Good afternoon, ladies and gentlemen, and welcome to the Q1 2023 Kura Oncology, Inc. Earnings Conference Call. This call is being recorded on Wednesday, May 10, 2023. I would now like to turn the conference over to Pete De Spain, Senior Vice President of Investor Relations and Communications. Please go ahead.

Great. Thank you, Julie. Good morning, and welcome to Kura Oncology's First Quarter 2023 Conference Call. Joining me on the call are Dr. Troy Wilson, our President and Chief Executive Officer; and Tom Doyle, our Senior Vice President of Finance and Accounting. Before I turn the call over to Dr. Wilson, I'd like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to Kura's filings with the SEC, which are available from the SEC or on the Kura Oncology website for information concerning risk factors that could affect the company. With that, I'll now turn the call over to Troy.

Thank you, Pete, and thank you all for joining us. Our strong conviction in ziftomenib and its potential to be the best-in-class menin inhibitor continues to increase. This confidence is supported by one of the highest complete response rates reported for a targeted therapy in the setting of relapsed/refractory leukemia and is reinforced by the rapid pace of enrollment in our registration-directed trial. More on that in just a moment. We're also encouraged by the durable remissions in our Phase I trial, driven primarily by single-agent activity of ziftomenib, and we look forward to sharing an update at the European Hematology Association Congress next month. You've got a glimpse of these data in our recently released abstract, which showed that ziftomenib continues to demonstrate significant clinical activity in patients with heavily pretreated and co-mutated relapsed refractory NPM1 mutant AML. As of January 31 data cutoff, 6 of the 20 NPM1 patients treated at the recommended Phase 2 dose achieved complete responses with full count recovery. The abstract showed a median duration of response of 8.2 months with a median follow-up of approximately 8 months. 4 patients were still ongoing at the time of data cutoff. Ziftomenib is well tolerated and the on-target effect of differentiation syndrome is manageable. We are excited by these evolving data and we look forward to reporting updated data as of an early April data cutoff. Now building on the momentum generated by our positive Phase 1 data, we announced in February that the first patients were dosed in our Phase 2 registration-directed trial of ziftomenib in NPM1 mutant relapsed or refractory AML. Site activation and enrollment in our registration-directed study are outperforming our projections, an indication of the continued enthusiasm surrounding ziftomenib among investigators and patients. As a reminder, NPM1 mutant AML accounts for approximately 30% of new AML cases annually and represents a disease of significant unmet need for which no approved targeted therapy exists. Once the disease becomes relapsed or refractory, the prognosis for NPM1 mutant AML patients is particularly poor, with an overall survival of approximately 6 months after initial chemotherapy. NPM1 mutant AML is further compounded with co-mutations such as IDH or FLT3, notably in our Phase I trial for ziftomenib, 2/3 of NPM1-mutant AML patients who achieved a CR at 600 milligrams had IDH and/or FLT3 co-mutations, all of whom have failed prior treatment with IDH and/or FLT3 targeted inhibitors. A complete response rate with full count recovery after prior failure of these targeted therapies makes the clinical activity of ziftomenib even more striking. We're also impressed with the potential for ziftomenib to drive durable remissions as a monotherapy, and an additional NPM1 mutant patient who entered the trial with multiple code mutations, including DNMT3A, following 2 prior stem cell transplants achieved a CR with no evidence of minimal residual disease and remains on ziftomenib for more than 32 cycles as of our January 31 data cutoff. In parallel with our efforts to advance ziftomenib monotherapy, we're preparing to initiate a series of combination studies to significantly broaden the addressable patient population. We believe ziftomenib is uniquely positioned for these combination strategies. This belief is driven by several key competitive advantages, including no evidence of drug-induced QT prolongation, no predicted adverse drug-drug interactions and once-daily oral dosing that should enable convenient administration with current standards of care. Our team is working diligently to initiate the COMET 007 and COMET 008 trials to evaluate ziftomenib in combination with current standards of care in earlier lines of therapy and across multiple patient populations, including both NPM1 mutant and KMT2A-rearranged AML. We've designed the Phase 1 studies to assess safety, tolerability and antileukemic activity of ziftomenib in combination with key regimens such as venetoclax and azacitidine, the FLT3 inhibitor gilteritinib and the chemotherapy regimen of 7 plus 3. Our approach to combinations is to establish ziftomenib as a foundational therapy that can be combined safely