Greetings. And welcome to Oncternal Therapeutics Q2 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

[Operator Instructions] As a reminder this conference is being recorded.I would now like to turn the conference over to your host Richard Vincent, Chief Financial Officer. Please go ahead..

Thank you, operator. Good afternoon, everyone.

I'd like to welcome you to our conference call to discuss Oncternal second quarter financial results and provide an update of our clinical and preclinical development programs.Earlier today, we issued our earnings release reporting financial results and business updates and plan to file out Form 10-Q for the quarter ended June 30 2019 with the Securities and Exchange Commission tomorrow.

Our filings and a replay of this call will be available on the Investor section of our website at www.oncternal.com for at least the next 30 days.With me today is Oncternal’s President and CEO, Dr. James Breitmeyer. During our call today Jim will provide an overview of our business and pipeline and an update on recent progress.

I will provide a brief summary of our financials for the second quarter ended June 30 2019. We will conclude with a brief Q&A.Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act.

I caution listeners that during this call Oncternal management will be making forward-looking statements about future events and Oncternal’s business strategy and future financial and operating performance, actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the Company's business.

These forward looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in Oncternal’s earnings release and SEC filings, including its Form 10-Q for the quarter ended June 30 2019.

This conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 8, Oncternal undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.With that, I'll now turn the call over to Jim..

Good afternoon, everyone. Thank you for joining our first conference call since we commenced trading on NASDAQ as Oncternal Therapeutics Inc. Under the ticker symbol ONCT.

We are proud of the speed and efficiency with which we were able to debut trading on the NASDAQ market through a reverse merger that Rich will described later in the call.But we're particularly proud of the progress we have continued to make across our product development pipeline by maintaining momentum and focus on clinical development, even while the reverse merger was being completed.I'd like to provide some insights into what we've been working on.

What we've accomplished and why we at Oncternal are so excited about the potential impact that the drug candidates in our pipeline may have for patients with cancer.Let me start with an overview of our pipeline, which consists of two clinical stage product candidates and one preclinical development program.

Each of our product candidates is designed to attack very specific mechanisms that cancer cells use to grow, thrive or metastasize.We have a highly experienced drug development team focused on identifying and developing the best approaches for targeting these novel cancer pathways, while minimizing effects on healthy cells.

With our drug development expertise and continued collaboration with academic institutions, we are focused on turning important research discoveries into new potential therapies for patients.Our lead program is cirmtuzumab, a monoclonal antibody designed to inhibit the ROR1, R-O-R1 receptor which is currently in a Phase 1/2 clinical trial in combination with a ibrutinib said for patients with chronic lymphocytic leukemia or CLL and patients with mantle cell lymphoma or MCLIn addition, cirmtuzumab is in a Phase 1 clinical trial in combination with paclitaxel for the treatment of patients with metastatic or unresectable of breast cancer.

We believe that ROR1is an important cancer target implicated in tumor genesis, disease progression and treatment resistance. We believe that the combination of cirmtuzumab and ibrutinib may address a serious and important unmet medical need. Ibrutinib is becoming a standard of care in the modern treatment of patients with CLL and MCO.

However, complete responses or CRs are uncommon in patients treated with ibrutinib alone. We believe that an agent that works synergistically with ibrutinib to increase the number of patients achieving a CR without substantial added toxicity is therefore needed and would provide meaningful clinical benefit.

And while cirmtuzumab is early in development, we have already seen encouraging responses in our clinical trial in patients with CLL and MCO.In June we presented interim data from our ongoing Phase 1/2 clinical trial of cirmtuzumab at the ASCO annual meeting, demonstrating an overall interim objective response rate of 91.7% for the first 12 patients with CLL treated in part 1 of the Phase 1 portion of the study who had received cirmtuzumab in combination with ibrutinib for 24 weeks or more.

This included three patients with clinical or confirmed complete responses and a well tolerated safety profile, consistent with that scene for ibrutinib treated - treatment alone.Earlier this week, we were pleased to announce that we have open for enrollment the randomized Phase 2 part of this ongoing clinical trial of cirmtuzumab and ibrutinib in patients with CLL triggered by favorable outcomes from the part 1 dose finding and part 2 dose confirming cohorts, including an observed interim objective response rate of 100% for the first nine CLL patients with valuable data receiving the recommended dosing regimen who have completed 12 weeks of cirmtuzumab, plus ibrutinib of treatment in part 2/ We have continued to see a well tolerated safety profile in the trial consistent with that scene with ibrutinib treatment alone.Included in the results presented at ASCO, were preliminary results from six patients with mantle cell lymphoma who were treated in a separate cohort of that Phase 1/2 study.

