Ladies and gentlemen, thank you for standing by and welcome to the Calithera Biosciences Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Stephanie Wong.

Thank you. Please go ahead Ma' am..

Thank you, operator. Good afternoon, everyone. Welcome to our third quarter 2021 conference call. Joining me today are Susan Molineaux, Founder, President and CEO; and Emil Kuriakose, Chief Medical Officer.

Earlier this afternoon, we issued a press release, which included an overview of our third quarter 2021 financial and operational results, which 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 purposes of the Safe Harbor provisions under the Private Securities Litigation 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 discussed in the Risk Factors section of our periodic filings 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 that this call is being recorded. And with that, I will turn the call over to Susan..

Thanks, Stephanie. Good afternoon, everyone and thank you for joining us today on our third quarter 2021 conference call. And a special welcome today to Emil Kuriakose, who is joining us in his new role as Chief Medical Officer. And he will be presenting later in this call. We could not be more excited to embark on this next chapter with Emil.

Speaking of the next chapter, last month, we strengthened our precision oncology pipeline with the acquisition of Sapanisertib and Mivavotinib from Takeda.

As a reminder, Sapanisertib is a dual mTORC 1/2 inhibitor that targets a key survival mechanism and KEAP1 NRF2 mutated tumors, which has the potential to be the first treatment for NRF mutated squamous non-small cell lung cancer.

As the next generation TORC inhibitor, Sapanisertib provides dual inhibition of the TORC 1 and TORC 2 complexes and has demonstrated durable single agent responses and clinical benefit in patients with relapsed refractory NRF2 mutated squamous non-small cell lung cancer with a well-tolerated safety profile.

Mivavotinib is a sick inhibitor with the potential to be a best-in-class drug and non-Hodgkin's lymphoma, as well as the first to market therapy for patients with DLBCL whose tumors harbor MyD88 or CD79 mutations. Mivavotinib has shown compelling single agent activity in relapsed refractory NHL patients in completed Phase 1 and II studies.

We plan to initiate Phase 2 studies of both Sapanisertib and Mivavotinib in the first quarter of 2022. Additionally, last week, we announced the decision to discontinue the KEAPSAKE trial of telaglenastat and non-squamous non-small cell lung cancer following an interim analysis of 40 patients.

We have no plans to continue the development of telaglenastat internally at this time.

We remain committed to developing targeted therapies for patients with difficult to treat cancers, with the advancements of both Sapanisertib and Mivavotinib in biomarker defined populations of squamous non-small cell lung cancer and diffuse large B-cell lymphoma respectively.

Last week at the North American Cystic Fibrosis Conference, we presented interim data from the Phase 1b study of CB-280 our oral arginase inhibitor. In the presentation, we reported the CB-280 was well tolerated and showed linear pharmacokinetics and robust dose related pharmacodynamic effects.

Additionally, we saw encouraging trends in disease biomarkers, including increased fractional exhaled nitric oxide or FeNo and decreased sweat chloride. The current data substantiates the proposed mechanism as a rational approach for treating CF. The poster can be found on our website.

Finally, as we closed on Friday, we have promoted Emil Kuriakose, from Vice President and Head of Clinical Development to succeed Keith Orford as CMO. In addition, we have strengthened our Board of Directors with the addition of Keith.

I would like to take this opportunity to thank Keith for his contributions over the last seven years and to congratulate Emil on his promotion. Emil has been a part of our team for the last four years, and was an integral part of the diligence team that evaluated Sapanisertib and Mivavotinib prior to our acquisition of these assets.

This has been a transformational year for Calithera, as we prepare to close out 2021 and enter 2022, we look forward to exciting times ahead. We will begin the New Year with a keen focus on precision oncology, and two new highly compelling clinical development programs.

We plan to initiate the Phase 2 studies of Sapanisertib and Mivavotinib in the first quarter, and look forward to updating all of you on our progress. And with that, I will pass the call over to Emil for additional details on our clinical programs..

Thank you, Susan and thank you for the kind words. I'm truly honored to accept the role of CMO and want to express my sincere gratitude to Keith for his leadership and mentorship over the last several years. I'm thrilled to continue our partnership and going forward to be joined the Board of Directors.

