Jim DeNike - Senior Director, Corporate Communications and IR Scott Cormack - President and CEO John Bencich - VP and CFO Cindy Jacobs - CMO.

Katherine Xu - William Blair Chad Messer - Needham Stephen Willey - Stifel Nicolaus.

Good day, ladies and gentlemen and welcome to the OncoGenex Second Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the call over to Jim DeNike, Senior Director of Corporate Communications. Please go ahead sir..

Thanks Abigail, and thanks everyone for joining us. With me today from OncoGenex are Scott Cormack, President and Chief Executive Officer; and John Bencich, Chief Financial Officer and Dr. Cindy Jacobs, our Chief Medical Officer.

Before we begin, I'd like to remind everybody that today's conference call contains forward-looking statements based on current expectations. These statements are only predictions and actual results may vary materially from those projected.

Please refer to OncoGenex documents filed with the SEC concerning factors that could affect the Company, copies of which are available on the Web site. I'll now turn the call over to Scott..

Thanks, Jim. Good afternoon and thank you for joining us. Today I will provide an update on several of our key clinical programs, as well as preview anticipated milestones for the second half of this year and into 2016. John will conclude with a review of our financial results for the second quarter and then we’ll open the call to questions.

The insights we've gained about our products and the updates we've made to our clinical program over the past year have resulted in several upcoming key catalysts which are now eminent, including a Phase 3 data readout expected by the end of the year.

Our two priority assets Custirsen and Apatorsen continue to demonstrate their potential value to provide clinical benefit in the most vulnerable patients those at increased risk for poor outcomes or more resistant disease. We have realized a number of important achievements since our earnings call in May.

So let me take a moment to summarize some of these highlights. I'll begin today's update with our product candidate Custirsen which is the subject of two ongoing Phase 3 clinical trials in lung and prostate cancer.

As we reported at ASCO SYNERGY findings showed a benefit with Custirsen therapy in men with metastatic castrate-resistant prostate cancer who are at increased risk for poor outcomes and we continue to gain a better understanding of the patients most likely to benefit from Custirsen treatment.

Additional analysis of the SYNERGY data have been accepted for presentation at the upcoming European Cancer Congress Meeting in Vienna in September and we look forward to sharing these findings in more detail at that time.

I'd like to emphasize that we continue to believe that this data is significant as our ongoing AFFINITY and ENSPIRIT Phase 3 Custirsen trials include a higher percentage of patients for an increased risk for poor outcomes.

Based on the SYNERGY findings we reached the agreement with the FDA in June to amend the Phase 3 AFFINITY trial and statistical analysis plan to include a co-primary objective of evaluating survival benefit in men who are at increased risk for poor outcomes. These patients will be identified as having two or more of five common risk factors.

In addition we agreed that an interim analysis will occur for the entire study population or intend to treat population when the final analysis for the poor prognosis sub population occurs. This interim analysis will have both utility and early efficacy criteria to find for the entire study population.

If the earlier final analysis on the poor prognostic sub population shows a survival benefit for Custirsen we could initiate a regulatory submission at that time and now be required to wait for final results from the ITT population.

The entire trial could also be stopped early due to efficacy based on the interim assessment for the ITT population by the Independent Data Monitoring Committee. Advice from European Medicines Agency through their scientific review process will be obtained prior to finalizing the pending protocol amendment.

Subject to finalizing the amendment timing for the final analysis of the poor prognosis sub population is projected to occur by the end of 2015 while the final analysis for the entire study population is projected to occur in the second half of 2016.

Our other Phase 3 Custirsen trial ENSPIRIT continues to accrue non-small cell lung cancer patients who have progressed following initial treatments and are receiving Custirsen in combination with docetaxel at second line chemotherapy.

Based on current enrollment projections we believe final survival results could be available in the second half of 2016. Although advancements have been made in the treatment of non-small cell lung cancer patients with specific mutations and biomarkers acquired resistance to treatment and patient selection continue to be a challenge.

