Oncolytics Biotech - Q1 2024

Transcript

Operator (participant)

Good afternoon and welcome to Oncolytics Biotech's first quarter 2024 conference call. All participants are now in listen-only mode. There will be a question-and-answer session at the end of this call. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Jon Patton, Director of Investor Relations and Communication. Please go ahead.

Jon Patton (Director of Investor Relations and Communication)

Thank you, Operator, and good afternoon, everyone. Earlier today, Oncolytics issued a press release providing recent operational highlights and financial results for the first quarter of 2024. A replay of today's call will be available on the event section of the Oncolytics website approximately two hours after its completion. After remarks from company management, we will open the call for Q&A.

As a reminder, various remarks made during this call contain certain forward-looking statements relating to the company's business prospects and the development and commercialization of pelareorep, including statements regarding the company's mission, the company's belief as to the potential and mechanism of action of pelareorep as a cancer therapeutic, our belief that we are positioned to begin registration track studies in breast and pancreatic cancer, and our strategies and upcoming milestones in connection therewith, our critical objectives for 2024, the anticipated timing and the release of additional data, the company's belief that it has sufficient cash to achieve its milestones, and other statements related to anticipated developments in the company's business.

These statements are based on management's current expectations and beliefs and are subject to a number of factors which involve known and unknown risks, delays, uncertainties, and other factors not under the company's control that may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. In any forward-looking statement in which Oncolytics expresses an expectation or belief as to future results, such expectations or beliefs are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that these statements or expectations or beliefs will be achieved. These factors include results of current or pending clinical trials, risks associated with intellectual property protection financial projections, actions by regulatory agencies, and those other factors detailed in the company's filings with SEDAR and the SEC.

Oncolytics does not undertake any obligation to update these forward-looking statements except as required by applicable laws. I'm joined by several members of the Oncolytics management team to review our first quarter 2024 results and corporate updates, including Chief Executive Officer Dr. Matt Coffey, Chief Financial Officer Kirk Look, and Chief Medical Officer Dr. Tom Heineman. Dr. Coffey will begin our discussion today. Matt, please take it away.

Matt Coffey (CEO)

Thank you, Jon. Good afternoon and welcome to Oncolytics' first quarter conference call. Oncolytics' mission is to improve the lives of people with cancer by bringing our proprietary immunotherapeutic product candidate, pelareorep, or Pella as we'll refer to it, to patients as quickly as possible. We are taking the next steps to make that happen as we transition to become a late-stage cancer company by progressing Pella in our two lead indications, breast cancer and pancreatic cancer. As we'll discuss throughout the call, we are building the necessary foundation to begin registration track studies for both of these indications for which there is urgent need for new or alternative therapies. We have organized today's call to provide you with a comprehensive update on our progress and upcoming milestones.

I'll spend a few moments sharing what excites us about pelareorep and touch on our recent developments, upcoming milestones, and key corporate messages. After that, I will ask Tom to provide an update on the breast cancer program, the new GOBLET pancreatic cancer cohort, the expansion of the GOBLET anal cancer cohort, and initial plans for the registration track pancreatic cancer study. Then I will ask Kirk to review the financials. And finally, we will end by taking your questions. Let's start with a brief note on what makes pelareorep such a compelling immunotherapy candidate. In a nutshell, it's all about results. Pelareorep is delivered intravenously and works systemically. It is able to selectively replicate in tumors and introduce double-stranded RNA into these cancer cells.

This results in generating, recruiting, and training immune cells to begin identifying cancer cells to enable cancer cell killing in addition to remodeling the tumor microenvironment to activate immune cells. This has made pelareorep unique because the responses pelareorep generates have led to synergies with multiple cancer treatments, including chemotherapy, immune checkpoint inhibitors, CAR-T cell therapy, and others. These synergies come from two randomized breast cancer studies, multiple studies in pancreatic cancer, and recently, there's been an intriguing efficacy signal in the anal cancer cohort of our GOBLET study, which included a complete response even in the absence of standard cytotoxic chemotherapies. In these clinical trials, pelareorep was used in combination with chemotherapy drugs like nab-paclitaxel or immune checkpoint inhibitors like atezolizumab.

