Crescent Biopharma, Inc. (CBIO) Q3 2017 Earnings Report, Transcript and Summary

Good morning. And thank you all for joining GlycoMimetics Third Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. Following management's remarks, we will hold a brief question-and-answer session. And at that time, the lines will be opened for you. [Operator Instructions] I would now like to turn the call over to Ms. Shari Annes of the Investor Relations group at GlycoMimetics. Please go ahead.

Good morning. And welcome to GlycoMimetics' third quarter 2017 conference call. Copies of today's press release [Technical Difficulty] released last week on GlycoMimetics' accepted abstracts for ASH are available in the News section of the company's website at www.glycomimetics.com. Today's call is being recorded. Dial-in phone replay will be available for 24 hours after the close of the call. The webcast replay will also be available in the Investor Relations section of the company's website for 30 days. Joining me on the call today from GlycoMimetics is Rachel King, Chief Executive Officer; Brian Hahn, Chief Financial Officer; and Dr. Helen Thackray, Senior VP of Development and Chief Medical Officer. We will start today's call with Brian providing a review of the financial results for the third quarter of 2017. Rachel will then discuss recent progress and our clinical development outlook for this year and next. And then, Helen will also comment in more detail on the developing dataset for GMI-1271, a novel drug candidate for the treatment of hematologic malignancies. Rachel will then make some concluding comments. And then we will ask the operator to open up the call for your questions. Before we start, I'd like to remind you that today's call will include forward-looking statements based on current expectations. Forward-looking statements contained on this call include but are not limited to statements about the timing of clinical results and presentation of data from our GMI-1271 clinical development program, as well as the development plans for rivipansel, our product candidate licensed to our collaborator Pfizer, and our other pipeline program, GMI-1359. Such statements represent management's judgment and intention as of today, and involve assumptions, risks and uncertainties. GlycoMimetics undertakes no obligation to update or revise any forward-looking statement. Please refer to GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics website for information concerning the risk factors that could affect the company. I'd now like to turn the call over to Brian.

Thank you, Shari. As of September 30, 2017, GlycoMimetics had cash and cash equivalents of $112.9 million, as compared to $40 million, as of December 31, 2016. The company raised $86.8 million in net proceeds from the public offering of common stock completed in May 2017. Subsequent to September 30, the company raised an additional $19.2 million in net proceeds under an at-the-market equity facility for pro forma cash balance of $132.1 million. This added to our shareholder base both new and existing blue-chip biotech investors. We are pleased to be in such as strong financial position. Research and development expenses for the third quarter of 2017 were $5.8 million compared to $5.9 million for the same period in 2016. Clinical trial expenses were decreased due to the completion of enrollment in the Phase 2 clinical trial of GMI-1271 for treatment of AML in May 2017, and a decrease in the cost for non-clinical toxicology studies and clinical studies for GMI-1359. These decreases were offset in part by additional costs related to the manufacturing of Phase 3 clinical supplies of GMI-1271. General and administrative expenses for the third quarter of 2017 were $2.4 million compared with $2 million recorded in the third quarter of 2016. Net loss and net loss per share for the third quarter of 2017 were $8 and $0.24 respectively, compared to $7.9 million and $0.34 respectively for the third quarter of 2016. I'll now turn the call over to Rachel King, our CEO, who will update you on progress across our pipeline.