Combination with chemotherapy remains the backbone of treatment for the majority of these patients. Although we remain blinded to the results we were pleased to learn in July that the ENSPIRIT trial would be continued following its final scheduled interim futility analysis.

As a reminder we amended the ENSIPIRIT protocol to include a more rigorous evaluation for determining futility in achieving the survival benefit when adding Custirsen to second line docetaxel. We believe this more rigorous threshold is more appropriately aligned in the interest of both clinicians and their patients.

Given the aggressiveness of non-small cell lung cancer and the fact that approximately 80% of the patients in this trial had at least one poor prognostic risk factor at the time of the initial futility analysis, we believe the ENSPIRIT trial may already be enriched for the desired patient population.

While it is too early to predict the final results or the potential of Custirsen in treating non-small cell lung cancer passing its important futility analysis milestone further strengthens our belief in this drug and its potential to provide clinical benefit in this vulnerable patient population.

Having cleared the remaining futility hurdle and with the additional funds raised through the recent sales of our stock to Lincoln Park that John will be discussing in a moment, we believe we now have the required capital in hand to achieve our clinical goals including the reporting of ENSPIRIT data expected in 2016.

I’d now like to take a few minutes to discuss recent updates regarding our other clinical asset Apatorsen and our ORCA clinical trial program. The ongoing trials in the ORCA program consist of investigator-sponsored clinical study designed to evaluate whether the inhibition of Hsp27 can lead to improved outcomes for cancer patients.

We currently have five ongoing Phase 2 studies in bladder, lung, pancreatic and prostate cancers. The ORCA trials with the exception of the Pacific Trial are designed to provide information that will be useful for designing future Phase 3 trials and maybe used as supportive studies for registration if applicable.

As a reminder, due to small sample sizes data from these trials are not likely to result in statistically significant differences in either progression free survival or survival.

At ASCO, data from the global Phase 2 Borealis-1 metastatic bladder cancer trial were presented and showed clinical benefit in patients with advanced disease who had specific poor prognosis risk factors including performance status, liver involvement, low hemoglobin and high alkaline phosphatase.

Additional results from this trial have been accepted for presentation at the upcoming European Cancer Congress. The other metastatic bladder trial Borealis-2 is expected to finish enrolling this quarter and will evaluate overall survival.

Given the urgent need for new bladder cancer treatments and our results to-date we are working closely with investigators and plan to engage regulatory agencies to determine next steps. Turning to our Phase 2 Rainier trial, we anticipate top-line survival data by the end of the year.

This randomized placebo control trial is evaluating Apatorsen in combination with ABRAXANE and gemcitabine in approximately 130 patients with previously untreated metastatic pancreatic cancer. Rainier will evaluate overall survival as well as survival outcomes in patients with defined poor prognostic risk factors.

Our first trial is an investigator-sponsored randomized placebo controlled Phase 2 trial evaluating Apatorsen plus carboplatin and pemetrexed therapy, compared to carboplatin and pemetrexed therapy alone. In patients with previously untreated advanced non-squamous non-small cell lung cancer.

The aim of this trial is to determine if adding Apatorsen to carboplatin and pemetrexed therapy can extend progression free survival outcome. Additional analysis are expected to improve tumor response rates, overall survival, safety, tolerability and the effect of therapy on Hsp27 levels.

Patients who are at increased risk for poor outcomes will also be prospectively evaluated. This trial was initiated in August 2013 and patient enrollment was completed in February 2015. Primary progression free survival endpoint data is expected in the first-half of 2016.

Our other investigator-sponsored trials in the ORCA program include the Cedar trial in untreated advanced squamous non-small cell lung cancer and the Pacific Trial in men with castrate-resistant prostate cancer for experiencing a rising PSA while receiving Zytiga.

So that concludes my update on our recent development programs and I would now like to invite John to provide an overview of our financial results for the second quarter of 2015.

John?.

