Oncolytics Biotech Inc Q1 FY2024 Earnings Call

Good afternoon and welcome to Oncolytics Biotech's First Quarter 2024 Conference Call. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Jon Patton, Director of Investor Relations and Communications. Please go ahead.

Thank you, operator, and good afternoon, everyone. Earlier today, Oncolytics issued a press release providing recent operational highlights and financial results for the first quarter of 2024. A replay of today's call will be available on the Events section of the Oncolytics website approximately two hours after its completion. After remarks from company management, we will open the call for Q&A. As a reminder, various remarks made during this call contain certain forward-looking statements relating to the company's business prospects and the development and commercialization of pelareorep, including statements regarding our mission, our belief in the essential mechanism of action of pelareorep as a cancer therapeutic. We believe we are positioned to begin registrational track studies in breast and pancreatic cancer, and our strategies and upcoming milestones in connection therewith, and our critical objectives through 2024 anticipated timing and the release of additional data indicating the company believes it has sufficient cash to achieve these milestones and other statements related to spending built into the company's business. These statements are based on management's current expectations and beliefs and are subject to a number of factors that involve known and unknown risks, delays, uncertainties, and other factors not under the company's control that may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. In any forward-looking statements, expectations or beliefs are expressed in good faith and are believed to have a reasonable basis. But there can be no assurance that the statement or expectation or belief will be achieved. These factors include results of current or pending clinical trials, risks associated with intellectual property protection, financial projections, actions by regulatory agencies, and those other factors detailed in the company's filings with SEDAR and the SEC. I undertake no obligation to update these forward-looking statements, except as required by applicable laws. I'm joined by several members of the Oncolytics management team to review our first quarter 2024 results and corporate updates, including Chief Executive Officer, Dr. Matt Coffey; Chief Financial Officer, Kirk Look; and Chief Medical Officer, Dr. Tom Heineman. Dr. Coffey will begin our discussion today. Matt, please take it away.

Thank you, Jon. Good afternoon and welcome to Oncolytics' first quarter conference call. Oncolytics' mission is to improve the lives of people with cancer by bringing our proprietary immunotherapeutic product candidate, pelareorep, or pela, as we will refer to it, to patients as quickly as possible. We are taking the next steps to make that happen as we transition to become a late-stage cancer company by progressing pela in our two lead indications, breast cancer and pancreatic cancer. As we will discuss throughout the call, we are building the necessary foundation to begin registrational track studies for both of these indications, for which there is an urgent need for new or alternative therapies. We have organized today's call to provide you with a comprehensive update on progress and upcoming milestones. I'll spend a few moments sharing what excites us about pela and touch on our recent developments, upcoming milestones, and key corporate messages. After that, I will ask Tom to provide an update on the breast cancer program for the GOBLET pancreatic cancer cohort expansion, the anal cancer cohort, and initial plans for the registrational track pancreatic cancer study. Then I will ask Kirk to review the financials, and finally, we will end by taking your questions. I'll start with a brief note on what makes it such a compelling immunotherapy candidate. In a nutshell, it’s all about results: how it is delivered intravenously and works systemically. It is able to selectively replicate in tumors and introduce double-stranded RNA into these cancer cells. This results in generating the recruitment and training of immune cells to begin identifying cancer cells to enable their killing in addition to remodeling the tumor microenvironment to activate immune cells. This has been highly unique because the responses pela generates have led to synergies with multiple cancer treatments, including chemotherapy, immune checkpoint inhibitors, CAR T-cell therapy, and others. These synergies come from two randomized breast cancer studies, multiple studies in pancreatic cancer, and recently, there's been an intriguing efficacy signal in the anal cancer cohort of our GOBLET study, which included a complete response even in the absence of standard cytotoxic chemotherapies. In these clinical trials, pela is used in combination with chemotherapy drugs like nab-paclitaxel for immune checkpoint inhibitors like atezolizumab. Compelling data from these studies showed that treatment with pela produced meaningful clinical responses with favorable comparisons to historical controls. As in the case of GOBLET, from randomized controlled trials demonstrated in breast cancer, it has demonstrated a positive association between increases in tumor infiltrating lymphocytes or TILs and tumor responses, and those results are by patients. Taken together, these data form the basis of our enthusiasm for pela as a novel differentiated immunotherapeutic agent and support our plans to study it with registration track studies. 2024 is off to a promising start. We're building on our compelling pela clinical database and continuing our transition to become a late-stage oncology company. A few notable milestones marked our year-to-date progress. We've been granted a Type C meeting with the FDA for a Q2 2024 meeting to discuss our planned registrational enabling study in breast cancer, defining this registration of pelareorep in breast cancer as a pivotal cohort clinical goal for the year. We expanded enrollment for the cancer cohort of the GOBLET study to strengthen the already promising signal of efficacy. This is important because it could open the door to a new registrational indication, an accelerated approval pathway. We received regulatory clearance to begin enrolling patients in the new pancreatic cancer cohort of the GOBLET study. This cohort will evaluate pela in combination with a widely used chemotherapy regimen called modified FOLFIRINOX, with and without atezolizumab. The study is supported by a $5 million grant from the Pancreatic Cancer Action Network, known as PanCAN, which provides additional positive validation for pela. We affirm plans to report overall survival data from the Phase 2 BRACELET breast cancer study in H2 2024. While we have reported overall survival response data for pela paclitaxel, that is three times that of paclitaxel monotherapy, overall survival data continues to mature. This has the potential to be a major catalyst as we have already had another metastatic breast cancer study called IND-213 for overall survival integrations. We announced that two abstracts related to clinical and translational data were selected for presentation at the annual meeting of the American Society for Clinical Oncology or ASCO 2024, which we'll be able to discuss in more detail later this month. We continue to maintain an active dialogue with our clinical collaborators and potential strategic partners. These discussions provide valuable perspectives that have shaped and enriched our registrational study plans. Looking ahead, we remain laser-focused on our critical objectives for 2024. In H1 2024, we intend to provide guidance on the registration path for pela in breast cancer. Over the coming months, we expect to enroll the first patient in Cohort five of the GOBLET study, which is evaluating pela plus modified FOLFIRINOX with and without atezolizumab in pancreatic cancer patients. Also in H2 2024, we expect to report overall survival data from the BRACELET-1 breast cancer study. Now, before I turn the call over to Tom to provide you with an update on our clinical programs, I’d like to thank everyone in the Oncolytics organization and our collaborators for the dedication that you bring to our mission every day to improve the care of patients with cancer. Your work and unwavering commitment are critical to advancing the development of pela. Tom?

Thanks, Matt. During today's call, I will provide an update on Oncolytics' breast cancer program, the new pancreatic cancer cohort and the GOBLET study, the expansion of the GOBLET study, anal cancer cohort, and our plans for a registrational track pancreatic cancer study. Over the coming months, we will provide updates on our ongoing clinical trials as new results become available. Starting with our breast cancer program, I'd like to touch on three topics. First, our thoughts on the most appropriate registrational trial. Next, the upcoming Type C meeting with the FDA to discuss our breast cancer program, and finally, the BRACELET-1 study survival results. Let me start with our thoughts on what constitutes a registrational trial in breast cancer. As the BRACELET-1 data has continued to mature, we have spent the past year speaking with our clinical advisers, collaborators, and potential partners about registrational trial strategies for new breast cancer therapeutics. The strategy that has emerged from these discussions is to advance pela to regulatory approval in breast cancer utilizing a cost-effective approach that optimizes study timelines and retains sufficient flexibility to adapt to the evolving breast cancer treatment space. Our conversations with potential pharmaceutical partners have emphasized the value of conducting an efficiently sized randomized control study that with positive data could lead directly to a registrational filing or to substantially derisk a subsequent Phase 3 study. It is notable, for example, that Pfizer's CDK4/6 inhibitor received its initial approval in breast cancer based on the 165 patient randomized Phase 1 study. On the topic of our upcoming Type C meeting, as Matt indicated, defining the registrational path for pela in breast cancer is a major goal for Oncolytics in 2024. Earlier this year, we submitted a Type C meeting request to the FDA, and the meeting will take place in the second quarter of 2024. At this meeting, we will discuss our proposed next breast cancer clinical trial with the FDA, including the anticipated study design, study population, and study endpoints. Through this interaction, we expect to align with the agency on the optimal clinical approach, which will allow us to move forward confidently as we continue to develop pela as a treatment option for breast cancer patients. Next, the BRACELET-1 survival data. We previously reported strong tumor response and progression-free survival results from the BRACELET-1 study. Overall survival results from BRACELET-1, which have not yet been reported due to ongoing patient follow-up, are anticipated later this year. As Matt mentioned, the earlier IND-213 study showed a significant survival benefit in HR-positive HER2-negative metastatic breast cancer patients who received the combination of pela and paclitaxel compared to paclitaxel alone. Strong overall survival in the pela-paclitaxel arm in BRACELET-1 will serve to validate these earlier findings and support discussions with potential strategic partners and with regulators. Moving to the GOBLET study, I'll touch on two topics. First, the expansion of the anal cancer cohort and then the new cohort in GOBLET study evaluating pela combined with modified FOLFIRINOX. By way of background, the GOBLET study is a platform study designed to assess the potential of combination therapies to benefit patients with advanced or metastatic gastrointestinal cancers. It is being conducted at 12 centers in Germany and is being managed by our clinical collaborator, the AIO study group. To date, we have evaluated three cohorts: first-line metastatic pancreatic ductal adenocarcinoma or PDAC, third-line metastatic colorectal cancer, and second-line or later anal cancer. In each of these indications, the pela-based combination therapy met the initial predefined success criteria. Starting with anal cancer, on February 14, we announced plans to initiate the expansion of enrollment into this cohort based on positive preliminary results reported at an international medical meeting in November of last year. It is notable that this cohort evaluates the combination of pela and atezolizumab without chemotherapy in patients with second-line or later disease. Positive results from the expanded anal cancer cohort may open the door to an accelerated registrational path. A modest expansion of fewer than 28 patients is expected to be sufficient to confirm the benefit we've seen so far and to provide the basis for a registrational study, which we anticipate will be the next logical step. We are actively enrolling patients into this study as well as adding new sites. We intend to report additional anal cancer results in 2025. Moving to the modified FOLFIRINOX pancreatic cancer study. On March 5, we announced plans to initiate a new pancreatic cancer cohort in the GOBLET study. This cohort is supported by a $5 million grant from PanCAN. We'll evaluate pela in combination with modified FOLFIRINOX with or without atezolizumab in newly diagnosed PDAC. This study complements our ongoing development of pela in combination with gemcitabine and nab-paclitaxel, the other commonly used chemotherapy for metastatic pancreatic cancer. Evaluating pela in combination with both of these widely used chemotherapeutic regimens will broaden the scope of our clinical development program with the goal of making pela-based therapies available to the widest possible range of pancreatic cancer patients. Earlier this morning, we announced we have received regulatory approval to move forward with the pela-modified FOLFIRINOX combination study, and we expect to enroll patients beginning in the second quarter of this year. In closing, I'd like to discuss our registrational plans for pela in pancreatic cancer. Our registrational strategy will focus on pela in combination with atezolizumab, gemcitabine, and nab-paclitaxel in patients receiving first-line treatment for metastatic pancreatic cancer. We continued to develop a study protocol that utilizes an adaptive design building on the positive results from Cohort 1 of the GOBLET study. We expect to provide an update on these plans this quarter. Before I close, I'd like to express our deep thanks to everyone who has participated in or supported our clinical program. We are very grateful for your valuable contributions. Now I'd like to turn the call over to Kirk to review the financial results for the first quarter of 2024.

