Plus Therapeutics, Inc. (PSTV) Q2 2021 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Second Quarter 2021 Results Call. At this time, all participants have been placed in a listen-only mode, and floor will be open for your questions following the presentation. [Operator Instructions] Before we begin, we want to advice 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 and including the risks and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual reports on Form 10-K and quarterly reports 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.

Great. Thank you very much, Catherine. Good afternoon, everyone, and thank you once again for taking the time to join us today as we provide an overview of recent business highlights and discuss our 2021 second quarter financial results. Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer. But before Andrew provides a summary of our financial performance, I would like to provide an update on the company's business activities since our last call. Last quarter, I provided a detailed overview of the company and I'll refer you back to that description. But in summary, for those new to the company, Plus Therapeutics is a clinical-stage pharmaceutical company developing innovative, targeted radio therapeutics for rare and difficult-to-treat cancers. Our lead drug is, RNL, Rhenium NanoLiposome. This is a proprietary liposomal encapsulated radionuclide that is delivered local regionally via targeted 3-dimensional convection-enhanced delivery directly to the tumor. The active agent is rhenium-186 isotope, which is a dual energy emitter releasing both cancer-killing beta particles, which are high-energy electrons and gamma particles, which are useful for imaging and dosimetry. Rhenium is a unique isotope, in part, because of its energy profile. Its beta energy has a short path link, which gives one precision, allow dose rate which provides a margin of safety and a high energy density, which is particularly toxic for highly mitotic cells, which can overwhelm the DNA repair mechanism that can also contribute to radio resistance. Thus far, we've shown that we can successfully deliver 20 times the radiation dose one the radiation dose one can deliver with traditional external beam irradiation. Our initial indication for RNL is recurrent glioblastoma, which affects approximately 12,000 to 13,000 patients annually in the U.S. and about the same number of patients in the EU. It is the most common and lethal form of brain cancer and the treatment of this devastating disease remains a significant medical challenge. Published studies indicate that external beam radiation provides the best incremental improvement in survival of all therapies currently used for glioblastoma, and it remains an essential component of multimodal therapy for both glioblastoma and, in fact, many other cancers. In theory, glioblastoma and, frankly, any tumor can be fundamentally controlled if a sufficient dose of radiation can be delivered to a particular tumor. RNL is currently under evaluation in the U.S. ReSPECT GBM trial, which is a dual Phase I and II multicenter sequential cohort, open label volume and dose escalation study of the safety, tolerability and distribution of 186 RNL. The trial is currently funded to a significant degree of a U.S. National Cancer Institute. In short, the trial is progressing nicely, and we have now moved into an 8th dosing cohort. As a reminder, in November 2020 at the Society for Neuro-Oncology Annual Meeting, we provided an interim analysis of the first 5 dosing cohorts in 15 patients. And in March of 2021 in our BioEurope corporate presentation, we updated those interim results to include Cohort 6, and that data can be found on our website. Subsequently following the successful completion of cohort 6 and without any dose-limiting toxicities, the Data Safety and Monitoring Board recommended enrolling an additional cohort of 3 patients or a cohort 7 at the same volume and radiation dose, but with a higher maximum convection flow rate specifically at 20 microliters per minute. Then in June of this year, we announced that through cohort 7, no dose-limiting toxicities have been observed and the DSMB recommended proceeding to the next dosing cohort, representing a 40% increase in both volume and radiation dose. So specifically, where we are now at, we're introducing a volume of 12.3 milliliters, a radiation dose of 31.2 millicuries, and we're staying at the same maximum flow rate of 20 microliters per minute. As announced to same, the first patient in the additional cohort has been successfully treated. And I think it might be helpful at this point in the product development cycle to provide a summary of what we have learned thus far in the ReSPECT GBM trial and then consider next steps. So specifically, what we've learned is that hemispheric or one-sided super tentorial, which is into the upper part of the brain, highly targeted and continuously infused or conducted volumes of up to 12.3 milliliters and 31.2 millicuries of radiation have been well tolerated thus far. Up to 4 catheters can be successfully placed for delivery to best accommodate a variety of tumor sizes and geometries. Tumors up to approximately 25 ccs and with various morphologies can be treated. RNL seems thus far to be safe despite delivering up to 740 grade of absorbed radiation to the tumor which, by the way, is 20 times the radiation typically delivered by external beam radiation therapy in the recurrent setting. Patients receiving prior bevacizumab did not convict as well as bev-naive patients. And in the past, we elected to focus the current trial only on bev-naive patients. Furthermore, because of the very substantial doses of radiation administered when the tumor dies, we found that it induces local swelling or edema which we can observe on MRI scans, which is so-called pseudoprogression, which is very obvious to see on imaging. So traditional imaging analysis looking at response criteria as suboptimal and have lesser value in this particular clinical situation. Although, the Phase I is not designed nor powered for efficacy, today, 8 of 22 treated patients are still alive which is obviously a good thing. But because many of those patients have been treated relatively recently and at the higher dosing cohorts and volume cohorts, and understandably makes efficacy determinations today a challenging enterprise. As to the issue of overall