One patient with MCL who had relapsed following an allogeneic stem cell transplant experienced a confirmed complete response after 3 months of cirmtuzumab plus ibrutinib treatment, including complete resolution of a large mediastinal mass.

This complete response appears to be durable, and it has been confirmed after 6, 9 and 11 months of cirmtuzumab plus ibrutinib treatment.Cirmtuzumab is also being studied in an investigator initiated Phase 1 clinical trial in combination with paclitaxel for patients with unresectable or metastatic breast cancer.

That study is open and enrolling patients at the University of California, San Diego.Cirmtuzumab was developed at the UC San Diego School of Medicine, based on the pioneering scientific research of Dr.

Thomas Kipps and his colleagues and has been supported by grants from the California Institute for Regenerative Medicine or CIRM.We expect to provide additional updates from both cirmtuzumab clinical studies later this year, including results from additional patients with CLL and MCO enrolled in the Phase 1 portion of our study of a brute of cirmtuzumab, plus ibrutinib and for patients with breast cancer enrolled in the Phase 1 study of cirmtuzumab, plus paclitaxel.Our other clinical program is TK216, the first investigational small molecule to enter the clinic that is designed to inhibit the biological activity of ETS or ETS-family transcription factor oncoproteins in a variety of tumor types.

Our lead indication for TK216 is Ewing sarcoma, a rare but devastating pediatric bone cancer with few treatment options after first line chemotherapy.

Virtually all cases of Ewing sarcoma express an oncogenic ETS fusion protein that is potentially targeted by TK216.Oncternal has already received an orphan drug designation and fast track status from the FDA and believes that the program will be eligible for a pediatric voucher.

We are evaluating TK216 alone and in combination with vincristine in a Phase 1 study in patients with relapsed or refractory Ewing sarcoma.

The dose finding portion of that Phase 1 study is almost complete and we expect to select a recommended dosing regimen and begin enrolling an expansion cohort of Ewing sarcoma patients treated with TK216 in the third quarter of 2019.Our third program is an anti-ROR1 CAR-T therapy which is in preclinical development in collaboration with UC San Diego.

This research has also been supported by grant funding from CIRM.

CAR-T therapies are T cells that have been engineered to bind and engage a specific target on cancer cells in an effort to direct the patient's own immune system to react against those cancer cells.We believe ROR1 is an attractive target for a CAR-T therapy due to its expression across a wide variety of common blood cancers and solid tumors.

Our targeting antibodies were designed to bind cancerous cells with high-affinity, but to not recognize most normal human tissues. Our goal is to select the candidate and initiate clinical trials with our lead CAR-T therapeutic candidate next year.That concludes my formal comments on our pipeline programs.

I'd like to close this business update by saying Oncternal has in its own DNA, a number of key traits found in leading biotechnology companies, serial biotech entrepreneurs and drug developers with proven success, a diversified pipeline of oncology drug candidates targeting untapped cancer biology and emerging clinical data demonstrating potential therapeutic activity.

We are proud of the progress Oncternal has made building and advancing its oncology pipeline and we remain unwavering in our commitment to bring new cancer treatments to patients.I will now turn the call back to Richard Vincent, CFO of Oncternal to review second quarter financial results..

Thank you, Jim. On June 7th 2019 privately held Oncternal Therapeutics completed a reverse merger transaction with GTX Inc. and its wholly owned merger subsidiary.

Under the merger agreement the merger subsidiary merged with and into private Oncternal with private Oncternal surviving as a wholly-owned subsidiary of the company.The surviving entity changed its corporate name from GTX Inc. to Oncternal Therapeutics Inc.

The transaction was accounted for as a reverse asset acquisition in accordance with Generally Accepted Accounting Principles. Under this method of accounting private Oncternal was deemed to be the accounting inquirer for financial reporting purposes.

As a result, effective as of the closing date of the merger the reported historical operating results for periods prior to the merger closing date will be those of private Oncternal.Furthermore given the growth Oncternal has experienced within the last 12 months period over period comparisons may not be meaningful.