I'm happy to update you today on our clinical programs and look forward to meeting all of you over the next several months. I'd like to start today by providing some additional detail around the data we presented last week on CD-280 or novel oral arginase inhibitor for the treatment of cystic fibrosis.

Last week at the North American CF Conference, we presented data on the first 24 subjects in the ongoing Phase 1b dose escalation trial in adults with CF. These 24 subjects were enrolled across the first three dose levels, 50 mg, 100 mg, and 200 mg b.i.d. with 18 receiving CB-280 and six receiving placebo.

The study population comprised a broad spectrum of CFTR genotypes, including subjects with non-sense mutations. Notably, 91% of the subjects were already on CFTR modulator therapy with ivacaftor or Kalydeco.

CB-280 had a well-tolerated safety profile across all three dose levels and all 18 subjects receiving CB-280 completed treatment without interruptions or premature discontinuation, changes in forced expiratory volume in one second, or FEV1 for assessing the safety endpoint and a pooled analysis of treatment versus placebo showed a positive trend in FEV1 compared to placebo.

CB-280 demonstrated linear pharmacokinetics with plasma exposure increasing proportionately with dose. Complete and continuous target inhibition in plasma was achieved at the 100 mg dose and above.

CB-280 also demonstrated robust pharmacodynamic effects with rapid and significant dose proportional increases in plasma arginine, which is a key driver of every nitric oxide production. Increased airway NO production was reflected by a trend showing an increase in fractional exhaled nitric oxide or FeNo in subjects treated with CB-280.

Sweat chloride, a marker of CFTR function showed a trend towards decreasing NCF CB-280 treated subject, which is consistent with previous reported preclinical data showing that arginase inhibition enhances CFTR function in human bronchial epithelial cells.

Together these pharmacodynamic and biomarker data substantiate the overall mechanistic rationale for CB-280 in CF.

Turning to our newly acquired programs, we plan to initiate a Phase 2 study in the first quarter of 2022 that will strengthen the existing data on Sapanisertib as a monotherapy in patients with relapsed or refractory squamous non-small cell lung cancer harboring NRF2 mutation and further evaluated monotherapy activity and KEAP1 mutated and NFR2 or KEAP1 wild type squamous non-small cell lung cancer.

Also in the first quarter of 2022, we plan to start a Phase 2 study of the SYK inhibitor Mivavotinib as monotherapy in-patients with relapsed or refractory DLBCL both with and without the MyD88 or CD79 mutation.

The efficacy data that will be generated from these studies over the course of the next 12 to 18 months are intended to inform and support the initiation of registrational trials in both of these molecules in the specific biomarker defined populations of non-small cell lung cancer and DLBCL that we're interested in.

With that, I'll pass it over to Stephanie for an update on our financial..

Thank you, Emil, and good afternoon everyone. Detailed financial results for the current quarter were included in today's press release. I will briefly review our results on this call.

Revenue was $6.8 million for the three months ended September 30, 2021 and represents the milestone payment received in September under our inside collaboration agreement. R&D expenses were $11.6 million in the third quarter of 2021 compared to $18.2 million in the third quarter of 2020.

The decrease was primarily driven by decreases in telaglenastat and 11.58 programs partially offset by investments in early stage research. G&A expenses were $6.3 million in the third quarter of 2021 compared to $4.7 million in 2020. The increase was primarily related to increased legal expenses. Net loss for the third quarter 2021 was $11.2 million.

Cash and investments totaled $84.5 million at September 30, 2021, $74.5 million after the upfront cash payments in October. As mentioned during the KEAPSAKE data call on Friday, we expect with this scheme continuation of the KEAPSAKE study to result in cost savings between $10 million and $15 million.

We also expect our cash and investments will be sufficient to meet our current operating plan into 2023. And with that, I'll now return the call back to Susan..

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

. Your first question comes from the line of Roger Song from Jefferies. Your line is now open..

Great, thank you for taking the question. A couple from me. The first one is, so besides those two Phase 2 plan for the two new assets.

Would you conduct an additional kind of mechanistic or preclinical work to better characterize the MOA and the unique property for the best-in-class potential in the targeted indications?.

Emil..

Sure, yes, thanks for the question. Yes, so I think the answer is yes, in the sense that for both of these molecules, I think the key theme is that the clinical data are already there and compelling in terms of the fact that they both have single agent activity demonstrated in these specific populations.

