Greetings, and welcome to Oncternal's Q2 Financial Results Call. [Operator Instructions] Please note that this conference call is being recorded. I will now turn the conference over to our host, Richard Vincent, CFO of Oncternal Therapeutics. Thank you. You may begin..

Thank you, operator. Good afternoon, everyone, and thank you for joining us today. Joining me on the call this afternoon are our President and CEO, Dr. James Breitmeyer; and our Chief Medical Officer, Dr. Frank Hsu. We welcome all of you.

Today's call includes a business update and discussion of our 2020 second quarter financial results, which will be followed by Q&A. Earlier today, we filed our 10-Q for the second quarter 2020.

Please note that today's press release and a replay of today's earnings call will be available on the Investor Relations section of Oncternal's website for at least the next 30 days. Please also note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act.

We will be making forward-looking statements during this call about future events such as our business and product development strategies and future financial and operating performance.

Our actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business.

These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in today's press release and our SEC filings, including our Form 10-Q for the quarter ended June 30, 2020.

This conference call contains a time-sensitive information that is accurate only as of the date of this live broadcast, August 6, 2020. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances occurring after the date of this conference call.

With that, it's my pleasure to hand the call over to our CEO, Dr. Jim Breitmeyer..

Thank you. Thank you, Rich, and good afternoon, everyone. At Oncternal, we are committed to developing novel treatments for patients with cancer who have critical unmet medical needs. We are advancing a robust product pipeline with clinical and preclinical product candidates that target several such cancer indications.

Our development efforts focus on untapped biological pathways implicated in cancer genesis and/or progression.

In the second quarter of 2020, we continued to make steady progress on the development of TK216, our investigational, potentially first-in-class targeted small molecule inhibitor of the E26 transformation-specific, or ETS, family of oncoproteins. TK216 is being evaluated in a Phase I clinical trial for patients with relapsed/refractory Ewing sarcoma.

In fact, after we reported two deep responses in patients with Ewing sarcoma, there has been so much interest in TK216 among the investigators and in the Ewing sarcoma patient community that enrollment of patients in the expansion cohort of our clinical trial has actually accelerated despite the COVID pandemic.

As a result, we are increasing our guidance and now expect to announce clinical data for 12 to 16 patients dosed in the expansion cohort in the fourth quarter of 2020.

During the second quarter of 2020, we also made significant progress in the development of cirmtuzumab, our investigational, potentially first-in-class humanized monoclonal antibody that binds with high affinity to a biologically important epitope on ROR1 or Receptor-tyrosine kinase-like Orphan Receptor 1.

In May of 2020, we provided a data update from the ongoing Phase I/II clinical trial of cirmtuzumab in combination with ibrutinib at the American Society of Clinical Oncology, or ASCO, 2020 Virtual Annual Meeting, showing a 58% complete response rate and 83% overall best objective response rate, or ORR, for patients with relapsed/refractory mantle cell lymphoma or MCL.

Importantly, the combination of cirmtuzumab has also been well tolerated with no significant adverse events above those reported for ibrutinib therapy alone. Based on these encouraging data presented at ASCO, we recently announced that MCL is our lead indication for cirmtuzumab.

We are recruiting new investigator sites and will increase enrollment of patients with MCL in our Phase II expansion cohort to at least 20 patients. Based on the interesting observation, the patients with MCL who had previously received ibrutinib subsequently did well on the combination of cirmtuzumab plus ibrutinib.

We are also increasing enrollment of patients with a broader range of prior ibrutinib treatments. We have requested a meeting with the U.S. Food and Drug Administration, or FDA, to seek guidance on a potential accelerated approval pathway for cirmtuzumab plus ibrutinib in patients with relapsed/refractory MCL.

We are pleased that the FDA also granted the company orphan drug designations for cirmtuzumab for treatment of MCL and for treatment of chronic lymphocytic leukemia or CLL. Oncternal strengthened its balance sheet over the last few months by raising an aggregate $11.2 million in gross proceeds from two registered direct offerings.

This is expected to support our operations into the second quarter of 2021. We also hosted a very well attended virtual KOL call on the current treatment landscape of MCL along with the discussion of the cirmtuzumab MCL clinical results. This involved Dr.

Michael Wang, President of – Professor of Lymphoma & Myeloma at The University of Texas MD Anderson Cancer Center. Dr. Wang was particularly impressed by the strong complete response rate seen for patients with MCL in our Phase I/II trial of the combination of cirmtuzumab plus ibrutinib, along with its well-tolerated safety profile.

