Crescent Biopharma, Inc. (CBIO) Q2 2020 Earnings Report, Transcript and Summary

Good morning and thank you all for joining the GlycoMimetics Corporate Update 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 open for you. [Operator Instructions] I would now like to turn the call over to Ms. Shari Annes of Investor Relations Group at GlycoMimetics. Please go ahead.

Thank you. Good morning. Today, we will review our accomplishments and financial results for the second quarter of 2020. The press release we issued this morning is available on the company’s website at www.glycomimetics.com under the Investors tab. This call is being recorded. A 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 are Rachel King, Chief Executive Officer; Brian Hahn, Senior VP and Chief Financial Officer; and Dr. Helen Thackray, our Senior VP of Development and Chief Medical Officer. We will start today’s call with comments from Rachel, and after that, Brian will provide an overview of the company’s financial position. We’ll then open the call for Q&A when Dr. Thackray will be available to respond to your questions 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 company’s product candidates, uproleselan, GMI-1359 and GMI-1687 and rivipansel, as well as our other pipeline programs and the potential impact of the ongoing global COVID-19 pandemic on the company’s clinic programs, operations and cash burn. 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. For information concerning the risk factors that could affect the company, please refer to GlycoMimetic’s filings with the SEC, which are available from the SEC or on the GlycoMimetics website. I’d now like to turn the call over to Rachel.