I would say the mechanistic or the overall mechanism for the sick inhibitor is probably much clear in terms of the fact that it's a well characterized signal transduction pathway in lymphoma that's been well studied both MyD88 and CD79b.

There have been published reports on the connection between NRF2 and TORC12, in squamous non-small cell lung specifically. Although the exact details of the mechanism are not known. But there's clearly rationale, supporting that TORC12 is activated and upregulated in the context of NRF2 activation in squama.

So yes, we will do some further characterization of that. But I think the fact that we're running a clinical trial also allows us to do translational work in that regard, and collaborate the mechanism and hypotheses using that work as well..

That's great. Thanks for the comments. And maybe just for the CF data.

So understand you have kind of promising initial Phase 1 data, maybe just what are the key elements you will be looking for there -- from for Phase 1 data to make the go/no-go decision for CF program?.

No, great question. So I think the data so far are very encouraging in that the molecule has a very well tolerated safety profile. And from a PK PD standpoint, it's behaving very nicely. And lastly, from a biomarker standpoint, where these are the key downstream biomarkers of the pharmacodynamic effect, they're all headed in the right direction.

So the mechanistic rationale, I think is so far corroborated by the data. As far as next steps, obviously, we're continuing dose escalation, the current cohort, which is cohort 4 a 300 milligrams is enrolling and expected to complete by the end of the year.

Per protocol, we have the option to go to another dose level, go up another dose level, per the dose escalation design. And so the idea is we want to get a full characterization of the molecule PK PD profile and define the entire dose range in terms of safety, PK PD and biomarker.

Once we do that, the next step would be a more dose finding type study where we would pick doses from dose escalation where we think, they're both safe and therapeutic in order to define what the dose would potentially be for full development.

And we do have the option to increase the dose and duration to 28 days and look at efficacy in a more robust fashion. So that would be the next step that would be planned..

Got it.

So the -- for the full data mostly for the safety and the PK PD environment not necessary for the efficacy and the next step you will start to looking at the efficacy for the full development?.

Correct..

Okay, got it. Okay. Maybe just one last question. Susan I think you mentioned, you also tried to discover some kind of synthetic lethality compounds. Maybe just tell us about the -- what is the history of that discovery platform.

And any synergy with previous focus can contaminate or the metabolism pathway, internal discovery?.

Sure, no problem. So, our synthetic lethality targets are not specifically designed to be in metabolism. We've really moved away from metabolism and looked at a whole series of paralog genes. So we're interested in targeting pairs of genes where one gene is deleted in the tumor and inhibition of the activity of the other gene is the basis for a drug.

And so we've ranged pretty far from where we started. And it really puts more to the drug that we've just brought in, Mivavotinib and Sapanisertib where it's clear that they play roles in signal transduction pathways, for example, that are important and important in specific biomarker defined populations.

So paralog gene is like boiling it down to the simplest case, you have Gene A and you have Gene B. If Gene B is missing, and you inhibit Gene A, then you know that they're very related and it's tumor can't survive without Gene A.

So that's the basis for where we've gone in synthetic lethality and we expect to discuss some of where we're showing some of the targets in 2022..

Got it. That's very helpful. Okay, so that's all from me. Thank you for taking my questions..

Thank you..

Thank you..

Your next question comes from the line of Nick Abbott from Wells Fargo. Your line is now open..

Great, thank you. Thanks for taking my questions, maybe a couple on CB-280 to start off with, I think the original dosing plan was to go from 200 milligrams to 400 milligrams, but the data you reported last week was at 300 milligrams.

So what was the rationale to go to 300 and given that you reported continuous plasma division of arginase 100 milligram or higher, what do you hope to achieve by going above 300?.

Great, great question. So I think that's a two part question.

So with regard to the decision to go to 300, instead of going straight to 400 being that we were at the top end of the dose range, despite the fact that we haven't seen any DLTs which are related, we and the data safety monitoring committee together decided that it would be better to get to 400 in two steps rather than one.

And I think that's primarily driven by, the idea that preclinically the key on target task, which is urea cycle inhibition that's measured by this marker called urinotic acid could have sort of a more nonlinear profile.

