Crescent Biopharma, Inc. (CBIO) Q2 2021 Earnings Report, Transcript and Summary

Good morning, and thank you all for joining GlycoMimetics call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to turn the call over to Shari Annes of Investor Relation group at GlycoMimetics. Please go ahead.

Good morning. Today, we will review our accomplishments and financial results for the period ended June 30th, 2021. We'll also update you on recent achievements. 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 for 30 days in the Investor Relations section of the company's website. Joining me on the call today from GlycoMimetics are Rachel King, Chief Executive Officer; Dr. Eric Feldman, Chief Medical Officer; and Brian Hahn, Chief Financial Officer. Our new CEO, Harout Semerjian, is also on the call with us this morning. We'll start today's call with comments from Rachel and Eric. Brian will follow Rachel to provide an overview of the company's financial position, and Harout will add some initial comments. We'll then open the call to Q&A. 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 our other pipeline programs, along with our operations and cash position. 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 GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics website. I'll now turn the call over to Rachel.

Thank you, Shari. As we've said in prior calls, our primary operational focus is on advancing three uproleselan administration programs in AML; our company-sponsored Phase 3 trial in relapsed/refractory AML, the National Cancer Institute's trial in newly diagnosed patients, and the registration study in China being conducted by our partner, Apollomics. I'm pleased to report today that recruitment rates in both our own Phase 3 and the National Cancer Institute's Phase 2 portion of its Phase 2-3 trial continue to support an expectation that enrollment will be completed by the end of this year. During the quarter and just after it closed, we announced the initiation of three new investigator-sponsored trials, or ISTs, that expand the breadth of our uproleselan clinical research activities. There are now six trials evaluating uproleselan, including three registration trials and three ISTs. The support of clinicians who are enrolling patients in our global studies and now the new ISTs has made it possible to broaden the scope of our uproleselan clinical research to address unmet needs of patients with hematologic malignancies. Leading clinicians, academic centers, collaborative networks and regulatory agencies are working with us, as uproleselan continues to garner significant attention and interest. The breakthrough therapy designations granted by both the FDA and the Chinese health authority, we believe, have added momentum for this program worldwide. To reiterate, we're confirming that we anticipate completion of enrollment of all 380 patients in our company sponsored registration trial by the end of this year. As you know, the readout on the primary endpoint is event driven. As we approach completion of enrollment and as we acquire additional data on events to date, we plan to give guidance as to timing of top line data. In parallel, the NCI sponsored Phase 2 registration trial that's enrolling uproleselan in newly diagnosed older adults with AML also continues to accrue participants at a steady pace. Based on the public information provided by NCI to date, we continue to anticipate that the trial will complete enrollment of the Phase 2 portion by year-end, supporting a subsequent interim analysis of event-free survival, or EFS, as the trial -- in the trial's initial 262 patients. To be clear, if the NCI alliance's interim analysis is positive, the data will be transferred to GlycoMimetics to support our regulatory filings. Together, the GlycoMimetics and NCI sponsored programs will constitute a large data set of over 500 AML patients. We would anticipate filing for approval for treatment of patients in both settings should both trials hit their primary endpoints. Apollomics last quarter announced that it had dosed the first patient in Greater China in a Phase 1 clinical trial for treatment of adults with relapsed or refractory AML. This study is a bridging study that's expected to allow Apollomics to expeditiously advance development to Phase 2 registration trial in Greater China. Beyond working with the NCI and Apollomics, we've now announced three new trials in which uproleselan is being paired with a variety of chemotherapy regimens and other AML and multiple myeloma therapies. These investigator-sponsored trials complement our registration trials and should begin to produce data in 2022. They provide us three additional perspectives and could well provide a basis for expanding use of uproleselan across the AML spectrum and potentially beyond AML as well. I'd like to add that all three of the institutions sponsoring these trials have collaborated with us in the past and reflect the growing enthusiasm for upro that I mentioned before. I'd now like to turn to Dr. Eric Feldman, our Chief Medical Officer, to describe each of these in a bit more detail. Eric?