Thanks, Scott. As of June 30th, we had 60.2 million in cash, cash equivalents and short-term investments. During the second quarter, we sold shares of our common stock to Lincoln Park Capital that resulted in gross proceeds of 3.3 million including 2 million that was provided at the time we announced the purchase agreement.

After the end of the second quarter we sold additional shares of common stock to Lincoln Park Capital resulting in gross proceeds of approximately 14.7 million, no further amounts remain available for sale under this offering program.

Based on our current expectations, we believe that these resources will be sufficient to fund our currently planned operations late into the fourth quarter of 2016, which may include announcement of the Phase 3 affinity prostate cancer trial final results of the poor prognosis sub-population by the end of 2015 and final analysis for the entire study population in the second half of 2016.

Announcement of the Phase 3 ENSPIRIT lung cancer trial final survival results in the second half of 2016, completion of enrollment in the Phase 2 Borealis-2 bladder cancer trial expected to occur in the third quarter of 2015, announcement of the Phase 2 Rainier pancreatic cancer trial results expected by the end of 2015, announcement of the Phase 2 Spruce lung cancer trial results expected in the first-half of 2016, announcement of the Phase 2 Pacific prostate cancer trial preliminary results expected in 2016 and completion of enrollment in the Phase 2 Cedar lung cancer trial expected in 2016.

Revenue for the three and six months ended June 30, 2015 was 4 million and 5.4 million respectively, compared to 4.9 million and 16.7 million for the three and six months ended June 30, 2014 respectively.

Total operating expenses for the three and six months ended June 30, 2015 were $9.6 million and $16 million, respectively, compared to $12.6 million and $13.2 million for the three and six months ended June 30, 2014, respectively.

Net loss for the three and six months ended June 30, 2015 was $6 million, or $0.26 per diluted common share, and $10.5 million, or $0.46 per diluted common share, respectively, compared with 7 million, or $0.47 per diluted common share, and 15.7 million, or $1.05 per diluted common share, respectively, for the three and six months ended June 30, 2014.

That concludes our discussion of our financial results. I will now turn the call back over to Scott for his closing remarks..

Thanks John. As John just outlined this is an exciting time for the company with multiple eminent milestones expected throughout the rest of 2015 and continuing into 2016.

Our two product candidates continue to demonstrate their potential value in the clinical setting and now with the additional capital that was secured that John discussed we believe we are now well position to achieve our important upcoming milestones.

We look forward to providing additional updates throughout the rest of 2015 as we continue to build on our recent successes. Thank you again for joining us today and at this time I would like to invite Abigail to open the line for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Katherine Xu with William Blair. Your line is now open..

A few questions here on the AFFINITY study can we just assume that if the poor prognostic group does not meet the final end point by the end of the year and then the ITT analysis would not work either?.

So I don’t think that’s necessarily our view I think we do have two separate shots. Obviously we believe the poor prognostic group is the best opportunity for the drug based on the SYNERGY results.

But I think there is an opportunity for the ITT patient population as well and may be if Cindy can turnover and address this it in a little bit more detail..

Yes because of the statistical design or methods for both the poor prognostic sub population and the ITT are little different. So the hypothesized hazard ratio for the poor prognostic is 0.69 versus is the ITT of 0.75. So we have put a little higher bar for the poor prognostic patients to achieve.

So that would mean that the ITT when the data is complete would still have a chance..

With ENSPIRIT the interim analysis part there was a efficacy bar here that you actually cleared what does it mean from your perspective.

Does it bode well for ENSPIRIT how much more confidence you think you have gained from this interim analysis and the n does that extrapolate our thesis of AFFINITY as well?.

Again I'll let Cindy take the first response to your question and then I can fill in as necessary..

Sure I mean with our futility criteria we haven’t disclosed that. But certainly as they more rigorous criteria that is not just that the two arms are similar or certainly that the treatment arm is doing more harm. I think what it does in its criteria is give us better confidence that the trial is less futile to us.

I mean obviously not being able to set or state that criteria but I think we feel confidence that this trial is definitely preceding well and we look forward to the results at the end of next year..