He noted that if approved, cirmtuzumab plus ibrutinib could be attractive to physicians for patients with MCL, either prior to CAR-T therapy or for those who progress following CAR-T therapy. Dr.

Wang was impressed that a patient on our study who had relapsed following CD19 CAR-T therapy achieved a rapid complete response when treated with cirmtuzumab plus ibrutinib.

Finally, even though the social distancing related to COVID-19 created a significant patient enrollment headwind across the country, I am pleased to report that our programs remain on track and our dedicated employees continue to successfully manage the challenges related to the pandemic.

We reaffirm that we have adequate supplies of TK216 and cirmtuzumab clinical trial period through at least mid-2021. We do still expect some delays in generating preclinical data for TK216 and cirmtuzumab for potential new indications, which we first noted last quarter.

Overall, I'm happy to report that Oncternal is making steady progress toward our previously disclosed clinical data milestones for 2020, which I will review for you shortly. In the meantime, let me turn the call over to our Chief Medical Officer, Dr. Frank Hsu, who will provide more detail on the clinical programs..

Thank you, Jim. I'll spend the next few minutes updating you on the progress of our clinical programs and filling in more detail about each product.

In April 2020, we announced an interim clinical data update for TK216, which is a novel investigational small-molecule inhibitor that targets the E26 transformation-specific, or ETS, family of oncoproteins.

In our ongoing multicenter Phase I clinical trial, we've been investigating the effect of this agent in patients with relapsed or refractory Ewing sarcoma. Ewing is the second most common type of bone cancer affecting children. It is an orphan indication that is highly difficult to treat.

As we reported, seven patients treated at the recommended Phase II dose of TK216, 200 milligram per meter squared per day for 14 days with or without vincristine, were evaluable for clinical response. Two of the seven, or 28.5% had achieved deep partial responses or PR, two had stable disease and three had progressive disease.

Both patients achieving a PR remain on treatment and are doing well; one patient had complete regression of all target metastatic lung lesions after receiving single-agent TK216.

After maintaining this response on TK216 and then TK216 plus vincristine for about six months, a small residual non-target lung lesion was surgically removed, and the patient achieved a surgical complete remission. That young patient remains on study for more than 12 months now and still has no evidence of disease.

The second responding patient who initially presented with multiple lung metastases achieved a 90% reduction of target lesions and resolution of non-target leases following two cycles of TK216 in combination with vincristine. Overall, safety events associated with TK216 have been manageable.

For instance, related events such as neutropenia, have been transient and reversible and, if needed have responded quickly to growth factors such as G-CSF. Our investigators, other physicians, patients and caregivers have reacted very positively to this data because Ewing sarcoma has few treatment options in this advanced disease setting.

Enrollment in the expansion cohorted study has accelerated, and we now anticipate announcing clinical data for 12 to 16 patients dosed in this expansion cohort in the fourth quarter of 2020, above our previous guidance for seven to 12 patients.

Now switching the discussion towards cirmtuzumab program, which is an investigational, potentially first-in-class humanized monoclonal antibody that binds with high affinity to a biologically important epitope on R-O-R-1, also known as ROR1.

At this year's ASCO meeting, we announced updated clinical data for cirmtuzumab in combination with ibrutinib, an approved Bruton Tyrosine Kinase, or BTK, inhibitor in patients with relapsed/refractory MCL enrolled in our ongoing Phase I/II clinical trial. The data cutoff date was April 30.

These data indicated that seven of 12 evaluable patients or 58% achieved a complete response by Cheson criteria, one of which was a complete metabolic response as determined by PET scan. The best objective response, complete or partial response rate, was 83%.

Four of the seven patients achieved complete responses rapidly after three to four months of starting cirmtuzumab treatment. We and our investigators have been particularly impressed by the responses in heavily pretreated patients. Five patients with MCL who had relapsed following prior autologous stem cell transplants were enrolled in our study.

All five of them responded to the combination of cirmtuzumab and ibrutinib, four achieving a complete response and one achieving a partial response. One patient who had relapsed following both an autologous transplant and an allogeneic transplant achieved a complete response on the combination of cirmtuzumab and ibrutinib.

CAR-T therapies are becoming more widely used for patients with MCL. TECARTUS was recently FDA approved and it's encouraging that one patient on our study who had relapsed following both an autologous transplant and prior CD19 CAR-T therapy achieved a complete response on the combination of cirmtuzumab and ibrutinib.

And the treatments were well tolerated. In addition, four patients with MCL enrolled in our study have been previously treated with ibrutinib and later relapsed. All four of these patients responded to the combination of cirmtuzumab and ibrutinib in our trial, two achieving complete responses and two achieving partial responses.