All share and per share figures for all period presented reflect exchange ratio for private Oncternal shareholders on the one hand or the one for seven reverse stock split for GTX shareholders on the other hand, both of which occurred immediately prior to the closing of the merger.

For more detailed information regarding the reverse merger transaction and our financial results, I invite you to review our quarterly report on Form 10-Q for the quarter ended June 30, 2019 which will be filed tomorrow.Grant revenue was $0.7 million for the quarter ended June 30, 2019.

Our grant revenue is derived from a CIRM grant subaward with the University of California, San Diego.

The grant was awarded to advance our lead clinical program in a Phase 1/2 clinical trial evaluating cirmtuzumab in combination with ibrutinib for the treatment of patients with B-cell lymphoid malignancies, including CLL and MCLTotal operating expenses for the quarter were $22.3 million, which included one time non-cash charge for acquired in-process research and development expenses of $18.1 million that was recorded in connection with the closing of the merger.Research and development expenses for the quarter totaled $2.6 million.

General and administrative expenses for the quarter totaled $1.6 million. Including the one-time merger charge, the net loss for the second quarter was $22.8 million, or a loss of $3.38 per share, basic and diluted.As of June 30, 2019, we had $28.5 million in cash and cash equivalents.

We believe these funds will be sufficient to fund its operations into the second quarter of 2020. As of June 30, 2019, we had 15.4 million shares of common stock outstanding.That concludes the financial discussion. With that, let's open the call for questions.

Operator?.

Thank you, sir. [Operator Instructions] Our first question today is from Hartaj Singh of Oppenheimer. Please go ahead..

Great. Congratulations on your first call and thank you for the questions. I just have a few guys if you don't mind, excuse me. My voice here a little bit.

So congratulations on finishing up the first Part 1 in Part 2 of your Phase 1/2 and then are you starting the Phase 2 part of the study with the 90 patients.Can you just talk a little bit about you know, it looks like you will randomize 90 patients with CLL receiving the ibrutinib - ibrutinib per person cirmtuzumab.

Can you just talk a little bit about you know, the kind of the way the cohorts are set up and then what - I guess the primary endpoint will be complete response.

But just what are you thinking about how the cohorts are set up and then how will you sort of report data as it kind of comes out or will you wait till you know you get to the 90 patient for reporting data? And I just got a couple of follow up questions. Thank you..

Thank you for your question Hartaj. So let me clarify, you're asking about the way that the randomized portion of the study is composed.\.

Correct.

As you start this Phase 2 sort of just what the structure looks like and how those cohorts are structured and then just one of the primary and then secondary endpoints you are looking for?.

Thank you. Thanks for the clarification.

So the randomized portion of our of our Phase 1/2 study that the Phase 2 portion will be - will be composed of 90 patients all with - all with CLL and they will be randomized 2 to 1 to receive either some cirmtuzumab, plus ibrutinib and the one arm and ibrutinib alone on the other hand.So the cirmtuzumab dose was selected during the Parts 1 and 2, the Phase 1 portion of the study and that is - it's a 600 milligram dose, given once a month after a couple of loading doses at the begin - at the beginning.

Now you'll also realize – so that's the randomized portion.You'll realize that the earlier parts of the study Part 1 and 2 are also ongoing.

And we've had such encouraging results from that part of the study that we have just amended it to permit patients who are responding after 1 year on the study to continue to receive treatment.The study is open label and - but there are – there is only one specified interim analysis during the randomized portion of the study..

Great. Thank you. That that actually helps a lot.

Now another question I have is that just looking for your two to one randomization you know, for [indiscernible] along versus your mono arm what's the sort of for complete response, what's the kind of the bogey you're looking for the delta between the two?And then you know, I assumed that you know is that just coming from sort of you know the previous experience with ibrutinib or you know, I imagine is in the public domain with you know just the complete response that ibrutinib tends to give in this patient population?.

Yes. Yes it is. Thank you for that question.

The expected response rate for patients with CLL who have relapsed or refractory disease to ibrutinib is generally reported to be less than 10%, and in fact, most commonly in the range of 6% to 7%.So the study is powered to detect a difference in complete response rate of about 25% between the two arms of the study..

Great. Fantastic. So that is really now – you know, if your Phase 2 with the 90 patients which is you know an interesting design, is there some you know - a result I guess that could get you in front of the regulators or you know it might even lead to sort of an accelerated kind of approval.