Thank you, Shari, and thank you all for joining our call this morning. Just as I began our last call, I'd like to say that the entire team hopes that you and your families remain healthy in the face of the myriad of challenges presented by the COVID-19 pandemic. Here at GlycoMimetics we've continued our work largely from our homes with minimal disruption to our operations. Although we're happy to report that our scientists have been able to return to our labs on a staggered basis all in compliance with CDC and Maryland state guidelines, we're diligently coordinating our activities to maintain ongoing business operations. Let me begin by saying that the second quarter was a busy and productive one for us. Enrollment continued in our pivotal Phase 3 registration trial evaluating uproleselan in relapsed/refractory AML. The enrollment rate for the quarter was such that we are maintaining our prior guidance. We expect completion of enrollment in the second half of 2021. We also saw a steady progress in our collaborative multicenter registration trial with the National Cancer Institute or NCI where uproleselan is being studied in newly-diagnosed elderly AML patients who are fit for intensive chemotherapy. With respect to rivipansel, we believe our additional analyses of efficacy data represent an opportunity to reassess the potential viability of this drug. We now plan to explore with the FDA whether there's a path forward for this drug as a candidate for treatment of vaso occlusive crisis or VOC in sickle cell disease. We'll now comment on each of these achievements and cover several other highlights as well. First update on uproleselan. We did see an initial slowing in enrollment in our company-sponsored AML trial during the early days of the COVID pandemic. However, enrollment rates recovered well and accordingly we are affirming our prior guidance namely that we expect to complete enrollment in the second half of 2021. We will continue to actively monitor the ongoing impact of the pandemic on patient enrollment and study progress. The clear enthusiasm for our trial among clinicians continues to be high again underscoring uproleselan's potential to provide benefit across a host of clinical endpoints. These include improving chemotherapy outcomes and ameliorating some of the serious adverse events of intensive cytotoxic chemotherapy. You'll remember that there's a second registration trial now underway of uproleselan. This is being conducted by the National Cancer Institute and is treating patients with newly-diagnosed AML. For this trial as well I can report that accruals slowed during the early days of the COVID pandemic the sites are now actively enrolling again. As soon as the NCI publicly shares an update on that trial's enrollment, we'll provide that information to you. While work in the clinics both in our own relapsed/refractory AML trial and in our collaborative NGI trial continues to progress. I'd also like to call attention to the preclinical data we presented at this year's first virtual annual meeting of the American Association of Cancer Research or AACR. At that meeting, we presented animal data that further supports the potential of our compounds in the treatment of AML, specifically co-targeting and inhibition of E-selectin, CXCR4 and FLT3 with GMI-1359 in combination with sorafenib was shown to protect normal hematopoiesis that is blood cell formation and more efficiently reduce leukemia burden compared to sorafenib alone. This resulted in extended survival in the patient-derived sub mutated AML model. Preclinical data also addressed opportunities in the setting of stem cell transplantation. Additionally, new information was presented on the potential of transcriptome profiling to identify those tumor types in patients most likely to benefit from targeted E-selectin inhibition the key mechanism of uproleselan and support of a biomarker-driven approach to treating patients with AML. Further analysis of E-selectin ligand glycosylation genes supports our belief in the prognostic importance of this gene expression signature in AML highlighting the potential use of uproleselan in AML and other hematologic malignancies. Let's now turn to rivipansel. We shared with you in our year-end call Pfizer's decision to return to GlycoMimetics its rights to rivipansel, our investigational drug per vaso-occlusive crisis or VOC and sickle cell disease. The transfer back to GlycoMimetics of these rights and licenses the IND for the clinical development program and the entire data set for the Phase 3 RESET trial is now complete. Over the past few months, we've been actively analyzing the Phase 3 data to determine if there is a potential path forward for this asset in sickle cell disease. We're committed not only to sharing the details of these analyses with the scientific community, but also to defining various potential options if any that could be available to us to carry rivipansel forward. A particular note in June we were able to share the first data glean from in-depth analysis of the RESET study including new data evaluated primary efficacy endpoint. Specifically, patients treated with rivipansel within approximately 26 hours of onset of vaso-occlusive crisis experienced statistically significant improvements in time to readiness for discharge compared to placebo. To remind you the Phase 3 RESET trial evaluated 345 patients who were experiencing acute VOC and required hospitalization for treatment. The patients ranged in age in six years to adult with a mean age of 22 years. The analysis showed that patients treated with rivipansel early in their acute painful episode experienced statistically significant improvement on the primary efficacy endpoint of the p-value of 0.03, a hazard ratio of 0.58 and median improvement compared to placebo of 56.3 hours. In other words, if treatment with rivipansel was initiated early patients receiving rivipansel were ready for discharge over two days earlier and than patients randomized to placebo. Since we're often asked, let me explain that the time to readiness for discharge endpoint was the endpoint specifically agreed to with the U.S. FDA. It reflects achievement of multiple clinical criteria assessing healthcare utilization and the patient's medical improvement prior to leaving a hospital including no longer needing IV opioids, IV hydration or other related treatments. Equally important, we observed that patients treated with rivipansel showed a deep rapid sustained and statistically significant reduction in soluble E-selectin an inflammatory biomarker of acute VOC. We believe this shows that rivipansel has its intended on target biological effect. The effects observed on soluble E-selectin in this trial provides valuable insight into the mechanism for the improvement in the clinical criteria for discharge from the hospital observed in those patients treated early in their acute VOC. Data from the RESET trial additionally demonstrate the favorable safety profile for rivipansel. Safety profile of rivipansel observed in this trial is evaluated in the population with pediatric, adolescents and adult patients bolsters the case for potential risk-benefit value proposition favoring rivipansel. We're exploring various options for rivipansel in this acute treatment setting for which there are no approved drugs and to our knowledge no drugs currently in late-stage development. As part of that process, we intend to discuss these data with the FDA to determine what if any next steps could be taken to carry this program forward in acute VOC. In the interim the supportive efficacy analysis on the new biomarker data will be presented at the September meeting of the Foundation for Sickle Cell Disease Research or FSCDR. FSCDR posted the abstracts on its website FSCDR.org in mid-June and they are available for your review. We've also completed additional analyses on the Phase III RESET trial that further support the potential benefit rivipansel may provide in acute VOC. We hope to publish and/or present these new findings at upcoming medical meetings. In addition to the rivipansel's poster an abstract containing data on GlycoMimetics more selective and highly-potent E-selectin antagonist GMI-1687 has been accepted for an oral presentation by FSCDR for their September meeting. The GMI-1687 abstract includes data from a preclinical model showing that drug candidates potential as a subcutaneously administered treatment for VOC. With rivipansel now back in our own hands, GMI-1687 provides an opportunity for a potential follow-on product with subcutaneous administration. Prior to Pfizer's return to the rivipansel rights, we were prohibited from pursuing this molecule in sickle cell disease. IND-enabling activities are now underway and it's our belief that GMI-1687 could provide an opportunity for patients to be treated at home as soon as the acute pain VOC begins. The opportunity to do so could potentially abort the event before vascular coagulation and potential organ damage occur. Since we now know that early targeted E-selectin intervention can have an impact on acute VOC this asset is uniquely suited to address that need. Needless to say, it's an exciting time at GlycoMimetics. We have two pivotal programs progressing well in AML. The rivipansel rights are returned and additional analyses are completed. We plan to engage in discussions with FDA on rivipansel and our portfolio of novel GlycoMimetics drugs includes multiple candidates that are truly differentiated. Now I'd like to turn to Brian to review both the quarter's financial results and to provide his perspective on our financial situation. Brian?

