Good day, ladies and gentlemen and thank you for standing by. Welcome to the Calithera Biosciences, Inc. Fourth Quarter 2018 Earnings Conference. [Operator Instructions] And now, it’s my pleasure to turn the call to the Vice President of Investor Relations and Strategy, Ms. Jennifer McNealey..

Thank you, Carmen. Good afternoon, everyone. Welcome to our fourth quarter and year end conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; Stephanie Wong, Senior Vice President of Finance; and Keith Orford, Chief Medical Officer.

We have issued our press release and it can be accessed through our website at calithera.com.

Before we begin, I would like to remind you that today’s discussion will include statements about our future expectations, plans and prospects that constitute forward-looking statements for the purpose of the Safe Harbor provisions under the Private Securities Litigations Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those in the risk factors discussed in the Risk Factors section of our annual report on Form 10-K filed with the SEC.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.

Please note this call is being recorded. And with that, I will turn the call over to Susan..

for telaglenastat, expecting ENTRATA trial to be fully enrolled, and we expect to report the top line data in the second half of 2019. We also plan to enroll the CANTATA trial, a Phase 2 randomized trial with approximately 400 patients by year-end.

For 1158, we and our partner, Incyte, expect to present data at a medical meeting in the second half of 2019. For CB-280, we have achieved our goal of initiating a Phase 1 trial and look forward to additional updates on this program.

And for CB-708, a preclinical abstract describing CB-708 has been accepted for presentation at the 2019 AACR meetings in March, and we expect to initiate a Phase 1 trial in 2019. And with that, I will pass the call over to Keith for an update on the clinical programs..

Thank you, Susan. Let’s begin with a more detailed update on telaglenastat, our glutaminase inhibitor and our most advanced product candidate. We are currently focused on forging a clinical commercial path for telaglenastat in renal cell carcinoma. The program includes two randomized clinical trials of telaglenastat for the treatment of RCC.

The Phase 2 ENTRATA trial of telaglenastat in combination with everolimus in late-line patients recently completed enrollment.

This randomized double-blind trial, which is designed to evaluate the efficacy and safety of telaglenastat in combination with everolimus enrolled 69 clear cell RCC patients, who had previously been treated with at least 2 prior lines of systemic therapy, including a VEGFR-targeted tyrosine kinase inhibitor.

Patients are being randomized in a 2:1 ratio to either telaglenastat plus everolimus or placebo plus everolimus. The primary endpoint is progression-free survival. Overall survival will be assessed as a secondary endpoint. The multi-center study is being conducted at sites in The United States.

We remain on track to reach the primary endpoint analysis in the second half of 2019. We are also actively enrolling CANTATA, a global trial of telaglenastat in combination with cabozantinib in second- and third-line RCC patients. CANTATA is a randomized, placebo-controlled trial in approximately 400 patients and has registration potential.

It is designed to evaluate the efficacy and safety of telaglenastat in combination with cabozantinib versus placebo plus cabozantinib in clear cell RCC patients, who have previously received 1 or 2 prior lines of therapy, including at least 1 prior anti-angiogenic agent or the ipilimumab-nivolumab combination.

Patients are being randomized in a 1:1 ratio to either telaglenastat plus cabozantinib or placebo plus cabozantinib. Patients will be stratified by IMDC risk category and prior treatment with anti-PD-1, PD-L1 therapy. The primary endpoint is progression-free survival by independent review. Overall survival will be assessed as a key secondary endpoint.

We recently presented an update to the Phase 1 data of telaglenastat in combination with cabozantinib as an oral presentation at the 2019 ASCO GU meeting in February.

In the Phase 1b trial, 12 of the advanced renal cell carcinoma patients, including 10 clear cell and 2 papillary patients were treated with telaglenastat plus cabozantinib and were evaluable for response.

Patients enrolled in the trial had advanced or metastatic disease and received a median of 3 prior treatments, which included tyrosine kinase inhibitors, mTOR inhibitors and checkpoint inhibitors.

100% of the viable patients experienced tumor shrinkage and disease control, including 5 patients who had a partial response and 7 patients who had stable disease. In the clear cell patient population, the disease control rate was 100% and the response rate was 50% and 5 out of 10 of the clear cell patients continued on the study for over 14 months.

In the fourth quarter, we also announced two new clinical trial collaborations to evaluate Pfizer’s CDK4/6 inhibitor, palbociclib, also known as IBRANCE, and the PARP inhibitor, talazoparib, also known as TALZENNA, each in combination with Calithera’s glutaminase inhibitor, telaglenastat.

The clinical data suggests that telaglenastat synergizes with PARP inhibitors to impair DNA synthesis, enhance DNA damage and block cancer cell proliferation. We plan to initiate a Phase 1/2 clinical trial of the combination of telaglenastat plus talazoparib in patients with RCC and TNBC in the first quarter of 2019.