Thank you, Rachel. I'd like to begin by providing context for the three investigator-sponsored trials. We're often asked why ISTs are important. First and foremost, these trials provide GlycoMimetics with an opportunity to extend the potential use of uproleselan in key areas of unmet need. Investigators see in real-time both how newly approved therapeutics are working and how even advances often leave continued opportunities for improving patient outcomes. Our Phase 3 in relapsed/refractory AML and the NCI's trial in newly diagnosed AML addressed those patients undergoing intensive chemotherapies. As you know, with increasing frequency, older patients with AML and those with significant comorbidities are alternatively treated with less intensive therapeutic regimens, such as the combination of venetoclax and the hypomethylating agent. Despite the progress seen with the venetoclax HMA regimen and other molecularly targeted agents, investigators are seeing limitations in terms of the depth and durability of responses. In particular, patients with adverse risk features, including patients with secondary AML, and in those with specific poor risk biological profiles are not achieving high MRD negative responses, leading to early relapses. This is where uproleselan may have an important role and is the focus of our two ISTs in additional high unmet need frontline AML populations. The first IST in AML is being conducted at the University of California Davis and was announced in July. This trial is especially exciting and that we anticipate that it will shed light on what we believe is an important opportunity to further improve outcomes by combining our drug with the venetoclax HMA regimen. Although, uptake of venetoclax HMA in the frontline unfit AML setting has been strong and while 60% to 70% of patients achieve a response, the responses are incomplete in approximately half the patients. As discussed earlier, only a minority of patients achieve an MRD negative response, reducing durability and leading to relapse. A strong scientific rationale for adding upro was demonstrated in preclinical studies done at the MD Anderson Cancer Center and reported at last year's ASH meeting. This research showed that the addition of uproleselan completely restored sensitivity in the xenograft model using cells from a patient that was resistant to venetoclax and hypomethylating agent. Additional preclinical data has also demonstrated that prior exposure to HMAs increases the expression of E-selectin ligand on the surface of blast cells, making them more resistant to chemotherapy and more likely to benefit from treatment with the addition of uproleselan. The UC Davis IST will be the first clinical trial to potentially generate human data supporting our preclinical findings. Importantly, given the safety profile we have seen so far in our Phase 1-2 data, we believe that uproleselan may be one of the few drugs that in the chemo combinations actually improves outcomes without adding incremental toxicity. Among the study endpoints will be the critical evaluation of the improvement in patients achieving a full CR and an MRD negative CR compared to rates reported with azacitidine plus venetoclax alone in the VIALE-A registration trial. In late July, we also announced a second IST in AML, a Phase 1b-2 study evaluating uproleselan added to cladribine plus low-dose cytarabine in patients with treated secondary AML. The principal investigator is Tapan Kadia, an Associate Professor of Leukemia at The University of Texas MD Anderson Cancer Center. Patients with treated secondary AML, meaning those who received HMAs as part of treatment for a prior myelodysplastic syndrome have an extremely poor prognosis with current therapies. This is a growing population of patients as the use of HMAs continues to increase in MDS. As noted previously, our preclinical and clinical research supports the potential for patients previously exposed to HMAs to benefit from the addition of uproleselan to current treatment regimens. If the new study demonstrates that targeting E-selectin with uproleselan could help to overcome resistance to other therapies, this would be a significant achievement that underscores the broad potential of our drug candidate. Specifically, this trial is designed to demonstrate the safety and tolerability of the combination therapy as well as to evaluate whether upro can increase the rate of response in this highly resistant group of patients. The last IST I will discuss, which we announced in April, is being conducted at Washington University in St. Louis. Dr. Keith Stockerl-Goldstein, Professor of Medicine at the Wash U School of Medicine, is the principal investigator. This is a randomized Phase 2 study evaluating uproleselan as a prophylactic agent to reduce GI toxicities associated with high-dose melphalan in autologous hematopoietic stem-cell transplantation for multiple myeloma. GI side effects are the dose-limiting toxicities of high-dose melphalan in auto transplant, and our preclinical data have demonstrated a protective effect of uproleselan against mucosal damage. In addition, our Phase 2 trial demonstrated the potential of our drug to mitigate severe mucositis in relapsed and refractory AML patients undergoing intensive chemotherapy. Hence, we are optimistic about what we may learn. The Wash U clinicians will be the first to look closely at the potential of uproleselan to attenuate GI toxicities in multiple myeloma patients undergoing transplant. If this placebo controlled study demonstrates [technical difficulty] …