Thank you Rachel. As of June 30, 2020 GlycoMimetics had cash and cash equivalents of $149.8 million, as compared to $158.2 million as of December 31, 2019. The company's research and development expenses decreased to $9.9 million for the quarter ended June 30, 2020, as compared to $13.1 million for the second quarter of 2019. The company's research and development expenses decreased to $22.5 million for the six months ended June 30, 2020, as compared to $24.8 million for the same period in 2019. The decreases were primarily due to a decrease in manufacturing and formulation expenses resulting from lower raw material costs as the validation of manufacturing batches were purchased in the prior year. The decreases were offset in part by higher clinical expenses as a result of the increased enrollment in the ongoing global Phase 3 clinical trial of uproleselan in individuals of relapsed/refractory AML and the Phase 2/3 clinical trial being conducted by the National Cancer Institute. Contract research services consulting and other costs were lower in 2020, as research activities were affected at outside universities and travel by research and development personnel was largely eliminated due to the COVID-19 pandemic. Now turning to G&A expenses. General and administrative expenses increased to $4.2 million for the second quarter ended June 30, 2020, as compared to $3.8 million for the second quarter in 2019. General and administrative expenses for the six months ended June 30, 2020 increased to $8.7 million, as compared to $7.1 million in the same period in 2019. Personnel-related expenses increased due to additional general and administrative headcount, annual salary adjustments awarded in the first quarter of 2020 and retention bonuses. Patent legal fees consulting and other professional expenses, including direct and offices insurance premiums increased as compared to 2019. Other general and administrative expenses decreased for both the three and six months ended June 30, 2020 as compared to the same period in 2019 due to lower travel expenses as a result of the COVID-19 pandemic. I'll now turn the call back over to Rachel.

Thank you, Brian. Before opening up the call to your questions, I'd like to reiterate our confidence in the clinical pipeline of course in our specialized GlycoMimetics chemistry platform. Our chemistry insights have fueled several innovations that we believe have the potential to improve the standard of care in AML and may do the same in sickle cell disease and other diseases as well. Now operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Zegbeh Jallah with ROTH Capital Partners. Your line is open.

Good morning guys. Thanks for the very detail update. Just had a quick question actually about the preclinical efforts. I just wanted to get a sense of how you're prioritizing that especially amidst of COVID particularly since you mentioned now you're staggering employees into the lab. So how are you prioritizing preclinical efforts so what's the key focus there?

Sure. Hi Zeg. Good morning. Thanks for your question. So I want to answer that in two ways. We have as you know the preclinical assets that we've mentioned in the earnings call today and previously it's specifically 1687 and 1359, and both of those -- actually sorry, 1359 -- of course, in the clinic, but 1687 as the preclinical asset is currently in IND-enabling studies. What we're doing in the labs is actually work -- even earlier to that where we're focusing on some of the more basic chemistry opportunities that we have to potentially develop even additional molecules, where we're focusing on the galectins and we have compounds that target galectin three as well as compounds that target both galectin three and E-selectin. So we've got some very exciting novel compounds that we still haven't yet brought forward into advanced preclinical testing. So we're doing a lot of chemistry work and we're continuing to do evaluations in our assay group for activity of these and other molecules so it's that type of activity that we're doing in the labs.

Thank you. And then I just had a quick follow-up on rivipansel, just kind of wanted to know how you planning to disseminate some of the additional post-tax analysis that you plan to -- continue to do.

So in the normal course of our work we quickly present this data -- we submit this data and abstracts to scientific meetings and so we'll continue to do that as we have the opportunity as the meetings come up and as the abstracts are ready to be submitted.

So looking forward to hearing your next steps on rivipansel.

Sure. Sure. Thanks. So just to clarify I can't speak to specific meetings until -- obviously until abstracts are accepted. But in the normal course of things, we would prepare those abstracts and submit them as the meetings come up.

Perfect. Thank you.

Yes, thanks.