with various commonly used regimens and then prioritize those combinations that represent the largest unmet medical need and the greatest potential commercial value, namely venetoclax and FLT3 inhibitor containing regimens. Notably, up to half of NPM1 mutant AML patients also exhibit co-mutations in the FLT3 gene. Given the safety profile of ziftomenib, we believe it may be the ideal menin inhibitor to combine with FLT3 inhibitors to address this population, a difficult-to-treat group that represents approximately 15% of AML. We also believe that rational combination approaches will help to mitigate differentiation syndrome in the KMT2A rearranged population as has previously been demonstrated in the development of IDH inhibitors in combination with azacitidine. We're very excited about the potential for our combination studies to further unlock the value of ziftomenib for patients with acute leukemias. We've begun site activation in the first of these studies, COMET-007, and we're on track to dose the first patients this quarter. We're very proud of our team's execution and grateful for the continued support of our study investigators. Their enthusiasm, coupled with a growing body of clinical data and multiple emerging lines of evidence reinforce our confidence in ziftomenib as the best-in-class menin inhibitor. We look forward to sharing more at our upcoming presentation at EHA. Now let's turn our attention to our farnesyl transferase inhibitor program. Over the past several years, we've pioneered the development of FTIs as combination agents to prevent or delay the emergence of resistance to certain classes of targeted therapy in large solid tumor indications. Although targeted therapies have demonstrated meaningful clinical activity across a range of solid tumors, adaptive resistance almost invariably emerges over time, which limits the ability of targeted therapies to drive sustained clinical benefit. We have generated a growing body of preclinical and clinical data that support the combination of FTIs with multiple classes of targeted therapies, including EGFR inhibitors as well as PI3-kinase inhibitors. In April, we presented encouraging preclinical data at the American Association for Cancer Research Annual Meeting, which supports the potential use of FTIs in combination with 2 additional distinct classes of targeted therapy. The first of 2 posters revealed robust synergy between tipifarnib and the standard of care anti-angiogenic TKI, axitinib in cell and patient-derived xenograft models of clear cell renal cell carcinoma. The second poster reported regression of multiple models of KRAS inhibitor resistant non-small cell lung cancer through the addition of tipifarnib either to adagrasib or sotorasib therapy. These promising preclinical data illustrate the potential for FTIs to drive enhanced antitumor activity as well as address mechanisms of both innate and adaptive resistance to targeted therapies. In addition, we believe these data strongly support our rationale to combine our next-generation FTI, KO-2806 with TKIs in clear cell renal cell carcinoma as well as KRAS G12C mutant inhibitors in non-small cell lung cancer. In January, we were pleased to announce FDA clearance of our investigational new drug application for KO-2806 for the treatment of advanced solid tumors, an important next step for this program. Now we intend to evaluate safety, tolerability and preliminary antitumor activity of KO-2806 in a Phase 1 dose escalation study, which we're calling FIT-001. We're now in study startup, and we look forward to dosing the first patients in FIT-001 later this year. Concurrent with the dose escalation as monotherapy, we also plan to evaluate KO-2806 in dose escalation combination cohorts in advanced solid tumors. Meanwhile, we continue to evaluate tipifarnib in combination with the PI3 kinase alpha inhibitor, alpelisib, a combination that has potential to address up to half of all patients with recurrent and metastatic HNSCC. We're encouraged by the preliminary activity observed in our ongoing current HN trial, including a durable partial response in a patient with PIK3CA mutated squamous cell carcinoma of the tonsil. We're also very pleased by our ability to combine tipifarnib with another targeted therapy, in this case, alpelisib with no dose-limiting toxicities reported to date. We remain on track to determine the optimal biologically active dose in mid-2023. We continue to unlock the potential therapeutic and commercial value of farnesyl transferase inhibition, which is challenging, but we believe is increasingly a substantial opportunity that has the potential to address large solid tumor indications such as renal cell carcinoma as well as cancers of the lung and colorectal system. As with our menin inhibitor program, we believe FTI programs have potential to create significant value for patients, health care providers, and our shareholders. We're confident we have the leadership, experience, and operational and financial resources to realize that value. With that, I'll now turn the call over to Tom Doyle for a discussion of our financial results.