It seems we've lost Dr. Feldman, so I'll pick up the call. As we think about the opportunities before us with our three ongoing registration trials and these exciting ISTs, we believe the enthusiasm of clinicians for uproleselan reflects their shared vision for upro's potential as a foundational treatment in AML, as well as its potential in other hematologic malignancies. The broad clinical program of company-sponsored, NCI-sponsored and now investigator-sponsored trials supports our vision, namely to establish upro as a foundational therapy across the entire spectrum of AML. Simply put, uproleselan targets the bone-marrow microenvironment by inhibiting pathways that protect cancer cells from the effects of chemotherapy. This is a novel approach that we believe could be broadly applicable across the spectrum and range of therapies used for relapsed/refractory or newly diagnosed patients. Before completing the summary of our clinical work, I'd like to remind you that during the second quarter at the meeting of the American Association for Cancer Research, or AACR, we presented a poster on our phase -- on our ongoing Phase 1b study of GMI-1359, a dual antagonist of E-selectin and CXCR4. This study was designed as a proof-of-concept study evaluating biomarkers of cell mobilization. Our Duke University collaborators reported on biological activity as demonstrated by cell mobilization, redistribution of immune subset profiles and changes in other pharmacodynamic markers in the initial two patients treated in the ongoing study in patients with advanced breast cancer with bone metastases. The initial clinical data support the dual functionality of the compound and the potential of GMI-1359 to enhance responses to chemo and immune therapies. This provides us with confidence that GMI-1359, by potentially disrupting the tumor microenvironment, could be active across both liquid and solid tumors. That trial is continuing to enroll patients. And based on findings so far, we're evaluating indications for moving the program forward in the clinic. In the sickle cell setting, based on input from the FDA with respect to rivipansel, as well as feedback from KOLs, we've previously reported to you we are focusing on the development of GMI-1687. We have initiated IND-enabling activities with treatment of acute vaso-occlusive crisis as a potential lead indication. This work continues toward a goal of initiation of Phase 1 in the first half of 2022. We believe that GMI-1687 may be ideally suited for this indication as it would enable patients to potentially self-administered treatment early in their crisis and reverse the underlying inflammatory cascade that's mediated by E-selectin. Our earlier stage research efforts continue to progress, particularly in the galectin field. Also at AACR, our research team presented new evidence on the effects of one of our galectin-3 antagonists in a pancreatic cancer model. The potency and selectivity of our compounds distinguishes us from competitive approaches and we intend to rollout additional data as we move toward our goal of selecting a lead candidate for clinical development. Brian will now comment on our financial results.

Thank you, Rachel. As of June 30th, 2021, GlycoMimetics had cash and cash equivalents of $118.9 million as compared to $137 million as of December 31st, 2020. Research and development expenses increased to $10.2 million for the quarter ended June 30th, 2021, as compared to $9.9 million for the quarter ended June 30th, 2020. This increase was primarily due to an increase in clinical trial costs in our ongoing global Phase 3 clinical trial of uproleselan in individuals with relapsed/refractory AML. General and administrative expenses were $4.2 million for the second quarter ended June 30th, 2021 and 2020. I'd now like to turn the call back to Rachel.

Thank you, Brian. Before I open the lines to Q&A, I'd like to leave you with two takeaways. First, that we believe we are now less than six months from completing enrollment of our pivotal trial with uproleselan in relapsed/refractory AML patients. This remains an area with high unmet need to improve clinical outcomes. Second, we've delivered on our promise to bring you news of newly initiated trials with independent investigators. We believe this speaks to the broad enthusiasm around the potential of uproleselan, and it also shows how we are laying a strong foundation for uproleselan in the hematologic arena. All of this speaks to the value of our glycochemistry platform as we look forward to being in a position to share data with you in the future. I'd now like to comment on the other announcement we made yesterday that I'll be retiring from my role as CEO at GlycoMimetics and that Harout Semerjian will be taking over for me. Let me begin by sharing some personal reflections. As many of you know, I co-founded this company together with John Magnani, our Chief Scientific Officer, 18 years ago. I feel very proud of what our team here at GlycoMimetics has accomplished together. We have progressed the company from its early days as a venture-backed startup, through its initial public offering and multiple secondary offerings, through strategic partnerships and the advancement into late-stage development of two clinical candidates, each of which was discovered in our own labs. Our platform has been very productive. And we now have a pipeline of differentiated and exciting drug candidates that I hope and believe will make a difference in the lives of patients. I've loved this job. I've often reflected to friends and family how grateful I have felt that most of the days in my career, I've come to work looking forward to what the day held. And at the end of the day, though sometimes tired, I have felt gratified by the opportunity to do such deeply meaningful work with colleagues I both like and respect. So why leave now? As I'm sure many of you will appreciate, demands on my personal life as well as my personal priorities have changed over the years. Our children are grown, but I now find myself spending more time addressing the needs of an aging parent who requires increasing care. In addition, my husband and I are new grandparents, and we see increased opportunities for time together with each other, as well as with our growing and extended family. This coincides with the time at GlycoMimetics when if our Phase 3 trial is successful, the company looks to the potential to commercialize our first drug candidate. At such a time, it's exciting to bring in a CEO of the caliber of Harout Semerjian. Harout is an experienced oncology executive who is ideally positioned to lead the company going forward. Harout brings commercialization expertise that is spot on for what we need at the company in this phase. He has overseen several successful hematology/oncology product launches, including preparation for the launch of midostaurin in AML. During his 16-year tenure at Novartis, he held both strategic and operational roles of hematology and oncology. After that, at Ipsen, he served as EVP and Chief Commercial Officer, where he was accountable for worldwide commercialization and portfolio strategy. Most recently, he served as CEO of Immunomedics before its sale to Gilead Sciences. Harout clearly brings the background and leadership experience that will no doubt serve us well. While it's hard for me to leave a job that I've loved, I know that the time is right in my personal life to make this change. And I'm confident that Harout brings just what the company needs. Harout will be taking the reins as CEO tomorrow so he'll not be taking questions today. But I do know that he looks forward to engaging with you not only in future earnings calls, but also at conferences and in one-on-ones. Today, I'd like to officially welcome him and offer him the chance to share some of his thoughts as he comes onboard. Harout?