Telaglenastat also synergizes with CDK4/6 inhibitors by enhancing cell cycle arrest and blocking cancer cell proliferation.

We plan to initiate a Phase 1/2 clinical trial of the combination of telaglenastat plus palbociclib in patients with KRAS-mutated colorectal cancer, or CRC, and patients with KRAS-mutated nonsmall cell lung cancer, or NSCLC in the second quarter of 2019.

Next, the arginase program, INCB001158, also known as 1158, is an investigational first-in-class immunooncology metabolic checkpoint inhibitor targeting arginase, an immunosuppressive enzyme utilized by myeloid-derived suppressor cells, or MDSCs, responsible for T-cell suppression.

1158 is being co-developed with Incyte in a co-development, co-commercialization collaboration. The program is progressing well and is actively enrolling two 1158 trials.

The first trial is evaluating 1158 as a monotherapy and in combination with pembrolizumab; a second clinical trial is evaluating 1158 administered orally twice daily in combination with each of three chemotherapy regimens, FOLFAX, gemcitabine/cisplatin or paclitaxel. Primary endpoints include safety and objective response rate.

We and our partner, Incyte, plan to present solid tumor data at a medical meeting in the second half of 2019. CB-280 is a novel arginase inhibitor in development for the treatment of cystic fibrosis.

Under our collaboration agreement with Incyte, we retained worldwide rights to develop arginase inhibitors in specific non-oncology rare disease indications, including cystic fibrosis. Arginase has been proposed to be critical in the pathophysiology of cystic fibrosis and several other nononcology diseases.

CF patients have neutrophil infiltrates and high levels of secreted arginase in their lungs. This reduces the levels of arginine. Reduced arginine in turn is thought to exacerbate pulmonary disease in CF, primarily by impairing production of nitric oxide from arginine.

Nitric oxide has potent antimicrobial activity and has been shown to improve lung function in CF patients. So in summary, high arginase activity, which is brought into CF patients’ lungs by neutrophils, results in depletion of arginine and worsening of pulmonary function, primarily through the depletion of nitric oxide.

In February, we announced that we filed an IND application for CB-280 with the U.S. FDA and have initiated a Phase 1 clinical trial. This first-in-human Phase 1 trial will evaluate the safety, tolerability and pharmacokinetic profile of oral CB-280 in healthy volunteers.

Our next oncometabolism drug candidate is CB-708, an orally bioavailable small molecule inhibitor of CD73. CD73 is an enzyme in the adenosine pathway that plays a critical role in converting extracellular ATP into adenosine. Adenosine is a powerful inhibitor of antitumor immunity in tumors.

We plan to initiate clinical studies with our oral small molecule CD73 inhibitor in 2019. In addition, a preclinical abstract describing CB-708 has been accepted for presentation at the 2019 AACR meeting in March. With that, I will pass it over to Stephanie for an update on our financials..

Thank you, Keith and good afternoon everyone. Detailed financial results for the fourth quarter and year end 2018 were included in today’s press release. I will also briefly review our results on this call. Calithera ended the year well capitalized, which enables us to drive our clinical programs to meaningful value inflection point.

Cash and investments were $136.2 million at December 31, 2018. Collaboration revenue for the year was $22.2 million compared with $26 million in the prior year.

In June 2018, we completed the manufacturing services and technology transfer under our collaboration and license agreement with Incyte with satisfied performance obligation under ASC 606, and as a result, all remaining deferred revenue was recognized.

Research and development expenses for the year were $66.2 million compared with $43.1 million in the prior year.

The increase of $23.1 million was due to an increase in the telaglenastat program to support the company’s new and ongoing clinical trials, including our Phase 2 CANTATA trial, which opened in 2018, increases in 1158 and CB-280 programs as well as investment in early-stage research.

Research and development expenses for the fourth quarter were $17 million. General and administrative expenses for the year were $13.3 million compared with $12.5 million in the prior year.

The increase of $0.8 million was primarily due to higher personnel related costs to support our clinical trials offset partially by lower outside professional services. G&A expenses for the fourth quarter were $3.2 million.

The net interest income for the year was $2.7 million compared with $1.9 million in the prior year and reflects higher returns on investment partially offset by lower investment balances. Net interest income for the fourth quarter was $0.7 million.

Net loss from operations for 3 months and year ended 2018 was $19.5 million and $54.6 million respectively. And with that, I will now return the call back over to Susan..

Thank you, Stephanie. And with that, operator, we are happy to open the line for questions..

Thank you. [Operator Instructions] And our first question is from Matt Phipps with William Blair. Go ahead. Your line is open..

Thanks for taking the question. Just a couple.

