Earnings Transcript for RAIN - Q1 Fiscal Year 2022

Operator: Good afternoon, and welcome to the Rain Therapeutics First Quarter 2022 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Bob Yedid of LifeSci Advisors. Please go ahead.

Bob Yedid: Thank you, operator, and good afternoon, everyone. With me today on the phone are Avanish Vellanki, Chief Executive Officer of Rain Therapeutics; Robert Doebele, Chief Scientific Officer; Richard Bryce, Chief Medical Officer; and Nelson Cabatuan, SVP of Finance. During today’s call, Avanish will provide an overall business update. Richard will provide an update on Rain’s clinical programs. Bob will review the research efforts. Nelson will review the financials. Before we begin, I’d like to remind you that the statements made on 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 Rain’s current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties as described in Rain’s annual report on Form 10-K for the year ended December 31, 2021, and in subsequent filings with the Securities and Exchange Commission. All forward-looking statements made during this conference call are based on management’s assumptions and estimates as of today, May 4, 2022. 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 those prepared remarks, it’s my pleasure to turn the call over to Avanish Vellanki, CEO of Rain. Avanish?

Avanish Vellanki: Thank you, Bob, and thanks to everyone for joining us for our first quarter earnings call. In the most recent quarter and since the end of 4Q of last year, Rain continues to advance the milademetan program and progressing nicely with enrollment in 2 of the 4 planned clinical trials with the 2 additional clinical trials planned to start in the fourth quarter of this year. As a reminder, we may refer to milademetan as mila or RAIN-32 on occasion. Today, Rain is very much a clinical execution story, and we’re very excited about our progress. First and foremost, our Phase III trial, the MANTRA study, for mila in patients with liposarcoma, has progressed well, and we can now offer guidance on completion of enrollment and refine the availability of top line pivotal Phase III data from the MANTRA study. We anticipate completion of enrollment by the end of this year with top line data anticipated in the first half of 2023, which is earlier than previously guided. Richard will provide more color on our progress. Based on our related guidance for the pivotal MANTRA study and our existing cash balance, we believe there is ample cushion between the availability of pivotal data and our cash runway, which takes us into the first half of 2024, avoiding the need for additional equity financing ahead of Phase III data. Our expectation is that if the data are supportive, the MANTRA study would enable our regulatory filing for milademetan and liposarcoma in the U.S., Europe and possibly other regions. As a reminder, the MANTRA study was designed based on discussions with the FDA and EMA held in early ‘21. Second, our Phase II tumor-agnostic MANTRA-2 study is also proceeding according to plan, and we continue to anticipate an interim data readout on approximately the first 10 patients in the fourth quarter of this year. To recap, this trial will evaluate mila in a basket trial across approximately 65 patients in the U.S. with solid tumors that exhibit high MDM2 gene amplification. If the early data show clinically meaningful responses, our intention would be to approach the regulatory agencies to obtain guidance on an estimated cohort size for purposes of registration from an expanded Phase II study rather than pursuing a separate Phase III study. In the prior quarter, we said that we would start the additional 2 studies for milademetan in the second half of this year, pending appropriate progress in enrollment of the first 2 studies. The reason for getting the study was to ensure appropriate use of cash resources at the company and to avoid triggering additional expense if there were any material budgetary concerns based on enrollment of the first 2 studies. We confirm that we now will seek to start both studies in the fourth quarter of this year. This includes the Phase II MANTRA-3 study in Merkel cell carcinoma, evaluating polyomavirus positive patients who are resistant or refractory to checkpoint inhibitor therapy and a Phase I/II MANTRA-4 study evaluating the combination of milademetan with a checkpoint inhibitor, Roche’s atezolizumab in a basket study of patients with p53 wild-type advanced solid tumors that exhibit loss of the gene CDKN2A. Richard will provide more detail on the MANTRA-3 and MANTRA-4 planned studies shortly. Coming back to our cash position. We continue to anticipate that based on the progress of our ongoing studies, there will be an ample cash runway beyond our Phase III data for the MANTRA study, and we anticipate to be able to complete all 4 studies within the articulated cash runway into the first half of 2024. We continue to progress our early research effort for RAD52. And while we’ve been more cautious about resourcing this effort relative to the later-stage milademetan program, we’re very excited about our progress. We would anticipate accelerating these efforts for RAD52 upon an event that could further bolster our financial position. We will update investors on our progress with the RAD52 program when appropriate. With that, I’d like to turn it over to our Chief Medical Officer, Dr. Richard Bryce.

