Earnings Transcript for CTIC - Q1 Fiscal Year 2021

Operator: Ladies and gentlemen, thank you for standing. Welcome to CTI BioPharma's First Quarter 2021 Earnings Call. [Operator instructions] This conference is being recorded today June 1, 2021. I would now like to turn the conference over to Dr. Adam Craig, CEO and President of CTI BioPharma. Please go ahead.

Adam Craig: Thank you, Liz. Welcome to this afternoon's conference call. Joining me today are David Kirske, Chief Financial Officer; and Bruce Seeley, Chief Operating Officer. Following formal remarks, the conference call will be open for questions. Before I begin, please note that during this call, we will be making forward-looking statements based on current expectations. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. Additional information concerning these risks and uncertainties are contained in today's press release. This quarter, CTI executed on critical activities that have further advanced pacritinib toward a U.S. approval and commercial launch later this year. Most notably, today we announced that our NDA submission for the use of pacritinib in patients with cytopenia modified process, that is those with severe thrombocytopenia defined as platelet counts of less than 15 times 10 to 9 petechiae been accepted by the Food and Drug Administration has been granted priority review. Our PDUFA target action date is November 30, 2021. And the FDA has informed us that they are not currently planning to hold an advisory committee to discuss the application. The NDA was accepted based on data from the two Phase 3 PACIFICA trials and the Phase 2 PAC203 trial with a focus on the severely thrombocytopenic patients enrolled in these studies who received pacritinib 200 milligrams twice a day. Our population includes frontline treatment naive patients and patients with prior exposure to JAK2 inhibitors. In the Persist-2, in patients with severe thrombocytopenia, who were treated with pacritinib 200 milligrams twice a day, 29% of patients had a reduction in spleen volume of at least 35% compared to 3% of patients receiving best available therapy. 23% of patients had a reduction in total symptom score of at least 50% compared to 13% of patients receiving the best available therapy, which included ruxolitinib. In the same population of patients treated with pacritinib, adverse events were generally low grade manageable with supportive care and rarely led to discontinuation, platelet count and hemoglobin were stabilized. Following approval, the ongoing Phase 3 PACIFICA study is now expected to be completed as opposed to prove or confirmatory trial. Over the last few months as the COVID pandemic has abated in the US, enrollments on PACIFICA has picked up significantly and we now expect to report top line prime FC data in 2022. With the FDA accepted and the PDUFA target date set, we're now even closer to being able to provide pacritinib to patients with cytopenia myelofibrosis, who are underserved by existing therapies. As a reminder, 1/3 of the existing myelofibrosis population has severe thrombocytopenia of approximately 7,000 patients. To address this unmet medical need and to prepare to deliver pacritinib to patients this year, our team has been working diligently on pre commercialization activities, including market access, distribution, supply chain, disease education, and field force planning and deployments. Moving on to an additional indication for pacritinib last year we launched the study of pacritinib in severe COVID-19 patients in response to the pandemic. This study PRE-VENT is a randomized, double blind, placebo controlled multicenter Phase 3 clinical trial comparing the use of pacritinib plus standard of care versus placebo plus standard of care in hospitalized patients with severe COVID-19. The primary endpoint of the trial will assess the proportions of patients who have progressed to invasive mechanical ventilation and/ or extra corporal membrane oxygenation or die by day 28. We expect to report on the outcome of the interim analysis from the study in the third quarter of 2021. Finally, as we have previously reported, we are investigating the use of pacritinib in the prevention of acute graft versus host disease or GvHD. At the American Society Hematology meeting or ASH in December 2020, data was presented from an investigator sponsored Phase 1/2 study showing that adding pacritinib to the standard prophylaxis of sirolimus and low dose tacrolimus resulted in significant reduction in the expected acute graft versus host disease rates in patients within the first 100 days of therapy, as compared to historical data without compromising transplantation outcomes and without any new safety concerns. The Phase 2 component of this study continues to enroll. And we remain on track to provide an update on the progress of the Phase 2 trial and any potential regulatory interactions around this indication later in the year. I'll now turn the call over to David to review our quarterly financials. David?