Thanks, Tom, and good afternoon, everyone. During this portion of the call discussing our financial results, I will be providing data in Canadian dollars unless otherwise noted. A full summary of our financial results can be found on the Investors section of our website under filings and reports for in the press release issued earlier this afternoon. As you all will hear, we have taken a responsible approach to our financial strategy and spending. The company closed the first quarter with $29.6 million in cash and cash equivalents compared to $34.9 million in cash and cash equivalents as of December 31, 2023. We believe this will enable us to achieve the milestones discussed in today's call. Net loss for the first quarter of 2024 was $6.9 million compared to $6.4 million in the first quarter of 2023, equating to a net loss of $0.09 per share in the first quarter of 2024 compared to a net loss of $0.10 per share for the same period in 2023. The general and administrative expenses for the first quarter of '24 were $3 million compared to $3.2 million for the first quarter of 2023. The change is primarily due to lower public company-related expenses associated with lower investor relations activities and lower directors' and officers' liability insurance premiums. Our research and development expenses for the first quarter of 2024 were $5.7 million compared to $3.5 million for the first quarter of 2023. The change was mainly driven by higher manufacturing expenses associated with completing a cGMP production run and the related batch testing. We've also begun preparation for upcoming product fill. So this is an exciting time for Oncolytics as we position the company to make the jump to a late-stage oncology company. We look forward to providing updates on our progress, especially in regard to the registration-enabling studies for breast and pancreatic cancer. I'll now give the call back to Matt for closing comments.

Thanks, Kirk. As we conclude today's call, I hope you take away these key messages. Pela is on track to advance the registrational trials in breast cancer and pancreatic cancer. We believe our robust positive clinical and translational data supports pela's mechanism of action as an immunotherapeutic agent. We expect to report overall survival data from the BRACELET-1 breast cancer study in H2 2024. The pela dataset has attracted and enriched the interest of the clinical oncology community and potential strategic partners. And finally, expanded enrollment in the anal cancer cohort of the GOBLET study could open the door to a new registrational indication. As Kirk mentioned, we are enthusiastic about the groundwork we have laid so far this year as we move closer to starting the registration-enabling studies to bring pela closer to regulatory approval. I don't think I've ever been more excited about our dataset and the productive discussions that we've been having with key opinion leaders, clinical collaborators, and regulators. Operator, I would now like to open the call for questions.