Richard Bryce: Thank you, Avanish, and good afternoon, everyone. Following on from our last earnings call in March 2022, we have successfully activated a multitude of sites around the world for our Phase III MANTRA study in dedifferentiated liposarcoma, which I will abbreviate later to DDLPS. These include sites in the U.S., Europe and in Asia. Our site plan built in a degree of redundancy as it was difficult to have predicted how the pandemic was to evolve when we first started planning for the study in early 2021. We also believe that our global site plan was able to mitigate the potential enrollment impact at the Russia-Ukraine conflict. We’re thrilled to announce that we are now over halfway enrolled in the 160-patient study. And as Avanish pointed out, we anticipate enrollment completion by the end of this year with top line data from the pivotal study in the first half of 2023, which is earlier than previously guided. As a reminder, this pivotal trial compares milademetan monotherapy at our preferred dose of 260 milligrams dose daily for 3 consecutive days followed by 11 days off. We refer to this as the 3-out-of-14-day schedule to the approved agent on Yondelis or trabectedin. Yondelis has a published median progression-free survival in the DDLPS population of 2.2 months. In the prior 107-patient clinical trial at milademetan in which 53 patients with DDLPS were enrolled using various doses and schedules, the data previously presented demonstrated that those with the lowest median PFS rates were in the 30 patients receiving milademetan daily for either 21 or 28 days of a 28-day cycle. These dose schedules exhibited a median PFS rate of 6.3 months, which is almost triple out of trabectedin from the DDLPS population in the Yondelis registrational study. In the 16 patients receiving the intermittent schedule of 3 out of 14 days, at the 260-milligram dose, the median PFS rate was 7.4 months. And of note, our Phase III trial is powered to show a doubling of PFS benefit versus Yondelis. And as I mentioned earlier, we anticipate top line data readout from this study in the first half of 2023. Our MANTRA-2 basket trial in patients with p53 wild-type tumors, with MDM2 amplification at copy #12 or greater, is progressing as planned. 11 sites have been activated in the U.S. at the end of April, and additional just-in-time sites will be opened as necessary from referrals from the Tempus and Caris genomic testing services. We anticipate enrolling 65 patients across a range of solid tumors and using the same treatment protocol as in the registrational MANTRA trial. That is with milademetan dosed at 260 milligrams in the 3-out-of-14-day schedule. We anticipate an early data readout in the fourth quarter of this year and reporting patient responses, duration of response and safety in approximately 10 evaluable patients. Based on the progress made with our milademetan clinical program thus far, we’re looking forward to commencing 2 additional studies in the fourth quarter of this year. As Avanish mentioned, we anticipate starting the MANTRA-3 study of milademetan in patients with Merkel cell carcinoma who are resistant or refractory to checkpoint inhibitor therapy. As a reminder, we believe the majority of patients with Merkel cell carcinoma, up to 80% of them have a cancer induced by the polyomavirus, which induces MDM2 overexpression. We are also encouraged by data from other MDM2 inhibitor programs revealing monotherapy activity in this tumor setting. And hence believe that there is an opportunity for an MDM2 inhibitor program that may be better able to manage the on-target cytopenic toxicities. And finally, we’re excitedly anticipating the initiation of our fourth study before year-end to evaluate our first combination regimen with milademetan. This study, the MANTRA-4 study will evaluate the combination of milademetan and Roche’s Tecentriq or atezolizumab, in a Phase I/II study, in approximately 30 patients with wild-type p53 advanced solid tumors that also exhibit loss of the CDKN2A gene. As a reminder, we believe loss of the gene CDKN2A and loss of its protein product, p14ARF, leads to increased MDM2 levels. p14ARF is a natural regulator of MDM2. There are a significant number of patients with wild-type p53 solid tumors with advanced disease that exhibit loss of CDKN2A. This is estimated at over 35,000 patients per year in the U.S., as many as 6% to 7% or more of all solid tumors and is the second most common tumor suppressor aberration after p53 mutation. The MANTRA study will be primarily focused on confirming the safety of the combination regimen but will also evaluate efficacy. With multiple clinical strategies for milademetan underway, we are excited for all the potential new data. So let me turn now over to our Chief Scientific Officer, Bob Doebele. Bob?

Robert Doebele: Thanks, Richard, and good afternoon, everyone. First, Rain recently presented additional data relating to the MANTRA-2 patient population at the AACR Annual Meeting in New Orleans. This work further details the variety of tumors that harbor high-level MDM2 gene amplification using Rain’s copy number threshold of 12 and showed a meaningful number of patients with lung, breast, bladder and gastroesophageal tumors, amongst others. Although CDK4 is commonly coamplified with MDM2 in dedifferentiated liposarcoma and other sarcoma subtypes due to its proximity on chromosome 12, this presented work demonstrated a notable lack of CDK4 co-amplification in lung, breast, bladder and gastroesophageal tumors, amongst others, particularly at the copy #12 threshold. Although the impact of oncogenic drivers remains unknown with respect to clinical benefit of MDM2 inhibition, this analysis only found approximately 20% of patients with MDM2 amplification and a known oncogenic driver mutation. Analysis of TCGA data demonstrated a worse overall survival for patients whose tumors have MDM2 copy #12 or greater with wild-type TP53, highlighting the unmet need in this patient population. We presented a population analysis of over 50,000 patients with solid tumors across the AACR GENIE and TCGA databases, which confirmed the presence of MDM2 copy #12 or greater with wild-type TP53 in 1.2% of all cancer patients. Second, Dr. DeCaprio’s group at Dana Farber presented preclinical data last month at the second international symposium of Merkel cell carcinoma, demonstrating robust activity of milademetan in in vivo PDX models of Merkel cell. This preclinical data supports our upcoming MANTRA-3 study. Third, Rain will present an abstract at the upcoming ASCO annual meeting in Chicago relating to the patient population eligible for the upcoming MANTRA-4 clinical study. In addition to tumor-specific frequencies of CDKN2A loss in the setting of wild-type TP53, Rain plans to present new data supporting the rationale behind our first combination trial of milademetan and atezolizumab. Finally, we remain excited about RAD52 as a synthetic lethal target and internal research efforts at Rain are ongoing to advance this program. And with that, let me now turn it over to Nelson to review our financial results. Nelson?

Nelson Cabatuan: Thank you, Bob, and good afternoon, everyone. I’m pleased to provide an update to our financial results for the first quarter ended March 31, 2022. I would also like to invite you to review our Form 10-Q filed today for more details. For the first quarter of 2022, we reported a net loss of $17.4 million compared to a net loss of $6.8 million in the first quarter of 2021. Research and development expenses were $13.6 million in the first quarter of 2022 as compared to $5.3 million in the first quarter of 2021. The increase was primarily driven by R&D costs mainly for our lead candidate, milademetan from the ongoing Phase II MANTRA clinical study, our ongoing Phase II MANTRA-2 study as well as personnel costs. General and administrative expenses were $3.9 million for the first quarter of 2022 compared to $1.5 million for the first quarter of 2021. The increase was primarily driven by higher third-party G&A costs, including personnel, insurance, legal, accounting and audit, and outside consulting fees. As of March 31, 2022, Rain had $123.2 million in cash, cash equivalents and short-term investments. And we anticipate that our 2022 year-end cash position will provide runway in the first half of 2024. We expect our milademetan clinical program to be well funded. With that, I’ll now turn the call back to Avanish.

Avanish Vellanki: Thanks, Nelson. Again, our focus with the milademetan program has been on clinical execution. We’re very happy with our rate of progress thus far. With the anticipated start of the MANTRA-3 and MANTRA-4 studies by year-end, on top of the ongoing progress of both MANTRA and MANTRA-2, Rain anticipates a broad clinical effort for milademetan with a steady cadence of updates over the next 2-plus years. In particular, for our Phase III MANTRA study, we highlighted rapid enrollment in liposarcoma and top line data anticipated in the first half of 2023, earlier than previously guided. Overall, the Rain team is poised to generate significant new data for milademetan that will potentially lead to a new targeted therapy for cancer patients. With that, we’ll turn it back to the operator to take your questions.