David Kirske: Thank you, Adam. As of March 31, 2021, cash, cash equivalents and short term investments totaled $37.2 million, as compared to $52.5 million as of December 31, 2020. On April 6 of this year, we completed an equity financing with net proceeds of $53.8 million, which extends our cash position to fund our operations into the fourth quarter of this year. Operating loss was $17.1 million and $11.9 million for the three months ended March 31, 2021 and 2020, respectively. No revenues were reported for the first three months ended March 31, 2021 or for the three months ended December 31, 2020. Net loss for the three months ended March 31, 2021 was $17.3 million or $0.23 basic and diluted loss per share, as compared to a net loss of $12.2 million or $0.20 basic and diluted loss per share for the same period in 2020. So with that, Adam, I'll hand it back to you.

Adam Craig: Thank you, David. So in summary, we're very pleased that our NDA has been accepted by the FDA with the PDUFA date of November 30, 2021. This represents a significant step forward in our efforts to deliver a treatment paradigm altering medicine to myelofibrosis patients in need. We look forward to continuing to work collaboratively with the FDA over the coming months and to advance our pre commercial activities in preparation for end of year product launch. This now concludes our remarks. Liz, please open the call for questions.

Operator: [Operator Instructions] Our first question comes from Ben Burnett with Stifel.

UnidentifiedAnalyst: Hi, good afternoon. This is Carolina on for Ben Burnett. Thank you for taking our questions and congrats on all the progress. Adam you mentioned in your prepared remarks, you're launching different initiatives to support the commercialization of pacritinib including business allocation, customer engagement et cetera. Could you provide additional context and a timeframe for these different activities?

AdamCraig: Yes, I'll hand the question to Bruce Seeley. Thank you.

BruceSeeley: Hi, Carolina. So the activities for commercialization are well underway. The teams have been following very detailed launch planning playbook to prepare for launch. And the teams are already working towards that hiring is on time, execution of the commercialization activities on time. As Adam mentioned in his opening remarks, we are spending a lot of time right now working on market access activities clearly for an oral compound that's going to be very important for us. We've hired a very good team to be able to help us with that. And those activities are well underway. I'm very confident that we will be able to meet the timelines to be prepared for launch later on time.

UnidentifiedAnalyst: Okay. Thanks. If I may as a follow up, when did you plan to complete the salesforce and the other commercial teams? Do you have headcount targets for the salesforce that you could share and then how long is the training process they have to go through? Thank you.

BruceSeeley: So we've not made a specific timeline as to the hiring of the salesforce in particular, we're focused on bringing in sales leadership right now. The field force is going to be later on this year, a little bit closer to launch. As it relates to training, we've already completed the development of all our training materials for the sales organization. The total training timeline will be about four to six weeks for the sales representatives to be field ready at that time.

Operator: Our next question comes from Ren Benjamin with JMP Securities.

RenBenjamin: Hey, good afternoon, guys. Thanks for taking the questions. And let me add my congratulations as well. Adam, can you just maybe take us through in terms of how much drug is available? What the -- kind of status of manufacturing is? And does the manufacturing plant need to be inspected as well? Or is that kind of already done? Maybe just a sense of how that's progressing?

AdamCraig: Yes, well, we are just give you brief manufacturing as well is under control, we've for some time had a substantial amount of drug products available. So we do have commercial lots, and we were ready and we're ready to launch if the approval comes early. And towards the latter part of this year, we will be manufacturing some new material, for the moment we are ready, and able to move forward as and when the drug is approved.

RenBenjamin: Got it. And then I guess just following up on the COVID-19 study, I believe it was you mentioned in the prepared remarks third quarter, just wanted to get a sense is that still, should we still be considering that quite material for the company or now that you have the acceptance and it's really a lot more about launch preparations? Should we really be focused on that?

