Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2019 Earnings Results Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation.

[Operator Instructions] Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics’ future operating results and financial position.

All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section, included in the Plus Therapeutics’ annual results on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission from time-to-time.

Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr.

Marc Hedrick, Plus Therapeutics’ President and Chief Executive Officer. Sir, you may begin..

First, they address an unmet or substantially underserved medical need; Second, they combine known active pharmaceutical ingredients that have extensive safety and efficacy information with new technologies that improve both safety and efficacy; and third, these products will have at least a $250 million addressable market.

These drug candidates evolved in this transaction check all three boxes. I'll provide more details on the technology and the clinical status regarding this transaction momentarily. But in summary, this transaction comports precisely with our previous guidance.

And we are particularly pleased that we were able to deliver our first deal so promptly within the first quarter of our new fiscal year. So, now, before getting to our FYI 2019 review, I'd like to address the current global crisis now in everyone's mind, specifically COVID-19 and this Company's response to it.

I am relieved to report that there's been no material impact on our operations as a result of the coronavirus. None of our employees have tested positive, and we currently expect no material impact on our results for fiscal year 2020, which ends December 31, 2020.

Our recent implementation of a substantially virtual development model is serving us well during the pandemic. Additionally, our facilities in Austin and San Antonio remain open, although while lightly staffed, we have flexible work schedules to provide maximum support for our employees.

Be sure our company has business continuity plans at all sites, should the need arise to implement them. No supply chain interruptions have occurred and we remain in close coordination with our partners and employees of potential risks and mitigations.

We are also exploring the provisions of the recently passed CARES law as to how it might provide support to Plus. As a final point with regard to this issue, besides protecting our workforce and maintaining our business, we are also trying to make a difference to others coping with the impact of the coronavirus.

Recently, we donated a lion's share of our personal protective equipment inventory such as surgical masks, gloves and other protective items to San Diego Scripps Health for distribution to its frontline doctors, nurses, and other healthcare practitioners that are on the front lines caring for patients affected by the COVID-19 pandemic.

As many of you know, Scripps Health is a private nonprofit integrated health system in San Diego and Plus Therapeutics of course has had a longtime presence in San Diego and La Jolla. We'll continue to do our part to look after our employees and look for other ways we can help the communities in which we live and work. Okay.

So, let's return to the FY 2019 review, which marked the productive and pivotal time in the history of this Company.

In fact, Q4 was the first full quarter of the new revitalized Plus Therapeutics, a clinical stage pharmaceutical company focused on the discovery, development and delivery of complex and innovative treatments for patients battling rare cancers. Let me briefly summarize some of the substantial progress we made in 2019.

Most notably, we injected $26 million into the balance sheet by a combination of transactions including selling noncore assets, completing a $15 million public offering and negotiating a $4.6 million study closeout reimbursement from the U.S. Department of Health and Human Services.

Also, in order to preserve cash and ensure efficient future capital deployments, we consolidated operations from La Jolla, California to Texas and significantly virtualized our development model, meaning an increase in cost effective reliance on trusted consultants and less on expensive fulltime infrastructure.

In short, we slimmed down to a built for scale engine of drug development, monetization and liquidity. Our move to Texas was a key part of this. We are in close geographic proximity to some of the world's most renowned cancer researchers and institutions.

As you probably know, our new home state of Texas has a statewide commitment to oncology, best characterized by the Cancer Prevention and Research Institute of Texas, whose funding is second globally only to the United States federal government in the public funding of cancer research.

Founded in ‘08, CPRIT has since awarded almost $2.5 billion towards over 1,500 grants focused on academic research, cancer prevention, and product development research. To summarize all this, I'll just reiterate what I said in our recent letter to shareholders.

I believe strongly that Plus Therapeutics now has the financial capability, development focus and cost structure to achieve long-term viability and growth. Now, let me march ahead here and provide further details on the transaction we announced this morning.

We've licensed a family of drug candidates characterized by novel chemistry, specifically, the BMEDA-chelated. BMEDA is a chelator, in this chelates rhenium-186. These are radio isotopes encapsulated via nanoliposomes. These unique drugs are both beta and gamma energy emitters.

That two third serves to both kill [Technical Difficulty], which is very important, particularly in the brain. And these precise formulations [Technical Difficulty] one to two millimeter radioactive penetration and a 90-hour half life.

When delivered directly to tumors, these compounds can deliver approximately 30x or 30-fold the radiation to tumors than can standard external beam radiation without also local side effect incurred being a radiation, which is aimed through normal tissue to get to the brain.