Thank you, Troy, and good afternoon, everyone. I'm happy to provide a brief overview of our financial results for the first quarter of 2023. Research and development expenses for the first quarter of 2023 were $25.2 million compared to $20.9 million for the first quarter of 2022. The increase in R&D expenses was primarily due to increases in clinical trial costs related to our ziftomenib and KO-2806 programs, offset by decreases in clinical trial costs related to our tipifarnib program. General and administrative expenses for the first quarter of 2023 were $11.4 million compared to $11.9 million for the first quarter of 2022. Net loss for the first quarter of 2023 was $34.1 million compared to a net loss of $32.5 million for the first quarter of 2022. This included noncash share-based compensation expense of $6.8 million compared to $6.7 million for the same period in 2022. As of March 31, 2023, we have cash, cash equivalents, and short-term investments of $405.9 million compared to $438 million as of December 31, 2022. We believe that our cash, cash equivalents, and short-term investments will be sufficient to fund our current operating plan into the fourth quarter of 2025.

Thank you, Tom. Before we jump into the question-and-answer session, let me lay out our anticipated milestones for the remainder of this year. For ziftomenib, we expect to dose the first patients in the COMET-007 combination trial in the first half, present updated data from our Phase 1 trial in NPM1 mutant AML at EHA in June, and dose the first patients in the COMET-008 combination trial in the second half. For tipifarnib, we plan to determine the optimal biologically active dose in the current HN trial in combination with alpelisib in mid-2023. And for KO-2806, we intend to dose the first patients in the FIT-001 dose escalation trial in the second half of 2023. With that, operator, we're now ready for questions.

Your first question comes from Jonathan Chang from SVB Securities.

First question, can you help set expectations for the upcoming EHA ziftomenib update and discuss the importance of achieving a good duration of response?

As noted in the released abstract, it focuses on NPM1 mutant AML patients who were treated at 600 milligrams, which is the FDA's recommended Phase 2 dose. The data cutoff for the abstract was January 31, and we plan to present all clinical data on these patients with an early April cutoff at EHA. We are now observing multiple converging lines of evidence suggesting that ziftomenib may be the best menin inhibitor for acute leukemias, and we look forward to sharing this data at EHA. Regarding your second question about duration of response, there are two key aspects to consider. First, we need to understand the requirements for FDA registration, and second, what constitutes a clinically meaningful outcome. For FDA approval as a monotherapy, the target is a response rate of 20% to 30% and a median duration of response of 4 to 6 months. These figures are significant because they pertain to patients who have exhausted all other treatment options, with overall survival for NPM1 patients in the relapsed/refractory context being around 6 months. Achieving a duration of response within that timeframe is clinically relevant. Furthermore, we have consistently recognized these as the bars for registration. Clinically, it’s important to note that we are achieving complete responses with full count recovery, meaning that patients are healthier and possess a fully restored immune system, which is critical since they face a high risk of infection. Doctors emphasize that reaching full complete response improves patient outcomes. Regarding duration, while I can’t disclose specifics before the abstract is released, I can say we are encouraged by ziftomenib’s ability to produce durable responses as a standalone treatment, without necessitating transplant or additional therapies. We also observe a different mutational profile compared to other agents, which will be significant, particularly in relapsed/refractory cases and as we explore combination therapies. We look forward to sharing all this information at EHA and likely at a related investor event.

Understood. And second question, can you provide any more granularity on what you mean by the Phase 2 NPM1 study enrollment outperforming projections?

Yes, I'm happy to. So I'll just remind everyone that last year, we reported that we had enrolled 14 patients in our Phase 1b study in approximately 3 months. And here's where we are today. Our total goal for this trial is 62 clinical sites in the U.S. and Europe. We're now open, Jonathan, in a majority of those sites. And we've seen site activation in both the U.S. and Europe that has exceeded our expectations. The only thing we can attribute that to is excitement of the investigators, the sites, and the patients for getting their hands on ziftomenib. As you know, an obvious competitor of ours has extended its timelines for recruitment of NPM1. We're not ready yet, Jonathan, to pull timelines in. What I can tell you is the investigators on the Phase 1b study as well as the new investigators have picked up exactly where they left off. Site activation is always a leading indicator, but we've seen both site activation and now enrollment that exceeded our already pretty aggressive goals. So I think we're seeing a continuation of the excitement, the enthusiasm from the Phase 1b. And I think it positions us very well not only to come forward with potentially best-in-class data, but to be very competitive on timelines in the NPM1 setting.