First on cystic fibrosis, is there any kind of pharmacodynamic or pharmacokinetic level you are looking for in that healthy volunteer study to know what dose to move forward? And then secondly when you do move into cystic fibrosis patients, could you potentially try to enroll patients with either low baseline levels of exhaled nitric oxide or maybe high arginase levels in sputum? And then as far as RCC goes, the landscape is changing a little bit and I know the enrollment criteria for CANTATA includes 1 anti-angiogenic therapy or nivo-ipi, but I just want to make sure that does then of course include like a pembro-Inlyta patient?.

Okay, great. Yes, hi Matt. This is Keith. So I will take those in order. So in terms of the first-in-human and the Phase 1 study and for CF in healthy volunteers, especially with experience from 1158, we do have a good sense as well as preclinical data, a good sense of the exposure levels that we need to achieve in order to inhibit the enzyme.

So in addition to PK targets, we will also be able to, we expect with multiple dosing to be able to see elevations in plasma arginine. So, both of those will be useful in terms of selecting a dose to go into patients. So we think we will be able to pre-accurate with the dose selection coming out of the healthy volunteer study.

The second question was around selecting patients in CF and based on the data we are aware of, it looks NO reduction and arginase in sputum, are fairly universal.

So arginase is high in the large majority of patients and we don’t think we are going to need to do any sort of restrictive or that we would need to restrict enrollment to just patients that have particularly high arginase, that’s something we will explore during the Phase 1, Phase 2 development.

So we will be able to look at that retrospectively, but our expectation is that there won’t be a need to restrict in that way.

And then finally, in terms of the RCC landscape, yes, so we do allow – so basically, any current therapy or most of the experimental regimens that include a PD-1 plus a TKI would all be acceptable first line therapies prior to entering this study.

So, you need to receive either TKI and so a TKI plus a PD-1 would count as a prior TKI regimen or the ipi-nivo regimen also counts. So it pretty much accepts any regimen that’s currently approved and those that are likely to come from the ongoing studies..

Thanks, Keith..

Thank you. And our next question is from Robyn Karnauskas with Citigroup. Your line is now open..

Hey, guys. This is Kripa on for Robyn. Thank you so much for taking my questions.

Regarding the 1158 data that we expect to see in second half of 2019, I was wondering if you can set some expectations as to what sort of data we will see and I know you are running multiple trials, so can we expect to see data from all the trials together at one conference or would you be splitting it between conferences? Any color would be really helpful..

Sure. Yes. So yes, as you know, we have 2 ongoing studies and a number of ongoing combinations. So, we have the monotherapy and the pembro combination in the 101 study. We have 3 chemo combinations in the 203 study across a number of tumor types. So, in the second half of the year, we’re planning to present monotherapy and combo data.

And the in terms of exactly what data we’ll present and at which conferences is to be determined, but we will be presenting data for monotherapy and combinations..

Okay. And a quick follow-up question. The monotherapy, is it in all the indications that you’re looking? Then you’re testing the combo in as well.

Will it be able to compare monotherapy versus the pembro or the chemo combos?.

Yes. So, we the monotherapy development was not as expansive. So, we don’t have all the same cohorts for the monotherapy that we do for the combination. We have 8 different combo PD-1 combo combinations 8 different cohorts for the PD-1 combination.

So that includes four cohorts of patients that had seen a prior PD-1 and had failed that PD-1 and then four cohorts of patients that had not seen prior PD-1. And we can go through those. But that’s 8 different cohorts.

For the monotherapy, we had a CRC cohort, we had a nonsmall cell lung cancer cohort and then we had a cohort that sort of it included a number of different tumor types that had historically through our own data and published literature are known to have elevated MDSCs.

But they don’t there’s not a 1:1 correlation between patients that were enrolled in that monotherapy versus those enrolled on the PD-1 combination or the chemo combinations..

Thank you. Our next question is from Jonathan Chang with SVB Leerink. Your line is now open..

Hi, thanks for taking my questions. First question, maybe just to follow up on the previous question on the arginase data coming up.

So, will we have data from all the different cohorts in the second half update or are we just going to get data from specific indications? And also, will we have enough follow-up at that point in time to be able to comment on durability of any responses seen?.

Yes. So, the different cohorts, as you would expect, enroll at different rates. So, I think it’s unlikely that all of those cohorts will have sufficiently mature and robust data to present to be clear that those decisions will be made over time as the data mature and we have a better understanding of exactly what data are available for presentation.

But so, there could be it may not be that every cohort is presented just but it will depend on the enrollment at that time.

And I’m sorry, I forgot, I think there may have been another part to the question, Jonathan?.

No.

It was just a combination of whether we are going to see data from just a specific indication of cohort or are we going to see everything and that you have at that time and whether we’ll have enough follow-up at that point of time for durability of any responses?.

