Earnings Call Transcript - PSTV Q3 2024

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to Plus Therapeutics Third Quarter 2024 Results Conference Call. Before we begin, we want to advise you that over the course of the call, including any 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 risks and uncertainties. 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, President and CEO

Thank you, Sheri. Good afternoon, everybody, and thank you once again for taking the time to join us today as we provide an overview of recent business highlights and discuss our third quarter 2024 financial results. Joining me for the call today is Mr. Andrew Sims, our Chief Financial Officer. I'll begin the call by reviewing our recent clinical and corporate progress in the third quarter and then turn the call over to Andrew for a review of our financials, and then we'll both come back for Q&A. I'll begin this afternoon with an overview of our leptomeningeal metastases program in which we are investigating our lead radiotherapeutic Rhenium (186Re) Obisbemeda in ReSPECT-LM trial. As a note, going forward for this call, I'll refer to Rhenium (186Re) Obisbemeda as RNL, which is its research name for the sake of brevity. Part one of our development program, our ongoing ReSPECT-LM Phase 1 single-administration, dose-escalation trial, is perhaps closing in on a maximal dose of 5 in which we administer a very substantial dose of RNL approximately 66 millicuries. The Data Safety and Monitoring Board recommended proceeding to a modified lesser cohort 6 dose of 75 millicuries, and the first patient has been treated. To date, 21 patients have participated, including a subset of three patients who responded well to the initial dose and have received multiple doses under compassionate use. Part two of our integrated development plan is to expand the Phase 1 ReSPECT-LM trial to a multiple dose administration trial. Relatedly, in Q3, we reached agreement with the FDA to proceed under a multiple dose escalation protocol, and we are currently in the site start-up phase for that trial. I'll review that trial design more fully in a moment. In terms of clinical data from the ReSPECT-LM single administration trial, we presented an interim update at the SNO/ASCO conference in August through cohorts 1 through 4. Here are the key highlights from that presentation. Doses of RNL up to 44 millicuries were found to be safe and well tolerated with no dose-limiting toxicities. Pharmacokinetic data demonstrated a very high therapeutic index, specifically about a 50 to 100 target to off-target ratio through cohorts 1 through 3, meaning circulating tumor cells were reduced on average 53% at day 28 post-treatment. The median overall survival for cohorts 1 through 4 was 12 months, which is quite favorable compared to the historically reported consensus of approximately four months with treatment in breast and non-small cell lung cancer. The full presentation from that meeting is available on our website. Later this month, at the SNO, Society for Neuro-Oncology Annual Meeting, which is going to be November 21 to November 24th in Houston, we will provide a comprehensive update on the Phase 1 single administration dose escalation trial through cohort 5 with important new data, including pharmacokinetic, pharmacodynamic response, and survival data. We will also host a luncheon symposium to discuss the data in greater detail with leading subject matter experts; Priya Kumthekar, Dr. Jonathan Yang, and Dr. Andrew Brenner. As I mentioned before, we have reached agreement with the FDA to initiate enrollment in a Phase 1 trial of multiple dose administrations of RNL for treating patients with leptomeningeal metastases. Favorable outcomes observed in compassionate use patients receiving multiple doses of RNL from our single administration dose escalation trial reinforced the safety and potential value of a multiple dose administration regime to obtain long-tail survival in patients with leptomeningeal metastases. More specifically, the Phase 1 ReSPECT-LM multiple dose administration trial is an open-label two-part study aimed at evaluating the safety, dosing intervals, and efficacy of administering multiple doses of RNL to patients with LM. Primary objectives are to assess safety and tolerability and to identify both the maximum tolerated and the maximum feasible doses at various dosing intervals and frequencies. The secondary objectives include evaluating response and survival. The first part of the study will treat up to 24 patients administering at least three doses of RNL at 13.2 millicuries at progressively shorter intervals, starting at 56 days and then every 28 days and finally, every 14 days, and then potentially up to six doses in a subsequent cohort. The trial is expected to begin enrollment in Q1 2025 with the aim to utilize the current seven active US trial sites enrolling patients in our ReSPECT-LM Phase 1 single administration dose escalation trial. We plan to provide further details on the integrated development plan and path to approval for leptomeningeal cancer at the 2024 SNO Annual Conference in Houston. Now for a discussion around our diagnostic. Increasingly, we are recognizing the importance of our CNSide Cerebrospinal Fluid Assay platform in both the investigation of RNL for LM and the assay's commercial value as a stand-alone diagnostics product in the broader group of patients at risk for LM or other CNS malignancies. The CNSide Cerebrospinal Fluid Assay Platform consists of four lab-developed tests (LDTs) and may be used by neuro-oncologists, neuro-immunologists, medical oncologists, or other petitioners for the diagnosis, treatment selection, and monitoring of patients with or at risk for LM as well as other CNS malignancies. In terms of market access activities related to the planned CNSide launch in January, as you may recall, step one was tech transfer and initiating lab testing, which was completed earlier this year. Step two, at our wholly-owned subsidiary based in Houston, Texas, we obtained a CLIA certificate of registration in Q3, and we intend to obtain a CLIA certificate of compliance in Q1 2025 following inspection by CMS. This quarter, we will apply for expanded reimbursement with a Z-Code through the Diagnostics Exchange, which helps ensure that both healthcare providers and payers understand which test is being conducted and it also allows payers to automate the preauthorization or adjudication of claims. Specifically, a Z-Code is required by well-known payers such as Medicare, UnitedHealthcare, Humana, Blue Cross Blue Shield, and so forth. Next quarter, following receipt of the CLIA certificate of compliance, we intend to apply for a CPT Proprietary Laboratory Analysis Code (PLA code) with the American Medical Association. This code is required by Medicare and certifies labs for complex testing, ensuring they meet federal standards for quality, accuracy, and safety, and the PLA code further specifically identifies the test. In parallel to these activities mentioned above, we are negotiating with a number of commercial payers, which previously had agreements in place for the CNSide assay. Specifically, we're informing them that we acquired the assets of CNSide from the previous owner and plan to make the test platform commercially available again, and new agreements will be put in place. Also, we are focused on payers that cover regions containing the highest number of LM patients. Currently, the CNSide tumor cell and enumeration LDT continues to be used in the ReSPECT-LM clinical trials. We are on track to commercially reintroduce the test as part of a limited market release in the US in January 2025. At the same time, we are expanding the CNSide test menu on a rolling basis to include specific cellular biomarker assays and molecular assays. We will talk more about that in 2025. Aggregate 2024 investment in the test will remain limited as test costs are offset in a meaningful way by our current CPRIT grant. In 2025, post expanded market access, we will guide more specifically toward forecasted diagnostic growth ramp and related economics. Now shifting gears to our ReSPECT-GBM trial, which evaluates a single dose of RNL in patients with recurrent glioblastoma. Enrollment in the Phase 1 portion for patients with recurrent glioblastoma tumors greater than 20 mLs has been completed, and we will be evaluating that data into 2025 and completing the final Phase 1 clinical study report. Enrollment continues for the ReSPECT-GBM Phase 2 trial limited to patients with tumors less than or equal to 20 mLs. The last ReSPECT-GBM trial update was at the Congress for Neurological Surgeons Annual Meeting in October of this year. As a reminder, key highlights include a total of 42 patients who had been enrolled across three sites at that time. In Phase 2, most adverse events were mild to moderate, with over half deemed unrelated to the study drug. Only two of the nine severe adverse events were related to the study drug, and systemic radiation exposure remains low. Moreover, the average absorbed radiation dose to tumors in Phase 2 was 300 gray, well above the 100 gray threshold preclinically and in Phase 1 that is highly correlative with increased overall survival. Furthermore, approximately 90% of patients achieved critical drug delivery parameters, which also correlate with improved survival. Finally, objective tumor response analysis using both cerebral blood volume and volumetric analyses showed a statistically significant relationship between tumor control and absorbed dose, specifically patients receiving doses above 100 gray showed effective tumor control within the treated areas. The ReSPECT-GBM trial continues to benefit from substantial NIH support, and we are pleased to announce we have added two new large-volume clinical trial sites to support Phase 2 enrollment and potentially a pivotal trial. We've added Ohio State University, which provides us coverage in the Upper Midwest and North Shore Hospital, part of the Northwell and Lenox Hill Network in the greater New York metropolitan area. With these two additional sites activated and screening patients for enrollment, we expect Phase 2 completion with 34 total patients by midyear 2025 with a data readout in the second half of 2025. Additionally, we would like to announce that we recently entered into a research and collaboration agreement with Brainlab, a software-driven medical technology company, to develop and implement optimized case planning software or convection-enhanced delivery of RNL for brain cancers. Brainlab's software, married to their device ecosystem, will enhance treatment planning, procedure execution, and more precise drug delivery for GBM patients, anticipated to further improve patient outcomes. Now just a bit about our pediatric brain cancer program. Recall, we previously announced that we have received a US Department of Defense Award of a $3 million grant to substantially support a Phase 1 trial for children with pediatric high-grade glioma and ependymoma. Approximately $900,000 payment was received in September 2024 as part of this award. We anticipate obtaining IND approval in the first half of 2025 at Lurie Children's Hospital in Chicago serving as the initial clinical trial site. And moving on to drug production and manufacturing. We are expanding our GMP manufacturing capabilities and building redundancy in terms of materials and intermediates to support registrational trials and future commercial demand projections. To ensure a reliable supply of RNL, we recently announced our second GMP manufacturing partnership, this time with SpectronRx. Through this partnership, we have completed process qualification to transition from single dose, single batch production to a pilot scale process capable of producing multiple doses per batch with the potential opportunity for scale-up at a capacity of approximately 15,000 doses per year around the time of anticipated FDA approval.

Andrew Sims, CFO

Thank you, Marc. Good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the third quarter ended September 2024. The cash and investments balance was $4.8 million at September '24 compared to $8.6 million at December '23. In addition, we received the first advance from the DoD grant in October '24 of $0.9 million and are on track to receive the next CPRIT advance of $3.9 million within 90 days of today. The company recognized $4.4 million in grant revenue year-to-date '24 compared to $3.6 million in the same period of '23. This represents CPRIT's share of the cost incurred for our RNL development for the treatment of patients with LM. We expect 2024 grant revenue to be in the range of $6 million to $7 million. The total operating loss year-to-date 2024 was $10.8 million compared to $9.5 million in the same period of 2023. The increase is primarily due to increased spend related to the ReSPECT-LM trial. Net loss year-to-date 2024 was $9.1 million or $1.46 per share compared to a net loss of $9.5 million or $3.54 per share for the same period in the prior year. I'd also like to provide an update on our runway and cash position based on the previously announced private placement and provide guidance on our grant funding for the remainder of 2024 and into 2025. There are three additional sources of cash that Plus has access to beyond the balance disclosed in cash on hand and liquid investments on our Q3 2024 balance sheet. First, as a reminder, we announced in May that we closed a private placement financing of up to $19.25 million from new healthcare-focused institutional investors and company insiders with a total of $7.25 million received at closing, with up to $12 million remaining available under this financing. The second source of cash remains our continued funding through now three announced grants. Firstly, the CPRIT grant to support the ReSPECT-LM trial. As reported, we received $3.3 million from CPRIT in Q2, and at this time $7.8 million remains due on the grant, and we remain on track to receive the next advance from CPRIT of $3.9 million within 90 days from today. An additional $3.9 million is expected from CPRIT in Q3 2025. Secondly, as reported on April 22, Plus has received an award recommendation from the United States Department of Defense for $3 million to support the upcoming ReSPECT pediatric brain cancer trial. The first advance was received in October for just under $1 million. Plus also continues to benefit from the NIH grant to support the ReSPECT-GBM Phase 1/2 trial, although expected to be complete in the next six months, it currently covers approximately 90% of the overall trial costs. We also continue to source other non-dilutive sources of grant capital with a target of applying for at least $10 million per year. We will continue to only report on individual grants when they're awarded. Taking in total, this cash on hand, financing warrants are fully exercised, and committed contractual grant revenue is approximately $27 million.

Marc Hedrick, President and CEO

Great. Thank you, Andrew. I appreciate it. Before we move on to Q&A, I'll take a moment to provide a specific summary of guidance for anticipated key events and milestones taking us through the remainder of 2024. First, in terms of conferences, we'll have a substantial presence at the SNO, its Society for Neuro-Oncology Annual Meeting from November 21 to November 24 this year. There, we will present three abstracts, host an educational symposium on LM and GBM, conduct our annual investigator meeting, and showcase our CNSide Cerebrospinal Fluid Assay Platform in our booth as we will showcase our investigational drug, RNL for LM, GBM, and pediatric brain cancer. More specifically, in terms of the three abstracts. As mentioned for our LM therapeutic program, we will present data on the safety and feasibility of the ReSPECT-LM Phase 1 single administration dose escalation trial through cohort 5, including important pharmacokinetic/pharmacodynamic response and survival data. We'll also provide an update on our integrated development plan for both single dose and multiple dose ReSPECT-LM programs and linking them to an FDA approval plan and timeline. For our CNSide Assay Platform, we will present data on first, the 4C clinical trial data on CSF tumor cell detection, including its clinical utility and accuracy in diagnosing LM patients with high sensitivity and specificity compared to the gold standard cytology, and also its clinical utility in enhancing clinical management of patients with LM. Second, we will show the results of a retrospective analysis of CNSide's real-world ability to detect a variety of gene mutations in CSF tumor cells, offering insights into the potential treatment strategies and also ways LM patients may benefit from complementary regional therapies such as RNL and other treatments. As mentioned, the company will host an educational symposium featuring three subject matter experts, Dr. Kumthekar, Dr. Yang, and Dr. Brenner, who will provide updates on our LM and GBM programs in our CNSide Platform. Lastly, we will showcase our investigational therapies as well as the CNSide diagnostic at our booth. Later in December, we will also attend the San Antonio Breast Cancer Symposium in San Antonio, Texas, where we will present data on the safety, feasibility of the ReSPECT-LM Phase 1 single administration trial through cohort 5 with a focus on the breast cancer patients and related data. That happens to be the primary cancer with the highest incidence of patients with LM. In addition to those upcoming events and conferences mentioned above, the company also anticipates completing our ReSPECT-LM single administration dose escalation trial by year-end, initiating enrollment in our ReSPECT-LM multiple administration dose trial in Q1 of 2025, and launching a limited commercial release of our CNSide Platform as an LDT in early 2025. We anticipate completing enrollment in our ReSPECT-GBM Phase 2 trial by mid-2025, and for our pediatric brain cancer trial, obtaining IND acceptance, initiating enrollment for the ReSPECT trial for pediatric ependymoma and high-grade glioma patients in 2025. So, Sheri, with that, I'll turn it back over to you for any questions.

Operator, Operator

And our first question will come from Justin Walsh with Jones Trading. Your line is open.

Justin Walsh, Analyst

Hi, thanks for taking the question. Congrats on all the progress. I'm wondering how you view the opportunities for CNSide and RNL in LM as complementary products versus on their own?

Marc Hedrick, President and CEO

Hi, Justin, great question. You know what, we continue to see more and more synergies. And you may recall when we first considered this acquisition, it made sense solely on one factor and that is it could potentially increase the total addressable market for LM by 2 to 4 times just by improving diagnostic sensitivity. But since then, there's more and more data that shows that using circulating tumor cells can be a proxy for survival and for disease monitoring. We see more and more papers coming out related to that. And then we're now increasingly relying on it as an exploratory endpoint in the Phase 1. We're going to be providing more insight into that data next week, and I think it's highly relevant supporting the other signals we've seen in terms of response and efficacy. I think there's a recent publication by one of the key opinion leaders, Dr. Yang, who treated patients with targeted radiation, in that case from proton beam craniospinal irradiation, which showed in that trial targeted radiation therapy correlated very highly. The CNSide assay, actually our assay correlated very highly with survival and progression. So I think over time, we'll see more and more reliance on that. Is it ready to be used as a primary endpoint in a pivotal trial? I don't think so. But I think as a secondary endpoint, it provides substantial collaborative data to other progression data and survival.

Justin Walsh, Analyst

Great. Thank you for taking the question. Looking forward to the presentation.

Operator, Operator

Thank you. One moment for our next question. And that will come from the line of Edward Woo with Ascendiant Capital. Your line is open.

Edward Woo, Analyst

Congratulations on the progress. I was just wondering what the landscape looks like for grants? Has this changed in terms of the opportunities that are available? And do you anticipate any change with the incoming government? Thank you.

Marc Hedrick, President and CEO

Ed, to answer your latter question, I don't know. It's hard to tell. I think we're in a pretty good spot through the next year as it relates to grants. We think being in Texas insulates us a bit from what's going on at the federal level. We've been very successful in at CPRIT. As I think we have almost $18 million active grant from them in an aggregate $25 million total in active grants. What we're hearing, no guarantees, but what we're hearing from CPRIT is that from time to time, there's additional capital that they can deploy, and they tend to reach out to companies who are executing, and we're executing precisely to our proposed and planned timeline. So we're hoping there might be some opportunities there. But also we'll continue, as Andrew said, to talk about grants as they come in, but we think there's continued opportunity in Texas if things change at the federal level.

Edward Woo, Analyst

Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.

Marc Hedrick, President and CEO

Thank you.

Operator, Operator

Thank you. One moment for our next question, and that will come from the line of Sean Lee with H.C. Wainwright. Your line is open.

Sean Lee, Analyst

Hey, good afternoon guys and thanks for taking my questions. I just have two quick ones. One is first is on the LM multi-dose study. So how do you guys come up with the 13 millicuries dose to be used in that study? And how does that compare to what patients have received so far through the compassionate use program?

Marc Hedrick, President and CEO

Hey, Sean, thanks for the question. It's a good one. So as we were getting into cohort 4, which is approximately 44 millicuries, that we were seeing excellent safety and also strong response cohort. So we — as we began our negotiations with the FDA on a multiple dose approach, we felt like we could support taking that cohort 4 dose and then fractionating it, and that follows approaches that the FDA is very comfortable with. I think that because of what we're seeing clinically, that earlier compression of doses will be very important and getting that long tail survival that I mentioned. In terms of the compassionate use, we've had, I think, two patients that have received three aggregate doses. We're actually giving them the whatever dose is currently enrolling. So they're getting actually in the neighborhood of 40 or more higher dose, but their dose frequency is much longer. They're being treated when they come back with symptoms. In other words, patients seem to are responding to the initial dose and then they're doing well for an extended period of time, maybe up to a year or so. They're coming back with symptoms or progression and asking to be retreated. So we treat them with that dose that's available. So back to my original point, I think increasingly, we recognize the Bayesian design is appropriate. We're modeling that right now, that's integrated into the multiple dose trial. And then as we'll talk about over time, how we leverage that and get to approval.

Sean Lee, Analyst

My second question is on the CNSide assay. So in the prepared remarks, you mentioned that you needed to get the CLIA compliance followed by a CMS inspection, as well as getting the Z-Code and PLA-Code. So do you have a rough guideline for the approximate timeline for these processes?

Marc Hedrick, President and CEO

I'm sorry, Sean, just to clarify, what's the timeline for getting additional reimbursement?

Sean Lee, Analyst

When can we expect CNSide to start selling commercially and obtain reimbursements?

Marc Hedrick, President and CEO

Yes. So I think we're on track to be able to commercialize the test in Q4 of this year. I think the issue is going to be that we need to — we're more likely to get reimbursed if we have a CNSide CLIA compliance, and that inspection is — it's not been scheduled, but it's going to be Q1, and we're pushing to make that as early in Q1 as possible because we want to try to accelerate that timeline. And then number two, I think some of these laboratory services agreements, we had approximately 10 in place with Biocept. We've hired a market access team that is actively negotiating with those 10 institutions on a regionally focused basis based on where the patients are and where the highest level of reimbursements are. So we're prioritizing those areas just sort of being practical, obviously. I think we're going to have some more things to talk about in Q1 as it relates to reimbursement. And I think once those reimbursement dominoes fall, then I think we'll feel more comfortable talking about pricing ramp, margins, and so forth. I think right now, it's just a bit premature until we get those things in place. We want to be really cautious in terms of guiding in the early phases until we get comfortable that we can stand behind that guidance. I can tell you that with the time that Biocept quit offering the test, they had 200 unique customers. They were growing at about 30% per year CAGR. And that was with no data, no NCCN guidelines, no specific reimbursement, no foreseeable clinical trial data. So we have all those elements behind us at this point today, and that's only going to grow. There are only more papers coming out and so forth. So I think the environment continues to look really positive for that as a standalone product.

Sean Lee, Analyst

Got it. Thank you for that. That makes it a lot clearer. That's all the questions I have.

Marc Hedrick, President and CEO

Thanks a lot, Sean. Appreciate it.

Operator, Operator

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call over to Mr. Andrew Sims.

Andrew Sims, CFO

Thanks, Sheri. We have two written questions. So the first is, can you elaborate on the therapeutic ratio you are seeing in your trials and safety data profile?

Marc Hedrick, President and CEO

Yes. So that's a good question. We'll talk probably more in detail at SNO next week. But I think it's a key point that the therapeutic ratio that we're seeing going out to cohort 4 is very high. In particular, for LM, we're seeing about a ratio of about 50-plus in cohort 4 in terms of therapeutic to target versus off-target. I can give you a preview of cohort 5. I think we're seeing that as greater than 100:1 ratio. So we're continuing to see a linear dose as we dose escalate a higher absorbed dose in the spinal subarachnoid space and relatively flat absorption in the key critical organs. Bone marrow is starting to tick up a bit in cohort 5, and that was part of the rationale for the DSMB to cut back the cohort 6 dose. We're increasingly becoming more comfortable that the cohort 4 dose will be the recommended Phase 2 dose, and the maximum tolerated dose will be cohort 5. The FDA has been very consistent about us continuing to dose escalate to failure, hence, the cohort 6 dose. In terms of GBM, I think the therapeutic ratio is really hard to calculate because we're seeing essentially very minimal systemic absorption and very high delivery of radiation to the region of interest, tumor in the infiltrated margin. So yeah, I think we're seeing — what we're seeing is very favorable, much higher than other companies are reporting with their systemically delivered technology. So I think that's a really strong part of the technology.

Andrew Sims, CFO

And the second question is, can you provide details on your integrated development plan for LM?

Marc Hedrick, President and CEO

Yeah, I think I've mentioned some of the details, and I think we'll present more at SNO and roll that out over the first part of 2025. I think right now, based on the data we're seeing in the single dose, there is clearly activity and a strong potential for advancing to single dose in an expansion cohort for specifically breast and lung cancer, non-small cell lung cancer, and that data continues to look strong. We can use that data to help de-risk a pivotal Phase 2/3 trial thereafter. I anticipate getting that into the clinic pretty soon next year, but we'll talk more about that. In terms of multiple doses, I think we could follow a similar pattern where we pick as we complete each cohort, a promising dose, cohort, expand it, confirm that there's an efficacy signal there as well as a safety signal, and then move that forward. I could potentially see taking two different doses to market, a high single dose and a lesser multiple dose regime. So more on that next week and then the first half of next year. Are there any other questions? That's okay. Thank you, Andrew. Well, just to conclude, thank you, Sheri, and thank you, everyone. I appreciate you being on the call. On behalf of the Board, I'd just like to thank our employees and team members and the physicians we work with and very much thank you to the patients who continually trust us to enter into these trials. Thank you for your participation. Have a good evening.

Operator, Operator

This concludes today's program. Thank you all for participating. You may now disconnect.