Earnings Call Transcript - PSTV Q1 2022

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics First Quarter 2022 Results Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. 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 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, President and CEO

Thank you very much, and good afternoon, everyone. Thank you once again for taking the time to join us today as we provide an overview of recent business highlights and discuss our 2022 first quarter financial results. Joining me on 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 corporate and clinical progress before turning the call over to Norman who will provide commentary on our clinical progress for 2022. Then, following Norman, Andrew will review our financials. Despite the short interval since we last reported quarterly results, I continue to be very pleased with our overall progress as we work towards several meaningful catalysts and milestones throughout 2022. During the first quarter, we began enrolling patients in our ReSPECT-LM trial of 186RNL in patients with leptomeningeal metastases, or LM. The trial is a multi-center Phase 1/2a dose escalation study to determine the maximum tolerated dose and safety and efficacy of RNL186 in LM. LM is a typically fatal complication associated with advanced cancers that affect the fluid line structures of the central nervous system or leptomeninges. Median survival with current aggressive treatment is about three to eight-and-a-half months depending on which primary tumor caused the LM and the one and two-year survival rate is 7% and 3%, respectively. Survival without treatment is only a few weeks. LM is diagnosed in approximately 5% of cancers with 20% of patients at autopsy. U.S. annual incidence is about 110,000 patients and growing, and the prevalence of neurologic impairment in these patients is about 50%. The most common tumors giving rise to LM are breast cancer, lung cancer, melanoma, and gastrointestinal malignancies. There are no FDA-approved therapies and standard treatment that is employed includes external beam radiation therapy to the affected sites, followed by chemotherapy given either orally or intravenously or even directly into the cerebrospinal fluid. Although we can only draw limited conclusions from our initial experience, we’re very pleased with the outcome and the first patient receiving a single administration of 186RNL. Specifically, we found that the drug circulated rapidly throughout the cerebrospinal fluid space. We found that radiation was released through leptomeninges and cerebrospinal fluid for at least one week after treatment. The patient exhibited no adverse events, and 186RNL reduced the circulating tumor cell counts by over 90% at two weeks after treatment. This is about as good as it gets in a first-in-man trial, so we’re very excited about this very preliminary result. We now have two active sites screening LM patients, with another six sites being onboarded as we speak. We’re on track to have at least the first two cohorts completed by the end of 2022, and hopefully a bit more than that. Regarding our ongoing clinical development program for 186RNL in recurrent glioblastoma, we have a number of updates. First, as a reminder, that trial is a dual Phase 1/2a multi-center sequential cohort open-label volume and dose escalation study for recurrent glioblastoma or GBM. The trial is currently funded to a significant degree by the U.S. National Institutes of Health and NCI. Glioblastoma affects about 13,000 patients annually in the U.S. and about the same number of patients in the EU, and it’s the most common and lethal form of brain cancer and treatment of this devastating disease remains a very significant unmet medical challenge. In terms of the clinical data, 23 patients have been treated and 186RNL appears to be safe and well tolerated. This data presented most recently back in March can be found in detail on our website and that’s accessible to anyone. In summary, no dose limiting toxicities have been observed. Generally mild-to-moderate adverse events have been seen in seven serious adverse events, all grade three or lower, most are not deemed to be RNL-related. In terms of drug delivery, we are now reliably able to deliver over 100 gray of absorbed radiation dose to tumors, which is our empirically determined minimal dose threshold of adequate absorbed radiation, and we can achieve well over 80%, with 90% being achievable in terms of reliable dose delivery of 100 gray. Finally, we have observed both the median and mean overall survival signal that exceeds the best-published rate for monotherapy bevacizumab. Based on this data, I’d like to explain our big picture plan. We plan to bifurcate the current GBM clinical development plan based on tumor size. For tumors of approximately 15 to 20 cc in volume, which represents about half to about two-thirds of all recurrent glioblastomas, we plan to use the cohort six dose of 22.3 millicuries and 8.8 cc of volume as our recommended first Phase 2 registrational dose. For larger tumors that potentially require greater radiation dosages and treatment volumes, we intend to continue our Phase 1/2 dose escalation trial to establish the upper limits of dose and potential for dose-limiting toxicities. In 2022, for GBM, we have two key regulatory milestones. We have already submitted and asked for the first of two FDA meetings, specifically a Type C CMC meeting to determine the sufficiency of our CMC package for GMP 186RNL to support a registrational trial. Our team continues to make excellent progress in our drug scale-up and manufacturing activities. Specifically, the company has finalized key RNL drug development and characterization activities for GMP manufacturing to support our planned Phase 2 registrational trial and commercialization activities thereafter. The company remains on track to deliver GMP RNL by mid-2022. The second FDA meeting is a clinically focused meeting planned for Q2, Q3 to solicit FDA feedback on our planned Phase 2 registrational trial using our recommended Phase 2 dose of 22.3 millicuries and a little less than 9 cc of volume. During Q1, we completed another key milestone. Specifically, we successfully completed the preliminary evaluation phase and entered into a broad partnership with Medidata to use its Synthetic Control Arm platform and Real World data as the comparators for our glioblastoma trials. The primary goal of this partnership is to develop an FDA compliant control group of patients identical to those treated thus far in our Phase 1/2a trial and in the planned Phase 2 registrational trial. That data will support our planned end-of-phase meeting with the FDA and proposed Phase 2 registrational trial. More generally, Synthetic Control Arm or SCA platform facilitates the use of historical clinical trial data in a manner that has been favorably received by the FDA. These SCAs reduce the time and cost associated with complex clinical trials in rare diseases, allowing for fewer patients to be exposed to placebos or existing standard of care treatments that might not be effective for them. This offers them greater access to potentially life-extending therapies. Although a recent advancement, the FDA has already agreed to recognize a Phase 3 clinical design incorporating an SCA in a registrational randomized control arm for recurrent glioblastoma. Besides initiating our Phase 2 registrational trial with RNL in recurrent GBM, as I mentioned before, we also continued enrollment in our Phase 1/2a dose escalation GBM trial, and that will continue. Furthermore, this quarter, we intend to open a Phase 2 multi-dosing extension trial of RNL in recurrent glioblastoma. As you know, if you follow the company, glioblastoma is notoriously difficult to cure and recurrent disease is the norm. This extension trial will provide important information about the utility of multiple potential doses of 186RNL in the overall treatment paradigm for these patients. The goal is to determine the safety, feasibility, and potential efficacy of using additional doses of RNL in patients following the initial single administration, as we have done previously in the Phase 1/2a trial. This is crucial to our big dream. One day, if not curing GBM, turning it into a chronic disease in which we help patients live with brain cancer. Lastly, in Q1, we announced our license of a novel radioembolic microparticle technology from the University of Texas. As we’ve said, we believe the future of cancer therapy is precise targeting of tumors with the most potent cancer killing agents while minimizing damage to normal tissues. This transaction builds upon our existing Rhenium NanoLiposome technology. With this new technology, we can use a resorbable biomaterial embolic technique, coupled with a highly potent radiotherapeutic isotope, to target almost any solid organ tumor in the body using standard interventional radiologic means and leverage the breadth of the human vascular system. Rhenium-188, not 186, but Rhenium-188 NanoLiposome Biodegradable Alginate Microspheres, we call BAM for short, is a next-generation fully resorbable technology that solves many of the existing problems with current radioembolic technology. The BAM technology incorporates the Rhenium-188 isotope for use as the radiotherapeutic source with different emission criteria and characteristics than 186. It emits a high-energy beta particle with a half-life of about 17 hours or longer path length of over 3 millimeters. It also produces gamma energy that we can use for high-quality real-time imaging of the BAM construct in the organ. The company will initially focus on developing the BAM technology as a next-generation radioembolization therapy for liver cancer, in which BAM blocks the hepatic artery segments that supply blood to the malignant tumor while also providing radiotherapy by directly irradiating the tumor. Liver cancer is a rare disease with increasing annual incidence and a five-year overall survival rate of only about 20%. The global opportunity for localized embolization, chemoembolization, and radioembolization for primary and secondary cancers in the liver is about a 1.3 billion opportunity globally. We have three objectives in 2022 for our BAM program: the technology cancer phase has been completed, and we are on track to complete key CMC feasibility studies, IND-enabling preclinical studies, and an FDA pre-IND meeting this year.

Norman LaFrance, Chief Medical Officer

Thank you, Marc. Following on Marc’s comments, in 2022 we plan to extend the existing ReSPECT-GBM trial and program into a strong development plan. First and most importantly is the ReSPECT-GBM Phase 2 registrational trial using the cohort six recommended Phase 2 dose that Marc mentioned earlier. The company and its key advisors believe the safety profile and the clinical efficacy signal of a potential doubling of overall survival in patients receiving absorbed radiation doses greater than 100 gray has the potential to be an approvable NDA for recurrent GBM. Pending the outcome of our planned FDA meetings, we will initiate the first sites for that registrational trial by year-end. In the interim, we will be executing our clinical operations plan to be ready to achieve this milestone. Second is the continuation of the Phase 2 dose escalation trial supported by NCI for larger tumors. Third is a Phase 2 multi-dose extension trial for previously treated patients and patients that will be treated in the two trials just mentioned. Regarding GBM data presentations for 2022, we plan to provide key GBM clinical updates at the Society of Nuclear Medicine Meeting this June in Vancouver; the SNOW ASCO-sponsored Clinical Trials & Brain Mets Meeting in Toronto in August; EANO and ESMO in Vienna and Paris, respectively, both in September; potentially EANM in Barcelona in October; and the SNOW Annual Meeting in Tampa in November. Additionally, I’ll be participating at the Medidata Synthetic Control Arm Focused Industry Roundtable next week on April 26. As Marc mentioned, our clinical team and investigators were very pleased with the first patient outcome in the ReSPECT-LM trial. Treating the first patient of any new condition with an investigational drug is always exciting, but it also comes with many unknowns. A comment from one of the experienced investigators in the trial was that they had never seen such a clinical response in the first patient in a Phase 1 first-in-man trial. The delivery of RNL in this trial is very simple and straightforward, with a five-minute outpatient procedure through an existing Ommaya reservoir. There are substantial existing biomarkers, such as tumor cell count, which we are measuring in the cerebrospinal fluid, which is simple to obtain in these patients. There are also a number of additional exploratory biomarkers we are investigating as well. Furthermore, Plus will perform several preclinical studies to evaluate additional LM treatment paradigms with 186RNL, specifically multi-dose administrations and combination treatments with immunotherapy such as PARP and checkpoint inhibitors, both known to be synergistic with radiation. Despite impressive initial results at the first dose with a single RNL monotherapy, Plus believes optimal patient benefit can be amplified with multiple RNL doses and/or combination therapies. For our current trial, I’m optimistic enrollment will proceed rapidly based on the significant unmet medical need, very well tolerated administration, and enthusiastic responses from investigative clinical sites along with other oncologists once they learn about our trial. We plan to present developing preliminary clinical data and medical meeting presentations for LM in 2022 as previously discussed. Finally, RNL is being developed for pediatric brain cancer. The key goal here is to obtain FDA IND approval to investigate the use of 186RNL for children with brain cancer, and we are working with our lead site, Lurie Children’s Hospital in Chicago, and we are on track to meet this milestone later this year. Next, I’ll turn the floor to our CFO, Andrew Sims, who will review financials.

Andrew Sims, Chief Financial Officer

Thank you, Norman, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the 2022 first quarter ended March 31, 2022. As of March 31, 2022, cash and cash equivalents were $21.2 million compared to $18.4 million as of December 31, 2021. This represents 18 to 24 months of cash on hand. Cash used in operations for the three months ended March 31, 2022, was $3.9 million compared to $2 million in the first quarter of 2021. The main changes between 2021 and 2022 are as follows: total operating expenses for the first quarter 2022 were $3.9 million compared to total operating expenses of $2.5 million for the first quarter 2021. Approximately $0.7 million of this increase is due to research and development expenses, and $0.6 million is due to legal, intellectual property, and professional fees in 2022. Interest expense decreased from $247,000 in the first quarter of 2021 to $198,000 in the first quarter of 2022. This decrease reflects the principal paydown that commenced in November 2021 on the Oxford debt. The net loss for the first quarter of 2022 was $4.1 million, or $0.19 per share, compared to a net loss of $2.7 million, or $0.33 per share for the first quarter of 2021. Now, I’ll turn it back to you, Marc.

Marc Hedrick, President and CEO

Great. Thank you, Andrew. Before we move on to Q&A, let me just summarize key milestones anticipated for 2022. First, with respect to the 186RNL GBM trial, we’re planning for a clinically focused FDA meeting mid-year 2022 to propose a Phase 2 registrational clinical trial and trial design using the cohort six 8.8/22.3 millicuries dose, as detailed earlier. We expect to initiate the Phase 2 towards the end of the year. We anticipate the CMC-focused FDA meeting in the second quarter of 2022 or perhaps the beginning of the third quarter. It’s important that we have GMP drug availability to proceed with the trial. We’re on track with CMC activities for RNL, and we plan to complete those to have that GMP Phase 3-ready drug supply available by mid-2022. Additionally, we’ll report Phase 1/2 data and enrollment updates in an ongoing manner, as Norman mentioned, for the ReSPECT-LM trial, and our goal is to complete enrollment in at least the initial two cohorts this year. Regarding the pediatric brain tumor trial, we plan to get our IND submitted relatively soon this year and be able to initiate that trial towards the end of the year. Lastly, regarding our recently acquired rights to the 188RNL-BAM radioembolization therapy technology, we plan to complete key CMC and FDA IND-enabling studies and a pre-IND meeting this year. At this point, I think we’ll move to Q&A, and I’ll turn the call over to Gretchen.

Operator, Operator

Thank you. Our first question is coming from Ed Woo from Ascendiant. Your line is open.

Ed Woo, Analyst

Thanks for taking my question. I was wondering, you have a couple of meetings planned with the FDA this year. Do you know if the timing has reverted back to normal post-COVID, or do you see that there might still be possible delays that could run a little bit longer than expected?

Marc Hedrick, President and CEO

Norman, would you answer that?

Norman LaFrance, Chief Medical Officer

Ed, that’s a great question. We won’t know until the FDA gets back to us, but I’m anticipating they’ll probably follow their published guidance for these meetings, meaning they’ll usually provide an answer within three or four weeks and the meeting date by 75 days. As you know, they have the right to actually move those meeting dates up sooner than the PDUFA guidance requires them. But I’m not anticipating those to be pushed out further than usual as they were earlier in the pandemic.

Ed Woo, Analyst

Great. Thank you. And then my last question is your current GBM trial is funded by the NIH. Do you anticipate trying to get additional funding for some of these other indications that you guys are working on?

Marc Hedrick, President and CEO

Ed, one of the reasons we’re based in Texas is because there are opportunities for Texas-specific oncology-related grants, as I know you’re aware. That’s called CPRIT. We’ve been very interested in obtaining CPRIT funding for our various programs. Unfortunately, for the GBM program, they typically don’t fund Phase 3 trials, but they will fund Phase 1 to Phase 2. We spent a lot of time trying to find non-dilutive ways to obtain funding like CPRIT, so we’ll continue to do that. As per our previous plan, we won’t talk about specific grants we commend, but once we get something approved and funded, we’ll talk about that once we’re notified.

Ed Woo, Analyst

Great. Well, thank you, and I wish you guys good luck. Thank you.

Marc Hedrick, President and CEO

Thank you.

Operator, Operator

We’ll take our next question from Sean Lee at H.C. Wainwright.

Sean Lee, Analyst

This is Sean Lee from H.C. Wainwright. Thanks, guys, for taking my questions. My first one is on the LM study. It’s great to hear that the first patient is doing well. Traditionally, with intrathecal chemotherapy to treat LM, there are all the issues faced with insufficient penetration of the drug into larger solid tumors. Is that something you could potentially face with RNL as well?

Marc Hedrick, President and CEO

Hey, Sean, great question. With leptomeningeal disease, there are two types: linear and nodular. The nodular tumors can be a few millimeters and focal, whereas you have more linear disease, which can be very thin, but it’s just on the lining of the leptomeninges. One of the things we’re excited about with RNL is that it does have some penetration characteristics. It’s delivered within the cerebrospinal fluid and has an average path length of about 2 millimeters, but can have path lengths up to closer to 4 millimeters. You can actually achieve some penetration in nodular disease as well as hitting the linear disease. We think that this could have a better effect than chemotherapy due to some of the limitations of chemotherapy and some benefits of radiation therapy. Dr. LaFrance, do you have anything to add?

Norman LaFrance, Chief Medical Officer

It’s a great question. One of the unique characteristics of the LM study design, and unfortunately, this tragic complication for these patients, is the leptomeningeal metastases spread throughout the subarachnoid space. You’re absolutely right—chemotherapy, even CSF-administered chemotherapy, has the challenge of achieving delivery. When administered intrathecally, it usually escapes the CSF very rapidly. The turnover volume of the CSF, with a volume of about 125 ml, is five times a day. You have any drug in there that quickly exits with this circulation. The RNL nanoliposome design is administered easily through the Ommaya shunt. The administration takes five minutes, and patients usually don’t even need a band-aid. We’ve seen, as we predicted, excellent distribution, with the product staying in the subarachnoid space for over a week. Given our half-life, the product remains during its effective energy particle decay period, and you gain full benefit by three or four half-lives instead of throughout the period. In hindsight, that’s likely why we observed these results at this very early dose, which is a small dose. I think one of our experienced investigators has noted they've never seen this kind of response before. Thank you.

Sean Lee, Analyst

Thanks, Marc, and thanks, Dr. LaFrance. That’s very helpful. My second question concerns the RNL delivery method used for LM. Would that limit the kind of radiation dose you can deliver compared to the GBM study?

Marc Hedrick, President and CEO

I appreciate that question. The delivery for LM makes it easy. The amount we will deliver is part of our dose escalation trial, and we’ll find that out. The next cohort will double the dose we’re using now, and the one after that will double it again. By year-end, we hope to have experienced at four times the current dose. Given the response we saw in the first patient and the preclinical work we’re starting on combination therapies or multiple dosing, I don’t believe the administration of RNL will be an issue. You’re correct that we deliver it differently, but this actually turns this into an outpatient therapeutic process.

Sean Lee, Analyst

That’s great to hear, and I’m certainly looking forward to the results later this year. My final question is regarding the upcoming Phase 2 GBM study. Aside from the CMC aspect and the awaiting FDA meeting, what else does the company need to prepare before initiating that study?

Marc Hedrick, President and CEO

I understand what you’re asking. A significant part of our preparation involves working with Medidata to develop the Synthetic Control Arm. This will be important in maximizing enrollment and ensuring a patient-friendly randomization scheme, while also decreasing costs. We’ve completed a feasibility assessment with them, and we’re confident it’s feasible. Additionally, we need to prepare the meeting package, protocol synopsis, and the statistical analysis plan, and all of those are in progress.

Norman LaFrance, Chief Medical Officer

We have the benefit of the ongoing trial.

Sean Lee, Analyst

That’s good to hear. I wonder, as a quick follow-up, will the company seek a special protocol assessment with the FDA for this study?

Marc Hedrick, President and CEO

It’s possible, but I don’t think we need one, honestly. Norman, do you have any thoughts?

Norman LaFrance, Chief Medical Officer

That’s a great question. People often look for the SPA. Given our Synthetic Control Arm approach and this being a rare orphan disease, we already have Fast Track designation, with the potential for breakthrough therapy. Obtaining a special protocol assessment would likely add time. We believe we can proceed rapidly in drug development based on our current findings and the preliminary efficacy signals. We anticipate that by summer, we’ll have an agreement, and by the third quarter, we’ll be able to initiate site activities by year-end. We’ll need to interact with the FDA for sure, but we’re doing it in the fastest way possible.

Sean Lee, Analyst

I see. Thanks for that. That's all the questions I have.

Marc Hedrick, President and CEO

Thanks, Sean.

Operator, Operator

It appears we have no further questions at this time. I will now turn the floor back over to Andrew Sims.

Andrew Sims, Chief Financial Officer

Thanks, Gretchen. I have a question that was emailed in on the GBM trial. The question is, it sounds like you’re working towards a Phase 2 registrational trial on GBM toward the end of 2022. What details can you provide about the trial design, including patient numbers?

Marc Hedrick, President and CEO

I can’t tell you anything definitively because we haven’t discussed it with the FDA, but I can give you some guidance on how we’re thinking about it. We believe it’s realistic for a successful registrational trial with 100 patients. We’re likely going to be between 100 and 200 patients. Everything depends on what the FDA advises us. The primary endpoint will focus on overall survival, which is the goal in GBM trials. Typically, for rare diseases, you might see a 2:1 or 1:1 randomization. One advantage of the Synthetic Control Arm is that it may allow a 3:2:1 randomization scheme, which has previously been done where three patients receive treatment and two come from the Synthetic Control Arm, allowing three out of four patients to be treated, promoting enrollment and ethical considerations. We’re optimistic this trial could be around $10 million, with a guiding figure near $15 million. We anticipate involving up to 10 sites, year-end likely seeing initiation for the trial lasting up to 24 to 36 months. These estimates depend on FDA discussions. Gretchen, are there any other questions?

Operator, Operator

No further questions over the phone.

Marc Hedrick, President and CEO

Thank you all for joining us on the call and listening to the recorded version. Thank you. On behalf of the Board, I want to thank our employees, the broader members of our team, and of course, the physicians that we work with and the patients that trust us. Thank you, and have a good evening.

Operator, Operator

Thank you. This concludes today’s conference call. Please disconnect your line at this time, and have a wonderful day.