Progression-free survival was 17.5 months with a median follow-up of 8.3 months. The combination of cirmtuzumab plus ibrutinib has been well tolerated with no new or accentuated adverse events compared to the known safety profile of ibrutinib alone.

For patients with MCL who are older or have comorbidities and cannot tolerate aggressive treatment regimens, safety and tolerability are particularly important. We believe that these results compare favorably to the reported outcomes from single-agent ibrutinib in a similar MCL patient population.

Based on the published pooled analysis of three prior clinical trials of single-agent ibrutinib in patients with relapsed or refractory MCL summarized in the 2019 paper by Simon Rule, for patients with more than one prior line of therapy, the complete response rate was 23%, the OR was 67% and the PFS was 10.3 months.

Based on the strength of these results presented at ASCO in May, Oncternal has made a strategic decision to amend our ongoing Phase I/II study and to increase the number of patients with relapsed/refractory MCL to be enrolled in the Phase II expansion cohort to at least 20 patients and to allow enrollment of patients with a broader range of prior ibrutinib treatments.

The company has also requested an FDA meeting to discuss the results of the interim – the recent interim analysis and to seek guidance on potential accelerated approval pathway for cirmtuzumab plus ibrutinib in patients with relapsed/refractory MCL.

We also reported an update on the CLL portion of our ongoing study of cirmtuzumab and ibrutinib at ASCO. 34 patients were enrolled into the dose escalation and expansion portions of the trial, and 30 of 34 evaluable patients achieved a complete response or partial response for an overall best objective response rate of 88%.

One patient or 3% achieved a complete response, and 29 patients or 85% achieved a partial response with a median follow-up of 12.8 months. No patients with CLL progressed while on study, and progression-free survival was 100%.

Now while the 100% progression-free survival rate is encouraging, we believe the MCL indication may offer a more rapid path to potential regulatory approval.

Based on these interim results, Oncternal will continue treatment and follow-up of the patients with CLL who are already enrolled in our study for up to two years or until disease progression but will limit the total enrollment of patients in the randomized Phase II CLL cohort to approximately 30 patients in order to focus our resources on the MCL portion of the study.

We are also pleased that the FDA granted the company orphan drug designations for cirmtuzumab for the treatment of MCL and for the treatment of CLL. We are planning to update both this MCL and CLL data from our ongoing Phase I/II trial at an scientific conference in Q4 2020.

Cirmtuzumab is also being investigated for treatment of patients with breast cancer. Patient enrollment continues in a Phase Ib investigator-sponsored study of Cirmtuzumab plus paclitaxel in patients with HER2-negative breast cancer.

Previously presented results showed an objective response rate of 57%, with no new or accentuated adverse events compared to the known safety profile of paclitaxel alone. We expect additional clinical data from this trial to be available in the first half of 2021, which is a slight delay from prior guidance.

Now work continues on our ROR1 CAR-T cell therapy program together with their collaborators at The University of California, San Diego under a grant from the California Institute of Regenerative Medicine and through a partnership with Shanghai Pharma. Our goal is to initiate a first-in-human study in 2021.

I will now turn over the call to Richard Vincent, our CFO, to review our financial results..

Thank you, Frank. In October 2017, CIRM awarded an $18.3 million grant to the researchers at the UC San Diego School of Medicine to advance our Phase I/II clinical trial evaluating cirmtuzumab in combination with ibrutinib for the treatment of patients with B-Cell Lymphoid Malignancies, including MCL and CLL.

We are conducting this study in collaboration with UC San Diego and expect to receive approximately $14 million in development milestones under research subawards throughout the award period. In conjunction with this award, our grant revenue was $0.6 million for the second quarter ended June 30, 2020.

Our total operating expenses for the quarter ended June 30, 2020, were $6.2 million. Research and development expenses totaled $3.8 million, and general and administrative expenses totaled $2.3 million. Net loss for the quarter was $5.5 million for a loss of $0.34 per share, basic and diluted.

As of June 30, 2020, we had $16.6 million in cash and cash equivalents. In May and July 2020, Oncternal strengthened its balance sheet, raising an aggregate $11.2 million in gross proceeds from two registered direct offerings, including a $6.2 million offering in July. Existing investors represented approximately half of the invested capital.

We believe these funds will be sufficient to support our operations into the second quarter of 2021. Following the July offering, we had 19.9 million shares of common stock outstanding. Now I will turn the call back to our CEO, Jim Breitmeyer..

Thank you, Rich, for that summary of our financial results. I'll now close the call by highlighting the upcoming milestones that we expect to reach over the next several months.