And while we have not seen clinically relevant urea cycle inhibition or disruption in this study, we just thought it was the best approach in order to do that in two steps. And that also gives you the opportunity to better more granular, better granular characterization of the PK PD profile. So that was the reason we decided to go 300 and then 400.

With regard to your second question around why go higher than the dose where you see full plasma target inhibition? The main reason is, there's two reasons. One is that we continue to see the PD effect with regard to arginine increases occurring even above doses where we're saturating the target in the plasma.

And given that Arginine is the key driver of NO production, but thinking is, as long as you're getting dose related improvements in arginine that are expected to drive up production, you could continue to go up as long as your safety is okay.

And the second reason is that plasma inhibition doesn't necessarily translate to inhibition within the airways.

And so the assumption is that you're driving up systemic arginine levels that you might need higher doses to make sure that site of action in the airways is achieved at higher doses, and that's reflected by the fact that we're seeing trends in FeNO which is a reflection of inhibition of the target within the lung.

And so that's the other thing we're targeting..

All right, so as you know, just following up on that, I think do you think you would see a plateau of the effect on FeNO?.

That's a good question. I don't know if we know the answer to that yet. And so, we know that these patients at baseline has diminished NO production, their baseline FeNO's are lower than the normal population. And so you know, we are clearly seeing a trend in FeNO going up and FeNO has a wide dynamic range. And it's also highly variable readout.

So I don't think we know the answer to that. But again, I think we could get more data on that, as we continued successfully..

Okay.

And then I know collection of sputum was affected by COVID in this trial, but is there anything you can say we'll be able to say about microbial burden in these patients?.

Yes, that's a great question. And we had, we do have an exploratory endpoint. And looking at quantitative sputum colonization, the yield of samples has been relatively poor, I think it was primarily impacted by the fact that the study was enrolling during COVID.

And there were a lot of site level restrictions on induced sputum collection in these patients. And so unfortunately, the level of sputum data we have is not there. But I think what's reflective of the benefit is number one, again, the trend in FeNO and that we're seeing a positive trend in FEV1 as well.

And even with mechanism being primarily anti-microbial, that's a reflection of the fact that, when you do eliminate pathogens in the airway and reduce the inflammation, you do see benefits with regard to airway function. So we're all encouraged by the fact that we're seeing the biomarkers heading the right direction..

Okay, and then maybe a couple of quick questions on the new program. So the Sapanisertib understood the KEAP2 trial, but then I think you also mentioned continue to evaluate, I'm sorry, a NRF2 and it continue to evaluate NRF2 and KEAP.

So those two separate cohorts are two separate trials?.

No, they're two separate. So we'll evaluate those patients separately as separate groups in the same study.

And the idea here is that the data we already have from the CTEP study that was completed, so there was a pretty compelling, differentiated signal in NRF2 and evidence of a moderate signal in KEAP1 and so we want number one can look at the NRF2 population individually, look at KEAP1 separately, and also look at the question on whether wild type patients also have that good response.

So we'll be looking at all of those in the context of this study..

Okay, great. And at Mivavotinib, you're looking at patients who have those mutations in wild type or patients who don't have those mutations, will that be split evenly.

And then just in relation to 79 and MyD88, do those mutations tend to co-occur with other genetic abnormalities in double or triple-hit lymphoma?.

Great, so the first question, answer for the first question is yes, we will be looking at both the dosing in equal number across two separate cohorts is the idea because we think number one, the existing data already show that there's a signal potentially even outside of that MyD88 and 90 mutation.

And there's strong preclinical data indicating an increased probability of single agent response within that mutational subsidy as well as early trends in the clinical data.

And so your second question with regard to co mutations, I think, sorry, just can you repeat that second question, specifically with regards to co mutation?.

Yes, exactly, co mutation because we often hear about double and triple-hit lymphomas and so..

Great, yes, so the MyD88, CD79 do not overlap strongly with a double hit phenotype. So the double-hit lymphomas are predominantly in the GCB cell of origin classification, whereas the MyD88, CD79 for the most part in the ABC classification, so there's very little overlap, and that's published based on published data..

Okay, terrific. Thank you very much..

Sure..

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

Thank you, operator and thanks all for joining us today. Have a good evening..

This concludes today's conference call. Thank you all for your participation. You may now disconnect..