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spk03: Good afternoon, ladies and gentlemen, and welcome to the Reign Oncology, Inc. Second Quarter 2023 Earnings Conference Call. At this time, all lines are in listen-only mode, and following the presentation, we will conduct a question-and-answer session. If at any time during the call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 10, 2023. I would now like to turn the conference call over to Mr. Dan Barry of LifeSci Advisors, please go ahead.
spk00: Thank you, Operator, and good afternoon, everyone. With me today on the phone is Avinash Valenki, Chief Executive Officer of Raid Oncology, and Nelson Cabochon, Acting SVP of Finance. Following the call, Dr. Robert Doble, Chief Scientific Officer and Chief Medical Officer, will be joining Avinash and Nelson for a short Q&A. Earlier today, RAINN issued a news release announcing the company's results for the second quarter of 2023. Copies of this news release and SEC filings can be found in the Investors section of our website. Full details on updates from the quarter can be found in our news release and 10-Q issued today. Before we begin, I would 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 1995. These forward-looking statements are based upon RAINN's current expectations and involve assumptions that may never materialize or may prove to be incorrect. Action results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties as described in RAINN's most recent quarterly reports on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission and other SEC filings. All forward-looking statements made during this conference call are based on management's assumptions in estimates as of today, August 10, 2023. RAIN undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after today, except as required by law. With that, I'd like to turn the call over to Avinash Valunkey, CEO of RAIN Oncology. Avinash?
spk06: Thank you, Dan, and thanks to everyone for joining us for our second quarter 2023 earnings call. The second quarter was an important time at Wayne Oncology as we provided the top-line data readout on our Phase III global registrational trial for milodontan, our oral small molecule inhibitor of the MDM2-P53 complex in dedifferentiated liposarcoma, or DD-LPS. We reported that the phase three trial for milodimetan did not meet its primary endpoint. We also announced that we would suspend the enrollment of our second clinical study, the Mantra 2 study. We have begun the process of closing down Mantra 2. Despite what we feel is very clear activity from the Mantra 2 study, we do not feel its monotherapy activity rises to a level sufficient for registrational purposes. The closure of this study will ensure we remain judicious with our use of capital. We hope to present final data from the Mantra Phase 3 study and updated data from the Mantra 2 Phase 2 study of milodimetan in MDM2-amplified solid tumor patients in the fourth quarter of this year. We note the Mantra 2 presentation will reflect a significant number of additional patients beyond what was presented last year. We continue to believe that reactivating p53 is an important therapeutic strategy to add to the armamentarium of the anti-cancer therapies. At RAINN, we're proud that we were able to move as quickly as we did to test the hypothesis in a robust trial, as we did for a global phase three study, despite the results not being what we had hoped. Given these top line data for milodermatin, we determined that RAINN would be best positioned to achieve its business objectives by taking action to streamline operations, reprioritize its activities, and implement certain cost saving measures, including a reduction in force. We will implement those actions very quickly, resulting in substantial moderation of cash burn that will be apparent in the third quarter and beyond. Looking forward, we believe there are exciting opportunities ahead. It is no surprise that the challenging climate in biotech over the last few years has resulted in a number of interesting programs, companies, and technologies being underfinanced and often without strong cross-departmental leadership. Our corporate development team has been rapidly reviewing an extraordinary number of actionable opportunities to license or acquire clinical stage programs and technologies that may allow RAIN to continue to try to make a difference for cancer patients. Although we won't comment on programs under diligence, there are a number of opportunities that could be a great fit for RAINN with fascinating technology and novel therapeutic strategies for patients. We will update investors when appropriate on how we intend to push forward to add value for our shareholders. Let me now hand it over to Nelson Tabatouan to discuss our financials. Nelson?
spk01: Thank you, Evanesh. Before I proceed in providing updates for the financial results for the three months ended June 30, 2023, I would like to invite you to review our quarterly report and form 1025 today for more details. For the three months ended June 30, 2023, RAINN reported a net loss of $22.1 million as compared to a net loss of $17.6 million for the same period in 2022. The increase was primarily related to clinical trial costs for a Phase III MUNTRA trial and Phase II tumor agnostic basket trial MUNTRA II, as well as personal costs. General and administrative expenses were $5.4 million for the three months ended June 30, 2023, as compared to $3.5 million for the same period in 2022. The increase was primarily due to higher costs associated with launch preparation in anticipation to commercially launch melidematin and liposarcoma, personnel, legal, outside consulting, in accounting and audit fees. In May 2023, we announced a reduction in our workforce in connection with the reprioritization of the company's clinical strategy designed to optimize company resources. We recorded the restructuring charges of 2.8 million in the statements of operations for the three months ended June 30, 2023, comprised of $2.8 million cash severance, bonus, and related employee benefits and taxes of affected employees, as well as $37,000 of stock-based compensation expense related to option notification. Total non-cash stock-based compensation expense were approximately $0.8 million for the three months ended June 30, 2023, as compared to $1.4 million for the same period in 2022. As of June 30, 2023, RAINN had $86.3 million in cash, cash equivalents, and short-term investments. RAINN anticipates that its quarter-end cash position will provide runway into year-end 2026 in the absence of a corporate transaction and further financing. As of June 30, 2023, RAINN had approximately 36.4 million shares in Comstack outstanding.
spk08: Let me now turn it back to Avani. Thanks, Nelson.
spk06: With that, we'll turn it over to the operator to take any questions. Operator?
spk03: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You'll hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order that they are received. Should you wish to decline from the polling process, please press the star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. And your first question comes from Michael Schmidt from Guggenheim. Please go ahead.
spk02: Hey, good afternoon. It's for Michael. Thanks for taking our questions. Maybe a quick one on the potential new opportunities you guys are reviewing. Amnesia, I know you can't talk much on it, but maybe on a high level, can you talk about what modality Are you more interested at this moment?
spk06: Hi, Uday. Thanks for the question. So at a very high level, we're trying to be opportunistic across a multitude of opportunities. I think we have certainly been approached with a variety of precision oncology strategies, but across both small molecule and large molecule approaches. So that's what we have certainly been reviewing so far. But I won't comment more broadly than that.
spk08: Okay, that's very helpful. Thank you.
spk03: Thank you. Your next question comes from Yajal from CD. Please go ahead.
spk09: Hi, guys. This is Ashk Mubarak on FECOL. Thanks for taking my questions. I just, I guess I wanted to ask about the future of Melodemodan at this point. Is it more or less on the shelf at this point for the foreseeable future, or are there plans in the background that you're thinking about? And then my second question was, I recall in the past you had a RAD52 asset, which you had in development. I'm just wondering if you have any thoughts on that asset, and if maybe there's a world in which you reactivate that program. Thanks.
spk06: All right, Ashwin, thanks. We can be brief here. So there are no plans at the current time for Mila Demetan, and there's really no intention for deploying capital to support Mila Demetan today. And same for the RAD52 program, we're not moving that forward, and we stopped all investment over a year ago.
spk09: Okay, understood. Last question from me. I guess what's embedded in your cash runway guidance at this point, it doesn't sound like it includes any considerations for any potential deal you might do. So just curious what's in there right now.
spk06: Sure, I'll start that and then I'll ask Nelson to follow up with any additional detail. So in the cash runway guidance, we are certainly reflecting the closure of the existing studies that we alluded to and maintenance of a lean, organization that we think is sufficient for developing multiple earlier stage clinical programs. Nelson, do you have any additional comments?
spk01: Yeah, I just want to highlight that, you know, we speak about cash runaway through the end of 2026. It does not incorporate additional corporate transaction as well as additional financing. But I just want to highlight that in the second half of this year, 2023, you will see a significant reduction in cash runaway.
spk08: Got it. Thanks very much.
spk03: Thank you. And your next question comes from Joe Catanzaro from Piper Sandler. Please go ahead.