survival, what I can say is that we have observed that increases in both conducted volumes and radiation dosage seem to correlate with better tumor coverage in higher tumor absorbed doses, and this in turn seems to correlate with overall survival. As I mentioned, 8 of 22 patients remain alive and 3 of 22 patients have survived to 30 months or more, where average survival for current GBM with standard of care is only about 8 to 10 months. This present cohort should complete enrollment this year, and later this year, we intend to provide a comprehensive update with safety and efficacy data as of that time point, including our updated proposed next steps for the clinical investigation of RNL in recurrent GBM. As mentioned last quarter, the go-forward clinical development plan depends in part on the observed safety outcomes in the present data -- present dosing cohort and the involving efficacy data readout of the data set as a whole. There is the potential to further dose escalate following the current dose cohort dosing cohort as a protocol provides for another 33% increase in volume and radiation dose following the current cohort 8. Besides dose escalation or perhaps in conjunction with dose escalation, we could potentially implement further changes to the delivery parameters as we have done previously. It's also possible that the company may deem the present dose and delivery parameters to be acceptable to move forward and we could expand the enrollment at this present dose to generate further efficacy data to better inform and power a follow-on Phase II registrational trial. As mentioned previously, CMC activities and the availability of cGMP investigational drug product is the primary hard gating item for a Phase II registrational trial. Therefore, CMC activities are a top priority for us. Our team continues to make excellent progress towards submission and is simultaneously laying the groundwork for commercial readiness. The team has been focused on cGMP drug product development, test method validation, material characterization and supply chain planning. To that end, we have formally engaged with key suppliers for both critical materials and contract development work. Longer term, manufacturing relationships will be key to commercial success and our team continues to make nice progress in developing those strategic partnerships. For example, Pure Mall, Invicro and Eurofins are to just name a few and others are forthcoming. So we remain on track without delay to have the key CMC activities completed by year-end and stability testing complete thereafter such that we should be ready with cGMP product by mid-2022. Switching gears a bit. Last quarter, we noted that 2 pre-IND meetings have been requested from the FDA to discuss expanding the clinical indications for RNL. Both are complete and based on the positive FDA feedback, we intend to move forward in filing INDs for both indications. The first is left the meningiomatosis, an increasingly common secondary cancer complication occurring as a result of increasing overall survival rates that we are seeing for a variety of primary solid and hematologic tumors. LM affects over about 100,000 patients per year in the U.S., and patients can present with a broad range of signs and symptoms due to simultaneous involvement in multiple areas of the craniospinal axis. The most common tumors giving rise to LM are breast cancer, lung cancer, melanoma, gastrointestinal malignancies and in cancers of unknown primary. There are no great current treatment options available and the goals of treatment and patients have been limited primarily to stabilizing or improving neurologic function, elating symptoms and improving quality of life. Median survival in this patient population is approximately ingeniously about 4 to 6 months if treated. In the planned forthcoming trial, we intend to treat with RNL via an indwelling subcutaneous reservoir called in Ommaya reservoir that sits under the skin and communicates directly with the ventricle in the leptomeningeal or cerebral spinal fluid space. And this is commonly placed in these patients. It makes delivery a much more straightforward issue than we have in our current GBM trial. The trial will be an open-label, multisite dose escalation trial evaluating feasibility, safety dose and potential efficacy. We plan to submit the IND for ReSPECT LM trial by Q3, perhaps as latest Q4 2021 and commence enrollment as soon as possible thereafter. The principal investigator will be Dr. Andrew Brenner, who's Professor of Research at the Division of Hematology and Medical Oncology and clinical investigator at the Institute for the Institute for Drug Development at the Mays Cancer Center at University of Texas, San Antonio and MD Cancer Center. He's also the co-leader of experimental and developmental therapeutics program there. Additionally, we believe there is an opportunity to help patients with pediatric brain cancer with RNL. And based on our pre-IND meeting feedback we intend to submit an IND later this year or in early 2022 to investigate the use of RNL on kids with brain cancer. The details of that trial will be finalized later in 2021. The PI for that trial will be Dr. Ashley Plant, the Co-Car Research Scholar and attending Physician in Neuro-Oncology and Assistant Professor of Pediatrics at the LEAD trial site, which is a Lurie Children's Hospital of Chicago at the Northwestern University School of Medicine. Finally, I'd like to point out that we have been working diligently for some months to take our corporate communications to a new level. That includes in all areas, including public relations, investor relations and scientific and clinical communications. You'll see the fruit of that work over the remainder of the year. But today, we -- you can find the first part of that, which is our clinical trial microsite for the ReSPECT trials that can be found at respecttrials.com. The front end is intended to educate and illuminate potential patients and family members with GBM. On the back end that you won't see is a sophisticated compliance patient referral network to help match our clinical trials with patients that may be good candidates and facilitate that process of connecting them with a clinical trial site and much more is to come in that regard. So at this point, I'll stop and turn the call over to my colleague, Andrew, for a brief review of the first quarter financial results. Andrew?