Your next question comes from Roger Song from Jefferies.

Maybe just a follow-up on your earlier comment related to the best-in-class profile, particularly in the emerging resistance data on the menin inhibitor. So maybe just tell us a little bit more about this, how the manager will differentiate in this kind of resistant mechanism, and why you think it's better suited.

Let's begin by discussing our observations and their implications. One of our competitors has reported that approximately 30% to 40% of their patients are showing the emergence of resistance mutations very early, during the first or second cycle. While we have known about the potential for resistance mutations for a long time, our analysis has revealed only three examples of such mutations in our patient samples. Out of these, two were patients who had the 327 methionine mutation at the time they entered the study after failing previous treatments. So yes, we do observe resistance mutations, but not as frequently as our competitors. The implication of this is significant; from our knowledge of EGFR and other small molecule oncology targets, the occurrence of resistance mutations usually indicates a decline in therapy effectiveness. We believe that our treatment will be important as a monotherapy, and it’s noteworthy that we are observing durable responses with ziftomenib alone. However, as we look towards combination therapies, it's crucial to consider the potential for resistance mutations to diminish therapeutic activity. This situation sets us up favorably, and we believe several biochemical and drug-like properties are contributing to our unique profile. As I mentioned previously, we are eager to share more data on this topic during and around the upcoming EHA.

And then moving on to the tipifarnib or your STI franchise. Since you're planning to announce the biologically optimized dose for alpelisib combination in the year. So what would be the next step for the program and also how that will play into your 2806 overall FTI franchise?

Stepping back for a moment, many of our analysts and shareholders have been with us for years, and they understand our strong commitment to this program. I believe it's fair to say that STIs could become one of the best combination agents for targeted therapy. There has been interest in SHIP 2 and other alternatives, and attempts to target both the MAP kinase and the PI3 kinase pathways have been ongoing for decades. One might wonder why this wasn't discovered earlier. The majority of the FDI programs were ending just as many targeted therapies were being uncovered, and it wasn't until our team began first with preclinical studies and then clinical work on combinations that we really recognized the opportunity. Initially, we thought we should focus on farnesylated onco proteins, with HRAS being the most notable. However, we've found that when cells are stressed with EGFR inhibitors or KRAS inhibitors, they respond in a highly organized manner, revealing farnesylated proteins like REV, which become excellent targets for drug synergy. This biological insight is reflected in the two posters showcased at AACR, highlighting remarkable synergy in the context of RCC and KRAS mutant inhibitors. Now, to your question and the important context behind it. The most immediate conclusion from our alpelisib combination is that we can administer both drugs at their full doses without encountering dose-limiting toxicities. I believe this has surprised many investors and even some at KURA. This is a positive indicator for combining 2806 with various targeted therapies. Successfully combining with alpelisib sets a solid benchmark. For this specific program, we're going to focus on two aspects. First, we know we have enough safety and tolerability. The next question is whether the clinical activity is robust enough to warrant further development of tipifarnib and alpelisib, or if we should prioritize KRAS-driven tumors and RCC as our potential next steps. The good news is we will have options and choices. The team is working diligently to expedite 2806 into targeted combinations. Our focus is not so much on monotherapy but on how quickly we can get into combination therapies and whether we can replicate the preclinical findings. This is the data we anticipate, and the frameworks we plan to utilize will guide the next investment, either in head and neck, possibly lung cancer with KRAS, or RCC, or ideally, more than one.

Your next question comes from Peter Lawson from Barclays.

This is Alex on for Peter. Just given the comments on the pace of site activation and enrollment in the pivotal study. Any color you could provide around when enrollment could complete in that study?

Yes, thank you for the question. The Phase 2 study is set to enroll a total of 85 patients with relapsed/refractory NPM1 mutations. We believe this number provides an adequate safety database to support a leading menin inhibitor. The FDA typically expects to see around 100 patients at the recommended Phase 2 dose for safety reasons. From an efficacy standpoint, having 85 patients may not be necessary. Based on our trial design, we expect to complete enrollment of the 85 patients by the middle of next year. Our initial site activation and enrollment are surpassing expectations, and while we are not ready to revise our timelines yet, we will capitalize on every opportunity to be competitive. I believe we will have data that stands out in the market. The key consideration will be the timing of our progress. Currently, we are performing well and possibly even gaining an edge, and we are pleased with the results from the ongoing COMMET registrational trial.

And then just a second question on EHA. Now the focus is on NPM1, but should we expect any updated data from the MLL patients you've treated so far?

At this point, I'll just refer you back to the abstracts. Again, I don't want to get ahead of the abstract or sort of get under the four corners. We'll focus, at this point, on what's laid out in the abstract. As I mentioned, we're intending to provide an investor event in connection with EHA. And as I've said, we're seeing multiple lines of evidence that are supporting ziftomenib as being a best-in-class inhibitor in acute leukemias. We look forward to sharing that data with you and the rest of the folks on this call at that time.

Your next question is from Brad Canino from Stifel.

Strategic ziftomenib question for me, Troy. You've been open in the past about the requirement for a global pharma partner to capitalize on the valuable frontline AML setting. So as I look at it now, you're in a position where you have NPM1 data evolving positively. You've got this pivotal trial progress that's ahead of schedule as you state, and you're moving to dose optimize the combos as quickly as possible. Ahead of you, you've got competitor pivotal data and combo safety data in the second half of '23. I look at your cash burn guide; that would suggest even with all the planned trial additions that you have laid out in your press release, you expect the cash burn to cap at about a 50% increase from the current levels this past quarter as I look through 2025. So as you think about the evolution of all of these pieces, how are you currently weighing the ideal time for such a transaction?

Yes, Brad, thank you for your thoughtful question. The conversations we've had with knowledgeable parties involved in research, development, and commercialization of hematology products confirm that we have a top-tier compound. They are attracted not only to the clinical efficacy but also to some of the other benefits we've highlighted, such as the absence of QT prolongation, minimal drug-drug interactions, once-daily oral dosing, and the stability of dosage even when adjusting SIP regimens. In our upcoming prepared remarks, we'll emphasize the potential of FLT3 inhibitors, as they account for a significant portion of NPM1, and it's crucial to address this opportunity as early as possible to achieve lasting responses in NPM1-3 patients. Our team is diligently working on all these aspects and more. At some point, Kura will require additional operational support to fully leverage the potential of ziftomenib. We anticipate ziftomenib will be the preferred combination agent throughout the treatment spectrum, from frontline therapy to maintenance alongside all approved and emerging agents. Achieving global scale will be necessary for this. However, our priority remains with patients and our shareholders, ensuring that our actions lead to appropriate rewards for them. While I can't provide specific details, those familiar with my background know I'm deeply involved in both the business and scientific sides. There is significant enthusiasm for ziftomenib across the treatment continuum, and we'll provide updates as we progress throughout the year.

Your next question comes from Li Watsek from Cantor Fitzgerald.

I guess for the dealer that you just shared with us. Just wondering if you could put this into perspective for us relative to your competitor? And then second, in terms of the combinations, you mentioned that you will dose the first patient this quarter. And I guess just based on the past enrollment you've seen so far for your NPM1 patients, do you think that's going to translate into your studies as well?

Yes, that's an excellent question. Can you please repeat your first question?

Yes, duration of response, maybe just share your perspective relative to our competitor.

Thank you for your question. I want to clarify our findings from the Phase 1b study. We are reporting data on 20 patients with NPM1 mutations at our recommended Phase 2 dose, which brings us close to a quarter to a third of what would be needed for a registrational study in terms of patient numbers. This provides both you and the analysts a substantial insight into what pivotal data could look like if we maintain our current progress. In comparison, our competitor has data on only three patients, with two of them having been referred for transplant shortly after. While I can't share specific figures before EHA, it's evident that ziftomenib is influencing the duration of response positively. We have seen a couple of patients fortunate enough to undergo transplants with successful outcomes. The efficacy and strength of ziftomenib, especially in promoting complete recovery and avoiding resistance mutations, are contributing significantly to its durability. This combination of factors is what excites investigators. Regarding your other question about our combination studies, we are optimistic about ziftomenib being a foundational treatment for acute leukemia. Our ambition is to revolutionize AML, similar to how Gleevec changed the landscape for CML, transforming it from a severe illness to a manageable condition. Menin inhibitors might be the breakthrough AML needs. We’re witnessing great interest from investigators eager to participate in the 007 and 008 studies. Our objective is to ensure as many sites across the U.S. and Europe as possible can utilize ziftomenib in their practice, fostering continued enthusiasm and supporting our strong performance expectations as we move into combination studies.