Your first question comes from the line of John Newman from Canaccord.

Hey, guys. Thanks a lot for taking my question. Just wondering if you could provide a little bit more color on the potential design of a pivotal study in metastatic breast cancer with pela. Obviously, you're going to be meeting with the FDA soon. But just curious, generally speaking, sort of what that design could look like? Thanks.

Thanks, John. I'm going to push Tom under the bus on this one. And it's interesting because I'm not sure if you saw the Destiny 6 results that came out yesterday because that certainly has a bearing on what we were able to flag with the Type C meeting with the agency, and then very loosely, we can talk about comparable studies on that. I think if there are any questions at that time, we'd be happy to help out.

Yeah. Hi, John. So as we mentioned, we will be meeting with the FDA to discuss some of the key elements of our next breast cancer study, and among those key elements will be the population. And that's what Matt was referring to: we want to make sure that the population we evaluate in our next study is the most relevant from the perspective of the current and future standard of care for these patients. The Destiny 6 results, which are expected shortly, will help shape the future standard of care in metastatic breast cancer patients who failed hormonal therapy. We want to anticipate that and will have a specific discussion with the agency about the most appropriate population. We also plan to discuss some of the other key elements of the study design, including the primary endpoints and the statistical plan in general. Our goal is to design a study that is efficient, flexible, quick, and offers the potential for registration of pelareorep in this population.

Your next question comes from the line of Rahul Sarugaser from Raymond James.

Hey, Matt, Kirk, and Tom, this is Mike on for Rahul today. Congratulations on the action-packed quarter. I have a question on the interaction between the two pancreatic cancer trials. And congratulations on announcing your green light on the mFOLFIRINOX trial. I'm curious about your go-forward plan with these two trials in mind. The Cohort 1 trial seems to be more advanced than the latter. I'm curious about your staging in respect to registration for those two trials.

Mike, great question. And I'm glad you asked that because I think there's some confusion around why we would like to pursue both first-line studies. What we're finding from GOBLET is the earlier the patient, the more robust the T-cell response. So when we look at pancreatic, they have, by far, the strongest T-cell response. Anal, in the second line, is the next time we get the third line colorectal. We've met the success criteria, but there's more of a muted T-cell response. So we want to see in the first-line setting. And there's a really nice paper by Jim Allison that just came out talking about how immunotherapy has become more effective in the treatment. So we want to say in the first-line setting, patients with pancreatic cancer, even in the first-line setting, can be quite variable. Older patients, patients receiving adjuvant therapy tend to get nab-paclitaxel gemcitabine because it's considered to be gentler. So you're going to see a little bit less than half the patients getting that. We combine that based on results that we had with nab-paclitaxel in the past and think it did very well with that study. Similarly, those patients were given gem nab-paclitaxel because I think almost a third of them had received a prior modified regimen, but they were entirely appropriate for that patient population to get gem nab-paclitaxel because they were more heavily pretreated and had more burdensome disease. With this second study, it is randomized to modified FOLFIRINOX plus-or-minus atezolizumab. Our expectation in Type C patients will have much higher organ reserve, allowing less pretreatment and hopefully fewer liver metastases. So we can go in there and treat much more aggressively. The treatment will be much easier to characterize the role we're seeing for T-centriq. From what we've seen before, T-centriq does enhance the inflammatory response. We do see greater numbers of NK and T-cells in T-centriq's presence, and we get a lot fewer exhaustion markers. Therefore, we expect tremendous activity with the addition of T-centriq because they work so well together. By addressing both groups, we hope to become the standard of care for all first-line patients in pancreatic cancer, irrespective of their pretreatment histories or organ reserve. Tom, did you want to add?

No, no, I think that covers it. The bottom line is that by exploring pela in combination with both of the backbone chemotherapies that are commonly used in this population, it provides an opportunity to treat ultimately the broadest range of patients and to give physicians the most flexibility possible and the best option for all pancreatic cancer patients.

Okay, very helpful. And quickly on the data that you think represents at ASCO coming up, this Phase 1/2 trial with mFOLFIRINOX. I'm curious from where this data drives and what maturity of data should we expect here and I guess the data cutoff date we might be presenting the data?

So just to be clear, the poster presentation that we'll have at ASCO related to the modified FOLFIRINOX study is a trial in progress poster in which we outline the details of the study that will be currently enrolling. There will be no data from that study presented at ASCO at this meeting.

Got it. Thanks for clarifying. I'll pass it on.

Operator, is there another question? Well, if there's no further questions, I just want to thank everyone for participating in today's call and for following Oncolytics' development. We're optimistic about the potential of pela to make a big difference in the lives of cancer patients. I look forward to updating you on our progress throughout the year, and I wish everyone a great evening. Thanks so much.