AdamCraig: Well, with we are still going to, thank you, Ren, we're still going to conduct the interim correctly and assess the position of the drug once we have this trial. Rather, once we have the interim results. It's certainly not the main driver for the company at the moment. Majority of our focus, the vast majority, our focus is on the successful commercialization launch of the drug at the end of this year. But if there is an opportunity to move forward with COVID based on the interim analysis, then we'll discuss it and we'll let the street know.

Operator: Our next question comes from Thomas Flaten with Lake Street Capital Markets.

ThomasFlaten: Hey, good afternoon, guys and congrats as well. Just curious, Adam, it looks like the MPN guidelines were updated in mid April. Do you have a sense if that's on what time schedule there might be for another update there? I don't know what how closely your team has been interacting with the NCCN guideline committee for MPN.

AdamCraig: Bruce will take this question, Thomas.

BruceSeeley: We've been thinking a lot about our NCCN strategy. There's an opportunity for NCCN -- for us to inform NCCN of the data and so we have plans to be able to do that at the -- in the middle of the year, and then towards the end of the year is generally when they meet, although it is our expectation that time of approval that the NCCN committee can meet at the time of any new important approval in the marketplace. So that's what we expect.

ThomasFlaten: Got it. And Adam, could you remind us did you submit the indication with or without the restriction for the platelet counts?

AdamCraig: In our top line indication was for primary and secondary myelofibrosis.

ThomasFlaten: Got it. And then just one final one for me. Is there anything you can share with us around your thoughts on pricing, given the disparity in pricing between JAK and pacritinib?

AdamCraig: Not this time Thomas. We're not commenting on pricing.

Operator: Our next question comes from Chad Messer with Needham.

ChadMesser: Great. Thank you. Good evening. Thanks for taking my question. And congratulations on the NDA acceptance. Can you just talk a little bit about how patients who have low platelet count how they're treated in the system in terms of, are there any specialists they see or how are you going to target them given that this is your label? I guess is my question.

AdamCraig: I will hand over to Bruce.

BruceSeeley: So our market research suggests that community physicians are also quite comfortable treating myelofibrosis patients with low platelet counts. When the patients are referred to the academic centers, they generally have constitutional symptoms and which would include spleen volume increases, that the community oncologist is no longer comfortable treating in their offices. So at that point, they get referred. From a deployment perspective, it's going to be important for us not to just focus on the academic centers, but also have outreach to the community centers as well. They may not treat on an individual basis, that many patients in general, but as an in aggregate, they do represent a very large portion of the trading population.

Operator: Our next question comes from Bert Hazlett with BTIG.

BertHazlett: Yes, let me add my congratulations on the priority review as well. And just a quick one on GvHD. Could you remind of any differences between the Phase 2 design that's ongoing and the Phase 1?

AdamCraig: We can't hear you properly. It's very muffled.

BertHazlett: I'm sorry, Is that better?

AdamCraig: Yes, thank you.

BertHazlett: Could you remind us, first of all, congratulations again on priority review and then with GvHD, could you remind us of the any differences between the Phase 2 design that the ongoing study and the Phase1/2 ISP study? Just any changes or tweaks in design or patient population? Or endpoints or anything of the like, thank you.

AdamCraig: No, not really, that's essentially very similar purpose of the Phase 1 was to identify a safe and effective dose to go into Phase 2. And then at Phase 2, the number of patients was expanded. But so having tested two dose levels at Phase 2, 100 milligrams twice at Phase 1, 100 milligrams twice a day was selected. And that will be given in combination with sirolimus and tacrolimus to all Phase 2 patients.

Operator: That concludes today's question-and-answer session. I'd like to turn the call back to Dr. Craig for closing remarks.

A -AdamCraig: Thank you, Liz. And thank you everyone for joining the call today. We look forward to further conversations over the coming months.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.