Oncolytics Biotech Inc

TSX:ONC

Earnings Call Transcript

[Operator]

Good afternoon, and welcome to Oncolytics Biotech's First Quarter 2024 Conference Call. [Operator Instructions] Please be advised that this call is being recorded at the company's request.

I would now like to turn the call over to Jon Patton, Director of Investor Relations and Communications. Please go ahead.

[Jon Patton, executive]

Thank you, operator, and good afternoon, everyone.

Earlier today, Oncolytics issued a press release providing recent operational highlights and financial results for the first quarter of 2024. A replay of today's call will be available on the Events section of the Oncolytics website approximately 2 hours after its conclusion. After remarks of company management, we will open the call for Q&A.

As a reminder, various remarks made during this call contain certain forward-looking statements relating to the company's business prospects and the development and commercialization of pelareorep, including statements regarding the company's mission, the company's belief as to the potential and mechanism of action of pelareorep as a cancer therapeutic, our belief that we are positioned to begin registrational track studies in breast and pancreatic cancer, and our strategies and upcoming milestones in connection therewith; our critical objectives through 2024, the anticipated timing and the release of additional data, company's belief that it has sufficient cash to achieve its milestones, and other statements related to anticipated developments in the company's business. These statements are based on management's current expectations and beliefs and are subject to a number of factors, which involve known and unknown risks, delays, uncertainties and other factors not under the company's control that may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements. And any forward-looking statement in which Oncolytics expresses expectation or belief as to future results, such expectations or beliefs are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that these statements or expectations or beliefs will be achieved. These factors include results of current or pending clinical trials, risks associated with intellectual property protection, financial projections, actions by regulatory agencies and those other factors detailed in the company's filings with SEDAR and the SEC. Oncolytics does not undertake any obligation to update these forward-looking statements, except as required by applicable laws.

I'm joined by several members of the Oncolytics management team to review our first quarter 2024 results and corporate updates, including Chief Executive Officer, Dr. Matt Coffey; Chief Financial Officer, Kirk Look; and Chief Medical Officer, Dr. Tom Heineman.

Dr. Coffey will begin our discussion today. Matt, please take it away.

[Matt Coffey, executive]

Thank you, Jon. Good afternoon, and welcome to Oncolytics' first quarter conference call.

Oncolytics' mission is to improve the lives of people with cancer by bringing our proprietary immunotherapeutic product candidate, pelareorep, or pela, as we'll refer to it, to patients as quickly as possible. We are taking the next steps to make that happen as we transition to become a late-stage cancer company by progressing pela in our 2 lead indications: breast cancer and pancreatic cancer. As we'll discuss throughout the call, we are building the necessary foundation to begin registrational track studies for both of these indications for which there is urgent need for new or alternative therapies.

We have organized today's call to provide you with a comprehensive update on our progress and upcoming milestones. I'll spend a few moments sharing what excites us about pela and touch on our recent developments, upcoming milestones and key corporate messages. After that, I will ask Tom to provide an update on the breast cancer program, the new GOBLET pancreatic cancer cohort, the expansion of the GOBLET anal cancer cohort and initial plans for the registrational track pancreatic cancer study. Then I'll ask Kirk to review the financials. And finally, we will end by taking your questions.

I'll start with a brief note on what makes pela such a compelling immunotherapy candidate. In a nutshell, it's all about results. Pela is delivered intravenously and works systemically. It is able to selectively replicate tumors and introduce double-stranded RNA into these cancer cells. This results in generating, recruiting and training immune cells to begin identifying cancer cells to enable cancer cell killing in addition to remodeling the tumor microenvironment to activate immune cells. This has made pela unique because the responses pela generates have led to synergies with multiple cancer treatments, including chemotherapy, immune checkpoint inhibitors, CAR T cell therapy and others.

These synergies come from 2 randomized breast cancer studies, multiple studies in pancreatic cancer. And recently, there's been an intriguing efficacy signal in the anal cancer cohort of our GOBLET study, which included a complete response even in the absence of standard cytotoxic chemotherapies. In these clinical trials, pela was used in combination with chemotherapy drugs like nab-paclitaxel or immune checkpoint inhibitors like atezolizumab.

