Earnings Call Transcript - PTGX Q1 2020

Operator, Operator

Good day, and welcome to the Protagonist Therapeutics PTG-300 Development Update Call. Please note that today's conference is being recorded. At this time, I would like to introduce Don Kalkofen, Protagonist's Chief Financial Officer. Please go ahead.

Don Kalkofen, CFO

Thank you, operator. Good afternoon, everyone. Please note that a replay of today's call will be available at the Investors section of our website at protagonist-inc.com. Before we begin, I'd like to remind you that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Dinesh Patel, CEO

Thanks, Don. Good afternoon, everyone, and thank you all for joining us today. On today's call, we'll also hear from Samuel Saks, our Chief Medical Officer; and Dr. Ronald Hoffman, Professor of Medicine in Hematology and Medical Oncology at the Mount Sinai Hospital in New York City. Dr. Hoffman has been involved in the Phase II clinical study of PTG-300 in polycythemia vera, and he will provide a brief overview of the disease and his perspectives on PTG-300 and its potential benefits as the novel treatment for polycythemia vera or PV. Also present for the call today are David Liu, our Chief Scientific Officer and Head of R&D; and Suneel Gupta, our Chief Development Officer. We are pleased to have all these individuals available to address questions during the Q&A session of today's call. So let's start with Slide number 3. As you are well aware, Protagonist started the year 2020 with 3 clinical assets, all of which have been discovered through the use of our peptide technology platform in 6 different clinical proof-of-concept studies. The 3 assets fall in 2 broad categories: PTG-300 for various blood disorders, most of which are rare diseases; and oral GI-restricted targeted peptide PTG-200 and PN-943 for inflammatory bowel disease, or IBD. All of these assets have multibillion-dollar potential in multiple indications. PTG-300, a peptide mimetic of the natural hormone hepcidin, serves as a master regulator of iron homeostasis storage and distribution in the body and is being pursued in Phase II open-label proof-of-concept studies in beta-thalassemia, or beta-thal; polycythemia vera, or PV; hereditary hemochromatosis, or HH; and an investigator-sponsored study in myelodysplastic syndrome, or MDS. As you may recall, a major objective for 2020 was to select our first clinical indication for PTG-300 that we can progress toward a pivotal study in 2021. Today, we are pleased to announce initial but yet very robust clinical data from our polycythemia vera program and the selection and prioritization of polycythemia vera as the first indication for a pivotal study with PTG-300. This decision is based on three criteria: strength and consistency of the clinical data, favorable regulatory path forward, and the commercial opportunity. This is our major announcement today. And while most of our discussion will be around PTG-300 and polycythemia vera, let me also take this opportunity to talk briefly about our oral gut-restricted IBD assets, largely in the context of corporate update and cash runway.

Samuel Saks, CMO

Thanks, Dinesh. As Dinesh mentioned, we are really encouraged by the results we have seen in the ongoing Phase II study of PTG-300 in patients with polycythemia vera. Dr. Hoffman is going to walk you through the study results in detail, but I wanted to highlight why I believe this data has prompted us to focus on PV as the first indication for PTG-300. The majority of PV patients today are treated with phlebotomy, or phlebotomy in combination with cytoreductive therapies to control erythrocytosis and keep the hematocrit levels below 45%, as indicated in many treatment guidelines. There is a large body of evidence that shows that managing hematocrit is challenging, and regardless of best available therapy, there is a substantial portion of patient segments that have poorly controlled hematocrit, leading to a higher mortality rate compared to age-matched controls. The treatment paradigm of PV allows patients to enter what I call the danger zone before they get the next treatment. So even those people who are considered well-controlled have increased hematocrit leading up to their phlebotomy. Self-administered PTG-300 may reduce doctor visits and the anxiety associated with the uncertainty of phlebotomy at that time. Phlebotomy, as those who have donated blood know, is associated with acute symptoms and difficulties. But the real problem in these patients is the potential for chronic symptoms related to iron deficiency in phlebotomized patients.

Ronald Hoffman, Professor of Medicine

Yes. Thank you very much, Sam. Thanks for the opportunity to present this really exciting data. So if we can go to Slide 7, I can educate the audience on what polycythemia vera is so they can have a better understanding of the potential for PTG-300 and put this in context. So as you can see here, this slide is entitled, 'What is Polycythemia Vera?' Well, polycythemia vera is a member of a group of chronic hematologic malignancies termed myeloproliferative neoplasms. These neoplasms are unusual in that patients frequently live several decades. And these neoplasms occur at the level of the hematopoietic stem cell. Unlike leukemia, they are characterized by increased production of mature blood cells. In polycythemia vera, the cell that's most destructive to the patients is the increased production of red blood cells. That's the term erythrocytosis that you've heard previously and will hear subsequently. Now the interesting thing about this disease is that there are 100,000 cases of polycythemia vera in the United States. This disease occurs across races and age groups. The critical diagnostic warning sign is that of an elevated hematocrit, which is the hallmark of the disease. I think the importance of this drug is that although there are 100,000 cases of these patients, they live for several decades, so the usage of this drug would be quite prolonged over that period of time.

Dinesh Patel, CEO

Thank you, Dr. Hoffman. I would like to note that the results we have discussed today address the study data as of May 1, and the study continues to enroll. Our plan will be to submit to present additional data at upcoming medical meetings. At Protagonist, we are now working on 4 clinical programs with our 3 candidates, all discovered through our technology platform. Our priorities are: one, advancing PTG-300 in polycythemia vera as well as in hereditary hemochromatosis; two, advancing PN-943 to a Phase II study in ulcerative colitis; three, working closely with our partner, Janssen, to continue Phase II development of PTG-200 in Crohn's disease. As a result of our ability to limit our focus with PTG-300 to PV and HH, we have organized our efforts to extend our cash runway for an additional 6 months. We have taken steps to manage and lower our operating costs and align our resources around our current studies. As a consequence, we now have adequate financial resources to fund planned operating and capital expenditures through the middle of 2022. Finally, we are mindful of the impact that the current coronavirus outbreak may have on our local operations and global activities. As we disclosed in our financial results released today, we are suspending guidance for PN-943 Phase II initiation and PTG-200 Phase II data, and we are actively working to minimize the impact on timelines and move as quickly as conditions will permit. Our priority is maintaining the health and safety of our employees and those who are participating in our studies. We will continue to monitor changing conditions carefully and provide updates as appropriate. With that, we would like to now open up the call for questions. Operator?

Operator, Operator

Our first question comes from the line of Chris from Nomura.

Chris Marai, Analyst

This is Chris Marai from Nomura Instinet. Maybe the first one is for the physician on the line. Thank you so much for the overview of PV. I was curious how you look at a therapeutic like PTG-300 in terms of clinical practice on sort of an everyday basis as you see PV patients? And how do you think it may fit, assuming this profile remains consistent in sort of the treatment lines of PV, how you may see its usage, in particular relative to drugs like Jakafi?

Ronald Hoffman, Professor of Medicine

Okay. I think that's a really terrific question. I think its use would be quite wide. I think virtually all patients with PV would be candidates for this drug. We've, as you can see, treated young patients and also older patients with this drug. So it's been well tolerated. The advantage, again, is that especially with young patients, we do not want to give life-long myelosuppressive therapy or interferon or Jakafi because of the unanticipated potential for adverse effects. If they have an increased phlebotomy requirement, this would be an ideal treatment for those folks because basically, it would free them up from returning to the clinic as frequently as they do and requiring repeated phlebotomies. When we risk-stratify these patients, those who go on the three treatments that I've discussed before frequently still require phlebotomies, and it's been shown by European investigators that if you have additional phlebotomies during your administration of these drugs, you are at an increased risk of thrombosis. So in that setting, this drug could be an adjunctive agent that would eliminate the need for phlebotomy. Alternatively, I could see this developing quite quickly; patients are frequently unwilling to take any of these agents, especially hydroxyurea and interferon because of the potential of hydroxyurea and the concern about interferon essentially having systemic symptoms, problems related to immune disease and exacerbating depression in patients. So in those individuals, if we can control their hematocrits with this drug, which I think we can easily do, and we've demonstrated that, this drug would be a real competitor for any of those agents. I think it could essentially be used potentially for the broad swath of patients with polycythemia vera. For instance, young females who have Budd-Chiari syndrome, we usually put those young females on myelosuppressive therapy and interferon for life-long periods, and they can live several decades. They would far prefer being on a non-chemotherapy, non-biologic agent like interferon; it would really liberate them, especially from the adverse effects.

Chris Marai, Analyst

Okay. That's very helpful. And then I was wondering if we could touch upon the data for a minute. Dr. Hoffman, could you elaborate on some of the effects of spleen size that you may have observed in the trial, if any? What you would hope to see there on an endpoint like that in a patient population like this?

Ronald Hoffman, Professor of Medicine

Yes. In this situation, what you have to understand is this is not myelofibrosis. In reality, most patients with polycythemia, or virtually all patients, I'll say most, the overwhelming majority of patients with polycythemia do not have symptomatic splenomegaly. The endpoints that have been used in the past, let's say, for Jakafi for reduction of spleen size, are of minimal importance. Patients with polycythemia vera, even though some have high-risk disease, really do not have significant splenomegaly; only 40% of patients with polycythemia vera have splenomegaly, and only for our advanced disease is it symptomatic. So the sample size is too small. In animal models, when hepcidin mimetics were given, those are polycythemia vera animal models, the administration of a different hepcidin mimetic did lead to a reduction in splenomegaly, but we really were not able to assess this because none of these patients had significant splenomegaly. We await treating patients like that to see if the data in the mice is recapitulated in humans as it relates to spleen size.

Operator, Operator

Our next question comes from the line of George Farmer of BMO. Your line is now open.

Gobind Singh, Analyst

Hi, everyone. This is Gobind Singh on for George. Congrats on making a decision and moving forward with those 2 indications. I guess we had 2 buckets of questions. The first 2, maybe for Dinesh. I know you guys were thinking about once-weekly dosing and possibly twice-weekly dosing in beta-thal. I was wondering if maybe going forward, at least with PV, do you think you might be looking at twice-weekly dosing at all? And I was wondering since we are moving past beta-thal and MDS, if you'd be willing to comment at all as to what kind of data we're seeing in those indications? And I'll have a follow-up for Dr. Hoffman, if that's okay.

Dinesh Patel, CEO

Yes. Gobind, thanks for the question. And I will have Sam Saks, our CMO, answer the first question.

Samuel Saks, CMO

Sure. With respect to the use of PTG-300, we think that it's going to be used widely. You were asking me about the once-weekly dosing in beta-thal; we don't anticipate that we'll need to go to twice-weekly based on this data. The patients are having a robust response to once-weekly therapy. We can always consider that in patients who max out with respect to the effect. But at least so far, once-weekly dosing in the range that we're studying has been adequate, which is why we're confident about moving forward into a pivotal study because it looks like we're in the active range and we understand how to titrate the drug.

Dinesh Patel, CEO

Gobind, you may recall that in the beta-thal data, the transfusion-dependent data, the TSAT levels are at 100% near saturation. So that was our toughest population requiring high doses and twice-weekly dosing to get the TSAT levels into the normal ranges. In comparison to that, diseases like HH and especially PV have an incredibly lower TSAT burden. We had always hypothesized that logically, one would assume that for all these other indications, you may notice lower doses and lower frequency of dosing. All the data that you have seen today is once-weekly dosing, and we are oscillating anywhere between 20 to 40 milligrams over here. Sorry, Gobind, can you repeat your second question for Dr. Hoffman?

Gobind Singh, Analyst

Sure. I didn't say it, but it would be great if Dr. Hoffman could comment on the PV-specific kind of symptom score. I was wondering if maybe you'd be willing to comment on how the trend is looking in the patients that you've seen so far? Especially since there's a blinded phase, how are you guys using hydroxyurea or Jakafi, whether it's past history or in combination? What's the protocol for how people can give these other medications in addition to PTG-300?

Ronald Hoffman, Professor of Medicine

Okay. I can speak to these questions. One is, let's take the second question, and then I'll probably ask you to repeat the first one. In the second question, we have one patient in the protocol. This patient is emblematic. Many patients in the clinical trial have been reluctant to go on myelosuppressive therapy due to its associated toxicities. We have kept this patient on a fixed dose of hydroxyurea and added PTG-300, which has eliminated the phlebotomy requirement. Many patients are reluctant to go on myelosuppressive therapy or interferon because of concerns regarding secondary malignancies and the increased incidents of shingles linked to Jakafi. This context informs our approach to administering the drug. We have not had anyone who has concurrently received interferon; we only had a patient who has been treated concurrently with hydroxyurea.

Don Kalkofen, CFO

This is part of our goal in expanding the study is to open it up to accrue additional patients with a wide variety of approaches that are used in these patients. But it's too early to comment on the symptom score.

Ronald Hoffman, Professor of Medicine

Let me comment on the symptom score. I mean, the symptom score is of value. In the patients with polycythemia vera, we've done—I have a large program ramped from the NCI. We've used that symptom score to assess the efficacy of interferon and hydroxyurea as well. It is useful, but it's not as robust as it is in myelofibrosis. Anecdotally, I can tell you that one of the patients in our cohort had intractable pruritus, which was eliminated by the use of this drug, and that was very satisfactory. But again, that's just one anecdotal indication. The patients do experience a sense of well-being, but that is really just a global assessment. To truly gauge the results of the symptom score would require a much larger patient group to study with that quality of life tool.

Gobind Singh, Analyst

That's perfect. That's really helpful. And sorry, Dinesh, I might have missed this. Can you comment at all about any data that you've seen with PTG-300? I believe it was an IST with myelodysplastic syndrome.

Don Kalkofen, CFO

So that study has been discontinued. We decided not to begin that study with a focus on PV. We've had such a strong reaction to the positive data in PV; our feeling was that we wanted to focus our efforts where we saw such great results.

Operator, Operator

Our next question comes from the line of Mr. Joe Schwartz.

Joe Schwartz, Analyst

Can you talk at all about any of the other blood compartment components like leukocytes, reticulocytes, whether there were any notable changes there and whether you can tie any of that to the targeted mechanism of action?

Ronald Hoffman, Professor of Medicine

If we go back to the appendix slides, the next slide essentially shows the platelets, and you can see that they have remained steady in response to treatment. Platelet count has not gone dramatically up. But I'd like to emphasize to you that although many clinicians have used platelet numbers as a trigger to treat patients with polycythemia, the literature justifies that platelet numbers do not correlate with thrombotic risk. Hematocrit makes the biggest difference. If clinicians treat patients with polycythemia vera, they should not focus on the platelet count. We have not had patients with platelet counts over 1.5 million, which would increase the risk of Von Willebrand disease. If you go to the next slide, which you are interested in, the leukocytes, you can see that those levels have also remained steady during the treatment period. Importantly, none of the patients who received the drug had any thrombotic episodes during its administration or any indication of disease progression to myelofibrosis or acute leukemia. The reason I mention this is that frequently, patients display elevated leukocyte counts when that occurs. Therefore, the other lineages have remained stable during the period of administration.

Joe Schwartz, Analyst

Great. That's helpful. And then for the company, what are the next updates we should look for from this trial? And how quickly do you think you can get a pivotal trial ongoing? What would be the design and an endpoint analysis that you'd target?

Dinesh Patel, CEO

Thanks for that question. I will have Sam Saks elaborate on the answer to the question.

Samuel Saks, CMO

Sure. We're currently in the process of working with thought leaders to design pivotal studies. We can't say much more about that until we finalize that design. The current study will continue and expand. We expect the first part of it is, of course, open-label, so we'll be aware of the data as it evolves. The randomized portion will be starting. We expect that there will be further data updates in the last half of the year at various medical meetings in this field that people are well aware of.

Dinesh Patel, CEO

I would like to add that even in these difficult times, we are satisfied with the rate of enrollment. Today, we showed you data on 7 patients. We also mentioned that now there are 8 patients enrolled, and the data speaks for itself. We believe enrollment will strengthen in the coming weeks and months, and it is our intent to share the data and as much information as we gather from this expanded study.

Samuel Saks, CMO

One of the things that Dr. Hoffman mentioned is these patients need to be phlebotomized, so they must seek medical care. They can't just stay at home. That's worked in our favor, allowing them the possibility of self-administration at home. These patients can't just avoid care altogether because they risk thrombotic events.

Dinesh Patel, CEO

As you mentioned during the call, obviously, the next steps involve collaborating with the thought leaders and KOLs, gathering more data, and maintaining good dialogue with the FDA to finalize the next pivotal study.

Operator, Operator

Our next question comes from the line of Douglas Tsao of HCW. Your line is now open.

Chris Bialas, Analyst

Hi, everyone. Chris Bialas on for Doug Tsao. Congrats on the data. I was just wondering if you could provide more detail about what you saw in the beta-thalassemia trial that led to your decision to discontinue?

Dinesh Patel, CEO

Our guidance has always been that we are conducting multiple open-label proof-of-concept studies with the intent of picking a winner. Today, we have selected a winner by a huge margin, and that's what we are sharing. Regarding beta-thal, we received excellent safety data in over 50 patients with 1000-plus injections. We obtained superb pharmacodynamic data that we shared during our last December call, but we cannot share more information right now as we are under embargo. However, we will present beta-thal at an upcoming medical conference in this quarter.

Samuel Saks, CMO

I want to clarify your impression. This isn't about us reacting to beta-thal; it is about us reacting to the outstanding data for PV. We really want to emphasize that, as Dinesh said, we were investing in these 4 things in parallel that are open label. We get to see the data continuously. When we saw this data, it was clear in our minds that this needed to be the focus of the company. I just wanted to ensure you understood that we were responding positively to the data for PV.

Operator, Operator

I'm showing no further questions at this time. I would like to turn the conference back to Dinesh.

Dinesh Patel, CEO

Great. In summary, we are pleased to have delivered on our promise to select an indication for the initial pivotal development of PTG-300, which was a major objective for this year. Additionally, we would like to thank Protagonist shareholders, the patients who participated in our studies, and the investigators who support these studies. In these difficult times, I want to specifically emphasize how thankful and proud I am of the Protagonist employees who have brought us to where we are today. Thank you all for joining us.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.