Thank you, Marc, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the second quarter ended June 30, 2021. As of June 30, 2021, cash and cash equivalents were $17.2 million compared to $8.3 million as of December 31, 2020. Cash used in operations for the 6 months of 2021 was approximately $5.4 million compared to $2.9 million in 2020. This difference is mainly due to timing differences and when certain accounts payable and accrued expenses were paid in 2020, in particular, relating to the legacy government contract together with increased R&D spend. There were no revenues in the 6 months of 2021 as compared to approximately 303,000 in the same period last year. This decrease was due to the closeout of the legacy government contract as previously disclosed. Research and development expenses were $2.2 million for the first 6 months of 2021 as compared to $1.3 million for 2020. The increase was anticipated and reflects additional RNL CMC development costs to obtain cGMP drug product. G&A expense was $2.8 million for the first 6 months of 2021 and as compared to $3 million for 2020. The decrease was primarily driven by a reduction due to tight management of professional and other fees. Interest expense decreased for the 6 months of 2021 and to approximately $476,000 from approximately $601,000 for the same period in 2020, reflecting the paydown of debt principal to $4.3 million in 2020. Net loss for the 6 months to June 2021 was $5.5 million as compared to a net loss of $2.9 million for the equivalent period in 2020. The net loss was consistent year-on-year when excluding the book gains on the warrants reported in the first quarter of 2020. We -- As noted in our quarterly filing, this required transaction was eliminated in the second quarter of 2020 when the Series E warrants were amended. And now I'll turn it back to you, Marc.