Thank you, Rachel. Following in your footsteps is an honor, and I might add, your accomplishments have set a high bar for your successor. I believe GlycoMimetics has exciting opportunities ahead. Uproleselan is a differentiated drug candidate already recognized with Breakthrough Therapy Designations from both the FDA and the Chinese regulatory authority. I'm confident based on both preclinical and clinical evidence that this drug candidate has potential for significant impact across the spectrum of AML. Enthusiasm of independent investigators, as well as the clinicians participating in our registration trials, provides a foundation for a successful commercialization plan, should the readout and regulatory interactions prove positive. While there are just a few glycobiology based therapeutics on the market today, the field of glycobiology is rapidly advancing and ripe with opportunity. The science and technical expertise residing in GlycoMimetics underlines my confidence in the productivity of the platform. Across the pipeline, I'm seeing novel and potentially game-changing therapies. I look forward to working with the outstanding team at GlycoMimetics, as we strive to make a difference in the lives of patients with cancer and other diseases. And, of course, while it's early days to say that at least, I look forward to the opportunity to transition this company to a new focus on commercialization of drugs that will change patients' lives. Back to you, Rachel.

Thank you, Harout, and I want to extend to you my warmest welcome. I know GlycoMimetics will be in good hands under your leadership. Operator, will you please open the lines for our Q&A session.

[Operator Instructions] Your first question comes from the line of Ed White from H.C. Wainwright. Your line is open.

Good morning. Thanks for taking my questions. So, maybe start off with a question for Brian. As far as SG&A and R&D go, they've been pretty steady over the last few quarters. I'm just wondering if the change in management will lead to any kind of significant onetime charges in the third quarter in SG&A. And then, just on overall, thinking about SG&A and R&D going forward, how should we be thinking about the cash runway?

Thanks, Ed. As far as one-time impact in Q3, we will see a slight increase in SG&A, but it will be a non-cash expense. Other than that, we're still on track with the same forecast we've given in previous quarters. So, current cash, with current commitments gets us through Q1 of 2023.

Okay. Great. Thank you, Brian. And then, a couple of questions maybe for Rachel. I know it's tough to put -- to look at the timing of data from ISTs, as they're out of your control. But how should we be thinking about how this data is released? Will this data come at medical conferences? Will you be putting them out in a press release? Or how should we be thinking about how we're going to find out about that data?

So, of course, as investigator-sponsored trials, the investigators will be leading the release of the data. But we do anticipate that, that would generally come in the form of presentations at medical conferences. And obviously, as data is released at medical conferences, that would be paired with press releases from the company. So, we'd expect those to be coordinated.

Okay. Thank you. And then, two other pipeline questions. When can we expect to see the next 1359 data? And on 1687, just what are the final hurdles for filing the IND going forward? And how confident are you in that timing of the filing of the IND?

