PLUS THERAPEUTICS, Inc.

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics fourth quarter and full year 2020 results call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We ask that you please pick up your handset to allow optimal sound quality. If you should require operator assistance, please press star zero. Before we begin, we would like to advise 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 Therapeutics' future operating results and financial position. All such statements are subject to risk and uncertainties, including the risk 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. Mark Hedrick, Plus Therapeutics President and Chief Executive Officer. Sir, you may begin.

Thank you, Erica, and good afternoon, everyone. Thank you for taking the time to join us today as we provide a business update and discuss our 2020 fourth quarter and full year results. Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer. But before Andrew provides a brief overview of our financial performance, I would like to provide an update on our drug development activities, focusing my remarks on two key topics. First, progress on the clinical development of our lead drug, rhenium nanoliposomes, also called RNL, currently being developed for recurrent glioblastoma. And second, and update on additional potential clinical target indications for RNL, apart from the current glioblastoma. Now, for those of you who are new to the company, RNL, our lead drug, is a unique therapeutic consisting of isotopic rhenium-186, which is made in a fission reactor that is chelated with proprietary technology and loaded into 100 nanometer liposomes. RNL is interesting in part because it releases two energy types, beta energy for cancer killing and gamma energy for imaging. Our lead indication for R&L is recurrent glioblastoma, which affects approximately 12,000 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 essentially all primary glioblastoma tumors will recur after initial treatment. The treatment of this devastating disease remains a significant challenge, and it's been about a decade since the FDA approved a new therapy to treat it. Not surprisingly, then, there is really no clear go-to standard of care for recurrent glioblastoma. And even in the few currently approved treatments, they provide only marginal survival benefit for those patients. So it's a real true medical need. Now, external beam radiation therapy is commonly used for glioblastoma, and its efficacy against GBM is about as good as it gets, or really better than any other potential treatment used today. Compared to external beam radiation therapy, whereby external energy or radiation passes through healthy tissue to reach the tumor, with RNL, it may be possible to deliver a radiation dose only to the tumor that is up to 15 to 20 times higher than with external beam radiation therapy as it's used today. And despite the super high doses of radiation delivered by RNL, and precisely because of its inherent tumor targeting capability, unwanted radiation exposure to nearby healthy tissue is actually reduced. Now the gamma energy produced by the RNL that I mentioned previously could actually be visualized in real time during the administration of the drug. This may allow doctors the ability to better control the radiation dose and distribution in order to more effectively treat both the bulk tumor and concomitantly the microscopic disease that's often left in the penumbra of healthy tissue. In 2020, R&L was granted both orphan and fast track designations from the FDA for treatment of patients with recurrent glioblastoma. And to further assist the company in its efforts to develop R&L successfully for brain cancer and other cancers, PLUS formed scientific and clinical advisory boards in 2020. These experts on our boards are leaders in the fields of neuro-oncology, neurosurgery, preclinical drug development, and nanotechnology, and will help guide and advise us as we advance our versatile proprietary nanotechnology forward. The ongoing RESPECT clinical trial is a Phase 1-2 design of up to 55 patients to determine the maximum feasible dose and to assess the safety, tolerability, distribution and potential efficacy of 186 RNL in recurrent or progressive malignant glioma funded to a significant degree. The trial is funded to a significant degree by the NIH or National Cancer Institutes. Through 2020 and into 2021 thus far, we remain on track and on plan for our RNL development program for glioblastoma, including winding up the phase one clinical program called RESPECT, optimization of the regulatory plan, and bringing the manufacturing and supply chains forward to industry standards in anticipation of the next steps in clinical development. In 2020, the Society for Neuro-Oncology annual meeting that was in November of last year, we provided an update on the RESPECT trial for RNL. At that time, interim data from the first 15 patients through cohort five and their SPECT trial were available. And that data can be found in detail on our website. But the interim data in brief showed that intratumoral RNL can successfully deliver up to 15 times the absorbed dose of radiation administered by standard external beam radiation therapy. RNL treatment volume and radiation dose were increased successfully from the earlier cohort's to the fifth cohort. Also, RNL was well tolerated with no dose-limiting toxicity observed, despite markedly higher absorbed doses of radiation compared to EBRT or external beam radiation. In our view, one reason we've seen no systemic serious adverse events or SAEs such as marrow ablation is that the radiation stays in the brain tumor and the adjacent tissue and exposure outside the brain is very low. And there's actually about a 3,000-fold difference between those two. Although the dose escalation part of the RESPECT trial is not designed to show efficacy per se, we have seen two long-term survivors greater than 30 months and a median and mean survival duration in subjects with tumor coverage greater than 75%, which is currently 8.9 months, and 13.6 months respectively and growing with six patients still alive. In the interim, we expanded enrollment to a third clinical trial site in the Anderson Cancer Center at Houston. We've completed enrollment of the three required patients in the sixth cohort of the RESPECT trial, increasing both the R and L drug volume and radiation dose once again. And additionally, I can tell you that we have treated one of an additional three planned patients at the cohort six dosage and volume, but with more aggressive drug delivery parameters. So thus far in summary, 19 patients with recurrent GBM have been treated in the respect trial. The latest patient update can actually be found in our February, 2021 by a CEO corporate presentation, which is now on our website. The plan then in GBM is to complete enrollment in the phase one trial this year, as well as complete critical CMC activities by year end or early 2022, such that we would potentially be ready for a phase two pivotal about a year from now, of course, depending on the strength of the data and FDA feedback. Now switching gears and regarding additional clinical development programs for R and L, A priority for us in 2021 is to move additional indications beyond recurrent glioblastoma forward into clinical trials. Although we have promising preclinical data for a number of potential indications, we intend to focus our near-term efforts on two additional CNS indications, leptomeningeal carcinomatosis, which the more modern term that's used is leptomeningeal metastases, and also pediatric brain cancer. Both are two very difficult to treat cancers. LM, leptomeningeal metastases, affects about 110,000 patients in the U.S., and there is no clear standard of care, and these patients die rapidly despite what care we do provide to them. Pediatric brain cancers, though much rarer, carry an equally poor prognosis. The anticipated treatment approach for pediatric brain cancer would mirror our approach in adults with glioblastoma using direct targeting and convection-enhanced delivery. However, LM is a disease of the lining of the spinal fluid space, and nanoliposomes seem to circulate freely if injected there, and preclinical studies thus far look promising. Therefore the delivery approach, which would be an LM direct into the CSF or cerebral spinal fluid, would go typically through an end-dwelling reservoir, which is commonly placed in these patients. Our goal is to have pre-IND meetings with the FDA for both indications in the early part of 2021, understand any gaps that we may currently have in the preclinical data, fill those as needed as rapidly as possible, and then move these into patients, hopefully by near end 2021, if possible. As a final note, and consistent with our stated philosophy of striving for maximum capital efficiency and minimal shareholder dilution in our drug development activities, we intend to apply for state of Texas funding through its CPRIP program whenever possible to help support our development expenditures, as we mentioned previously on other calls. So now with that, let me turn the call over to Andrew for a review of the financial results. Andrew.

Thank you, Mark, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year ended December 31, 2020. At year end 2020, cash and cash equivalents was $8.3 million compared to $17.6 million as of December 31, 2019. Debt principal at December 31, 2020 was 4.3 million, down from 9.3 million at December 31, 2019. In April 2020, we amended our debt with Oxford, providing additional flexibility by pushing out the interest-only period through May 2021 at the earliest, together with a 5 million pay down of principal. In the fourth quarter of 2020, we entered into a purchase agreement and registration rights agreement with Lincoln Park Capital Fund to sell to Lincoln Park up to $25 million worth of shares over the 36-month term of the agreement, subject to various terms and conditions. PLOS will have the right at its sole discretion to sell these shares. In addition, in the fourth quarter of 2020, the company filed a shelf registration on Form S3, allowing for sale of securities at the market of up to $10 million. As previously discussed, Our plan remains to maintain approximately 12 months of go-forward cash or access to cash on the balance sheet, such that we can reliably fund key product development efforts. In addition, we will continue to utilize non-dilutive sources of capital, such as the existing NIH grant that substantially offsets our clinical development costs. We will also continue to be aggressive in seeking further separate and other grants and partnership dollars where able. Cash used in operations for full year 2020 was approximately $8.4 million compared to $5.9 million in 2019. Reported revenues for full year 2020 were $303,000 compared to $7 million in 2019. This decrease was due to the closeout of the BARDA contract as previously disclosed. Research and development expenses were $2.7 million for full year 2020 as compared to $5.4 million for 2019. The decrease was partly attributed to the completion of the BARDA contract in 2019. G&A expense was $6.4 million for full year 2020, as compared to $5.3 million for 2019. The increase reflects an increase in professional fees relating to the recent enlightening transaction announced in 2020, partially offset by a decrease in payroll and related expenses. Interest expense decreased for a full year 2020 to $1.1 million from $1.9 million for full year 2019, reflecting the principal paydowns in 2019 and 2020. Net loss for full year 2020 was $8.2 million, as compared to a net loss of $11.4 million for full year 2019. Net loss in 2019 was impacted by 7.6 million loss from discontinued operations related to the asset divestiture in the second quarter of 2019. And now I'll turn it back to you, Mark. I think you may be on mute, Mark.

Thank you, Andrew. Regarding our forthcoming milestones, to summarize from the previous text of the script, they are complete enrollment of all patients in our respect phase one trial for RNL and our current GBM, complete key CMC activities for RNL, complete the phase two pivotal trial planning in conjunction with the FDA, conduct IMD enabling studies if needed for follow-on RNL indications, as mentioned. Advance RNL into phase one for leptomeningeal cancer and pediatric brain cancer, assuming we get the thumbs up and go ahead from the FDA. Complete additional preclinical studies, both for RNL and potential enhanced variants of RNL. Continue to evaluate potential synergistic acquisitions and licenses for new investigational drug candidates in related technology. and then continue to explore new partnering relationships, both for R&L and two of our legacy assets, DOSA Plus and DOXO Plus. So with that, Erica, let's turn it over for Q&A.

The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound keys. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Thank you. Our first question is from Jason McCarthy with Maxim Group.

Hey, everyone. Thanks for taking my questions. It's a Dave on the line for Jason. So I was just wondering if you could perhaps shed some color on when we could expect a full data readout for the phase one trial, and if that would include overall survival data. And then secondly, I just had a question about just the general risk profile of having patients undergo convection or enhanced delivery. I understand that in using CED you're able to minimize systemic exposure, but I'm just curious as to how that minimized risk from that perspective balances out with the invasive nature or also the invasive nature of convection or enhanced delivery. Thanks.

Hey, Dave. Thanks. Right now, I can't give you specific guidance on the Phase I trial data, and the reason why is because it's a dose escalation trial, we really have to sort of play read and react with respect to the data. I'd say there – let me give you an update of what the goals of that trial are, and I think I can sort of guide you towards, you know, when that may come, but not exactly. Okay. So in my mind, I think about it from five perspectives. First of all, feasibility. Can we get R&L into the brain and get it to where we want to go and keep it there? I think the answer to that is yes. I think you check that box. In terms of safety, and you brought up convection-enhanced delivery, and that is also dose-related as well and delivery-related. But so far, we've had no SAEs. So I think we're We've made good progress there, and I feel we're close there. The third thing that's important is getting to recommended phase two dose. And I think we're getting towards the end of that derivation. We're getting now to a point where, with the volume and radiation dose we're using, we can treat tumors that are roughly golf ball size. So we're getting the majority of the tumors that are out there. So we're close there. The fourth issue is delivery optimization. And I think we're getting close there. And as I mentioned, in the phase one, we've completed phase six cohort. And our plan now is to focus on improving and, in fact, making more aggressive the delivery parameters, specifically the rate of convection, which correlates to the pressure head behind the convective drug. So I think we're getting close there. And then finally, with respect to efficacy signal, that's the one that clearly the trial is not powered for. And because it does escalation, it's really the patients at the end of the escalation period that are really going to drive that efficacy signal, which is going to inform powering decisions going forward. So the way I'd sort of guide you is that we feel – pretty confident that we can get through the 2021 and have the trial fully enrolled. We can answer, I think, the majority of those five factors that I mentioned before. The one we can't answer really is efficacy. And so that really drives then what we do next. And it's sort of a long answer, but I'm going to hit on a couple of things here. So regarding, you know, the next clinical step, there are a couple of options. One is to go directly from Phase I into Phase III. One is to do an interim Phase II or what we call sort of an expansion cohort to help nail down those five features. And so, you know, our goal is to be ready with a pivotal ready drug by approximately the end of the year, and we're on track for that. wind up the phase one trial in enrollment in 2021, plan out that next step, whether it's directly the phase three or an interim trial of some sort, and then lay all that out to shareholders in the community as soon as possible. So 2021 will be a really important year for winding down the phase one, defining the what interim step there might be going into a pivotal and what the pivotal looks like. So that's a long-winded answer to try to cover a lot of ground there. I hope I did that. On the second question regarding the risk profile of CED, so, you know, it has been remarkable that we've had no treatment-related SAEs, and the adverse events that we've had have been things related to uh, you know, instrumenting the skin and, and developing burr holes into the skull. Uh, that is includes up to kind of more recently putting four catheters into the brain to get optimal tumor coverage. So, um, with respect to the surgery and the instrumentation, uh, we, you know, it's been, been very safe with respect to the convection, uh, we're now increasing the rate. We think that we might be able to do a better job conducting out beyond the tumor and get it to the rim of the cells that are responsible for their currents. We're doing a great job when we deliver over 75% absorbed dose to the tumor volume of really creating a cavity or void where the tumor was. You really just see empty space there once the RNL has had a chance to do its thing. So really we're now becoming, I think, more sophisticated where we're actually focusing on the cells, those pesky cells that we know that are there that are potentially responsible for occurrences and trying to address those by optimizing the delivery parameters. We may run into safety issues, but thus far I think it's been remarkably safe. given, you know, when you step back and think about what we're actually doing.

Great. That was really informative. I really appreciate it. Thanks a lot.

Sorry for being so long-winded.

No, it was very helpful. Thank you.

Yep.

Your next question is from Ahmed Samad with Octavian.

Hello, gentlemen. Thank you for taking the call. I just have a question on, you know, I think, Andrew, you mentioned non-diluted funding from the state of Texas in secret. I know in previous calls that you've stated that the companies based in Texas could receive up to $20 million in non-diluted funding from Texas or up to phase two trials. So I was just wondering if we could get a status update in the sort of the grant cycle round in Texas and any sort of color or visibility you can give on plus therapeutics therapeutics qualifying for secret funding now that you're closer to exiting phase one.

Do you want me to?

Yeah, Andrew, it was addressed to you. Go ahead, and then I may have something to add after.

Sure. Thank you, Matt, for the question. So, you know, obviously one of the underlying reasons for the move to Texas was to become eligible for the SIPRC grants. And at this point, we have submitted an application in the last month to help assist us funding leptomeningeal metastases indication. So that's the deadline for the application was end of January. And now we're waiting on the separate process. So, you know, realistically over the next, the process runs over the next 60 to 90 days. And then the goal is to have a decision sometime late summer, August, September timeframe.

Yeah. Yeah. I would just to reiterate what Andrew said, I, And I think he said in his remarks and what I mentioned as well, our goal is to maximally leverage the unique opportunity that being an oncology company in Texas provides. Our plan is not to specifically guide towards grant funding because, you know, these can be hard to get and can be fraught with bureaucratic requirements and so forth that make it hard to forecast until you actually sign the paperwork and it gets approved. So I think the key piece of guidance here is we're going to continue to aggressively seek funding like that, like the NIH, like other things that we think our technology wants that. We think there's a lot of interest in people wanting to see this successful and both from patient-related groups to scientific groups that have access to capital. So we're going to be aggressive there, but we'll be careful about not guiding towards any particular grant or grant funding. And if we get it, great. If we don't, we're going to keep trying. And we think that's a good use of our time and the talent of our team.

Yeah, no, thank you for that. I think it's a unique opportunity for a Texas-based biotech company, and so I always just want to to see what the current guidance is on that. And whether you get it or not, it's great to be able to leverage your status as a Texas company to take advantage of that. So it's always just top of mind when we're talking about these programs. So thank you so much for the information and the update.

Thank you for the question.

Your next question is from Ed Wu with Ascendia Capital.

Yeah, thank you for taking my question. Going back to the funding question, how much of the Phase I has currently been funded through grants?

Andrew, do you want to take that, or shall I?

You want to take it now?

Yeah, you can fill in any gaps. Yeah, thanks, Ed. I'll take you back to the timing of the grant because it may be illustrative. So when we, shortly after signing the agreement with NANATX to in-license the R&L product, the grant had really just been funded. It's a five-year grant of approximately just north of $3 million to cover the hard costs of the clinical trial. So again, it's phase one and phase two, up to 55 patients. So we closed the deal, I think, in Q2, Q3. So it's covering a substantial amount of the critical trial cost, probably on the order of 80% or more. The funding that we're actually contributing to the trial beyond our time and, you know, the overhead that comes with that. The hard costs are really related to drug availability. And why that's important is that investment that we're making in terms of drug availability helps us transition this to registrational drug supply downstream. So we're kind of investing in what we think is, you know, It's one of the really difficult, challenging parts of transitioning a phase one program to a later stage clinical program is getting the CMC right. So that's really where we've kind of picking up the ball from an NLTX team and really try to nail down the CMC component of that. So I think 80-20 is probably a good number, and with most of that 20% being in CMCs.

Great. And then my last question is in terms of, you know, timing. You said you hope to have most of the study wrapped up by the end of the year. Is there any possible delays, you know, either with COVID or with any other external factors?

Yeah. So, you know, initially we had concerns about the impact on COVID. Those fears have largely been unfounded. These are sick patients, and they get preferential treatment in the healthcare system because of the acuity and life-threatening nature of the disease. So a direct answer to your question is really no, we haven't seen any impact of COVID per se. Indirectly, we do see a a fight for resources within the academic institutions where they are running various trials. People may be sick or out or working from home or working different schedules. And then, frankly, kind of unrelated to COVID, there's a lot of competition in the workforce for clinical trial resources. And so to the degree that academic institutions are involved in the clinical trial execution, there's increased competition for those resources from pharma. So I would say that on the whole, we really haven't seen a meaningful delay. Don't anticipate any meaningful delay. The things that we're seeing are sort of at the margin, and they're things that we've been able to successfully manage through.

Great. Well, thank you, and good luck.

Thank you.

Thanks. There are no further questions at this time. Dr. Hedrick, I'll turn the call back over to you for closing remarks.

Great. Thank you very much, Erica. On behalf of our team, we appreciate everyone that joined in, participated in the call, and asked questions. And furthermore, I would like to really thank our PLUS team for their dedication and hard work. It was very productive 2020 as it relates to PLUS therapeutics. I also think the patients that have been involved in our trials and participated in the communication effort related to the potential for R and L in these tough diseases, and then also the physicians and providers that care for these patients. If you'd like to learn more about what we are doing, please go to our website. There are a lot of resources there, including presentations, videos, interviews with patients, that are available to you, and then we post on many of the social media channels to help educate you and keep you aware of what's going on. We are truly excited about the progress thus far. I hope you can see that in what we're doing, what we say. We are very excited also about the vision we have for helping these patients battle these very difficult, rare cancers. So once again, thank you, and have a good evening.

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