Compelling data from these studies show that the treatment with pela produced meaningful clinical responses with favorable comparisons to historical controls as in the case of GOBLET or in the randomized controlled trials demonstrated in breast cancer. It's demonstrated that a positive association between increases in tumor-infiltrating lymphocytes, or TILs, and tumor responses. And it was well tolerated oiled by patients.

Taken together, these data form the basis of our enthusiasm for pela as a novel, differentiated immunotherapeutic agent and supports our plans to go ahead with registration track studies.

2024 is off to a promising start. We're building on our compelling pela clinical databases and continuing our transition to become a late-stage oncology company.

A few notable milestones have marked our year-to-date progress.

We've been granted a Type C meeting with the FDA for a Q2 2024 meeting to discuss our planned registrational-enabling study in breast cancer. Defining this registration path for pela in breast cancer is a pivotal clinical goal for the year.

We expanded enrollment for the cancer cohort of the GOBLET study to strengthen the already promising signal of efficacy. This is important because it could open the door to a new registrational indication and accelerated approval for pathway.

We received regulatory clearance to begin enrolling patients in a new pancreatic cancer cohort in the GOBLET study. This cohort will evaluate pela in combination with a widely used chemotherapy regimen called modified FOLFIRINOX with and without atezolizumab. The study is supported by a USD 5 million grant from the Pancreatic Cancer Action Network, also known as PanCAN, which provides additional positive validation for pela.

We affirmed plans to report overall survival data from the Phase II BRACELET breast cancer study in H2 2024. While we have reported overall survival response data for pela-paclitaxel that is 3x paclitaxel monotherapy, overall survival data continues to mature. This has the potential to be a major catalyst as we have already had another metastatic breast cancer study called IND-213 with the near doubling of median overall survival observed.

We announced that 2 abstracts related to clinical and translational data were selected for presentation at the Annual Meeting of the American Society for Clinical Oncology, or ASCO 2024, which we'll be able to discuss in more detail later this month.

We continue to maintain an active dialogue with our clinical collaborators and potential strategic partners. These discussions provide valuable perspectives that have shaped and enriched our registrational study plans.

Looking ahead, we remain laser-focused on our clinical objectives through 2024. In H1 2024, we intend to provide guidance on the registration path for pela in breast cancer. Over the coming months, we expect to enroll the first patient in cohort 5 of the GOBLET study, which is evaluating pela plus modified FOLFIRINOX with and without atezolizumab in pancreatic cancer patients.

Also in H2 2024, we expect to report overall survival data from the BRACELET-1 breast cancer study.

Now before I turn the call over to Tom to provide you with an update on our clinical programs, I'd like to thank everyone in the Oncolytics organization and our collaborators for the dedication that you bring to our mission every day to improve the care of patients with cancer. Your work and unwavering commitment have been critical to advancing the development of pela.

Tom?

[Thomas Heineman, executive]

Thanks, Matt. During today's call, I will provide an update on Oncolytics breast cancer program, the new pancreatic cancer cohort in the GOBLET study, the expansion of the GOBLET study anal cancer cohort and our plans for a registrational track pancreatic cancer study. Over the coming months, we will provide updates on our ongoing clinical trials as new results become available.

Starting with our breast cancer program, I'd like to touch on three topics: first, our thoughts on the most appropriate registrational trial; next, the upcoming Type C meeting with the FDA to discuss our breast cancer program; and finally, the BRACELET-1 study survival results.

Let me start with our thoughts on what constitutes the registrational trial in breast cancer. As the BRACELET-1 data has continued to mature, we have spent the past year speaking with our clinical advisers, collaborators and potential partners about registrational trial strategies for new breast cancer therapeutics. The strategy that has emerged from these discussions is to advance pela to regulatory approval in breast cancer, utilizing a cost-effective approach that optimizes study time lines and retain sufficient flexibility to adapt to the evolving breast cancer treatment space.

Our conversations with potential pharmaceutical partners has emphasized the value of conducting an efficiently sized randomized control study that, with positive data, could lead directly to a registrational filing or to substantially derisk a subsequent Phase III study. It is notable, for example, the Pfizer CDK 4/6 inhibitor, IBRANCE, received its initial approval in breast cancer based on the 165-patient PALOMA-1 study.

On the topic of our upcoming Type C meeting, as Matt indicated, defining the registrational path for pela in breast cancer is a major goal for Oncolytics in 2024. Earlier this year, we submitted a Type C meeting request to the FDA, and the meeting will take place in the second quarter of 2024. At this meeting, we will discuss our proposed next breast cancer clinical trial with the FDA, including the anticipated study design, study population and study inputs. Through this interaction, we expect to align with the agency on the optimal clinical approach, which will allow us to move forward confidently as we continue to develop pela as a treatment option for breast cancer patients.

Next, the BRACELET-1 survival data. We previously reported strong tumor response and progression-free survival results from the BRACELET-1 study. Overall survival results from BRACELET-1, which have not yet been reported due to ongoing patient follow-up, are anticipated later this year. As Matt mentioned, the earlier IND-213 study showed a significant survival benefit in HR-positive/HER2-negative metastatic breast cancer patients who received the combination of pela and paclitaxel compared to paclitaxel alone. A strong overall survival in the pela-paclitaxel arm in [ BRACELET-1 study ] will serve to validate these earlier findings and will support discussions with potential strategic partners and with regulators.

Moving to the GOBLET study. I'll touch on two topics: first, the expansion of the anal cancer cohort; and then the new cohort in GOBLET study evaluating pela combined with modified FOLFIRINOX. By way of background, the GOBLET study is a platform study designed to assess the potential of pela-based combination therapies to benefit patients with advanced or metastatic gastrointestinal cancers. It is being conducted at 12 centers in Germany and is being managed by our clinical collaborator, the AIO study group.

To date, we have evaluated 3 cohorts: first-line metastatic pancreatic ductal adenocarcinoma, or PDAC; third-line metastatic colorectal cancer; and second-line or later anal cancer. In each of these indications, the pela-based combination therapy met the initial predefined success criteria.

Starting with anal cancer. On February 14, we announced plans to initiate the expansion of enrollment into this cohort based on positive preliminary results, which were reported at an international medical meeting in November of last year. It is notable that this cohort evaluates the combination of pela and atezolizumab without chemotherapy in patients with second-line or later disease. Positive results from the expanded anal cancer cohort may open the door to an accelerated registrational path. A modest expansion of fewer than 28 patients is expected to be sufficient to confirm the benefit we've seen so far and to provide the basis for a registrational study, which we anticipate would be the next logical step. We are actively enrolling patients into this study as well as adding new sites. We intend to report additional anal cancer results in 2025.

Moving to the modified FOLFIRINOX pancreatic cancer study. On March 5, we announced plans to initiate a new pancreatic cancer cohort in the GOBLET study, this cohort, supported by a $5 million grant from PanCAN, will evaluate pela in combination with modified FOLFIRINOX, with or without atezolizumab, in patients with newly diagnosed PDAC. This study complements our ongoing development of pela in combination with gemcitabine and nab-paclitaxel, the other commonly used chemotherapy for metastatic pancreatic cancer. Evaluating pela in combination with both of these widely used chemotherapeutic regimens will broaden the scope of our clinical development program, with the goal of making pela-based therapies available to the widest possible range of pancreatic cancer patients.

Earlier this morning, we announced that we have received regulatory approval to move forward with the pela-modified FOLFIRINOX combination study, and we expect to enroll patients beginning in the second quarter of this year.

In closing, I'd like to discuss our registrational plans for pela in pancreatic cancer. Our registrational strategy will focus on pela in combination with atezolizumab, gemcitabine and nab-paclitaxel in patients receiving first-line treatment for metastatic pancreatic cancer. We continue to develop a study protocol that utilizes an adaptive design, building on the positive results from cohort 1 of the GOBLET study. We expect to provide an update on these plans this quarter.

Before I close, I'd like to express our deep thanks to everyone who has participated in or supported our clinical program. We are very grateful for your valuable contributions.

Now I'd like to turn the call over to Kirk to review the financial results for the first quarter of 2024.

[Kirk Look, executive]

Thanks, Tom, and good afternoon, everyone. During this portion of the call discussing our financial results, I will be providing data in Canadian dollars, unless otherwise noted. A full summary of our financial results can be found on the Investors section of our website under Filings and Reports or in the press release issued earlier this afternoon.

As you all will hear, we have taken a responsible approach to our financial strategy and spending. The company closed the first quarter with $29.6 million in cash and cash equivalents compared to $34.9 million in cash and cash equivalents as of December 31, 2023. We believe this will enable us to achieve the milestones discussed in today's call. The net loss for the first quarter of 2024 was $6.9 million compared to $6.4 million in the first quarter of 2023, equating to a net loss of $0.09 per share in the first quarter of 2024 compared to a net loss of $0.10 per share for the same period in 2023.

Now general and administrative expenses for the first quarter of 2014 were $3 million compared to $3.2 million for the first quarter of 2023. The change is primarily due to lower public company-related expenses associated with lower investor relations activities and lower directors and officers liability insurance premiums.

Now research and development expenses for the first quarter of 2024 were $5.7 million compared to $3.5 million for the first quarter of 2023. The change was mainly driven by higher manufacturing expenses associated with completing a cGMP production run and the related batch testing. We have also begun preparation for an upcoming product fill.

Now this is an exciting time for Oncolytics as we position the company to make the jump to a late-stage oncology company. We look forward to providing updates on our progress, especially in regard to the registration-enabling studies for breast and pancreatic cancer.

I'll now give the call back to Matt for closing comments. Matt?

[Matt Coffey, executive]

Thanks, Kirk. As we conclude today's call, I hope you take away these key messages. Pela is on track to advance the registrational trials in breast cancer and pancreatic cancer. We believe our robust positive clinical and translational data supports pela's MOA as an immunotherapeutic agent. We expect to report overall survival data from the BRACELET-1 breast cancer study in H2 2024. The pela data set has attracted and enriched the interest of the clinical oncology community and potential strategic partners. And finally, expanded enrollment in the anal cancer cohort at a GOBLET study could open the door to a new registrational indication.

As Kirk mentioned, we're enthusiastic about the groundwork we have laid so far this year as we move closer to starting the registration-enabled studies to bring pela closer to regulatory approval. I don't think I've ever been more excited about our data sets and the productive discussions that we've been having with key opinion leaders, our clinical collaborators and regulators.

Operator, I would now like to open the call for questions.

[Operator]

[Operator Instructions] Your first question comes from the line of John Newman from Canaccord.

[John Newman, analyst]

Just wondering if you could provide a little bit more color on the potential design of the pivotal study in metastatic breast cancer with pela. Obviously, you're going to be meeting with the FDA soon, but just curious, just generally speaking, sort of what that design could look like.

[Matt Coffey, executive]

Thanks, John. I'm going to push Tom under the bus on this one. And it's interesting because I'm not sure if you saw the DESTINY-Breast06 results that came out yesterday because that certainly has bearing on what's -- fortunately, we were able to flag with the Type C meeting with the agency. And then very loosely, we can talk about comparable studies that I think basically we've modeled on.

And if there's any other questions at that, Tom, I'd be happy to help you out.

[Thomas Heineman, executive]

Yes. John, so as we mentioned, we will be meeting with the FDA to discuss some of the key elements of our next breast cancer study. And among those key elements will be the population, and that's what Matt was referring to, is that we want to make sure that the population we evaluate in our next study is the most relevant population from the perspective of the current and the future standard of care for these patients, right?

And so the DESTINY-Breast06 results, which are expected shortly, will help shape the future standard of care in metastatic breast cancer patients who failed hormonal therapy. And so we have anticipated that, and we'll have a specific discussion with the agency about the most appropriate population. We also plan to discuss some of the other key elements of the study design, including the primary end point and the statistical plan in general. And as we mentioned in our talk earlier, our goal is to design a study that is efficient, flexible, as quick as possible and that offers the potential for an early registration of pelareorep in this population.

[Operator]

Your next question is from the line of Rahul Sarugaser from Raymond James.

[Michael Freeman, analyst]

Matt, Kirk, Tom, this is Mike on for Rahul today. Congratulations on the action-packed quarter. I have a question on the interaction between the 2 pancreatic cancer trials. Congratulations on announcing your green light on the mFOLFIRINOX trial. I'm curious about, I guess, your go-forward plan with these 2 trials in mind. The cohort 1 trial seems is more advanced than the latter. I'm curious about your staging that you have in mind in respect to registration for those 2 trials.

[Matt Coffey, executive]

Mike, great question, and I'm glad you asked it because I think there's some confusion around why we would like pursue both first-line studies. What we're finding from GOBLET is the earlier the patient, the more robust is the T cell response. So when we look at pancreatic, it had by far the strongest T-cell response; anal in the second-line as the next; by the time we get to third-line, colorectal, we met the success criteria, but there's more of a muted T cell response. So we want to stay in the first-line setting. And there's a really nice paper by Jim Allison that just came out talking about how immunotherapies become more and more ineffective with each round of treatment. So we did want to stay in the first line setting.

Patients with pancreatic cancer or even in the first-line setting can be quite variable. Older patients, patients in adjuvant therapy tend to get nab-paclitaxel and gemcitabine because it's considered to be more, I don't want to say gentle, but gentle is the right word. So you're going to see a little bit less than half of the patients getting that. And we combine that based on results that we had with gemcitabine and paclitaxel in the past. And I think it did very, very well with that study.

Those patients were given gem/nab-paclitaxel because I think almost 1/3 of them had received FOLFIRINOX or modified FOLFIRINOX in the "adjuvant" phase. But we're not entirely sure it was really the adjuvant phase in the sense that it seemed that they had unclear margin. So they were almost like second-line patients. Also, those patients had a lot of liver mass. So they were entirely appropriate patient population to get gem-nab [ with a trio ] of Tecentriq because they were more heavily appreciated and tend to have more burdensome disease.

With the second study, it is randomized to modified FOLFIRINOX, pela, plus or minus atezolizumab. Our expectation here is patients will have much higher organ reserve, will have less pretreatment and hopefully less liver metastases, so we can go in there and treat much more aggressively. And it will be much easier to characterize the role that we're seeing for Tecentriq.

Looking at the results we've seen before, Tecentriq does enhance the inflammatory response. We do see greater numbers of NK and T cells in the presence of Tecentriq. And we get a lot less exhaustion markers in the presence of Tecentriq. So we do expect the modified FOLFIRINO/pela arm to be successful, but we really do expect to see tremendous activity with the addition of Tecentriq because they just work so well hand-in-hand. And by addressing both groups, hopefully, we become the standard of care for all first-line patients in pancreatic, irrespective of their pretreatment histories or organ reserve.

Tom, did you want to add anything?

[Thomas Heineman, executive]

Yes. No, I think that covers it. I think the bottom line is that by exploring pela in combination with both of the backbone chemotherapies that are commonly used in this population, it provides an opportunity to treat ultimately the broadest range of patients and to give physicians the most flexibility possible and best option for all pancreatic cancer patients.

[Michael Freeman, analyst]

Okay. Very helpful. And quickly on the data that you seek to present at ASCO coming up, this Phase I/II trial with mFOLFIRINOX, I'm curious from where this data derives and what maturity of data should we expect here and I guess the data cutoff date you might be presenting to data.

[Thomas Heineman, executive]

Yes. So just to be clear, the poster presentation that we'll have at ASCO related to the modified FOLFIRINOX study is a, trial in,- progress poster in which we outline the details of the study that will, at that time, be currently enrolling, right? So there will be no data from that study presented at ASCO at this meeting.

[Matt Coffey, executive]

Well, if there's no further questions, I just want to thank everyone for participating in today's call and for following Oncolytics development. We're optimistic about the potential for pela to make a big difference in the lives of cancer patients.

I look forward to updating you on our progress throughout the year, and I wish everyone a great evening. Thanks so much.