And our next question is from Ed White with H.C. Wainwright. Your line is open.

Hi, good morning, everyone.

Good morning.

So maybe Rachel just -- I don't know if I missed it but last quarter you had mentioned that GMI-1359 Phase I study was halted. Can you give us an update on that if that study's currently enrolling patients? And then also just for a time line update on both 1687 and rivipansel. Can you give us any thoughts on 1687 the timing of an IND filing? And then for rivipansel, any thoughts on when you are going to meet with the FDA? And once you meet with the FDA or schedule a meeting with the FDA, would you be alerting investors to that event? Thanks.

I'm sure. So with respect to 1359, yes that trial was put on hold in the early days of the pandemic and we do expect that we'll be able to start enrolling patients again soon, very soon in that study. Unlike our AML trial that -- that study is not specifically treating. It's not sit quite on top of the standard of care the way the AML trial is and so we don't see the acute need to treat those patients the way AML patients are currently need to be enrolled and treated acutely. In terms of the 1687 time line, as we were describing, under the agreement that we had with Pfizer, we actually were not able to develop any other of our compounds for sickle cell disease including 1687. Now that the rights are back, we are initiating the IND-enabling studies for 1687. And as we have a time line for that we will make that known but we have not specifically announced yet when we'll be starting or when we'll be anticipating filing the IND for that but we will let you know when we have a more tangible plan for that. And as far as rivipansel goes, we do intend to meet with the FDA. We've not -- we would not expect to initiate this -- to announce the specific date of an FDA meeting. But we would give any guidance that we can once we have information from the FDA. As you'd expect, those conversations are iterative they take place over time. So, we don't expect that, there's going to be a specific moment, where we're able to say -- now we have the meeting, we have a particular specific set of guidance but rather that over time we would expect that, we'd be able to have ongoing conversations with the agency that would clarify their guidance. Helen, would you like to add anything to that?

I think -- thank you, Rachel. I think this -- in terms of the FDA guidance for rivipansel, I fully agree and have nothing further to add. I would also just note for the 1359 trial. In 1359 this as Rachel said, this is a trial that is in outpatient setting. It's not in the acute treatment setting, but assessing for pharmacokinetics, pharmacodynamics we're looking for dosing information to inform readiness for a Phase 2 and that is an elective setting for patients. And so at the point that patients are being accepted back into the clinic, we would expect that that study would be enrolling. We are expecting that as Rachel said to leave the very experience yet.

Great. Thank you. And maybe just a question for Brian. Brian, can you give us any thoughts on cash runway? And then also, how much do you have left in the ATM facility? Thank you.

So current cash runway now gets us to about mid -- second of the middle of the second half of 2022. ATM has about $60 million left on that in the program.

Great. Thank you.

Thanks, Ed.

Thank you. And our next question is from Biren Amin with Jefferies. Your line is open.

Hi, guys. Thanks for taking my questions. Maybe I'll just focus on rivipansel from my Q&A. I guess, in terms of this analysis in addition to the time to administration of rivipansel from the onset of the VOC did you look at any other subgroup variables to see, if there were any differences or not across the primary and secondary end points?

Hi, Biren. Thanks for your question. I guess, we have but we have not disclosed anything beyond what's in the abstract that was made public in June. So we may have further comments about that going forward, but the data that was disclosed in the abstract just to the extent of the data disclosure at this point.

Got it. And then, I guess, Rachel how is the 26.4 hour cutoff established? Was that I guess a pre-specified time point that you looked at, or was that done post-hoc?

Let me defer that to Helen.

Thank you, Rachel. And good morning. So the 26.4 hours was not pre-specified, it was determined in further additional analyses after the initial reported top line data. It was however, the first quartile of the duration of time seen across the range of patients from onset of pain to initiation of study drugs. So it is a crisp interval to report in first quartile. It's not an arbitrary interval, and I would think that's an important point.

And as it relates to this cohort, did you also see any benefits on the secondary outcomes like time to discharge for example or IV opioid consumption?

Again, it was not disclosed in the abstract that's been made public so far.

Okay, great. Well, thanks for taking my question.

Sure.

Thank you. And our next question comes from the line of Stephen Willey with Stifel. Your line is open.