Great, Andrew. Thanks a lot. So before we go into Q&A, let me just summarize the milestones we anticipate over the next few quarters. First of all, with respect to the ReSPECT GBM trial, we intend to complete the current cohorts and present a comprehensive trial update in Q4 of this year. And it's our intention to alert folks for the timing of that as soon as we are able. Also, at that time, we intend to provide an update on next steps and the clinical development of RNL for GBM based on the evolving data set. Upon completion of the current trial and data analysis, and in that Phase I and II meeting with the FDA is likely to help finalize the pivotal trial plan. Regarding the CMC activities for RNL, we plan to complete cGMP manufacturing activities and we remain on track to begin stability testing later this year with TNT Investigational Drug products anticipated to be available around mid-2022. At the end of the year 2021, we anticipate possibly requesting a feisty FDA meeting to clarify and resolve any open CMC issues that may exist at that time. Regarding the respect LM trial, IND submission is planned for Q3 and Q4 2021 and enrollment to begin following approval. We will provide a formal update on that trial once we hear back from the FDA, perhaps at our next quarterly earnings call. Regarding pediatric brain tumor therapy, an IND submission is planned for later in 2021, to follow the LM-IND submission, which could be as late as early 2022. And as mentioned, we will provide a formal update on that trial once we hear back from the FDA. In terms of this development activities, we continue to be quite active, both in CMC and then assessing in licensing and out licensing opportunities and we'll provide updates in an ongoing matter if and when we have news to report on that front. So Catherine, with that, I think let's move to Q&A.

[Operator Instruction] Thank you. Our first question is coming from Jason McCarthy with Maxim Group. Please go ahead.

It’s Dave on the line for Jason. Just out of curiosity here, are you currently or do you intend on holding any meetings with X-US regulators to discuss past potential approval outside of the US or do you plan on initiating any clinical trials and any X-US territories?

I appreciate the question. Right now we don't, it doesn't mean that won't change. I think we want to really stick to U.S. approval and our CMC activities, over the course of the remainder of the year. I think after we get to 2021 and the pivotal plan starts coming together, then we will kind of begin exploring in earnest potentially broadening that trial to include international sites or separate clinical trials.

Okay. That makes sense. And then earlier in the call, you mentioned that, with respect to the patient population that was being evaluated in the ReSPECT trail. You mentioned that patients who had previously received bevacizumab, conducted the bev-naive patients. So, am I correct and saying that you guys are now currently focusing on GBM patients who are in that bevacizumab and naive, that's the target patient population, basically.

Yes, that's true. We excluded them, maybe about 9 months ago, doesn't mean we can't treat them. But, what it means to me is that we likely have to change the delivery parameters, perhaps the volume and the rates, to improve the coverage of the tumor, and that's something we can address downstream. But in terms of, in this to market, as quickly as we can and what we're going to exclude those patients.

Okay. That makes sense. And then you mentioned something about a potential Phase I/II , or either a meeting with the FDA regarding potential Phase I/II trial. Would that be potentially happening in 2021?

I guess is that's going to be a 2022 event. I think we're going to have to wait and see what Cohort 8 looks like, and look at the evolving efficacy and safety data, and then make a determination about whether we continue to dose escalate. I think that's probably unlikely, but possible. And right now, we are delivering pretty significant volumes and radiation doses such that theoretically, we think we can create a radiation cloud covering the tumor and the microscopic disease of the sphere of about seven centimeters in diameter. So I think we're getting pretty close to the max. But once kind of we have looked at the data, we see what efficacy looks like, the safety looks like we'll make a determination about whether to escalate or not, or whether to go into the next phase. And as I mentioned, that could include an expansion cohort or moving on to the next trial.

[Operator Instruction] Our next question comes from Sean Lee with H.C. Wainwright. Your line is open.

So my first question is on the current cohort. Like Cohort 8, you mentioned with the up volume and dosing, you can able to place fierce about 7 centimeters. So what percentage of GBM patients do you think that's sufficient to cover? And do you believe that -- do you feel that you had to go to a higher dose cohort later on?

