Earnings Call Transcript - MRKR Q1 2020

Operator, Operator

Good afternoon, ladies and gentlemen and welcome to the Marker Therapeutics First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. It’s now my pleasure to introduce your host, Mr. Tony Kim, Chief Financial Officer. Please go ahead.

Tony Kim, CFO

Thank you and welcome everyone to our first quarter 2020 earnings call. The press release reporting our financial results is available in the News section of our corporate website at markertherapeutics.com. Joining me for the call today are Peter Hoang, our President and Chief Executive Officer; Dr. Juan Vera, Chief Development Officer; and Dr. Mythili Koneru, Chief Medical Officer. As a reminder, we will be making forward-looking statements during today’s call. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-Q on file with the SEC. I would now like to turn the call over to Peter Hoang.

Peter Hoang, CEO

Thank you, Tony. Good afternoon everyone and thanks for joining us. Before we get started, I’d like to take a moment to address the COVID-19 pandemic that is affecting all of us today. Most importantly, our thoughts are with the patients and their families who’ve been directly impacted. And to the healthcare workers who are on the front lines, we are immensely grateful for your sacrifices that keep us all safe. As the situation continues to evolve, we have remained nimble in our decision-making regarding our business operations and strongly focused on the well-being of our employees and the patients that we serve, with their health and safety being our top priority. As such, we implemented the work from home policy in March and continue to follow local and federal health authority recommendations regarding travel restrictions, quarantines, and social distancing among other measures that help contain the virus. As the situation remains in flux, it’s challenging to predict the full impact of the COVID-19 pandemic on our business and the healthcare system as a whole. At this time, we are experiencing some immediate effects on the timing of our planned Phase 2 trial in acute myeloid leukemia or AML, resulting from delays experienced by our partners and supply chain. Our team has worked diligently to mitigate these effects, but it’s clear that these developments may impact our schedule. Mythili will address the details surrounding the situation in just a moment, but we remain optimistic and do not expect long-term material impact. Due to the unpredictability of the current environment surrounding the COVID-19 pandemic, we believe that it’s prudent to withdraw our guidance on the timing of our AML trial until the outlook clarifies for our clinical and supply chain partners. We continue to monitor the situation closely of the course, and make decisions based on the health and wellness of our employees. With that, I would like to hand the call over to Mythili to give a brief overview of the current landscape on the clinical front.

Mythili Koneru, CMO

Thank you, Peter. As you recall, based on data collected from academic sponsored studies at the Baylor College of Medicine or BCM, spanning various liquid and solid tumor cancers, we selected AML as our lead indication. In the BCM trials, patients treated with our novel MultiTAA-specific T cell therapy demonstrated durable responses, some lasting more than five years, with minimal to no treatment-related toxicities. In February, we were cleared by the FDA to initiate what will be our first company-sponsored trial, beginning with a safety lead-in portion, which will enroll about six patients. Under an amended trial protocol, the first three patients were cleared to be dosed with our legacy reagent, while the remaining three patients in a safety lead-in would be dosed with MT-401, our MultiTAA-specific T cell product manufactured using a new reagent from an alternative supplier. Our partial clinical hold remains on the trial until the FDA reviews and accepts the final data and certificate of analysis for the new reagent to be provided by the alternate new supplier. While we are eager to get the first three patients enrolled in our Phase 2 study, Baylor College of Medicine’s Research and GMP facilities, the latter of which we currently utilize to produce study drug supply remained closed due to safety precautions surrounding the COVID-19 pandemic. With Baylor’s Manufacturing and Research facilities expected to remain closed well into the second half of this year, we may need to pause patient enrollment for the safety lead-in portion of the study. We are uncertain at this time when Baylor’s facility will become available, but remain optimistic that once we are able to open the study, there will be significant patient interest. Additionally, due to the pandemic, our supplier has notified us that it will be delayed providing the new reagent along with the information to satisfy the FDA’s requirements for lifting the partial hold. We remain in close communication with them and will provide updates as they become available. In the interim, we continue to remain active identifying clinical trial sites and also working to complete process development and IND related experiments required for the initiation of our study and the build-out of our own manufacturing capabilities. We are moving with a sense of urgency as we recognize the need for new and improved therapies in AML, which affects more than 60,000 people in the United States alone. Despite adjustments to our guidance, we remain confident in the potential of MultiTAA-specific T cell therapy. In fact, just several weeks ago, the FDA granted orphan drug designation to MT-401, our lead drug candidate for patients with post-transplant AML, which we believe is yet another strong indicator of its promise in a challenging-to-treat disease. As we have seen in BCM sponsored studies, MultiTAA-specific T cell therapy consistently demonstrates several advantages over standard approaches, as well as other T cell therapies in development across multiple tumor types. Because of their potential to recognize multiple antigens, MultiTAA-specific T cells may enable epitope spreading, which may lead to a more potent and durable anti-tumor response. Additionally, in contrast to transplants, which require hospital stays, MultiTAA-specific T cells are administered in an outpatient setting, which is not only safer and more convenient for the patient, but it benefits the healthcare system as a whole. To that end, we are currently evaluating opportunities in other indications, in addition to our planned Phase 2 trial in post-transplant AML patients. Beyond AML, MultiTAA-specific T cell therapy has demonstrated encouraging early results in various other cancers, including solid tumors such as pancreatic cancer. We’ve previously reported interim data for an ongoing Phase 1/2 clinical trial of MultiTAA-specific T cell therapy for the treatment of pancreatic adenocarcinoma being conducted by BCM. In the front-line treatment arm, in combination with standard-of-care chemotherapy, we observed that clinical benefit correlated with a post-infusion detection of tumor-reactive T cells in the patient’s peripheral blood. These T cells exhibited activity against both targeted antigens and non-targeted TAAs, indicating the induction of antigen spreading. To date, we have not observed any cytokine release syndrome or neurotoxicity in this trial. An update for the study will be presented during the Annual Meeting of the American Society of Clinical Oncology later this month, which as you know, will be held virtually this year on account of the COVID-19 pandemic. The abstracts will be available this Wednesday, May 13th, around 5 PM Eastern on the ASCO website, at which point we look forward to being able to discuss in further detail. With that, I will turn it over to Tony to review the financials. And after that, we look forward to taking your questions.