Thank you, Brian. And thank you for joining GlycoMimetics earnings call. From this point on, we're planning regular quarterly calls to discuss financial results, as well as provide updates on corporate progress. During the third quarter, we continued to make strong progress across our pipeline. The rivipansel Phase 3 trial is being conducted by our collaborator Pfizer, in patients hospitalized for vaso-occlusive crisis of sickle cell disease. Pfizer reports that the study remains on track for completion in the second half of 2018. Our GMI-1359 Phase 1 program is ongoing. In addition, we continue to make important progress in our pre-clinical programs. Most importantly, for GMI-1271, our Phase 2 study data has been accepted for an oral presentation at ASH. And we will say more about that in a moment. At a high level, let me remind you that GMI-1271 is uniquely positioned to potentially play a key role in treatment of AML, in multiple AML treatment settings. This is due to its novel and differentiated mechanism of action. At major medical meetings we presented data showing GMI-1271's potential benefits, both in cancer-related outcomes and in improving the tolerability of chemotherapy. As you'll hear today, our drug candidate also has potential for broad use in multiple AML patient sub-groups. This is in contrast to other agents in development in AML, focused on more narrow patient populations. We believe GMI-1271 is uniquely well positioned to expand its value in AML treatment settings, even beyond those we studied so far in the clinic. And we're excited to be in a position to share this evolving foundation of data with you. Last week, as Shari mentioned, we issued a press release to announce the fact that ASH had accepted for oral presentation. Two GMI-1271 abstracts we submitted. The first oral presentation will update the clinical data we presented earlier in the year at ASCO and EHA. The data that we presented was, as you recall, the basis for GMI-1271's designation as a breakthrough therapy in relapsed/refractory AML in May. And ASH will provide an important opportunity for us to share our evolving dataset with you. I'd now like to ask Helen Thackray, our CMO, to discuss the clinical abstract and the announced oral presentation in more detail. Helen?

Thank you, Rachel. I'm pleased now to describe in more detail what we are seeing in our Phase 1/2 AML trial. As a reminder, we submitted data for the ASH abstract in August, shortly after the update presented at ASCO. We plan to provide an important further update of the data at ASH with a focus on durability of response and survival. From and overall perspective, we can share that the data remain very encouraging with respect to response rates and safety in both of the patient populations we are studying: AML patients with relapsed or refractory disease as well as those at least 60 years of age, who are newly diagnosed. Importantly, in both groups the response rates are substantially better than historical controls matched for age and risk. I can also tell you that we are seeing an encouraging signal in duration of response and survival as reflected in the abstract. And we look forward to providing meaningful update next month. As I noted, our data submitted for the abstract reflects a data cutoff as of mid-summer. At the time of the abstract deadline, the study was fully enrolled; Phase 1, 19 patients with relapsed or refractory disease were enrolled; and in Phase 2, 47 more with relapsed or refractory disease and another 25 of newly diagnosed AML were enrolled to give a total of 91 patients. In the abstract, we reported that there were 54 patients with relapsed or refractory disease treated at the recommended Phase 2 dose of 10 milligrams per kilogram of GMI-1271. For this group, treated at the selected Phase 2 dose level, we report in the abstract remission rate including CR and CRi of 41%, and an overall response rate which includes CR/CRi morphologic leukemia-free state and partial remission of 50%. In the Phase 1 portion of the trial, median overall survival was 7.6 months, with median disease-free survival of 11.1 months. In the Phase 2 portion for the patients with relapsed/refractory AML, median overall survival and disease-free survival had not been reached. We are pleased with the consistency of this data. The population enrolled in the full relapsed/refractory disease group now completed with a very high-risk group by age, by disease history with refractory or early relapsed AML, and by adverse cytogenetics risk category. These qualities define some of the hardest patients to treat. And in this study, we have consistently seen higher than expected remission rates for these patients with the addition of GMI-1271. In the older newly diagnosed patients, the CR/CRi rate was 68% for the whole group, which consisted of rates of 73% for de novo AML, and 64% for secondary AML. The overall response rate was 80%. Median overall survival and disease-free survival had not been reached at the last data cut-off date. With respect to safety, we report in the abstract, in both populations the drug was well tolerated with meaningful reductions in severe mucositis. Indeed, the mucositis reduction in the relapsed/refractory patients receiving MEC induction chemotherapy, where you would expect around 25% severe mucositis is quite striking. This was predicted by our preclinical models, in which GMI-1271 blocks inflammatory macrophages trafficking to the gut. It is exciting to all of us to see this dramatic effect translated into the clinic. Overall, these efficacy and safety outcomes compare favorably to well-established historical controls for comparable patient populations. Notably, these observations are reflected in all the patient sub-groups groups evaluated, including in high-risk populations of patients. With five months follow-up on the last patient in for the relapsed/refractory group, and six months follow-up for the last patient in for the newly diagnosed group, we are optimistic that the durability of response and median overall survival could well exceed expected benchmarks for either MEC or 7+3 alone. And look forward to sharing further data at the time of ASH. Clearly, the data generated to date from both newly diagnosed patients and those with relapsed/refractory disease strongly support moving GMI-1271 into studies to support marketing applications. I'll now turn the call back to Rachel.