Yes. So that's a great question and really gets into the therapeutic strategy of these patients. The -- as you know Sean, it GBM doesn't typically metastasize. It kills patients by local growth. If it's left untreated, it grows like a weed, you can surgically extirpate these tumors, but the problem is about 90% of the recurrences occur within a 2-centimeter RIM around the tumor. So you have microscopic disease that you can't image, but you know instinctively is there, and it's likely going to be the catalyst for recurrence. So our concept is that if we could treat tumors that are roughly around 3 centimeters and cover, call it, a 2-centimeter rim around that, which kind of accounts for a sphere and that's an idealized geometry, these tumors don't often occur as fears. But you can cover about a 2-centimeter RIM around a 3-centimeter tumor. And you can theoretically not only ablate the tumor, which is, I feel pretty confident we can do that reliably, but capture that microscopic disease. In our view, that's where you're really going to see some potential improvements and efficacy. And then that might downstream if patients do recur. For example, we've had patients that have it beyond 30 months. Were they to recur, we could potentially entertainment concept of early retreatment and essentially play whack a mole. And one can sort of think about the art of what's possible here. I mean, in theory, you might be able to turn this into a chronic disease, certainly more chronic than it is today. I mean it's an acute killer. So that's how we looked at it. So yes, you could cover a 207 centimeters, but practically, that just doesn't make any sense. I think the sweet spot is going to be kind of the 3-centimeter tumor with a RIM of 1 to 2 centimeters of grain that's diseased, but has microscopic disease, it's going to be the basis of a recurrence.

In terms of the mixed study, you mentioned you're likely -- you're looking to pursue a Phase II pivotal study. So would you be looking to go something towards a special protocol assessment with the FDA? Would you be pursuing, say, a breakthrough therapy designation? What are your plans on that on the regulatory side?

Yes. I think all those are possible and those are in our planning, and it's just going to be kind of based on the data. And I think we'll kind of know more around Q3 or more likely Q4 of this year. And that's assuming that we stay on the same enrollment cadence we've been on and get cohort 8 fully enrolled. And then the other thing is -- and as I mentioned, we have a lot of patients that we've treated relatively recently that are still alive. And so we're a bit more data as it relates to the evolving efficacy signal.

I see. My final question is on the upcoming RM and pediatric brain cancer study. So what's still left to do before you can initiate these studies -- And also, would you wait until you have the new GMP manufactured drug before you initiate the studies? Or would you go with your current stock?

Yes. On the latter question, we can go ahead and begin those studies today with our current manufacturing protocol, which is sufficient for a Phase I trial. -- as to timing on those, I would think about those sequentially. LM is the priority. And what's left there really is to finalize the IND, which, as mentioned, is going to be a Q3, maybe a Q4 event and then submitting that. And then it really depends on feedback we receive. We've already got a couple of sites identified a number of others that we are investigating. We've identified the PI and the PI is at a site that we're already working with and should be a relatively straightforward path to kick that trial off, assuming we've come to agreement with the FDA. Regarding pediatric brain cancer, Similarly, we've identified the PI, the lead trial site. We're working with them to develop the protocol, but we're just bandwidth constrained. So that won't go in until after which is likely going to be a filing date maybe towards the end of the year. So we probably won't be able to be too definitive about the start of timing until early next year.

We'll go now to Ed Woo with Ascendiant Capital. Your line is open.

Thank you for providing us the latest update. My question is on funding, mainly you've been able to fund most of your studies so far with various grants. Do you know what the funding plan will be if you do move to a pivotal study?

