Earnings Call Transcript - PSTV Q2 2022

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Second Quarter 2022 Results 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 the Plus Therapeutics' annual report on Form 10-K and quarterly report 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, 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.

Dr. Marc Hedrick, CEO

Thank you, Jonathan. Appreciate it. Good afternoon, everyone. Thank you for once again joining us today as we provide an overview of recent business highlights and discuss our 2022 second 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 Andrew to review our financials. And Dr. LaFrance will be joining us for a question-and-answer period. I can say with a tremendous amount of certainty that 2022 is shaping up to be an outstanding year of progress for Plus Therapeutics across all fronts. I continue to be very pleased with our team's performance in critical areas such as drug manufacture and clinical development. Also, I'm very excited about the performance of our 186RNL drug in our two active clinical indications, glioblastoma and leptomeningeal metastases. While still in the early to mid-stage of clinical development, 186RNL is functioning biologically in a manner that is very consistent with its original design objectives and showing a solid safety profile coupled with a biological response. So let's start with the Rhenium-188 NanoLiposome Development Program and specifically our CMC activities. In July 2022, the Company completed the technology transfer and initiation of cGMP manufacturing of the 186RNL drug intermediate with Piramal Pharma Solutions. Additionally, the intermediate drug product is in stability testing, and we believe it to be compliant with FDA guidance for the manufacture of nanoliposomal drug products for use in late-stage clinical trials and even commercialization. We expect to have GMP drug availability in the second half of 2022 on time for ongoing and planned Phase 2 clinical trials in adults with recurrent glioblastoma and leptomeningeal metastases across all future disease targets. In Q2, the Company submitted a briefing package to the FDA to seek their opinion on the sufficiency of the 186RNL CMC development plans for GMP drug manufacture. The Company anticipates making a summary of those meeting minutes public when finalized. Regarding the GBM program, this trial is enrolling currently, and it's a dual Phase 1/2 multi-center sequential cohort open-label volume and dose escalation study for recurrent glioblastoma. The trial is currently funded to a significant degree by the U.S. NIH and the National Cancer Institute. In July of 2022, at the Society for Nuclear Medicine and Molecular Imaging Annual Meeting, Dr. Bill Phillips presented positive interim data on our lead investigational drug 186RNL for the ReSPECT-GBM trial in patients with recurrent GBM. During the presentation, the Company noted that the trial has evaluated 23 adult patients with recurrent GBM across seven cohorts of increasing dose. To date, after a single administration, there have been no dose-limiting toxicities and promising efficacy signals have been observed in patients receiving an average absorbed dose of radiation greater than 100 Gy. As presented in Q2, the most recent data shows a two-year improvement in median overall survival in patients receiving greater than 100 Gy versus those receiving less than 100 Gy. Furthermore, in the greater than 100 Gy subset of patients, the median overall survival of 130 weeks compares favorably with real-world data in a recent meta-analysis of similar patients receiving monotherapy bevacizumab, and that was about 38 to 32 weeks median overall survival. And this data is referenced in detail on our website. As planned, we submitted a second briefing package to the FDA for the purpose of defining the clinical development plan for 186RNL bevacizumab. This is the Company's first formal detailed clinical correspondence and interaction with the agency since the in-license of RNL in mid-2020. Based on the positive safety profile and promising efficacy signals observed thus far in what is a very poorly met medical need, we'd like to determine the agency's opinion of the best next steps for ongoing clinical development. From this, we intend to craft a collaborative longer-term plan leading to a potential new drug approval for what is a very unique and novel combination of a radiopharmaceutical and novel delivery methodology. The Company anticipates making a summary of those meeting minutes public when finalized. Big picture, based on the data observed thus far, we believe the best overall clinical development path forward would incorporate at least a three-pronged approach. First, to continue the current Phase 1/2 trial to explore further dose escalation as we have yet to observe dose-limiting toxicities, and also continue to work to further optimize the delivery and dosing parameters. Second, we intend to explore serial dosing. And in Q2, the FDA allowed the Company to proceed to a multi-dose extension trial to go after tumors again, either if they recur, or if in key areas of the tumor were incompletely treated with a single administration. This is going to allow us to potentially treat larger tumors or those with significant morphological or geometric complexity that may be difficult to completely treat in a single administration. Finally, we feel the cohort dose and volume is likely appropriate to move forward as a recommended Phase 2 dose to treat patients with small- to medium-sized tumors, whether that's in the current Phase 2 NIH-sponsored trial that's ongoing, or combined Phase 2 or Phase 2/3 trial design sponsored by the Company that will be up to our discussions with the FDA. Taking a step back and putting this in a big picture, the combination of studies I just mentioned allows us to begin to explore for our big dream, which is to transform brain cancer from a death sentence as it is today to a chronic disease managed by serial RNL treatments as needed for each patient throughout their disease course. This fall, the trial's principal investigator, Dr. Andrew Brenner, will provide a full data update on the Phase 1/2 ReSPECT-GBM trial at the European Society of Medical Oncology in Paris, France, and that's going to be September 9 to 13. We don't have the exact date and time, but that will be a podium presentation. As to our leptomeningeal metastases or LM development program, this trial, as a reminder, is a multicenter Phase 1/2 dose escalation study to determine the maximum tolerated dose, safety, and efficacy of 186RNL in LM. To remind you, LM is an end-stage, typically fatal complication associated with advanced cancers that infiltrate the fluid line structures of the central nervous system or leptomeninges. The incidence of LM is growing with better local cancer care; median survival with current aggressive treatment is about three to eight months, depending on which primary tumor actually caused the LM. The one- and two-year survival rates are about 7% and 3%, respectively, and survival without treatment is about four to six weeks. The most common tumors giving rise to LM are gastrointestinal malignancies and melanoma. There are no approved therapies in standard treatment, which includes a grab bag of things such as external beam radiation therapy to the affected sites, followed potentially by chemotherapy that can be given orally, intravenously, or commonly administered twice weekly directly into the cerebral spinal fluid space until the patient can no longer tolerate the therapy or passes away. In Q2, the Company completed enrollment on time of Cohort 1 of the ReSPECT LN Phase 1/2 dose escalation trial of 186RNL. 186RNL was successfully delivered without dose-limiting toxicities in this initial cohort, and the independent ReSPECT LM trial data safety and monitoring board has approved the plan to move ahead with Cohort 2, which we're in the process of doing. Also in Q2, the Company announced that we had entered into a multiyear agreement with Biocept Inc. to employ its cerebrospinal fluid assay system in the ReSPECT-LM trial. Biocept's assay provides a highly sensitive method to assess and quantify tumor cell burden in LM of the central nervous system and also allows us to look at specific tumor cell markers and indicators of radiation damage. Assay results will be used to evaluate biological response to the treatment and treatment efficacy and ultimately, potential determination of the timing or cadence of retreatment in patients enrolled in the trial. Finally, regarding our novel, recently in-licensed radio embolic microparticle technology called 188RNL BAM or just BAM, we have completed the technology transfer phase and are on track to complete key CMC feasibility activities and certain IND-enabling preclinical studies by the end of the year, and we're on track for that. In addition, we are planning to meet with the FDA for a pre-IND meeting this year as well. With this resorbable biomaterial embolic technology, coupled with a highly potent radiotherapeutic isotope, we believe we can target almost any solid organ tumor in the body using standard interventional radiologic means and leverage the breadth of the human vascular system to selectively reach only the tumor without having to incur a systemic circulating radiotherapeutic that could harm the bone marrow or other organs of the body. Rhenium-188 NanoLiposome Biodegradable Alginate Microspheres is a next-generation fully resorbable technology that solves many of the existing problems with current radioembolization technology that's been out there for many decades for the treatment of liver cancer. Our plan is to initially focus on developing the BAM technology as a next-generation bioresorbable radioembolization therapy for non-operable liver cancer, which has a very low five-year survival rate of about only 20%, and the drugs that are out there are not bioresorbable; they're permanent. So with that, I'll turn the floor over to Andrew, our CFO, who will review the financials. Andrew?

Andrew Sims, CFO

Thank you, Mark. Good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the 2022 second quarter ended June 30, 2022. As of June 30, 2022, cash and cash equivalents were $18.1 million compared to $18.4 million as of December 31, 2021. This represents 18 to 20 months of cash on hand. Cash used in operations for June 30, 2022, was $6.5 million compared to $5.4 million in the same period for the previous year. The main changes between the second quarter of 2022 and 2021 are as follows: Total operating expenses for the second quarter of 2022 were $5.1 million compared to $2.6 million for the second quarter of 2021. The increase is due primarily to the following: increased one-time development expenditures on CMC-related activities to develop and produce GMP quality RNL drug material. The overall cost of this development program is in line with our original forecast of approximately $5.5 million. Expenditures are scheduled to be completed in late Q3 2022, with only minimal additional stability testing expenses required on a go-forward basis thereafter. $1 million related to a combination of third-party professional services and consulting in preparation for our planned FDA meetings, as Marc mentioned, as well as clinical trial planning activities to support the ongoing and future glioblastoma development program. The expenditures will be completed as planned in Q3 2022. And, to a lesser extent, an increase in legal, IP, and other general corporate expenses. Interest expense decreased from $229,000 in the second quarter of 2021 to $181,000 in the second quarter of 2022. This decrease reflects the continued principal pay down that commenced in November 2021 on the Company's Oxford debt. Net loss for the second quarter of 2022 was $5.3 million or $0.24 per share compared to a net loss of $2.8 million or $0.25 per share for the second quarter of 2021. Now, I'll turn it back to you, Mark.

Dr. Marc Hedrick, CEO

Great. Thank you, Andrew. Before we move on to Q&A, let me just summarize key milestones anticipated for the remainder of 2022. So besides, of course, continuing to work to meet our clinical enrollment goals, we intend to present ReSPECT-LM Cohort 1 data at the Society of Neuro-Oncology Brain Mets meeting, August 12 to 13 in Toronto. We also intend to present the ReSPECT-GBM Phase 1 data at the European Society of Medical Oncology in September in Paris. We intend to report on our two planned FDA meeting minutes in Q3, one for CMC and one for the ReSPECT-GBM ongoing clinical program. We anticipate achievement of our GMP 186RNL manufacturing capability goal soon, and we'll make that public. We also will communicate our planning process in an ongoing manner and the beginning of execution of Phase 2 activities for ReSPECT-GBM. We intend to submit, as mentioned, a protocol for respect pediatric brain cancer, the ReSPECT-PBC trial later in the year, and we'll announce that. Finally, we'll announce a 188 BAM pre-IND submission for planned clinical introduction in liver cancer, and that will be right around the end of the year. So at this point, Jonathan, let me turn it back over to you, and we'll take some Q&A.

Operator, Operator

And our first question comes from McCarthy from Maxim Group. Please go ahead with your question.

Michael Rabinowitz, Analyst

Hey, guys. Thank you for taking the question. It's Michael Rabinowitz on the line for Jason. I'd like to see if you could provide a bit more on the mechanism behind the BAM program and how it behaves differently in the body to enable that targeted use in solid organ cancers.

Dr. Marc Hedrick, CEO

Right now, the data we have is only from preclinical studies. Unlike the two existing products on the market that are permanent glass or polymer-based and used for radioembolization, this product will be bioresorbable. We are still in the process of determining the curve and timing for that bioresorbability. The concept is to identify the tumor and embolize the surrounding area to include the tumor in the radiation delivery zone. After the radiation has been fully administered and fully decayed, the body will resorb the product and restore perfusion. This could potentially allow for re-treatment if necessary or in case of recurrence. That's the general idea. Does that answer your question?

Operator, Operator

I believe he dropped off and then rejoined the call. So… And our next question comes from the line of Ed Woo from Ascendiant Capital. Your question please.

Ed Woo, Analyst

Yes. For Cohort 1 of the ReSPECT-LM trial, how many patients were involved? Did the enrollment proceed as planned? What challenges do you anticipate for Cohort 2?

Dr. Norman LaFrance, CMO

Thank you, Ed. To provide some context, the FDA has mandated a three-month gap between enrolling the first patient and beginning the next cohort. This means we have to wait before moving forward. Additionally, there is a 30-day delay between the first and second patients in the new cohort; however, the recruitment for the second and third patients can happen quickly. In an ideal scenario, we could enroll the first nine patients by the end of the year, depending on adhering to this schedule. The trial design includes a suggestion from the FDA that we will return to them after gathering safety data, allowing us to amend the data collection and consider offering retreatment to these patients. Thus, as we gain more confidence in the safety profile, we may start providing extra treatments. The goal is to enroll these nine patients swiftly, assuming no safety concerns arise. This would likely happen around year-end. Afterward, we will pause for discussions with the FDA, and we plan to return with a substantial number of sites involved in the trial, which has attracted considerable interest. We hope to move towards offering additional doses to each patient as part of an expanded treatment profile.

Ed Woo, Analyst

Great. And then the next question is, you obviously had a lot of interactions with the FDA, and you're looking forward to putting out the notes that you guys have. What has been a timetable with interacting with the FDA? Have things pretty much gone back to normal post COVID? Or are you still seeing possible delays here and there?

Dr. Marc Hedrick, CEO

Most of our interactions with the FDA have been recent. To answer your question, it has involved both me and our Chief Medical Officer along with our regulatory consultants. We have been very pleased with the response time and our interactions. Everything seems completely normal.

Operator, Operator

We have a follow-up from Jason McCarthy from Maxim Group. One moment.

Michael Rabinowitz, Analyst

Sorry about that. I got some bumped off the call before. But I'd like to see if you could discuss a bit further with the collaboration with Biocept and what it does for your clinical trial in LM. How do regulators view the use of insight to guide treatment? And can this be used as a surrogate endpoint for response monitoring? Is it more targeted at just collecting additional data to support your development?

Dr. Marc Hedrick, CEO

Yes. The ultimate use of this is still to be determined. We believe there’s an opportunity to potentially use it as a surrogate endpoint, and I’m confident it will be. However, whether it ultimately becomes a primary or secondary endpoint remains to be seen, depending on what the data shows. I think that would be valuable for Biocept, serving as a meaningful follow-up endpoint in these patients. The interesting aspect of this disease is that all patients have Ommaya reservoirs that we use therapeutically. As I mentioned, the current treatment is typically important for these patients, who return twice a week for chemotherapy injections through the port. Additionally, there’s an opportunity to withdraw cerebrospinal fluid (CSF) and measure various factors at any time. So far with Biocept, we’ve measured tumor cells per milliliter and reported those findings. I didn’t mention it before, but you’ll see the full data set in August. In all three patients we’ve treated, we observed dramatic reductions in tumor cells that persist for a month after a single administration. This tumor cell data suggests it provides information supporting the biological activity of the radiotherapeutic in the CSF. We are also exploring other tumor cell markers and will look at markers of radiation-related damage as part of our exploratory phase with Biocept. They have greater capabilities beyond just quantifying tumor cells. We see significant potential utility, even in guiding therapy. One could envision a scenario where after treatment, you track certain markers, including tumor cell count, over time, and make redosing decisions based on the data gathered from serial CSF sampling.

Michael Rabinowitz, Analyst

All right. And then just one last one for me. I'd like to just ask if there are any unique challenges associated with the treatment of LM compared to something like glioblastoma?

Dr. Marc Hedrick, CEO

Yes. I would say that with regard to GBM, these patients can be quite delicate. We have encountered a few patients who were initially on track for treatment but became decompensated, as their survival rates are very low, even with treatment. Since having their Ommaya reservoir placed, we conduct a flow study to ensure there is good flow from the ventricle to the rest of the CSF space. Unfortunately, these patients have decompensated and no longer meet the inclusion/exclusion criteria. For us, the important aspect is to minimize the time required for this process. Additionally, we aim to have more patients than available drugs to avoid slowing down the trial enrollment. Although you didn’t ask about this, I would like to mention that enrolling these patients is easier because physicians are very interested in this trial. There is significant enthusiasm for participation, as we interact with multiple patients each week who meet the criteria. I believe this trial could enroll rapidly once we advance to a more mature stage of the development plan, given the strong interest from physicians in this drug.

Operator, Operator

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

Dr. Marc Hedrick, CEO

Thank you, Jonathan. Just to close, I want to thank everybody that joined us on the call today and provide my appreciation also to stockholders, employees, physicians, and consultants with whom we work and the patients who trust us. So as always, we'll work to provide full and frequent updates as we move forward with these various programs. Thank you once again.

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.