As I mentioned, despite the disruptions related to the COVID-19 pandemic, we remain on track to achieve the key clinical data readouts for cirmtuzumab and TK16 [ph] that we have planned for this year.

Specifically, we expect to present clinical data from 12 to 16 patients with relapsed/refractory Ewing sarcoma, who have been treated with TK216 plus vincristine in the expansion cohort of the study at a scientific conference in the fourth quarter of 2020, a larger number than our previous guidance.

We expect to present a clinical data update from our Phase I/II trial for patients with MCL treated with cirmtuzumab plus ibrutinib at a scientific conference in the fourth quarter of 2020.

We also expect to present a clinical – a data update from our Phase I/II trial for patients with CLL treated with cirmtuzumab plus ibrutinib at a scientific conference in the fourth quarter of 2020.

We expect the clinical updates to be available from the Phase Ib investigator-sponsored study of cirmtuzumab plus paclitaxel in patients with HER2-negative breast cancer in the first half of 2021. Lastly, we are targeting to treat the first patient with a ROR1 CAR-T cell therapy in 2021 in a collaboration with Shanghai Pharma Limited.

In closing, we have a focused business plan ahead of us with multiple potential catalysts in 2020 and beyond and a clear priority of deploying our financial and operating resources against promising product candidates in rare cancers. We look forward to updating you during the remainder of 2020. So thank you for joining us today.

I will turn the call back over to Diego for the Q&A portion of this afternoon's call..

Thank you. [Operator Instructions] Our first question comes from Robert Burns with H.C. Wainwright. Please state your question..

Hi, guys. Thanks for taking my question and congrats on the progress. Just a couple from me, if I may.

So could you help frame expectations around what you believe potential accelerated approval pathway looks like for cirmtuzumab plus ibrutinib in MCL with regard to possible trial designs, sample sizes and overall timing? And I know that you might not want to comment for the FDA.

I just want to get your thoughts as to what you think it would be? And then my second question is, since we shall now see clinical data for TK216 in 12 to 16 patients from the expansion cohort, I was curious as to what you view as the go/no-go efficacy signal? Thank you..

Thank you, Rob. This is Jim, and we appreciate your question.

So we're going to the FDA, taking note of the fact that there have now been four recent approvals from the FDA for mantle cell lymphoma based on single-arm trials of modest numbers of patients and specifically ibrutinib, 111 patients; acalabrutinib, 124; zanubrutinib, the most recent one, 86 patients, and then among the BTK inhibitors; and then TECARTUS, the recent CAR-T approval, single-arm study with only 60 patients.

So we're optimistic that there may be a pathway for cirmtuzumab with a similar approach. And so a – let's use as a round number a 100-patient, single-arm registration study. And that would – and then we would, of course, work out the details with the FDA about patient population and other design elements.

So we think that, we're well aware of the fact that mantle cell lymphoma is not the most common form of malignant lymphoma, and we would expect that we would run a registration study internationally in the U.S. and in China with our partner, Shanghai Pharma, at a minimum, but we're also considering other countries.

And so if we look at other pivotal studies, they've typically taken around two to three years to enroll and in this rare disorder. And competition from other studies in MCL that are going on right now, we think that, that's a reasonable time frame.

If we use benchmark numbers of around $100,000 per patient, then – plus manufacturing costs, then you can imagine what the all-in costs for such a study might cost. And so before I go on to your TK216 question, let me ask you if you have any follow-up question on that..

No. That was crystal clear. Thank you..

Sure. So then, TK216, we are – as I think you can tell, we're very excited that this targeted agent is showing activity in patients with advanced metastatic Ewing sarcoma, and we believe that the bar for FDA approval for this kind of sarcoma is very low.

Specifically, we've taken note of an approval that Epizyme achieved for TAZVERIK in a similar sarcoma, epithelioid sarcoma, in which a pivotal trial had 62 patients with only one complete response. So we've already seen two near complete responses with our first few patients.

And so at this point, we are still encouraged that the TK216 program is likely to go forward with these deep responses that we have already seen under such circumstances where we believe the bar is pretty low to bring there some activity to genuinely desperate patients and their families. So I'll stop there and ask if you have a follow-up on TK216..

No. That's all for me. Thank you so much..

Thank you, Rob..

Thank you. There are no further questions at this time. I'll turn it back to management for closing remarks. Thank you..

So thank you, everybody, for joining us today for our Q2 investor call. And we appreciate your attention and look forward to keeping you updated in the future. Thank you very much and goodbye for now..

Thank you. This concludes today's conference. All parties may disconnect. Have a great day..