Furthermore, [Technical Difficulty] various modalities [Technical Difficulty] the newly licensed [Technical Difficulty] multi-institutional consortium based in Texas at the [Technical Difficulty] center and [Technical Difficulty] MD Anderson Cancer Center and it was led by the internationally renowned, Dr. Andrew Brenner, MD, PhD.

The lead drug assets in this basket of [Technical Difficulty], is rhenium nanoliposome developed initially for recurrent glioblastoma. Dr. Brenner and his [Technical Difficulty] even today, in the modern times that we live in, radiation is the most effective component of the standard multimodal therapeutic regime used in glioblastoma.

Multiple randomized studies show about a five-month improvement in survival with external beam radiation alone compared to the additional 2.5 months with the addition of chemotherapy and three months for targeted tumor treating fields.

By infusing the drug directly into the tumor, bypassing the blood brain barrier, normal brain external tissues are [Technical Difficulty] In the case of these drugs, the mechanism of action is clear cut. We know radiation is effective against glioblastoma if an adequate dose can be effectively delivered. For comparison, it’s very important.

[Technical Difficulty] patient protocols for recurrent glioblastoma, typically [Technical Difficulty] the radiation dose is measured. In contrast, the most recent patient dosed with RNL in the clinical trial that's ongoing today received over 500 gray -- 35 to 500 gray. In terms of clinical status with respect to this trial, we are currently in a U.S.

FDA approved Phase 1 dose finding study at a single site in Texas in San Antonio with plans underway to expand to two additional sites in Texas at UT Southwestern Medical School and MD Anderson. In the trial thus far 13 patients have been dosed to date and we are now in the fifth dosing cohort.

The radiation dose in the current cohort is now approximately at 15 times the dose that is typically delivered by external beam radiation. Higher doses are planned in subsequent cohorts. Thus far, no serious adverse events have been observed in the trial.

And in terms of efficacy signals, we continue to follow these patients but the first two patients in which complete tumor coverage with RNL was achieved, survived for 30 and 33 months respectively. And that's compared to a median survival of about nine months in patients who received standard of care.

Another thing we really like about this technology is it has had substantial third-party review and support. It was previously funded by the cancer prevention and research Institute of Texas, and there may be further opportunities for [Technical Difficulty] as well. Currently the technology is funded through Phase 2.

It’s in Phase 1 but through Phase 2 by the National Institutes of Health and National Cancer Institute here in the U.S. The recently awarded $3 million grant award from the NCI and NIH will function primarily to create cost offsets for Plus during the continued clinical development of RNL for recurrent glioblastoma.

So, what about next steps? [Technical Difficulty] simultaneously, namely complete the Phase 1 trial and determine the maximum tolerated dose, explore ways to accelerate development, both internally and with the FDA if supported by the clinical data, finalize our plans for more definitive safety and efficacy studies with the agency, and complete the CMC and scalability work required to move this to late stage clinical and commercial product availability.

Another reason our team is so enthusiastic about this technology and this transaction is that this same product candidate is in preclinical development for several additional indications, including breast, head & neck, leptomeningeal carcinomatosis, liver and ovarian cancers, and appears to be quite promising in those, although still early.

This technology could be a game-changer for some of these really tough clinical problems. Therefore, it's [Technical Difficulty] continue to refine the development plan and support development for additional indications and report back as soon as we complete that planning and process.

Furthermore, another licensed preclinical product candidate as part of this transaction is a co-encapsulated doxorubicin and chelated rhenium nanoliposome that has been studied in the treatment of squamous cell carcinoma of the head and neck and may have used in a number of other tumors as well.

Finally, these assets are supported by numerous patents worldwide in peer reviewed publications. So, let me move on to the rest of our pipeline. As you may know, our pipeline also contains DocePLUS, which is a Phase 2 ready albumin stabilized PEGylated liposomal docetaxel that is intended to target a number of cancers including small cell lung cancer.

To summarize what we've said before, it's a reformulation of Sanofi’s TAXOTERE or docetaxel, using our proprietary nanotechnology platform, being developed for relapsed small cell lung cancer as a new and alternative treatment option to Novartis’ HYCAMTIN or topotecan.

According to Decision Resources, topotecan is a standard of care in this patient population and generated $190 million in sales in 2018. DocePLUS has an FDA orphan designation for small cell lung cancer, and we have received FDA pre-IND feedback indicating that the product may be eligible for the 505(b)(2) regulatory pathway.

Prior to today's announced transaction, management's plan had been to proceed to a Phase 2 trial of small cell lung cancer patients with platinum sensitive disease who have progressed after first line therapy.

However, management believe prudence dictates that in the current macroeconomic environment, the uncertainty about the capital markets and with multiple new assets in the pipeline, we will proactively in Q2 adjust as needed our clinical priorities and plans for capital deployment. We'll do that in such a way to maximize stockholder return.

We’ve therefore put a near-term temporary hold on development spend for DocePLUS, while we rapidly assess the overall situation. Regarding our other asset, DoxoPLUS, we're in discussions with interested parties in acquiring this drug potential as the potential first generic version of CAELYX in Europe.

Additionally, we continue to review a number of other co-development and in-licensing opportunities geared to expand our pipeline. And now, I'll turn it over to Andrew Sims, our newly arrived Chief Financial Officer, for a financial review.

But, before I do, Andrew, let me just give you a brief word about Andrew's background who’s a great addition to the team. Andrew was previously an audit partner at Mazars, a global accounting advisory, audit, tax and consulting firm. He was originally based in both the Oxford, England and New York offices.

Andrew audited and advised global public clients, including a variety of health care companies, primarily based in Europe, and he was the lead partner on over 50 acquisitions and numerous cross border financings and other transactions. He's a Certified Public Accountant here in the U.S., and a Chartered Accountant in England and Wales.

And he was raised and educated in the United Kingdom, but he still has an understandable accent. So, Andrew, we welcome you aboard and turn it over to you..

In Q4 2019, our research and development expenses were $1.7 million versus a $1.6 million expense in Q4 2018. For the 12 months ended December 31, 2019 R&D expenses were $5.4 million compared to $5.5 million in 2018.

The decrease in research and development year-over-year spending was primarily attributed to a decrease in professional services and printing services. Now, on to our sales and marketing. Our sales and marketing expenses increased this quarter to approximately $163,000 as compared to approximately $47,000 in Q4 2018.

For the 12 months ended December 31, 2019 and December 31, 2018, our sales and marketing expenses were $468,000 and $643,000, respectively. The decrease in sales and marketing expenses is mainly due to decreases in salaries and benefits related to reduced headcounts due to our planned move towards an R&D-focused company.

G&A expense was $1.5 million for Q4 2019 as compared to $940,000 in Q4 2018. For the 12 months ended December 31, 2019 and 2018, G&A expense was $4.8 million as compared to $5.6 million in 2018. The year-on-year reduction in G&A expenses was many related to reductions in salaries, benefits and professional services.

In addition, this decrease was driven by a onetime expense related to termination of a lease agreement for office space in San Diego. There was also a decrease in legal and professional fees and salaries and benefits. Now, with respect to revenues. Q4 2019 total revenues were $1.2 million as compared to $713,000 in Q4 2018.

For the 12 months ended December 31, 2019, total revenues were $7 million as compared to $3 million in 2018. Increase in revenues is mainly due to the recognition of the BARDA revenue. Turning to the balance sheet. As of December 31, 2019 we had $17.6 million of cash and $9.3 million of debt principal.

In December 2018, we amended our debt with Oxford, providing additional flexibility by pushing out our interest-only period through April 1, 2020. Our liabilities increased to $22.1 million for the 12 months ended December 31, 2019 as compared to $18.8 million at December 31, 2018, primarily related to warrants issued in the September 2019 offering.

Finally, some of you may have also seen in the 8-K that was filed premarket this morning, we have entered into the ninth amendment with Oxford Finance, our senior lender. When this loan was first entered into in 2013, the total amount borrowed was $27 million.

The remaining balance -- principal balance prior to ninth amendment was down to $9.3 million.

The key aspects of this ninth amendment are to pay down a $5 million of principal to an outstanding balance of $4.3 million, extending the maturity date on the loan to June 2024, which is an incremental 36 months, extending the interest-only period from April 2020 through to April 2021, amortizing the remaining balance over the following 38 months at approximately $113,000 per month for the final payment of $3.2 million in June 2024.

Prior to this amendment, this loan was set to commence amortizing in May of 2020, at almost 700,000 per month, and with the final payment due in June 2021 of $2.2 million. And now, I'll turn it back to you Marc..

Andrew, thank you very much. So, let me just update you on key forth coming milestones and then we'll turn it over for Q&A. And regarding these milestones related to new assets, we will be -- we'll be integrating those assets immediately, and report back soon as we refine and clarify upcoming milestones.

So, I'll be a bit general here but I think you'll get the picture. First of all, most importantly, we want to complete the RNL Phase 1 trial as soon as possible and determine the maximum tolerated dose.

We also want to work with the agency right away to determine A, the suitability of potential accelerated paths to market, such as designation, fast track or breakthrough designation; and then B , development to commercial clinical, and regulatory plan for RNL to glioblastoma.

We also want to [Technical Difficulty] scalability work required [Technical Difficulty] pipeline. Regarding DocePLUS, as I mentioned, we want to rapidly in Q2 clarify its role in our overall pipeline and determine next steps for this asset. So, with that, I'll turn the call back over to Angela, the operator, for any questions. .

Thank you. [Operator Instructions] Thank you. And our first question comes from the line of Ed Woo. Please go ahead..

[Technical Difficulty] for taking my questions. And congratulations on the deal today. And I’ll seek thank you for donating the medical supplies. Obviously, everything helps in this time of need. My question is on DocePLUS. I know you mentioned that you're going to do a review in the second quarter.

But, are you leaning towards putting more emphasis on the assets that you guys acquired today or is it really just everything's on the table?.

I think, there -- we in-licensed so many diverse assets that I think it behooves us to take a step back, a rapid step back, recalibrate and deploy our capital where we can make the biggest impact for stockholders.

So, yes, I think where are we looking at that asset, we think it's a great asset, it requires some more development dollars but you know we also are really enamored with the assets we just in-licensed. So, I think to be fair, we just do -- and I assure you, this process has been ongoing, but we want to finalize that. That's a reevaluation process.

Make a clear, definitive decision and then communicate that and then move the ball forward..

Great. And then, I know you touched on a little bit about how you guys are still reviewing other possible assets that you guys might be interested in.

Has the coronavirus changed any of the outlook in terms of the type of opportunities and products that are out there?.

Yes. It's a great question. In my view, it’s too early to tell whether that has changed the outlook on the opportunities that are out there.

But what I will say is that the November state legislative approval and voter approval of the CPRIT has got a lot of inbound interest in our Company based in Texas with the deep connections into CPRIT in terms of our team and people that advise us.

A lot of companies that maybe have had run out of capital or capital constraints that have very exciting oncology assets and they're looking for ways to partner. We had hoped that being in Texas might create some visibility as it related to that and that seems to be the case.

But, we have a pretty aggressive outward facing process of trying to identify new assets that we can bring in. And we like assets like the one we announced today that comes in with partial funding that's pretty -- that is increasingly deep in the clinical development program.

So, that's -- today is I think the example of the kind of assets that we like..

[Operator Instructions].

Angela, we have an email question..

Okay, go ahead..

All right. The question is about the market opportunity for RNL, for glioblastoma and the overall market size. So, just briefly, currently there are approved treatments for glioblastoma, but none of them are particularly great. It’s one of the most aggressive of the primary tumors that occur in people.

So, I mentioned there are about 12,000 people a year that have that disease. So, once a patient fails standard frontline therapy, which is the typical course of prognosis is very poor, the active reintervention drugs in their current situation like bevacizumab and lomustine have been proven to prolong survival, but they're not great.

And after treatment failure, survival's not good about the 120 days or so. So, if you look at just a recurrent GBM market with that as a context, we think alone, this is a about a $750 million a year opportunity.

Now, if you add on other potential opportunities in first line GPM or some of the other cancers, I mentioned, I think the opportunity runs well over $1 billion. So, based on the kinds of things we're looking for, this fits very nicely into that bucket..

[Operator Instructions] We have no further questions at this time. I will now turn the call back to Dr. Hedrick for any additional or closing remarks..

Thank you, Angela. And thank you again for those of you on the call and are listening on the recording. Once again, the transition we completed in 2019 has positioned Plus Therapeutics to optimize the value of our core expertise and nanoparticle drug formulation, drug manufacturing and scale up, as well as clinical development.

And while we're extremely pleased by the transaction we announced this morning, we see more such transactions possible in the future.

We'll diligently continue to evaluate a number of other opportunities to support and build out a valuable drug development pipeline, consistent with the criteria we’ve laid out in previous two quarters and typified by today's announcement. So, as always, on behalf of the Board and management, thank you again for participating in this call.

More information can be found at our website at plustherapeutics.com. And on our LinkedIn and Twitter, social media sites. Have a good evening. Thank you..

Thank you. This does conclude today's conference call. Please disconnect your lines at this time and have a wonderful day..