Your next question comes from Phil Nadeau from TD Cowen.

A follow-up perhaps on the last question. In terms of those earlier lines of therapy in the combination regimens, when we've discussed the opportunity for inhibitors with our consultants in the earlier lines, some have questioned what trial design would be necessary to support approval and use. Do you have any thoughts on what a registration trial would look like for an early line combo regimen in particular? What endpoints do you think would be meaningful and likely to be hit?

Yes, Phil, that's a great question. I don’t want to jump ahead of the team on this, but it’s a topic we’re actively discussing. We haven’t publicly shared much about what registration studies in the front line might entail. It seems unlikely that we can depend solely on MRD negativity. We may need to focus on response rates alongside survival. Specific parameters will depend on the combination and the therapy line used. Our primary objective is to provide a data set that allows physicians to use ziftomenib with any regimen they prefer, whether that’s venetoclax, chemotherapy, or other targeted therapies. Our secondary objective is to address areas of greatest unmet need and commercial potential, which is likely venetoclax. As we gain experience with these patients, we will explore potential synergy or resensitization. We’re cautiously optimistic, but it’s still early to discuss specific registration designs. We need to gather more experience in Phase 1 and develop that data set further. Once we have more consistency with the investigators and key opinion leaders, we can share that information. This is a current focus for our team internally.

And then second question is I'm wondering whether you have any new visibility on the potential competitors. Obviously, not the competitors that are coming from the public companies, but investors have an eye out for those potential competitors, the menin inhibitors either at big pharma or foreign pharma. Any visibility on when the first data from any of those programs could be announced? Or are you running into any of them as you enroll your studies?

I'll tell you we're not running into them. No. I think there are 3: there's Janssen, Dai-ichi, and Dainipon Sumitomo. We don't hear a lot about them. We don't bump into them as you would say. We're careful not to put our investigators in a position where we ask them for data; for obvious reasons, we wouldn't want them to share data on our programs. But we've been impressed, Phil, to this point, as I said, by the pace of site activation and the pace of enrollment in the NPM1 setting. I think that's as much of a biomarker as we probably have. And I'll go even a step further and say my prediction is as we go into KMT2A, you're going to see the activity pick up significantly based on what we've seen with NPM1. I'm cautiously optimistic we'll be best-in-class there as well. The ability to drive durable responses without necessarily needing to go to transplant so quickly. But obviously, the proof is in the pudding on that one. That's what we're hearing back as we go out and talk to our investigators in both the U.S. and Europe.

Our last question is one that we frequently receive from investors. We're interested in your thoughts on this. Does Kura have any intention to enter the diabetes market?

Yes, that's a great question. We are conducting preclinical research not only with ziftomenib but also with next-generation reversible menin inhibitors. We're focusing on diabetes models to ensure our approach is data-driven. The data you're mentioning is intriguing, but quite incomplete. If there is indeed a connection and a biological rationale for using a menin inhibitor in diabetes, the key considerations will be the effect size and safety. We believe ziftomenib is the leading menin inhibitor for acute leukemia. For diabetes or solid tumor indications, it's important to consider a different compound from both a safety and IRA perspective. Based on our chemistry team's efforts, I think we will have a top-performing reversible inhibitor for diabetes. However, we need to validate this as a significant opportunity because it involves a totally different development approach.

There are no further questions at this time. I will turn the call over to Troy Wilson, President and CEO, for closing remarks.

Thank you, Julie, and thank you all once again for joining our call today. We'll be participating in the JMP Life Sciences Conference next week in New York, and we look forward to seeing a number of you there. In the meantime, if you have any additional questions, of course, please feel free to contact Pete, Tom, or myself. Thank you again, and have a good evening, everyone.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines.