’d mentioned that there was the one case of CRS that didn't seem too severe. Can we get any more details on that, like how long after treatment that is observed? How long does it last? What interventions were required? And anything else you can give on that front?

Yes, it’s quite straightforward. There was just a fever, and when the fever lasts for a certain duration without additional symptoms, it is classified as a Grade 1 CRS. In this instance, since infection was ruled out—which it was not—it is considered a possible CRS.

Perfect, thanks. I have one more question before moving on.

By the way, Justin, that's not a dose-limiting toxicity of Grade 1 fever CRS.

Got it. All right. So, I think the last one for me. Maybe, just some details on how Dr. Miller's involvement is expected to evolve following the Sponsored Research Agreement, and how that is expected to advance GT’s platform.

Yes. Martin, why don’t you take that one? Martin?

Pardon me. Mic was unmuted. Forgive me. Yes. So Jeff’s involvement with the company will continue to be quite strong. He is one of our Founders, and of course, a preeminent key opinion leader in the field. The Sponsored Research Agreement, we have several activities planned to help more fully understand TriKE’s capabilities as well as TriKE’s influence on NK cells biology during the course of therapy. And as you're, I'm sure, aware, as I mentioned, we are developing several new TriKE product candidates. Some of those are quite interesting dual targeting TriKEs that simultaneously target two different tumor antigens, the goal to help better cut off immune escape, particularly when moving into the solid tumor setting. So yes, Jeff’s efforts with the company will continue to be strong and he will be quite actively engaged for the long term.

Got it. Thanks for taking the questions. I'll jump back in the queue.

Our next question comes from Ram Selvaraju from H.C. Wainwright. Please go ahead with your question.

Thanks very much for taking my questions. Firstly, I was wondering if you could give us some color on the timing of release of final top-line data from the 3550 trial. And if you have line of sight on, which medical conference you expect to present the final data? I understand the interim data is being presented at ESMO, but just wanted to get a sense of timing of the presentation of final data?

Sure. Hi, Ram. It’s Greg, and I can address that. As you know, while we're in dose escalation, it's challenging to predict the recommended Phase II dose and the maximum tolerated dose because of the clean safety profile we've observed. This is why we've decided to increase the dose from 150 to 200. Keep in mind that enrolling, treating, and completing a cohort takes a couple of months, so we won’t determine the maximum tolerated dose, which will influence the final Phase I data, until we have established the recommended Phase II dose. We are definitely a few months away from that, which is why we anticipate it will be later in the fall. Shortly after that, we will start our Phase II. As for the timing of a conference to discuss the final data, I can’t confirm we will have it ready in time for ASH. It will likely be a conference in the winter or early spring to present the final data, but we might issue a preliminary press release before that.

What I would add, just to expand on that, is that MTD is an important milestone for the company and it's a positive development. When you're not achieving MTD, it indicates that your products are still functioning effectively, and you might have greater success as you progress.

Great. And also I wanted to ask about where in the treatment continuum you see 3550 potentially being most likely to be deployed within the context of AML specifically?

Yeah, that's a great question, Ram. It's something we think about every day, obviously. So our current study is monotherapy. And that's still our base case plan, is to hopefully in Phase II, if we see a compelling efficacy signal, and what I mean by that is a significant number of durable CRs, not just blasts or reductions, but durable CRs, we would obviously pursue an accelerated strategy, because these are patients as you know, that don't have any effective or even approved options. We're talking about relapsed refractory AML and high-grade MDS. So that's our monotherapy approach. And by the way, we're including, I think, as you know, the minimal residual disease cohort in our Phase II, because that's a population of patients who have a high unmet need; virtually all of them will relapse, and we're essentially treating lower volume leukemia. So the MRD cohort is very important to us. Ultimately, I believe that the drug could be moved up in combination with standard of care chemotherapy. While we're continuing our monotherapy expansion cohorts in Phase II, we will initiate a combination trial most likely with venetoclax, which is the most commonly used regimen in the relapse setting. It's also, as you know, used in the frontline setting. There is a lot of published data that NK cells and hypomethylating agents including both azacitidine and decitabine are synergistic and work together in AML models ex vivo, there's also a lot of evidence that venetoclax as well as the hypomethylating agent are not toxic to NK cells. So it makes a lot of sense to combine the engager with standard of care chemotherapy, and probably the perfect regimen would be another class decided. So that will be done in the future as well.

Great, very helpful color, wanted to switch gears now to talk about your B7H3 targeted TriKE, and ask if you can provide any additional color around the preclinical data that was previously announced as well as give us a sense of when it might be presented at a medical conference, and also if you have any thoughts on the current B7H3 competitive landscape, especially in terms of how that compares to other canonical targets that have emerged as being of interest in the context of oncology. Thank you.

Martin, you want to handle that one or Greg? Greg, why don't you actually go ahead and then I chime in.

No, I was just going to say Martin has done all the work on it, Ram, so I'll have Martin present it because it's really been his project.

Yes, I mean, well, actually, the B7H3 TriKE that we are matriculating through preclinical studies was developed by Jeff Miller and his colleagues at the University of Minnesota, and Jeff and colleagues have published on this product candidate already. B7H3 is ubiquitously expressed on a number of tumor targets. Macro Genics has been working on B7H3 targeted compounds for a number of years. We see with our preclinical data for TriKE that we are using NK cells as a viable therapeutic modality to very specifically target and kill B7H3 expressed in cancers. Today, we've looked at ovarian cancer, breast cancer, and prostate cancer to name a few, and we've seen good killing in vitro cell assays in our animal models. Positioning wise, I think that it does provide an additional therapeutic agent for physicians to consider as they move forward with the comprehensive treatment plan for their patients. So I think that sounds great.

Great. And then just lastly, I was wondering if you could comment at all on potential combinational regimens that you view as most ideal for any and all of your other earliest stage investigational TriKE candidates. Thank you.

Well, when you talk about combinational therapies, certainly comes to mind the criteria and not to protect T cells. But that being said, we are developing dual targeting TriKEs. The idea there is to assist in cutting off immune escape. So we have dual targeting TriKEs that's our CD 138, which is present on cancer stem cells. We have once we go EGFR, and that Jeff are three for example, PDL1 combination TriKE, so the platform is very versatile. That allows us to utilize multiple targeting domains with a single TriKE. We could, for example, we have – for example, a CD19 TriKE, and we could co-administer that with CD33 with our GTB-3550; could be done. But it's, I think, more efficient to make a dual targeting CD19, CD33 TriKE. So it's really the dual targeting strategy that, I think to a large extent, we're focused on more than trying to determine which TriKE we should pair with another standard-of-care therapy.

I just want to add to that, Martin, that it's a reasonable question, because generally historically in oncology, it's always been about combination, right. We're obviously going to pursue seeking a signal as monotherapy, because it's a much less challenging regulatory path, if it's used as a single agent. However, we're going to go where the science tells us to go. There's a lot of strong rationale scientifically to combine TriKEs with, as Martin mentioned, checkpoint inhibitors as well as standard of care chemotherapy. I do think we need to initiate combination studies very early into development, literally after we have a couple of cohorts of single agent safety data. So we're going to start doing this with AML with venetoclax, as I mentioned, because the science is really telling us to go there. We'll look at every possible solid tumor combination as well with our solid tumor TriKE and be guided by the science, as well as making sure there's a clear registration pathway for that combination.

Thank you very much.

Our next question comes from Tony Butler from ROTH Capital. Please go with your question.

Thank you very much. I have two questions, if I may. The first is for Greg or Martin regarding the Phase I/II study for 3550, which is enrolling at the Masonic Cancer Center, University of Minnesota. I noticed that Wisconsin is also listed but is not currently recruiting. I’m curious if you plan to open that site for 3550 or if you will wait for the Phase II. The second question is about the other TriKEs that Martin and Greg discussed. What caught my attention was the introduction of second-generation TriKEs, which have shown increased potency, activity, and cytotoxicity. Could you elaborate on those? For instance, the B7H3 TriKE has been developed with these second-generation features in mind. I think it’s important to mention that this approach is not a one-size-fits-all solution, and it appears that your flexibility has been utilized, which could lead to greater cytotoxicity, potentially depending on the target. Any insights on that would be appreciated. Thank you very much.

Sure. I can quickly answer the question about the sites and then hand it over to Martin for the discussion on the newer generation TriKEs. Regarding sites and what's posted on clinicaltrials.gov, we have pre-initiated and initiated Wisconsin and we've gone through the process also with Oregon. At the time we started the process of initiating sites, frankly, we thought we would be wrapping up Phase I now. We didn't think we would get to this high of a dose and it made sense for us to put a hold on those sites until we have them come in at Phase II. They are for sure coming in Phase II, but they may very well come in at the tail end of Phase I now, but they are ready to go. By the way, we are bringing on multiple new sites for the anticipated Phase II. We will have up to eight, eight sites, 8 to 10 total sites. We received a tremendous amount of interest from many of the KOLs in AML who want to participate in Phase II. So those initiations are starting already. I'll hand over to Martin. I’m sorry.

Yeah. So thanks, Tony, for the insightful question. Yes, our platform is very versatile. Our second-generation TriKEs, which we're implementing across all of our portfolio. What we've learned about how TriKE interacts with the NK cell and a target cell has led to the second-generation platform. The key thoughts are we wanted to improve the steric interaction between the various binding domains of the TriKE molecule and the NK cell and the target cell. In that regard, we've moved away from single-chain variable fragments to nanobodies. In that case, we have seen dramatic improvement in the potency of our drug candidates; in some cases, a tenfold better improvement, just because of improved steric interaction between the TriKE molecule and the NK cell. We've done the same investigation with respect to how the NK cell binds to the target cell. In the case of the B7H3 TriKE that you mentioned, it's a double nanobody construct with IL-15 in the middle. We have been optimizing the platform to accentuate other positive elements of TriKE therapy, and we'll continue to do so as we grow and mature the platform.

Thanks, Greg and Martin, appreciate it.

And ladies and gentlemen, at this time, we've exhausted the audio questions. I'd like to turn the floor back over for any offline questions. And we're showing no offline questions. So at this point, I'd like to close the question-and-answer session. And I'd like to turn the floor back over to Tony Cataldo for any closing remarks.

All right. Thank you. And thanks, everybody. I know all of you would like to hear about an update on patients 10, 11, and 12. As Greg was articulating, we have been selected to do an oral presentation at the ESMO Conference in September. Because of that, we're under an embargo prohibiting us from releasing this kind of data. This is actually good news for GT as results presented at a major conference like this gain much more coverage than a typical press release. I want to thank everyone for listening to our second quarter of 2021 corporate update call and for the continued support of our shareholders. We appreciate the courageous participation of the patients in our clinical trials and the dedication of all of those trial investigators. We look forward to sharing future data readouts from our preclinical and clinical activities as they progress. Again, thank you everyone, and have a great weekend.

Ladies and gentlemen, with that, we’ll conclude today's conference call. We do thank you for attending. You may now disconnect your lines.