Earnings Call Transcript - PSTV Q1 2023

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics First Quarter 2023 Results Conference Call. Before we begin, we want 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 risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual report 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

Thank you, Jonathan. Good afternoon, everyone, 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 2023 first quarter financial results. Joining me for the call today is Dr. Norman LaFrance, our Chief Medical Officer, and Andrew Sims, our Chief Financial Officer. I'll begin the call by reviewing our recent clinical and regulatory progress with a focus on the first quarter, and then turn the call over to Andrew to review our financials. Dr. LaFrance then will be joining us for Q&A. I can say we had a very productive start to 2023 highlighted by the increased enrollment momentum of our two lead programs in glioblastoma or GBM and Leptomeningeal Metastases or LM. Starting with our GBM program and the Phase 2b trial, we are actively enrolling the Phase 2b clinical trial of Rhenium obisbemeda in patients with small to medium-sized GBM tumors with a 20-centimeter, a 20 cc or 20 milliliter cutoff. The single administered dose is 22.3 millicuries and 8.8 mL. The primary endpoint is overall survival and there are a number of typical secondary endpoints such as safety, objective response rate, partial response, and PFS at six months. Our goal is to complete Phase 2b enrollment of 31 patients by the end of 2024 and we are on schedule to do that. The trial is substantially funded by the National Cancer Institute at present for up to 55 patients at five sites. We are in the process of negotiating with the NIH to expand the trial sites to a number sufficient such that we can rapidly complete the Phase 2b and a presumed Phase 3 pivotal trial thereafter. In parallel to our discussions with the NIH, we are actively engaged with over 17 sites in the U.S. and Europe as possible new trial sites, and we are pleased with the interest we see in that trial. Now regarding the ongoing Phase 1 GBM dose escalation trial for larger and more complex tumors over 20 cc. As announced, we have now enrolled the three required dose escalation patients in cohort 8 and administered a dose of 41.5 millicuries in 16.3 milliliters. That dose and volume are approximately double the dose and volume used in the current Phase 2b. In total since trial initiation, 27 patients have been enrolled in just the Phase 1 dose escalation portion of the trial. Since we have yet to reach a Phase 1 trial stopping point based on reaching a maximum tolerated dose, we have several options in terms of how we may proceed. We are in the process of analyzing the data from cohort seven and eight from the Phase 1 and intend to provide guidance on next steps once the data is analyzed and a plan is formulated. Now a bit of a side note or perspective on this Phase 1 dose escalation portion of the trial. Irrespective of whatever we do in terms of next steps, I want to highlight the fact that we are breaking new ground in medicine here with this trial. Specifically, if you look in terms of the amount of radiation and volume that we are now safely delivering to a single cerebral hemisphere, in a patient that may have a tumor of 30 cc or more, it's truly remarkable that we've been able to do that safely including administering up to 740 gray in a single administration dose to the tumor. Don't want that to be lost here and we haven't reached a maximum tolerated dose. So moving on to the LM development program. As announced, we completed Part A of the Phase 1 ReSPECT LM trial. In total thus far, have been treated across three dosing cohorts and in fact, one patient was retreated under a compassionate use protocol. The maximum administered dose thus far, and that was administered in cohort 3 is 26.4 millicuries up from 6.6 millicuries that were delivered in three patients in Cohort 1. At the Cohort 3 dose, the computed maximum absorbed dose to the CSF is approximately 200 gray radiation. Thus far, no dose limiting toxicities have been observed, and the safety profile as is in our GBM trial appears to be favorable. In nine of the 10 LM patients treated thus far remain alive. The go-forward plan is to conduct a Cohort 3 DSMB meeting, followed by an FDA Type C meeting to finalize the dosing regimen for Part B of the Phase 1 as requested by the FDA during our original negotiations for the trial. Presumably, we will continue to dose escalate through a single administration until a maximum tolerated dose is reached, and then incorporate multiple doses over time thereafter. It's helpful to us to be able to have already treated one patient under compassionate use with two separate treatments. Separately, we're working on a single institution leptomeningeal metastases trial specifically for melanoma primaries, and more about that as that develops. In addition, we plan to treat patients with the Cohort 3 dose to gain additional safety and efficacy data until cohort 4 is approved. And we will consider, as I mentioned, selectively retreating patients after the stipulated trial follow-up period of 90 days if the patient and their physician feel it would be beneficial. As with the GBM trials, we are focused heavily in 2023 onboarding new LM trial sites for the Phase 1 part B, and 20 sites are currently under evaluation. Finally, Plus continues to receive support for the program through our $17.6 million CPRIT grant awarded last year. Now regarding our development program for pediatric brain cancer. Based on the back-and-forth communication we've had thus far with the FDA, which goes back almost a year, we expect to submit an updated investigational new drug application soon for what will be called the ReSPECT PBC Phase 1 safety dose-finding and efficacy study of rhenium obisbemeda for two pediatric brain tumors, specifically ependymoma and high-grade glioma. The FDA has essentially signed off on the clinical trial plan, but they've asked for additional safety data from the human trial, which we've put together and will be refiling as part of that IND update. That will be submitted in conjunction with the lead academic institution that we've been working with along the way on this trial and that's Lurie Children's Hospital of Northwestern University in Chicago. Now a bit about supply chain, it's very important that we have drug available for any patient we treat and that we're at a stage appropriate to where we are in the development clinically as it relates to our supply chain. So maintaining a robust and redundant supply chain for rhenium obisbemeda supply is critical. In previous quarters, we have added key suppliers and consummate an impact CMO relationships as we have developed GMP drug for our trials. We anticipate continuing in 2023 to expand those relationships and in fact add new relationships such that we are ready for a potential Phase 3 trial, or alternatively an accelerated approval tract, if that presents itself. Now a bit about commercial planning, commercial go-to-market planning, including relevant medical economic research, billing and coding considerations and ultimately, drug pricing and commercial launch planning decisions are proceeding in the background consistent with our stage of development. Now regarding our novel in-licensed radioembolic microparticle technology RNL BAM. Recall that in 2022, we closed the license for RNL BAM, transferred the technology, successfully manufactured the product, and completed product feasibility work in a human ex vivo kidney perfusion model. We also sought the FDA's opinion on regulatory designation at the end of 2022. Currently, we have an active dialogue ongoing with the FDA, including a previously submitted preliminary request for designation. The outcome of that determination will dictate many of the next steps in the preclinical development program, and the timeline to the clinic, specifically, whether that ultimate designation is a device, drug or combination product. Notably, the legacy products that have been out for 20 plus years are devices; we think likely this should be regulated as a drug, but we await the outcome of that back-and-forth. So with that summary of our clinical development program, I'll turn the floor over to our Chief Financial Officer, Andrew Sims, who will review the financials. Andrew?

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 2023 first quarter ended March 31, 2023. As of March 31, 2023, cash and cash equivalents were $12.7 million, compared to $18.1 million as of December 31, 2022. In addition to current cash on hand, the company benefits from grant awards of $3 million from the NIH and $17.6 million from CPRIT. The company also has discretionary, or stockholder approved access to capital from its ATM and equity line of credit of at least $49 million. In aggregate, these capital sources can provide sufficient capital to fund currently planned and anticipated activities through 2025 fully utilized. The company recognized $506,000 of grant revenue in the first quarter of 2023, which represents CPRIT's share of costs incurred to fund a portion of our LM clinical program. Total operating expenses for the first quarter of 2023 were $5.2 million, compared to total operating expenses of $3.9 million for the same period the prior year. The increase is due primarily to a $750,000 licensed payment to Nano TX Corp for successfully meeting a key clinical milestone and related clinical expenses due to increased enrollment in the company's lead development programs. Interest expense decreased from $998,000 in the first quarter of 2022 to $134,000 for the first quarter of 2023. This decrease reflects the continued principal pay down that commenced in November 2021 on the company's Oxford debt. The net loss for the first quarter of 2023 was $4.8 million or $0.14 per share, compared to a net loss of $4.1 million or $0.19 per share for the same period the prior year. Now I will turn it back to Marc.

Marc Hedrick, CEO

Thank you, Andrew. Before we move on to Q&A, allow me to provide guidance on anticipated milestones for the remainder of 2023. Importantly, we intend to publish the ReSPECT GBM Phase 1 data in a peer-reviewed journal. Second, we intend to present safety and efficacy data from the ReSPECT GBM trials in the second half of 2023 as well as present safety and efficacy data of the Phase 1 part A of the ReSPECT leptomeningeal metastases trial in the second half of 2023 as well. We also intend to initiate Phase 1 part B of the ReSPECT LM trial in the second half of 2023, following an anticipated FDA Type C meeting mid-year. We intend to complete key enrollment and site expansion activities, as mentioned in the ReSPECT GBM Phase 2b trial, such that we can meet full trial enrollment by the end of 2024. We plan to initiate the Phase 1 ReSPECT pediatric brain cancer trial or PBC trial for pediatric patients with ependymoma and high-grade glioma. We intend to determine the appropriate FDA regulatory designation for RNL BAM technology to complete the key development activities as mentioned. We also intend to complete preclinical synergistic drug combination studies of rhenium obisbemeda, along with systemic therapies for GBM and LM. And we intend to submit multiple grant applications in order to try to secure additional non-dilutive capital to support expansion of the company's drug development pipeline. So at this point, now, let me turn it back over to you, Jonathan. We'll go through our Q&A session.

Operator, Operator

And I understand that we also have some questions that were pre-submitted from Justin Walsh from Jones Trading, and we'll take those questions first.

Andrew Sims, CFO

Thanks, Jonathan. Justin, thank you for emailing the questions. And the first question is, 'Radiopharmaceuticals seem to be in the spotlight with notable commercial success in imaging and therapy and prostate cancer. Any comments on the evolving development landscape for radiopharmaceuticals in brain cancer? And as a follow-up to that, can you remind us of the potential benefits of your approach versus molecularly targeted and/or systemic approaches in the context of brain cancer?' Norman, if you want to.

Norman LaFrance, CMO

Thank you for the question, Justin. It touches on the essence of our work with radiopharmaceuticals. Our delivery platform sets us apart and reduces the risks involved. Regarding your first question about commercial success, products like PSMA and serotonin products, as well as lutetium products, are significant and address vital medical needs. However, they exemplify the requirements for traditional targeted radiopharmaceuticals, which necessitate preclinical and clinical trials to validate and refine targeting technology. This process involves considerable time, financial investment, and regulatory considerations. While these products are effective, I'll highlight the serotonin products for neuroendocrine tumors that began development in the mid-2000s, specifically DOTATATE and DOTATOC. Lutera represents the lutetium product yttrium-90. These had comparable efficacious doses and shared safety profiles. During their rigorous clinical trials, renal toxicity was observed, leading the community to address this successfully, particularly with the development of an agent that enhances renal clearance during administration. This leads to our approach, where radiation's effectiveness in cancer treatment is well-established. We are leveraging established methods, like convection enhanced delivery catheters, originally developed by NIH in the late 90s and early 2000s, to access lesions in the central nervous system and deliver chemotherapy precisely where needed. While these drugs effectively reach the target area, they tend to diffuse away too quickly, failing to deliver the anticipated improvements in patient outcomes, despite early Phase one studies suggesting promise. The ideal scenario for chemotherapy delivery, given the behavior of these molecules, has not yet been fully achieved. However, our formulation, featuring a bifunctional chelated rhenium isotope (rhenium 186), is designed to provide durable localization after local delivery to the tumor. Our peer-reviewed presentations indicate promising results, and we will submit the Phase 1 data for publication soon. Our method differentiates itself by ensuring that the isotope—responsible for efficacy—remains localized throughout its physical half-life. Other systemic therapies face similar challenges as traditional chemotherapies, particularly with blood-brain barrier issues. Direct delivery, endorsed by neurosurgeons and oncologists, is crucial. Our approach, using an intraventricular catheter or Ommaya reservoir for local delivery to the subarachnoid space, mirrors the administration methods used in the GBM model. I hope that answers your question, Justin. Thank you.

Andrew Sims, CFO

Second question. It's great to see the addition of Northwestern Memorial Hospital as a trial site. Can you provide any color on how easy or challenging it is to onboard new sites? And then do you have a sense of how that could translate to potential commercial success down the line? And what type of sites do you imagine these assets could be administered at, e.g. only top centers versus any hospital with a working radio pharmacy?

Norman LaFrance, CMO

I'll take that too. There are some very good points here. I find it amusing that you refer to the challenge of onboarding sites. I would prefer to say that bringing a site on board is quite simple. We have three main collaborators that need to work harmoniously within the protocol and related documents; we coordinate how neuro-oncology, neurosurgery, and nuclear medicine interact in a clearly defined manner and sequence to ensure patients receive treatment. All of this is well outlined in our protocols and processes for site involvement. We are very proud to involve Northwestern and have several others ready to join. Our procedures for onboarding are well-established, and we have ample time to approach this thoroughly and effectively. I must mention that all the sites are adapting and moving past the staffing challenges brought on by COVID and the shift to virtual work. However, we’ve established our processes well, allowing each of the three major areas—neurosurgery, neuro-oncology, and nuclear medicine—to carry out their usual activities. We simply provide them a framework for collaboration for specific patients at clearly defined times. Regarding elite sites, these are the ones you would expect, and we are thrilled to see increased inquiries from many sites due to our presentations at meetings. They recognize the data, engage in discussions, and acknowledge the tolerability and safety of our approach. We let the data speak for itself, and interest continues to grow. Additionally, we are seeing inquiries from larger commercial hospitals, even those you might not categorize as elite. As for the radio pharmacy, we ship the product ready for use. Most sites do not have a dedicated radio pharmacy like in previous decades; instead, they rely on local large pharmacies to deliver patient-ready doses for both imaging and treatment. Therefore, that won't pose any issues. The sites we are working with will serve as a foundation for our commercial launch, and we anticipate having between 20 to 40 sites in a pivotal trial or more. I believe that addresses everything you raised in your last question. Thank you.

Andrew Sims, CFO

Questions, three. Can you provide any additional color on what we should expect from the data readouts in the second half of 2023? For example, estimates on patient numbers, et cetera.

Marc Hedrick, CEO

I'll take that. That's okay. So, yes, kind of reiterating. Justin, what I mentioned earlier, the plan for GBM is, a, to get the Phase 1 data published, that's cohorts one through six, that will be a comprehensive publication with full statistical evaluation of the data. And we've been invited by a top-tier, peer-reviewed journal with a high impact factor to submit. So that's largely done. So hopefully, that will go well. And that will be helpful also, as Norman said, to get new sites on board because that's peer-reviewed data that we can use in discussions with sites. In terms of ongoing data and the Phase 1, 2, and GBM, as well as the LM trial, the plan would be to present in the second half of the year, coinciding, most likely with the Society for Neuro-Oncology meetings. We had a podium presentation there last November, and the plan would be to present there as well update both Phase 1, Phase 2 for GBM as well as present the Phase 1 Part A trial from LM. And I think the second part of the question was estimate enrollment. So what our plan, I mean, this is not a 5000 patient hypertensive trial. Our plan here is to, we've got a timeline in place to get to Phase 2, for example, enrolled by the end of 2024, perhaps a bit ahead of schedule. We'll provide guidance on quarterly calls to whether we're on schedule or not. If something materially happens, that's better or worse, we'll mention that. However, my preference is not to present specific patient numbers, in the absence of the data itself. And so, for example, it's no, we'll update in terms of trial numbers, or when we hit a major milestone in terms of enrollment, we'll announce that or discuss that, but not on our earnings call to present individual patient numbers. As it relates to the LM trial, we'll continue our present current practice, which is to present when we hit major regulatory milestones or cohort enrollment milestones, we'll announce those. But that will be more frequent, likely as we hit each milestone. So that's the plan and we will update folks accordingly.

Andrew Sims, CFO

Last question from Justin. Based on your updates, you're obviously keeping pace with enrollment. Can you comment on investigator and patient enthusiasm that you've encountered?

Norman LaFrance, CMO

Justin, as Marc mentioned, enrollment is progressing well, which is encouraging. It's essential for everyone on the call to understand that our focus is on securing more sites and expanding our reach. Marc has discussed our plans to do this based on the feedback from the FDA and the pace of Phase 2 enrollment. The number of sites we have will align with what we need for agency feedback. I appreciate your inquiry regarding both investigator and patient enthusiasm; we are witnessing strong support from both fronts, which is crucial to highlight. For instance, during the recent SNO meeting, Skip Grossman, who received the neuro-oncologist award, expressed his enthusiasm after our presentation on LM. He remarked that patients with LM have very few options, and he is eager to participate in this trial. This sentiment is echoed by several institutions and respected individuals in the field. Additionally, in my visits to various sites, I often meet patients who express their gratitude for having this opportunity. Some have stated they felt there were no alternatives before participating and have shared positive feedback on how easy the process has been for them. One particular patient, a GBM case who faced typical complications, shared his story about returning to play softball just two to three weeks post-treatment and asked if he could communicate his experience to others in a way that's acceptable. He has even expressed interest in sharing his journey through his website, and he will be running a 5k next month, where our CEO will join him. This example illustrates the enthusiasm from both investigators and patients regarding our product, which has been rewarding for me on both personal and professional levels. Thank you, Justin, for your question.

Marc Hedrick, CEO

Okay, Jonathan. I think Justin got his money's worth on those questions. So who do we have next?

Operator, Operator

Certainly. Then our first question from the phone line comes from the line of Sean Lee from HC Wainwright. Your question please.

Sean Lee, Analyst

My first question is on the GBM side. I know you mentioned that the study for treating larger tumors has been going well, and you will be able to test the higher doses of RN. I was wondering whether it's something that you consider rolling into your potential future Phase 3 in GBM, or would you keep the two separate, like the regular dose and higher dose?

Marc Hedrick, CEO

It depends on the data. As I mentioned, we are currently analyzing cohorts 7 and 8. A crucial aspect of this analysis involves examining the distribution and the impact of increased volume and radiation. You may recall that in cohort 6, we actually raised the flow rate from the first three patients to the second three patients. There are numerous options available to us at this stage, and I wouldn’t dismiss anything. Ultimately, we are exploring uncharted territory in terms of volume and radiation delivered to the brain. There is significant value in continuing to treat patients while adjusting the delivery parameters. Our plan is to keep this approach, which aligns with the FDA's expectations and those of the NCI.

Sean Lee, Analyst

I see. Thanks for your thoughts on that. My second question is on the LM study. You mentioned that you were testing, in particular, looking to treat melanoma patients. That's one way why melanoma is and if there's something you see or you think makes it particularly well suited for treatment?

Norman LaFrance, CMO

Let me address that question. It's important because it highlights another aspect of leptomeningeal metastasis, which can arise from various solid tumors, many liquid tumors, and even primary brain tumors. The most common types include breast, lung, gastrointestinal, head and neck, and melanoma. The FDA typically requires a disease-specific indication, and as we move forward, given the main causes of leptomeningeal metastasis, lung and breast cancers will be our focus in the current protocol, although our initial dose escalation includes a broader range of cases. However, we will need to concentrate on specific diseases to target the largest number of patients we can assist. Melanoma is also a potential indication, but we are addressing it separately because it presents a more complex challenge. Melanoma has demonstrated some systemic therapeutic effects, especially with immunotherapy and checkpoint inhibitors. While I won't delve into the systemic therapies now, there is a significant opportunity for a combination approach for treating leptomeningeal metastasis with our product, alongside checkpoint inhibitors or other forms of immunotherapy, which we are currently assessing with selected lines.

Sean Lee, Analyst

Thank you. That was very helpful. My final question is on the upcoming pediatric study, just wondering whether you had to make specific adjustments to your delivery method? Because I know the uses the connection catheters; is it going to be any different than what you've done so far with adults?

Norman LaFrance, CMO

Yes, great question. And the short answer is, no, but let me give a little bit more color. I'm not known for my one-word answers. So sorry about that. It'll be the same approach. What is interesting is the pediatric neurologists are used to for epileptic evaluations. You would think, oh, my goodness, putting a catheter in a child's brain is going to be tough. Well, they're used to doing this not only with two or three or four catheters, as we're doing with adults, but 6, 8, 10 or more catheters. So the catheter and CD approach is something they're very comfortable with, they do all the time, epilepsy electrode tracing, for example. The only thing I would anticipate that might be different is particularly for ependymoma; some of these can be quite large volumes. And that will be something as we get into later dose escalations for those larger volumes that we'll have to evaluate differently. Marc already mentioned in the adult cohort 8, we're going to be increasing the volumes. So I would anticipate that in adult administration, although we have very tolerable infusion times, of course, depending on which dose we're using and the volume infused, that I see reducing that by 50%. I think the same possibilities for reduction and even greater reduction occurs in kids. I already mentioned that in the larger tumors, more catheters will be likely and the more catheters means the larger volumes can be given over a fixed unit of time. So does that answer your question, Sean?

Sean Lee, Analyst

Yes, it does. Thank you again for taking my questions.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Edward Woo of Ascendiant Capital. Your question, please.

Edward Woo, Analyst

Yes, congratulations on all the progress. My question is on the CPRIT grant. Are there any restrictions to where you can look at your sites or any other requirements that you guys have when you're running these clinical trials?

Marc Hedrick, CEO

There are no restrictions on where those clinical sites can be. There are some restrictions around having sites in Texas and so forth, and having employees and office spaces so forth in Texas, but not to in terms of sites.

Norman LaFrance, CMO

We can target those restrictions.

Edward Woo, Analyst

Great. Well, that's all the questions I have. Thank you.

Operator, Operator

Thank you. And this concludes the question-and-answer session of today's program. I would like to hand the program back to Dr. Marc Hedrick for any further remarks.

Marc Hedrick, CEO

Thank you, Jonathan. Appreciate the questions today and appreciate your attention. We want to finish up by thanking our employees, patients, physicians, and collaborators we work with, and our stockholders for their continued support. Thank you for the questions today. We wish you a nice evening. Thank you.

Operator, Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.