Our next question comes from the line of Chad Messer with Needham. Your line is open..

You mentioned that there is some additional SYNERGY data coming in September at your oncology conference.

We had in a pretty good update at ASCO is it possible to comment more specifically at least a sort of a general kind of information we might be getting?.

Yes I'll turn again over to Cindy who can respond to what the plans are for the European Cancer Congress coming up in September in Vienna..

What we will be presenting a little more detail of baseline same question level than how they are co-relating to the poor and good prognostic patients and our treatment arm benefit..

And then can you talk a little bit about assuming a positive result in the poor prognostic patients? What is your current thinking is on what kind of label you’d get if you’ve got the docetaxel study SYNERGY? And then this one would be just on in poor prognostic patients it's not an insignificant number with the second line chemo, but obviously we’re getting whittled down pretty far in metastatic prostate cancer, what kind of label do you think you could get?.

So I think there is a continuum that we’ll follow out of this based on the data set. So as you articulated the first data that comes off from the study is the poor prognostic patient group. But then following that a number of months later, we will follow with the overall ITG population.

So that obviously has potential to expand from the poor prognostic group.

Then there are some other discussions that we’ve had obviously with respect to how far does that potentially get to migrate, those are obviously review matters with the FDA and other regulatory bodies, but can you start to migrate there is a trial I think that people are fairly familiar with cabazitaxel in the frontline setting.

So where does that potentially move, I think there is some interesting opportunities that do follow for us in the migration of potential cabazitaxel.

And then I think we have also been seeking in fact I think it came up in our last call, last time about how chemotherapy and its placement in the treatment of prostate cancer is really completely changing the face of treatment of this patient group again.

If you recall there were two separate trials the Xandi trial and the Charter trial that is looking at patients that are at high risk, high volume patients that are early stage where chemotherapy has delivered a very substantive improvement in survival.

So I think generally there is this evolution that is going on for the use of chemotherapy in prostate cancer and obviously it will be our role and job assuming we see success in prostate cancer to continue that evolution and to expand the utilization of this drug to the ever expanding role of chemotherapy in the treatment of this disease..

I would agree it is a moving target and probably moving in your favor, maybe you could just comment on how prepared you are at this point provided you would be I mean filing an NDA potentially or starting to get ready to file an NDA by the end of the year that’s coming up pretty close?.

Yes, I think it's fair to say that we are all hands on decking preparation for that particular action, there are elements of an NDA filing that we can begin to write obviously. Obviously you have to plug-in the clinical data.

But the team is completely focused on a rapid writing efforts so that we can get before the FDA and other regulatory bodies as humanly impossible as we can. And I think the team is very much guided to that effort and that is where our primary focus is other than obviously execution of our clinical trials and strategies.

But that is kind of a dominant focus is, we are in now large preparedness mode on anticipation of a hopeful successful outcome from this trial..

And your next question comes from the line of Katherine Xu again with William Blair. Your line is open..

So Apatorsen Scott, I was just wondering what is the strategy that you have for the asset, what kind of data do you think you need to have for partnership or do you want to keep pushing forward yourself?.

Sorry I miss the question on Apatorsen, was it for partnering?.

Yes, so basically if you want to go for partnering what kind of data do you think you have to have in hand for it or do you want to keep pushing it and so do you have enough data or do you want to do all for yourself?.

We have a I think a very interesting opportunity with respect to Apatorsen, clearly we are on the eve of multiple data points across the evolution and the maturation of the ORCA program.

So in very short order we’re going to have results across many different tumor indications now and that obviously is an exciting opportunity that will define I think whether the opportunity expands the ORCA we’ve already identified as an opportunity for bladder cancer.

As it relates to partnering it provides a whole bunch of different opportunity obviously depending on where the Custirsen program goes. So if we see success and revenues starting to drive from that program it gives us a lot more optionality with respect to how much and what we do with respect to Apatorsen development.

So fortunately I think given the timeline we’re in pretty good position to at least understand what the outcome is with prostate cancer certainly with poor prognostic and potentially with ITG and maybe even lungs because those are starting to migrate towards a very similar timeline.

And that will give us so much more optionality with respect to Apatorsen and we have the benefit of having all of these other Apatorsen trials starting to demonstrate results for us.

So I think we’re in a good position to be able to understanding what that landscape is, not have to walk down partnering paths too soon or with incomplete data sets and I think most of that’s going to be no one in the next six to nine months across the board.

So at this point we’re not rushing to get into a partnership relationship, but we do what we always do which is we have multitudes at meetings at every conference and opportunity we can to keep our pharma partners and big biotech partners informed as to what we're doing and data sets as they mature and timeline.

So we're active and ready to strike but at this point we don’t ask if we need to and on the eve of multiple data sets it will drive a lot of that..

Thank you. [Operator Instructions] Our next question comes from the line of Stephen Willey with Stifel. Your line is open..

Wondering if you can maybe just comment a little bit with respect to I guess where you are with EMA in the scientific review process.

And I guess have you already received that advice from them and I guess is this really just kind of a timing issue with respect to finalization of the protocol amendment or is there kind of an additional back and forth that’s ongoing the needs to be completed between yourselves and the agency?.

Again I'll turn this one out to Cindy since she is in the frontline of discussions with the EMA. So I'll let Cindy answer your question..

Sure the EMA have some -- it is pretty -- the process is pretty formal and so everything has been submitted and we went for kind of a pre-review and comment before we give our final submission which was in early July then they have very strict timelines once that is done.

So we really won’t hear from their review until end of September or early October. And yes we plan on finalizing the protocol amendment once we have that final review and any interaction that might be needed with EMA for any issues that they want to discuss with us..

And maybe another question just I guess with respect to Rainier if you guys I'm just curious if you have any insight at this point as to what study conduct might look like.

And I just asked the question I guess because there is a little bit of a thin balance in the AE induced treatment discontinuations that we saw in Borealis, I was just wondering if that is something that you are seeing being replicated in Rainier?.

So on Rainier we are completely blinded as to the treatment groups and that is why we don’t have any visibility at all on basically a treatment effect that we'd be able to attribute to the drug at this point we'll have to wait till un-blinding the Custirsen and obviously we would take a look at that and that obviously is something that we're looking at for by the end of the year with respect to the Rainier results.

And again we can just turnover to Cindy for a little bit more detail..

Yes I think the one thing with Rainier just similar as placebo blinded control and also it does not have the 1,000 milligram dosage group. It has a 600 milligram dosage group which a far less issue on that as far as discontinuation. So we're hopeful that that will not be repeated because of the dosage..

And then maybe just a housekeeping question I guess.

Have we figured out what this schedule of the, I guess the amortization schedule be for the remaining revenue of the revenue that is due from Teva as a result of the collaboration termination?.

And again I'll turn this one over to John who can answer the question for you..

So in terms of how we're going to amortize the revenue this is going to be on a dollar for dollar basis for all the Custirsen development activities. So again we've been running AFFINITY and you’ve seen the revenue in prior period as that’s been our study.

And in Q2 we have a little bit of revenue again from taking on ENSPIRIT starting at the end of April. So right now just based on our expectations we would expect that to be fully amortized by the first quarter of 2016..

And then how much was remaining on the 27 million as of the end of 2Q?.

Yes roughly 18 million..

Thank you. I'm showing no further questions at this time I'd like to turn the call back to Scott Cormack for closing remarks..

Thanks Abigail. Thank you everybody for participating on today's call. As I said in the prepared statements we very much look forward to developed 2015 and into 2016. This is an unprecedented time for us with multitudes of events coming in that time period. And we certainly look forward providing you updates as those mature and are realized.

Thank you again for participating..

Ladies and gentlemen that does conclude today's program. Thank you for your participation. You may all disconnect. Everyone have a great day..