Yeah. Good morning. Thanks for taking the questions. Maybe just to piggyback a little bit of Baron's last question, have you guys looked at all at the prior Phase 2 study to see just whether or not patients receiving treatment within short order of experience in VOC showed a similar type of benefit as was described in the retrospective analysis?

Yeah. So Steve that's a great question, and I think that's the kind of analysis that the company is in process of performing, but we have not disclosed anything further than what was in that abstract.

Okay. And then just given that you're going to -- or given that you're potentially narrowing the window of treatment opportunity here, do you think that you could maximize the commercial opportunity with a drug like rivipansel requiring acute care administration or do you think that this opportunity then kind of really best positions itself for something like 1687?

Well, I think the opportunity in rivipansel could be substantial, because remember that the current guidance, it's given to sickle cell patients is that they stay home and delay seeking care in the hospital treating themselves with oral pain relief as long as they possibly can. So, it could represent a change in the treatment paradigm, a change in the way people think about giving guidance to sickle cell patients, if they were to be encouraged to take treatment more quickly. And in that context then, I think could potentially have a drug like rivipansel delivered in the outpatient setting earlier in crisis. So, it's not that the drug would be limited to, let's say, a quarter of patients but rather one would encourage any patient suffering from the VOC to go in -- to seek treatment earlier. So, I do think there's an opportunity potentially if this were to go through the various stages of evaluation that we've described the potential for rivipansel to in fact address an important need in the acute setting. And Helen, maybe you could comment more on that?

Yes. I think one thing that is interesting is the first quartile reported the 26.4 hours is in fact a day after onset of pain. We would expect that in the real-world setting patients would be coming in at the point that they need to have their pain treated, we would expect also perhaps in the clinical trial setting that it might take a little bit longer to initiate treatment after presentation to the hospital, because of the processes that need to be administered for participation in the clinical trial. So, in the real-world setting, I think there is a very real potential for treatment for patients to be treated relatively early and that provides an opportunity for treatment no matter what the agent. So whether it's IV with rivipansel whether it's subcutaneous 1687, I think the opportunity to give patients an effective agent early in the course of the VOC is there and it is similar potential regardless of the agent. Our opportunity with rivipansel is to assess whether there is a potential for rivipansel to be used in this way and that's a discussion that we refer back to the discussion that we intend to have with FDA.

Great. Thanks a lot for taking my questions.

Sure. Thank you, Steve.

[Operator Instructions] Our next question comes from the line of Boris Peaker with Cowen. Your line is open.

Great. Thanks. Good morning. This is Cynthia on for Boris. Just curious regarding enrollment for uproleselan, can you provide a little bit of context on enrollment dynamics between Q1 and Q2? And do you see an increase in enrollment or just a return to base line? And finally, I appreciate that no one really knows but are you anticipating a slowdown in the fall?

I'm sorry, I didn't understand your question. Were you saying comparing Q1 to Q2?

Correct. The enrollment dynamics correct.

Yes. Helen could you speak to that?

Yes, sure. So we have seen very high interest for rolling on this trial with the investigators and the sites involved in the trial. We have seen that they have identified uproleselan and the Phase 3 trial is something they want to offer to the patients and there's been a risk uptake in terms of sites starting on the trial and then enrolling patients once they are active on the trial. That has not changed over the course of the pandemic and the differences between Q1 and Q2. So the interest there that a deliberate offering trial to patients when the sensor is open to running a clinical trial and the only thing that has changed really is the a number of hospitals that had limited their clinical trial participation at point of the highest pace of patients coming in -- in their own hospital response to the pandemic. I would reiterate that we have a global clinical trial with the uproleselan Phase 3 and that gives us the opportunity to have centers open and actively enrolling across the world. That means that any impact of the pandemic on an individual hospital's ability to continued regular clinical trial activities is limited to that hospital. And when there's a region that's more affected there are the regions that have been less affected and that has allowed us to maintain a fairly continuous, sort of, ongoing enrollment across the globe with individual hospitals responding to the pandemic locally as they need to. So I think what we're seeing and reporting to you now is that the enrollment has continued. There's been some briskness to that enrollment. That's allowed us to keep our guidance for closure of the trial to be the same.

All right. Great. Thank you for taking our questions.

Thank you. And I'm not showing any further questions. I'll now turn the call back over to Rachel King for closing remarks.

Great. Thanks very much. Thank you operator and thank you everyone for your questions and for taking the time to listen to our call.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.