Tony Kim, CFO

Thanks, Mythili. We ended the first quarter with $40.3 million in cash and cash equivalents. We believe we will have enough cash on hand to take us into the second quarter of 2021. This excludes the cash available to us from our recent common stock purchase agreement of up to $30 million with Aspire Capital, an institutional investor and long-term shareholder of Marker. Net loss for the quarter ended March 31st, 2020 was $6.5 million, compared to a net loss of $5.3 million for the quarter ended March 31st, 2019. Research and development costs during the three months ended March 31st, 2020 was $3.8 million, compared to $2.8 million during the three months ended March 31st, 2019. The increase of $1 million was primarily attributable to headcount-related personnel expenses. General and administrative expenses were $2.8 million during the three months ended March 31st, 2020 and March 31st, 2019. With that, I would like to open the call for questions. Operator?

Operator, Operator

Thank you. We will now begin the question-and-answer session. Our first question today is from Matt Biegler from Oppenheimer. Your line is now live.

Matt Biegler, Analyst

Hey, guys. Thanks for taking my questions and thanks for the update. Peter, I had a question about the sequencing of patients in the AML trial. Just remind me prior to your discussions with the FDA, do you have to wait for the first three patients to be treated before you can switch to the new reagent treated patients? Or assuming the agency accepts the preclinical package for the revised reagents? Could you maybe possibly enroll all six of the leading cohort at the same time?

Peter Hoang, CEO

Hey, Matt. Thanks for the question. It's a great question. Mythili, do you want to take that?

Mythili Koneru, CMO

Sure, thank you. So to address your question, the patients that are enrolled with the previous reagent, those patients can be enrolled at the same time as the patients that are going to be treated with MT-401 using the new manufacturer for the reagent. The only issue is that each patient needs to have a two-week span between their first treatment, so that both sets of patients can be enrolled simultaneously.

Matt Biegler, Analyst

Okay. So there’s no requirement for you to first enroll the three patients with the old reagents before you can switch to the new reagent. It really just depends on when the manufacturer can turn around the certificate of analyses.

Mythili Koneru, CMO

That is correct.

Matt Biegler, Analyst

Okay, great. That makes sense. And then maybe if you could provide me with any detail on the pancreatic cancer trial update. Could we expect maybe biopsy data from Group C, which was neoadjuvant arm on and then maybe anything else you can tell me in terms of data flow from the other Baylor trials this year would be appreciated. Thanks.

Peter Hoang, CEO

You know absolutely. With respect to the pancreatic trial, the update for ASCO, the abstracts will become live on Wednesday at 5 PM Eastern Time. So we’ll look forward to providing more data you know, so you know after the object around in the course, when the presentation is actually given at the ASCO Conference. The second question you had, Matt was –

Matt Biegler, Analyst

About the other Baylor ongoing trials?

Peter Hoang, CEO

Yeah, Mythili, do you want to talk a little bit about the ongoing trials?

Mythili Koneru, CMO

Yeah. I mean, at this time as Peter mentioned, we are looking forward to the presentation at ASCO of the pancreas data and we plan to provide an update on additional trials as they become available, so yeah.

Matt Biegler, Analyst

Okay. Thanks, guys.

Operator, Operator

Our next question today is coming from Christopher Marai from Nomura. Your line is now live.

Jackson Harvey, Analyst

Hello, this is Jackson Harvey on for Christopher Marai. Thanks for taking the question. I was just curious about the ongoing Baylor trials. I recognize you’ll be having some updates later this year. But I’m just curious if they’ve been affected by the COVID-19 pandemic at all or have you been able to collect time points on these patients, in particular patients in the ADSPAM trial and that new high-dose arm that was recently added? Thank you.

Peter Hoang, CEO

Yeah, Mythili, do you want to comment?

Mythili Koneru, CMO

Sure. You know, as Peter mentioned, it’s difficult to predict the timelines given the current environment. We’re still monitoring the situation and in general, the studies at Baylor College of Medicine are proceeding as planned. I would say that there was one patient in the highest dose level of the Phase 1 study AML study that has been enrolled, but the treatment has been delayed due to COVID-19. As far as I know, that is the only delay I’m aware of regarding the Baylor study.

Jackson Harvey, Analyst

Okay, understood. And then just in terms of the pancreatic cancer trial, what kind of data would you like to see before maybe deciding that this would be something that you would pursue as a company-sponsored trial as well? Thank you.

Peter Hoang, CEO

That’s a great question. You know, we continue to monitor the data as it develops. As you know, last year when we presented the original pancreatic results, we had data from nine patients, including response rates where our nine of the ten patients who’ve been dosed to date. At this point, we’re looking for further evidence of efficacy. Obviously, we’re now about nine months from the time that we originally presented that data. At this point, you know, I think that we want to continue to monitor how these patients are doing, not just from a response rate perspective, but with respect to progression-free survival and overall survival and determine whether we’re seeing a meaningful therapeutic benefit that would justify a follow-on company-sponsored study.

Jackson Harvey, Analyst

Great, thank you so much.

Operator, Operator

Thank you. Our next question is coming from Tony Butler from ROTH Capital. Your line is now live.

Tony Butler, Analyst

Thanks a lot. Peter or Mythili, I appreciate the clarity around the two-week interval between the patients in the leading cohort of the AML trial. My question is actually at the end of the six total patients of the leading cohort, what then would you need to report to the FDA to move to the larger portion of that particular study? And importantly, is there a time limit upon which you need to submit those data? Thank you.

Peter Hoang, CEO

Thanks, Tony. Let me turn the question over to Mythili as well.

Mythili Koneru, CMO

Yes, thank you for your question. Regarding the parameters that we’re looking for the patients in the safety lead-in, the protocols typically outline dose-limiting toxicities that are provided in detail and those are the things that we will be looking for in terms of safety for these patients. If no dose-limiting toxicities occur as outlined in the protocol, we can then proceed into the Phase 2 study. There is no specific time limit that is outlined for us to achieve this goal, but obviously we’d like to do it in a manner that is safe and expedient. But we do not need to necessarily, while we will report this to the FDA, it’s not a prerequisite in starting the Phase 2 portion of the study.

Tony Butler, Analyst

So I apologize if I may just continue on that. And thank you for that clarity. But you’re also suggesting that there, once you report the DLTs, whatever they may be, you can simply move into that Phase 2 trial, you don’t need to wait on the FDA to respond. Am I understanding correctly?

Mythili Koneru, CMO

Correct. I mean, it depends on obviously the safety issues that are identified in the safety lead-in, but assuming no DLTs are identified, that is correct.

Tony Butler, Analyst

That’s perfect. Thanks so very much.

Mythili Koneru, CMO

Sure.

Operator, Operator

Thank you. The next question today is coming from Yun Zhong from Janney. Your line is now live.

Yun Zhong, Analyst

Hi, thank you for taking the question. So, on the pancreatic cancer data readout, is it correct to assume that there will be updated data from all three groups, the responsive, non-responsive plus the reset vocation? And also, I think Peter talked about patient enrollment before the last date of readout back in July last year. Are you able to say anything about patient enrollment after the data readout in July?

Peter Hoang, CEO

Hey, Yun. Thanks for the question. So the first question, we ask you to wait until the abstracts are released there, with respect to the overall patient counts. We want to be mindful of asking those timelines here. As I said before, we do expect that they will be releasing that on Wednesday of this week at 5 PM. With respect to the poster presentation, that’s determined by the Baylor investigators, in this case, I do believe that they have focused on any of the trials that are the patients who are receiving therapy in conjunction with standard of care.

Yun Zhong, Analyst

Okay, thank you.

Operator, Operator

Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.

Peter Hoang, CEO

Thank you very much. So thank you all again for joining our call today. We briefly acknowledge and hope that everyone is healthy and safe in this challenging time. Well, everyone, and please reach out to us if you have any additional questions. Thank you.

Operator, Operator

Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.