Operator: [Operator Instructions] Our first question will come from Corinne Jenkins with Goldman Sachs.

Corinne Jenkins: So I think you’re expecting to have 10 patients and previously have guided to a response rate [benchmark] of about 30% in the Phase II update later this year. And so I’m curious, what would you anticipate based on precedent or whatever else you can think of for the FDA to require -- to support accelerated approval just for Phase II single arm? What kind of cohort size are you expecting there?

Avanish Vellanki: Corinne, thanks for the question. Let me turn that question over to Bob. And just to reiterate the question, I believe the question was, what type of cohort size for MANTRA-2, the tumor-agnostic basket size do we think would be appropriate for registrational efforts. is that correct?

Corinne Jenkins: Correct. Assuming you have 10 patients and the 30% ORR that I think you’ve previously guided to.

Robert Doebele: Sorry, 10 patients and the previous -- what was the second part of that?

Corinne Jenkins: I think previously, you’ve all said that 30% ORR is a reasonable expectation for that update. And so assuming that’s kind of in the range of where you come, what should we expect for a cohort size based on what you’ve seen the FDA did previously.

Robert Doebele: Let me first, I guess, answer it. So in terms of cohort size needed for an accelerated approval, we can obviously look to prior examples that are private -- previous targeted therapies that have gotten accelerated approval in a diagnostic setting with approximately 50 to 60 patients. Obviously, that depends on the magnitude of the benefit and response rate and other things. I think maybe as we said that in terms of what is expected of an approvable agent in the agnostic setting, currently, the bar is set by a prior example, again, with pembrolizumab and MSI-high with a response rate of 40%. But we are following closely other targeted therapies that are seeking an agnostic approvals, and we will follow that data closely. In terms of clinical meaningfulness, typically patients with later-line therapeutic options such as chemotherapy only experience response rates in perhaps 8% to 12% range. And so the bar for clinical meaningfulness may be quite a bit lower than that 40%, which is the current lowest example of an agnostic-approved drug.

Corinne Jenkins: Okay. But then, I guess, the general cohort size, it sounds like 50 would be kind of the best case scenario. But is there cohort size or some sort of requirements that would be conservative as you think about the future development in this particular indication? Or is this the plan to go forward as this have the low [indiscernible] FDA requires?

Avanish Vellanki: Sorry, Corinne. We’re hearing a lot of background noise from your audio. So we’re trying to make out the entirety of the question. But yes...

Corinne Jenkins: Sorry, I’m at the airport. Do you need me to repeat?

Avanish Vellanki: So size of the cohort. If we have a 30% response rate, duration of response in excess of 5 months, which is kind of what we think is clinically meaningful responses. We would expect the cohort size expand to maybe in the 90 to 120 patient range.

Operator: Our next question will come from Soumit Roy with Jones Research (sic) [Jones Trading].

Soumit Roy: Congratulations on progress on multiple fronts. One quick question on MANTRA trial, the Phase III trial. Are you looking into any biomarker to detect the [caries and reuse] mechanism going on? Akin to [cal binding] that your peer have alluded is that could cause a reduction or lower clinical benefit.

Avanish Vellanki: Soumit, thanks for the question. And that question was regarding clinical biomarkers for the MANTRA-2 study, correct?

Soumit Roy: For the MANTRA trial in liposarcoma, the Phase III, just thinking ahead if you see less-than-predicted clinical benefit. Are you looking at [cal binding] or this kind of biomarkers to see if there -- a certain subgroup is kind of pulling back the entirety of the data set?

Richard Bryce: Soumit, it’s Richard Bryce here. So for the ongoing MANTRA study, we do have -- we’re looking at MIC-1, which is a surrogate biomarker moving forward. And the biopsies that we have will be going for central testing for MDM2 potentially downstream. But essentially, that’s all we’re looking at in the context of MANTRA, which is a kind of real-world study moving forward.

Soumit Roy: Okay. Got it. And a quick question on Merkel cell carcinoma. Do we know the incidence of what percent patient express MDM2 carcinoma greater than 12 akin to that bar graph you have presented for other indications?