Sure. So, in terms of 1359, I would expect that perhaps at the end of the year, we might see additional patients. The Duke site is continuing to enroll. As we previously reported that was a trial that's been affected by COVID, since the patients are needing to come in for extra visits to the hospital in the context of that study. But I would expect that we may have additional data toward the end of the year. As far as 1687 is concerned, we're well on track with all of the standard things that are normally done for IND-enabling studies, making nice progress with toxicology, manufacturing, et cetera. And we're well on track to initiate enrollment of a Phase 1 study in the first half. I would add that we're particularly excited about that program given how the program was -- generally, we believe, de-risked by the data from the rivipansel trial with respect to both the value of targeting E-selectin in vaso-occlusive crisis and the value of getting onboard early, which -- both of which we think 1687 is well-positioned to achieve.

Great. Thanks Rachel. And it's been a real pleasure working with you over the last few years and just want to send you all my best for your future.

Thank you. Thanks a lot, Ed, and a pleasure working with you too. And as a reminder, I will be staying on the Board and really look forward to doing all I can to continue to help GlycoMimetics in any way that I can.

That’s great. Thank you.

Yeah. Thanks.

[Operator Instructions] Your next question comes from the line of Roger Song from Jefferies. Your line is open.

Great. Thank you for taking a question. Just a quick one also related to those IST data release. Since you're -- of course, we know the registrational study, that's event-driven, and potentially those IST data will be released earlier than the pivotal study data. Just curious to hear your thoughts. Maybe, Rachel or Eric, you can provide some insights regarding the read-through from those IST data to your registrational study data.

Sure. So, I'll make a couple of general comments about those, the -- as far as the data release. The two AML studies are both open-label studies, and so that does give an opportunity to follow them on an ongoing basis until the point where it's felt that the dataset is meaningful enough to be released. The third study, the one that's being conducted in myeloma patients undergoing transplant, that is a randomized controlled trial. So, in that case, the data release would wait until the study is fully enrolled and the blind can be broken. As far as read-through, I think I would simply comment that these are opportunities to take different looks at how the drug could work in other populations of AML patients. And I think both of them -- or both of the AML ISTs provide really excellent opportunity to potentially expand the value of that asset more broadly than typically the registration trials might allow us to do. And both of them follow strongly from the excellent scientific rationale that is -- has been demonstrated through the preclinical data. So, we think that they provide an important strategic opportunity to build on that scientific rationale and to expand the potential use of uproleselan.

Got it. Thank you.

Sure.

Maybe, yeah, another quick one for the enrollment for the registrational study. So, you kind of maintained the guidance by the end of this year, but we also know of COVID, kind of Delta variant or that kind of different kind of dynamic. So, just curious, have you taken into account this new kind of COVID situation? Also, we know lots of the AML patients, they are on inpatient setting. How does that impact your kind of readout, if at all?

Yeah. So, just looking back on the past on that trial, we did have a slowdown when COVID first hit last year for about a month or two. But after that time, the study enrollment rebounded, and since then, we've had very consistent momentum of enrollment. We're fortunate that we've been enrolling that study in multiple geographies. As a reminder, we're treating patients in Australia, in Europe and in North America. So, we've been able to mitigate some of that risk by treating patients in different geographies. And we've had very consistent momentum of enrollment since the middle of last year. So, now where we are close to completion of enrollment, we do expect and -- certainly, we hope and expect that we'll be able to complete by the end of the year. But we have not seen a drop-off in momentum in the past couple of months. As you pointed out yourself, the patients are inpatient. The other thing that's important about the trial that we think has benefited enrollment in the -- even in the COVID setting is that because patients have acute leukemia, the acute treatments can't be delayed and uproleselan is added on top of the normal standard of care. So, the patient is not asked to have substantive additional interactions with the healthcare system through enrollment with this study. So, we think that those factors have supported the ongoing momentum. And to date, we've not seen a reduction in that momentum as a result of the Delta variant.

Got it. Thank you. Also, I'll add my kind of the sentiment on your retirement and really having pleasure working with you in the past. Thank you.

Thank you. Thanks, Roger.

There are no further questions at this time. Ms. Rachel, please continue.

Thank you. So, to conclude, I want to say that I am deeply grateful for my time at GlycoMimetics and for the opportunity to work with the talented and dedicated people here. I know that Harout and the rest of the team here will continue to make great progress during this exciting time for GlycoMimetics. Very much look forward to supporting him and the company however I can as a member of the Board and as an advisor during the transition. And thank you all for joining us today.

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