I mean, are you going to be seeing relapse refractory patients or other kind of patient types or you know where the data if it's compelling enough and you see that 25% or bettering of the complete response whereby you could you know get to market sooner or you think you'd still have to do probably a Phase 3 in order to get to market?.

That's a very good question, Hartaj. And we do believe that sufficiently robust outcomes emerging from the study would be worth taking to regulators and discussing with them the potential of an accelerated approval strategy..

Okay. That helps a lot. And then just you know, I just had a couple of like follow up questions. One is how are you getting you know the supply for ibrutinib.

Is that sort –are you sort of purchasing that on the open market or are you out – how you're getting the ibrutinib for these trials?.

Thank you. The ibrutinib is being provided free of cost to the patients through a very generous product donation and supply agreement that the company has established with Pharmacyclics.

But we are we are very grateful to Pharmacyclics for supporting this study and in fact, upon a recent review of the data that we're - that we've disclosed this week, Pharmacyclics agreed to expand this product donation and are - and we have their commitment to provide the ibrutinib for the entire study now.That means including the entire randomized portion of the study and with their support we are providing ibrutinib free of cost to patients who are responding well after a year on the clinical trial to continue their ibrutinib and cirmtuzumab treatment..

Great. That's fantastic. And is there is there any option that Pharmacyclics has to sort of support the trial you know, more than the ibrutinib donation.

I mean, can be - can they also you know sort of make an agreement with you with to help run the trial or will that be dependent on a full agreement that they might have to sign with an Oncternal if they were to go down that path?.

That would require an additional agreement to expand in the direction that you're suggesting..

Got it. And then just my last question which is in ROR1 CAR-T program, you know, cirmtuzumab is you know, hits that target.

How much of your understanding for - what biology kind of help to you know with the CAR-T and you know and the design of the CAR-T and going off to that target>And then secondly how would the CAR-T kind of play against cirmtuzumab you know, in the future, are you just going to go off a different tumor types with a CART-T or you see them sort of you know one coming before the other? And again, thank you very much for the questions..

Thank you very much for good questions Hartaj. We appreciate your interest in our programs. So the CAR-T questions fall into two categories. The first one is what is it that we know about ROR1 that helped us to just design a CAR-T project that we thought would be an important addition to the field.And I'll address that in a couple of ways.

One is that ROR1 expression does identify particularly aggressive subpopulations of a number of different kinds of cancer, from lung cancer to liver cancer to the hematologic malignancies.Secondly, and this is largely due to the pioneering research of Dr. Kipps at UCSD, but has been confirmed in other laboratories.

When ROR1 is expressed on a tumor cell, that tumor cell has adverse characteristics such as an increased proliferation rate, a increased tendency to invade and potentially resistance to certain forms of therapy. So in other words, we're targeting a bad actor in a ROR1 one expressing tumor cell.We've also had that through our collaboration with Dr.

Kipps a very deep depth of knowledge around ROR1 antibodies themselves and the targeting antibodies that we're using have been studied extensively and do not recognize most adult normal tissues.

And the antibody, the ROR1 one antibody really matters in this case.And what I mean by that is that there are other published ROR1 antibodies that have been - that have been in laboratory testing, none have ever - none other has ever reached the clinic, but other antibodies have been shown to cross react with normal tissues in a way that complicates their development as product candidates.

So I think that the - those are the key features that we knew about ROR1 that have led us to develop the CAR-T system that we are intending to take forward.Your second question is also a good one, and that is, we're developing an antibody and CAR-T.

So the development of the antibody has a particular emerging set of facts that we're paying careful attention to is that the cirmtuzumab map antibody has a safety profile that indicates that it is very well tolerated.I mean, specifically that in a Phase 1 monotherapy study that there were few if any serious adverse events that were attributed to treatment with the cirmtuzumab antibody.

Now the infusions are well tolerated and the side effects that we're seeing in the Phase 1 study were typical of those - of patients with CLLIn the ongoing Phase 1/2 clinical trial, the safety profile that we are observing is one that is characteristic of patients with CLL who are receiving a ibrutinib alone.

And there have not been any discontinuation or serious adverse events that have been attributed to treatment with cirmtuzumab.

So the antibody will have we think particular utility in patients who desire along with their physicians, added efficacy without the risk of substantial added toxicity.The CAR-T program may be a little different in that respect and I'm sure you know that most CAR-T systems are associated with a certain level of side effects as the immune system is activated to attack the cancer and sometimes those side effects can be severe.So we are considering we haven't selected our clinical targets yet, but we're considering clinical targets such as B-cell ALL, Richter syndrome or aggressive non-Hodgkin's lymphoma where ROR1expression is known to be common and the patients require a higher degree of efficacy and we believe that they and their physicians may be willing to accept the potential of more side effects to get there.

So I think I answered both halves of your questions. Let me - let me check back with you and see if I did..

No, that's fantastic. That makes a lot of sense and then is it just with the CAR-T because I assume it's an autonomous CAR-T that you kind of neatly sidestep some of the issues that have probably hamstrung some of the previous antibodies with ROR1.

So in this case you know you're for a bigger gun, but you're using the patient's own cells to be able to go after those ROR1 expressing cells?.

Yes. That's right. And so for example the Bluebird scientists did some preclinical work with a ROR1 CAR-T system utilizing an antibody that cross reacted with the lung tissue of the mice that they were using for their experimental system and they observed some substantial toxicities in preclinical studies..

Got it. James, thank you very much. Richard, really appreciate the questions and looking forward to more updates..

Thank you..

[Operator Instructions] Our next question is from Kumar Raja of Brookline Capital Market. Please go ahead..

Hi. Thanks for taking my questions. So what can you share with regard to the ROR1 cell therapic [ph] expressions so far.

And also what are you seeing in terms of the response to the correlation with the plasma concentration of the drug?.

Thank you for the question, Kumar. So as far as ROR1 expression is concerned we have confirmed that every patient that has been tested in this in the study has ROR1 expressed on their CLL cells, the mantle cell patients are a little harder to test because they don't have circulating tumor cells.

And we use a receptor occupancy assay and confirm that the antibody that we are administering is in fact coding ROR1 expressed on the surface of the patient CLL cells.As far as a correlation between blood levels and outcomes is concerned, the numbers are pretty small.

We had three patients in each of our dose finding cohorts and we had selected a range in the middle of the doses that had been tested previously in the Phase 1 single agent study, we expected of all four of the doses that we tested to have activity and in fact we saw that we have had - we have had solid partial responses at every dose that we tested..

Also there seems to be some [indiscernible] suggest that once you know, patients are treated with ibrutinib there seems to be increasing ROR1. Obviously you are blocking both of those.

My question comes down to you know, what can you speculate in terms of use the combination, what could be the potential resistance mechanism?.

Well, it's a great theoretical question. The - we haven't seen any progressive disease yet in the current phase 1/2 study. So I'm sorry to say that we can't study resistance yet. We're not sorry of course.

We're delighted that our patients are responding and are not experiencing progressive disease.So we are - we'll be we'll be interested to study any resistance that develops and the hypothesis would be that it will take longer.

And the you know the value proposition would be that that the hope that it might be less likely for resistance to develop to the combination since the two agents cirmtuzumab and ibrutinib inhibit CLL cell biology through two independent mechanisms.

And as you remember from preclinical work ibrutinib shuts down a number of pathways inside the malignancy allow cells but it does not shut down the raw one pathway..

And also in terms of the Phase 2 are you going to be expanding the number of sites for that?.

Yes we are. We have - we're open at 10 sites right now. And we'll be - we are in the process of adding on five additional sites at the moment..

So the expectation would be that probably we’ll have like a quick enrolment?.

Could you repeat the question?.

Enrolment expectation would be that we can see a very quick enrollment in the Phase 2 portion?.

Well we're not guiding on the amount of time to complete enrollment yet. We have just opened the randomized part of the study. But I will say that we have a good a good level of enthusiasm among our investigators for the results that we have seen so far..

Okay, great. Thanks for taking my questions..

Thank you, Kumar. We appreciate your interest..

There are no additional questions at this time. I would like to turn the call back over to Dr. Breitmeyer for closing remarks..

Thank you very much, operator. Everybody, thank you for joining us for Oncternal’s first quarterly earnings call as a NASDAQ listed company. Oncternal has a diversified pipeline based on cutting-edge science. We have strong management and a board composed of serial biotech entrepreneurs and experienced drug developers.

We expect to announce additional data from our ongoing clinical programs later this year and next year, including our randomized Phase 2 study of cirmtuzumab in combination with the ibrutinib. We realize that we have a lot of work ahead and are sharply focused on turning our promising science into progress and hope for patients with cancer.

Thank you for joining us today..

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation..