Rain Enhancement Technologies Holdco Inc (RAIN) Q3 2021 Earnings Report, Transcript and Summary

00:05 Thank you for standing by, and welcome to the Rain Therapeutics Third Quarter twenty twenty one Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there'll be a question-and answer-session. [Operator Instructions] As reminder, today's conference call is a being recorded. 00:25 I’d now like to turn the conference to the host, Mr. Glenn Garmont. Sir, you may begin.

00:37 Thank you, operator. And good afternoon, everyone. With me today on the phone are Avanish Vellanki, Chief Executive Officer; Robert Doebele, Chief Scientific Officer; Richard Bryce, Chief Medical Officer; and Nelson Cabatuan, Senior Vice President of Finance. During today's call, Avanish will provide an overall business update, Richard will provide an update on Rain’s clinical program, Bob will provide an update on research efforts and Nelson will review the financials. 01:11 Before we begin, I'd like to remind you that statements made during this conference call that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of nineteen ninety five. These forward-looking statements are based upon Rain's current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties as described in Rain's quarterly report on Form 10-Q for the quarter ended March thirty one, twenty twenty one and subsequent filings with the Securities and Exchange Commision. All forward-looking statements made during this conference call are based on management's assumptions and estimates as of today, November tenth. Rain undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after today, except as required by law. 02:17 With that, it's my pleasure to turn the call over to Avanish Vellanki, CEO of Rain. Avanish?

02:25 Thank you, Bob, and thanks to everyone for joining us for our third quarter earnings call. As a matter of principal for these earnings calls, we're going to make a standard practice to be very brief, and we'll leave it to the Q&A to address the details that are in the most interest. 02:38 In this most recent quarter and since the end of the third quarter, Rain continues to advance milademetan and RAD52 programs forward. As a reminder, we'll continue to refer milademetan as mila wherever appropriate. First and foremost our Phase III trial, the MANTRA study for mila in patients with liposarcoma is proceeding according to plan with sites being activated on a regular basis around the world. As a potential registration enabling study there is no interim read with final data anticipated in twenty twenty three. Richard will provide some more color here. 03:13 Second, we also expect to dose our first patient in the Phase II tumor-agnostic MANTRA-2 study shortly and we will announce that when it happens. This trial evaluate mila in a tumor agnostic signal finding basket study across sixty five patients in the U.S. with solid tumors that exhibit a certain threshold of MDM2 gene amplification. We expect to provide interim update for MANTRA-2 in the second half of next year. 03:41 Third, we announced that we will our reprioritize our clinical strategy for our third planned study towards Merkel cell carcinoma, replacing our prior planned study intimal sarcoma. This new trial will be called MANTRA-3. The decision to prioritize Merkel cell was made for three key reasons. One, new non clinical data presented by the Dana-Farber Cancer Institute demonstrating compelling efficacy for milademetan, which already adds to the biologic rationale that many Merkel cell tumors are MDM2 dependent. Two, we know there's already been presented signs of activity with MDM2 inhibition in Merkel cell from other MDM2 inhibitor programs. And three, the larger addressable market size of Merkel cell as compared to intimal sarcoma, hence representing the most appropriate use of our financial resources. 04:33 Based on the larger population of Merkel cell, faster projected patient accrual rates and an expected shorter trial duration, the new planned Merkel cell study has no significant impact on Rain’s cash runway. We expect MANTRA-3 to enroll thirty four patients in the U.S. in the second line or later settings amongst patients relapsed to checkpoint inhibitors, which is the standard of care in the frontline. And we expect to start to study in the middle of twenty twenty two. 05:02 Finally, we held an R& D day yesterday, where we hosted several prominent key opinion leaders across various treatment specialties where we think MDM2 inhibition could be applied. Speakers included Dr. Wafik El-Deiry from Brown University, who many of you may know for his discovery of P21. Doctors [indiscernible] Grounded and David Hong from Memorial Hermann, MD Anderson Cancer Centers, respectively, who will be participating in Rain’s first two clinical studies for milal and doctors Glen Hena and James Dicaprio from Dana-Farber for their expertise in Merkel cell carcinoma. We also included talks from doctors, [indiscernible] and Sylvia Stacchiotti who shed light on some additional clinical opportunities for mila. 05:46 Our strategy continues to be to focus our early effort on the most sensitive MDM2 dependent tumor types first. And will be followed by combination strategies to further enhance patient outcomes in other P53 wild type cancers. We're very excited about the potential for a range of opportunities from mila to have a meaningful impact on patient care. 06:08 Last, the early preclinical workaround programs targeting RAD52 continues to move forward, and we expect to provide updates at future scientific symposium as appropriate. 06:18 With that, I'd like to turn it over to our Chief Medical Officer, Dr. Richard Bryce.

06:22 Thank you, Avanish. And good afternoon, everyone. Following on from our last earnings call at August, where we announced a start to our pivotal Phase III MANTRA study in Dedifferentiated Liposarcoma, we are progressing the site activation throughout the U.S. and Europe, anticipating approximately thirty sites to be opened by the end of the year with the remaining forty five site in Europe, North America and certain Asia Pacific countries coming on stream before the end of the first quarter twenty twenty two. Patient enrollments continues as expected. 06:59 I am pleased to announce today that our second trial, the MANTRA-2 basket study is now active and open to enrollment. We will make a separate announcement when the first patient is dosed. We expect that the MANTRA-2 study will ultimately be opened in a total of approximately ten sites throughout the United States with additional just in time sites as necessary from the Tempus and Caris referrals. 07:27 The study is open to patients that are P53 wild type and MDM3 amplified with a minimum gene copy number of twelve or a six fold increase in copy number by local testing methods. As we previously discussed, this threshold has chosen because the hygiene amplification at these levels has been observed to exclude P53 mutations, thereby ensuring MDM2 as the oncogenic driver in these tumors. 07:56 As well as the in-house genomic screening at the selected U.S. sites, we have partnered with Tempus and Caris for referral of patients meeting these particular criteria. This study aims to enroll sixty five patients across a range of solid tumors, and the treatment protocol is the same as in the registrational MANTRA study. That is two sixty milligrams orally once daily for three consecutive days out of fourteen. And as we previously advised, we anticipate an interim analysis and data readout in the second half of next year. 08:33 As Avanish mentioned, we have de-prioritized our internal sarcoma program to focus on the opportunity in Merkel cell carcinoma in the second line setting following immune checkpoint inhibitor therapy. The incidence of this aggressive skin cancer in the U.S. is estimated to be around three thousand patients in twenty twenty and is rising year on year. 08:57 During the years twenty and twenty thirteen, we know there was a ninety five percent increase in reported cases, and this compares to fifty seven percent growth rates for melanoma and fifteen percent for all solid tumor. Due to the aging baby booming generation, the U.S. incidence of Merkel cell carcinoma is expected to climb to three thousand three hundred cases by twenty twenty five. 09:24 Current standard of care in the U.S. for patients with advanced or recurrent Merkel cell carcinoma is with [indiscernible]. But there is no standard therapy for patients who progress on or refractory to treatment with these immune checkpoint inhibitors. Or indeed, for those patients who are ineligible to receive treatment with immunotherapy. Response rates and duration of response to chemotherapy in this setting are very low and no survival benefit has been published from treatments in this setting. We expect to commence our Phase II study, the MANTRA-3 trial in mid twenty twenty. 10:04 So to conclude, for MANTRA, we have partnered with the key liposarcoma sites around the U.S., Europe and elsewhere internationally, all with a strong track record of enrollment into liposarcoma trials. In the MANTRA-2 basket study, our selection of major academic sites with ready access to genomic testing and MDM2 copy number reporting coupled with a large potentially eligible patient population should ensure rapid enrollment once the trial sites are all open. 10:37 For MANTRA-3, we have attracted the major National and International Merkel cell experts to help develop our MANTRA-3 protocol and development strategy in this indication. And we recently concluded an advisory board of renowned thought leaders treating Merkel cell carcinoma where they reiterated their excitement to milademetan investigation in this setting. 10:59 Our dedicated team within Rain continues to build personal relationships with all of our investigational sites around the world. As our selection of experienced oncology CROs equally committed to success will ensure we do all we can to develop milademetan as quickly as possible for patients. 11:19 Let me now turn it over to our Chief Scientific Officer Dr. Bob Doebele. Bob?

11:26 Thanks, Richard, and good afternoon, everyone. Since acquiring milademetan approximately one year ago, Rain’s team has been working diligently to identify and validate the most relevant cancer populations for this MDM2 inhibitor. 11:40 Our work has recently culminated in the presentation of multiple abstracts at recent conferences, including the AACR-NCI-EORTC Virtual International Conference on Molecular Targets and Cancer Therapeutics or the Triple conference, highlighted important preclinical collaborations with researchers around the world. 11:59 We also hosted our first Rain research and development day yesterday. This event featured both clinical and research experts who highlighted multiple opportunities for these use milademetan in different tumor studies where MDM2 plays a critical role. 12:14 Let's turn to our conference presentations. First, Dr. Vjaya Tirunagaru, Senior Vice President and Head of Research at Rain presented both preclinical and clinical data that support these with milademetan and patients with MDM2 amplification and wild type p53. 12:29 Preclinical models including cancer cell lines, patient derived organoids and patient derived graphs from numerous different solid tumor types demonstrated robust anti-tumor activity. We also presented the rationale for our MDM2 amplification of at least twelve copies using a mutual exclusivity analysis in relation to p53 mutations from over forty thousand solid tumor patients derived from the AACR Database. 12:56 Finally, clinical data from the Phase I study of milademetan demonstrated three patients with breast cancer, [indiscernible] sarcoma and small cell lung cancer with MDM2 amplification above the twelve copy number threshold, all experiencing tumor regression and two of the three patients experiencing a partial response. These exciting data support the rationale for the MANTRA-2 basket trial. 13:21 Also presented at the Triple conference was work from Dr. Dicaprio Lab at the Dana-Farber Cancer Institute. The polyomavirus induces Merkel cell carcinoma in up to eighty percent of all Merkel cell and leads to over expression of MDM2 and correlates with wild type p53 status. Dr. Dicaprio’s presentation highlighted the potency of milademetan and multiple in vitro and in vivo virus positive Merkel cell carcinoma models. This activity for milademetan was p53 dependent as milademetan induced gene expression of critical p53 targets such as p21 and PUMA. The presentation also showed that knocking out p53 aggregated the effects of milademetan. This exciting preclinical work form part of the basis to prioritize a Phase II trial for patients with Merkel cell carcinoma. 14:10 At our R&D held yesterday, Dr. James Dicaprio also presented additional new patient derived [indiscernible] from milademetan that exhibited compelling antitumor activity and tumor regression which was not previously presented from his team's work at Dana-Farber. 14:26 Further, Dr. Glen Hana gave an overview of the treatment landscape for Merkel cell carcinoma, and highlighted the unmet need in the second line setting following the treatment with checkpoint inhibitors. The view offered in Merkel cell is that, many patients don't respond in the front line setting with checkpoint inhibitors. And the second line setting offers very few options. MDM2 inhibition is the only targeted strategy that is being evaluated in Merkel cell and there was great enthusiasm for its opportunity. 14:53 Rain’s R& D also features several prominent clinical and research experts to highlight opportunities for milademetan in several cancer types. Dr. Wafik El-Dery, Director of the Brown Cancers Center gave an overview of the MDM2 p53 axis, highlighting the role for p53 reactivation as an important anti-cancer strategy. He stressed the non-overlapping strategies of restoring wild type p53 activities which is what we hope to do with milademetan via MDM2 inhibition versus programs that target p53 mutants. He also noted the potential for combination of MDM2 inhibitors with immunotherapy strategies in cancer given the association of MDM2 amplification with hyper progression on checkpoint inhibitors. 15:38 Additional speakers from MD Anderson, the [indiscernible] National Cancer Institute and [indiscernible] all highlighted the rationale for the current planned strategies for milademetan and several additional opportunities which are being considered by Rain. These presentations provide support for Rain’s clinical strategy and prioritization of the differentiated liposarcoma and MDM2 amplified agnostic tumor strategy and Merkel cell carcinoma. These presentations also help to provide the basis for exploration of clinical trials and other indications such as breast cancer and other large cancer populations. 16:15 With that, let me now turn it over to Nelson to review our financial results. Nelson?

16:21 Thank you, Bob. And good afternoon everyone. I'm pleased to provide an update on our financial results for the third quarter of twenty twenty one. I will also like to invite you to review our Form10-Q filed today for more details. 16:34 For the third quarter of twenty twenty one we reported a net loss of eighteen point four million dollars compared to a net loss of ten point four million dollars in the third quarter of twenty twenty. 16:45 Research and development expenses were fifteen point three million dollars in the third quarter of twenty twenty one as compared to seven point nine million dollars in the third quarter of twenty twenty. The increase was primarily driven by the milestone fees of [indiscernible] company limited of five point five million dollars related to the initiation of our Phase III clinical trial in [indiscernible] R&D costs mainly for our lead candidate from the ongoing Phase III pivotal MANTRA trial as well as personal costs. 17:15 General and administrative expenses were at three point two million dollars for the third quarter of twenty twenty one compared to six hundred thousand for the third quarter of twenty twenty. The increase was primarily due to increases in various third party G& A cost, including legal, outside consulting, accounting and audit fees, as well as personal costs. 17:36 As of September thirty twenty twenty one, Rain had one hundred and fifty point one million dollars in cash, cash equivalence and short term investments which provides funding to advance our research and development pipeline. Also, as of September thirty twenty twenty one Rain had approximately twenty six point five million shares of common stock outstanding. 17:56 We continue to expect our full year twenty twenty one operating spend to be approximately fifty million dollars to sixty million dollars and projected year-end balance of approximately one thirty seven million dollars to one forty seven million dollars in cash, cash equivalents and short term investment. 18:11 With that, I'll now turn the call over back to Avanish.

18:15 Thanks, Nelson. Let me now turn it back to the operator for Q&A session.

18:22 Thank you. [Operator Instructions] Our first question comes from Yigal Nochomovitz of Citigroup. Your line is open.

18:35 Great. Hi, Avanish a Team. Thanks for taking the question. I have two. The first one is, could you be a bit more specific about what you [indiscernible] in the recent MANTRA-2 data from the Dana-Farber, because [indiscernible] cell carcinoma for the Phase II in Merkel cell? And the second question is bit of a strange question, but was wondering regarding the basket trial, what happens if you have multiple biopsies and you get originating MDM2 copy number with some biopsies below and others above the copy number of twelve threshold. Thanks.

19:13 Thank you, Yigal. Appreciate the question. Let me turn the first question over to Bob and ask Richard to chime in on the second question. Bob?

19:20 Hi, Yigal, thanks for the question. So, in terms of the compelling data, I think the biology of Merkel cell has been well understood for quite some time now in terms of the virus positive patients showing dependency on MDM2 to rid cancer cells p53. 19:39 I think what we found compelling is for the first time we were able to demonstrate in multiple preclinical models activity of milademetan that was potent in both cell line and patient drives models, including data that showed a significant tumor regression in patient derived model. And so I think the rationale there is to move forward based on the biology and the unmet need in those Merkel cell patient.

