Earnings Call Transcript - PSTV Q1 2021

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics First Quarter 2021 Results Call. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following the presentation. Before we begin, we would like to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics' future operating results and financial position. All such statements are subject to risk and uncertainties, including the risk and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics' President and Chief Executive Officer. Sir, you may begin.

Marc Hedrick, CEO

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2020 Results Call. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following the presentation. Before we begin, we would like to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics' future operating results and financial position. All such statements are subject to risk and uncertainties, including the risk and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics' President and Chief Executive Officer. Sir, you may begin. Great. Thank you, Catherine. Good afternoon, everyone, and thank you for taking the time to join us today as we provide an overview of recent business highlights and discuss our 2021 first quarter results. Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer. Before Andrew provides a summary of our financial performance, I would like to provide an update on the company's business activities since our last earnings call. For those of you new to the company, Plus develops complex, innovative therapeutics for rare and difficult to treat cancers such as cancers of the central nervous system. Our aspiration from a drug development perspective is to leverage our expertise in drug formulation, nanoparticle drug design, drug manufacturing, scale up, and expertise in novel delivery technologies to provide better tumor targeting, a greater safety profile, and ultimately better clinical outcomes. Toward that goal, in 2020 we broadened our expertise and technology platform to include the use of radionuclides in our drug formulations. Our lead drug is RNL, Rhenium Nanoliposomes, which is a proprietary liposomal encapsulated radium nuclei. The active agent is the radium 186 isotope, which is a dual energy inductor with recent blood cancer killing beta particles and gamma particles, which are useful for imaging. Our initial indication for RNL is recurring glioblastoma, which affects approximately 12,000 patients in the US and about the same number of patients in the EU. It is the most common and lethal form of brain cancer and the treatment of this devastating disease remains a significant medical challenge. Published studies indicate that external beam radiation provides the best incremental improvement in survival of all therapies currently used for glioblastoma and it remains an essential component of multimodal therapy for both glioblastoma and, in fact, many other cancers. In theory, though, glioblastoma and indeed any tumor can be fundamentally controlled with a sufficient dose of radiation delivered to that tumor. With RNL, it may be possible to deliver radiation doses only to the tumor that is perhaps 20 times higher than can be given with external beam radiation therapy and, despite the super high doses of radiation delivered by RNL, and precisely because of its inherent tumor targeting capability, unwanted radiation exposure to nearby healthy tissue is actually reduced. This compares favorably to the most commonly used chemotherapy, as well as external beam radiation, which is associated with significant side effects that occur due to their deleterious effects on normal tissues. Preclinically, in animals, RNL has shown the ability to deliver almost 2000 gray, substantially prolonging survival and ablating brain tumors, since the cancer cells cannot be observed under the microscope. So the RNL product is currently under evaluation in the US RESPECT trial, which is a dual phase 1/2 multicenter sequential cohort open-label volume and dose escalation study of the safety, tolerability, and distribution of 186 RNL administered by convection-enhance delivery to patients with recurrent or progressive malignant glioma after standard surgical radiation and/or chemotherapy treatment. The study uses a modified 3+3 dose escalation scheme followed by an expansion at the tolerated dose to determine efficacy. In addition, the trial is funded to a significant degree by the US National Cancer Institute. And in short, the trial is progressing nicely. In November 2020, we provided an interim analysis from the first 15 patients enrolled in RESPECT specifically going fifth cohort and this can be found on our website. In this interim look at RNL, we found that it successfully delivered approximately 15 times the absorbed dose of radiation that can be administered by standard external beam radiation therapy without significant toxicity. RNL was well tolerated, with no dose-limiting toxicity observed despite markedly higher absorbed doses of radiation compared to EBRT. Most recently, in March of this year and in a corporate presentation in Europe, which can also be found on our website, we provided an interim update through Cohort Six. In summary, we found that it is feasible to deliver 8.8 CCs of RNL loaded with 22 mCi of radiation safely without treatment-related serious adverse events. In fact, most adverse events were causally unrelated to RNL, except for scalp discomfort considered related to the surgical procedure itself but not the drug. High absorbed doses were delivered to the brain, nearly 600 gray, but only with very limited systemic radiation outside the brain. In fact, approximately 3,000-fold difference between radiation to the brain versus the body demonstrated the absence of systemic effects of the radiation. There are two long-term survivors greater than 30 months and in terms of overall survival, median and mean survival duration in subjects with tumor coverage greater than 75% was, at the time, 8.3 months and 12.9 months respectively, with six patients still alive. Median survival duration with tumor coverage less than 60%, which was largely the failing patients, was 4.9 months with one patient still alive. Rather than escalate the Cohort Seven after Cohort Six, the Data Monitoring Safety Board elected to treat an additional three patients at the Cohort Six dosing volume but increase the convection rate to 20 microliters per minute. Based on the physics of convection, the presumption is that enhanced RNL distribution in the brain will be observed and, therefore, better coverage of the residual non-enhancing tumor cells achieved and, in theory, ultimately better patient outcomes. Our experience thus far with the planned additional patients at 20 mCi per minute has been successful in treating two out of three patients with others in screening. Thereafter, the SMB will evaluate the data and discuss and make recommendations. Potential next steps, assuming no emergent dose limiting toxicities are observed, include but are not limited to escalation of the dose in Cohort Seven, enrolling additional patients at current levels with further changes in delivery parameters, or simply moving directly to the Phase 2 expansion cohort at the recommended Phase 2 dose. As an aside and running in parallel to Phase 1 and outside the direct clinical objectives of the trial, we are also developing, in conjunction with academic collaborators, a mathematical model to better predict the spatial and temporal distribution of RNL delivered by convection. Data collected by Phase 1 imaging, when interpreted and analyzed, will upgrade a mechanism-based model of delivery and hopefully facilitate increasingly more accurate delivery of RNL in the Phase 2 expansion component of the trial and therefore maximize the clinical outcomes. Regarding additional clinical development programs for RNL, a priority for us in 2021, as we've explained previously, has been to begin clinical development with RNL in additional indications. To that end, we submitted two RNL pre-IND meeting briefing packages to the FDA, one for leptomeningeal metastases, the other for pediatric brain cancers including other indications. We plan to conduct these pre-IND meetings with the FDA for both indications in 2021, acknowledging the gaps that may exist in the preclinical data and updating those as needed to initiate those trials as early as 2021. Both indications represent significant unmet medical needs and for example, leptomeningeal metastases affect about 110,000 patients in the US that currently have no clear standard of care, and these patients die very rapidly despite the care being currently provided to them. As for pediatric brain cancers, they are rarer, but carry an equally poor prognosis. The treatment approach we envision for pediatric brain cancer involves a nearly similar approach to adults with glioblastoma, using direct targeting of the tumor through convection-enhanced delivery. Now regarding our manufacturing and supply chain development, which has been a key focus of our team of late. In the first quarter this year, we entered into a Master Services Agreement with Piramal Pharma Solutions for the development, manufacturing, and supply of RNL as an immediate drug product. Essentially, they'll make the liposomes for the long-term. We anticipate that this will lead to clinical and commercial supply agreements for the drug product at the appropriate future stage of development, and we are on track in terms of our development. Now at this point, I'll turn the call over to Andrew for a brief review of our first quarter financial results.

Andrew Sims, CFO

Thank you, Marc, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the first quarter ended March 31, 2021. As of March 31, 2021, cash and cash equivalents were $14.4 million compared to $8.3 million as of December 31, 2020. Cash used in operations for the first quarter of 2021 was approximately $3 million compared to $1.5 million in 2020. This difference is mainly due to timing differences on certain accounts payable and accrued expenses that were paid in 2020, particularly related to BARDA and professional fees. Revenues in the first quarter of 2021 were approximately $118,000 compared to the same period last year. This decrease was due to the closeout of the BARDA contract as previously disclosed. Research and development expenses were $1.1 million for the first quarter of 2021 compared to $0.9 million for 2020. The increase was primarily due to the additional RNL development costs. G&A expense was $1.12 million for the first quarter of 2021 compared to $1.6 million for 2020. The decrease was primarily driven by a reduction in professional fees and recruiting expenses. Interest expense decreased in the first quarter of 2021 to approximately $247,000 from approximately $349,000 for the same period in 2020, reflecting the principal paydown in 2020. The net loss for the first quarter of 2021 was $2.7 million compared to a net loss of $1.1 million for the first quarter of 2020. The net loss was consistent year on year when excluding the book gains on the warrants reported in the first quarter of 2020. This required booked transaction was eliminated in the second quarter of 2020 when the series new warrants were amended. I'll now turn it back to you, Marc.

Marc Hedrick, CEO

So let me just summarize the forthcoming milestones and then we'll move to Q&A. So we intend to complete enrollment of the RESPECT Phase 1 study in the current glioblastoma as soon as we get through the recommended Phase 2 dose, and then proceed with the trial. We plan to complete the pivotal trial planning with the FDA in parallel for RNL for recurring glioblastoma and then complete the key CMC activities as I mentioned before. We plan to complete the pre-IND meetings as mentioned with the FDA, execute any IND enabling studies, and move into clinical trials for our RNL indications: leptomeningeal cancer and pediatric brain cancer. We also plan to continue developing and evaluating additional external and internal drug development candidates related to RNL, DocePLUS, and generic DoxoPLUS. With that, those are my prepared remarks. I'll turn it back over to you, Catherine, for Q&A.

Operator, Operator

Your first question comes from Xiomi with Raymond James.

Unidentified Analyst, Analyst

My first question is on the RESPECT study, so you mentioned that the FDA has decided to do a Cohort Six instead of going to Cohort Seven. Should we take that as the doses used in Cohort Six are likely going to be the ones used in the next phase?

Marc Hedrick, CEO

Shaun, it could be. I presented what I thought were the most likely outcomes in the script and so where we did not see dose limiting toxicity in Cohort Six, typically that would be the reason to stop there and take that dose forward. But we're using Phase 1 not only to get the recommended Phase 2 dose but also to ensure that we go into the next trial with the appropriate delivery parameters. I think we might be getting a little bit greedy here, but we're delivering so much radiation that we can essentially ask how many times we can kill the same cancer cell. So part of what we're trying to do is to target the microscopic disease that's not enhancing on the scans, and we do that effectively by increasing the flow rate, which increases the pressure and pushes the leading edge of the radiation into that microscopic disease. So, it may be that this current dose of 22.3 mCi at about almost 19 is what we take forward, but I think we'll just have to see; we could conceivably go to a Cohort Seven as well, but with this increased flow rate.

Unidentified Analyst, Analyst

Got it. When do you think you'll be able to get the next update of Cohort Six?

Marc Hedrick, CEO

We actually had a pause in Texas at the end of February because all three of our sites in Texas were impacted by that weather. So things are recovering in April and a lot of patients are in screening, as I mentioned we've treated two out of the three patients. I think we will either provide the next update before the next earnings call or if we make a decision prior to that, we may just put that news out at that time. Either before or likely at the next earnings call.

Unidentified Analyst, Analyst

Our next question is on the CMC side, so with the current status of what should we expect the timeline on that? When do you expect to have the ready drug, for example, for the pivotal study?

Marc Hedrick, CEO

We’re on track from a timeline perspective. So we said we want to have a drug ready for the registration trial by around the end of 2021 and so we're on track to do that. Phase 2 drug supply, which we contemplate for the expansion cohort with Phase 1, will be ready for that as well, but that's a different supply chain for that. So we're on track for both of those with the end of 2021 or early 2022 being the timeline to have that drug available.

Unidentified Analyst, Analyst

I see. My last question is on the next clinical study. What are your thoughts on the designs of that study? Would you be looking to go at it with a traditional randomized Phase 3 or an adaptive Phase 2/3 design, or will you look to participate in the other studies that are going on?

Marc Hedrick, CEO

Yeah. So in terms of the Phase 1/2 trial, that trial is fairly locked in at 55 patients; we estimate 21 to get to the maximum tolerated dose and up to another 34 patients at the recommended Phase 2. So that’s fairly well locked in. In terms of Phase 3, we’re likely to look at overall survival as a primary endpoint. The number of patients is going to be based on what we see in the combination of the Phase 1, Phase 2 at the recommended Phase 2 dose. I anticipate we'll use a synthetic control arm, and that will also be patients that are very likely to have had no more than one occurrence in their treatment. As you know, those patients typically struggle, so I don’t see it being a traditional 1 to 1 randomization against other controls, rather using a synthetic control arm or participating in an agile control.

Unidentified Analyst, Analyst

I see, thanks for the additional clarification on that.

Marc Hedrick, CEO

Thank you, Shaun.

Operator, Operator

Your next questions come from the line of Edward Woo with Ascendiant Capital.

Edward Woo, Analyst

Thank you for taking my questions. I had a question regarding the three sites that you have running. I know you mentioned that those were impacted by COVID, but is everything back on track? Any COVID issues, and have you thought about potentially expanding the sites?

Marc Hedrick, CEO

Hey Ed, yeah. It was really just maybe 4 or 5 weeks interruption. We typically screen patients every week, and so we are back to normal; we are screening multiple patients. Things are going well, and we have a lot of work to spread the word about the trial—that's helping us. We are looking at additional sites, but probably not thinking as much about Phase 1 as an expansion cohort at the recommended Phase 2 dose. So that when decisions are made, we will be ready to get the sites on board, train them, and open them up for registration trials. So we are making progress.

Edward Woo, Analyst

Great, and then you mentioned at Phase 2 it's not an indication that you have to file an IND?

Marc Hedrick, CEO

Edward, you are unclear.

Edward Woo, Analyst

Sorry, can you hear me now?

Marc Hedrick, CEO

Yeah, maybe if Edward can call back in, we can get him. If someone else is in the queue, we could get them?

Operator, Operator

And there are no further questions at this time. I would like to turn the call back to you, Dr. Hedrick for additional and closing remarks.

Marc Hedrick, CEO

Okay great, thank you, Catherine. Sorry about the issues. I just want to thank everyone who joined us on the call and also participated in the call. I would like to also thank our employees who work so hard and are dedicated to trying to find a solution for rare cancers, and I also specifically want to thank the patients and the doctors and hospital staff, who we spend a lot of time with, and who helpfully support and make clinical trial work. So thanks again, and please have a good evening.

Operator, Operator

Thank you, this concludes today's conference call.