Thank you, Helen. Our next key step for the GMI-1271 program is to initiate a registration study in the relapsed/refractory AML population. We've begun engaging with the FDA under the Breakthrough Therapy designation GlycoMimetics received in May 2017. Those conversations have been productive and helpful as we design our Phase 3 protocol and other aspects of the program required for registration, including manufacturing and non-clinical aspects of the program. With regard to the clinical program, our immediate focus is on reviewing the data emerging from the Phase 1/2 study to determine how best to capture the diverse set of benefits we've seen, where we observe the strongest signals, and what we consider to be the optimal endpoint for the Phase 3. Of course, that determination will also take into account FDA's guidance and advice. And we're very encouraged by the approach the agency has taken with us under Breakthrough Therapy designation to expedite the drug's development. As soon as, we're able to do so, we will share our final study design for the pivotal trial in relapsed/refractory AML population. Our goals to initiate this Phase 3 trial in mid-2018 and this will be the key operational focus for the company. In addition to the clinical update, we are thrilled that preclinical data that further elucidates GMI-1271's mechanism of action has been accepted for second oral presentation at ASH. In the preclinical study that is a subject of our abstract, in Murine Models of AML, E-selectin was up-regulated, and AML cells binding to E-selectin increased chemo-resistance by activating specific tumor cell survival signaling pathways. We further report that this effect is unique to E-selectin as compared to other vascular adhesion molecules, and that it can be blocked by GMI-1271. This translational research provides important evidence that elucidates how treatment with GMI-1271 appears to be improving sensitivity to chemotherapy. Given response rates that we've observed to date, that suggest improved clinical benefit in combination with chemotherapy in two AML populations, this preclinical work provides important further support for the mechanism of action of the drug candidate. I'd also like to share with you some additional exciting preclinical research on GMI-1271. Our Phase 1/2 studies, as you know, are evaluating GMI-1271 in newly diagnosed patients fit for chemotherapy and in the relapsed/refractory setting. The new information is that we have now completed preclinical studies, in which synergistic antitumor effects we're observed, when GMI-1271 was combined with hypomethylating agent. This data is important, because it supports our plan to expand the use of GMI-1271 into a third AML setting, namely the unfit-for-chemotherapy setting. Here patients are typically treated with hypomethylating agents, because they are considered to be too vulnerable to the side effects of intensive chemotherapy. Specifically, in a Murine Model of AML, we have now shown that when GMI-1271 is added to 5- 5-Azacytidine, overall survival is significantly increased over 5-Azacytidine alone. This new research provides compelling scientific support to expand clinical testing of GMI-1271 in this otherwise unfit patient population to attempt to boost the antitumor activity of hypomethylating agents. We plan to submit this preclinical data to an upcoming scientific meeting. I'd like to take a minute to recap, what we believe will be the differentiating features of this drug candidate. First, we believe it has the potential for wide use in AML across the three key treatment settings I outlined a moment ago. Most other drugs in development in AML are limited to more narrow patient sub-groups. And second, we believe that GMI-1271 has the potential both to improve cancer-related outcomes including survival, and also importantly, to improve tolerability of the underlying chemotherapy regimen. Given the potential to use GMI-1271 in multiple AML treatment settings, you should also note that we are actively exploring clinical studies that could be conducted in addition to the planned registration study in relapsed/refractory AML. I'm pleased to share with you that we've been approached by a number of experienced and world-renowned clinical consortia in the U.S. and Europe that are interested in sponsoring clinical trials of GMI-1271. This level of independent unsolicited inbound interest is important validation for the data we've generated to date. And also provides a significant potential market expansion opportunity for GlycoMimetics, allowing the company to more fully-explore potential uses of the drug that may otherwise be possible in this timeframe. With this likely support, we can define a comprehensive development program for GMI-1271. Our goal is to eventually expand the label to multiple patient populations across the continuum of care in AML. Based on this, we're working toward initiating a consortium funded clinical trials in 2018. In addition, to the registration study in the relapsed/refractory AML setting. Further details related to these plans will be shared in the coming months. Before turning to the rest of our clinical pipeline, I would like to remind you that during third quarter, we announced that the European Patent Office issued an intention-to-grant letter to us. The European patent covering Composition of Matter of GMI-1271 has now been granted, complementing the issued U.S. Composition of Matter Patent. These provide coverage on the drug itself to 2032 in both the U.S. and Europe. Together, these issued patents are part of GlycoMimetics' expanding patent portfolio covering the drug candidate GMI-1271 and methods of use in a variety of indications including various cancers. You'll also remember that we have an ongoing study in Europe evaluating GMI-1271 in a proof-of-concept trial in multiple myeloma. We initiated that trial in Ireland and have now expanded to major myeloma research centers in England, Germany and Denmark. We anticipate initial data from that study in 2018. Now, let's quickly review our other pipeline programs. According to our collaborative partner, Pfizer, the rivipansel Phase 3 in sickle cell crisis continues to be on track for completing in the second half of 2018. If successful and if Pfizer secures an approval, we remind you that there are substantial potential economics due to us. This includes a significant milestone payment for acceptance of the NDA. We remain confident about the outlook for rivipansel as it offers a unique positioning in the acute treatment setting for vaso-occlusive crisis of sickle cell disease. For GMI-1359, our novel combined E-selectin and CXCR4 antagonist, enrollment of our Phase 1 in healthy volunteers is completed. And we're in the process of defining plans for trial in patients. The details of which we anticipate discussing further during 2018. Finally, I want to let you know that we continue to research additional novel compounds based on our specialized chemistry platform. This focus is now on the galectins, which are important targets in cancer and fibrosis. In addition, we continued pre-clinical studies to explore further possible uses of the drugs currently in the clinic, as well as for potential follow-on compounds. We are pleased to be in a strong financial position to pursue these many exciting opportunities and we look forward to important milestones over the next 12 to 18 months. Now, having given you an overall perspective on our progress and plans, I would like to open the call to your questions. Operator?

Thank you. [Operator Instructions] And our first question comes from the line of Yatin Suneja from SunTrust. Your line is now open.

Good morning, guys. Thank you for taking my questions, and congrats on all the progress. Just a couple of questions. On the upcoming oral presentation, could you maybe share with us your expectations on the durability and survival, like what is a good benchmark in relapsed/refractory AML? And then, with regard to the frontline setting, do you think you have or you would have enough follow-up to reach a median OS by ASH? And then I have two more.

Okay, good morning, Yatin. Thanks for your questions. I'm going to turn those over to Helen, could comment on that ASH data.

Good morning, Yatin. So, for the question on what the benchmarks might be for relapsed and refractory disease, we expect an update on the overall survival and disease-free survival for that group at ASH. The historical controls that are matched for age and for the risk of disease, have seen an overall survival somewhere between 5 and 5.5 months, and the disease-free survival usually about 9 or so months. So those would be the benchmarks that we use for comparison. In terms of the 7+3 group, that group we do expect to, again, update in terms of survival data and durability of remission at ASH.

Got it. And then, with regard to the potential pivotal program, I mean, you have a breakthrough designation for relapsed/refractory setting. Is there a way you could accelerate or is there an accelerated approval pathway there? I guess, I'm just trying to understand what the feedback has been from the FDA in terms of using something other than an OS endpoint for that particular setting?

Yes, we have had some very constructive discussions with the FDA around those questions. And we are looking hard at defining what we think would be the most expedited path to approval, taking into account the things that we have seen in the activity of the drugs to-date. So, as I said, we will be looking for the most expedited path to approval. And we're not yet in a position to say, what that is going to involve, what specific endpoint that would involve. We are encouraged by the fact that the FDA has shown flexibility with its recent approvals, couple of recent approvals in AML where they've looked at endpoints other than overall survival. So, we certainly consider those. But again, looking at how the drug functions, where we're seeing the best responses and where we think we're therefore mostly likely to see the benefit in a Phase 3.

Got it. And then just final, just maybe one more question, I mean, I know you're going to provide an update on the pivotal later this year or sometime in December. But maybe could you comment on the scope and the size of the program. And then, in terms of the control arm that you're going to use, will that be MEC or are you going to use something else as well on the control? Thank you.

Well, again, the size of the program is going to depend on the end-point that we determine. And so, I'm really not in a position to talk to the size yet. As far as the control arm, we have had some thoughts on that. Helen, do you want to comment on…?

Yeah, so for the pivotal trial being relapsed/refractory AML, we have a data now from the current trial with MEC chemotherapy as the backbone chemotherapy. So, it makes sense to include that in the trial as a control. We have also been looking at other regimens that include the cytarabine or intensive regimens that would give - the expectancy to give similar outcomes and we're assessing whether it makes sense to include those in the trial as well.

Got it. Thank you very much.

Thanks, Yatin.

Thank you. [Operator Instructions] And our next question comes from the line of Stephen Willey from Stifel. Your line is now open.

Hi, good morning. This is Prakhar Verma on for Steve. Thanks for taking my questions. So, a question on the pivotal trial that you plan to start on mid-2018, so I was wondering, if you're planning to build an interim analysis just to look at the response data probably to get a - to expedite the path to approval, any possibility you can build an interim analysis in the trial?

Again, that's a question that we'll be happy to answer once we define the details of the study. Again, we are looking to define the most expedited path to approval. So, we'll certainly be looking at any opportunity to do that.

Okay. And then, with respect to the newly diagnosed AML setting, what's your plan there? Do you need to see more data from the ongoing trial to initiate a Phase 3 there? And also, for the control arm, have you thought about evaluating it in combination with Vyxeos. I know Vyxeos was recently launched by Jazz. And it's been - the adoption has been - based on management commentary, the adoption has been pretty good. So, do you have any plans to evaluate [oxam-d1] [ph] in combination with Vyxeos?

So, we do believe that the data we have in the study so far in the newly diagnosed patients does support moving to a study which could potential be a registration study in newly diagnosed patients. Our focus, as I said, our own operational focus is on the relapsed/refractory setting currently, but we're exploring what path we might take forward in the newly diagnosed setting. And as we define our broader plans for the more comprehensive development program, we'll be sharing those with you. Helen, do you want to comment on Vyxeos at all?

Yeah. So Vyxeos is available and so it's now on available therapies. It can be used for patients with newly diagnosed AML. It also combines to drugs that we have experience with in the current study, where we have the patients with newly diagnosed disease, who are getting 7+3. So, we know that with 7+3, we're seeing what we think are benefit above that expected for the baseline chemotherapy. And I think, it would make a lot of sense to also consider adding this to Vyxeos in the future to see if you can see a benefit for those patients on Vyxeos. It makes a lot of sense.

Is that something you can do in collaboration with the consortium that you talked about?

That's possible. And again, we'll give more details as those plans come together.

Okay. Thank you. Thanks for taking my questions.

Thank you.

Thank you. [Operator Instructions] And I'm showing no further questions over the phone line. I would like to turn the call back over to Rachel King for closing remarks.

Great. Thank you, operator. And thank you everyone for your questions and for taking the time to listen to the call. We do feel that the next 12 months, we will be delivering some very key milestones including the presentation at ASH that's coming up next month. And we'll be in the office all day today and available for calls if anyone wants to reach out to us here. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. And you may now disconnect. Everyone, have a great day.