Yes. Again, I think those cohorts that enrolled again, given the difference in rate of enrollment of different cohorts, some of them will be more mature and more fully enrolled. So there but some of those cohorts, I think, we are confident will have mature data that we will be able to interpret..

Got it.

And second question, how should we be thinking about the implications of the ENTRATA data in the second half on the CANTATA study?.

Yes. That’s an interesting question, and I think, obviously, there are similarities and differences between the ENTRATA and CANTATA studies. The similarities include a similar patient population and that it’s an RCC patient population, and it’s a randomized study. But I think it’s at the same time, it’s a one study significantly larger than the other.

We have different combination partner in cabozantinib versus everolimus, although the preclinical data, there are similarities between the preclinical data. So, I think it’s hard to say this is a direct read-through, but they’re similar enough that there will be some..

Got it. Thanks for taking the questions..

Thank you. And our next question is from Jim Birchenough with Wells Fargo Securities..

Hi, thanks for taking the questions. The question – actually just one question, this is Yanan [indiscernible] for Jim. So just have this longer-term strategy question regarding telaglenastat.

Given that the landscape in RCC is changing and PD-1 plus TKI kind of, I think, is gaining momentum and the cabozantinib and nivolumab is being developed and I think with the data in second half of ‘19.

So how do you see the possibility that cabozantinib plus PD-1 becomes a first-line therapy? And what does that mean for telaglenastat in that situation? And are you considering having a trial evaluating PD-1 plus cabo plus telaglenastat? Thank you..

Yes. So that’s an excellent question. And as you mentioned, the frontline space for RCC is certainly evolving. And I think that evolution has been sort of visible over the last couple of years. So, the increase in IO combinations in the frontline is something that we were aware of and actually positioned this study to take advantage of.

In that, we knew that the IO therapy would be pulled out of second line and would really be used upfront either in combination in an in a PD-1, CTLA-4 combination like the ipi-nivo combination or in a PD-1, TKI combination in frontline.

And secondly, that there are a number of competing regimens that are being developed there and that the cabozantinib combination is going to be somewhat later to the game. So, you’ll have other regimens, ipi-invo is already approved and became fairly well [indiscernible], particularly in the intermediate and poor prognosis patients.

We have seen the Merck, pembroaxitinib data looked very impressive at ASCO GU, and that’s likely to become a significant player in the frontline as well.

So, assuming the cabo, PD-1 data are eventually positive, it will be one of several regimens, and I should mention there is there are other regimens also that are being nivolumab-axitinib also presented positive data, and others are being developed. So, it will be one of several frontline IO combinations.

So, assuming it did take over a certain fraction of that market, we still believe there will be a substantial majority of that market that frontline-setting patients will not have seen cabo, which will leave it to become really the dominant player in the second-line space.

Having said that, with an active a positive study in the second-line setting, one clear possibility for telaglenastat would be subsequent study that would move into the frontline and that could be any number of potential combinations where we could try to add telaglenastat.

We’ll have some time to see the data that read out here over the next year or so before we have to make decisions about what that triple combination might be..

Great. Thank you for the color..

Thank you. And our next question is a follow-up from Matt Phipps with William Blair. Please go ahead..

Hi guys. I am back. I wanted to ask about the CD73 compound. Just as far as what would be the development strategy as you think of it now? We’ve seen a variety of data with kind of adenosine targets. AstraZeneca just opened a pretty interesting expansion cohort in their NKG2A receptor inhibitor.

It’s a little different, but still looking really hard at the prostate cancer indication, both in combination with some of those AR receptors inhibitors as well as they also have some new cohorts that are looking at patients with high expression of CD73.

Do you think that could actually be a biomarker?.

Yes. So, I mean so I think you’ve highlighted one key point, which is that there are other groups. This is the one case of our programs that we’re developing in the clinic where we’re not blazing the trial.

So, there will be useful information to be learned by in terms of what’s happening in front of us and that we will certainly learn from the experience of others in terms of designing our own development plan, which will accelerate the development of CB-708.

In terms of CD73 as a potential biomarker, our understanding is that, that could be and could be a reasonable biomarker to use, whether it’s actually tumor CD73 or even circulating CD73 are both potential biomarkers that could be used. So that’s something we are certainly open to.

And as we go through our development plan, we’ll be incorporating biomarker strategy to investigate, whether it’s a preselection biomarker or also pharmacodynamic biomarkers to look for evidence of activity. But CD73 is certainly a possibility..

That’s it..

Yes, thanks Matt..

Thank you. And this concludes our Q&A session for today. I would like to turn the call back to Jennifer McNealey for final remarks..

Thank you, Carmen and thanks all for joining us today. We welcome your follow-up calls with any additional questions you may have. Have a good afternoon..

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program and you may all disconnect. Have a great day..