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spk02: Good morning and welcome to Cirrus Pharmaceuticals' second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investor Relations and Media section of Cirrus' website at www.cirrus.com. Please be advised that today's call is being recorded. At this time, I would like to turn the call over to Courtney Solberg, Manager of Corporate Communications and Investor Relations at Cirrus.
spk01: Thank you. This morning we issued a press release announcing our second quarter 2022 financial results and a broader business update. The release is available in the Investors and Media section of Cirrus' website at www.cirrus.com. We will begin the call with prepared remarks by Dr. Nancy Simonian, our Chief Executive Officer, Dr. David Roth, our Chief Medical Officer, and Jason Haas, our Chief Financial Officer. We will then open the call for questions. Kristen Stevens, our Chief Development Officer, Dr. Eric Olson, our Chief Scientific Officer, and Conley Chee, our Chief Commercial Officer, are also on the call and will be available for Q&A. Before we begin, I would like to remind everyone that statements we make on this conference call will include forward-looking statements, including statements related to our planned strategic merger with Time Technologies and concurrent private placement. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in the risk factor section of our annual report on Form 10-K and our quarterly report on Form 10-Q that we filed this morning, and any other filings that we may make with the SEC in the future. In particular, the extent to which the COVID-19 pandemic continues to impact our operations and those of the third parties on which we rely will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. I would now like to turn the call over to Nancy.
spk00: Thank you, Courtney. Good morning, everyone, and thank you for joining us today. In the past months, we've made important progress towards building Cirrus into a late-stage company with a portfolio of small molecule medicines that have the potential to deliver new standards of care for patients with cancer. Cirrus enters the second half of this year in a position of strength. Our clinical programs are progressing well, and we are on track to have multiple data readouts over the next 18 months. This includes pivotal data from our select MBS1 trial, and data from the safety leading portions of the select AML1 phase two trial, and the phase one trial of SY5609 in pancreatic cancer. Today, we are pleased to report promising preliminary data from our dose confirmation study of SY-2101, which supports advancement of 2101 toward our Phase III trial, which is expected to initiate in the second half of 2023. Additionally, as we announced in July, we expect to secure approximately $190 million through a merger with Time Technologies and a concurrent pipe investment, both of which are expected to close in the second half of 2022. Together, along with the previously announced amendment to our loan agreement with Oxford, we anticipate these transactions will extend our cash runway into 2025, at least one year beyond the expected pivotal data from our ongoing select MDS1 phase three trial. We are incredibly grateful to our new and existing investors for their support, as well as to the time team for their collaboration throughout the strategic process. We look forward to maximizing value for patients, our combined company, and our shareholders in the months and years ahead. I will now turn the call over to David, who will review the recent progress we have made across our clinical and preclinical programs.
spk04: Thank you, Nancy. We're pleased to report promising preliminary data today from our ongoing dose confirmation trial of 2101, our novel oral form of arsenic trioxide, or ATO. As a reminder, this is the first crossover study directly comparing 2101 to the approved dose of IV ATO and provides important data for our Phase III dose selection. In this trial, patients with acute promyelocytic leukemia, or APL, receive a single dose of 2101 in the fasted and in the fed states. as well as IV ATO, and serial PK measurements are taken after each administration. The goal of this study is to directly compare the AUC and CMAX of 2101 to IV ATO. Safety from the ongoing study continues to support that 2101 has a favorable tolerability profile. No severe adverse events have been reported in this study, and no new safety signals have been identified, in particular with respect to liver toxicity or cardiac QT prolongation, which have been associated with IVATL. Based on preliminary data with full PK datasets in our study, 2101 at a 15 milligram dose achieved exposures based on AUC and Cmax that were comparable to IVATO when administered at 0.15 milligrams per kilogram, the approved dose. Additionally, 2101 showed high oral bioavailability of approximately 80%, which is the first quantitative assessment of the oral bioavailability of 2101 in the context of this intrapatient crossover study. Furthermore, across multiple patients treated with 2101, at 10 milligrams or 15 milligrams, which includes those from the original PK study conducted by Orsinix, we continue to be encouraged that we will be able to identify a dose that can achieve exposures consistent with those of IV ATO for the planned Phase III trial. This preliminary data provides further confidence that 2101 has the potential to replace the standard of care IV treatment for APL. which is incredibly burdensome both for patients and the healthcare system. We're continuing to enroll patients in our dose confirmation study and expect to identify the optimal dose to advance into our planned phase three trial, which is expected to initiate in the second half of 2023. Additionally, in July, we received feedback from the European Medicines Agency, or EMA, on the pivotal development plan for 2101, which together with prior feedback from the FDA informs our decision to move forward with a single registration trial that can support the approval of 2101 in both the US and EU. Turning to Tamibaratine, our selective and potent RAR alpha agonist, Tamibaratine has the potential to set a new treatment paradigm for RARA positive patients who overexpress the RARA gene with higher risk MDS, and newly diagnosed unfit AML. The Select MDS-1 trial is on track, and we expect to report pivotal data in late 2023 or early 2024. We currently have over 50 sites open globally and expect to open additional sites in the months ahead. Importantly, and as we disclosed in June, based on data from over 175 patients, we now estimate that approximately 50% of MDS patients are RARA positive, which we believe has positive implications both for enrollment in our ongoing study as well as the market opportunity long-term. Also in August, we announced that the EMA issued a positive opinion on our application for orphan drug designation to Tamibaratine for the treatment of MDS. Medicines that meet the EMA's orphan designation criteria qualify for financial and regulatory incentives, including a 10-year period of market exclusivity after product approval, protocol assistance from the EMA at reduced fees during the product development phase, and access to centralized marketing authorization. As a reminder, Tammy Baratine was granted orphan drug designation in MDS by the FDA in February of this year. These agencies' decisions represent an important milestone for MDS patients who are in need of effective, tolerable, and convenient treatment options. Despite successful advancements in blood cancer more broadly, MDS has largely lagged behind in drug development. Hypomethylating agents, or HMAs, remain the existing standard of care and provide limited efficacy. No new therapies outside of HMAs have been approved in over a decade. We believe Tamibaratine, which has a novel mechanism and has demonstrated favorable tolerability and strong efficacy, has the potential to be the first therapy for a targeted patient population in higher-risk MDS. As you know, we're also evaluating Tamibaratine in the Select AML-1 Phase II trial in RARA-positive patients with newly diagnosed unfit AML. About a third of unfit AML patients do not respond to the standard of care, venetoclax and azacitidine, and a majority relapse. Our translational and clinical data support the potential for the RARA biomarker to enrich for patients more likely to respond to tamibaratine and for whom the standard of care may be suboptimal. The Select AML-1 trial is evaluating the triplet regimen of tamibaratine, venetoclax, and azacitidine in RARA-positive patients with AML, and we look forward to providing clinical activity and safety data from the safety lead-in portion of the study in the second half of this year. We believe that data with our triplet regimen will provide an understanding of safety as well as an early look at efficacy based on objective assessments of response rates and time to response. We plan to initiate the randomized portion of the trial in approximately 80 additional RARA-positive patients with data from the randomized portion expected in 2023 or 2024. Finally, I'll turn to 5609, our highly selective and potent oral CDK7 inhibitor. 5609 is being evaluated in the ongoing Phase I trial in combination with chemotherapy and in patients with relapsed refractory pancreatic cancer. Currently, the only approved agent for second-line pancreatic cancer is amavide in combination with 5-FU lucrevorin, which offers an average progression-free survival of approximately three months. The phase one trial of 5609 remains on track to report clinical activity and safety data from the safety lead-in portion later this year. Based on these data, we will determine the best course for further development of 5609. We're also pleased that the arm of Roche's ongoing Phase 1-1B intrinsic trial, evaluating 5609 in combination with atezolizumab, a PD-L1 inhibitor in BRAF mutant colorectal cancer, is now actively enrolling patients. We're very encouraged by continued momentum across our clinical portfolio, and look forward to sharing additional data in the coming months as we learn more about the potential of each of our investigational therapies to change the standard of care for patients. Next, I'll turn to our gene control discovery engine. In July, we nominated SY12882, our oral potent and selective CDK12 inhibitor, as our next development candidate. Preclinical data presented at AACR in April demonstrated that selective CDK12 inhibition decreased DNA repair and caused cell cycle dysregulation and genomic instability, leading to tumor growth inhibition and apoptosis in preclinical models. Additionally, selective CDK12 inhibition as a single agent induced tumor regression to model of small cell lung and breast cancer, and demonstrated activity in combination with lorbanectin in a small cell lung model, as well as with Olaparib in a PARP inhibitor-resistant patient-derived xenograft model of ovarian cancer. This nomination is a testament to our gene control discovery engine and Cirrhosis leadership in selective CDK inhibitors. As we announced also in July, we're exploring partnerships for 12882. as well as for our CDK11 and WRN programs. We're confident this approach will allow us to robustly advance each of our discovery programs as we focus our capital on our clinical assets, which have the potential to deliver the greatest benefit to patients in the near term. With that, I'll turn the call over to Jason to review our financial results.
spk03: Thank you, David. We are excited to be entering the second half of 2022 in a strong financial position. As Nancy mentioned, in July, we announced a definitive merger agreement with Time Technologies where we have agreed to acquire Time, including its pipeline assets and net cash of approximately $60 million. We also announced a Pike financing through which new and existing investors agreed to invest $130 million in our combined company. The PIPE was led by a life sciences-focused investment fund and also included new and existing Ciros shareholders such as Flagship, Avidity, DeepTrack, Bain, Invis, Samsara, Adage, Ally Bridge, and Cowen Healthcare Investments. We expect the PIPE to close concurrently with the merger in the second half of this year, subject to the approval of Ciros and Time shareholders and other customary closing conditions. Finally, in July, we also announced an amendment to our senior secured loan facility with Oxford Finance, which, subject to certain conditions, will extend the interest-only payment period from March 2023 to March 2024, and upon the achievement of certain milestones, all the way to September 2024. Following the close of these transactions, we expect to have a cash balance of approximately $240 million. And we believe this capital will be sufficient to fund our planned operating expenses and capital expenditure requirements into 2025, which is more than a year past our expected pivotal data readout from our select MDS-1 trial, and also allow us to build out our commercial operations to support the launch attempt of Baritone. Now I'll turn to our second quarter financial results. We recognized $6.3 million in revenues in the second quarter of 2022, consisting of $5.7 million from our collaboration with GBT and $600,000 from our collaboration with Insight. For the second quarter of 2021, we recognized a total of $5.2 million in revenue under our collaborations with GBT and Insight. R&D expenses were $33.1 million in the second quarter of 2022 compared to $25.8 million for the second quarter of 2021. This increase was primarily due to costs associated with the continued advancement of our clinical and preclinical programs and employee-related expenses. G&A expenses were $6.9 million in the second quarter of 22, as compared to $5.5 million for the second quarter of 21. This increase was primarily due to employee-related expenses. Finally, we reported a net loss of the second quarter of $34.5 million, or 54 cents per share, compared to a net loss of $22.5 million, or 36 cents per share, for the same period in 2021. With that, I will now turn the call over to the operator for questions.
spk02: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble the roster. The first question comes from Phil Nadeau of Kalman Company. Please go ahead.
spk04: Good morning. Congrats on the progress, and thanks for taking our questions. A couple follow-ups on 2101, if we could. First, is there any interpatient variability in the exposures to 2101, or is it relatively consistent across patients? And then second, I know you mentioned the tolerability profile was was good, but specifically, are there any AEs associated with oral dosing such as GI toxicity? Thanks, Bill. It's David. So it's a good question about variability. Variability is an important parameter that's going to really help to inform actually the totality of the data set that we need to generate in order to select our go-forward dose. And, you know, we haven't reported on that specifically, but I think what I can say is that we've been, you know, very encouraged by what we're seeing, and we're confident that we're going to have a dose to move forward with to start our Phase 3 trial in the second half of 2023. With respect to the adverse events, you know, I mentioned that we really haven't had any reports to date of serious adverse events, and we've had no real adverse events. So the childhood profile seems very encouraging. Obviously there's more opportunity for us to observe potential side effects, but at the moment things are looking very encouraging and we have no reason to expect any future issues with the oral form of ATO. That's very helpful. In light of the good data that you've seen thus far, what still remains to be optimized through the continuation of the study? What parameters are you are you trying to sell for? Yeah. So again, I, so I think the main, the main thing that I think we should all appreciate is, uh, is that IV ATO is, is dose at a dose of 0.15 milligrams per kilogram. So the dosing algorithm for the Adrenas form is weight, weight-based adjusted. Uh, you know, we've gone in, uh, initiating this trial with a 15 milligram, uh, flat dose and, we really feel it's important to understand the characteristics of the patients so that we understand the exposures we're measuring and whether there's any influence on those exposures based on characteristics of the patients. Now weight is an obvious one to look at because the IV has chosen to normalize their dose by weight. So depending on the range of weights of the enrolled patients, we'll have a good sense as to whether that is a parameter that influences exposure. So we just need to feel good about the breadth of the patients who are coming into the trial who are getting dosed to see if we can develop an adequate model that helps us determine the relationship between exposure and patient body weight. Obviously, if everyone comes in with the same weight, we're not going to get a lot of insight into that. But obviously, that's not going to be the case. So I think that's really the main thing that we're looking at now is just to build out the robustness of our data set and go in with the appropriate model to assure the right exposures over the range of different types of patients who may be treated. Oh, okay. I see. That makes a lot of sense. Second question on select AML. You mentioned we'll get clinical activity measures at the end of the year, and I think in the prepared remarks you even mentioned perhaps response rates Are we going to get response rates from SelectAML during the second half of this year, or will it be earlier measures of activity? Yeah, so, look, the trial is testing our triplet of Tamibaratine and Vaneza in what we're calling a safety lead-in, and that's a prelude to opening the randomized portion of the trial where we'll compare that to the doublet of Vaneza. obviously we're looking at safety, right? So that's the main thing that we need to demonstrate. But all these patients are being treated actively for newly diagnosed unfit AML. So we're gonna have responses, bone marrow aspirates are being done at all the usual times after one, two, three months and so on and thereafter. So I think it's reasonable to expect that you'll see activity in addition to safety. And those are all the usual measures, right? So our primary endpoint is the CR-CRI rate. So obviously we'll be looking for patients who have that and we'll be looking at the speed to determining the response and so on and so forth. Got it. That is very helpful. Thanks for taking our questions and congrats again on the progress. Thank you so much.
spk02: Thanks, Bill. The next question comes from Jason Butler of JMP Securities. Please go ahead.
spk06: Hi, thanks for taking the questions. A couple more on 2101. I guess just to confirm, is the plan to advance one dose into phase three, or could you explore potentially, you know, a lower dose as well? And then secondly, can you just remind us of the, you know, additional work you need to do after confirming the dose and the profile in the PK study, but before initiating the phase three trial? Thanks.
spk04: Yeah, so, you know, we would... We're going to establish the dose that we're going to recommend to treat patients with moving into the phase three. We haven't finalized that determination. That's why the trial is still ongoing. It may be a specific dose or it may be a weight-adjusted dose. So I think that's really where we're leaning right now. And, you know, in terms of other things that need to be done, obviously the obvious things that relate to the trial startup. You know, Nancy, if you have any other comments about other activities that are going to happen between now and the initiation of the trial, feel free.
spk00: Yeah, no, I was just going to add, Jason, that obviously selecting the dose, finalizing the protocol, and, of course, then there's all the manufacturing necessary for the Phase III material to start the phase three are kind of the things that we're working on right now and feel very confident that we're on track to with all of those activities that are needed to start the phase three.
spk06: Great. And then just on the earlier stage pipeline programs, you said you're looking to progress partnership discussions. Can you just give us a sense of what the priority level there is or how how early or advanced into those discussions are. Obviously, I understand you can't give timelines here, but just a sense of how active those discussions are.
spk00: Yeah, so first I would just say that, you know, we remain very excited and bullish on our gene control discovery engine. The CDK12 inhibitor development candidate nomination, I think, is a great testament to what our scientists can do in terms of selective, very potent inhibitors of these important regulatory targets. As you know, as we're focusing now on kind of our late stage clinical pipeline, we think that it's in the best interest of these programs that we seek a partnership to ensure that we have adequate capital to robustly develop those early programs. So, you know, we have ongoing discussions going on on these oncology discovery programs, and we feel, you know, confident in terms of being able to enter into one or more partnerships. But, you know, we'll keep you apprised of that.
spk06: Okay, great. Thanks for taking the questions.
spk02: As a reminder, if you have a question, please press star 1. The next question comes from Mark Bradenbach of Oppenheimer. Please go ahead.
spk05: Hey, good morning, guys, and thanks for taking our questions. Just a few quick ones for me. First, with regard to the EMA feedback on SYA 2101, did that feedback substantially influence or cause you to change your plans for the design of your pivotal trial in terms of size and endpoints? Another question is, is what's timing looking like for the initiation of the randomized portion of the select AML1 study? Is that something we can expect to kick off kind of later this year as soon as we see the safety lead-in data? And one final one for me, you know, very quickly, does the pending GBT acquisition by Pfizer, you know, what does that mean for your collaboration? Are you getting any indications that Pfizer would want to continue developing fetal hemoglobin inducers? Thanks for taking the questions.
spk04: Sure. Okay, so the first question was related to the EMA feedback on 2101. So, you know, we had already received feedback from a very fruitful dialogue with the Food and Drug Administration on our proposed strategy, and it really was important in corroborating our approach and giving us a solid foundation upon which we can move forward, you know, with endpoints and benchmarks to assess those endpoints and various things like that so we had a good structure for study design to take forward also in terms of size we took that strategy to the EMA and vetted our approach there and we received general alignment that that strategy was solid and so we come back from that meeting now emboldened with the notion that we have an opportunity to use one protocol to seek global approvals in both the U.S. and Europe. So that's really very exciting and very strong positive feedback for our go-forward plan. With the AML trial, obviously we're on target to report data coming out of the safety lead-in in the second half of this year, obviously later this year. And our current plan is to move forward with the randomized portion. As we get closer to that, we'll give you an update on on the specific timing of opening the randomized portion of the trial. And then the last one is related to GBT, and I'll let Nancy take that one.
spk00: Yeah, so we remain really excited about our ongoing collaboration with GBT, which is to develop sort of small molecule inducers of fetal hemoglobin, which we think is a really great opportunity to treat, kind of give a functional cure to sickle cell disease patients with an oral medicine. And obviously we're incredibly excited for GBT with the news yesterday about the Pfizer acquisition. And I think, you know, it suggests to me that there's a real interest in sickle cell disease and thinking about all the ways that we can improve that disease, which has been neglected for so long. And I think it's very exciting overall for the field to have that potential pending acquisition. In terms of what we're doing right now, it doesn't impact our collaboration, but as we learn more from discussions with GBT, we'll have a better idea about where that's going as it relates to our relationship. But we think it's actually overall really positive news for the sickle cell disease community.
spk05: All right. Thanks so much, and congrats again.
spk02: Mm-hmm. Seeing that there are no further questions, I would like to turn the conference back over to Nancy Simonian for closing remarks.
spk00: Thank you, Operator, and thank you, everyone, for joining us today and for your continued support of Cirrus. We look forward to updating you again soon as we advance our portfolio and work to build Cirrus into a leading biopharmaceutical company. Please reach out if you have any further questions. Thank you.
spk02: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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