Avanish Vellanki: Yes, Soumit. So Merkel cell doesn’t have MDM2 gene amplification as far as we know. There’s protein overexpression. So the polyomavirus and Merkel cell leads to greater protein production, but not necessarily due to gene amplification.

Soumit Roy: I see. And is that the same case with the CDKN2A mutant patients also? It’s morely the over production rather than gene amplification?

Robert Doebele: Thanks for that question. This is Bob Doebele. Yes, they’re slightly different mechanism. So here, the main mechanism of MDM2 dependent in CDKN2A loss is that CDKN2A encodes a negative regulator of MDM2. So loss of CDKN2A leads to increased activity of MDM2. So all the same idea in terms of MDM2 dependency, but not through necessarily overexpression or genetic amplification of MDM2.

Operator: Our next question will come from Yigal Nochomovitz with Citi.

Carly Kenselaar: This is Carly on for Yigal. We have 2 questions. First, can you talk about how patient identification and enrollment for MANTRA-2 are tracking relative to your initial expectations? I think you had laid out expectations for about a 1% positivity rate for the MDM2 copy number greater than 12. And then the second question is on liposarcoma. We saw that Boehringer Ingelheim had started a Phase II/III for their MDM2 inhibitor where they’re going straight into the frontline setting head-to-head versus chemo. So we wanted to get your thoughts on that strategy. And if MANTRA works, if you would consider a similar study to move milademetan into the front line.

Avanish Vellanki: Thanks, Carly. Let me start with the second question first. So I’ll address the Boehringer Ingelheim study. So I think one thing to point out with the BI program is the Phase II/III strategy is meant to first pick a dose. So there’s a couple of arms to identify the appropriate dose before moving into the Phase III component of their trial. So the Phase II/III is still going to be to -- aimed at determining the appropriate dose to carry forward. But the second part of your question is, if we see success in MANTRA, would we look at the first-line setting? I think it would be reasonable to assume that we would evaluate that opportunity. And in terms of the first question that you asked about...

Robert Doebele: The MANTRA-2 patient tracking. Yes, so this is Bob Doebele. So in terms of MANTRA-2, we are definitely confirming that 1%, actually closer to 1.2% of all patients have this and we are seeing these [systemically] identifiable patients. And as we’ve said, enrollment remains on track for MANTRA-2.

Operator: [Operator Instructions] Our next question will come from Michael Schmidt with Guggenheim Securities.

Yige Guo: This is Yige on for Michael. We have 2 questions. The first one on MANTRA. Congrats on the progress. Just wondering, is the earlier-than-expected top line primarily driven by faster-than-expected enrollment in the U.S. or ex U.S.? And also, could you confirm there’s no changes on the assumption on progression rates? And second question on MANTRA-2. How should we think about the tumor reduction kinetics? I mean, based on previous data, would one expect response to happen earlier, for example, in the first 2 cycles or this could be later on?

Avanish Vellanki: Thanks, Yige. Let me ask Richard to comment on the first question for the MANTRA enrollment. And Bob, on the second for MANTRA-2. Richard?

Richard Bryce: Sure. So I think your question was asking about no contribution to enrollment essentially for MANTRA U.S. or ex U.S. It’s a global study, and I think it’s fair to say the contribution has been across the board. So I wouldn’t select one geography over another in terms of enrollment. I think what it does do is validate the unmet need out there and the requirement for a treatment for this particular indication. I think the second part of your question related to assumptions around the PFS rate, have there been any changes to that? And the answer is no. It’s -- the protocol remains unchanged from the outset.

Robert Doebele: And regarding the second question in terms of response kinetics in the MANTRA-2 study. I’d say looking at the Phase I data, which was mostly either in liposarcoma patients, which don’t have a high response rate and unselected non-liposarcoma patients, we just simply don’t have enough data to make an estimate on response kinetics. I can say that we have seen rapid responses in some cases, but not enough and -- to really determine what’s expected and whether it will be similar to tyrosine kinase inhibitors that typically show response to the first scan that we just don’t know yet.

Operator: This concludes our question-and-answer session. I would like to turn it back over to Avanish Vellanki for any closing remarks.

Avanish Vellanki: I want to thank everyone for joining us on today’s update, and we look forward to providing an update on the second quarter call. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.