20:05 And the second question related to potential [indiscernible] sampling in terms of MDM2 copy number in the basket study. So we have a -- we will accept local testing as a criteria for entry. And so, any sample that meets the criteria and above the sample criteria in MDM2 copy number twelve or greater will be accepted. We do have retrospective testing at a central lab which we've discussed before. And so all patients entering will have their tumor tested and that will provide how much heterogeneity across the sites. And to some extent we will address potentially the heterogeneity that may be seen within sites. 20:57 I don’t [indiscernible] run up to this, whether you have anything on those to comments on that?

21:03 Just that. Our belief is that like a lot of oncogenic drivers, this is likely an early event and same way that p53 mutations are very early in the cancer, those tend to be trunk and thus not in quite as much heterogenetive non relevant mutations in cancer.

21:22 Great. Thank you.

21:25 Thank you. Our next question comes from Michael Schmidt of Guggenheim Securities. Your line is open. Q – Unidentified Analyst: 21:32 Hi. Good afternoon. This is [indiscernible] on for Michael. Thanks for taking our questions. We had a question on the MANTRA-2 basket study. So based on the observation of the MDM2 application across different tumor types, how should we think of the mix of the tumor types in this study? And perhaps related to this, what would be your registration strategy? Would you, for example, peak certain tumor types? Or are you going to consider a registration with a basket? Thank you.

22:08 Thanks, [indiscernible] for the question. Let me turn it over to Richard.

22:12 Yeah. Thank you again for the question. The study is open to all tumor types. So at the present time, it's not restricted to any particular pathology. We know that some tumor types are likely to be more prevalent. That's very clear from the analysis of the various [indiscernible] that are out there. But there is no general cap on milademetan. The expectation is that probably the top five tumors [indiscernible] the most from the [indiscernible]. 22:44 At present the strategy is tumor agnostic. In other words, we expect to see a response that's across all tumors regardless of the disease site. And biologically that's kind of rational, that's the oncogenic tumor types in these diseases. 23:03 As with everything, this is a signal seeking study. This is a basket study, we have the opportunity to look on an ongoing basis at the responses in the various tumor types and take action accordingly. But at the present time we are sitting out with a pure tumor agnostic approach, and we'll see where it goes.

23:22 And just to add color there. So in terms of the top few tumor types would be a long bladder breast in melanoma, we should be -- would we expected to yiels the greatest number of patients with that copy number of twelve or greater.

23:37 Got it. That’s super helpful [Multiple Speakers]

23:41 There is a anecdotal data from the Phase I trial of milademetan with high level of MDM2 amplification showing tumor regression and three different and very unique tumor types of small cell lung cancer, breast cancer and sarcoma, so some evidence already.

24:03 Got it That's super helpful. Thank you, guys.

24:10 Our next question comes from Joe Catanzaro of Piper Sandler. Your line is open.

24:15 Hey, guys. Thanks for taking my question. Maybe just one quick one from me. Maybe sounds a little naive, but I know MDM2 amplification is -- considered universal and well [indiscernible]. But do you have a sense of the average copy number amplification that you see there? And whether it frequently meets that threshold of being mutually exclusive with p53? And is there any plans as part of the MANTRA study to sort of retrospectively look at that? Thanks.

24:45 Thank, Joe. I hand it over to Bob.

4:48 Yes. Thanks for the question, Joe. So, yes, we do know the average copy numbers for well different -- differentiate liposarcoma, it approximately ten copies for dedifferentiated liposarcoma are closer to seventeen copies per cell, so a pretty high level amplification in both populations. And as far as the mutual exclusivity, yes, this is a pattern that we see across many tumor types that we think have MDM2 dependency and all of liposarcoma -- all of well dedifferentiated liposarcoma has a p53 mutation rate as low as two percent. So very, very rare p53 mutations compared to all cancers, which run around fifty percent p53 mutated. So that relationship seems to hold up in multiple populations.

25:40 Sorry the second part of the question was in terms of retrospective look, yes, we are going to [indiscernible] tumor samples and look at MDM2 copy number, p53 status and other biomarkers as well in the MANTRA study.