Yes. So I appreciate the question. We're in -- company is in a good cash position today. We're really blessed and fortunate to have the majority of our clinical trial covered by the NCI really picks the pressure off our need to raise capital. The management's philosophy is we like to stay at no less than 24 months of for looking cash and we're pretty close to that right now. We intend to stay there. I think it's just good biotech, hygiene to have appropriate tools in place to allow us to be opportunistic and raise capital when the stars align, and we've done that sparingly and -- but strategically. Our plan is to kind of state about 18 to 24 months of cash build to 24%, a little bit more if we can, and then go out and raise additional capital once we get to a position where we're ready to embark upon a pivotal trial and raise sufficient capital such that we can go all the way to an approvable endpoint with that cash without going back to partner or capital markets. So that's our plan. 24 months of cash as a baseline and raise additional cash when we need it -- when we need to it to a provable endpoint and be opportunistic in the meantime.

I was actually wondering with the NCI fund the pivotal study? And also 1 of the reasons you guys moved to Texas was to get the state of Texas cancer funding. Is there an option for the pivotal study as well?

No, I don't think -- the latter is not, the fund up through Phase II, and we've got Phase II covered. The NCI grant covers through -- it's a Phase I/II design, and it covers that. That's up to 55 patients, and we're at 22 now. So there's still some runway there. I think it's possible to get grant funding. But frankly, there's some trade-offs with having grant funding, which you're probably aware. There is a underbear loss of control. So my guess is time is money, and we'll very likely want to fund that trial ourselves for practical reasons.

[Operator Instructions] We'll go now to Emad Samad with Octavian. Your line is open.

Marc, you mentioned toward the end of the update about the BDM licensing activities. I was just wondering, could you give us some guidance on the types of opportunities the companies in search of, and what the strategic goals and approach or vis-a-vis the current pipeline, for instance, what should we be expecting from the company? And how are you guys thinking or focused on that aspect of corporate strategy?

Emad, appreciate the question. Obviously, the caveat is with BB is it's nothing is done until it's done. But I can get into the strategy a bit and tell you where our focus is right now. So our deal team is really active on 3 fronts. And what you've seen if you've been following the news over the last maybe quarter or so is that -- we're very active on the CMC front. We're partnering with leading suppliers and providers. And the most important of those we report publicly. So it's a good measure of progress. It's also not too early to think about things like barriers to entry exclusivity in terms of the supply chain interactions and further protections on that supply chain and even reimbursement and ultimate margin. So those are all things that are central to us, and we're making progress along those fronts. So that's kind of point 1. Point 2 is sort of in-licensing. And we are very active in evaluating additional new technology both in an effort to expand the platform. We really like the radio therapeutic space and also the pipeline. And we are really focused on becoming increasingly more targeted. Now we -- as you know, with the RNL for GBM, that's delivered in a very targeted way, but it leverages convection-enhanced delivery and imaging and you need a brain surgery in a way to do that. But we're also really looking beyond into other technologies and leveraging vascular access, either arterial or venous access and potential molecular targeting techniques. So we've got a core expertise in delivery in drug formulation and radio therapeutics and very interested in expanding in the targeted delivery space, and that's something we spent a lot of time evaluating potential opportunities. not to say that we're going to find something that becomes prefunded like RNL did with an NIH grant but one can dream. And then finally, and probably much, much, much lesser amount of time spent. We're still evaluating opportunities to out-license our 2 legacy drugs, which I didn't mention, but there is ongoing interest. But frankly, we're just going to need to see the right economics for that to make sense for us right now. So very active on those 3 levels, and we're going to keep communicating and when something happens, we'll let you know.

We have no further questions at this time. I would like to turn the floor back over to Dr. Hedrick for any additional or closing remarks.

Awesome. Thank you, Catherine. So I just want to say thanks to everybody that joined us on the call. And on behalf of the board, I'd like to just take a moment as I do every quarter to say thank you to our employees and our extended team members and now our multitude of academic collaborators with whom we work, and that work so hard, and they're so dedicated to finding solutions for GBM and other really tough narrowly cancers. I'd also like to thank the patients and the doctors and the hospital staff, who we spend a lot of time with, frankly, that significantly contribute to making these clinical trials possible. So thanks again, and please have a good evening.

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