spk05: Hey, guys. I just had one quick question actually on Mila Deventan, though appreciate that you won't be moving forward with that program at all. I'm wondering if, since you've had more time to digest the MANTO trial, whether you've been able to sort of hone in on you know, any potential reasons as to why milidimetan underperformed, you know, the previous data you had generated in DDLPS. Thanks.
spk08: Hi, Joe. Thanks for the question. This is Bob Doble.
spk10: So, you know, I think for that question, we'll refer you to our upcoming planned presentations in the fourth quarter at a medical conference.
spk05: Okay. Got it. Thank you.
spk03: Thank you. And your next question comes from Sam Slutsky from LifeSci Capital. Please go ahead.
spk04: Hey, everyone. This is Anshul on for Sam. Thanks for taking our question. One question I had is basically as you're looking into these licensing and bringing in other assets, is there sort of a sweet spot of deals you're looking for in terms of stage of development or deal structure and so forth?
spk06: So we'll share, first of all, thanks for the question, Sam, or Anshul. I think what we would comment there is we want to be able to leverage our clinical organization. And again, I think the expertise that the team demonstrated through the Mantra 2 studies we think is exemplary. And so clinical stage is an important attribute of where we're looking. And I'll leave the comments there.
spk04: Great. Thank you. That makes sense.
spk03: Thank you. And your next question comes from Greg Savannah from MISU Securities. Please go ahead.
spk07: For Greg, just a question for me. How do you weigh the pluses and minuses between starting essentially a new, almost like a new type of RAIN oncology with a new asset versus other corporate options like a potential reverse merger or with some public or private company?
spk06: Thanks for the question. It's a great question. So the way that we approach that is to take a look at the attractiveness of the options that were presented, the options that we find, and the actionability of those opportunities. And if we can find an avenue that we think we can add value to, that certainly becomes more attractive than one of the other alternatives. So we are certainly looking at all of those avenues, and in the absence of an investable option with our existing cash resources and even our personnel, then other options become available. But at the current time, I think with my comments on the call, this is a unique time in biotech where there's a multitude of opportunities that are available to companies in our current position.
spk07: Got it.
spk03: Thank you. Thank you. Ladies and gentlemen, just as a reminder, should you have a question, please press star followed by the one. And your next question comes from Mitchell Kapoor from HCW. Please go ahead.
spk10: Hi, team. I hope you're doing well, and thanks for taking the questions. First, I just wanted to ask about just broadly the options on the table. Obviously, you mentioned a new precision oncology therapy, a new technology platform. I wanted to learn a little bit more about what you're thinking about a technology platform. What could that look like? What broadly does that mean? And then, you know, how many assets might you in-license? Is there kind of a limit there?
spk08: And then is there a hope for how long this could take?
spk06: All great questions, Mitchell. Thanks for the question. We're not going to respond in any meaningful depth to any of those questions. We want to leave it sufficiently broad at this point until they reach a point where it warrants further articulation to the public. And we'll provide those commentaries when we can, but now is not the appropriate time to provide that color.
spk10: Okay, understood. And maybe this is a question for Nelson. I just wanted to ask a finance question. So as expenses, you know, have changed to kind of moderate the cash burn, What kind of broadly could we see for the next few quarters in terms of SG&A and R&D in the absence of any kind of transaction?
spk01: Thanks, Michel. So in terms of the cash burn expense in Q3 onwards is going to be significantly lower compared to what you've seen in the first two quarters of this year and the prior year. You know, I don't want to go through the details of this, but you'd expect a runaway at really low compared to the runaway in the top 20 million in the first two quarters of this year.
spk08: Okay, great. Thank you, guys. Thank you.
spk03: Thank you. And there are no further questions at this time. Ebony, you may continue your conference.
spk06: Thank you, operator. We look forward to keeping everyone abreast of our plans once a forward plan has been solidified. Thank you.
spk03: Ladies and gentlemen, this concludes your conference call for today. We thank you very much for participating and ask that you please disconnect your lines. Have a great day.
spk08: Goodbye. The conference is no longer being recorded.
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