25:56 Okay. Got it. And if I could just maybe ask a real quick follow-up. Appreciating that you already have a pretty broad clinical development strategy, but what needs to happen to commit to exploring that -- you positive signal that you've seen preclinically and take that into the clinic?

26:16 So great question, Joe. I'll take that one. So, we are considering the GATA3 continuously and we will articulate when we make a decision as to whether a complete sponsored study or whether another manner of evaluation is going to be most appropriate for Rain. We're certainly taking into consideration the totality of our financial resources and the cash runway that we have to bear. And we want to direct those resources towards the highest probability tumor types and those tumor types where we think that there's much clearer rate on a registration path. So, we are continuing to do work there? Continuing to do a lot of work on mechanism as to what's going on with the GATA3 frameshift mutations and the sensitivity to MDM2 inhibition. And as we make that progress, we'll keep the street updated.

27:05 Okay. Got it. That's clear. Thanks for taking my question.

27:09 Thank you.

27:10 Thank you. Our next question comes from Graig Suvannavejh of Goldman Sachs. Your line is open.

27:16 Hey. Good afternoon. So clearly you prioritized this MANTRA-3 studies partly because of the opportunity, but can you just help us frame that a little more specifically, how you think about the size of that opportunity?

27:28 Well, happy to take that one. So, again, from the population statistics around three thousand patients, those are twenty twenty statistics, which I did mention and this is a population that's growing far more quickly than the overall solid tumor population, given the primary demographic. Eighty percent of those patients are going to be MDM2 dependent based up their viral positivity, and about a third of those patients are going to be amenable to systemic therapy on an annual basis. We also know that from prior years of diagnosis, many of those patients with local disease are going to become metastatic. We also derive with patient population of systemic therapies per year of between one thousand to fifteen hundred patients.

28:17 Okay. That's really helpful. And then I know it's -- we just started the study. But in terms of the clinical bar for MANTRA-2. How would you think about framing out the kind of the clinical bar [indiscernible] mix of tumor types and lines of study in that basket trial?

28:34 Sure. I’ll turn it over to Bob.

28:36 Yes, thanks for the question, Graig. So the clinical bar is quite low. When discussing this indication with KOLs from across the country. There is really no second line standard following first line pembrolizumab or nivolumab, so both are checkpoint inhibitor therapies. The second line preferred therapy is a clinical trial. And after that, a distant option is chemotherapy, which although it has decent response rates has incredibly short durability, perhaps as low as in the range of three months. So the feedback from the Merkel cell KOL community is that, response rate in the range of fifteen percent to twenty percent and durability as low as four months, maybe meaningful in this patient population with limited options.

29:33 Was your question with regards to MANTRA-3 or MANTRA-2?

29:37 MANTRA-2.

29:40 Sorry about that, Graig. For MANTRA-2, I think we don't fully know what the FDA would consider approvable for an agnostic indication, There's only been three to date [indiscernible] and pembrolizumab in MFI high patients. 30:00 I think the feeling is that for patients who have exhausted most other cancer therapies that response rates in the range of forty percent with durability in the range of five to six months would probably be meaningful for patients who exhausted standard of care therapies, which is the criteria for our patients, but there aren't a lot of examples to be honest in terms of precedent.

30:27 Yes. Just one quick follow-up, given the interm readout will be twelve -- about twelve months from now, do we expect most response rates or will you be a position at that point, given kind of pace of enrollments, at least early indicators of what durability of responses?

30:45 Yes, Richard will take that one.

30:46 Sure. So what we plan to do actually is have a meaningful follow-up. So we can quote not just response rate the duration of response. And the likelihood is that, we'll wait till we have about four months worth of follow-up data. So that [indiscernible] responses are meaningful in terms of clinical lab durability.

31:09 That’s helpful. Thank you.

31:15 I'm showing no questions at this time. I like to turn the call back over to Avanish Vellanki for any closing remarks.

31:22 Thank you. And thanks everyone one for dialing in today. We look forward to giving you an update on our next quarterly results.

31:30 Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.