Compelling data from these studies show that the treatment with pelareorep produced meaningful clinical responses with favorable comparisons to historical controls, as in the case of GOBLET or in randomized control trials demonstrated in breast cancer. It's demonstrated a positive association between increases in tumor-infiltrating lymphocytes, or TILs, and tumor responses, and it was well-accommodated by patients. Taken together, these data form the basis of our enthusiasm for pelareorep as a novel, differentiated immunotherapeutic agent and supports our plans to provide with registration track studies. 2024 is off to a promising start. We're building on our compelling pelareorep clinical databases and continuing our transition to become a late-stage oncology company. A few notable milestones have marked our year-to-date progress. We've been granted a Type C meeting with the FDA for a Q2 2024 meeting to discuss our planned registration-enabling study in breast cancer.

Defining this registration path for pelareorep in breast cancer is a pivotal clinical goal for the year. We expanded enrollment for the cancer cohort of the GOBLET study to strengthen the already promising signal of efficacy. This is important because it could open the door to a new registration indication and accelerate approval for pelareorep. We received regulatory clearance to begin enrolling patients in a new pancreatic cancer cohort in the GOBLET study. This cohort will evaluate pelareorep in combination with a widely used chemotherapy regimen called modified FOLFIRINOX with and without atezolizumab. This study is supported by a $5 million grant from the Pancreatic Cancer Action Network, also known as PanCAN, which provides additional positive validation for pelareorep. We affirm plans to report overall survival data from the phase II BRACELET breast cancer study in H2 2024.

While we have reported overall survival response data for pelareorep/paclitaxel that is 3 times paclitaxel monotherapy, overall survival data continues to mature. This has the potential to be a major catalyst as we have already had another metastatic breast cancer study called IND-213 that neared the goal of median overall survival for patients. We announced that 2 abstracts related to clinical and translational data were selected for presentation at the annual meeting of the American Society for Clinical Oncology, or ASCO 2024, which we'll be able to discuss in more detail later this month. We continue to maintain an active dialogue with our clinical collaborators and potential strategic partners. These discussions provide valuable perspectives that have shaped and enriched our registration study plans. Looking ahead, we remain laser-focused on our critical objectives for 2024.

In H1 2024, we intend to provide guidance on the registration path for pelareorep in breast cancer. Over the coming months, we expect to enroll the first patient in cohort 5 of the GOBLET study, which is evaluating pelareorep plus modified FOLFIRINOX with and without atezolizumab in pancreatic cancer patients. Also in H2 2024, we expect to report overall survival data from the BRACELET-1 breast cancer study. Now, before I turn the call over to Tom to provide you with an update on our clinical programs, I'd like to thank everyone in the Oncolytics organization and our collaborators for the dedication that you bring to our mission every day to improve the care of patients with cancer. Your work and unwavering commitment is critical to advancing the development of pelareorep. Tom?

Tom Heineman (CMO)

Thanks, Matt. During today's call, I will provide an update on Oncolytics' breast cancer program, the new pancreatic cancer cohort in the GOBLET study, the expansion of the GOBLET study anal cancer cohort, and our plans for a registration track pancreatic cancer study. Over the coming months, we will provide updates on our ongoing clinical trials as new results become available. Starting with our breast cancer program, I'd like to touch on three topics. First, our thoughts on the most appropriate registration trial. Next, the upcoming Type C meeting with the FDA to discuss our breast cancer program. And finally, the BRACELET-1 study survival results. Let me start with our thoughts on what constitutes a registration trial in breast cancer.

As the BRACELET-1 data has continued to mature, we have spent the past year speaking with our clinical advisors, collaborators, and potential partners about registration trial strategies for new breast cancer therapeutics. The strategy that has emerged from these discussions is to advance pelareorep to regulatory approval in breast cancer utilizing a cost-effective approach that optimizes study timelines and retains sufficient flexibility to adapt to the evolving breast cancer treatment space. Our conversations with potential pharmaceutical partners have emphasized the value of conducting an efficiently sized, randomized control study that, with positive data, could lead directly to a registration filing or to substantially de-risk a subsequent phase III study. It is notable, for example, that Pfizer's CDK4/6 inhibitor, Ibrance, received its initial approval in breast cancer based on the 165-patient PALOMA-1 study.

On the topic of our upcoming Type C meeting, as Matt indicated, defining the registration path for pelareorep in breast cancer is a major goal for Oncolytics in 2024. Earlier this year, we submitted a Type C meeting request to the FDA, and the meeting will take place in the second quarter of 2024. At this meeting, we'll discuss our proposed next breast cancer clinical trial with the FDA, including the anticipated study design, study population, and study endpoints. Through this interaction, we expect to align with the agency on the optimal clinical approach, which will allow us to move forward confidently as we continue to develop pelareorep as a treatment option for breast cancer patients. Next, the BRACELET-1 survival data. We previously reported strong tumor response and progression-free survival results from the BRACELET-1 study.

Overall survival results from BRACELET-1, which have not yet been reported due to ongoing patient follow-up, are anticipated later this year. As Matt mentioned, the earlier IND-213 study showed a significant survival benefit in HR-positive, HER2- metastatic breast cancer patients who received the combination of pelareorep and paclitaxel compared to paclitaxel alone. A strong overall survival in the pelareorep/paclitaxel arm in BRACELET-1 will serve to validate these earlier findings and will support discussions with potential strategic partners and with regulators. Moving to the GOBLET study, I'll touch on two topics. First, the expansion of the anal cancer cohort, and then the new cohort in the GOBLET study evaluating pelareorep combined with modified FOLFIRINOX. By way of background, the GOBLET study is a platform study designed to assess the potential of pelareorep combination therapies to benefit patients with advanced or metastatic gastrointestinal cancers.

It is being conducted at 12 centers in Germany and is being managed by our clinical collaborator, the AIO Study Group. To date, we have evaluated three cohorts: first line, metastatic pancreatic ductal adenocarcinoma, or PDAC, third line, metastatic colorectal cancer, and second line or later, anal cancer. In each of these indications, the pelareorep-based combination therapy met the initial predefined success criteria. Starting with anal cancer, on February 14th, we announced plans to initiate the expansion of enrollment into this cohort based on positive preliminary results, which were reported at an International Medical Meeting in November of last year. It is notable that this cohort evaluates the combination of pelareorep and atezolizumab without chemotherapy in patients with second line or later disease. Positive results from the expanded anal cancer cohort may open the door to an accelerated registration path.

A modest expansion of fewer than 20 patients is expected to be sufficient to confirm the benefit we've seen so far and to provide the basis for a registration study, which we anticipate would be the next logical step. We are actively enrolling patients into this study as well as adding new sites. We intend to report additional anal cancer results in 2025. Moving to the modified FOLFIRINOX pancreatic cancer study, on March 5th, we announced plans to initiate a new pancreatic cancer cohort in the GOBLET study. The new cohort, supported by a $5 million grant from PanCAN, will evaluate pelareorep in combination with modified FOLFIRINOX with or without atezolizumab in patients with newly diagnosed PDAC. This study complements our ongoing development of pelareorep in combination with gemcitabine and nab-paclitaxel, the other commonly used chemotherapy for metastatic pancreatic cancer.

Evaluating pelareorep in combination with both of these widely used chemotherapeutic regimens will broaden the scope of our clinical development program with the goal of making pelareorep-based therapies available to the widest possible range of pancreatic cancer patients. Earlier this morning, we announced that we had received regulatory approval to move forward with the pelareorep modified FOLFIRINOX combination study, and we expect to enroll patients beginning in the second quarter of this year. In closing, I'd like to discuss our registration plans for pelareorep in pancreatic cancer. Our registration strategy will focus on pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel in patients receiving first-line treatment for metastatic pancreatic cancer. We continue to develop a study protocol that utilizes an adaptive design building on the positive results from Cohort 1 of the GOBLET study. We expect to provide an update on these plans this quarter.

Before I close, I'd like to express our deep thanks to everyone who has participated in or supported our clinical program. We are very grateful for your valuable contributions. Now, I'd like to turn the call over to Kirk to review the financial results for the first quarter of 2024.

Kirk Look (CFO)

Thanks, Tom. And good afternoon, everyone. During this portion of the call discussing our financial results, I will be providing data in Canadian dollars unless otherwise noted. A full summary of our financial results can be found on the investors section of our website under filings and reports or in the press release issued earlier this afternoon. As you all will hear, we have taken a responsible approach to our financial strategy and spending. The company closed the first quarter with CAD 29.6 million in cash and cash equivalents compared to CAD 34.9 million in cash and cash equivalents as of December 31st, 2023. We believe this will enable us to achieve the milestones discussed in today's call.

The net loss for the first quarter of 2024 was CAD 6.9 million compared to CAD 6.4 million in the first quarter of 2023, equating to a net loss of 0.09 per share in the first quarter of 2024 compared to a net loss of 0.10 per share for the same period in 2023. Now, general and administrative expenses for the first quarter of 2024 were CAD 3 million compared to CAD 3.2 million for the first quarter of 2023. The change was primarily due to lower public company-related expenses associated with lower investor relations activities and lower directors and officers' liability insurance premiums. Now, research and development expenses for the first quarter of 2024 were CAD 5.7 million compared to CAD 3.5 million for the first quarter of 2023.

The change was mainly driven by higher manufacturing expenses associated with completing a cGMP production run and the related batch testing. We have also begun preparation for an upcoming product fill. Now, this is an exciting time for Oncolytics as we position the company to make the jump to a late-stage oncology company. We look forward to providing updates on our progress, especially in regard to the registration-enabling studies for breast and pancreatic cancer. I'll now give the call back to Matt for closing comments. Matt?

Matt Coffey (CEO)

Thanks, Kirk. As we conclude today's call, I hope you take away these key messages. pelareorep is on track to advance the registration trials in breast cancer and pancreatic cancer. We believe our robust, positive clinical and translational data supports pelareorep's MOA as an immunotherapeutic agent. We expect to report overall survival data from the BRACELET-1 breast cancer study in H2 2024. The pelareorep dataset has attracted and enriched the interest of the clinical oncology community and potential strategic partners. And finally, expanded enrollment in the anal cancer cohort at the GOBLET study could open the door to a new registration indication. As Kirk mentioned, we are enthusiastic about the groundwork we have laid so far this year as we move closer to starting the registration-enabled studies to bring pelareorep closer to regulatory approval.

I don't think I've ever been more excited about our dataset and the productive discussions that we've been having with key opinion leaders, our clinical collaborators, and regulators. Operator, I would now like to open the call for questions.

Operator (participant)

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of John Newman from Canaccord. Please go ahead.

John Newman (Senior Biotechnology Equity Research Analyst)

Hi guys. Thanks a lot for taking my question. I just wondered if you could provide a little bit more color on the potential design of a pivotal study in metastatic breast cancer with pelareorep. Obviously, you're going to be meeting with the agency soon, but just curious, just generally speaking, sort of what that design could look like. Thanks.

Matt Coffey (CEO)

Thanks, John. I'm going to push Tom under the bus on this one. And it's interesting because I'm not sure if you saw the Destiny 6 results that came out yesterday because that certainly has bearing on what, fortunately, we were able to flag with the Type C meeting with the agency. And then very loosely, we could talk about comparable studies that I think would be basically modeled on or we've modeled on. And if there's any other questions at that time, I'd be happy to help you out.

Tom Heineman (CMO)

Yeah. Hi John. So as we mentioned, we will be meeting with the FDA to discuss some of the key elements of our next breast cancer study. And among those key elements will be the population. And that's what Matt was referring to, is that we want to make sure that the population we evaluate in our next study is the most relevant population from the perspective of the current and future standard of care for these patients, right? And so the Destiny 6 results, which are expected shortly, will help shape the future standard of care in metastatic breast cancer patients who fail hormonal therapy. And so we have anticipated that and will have a specific discussion with the agency about the most appropriate population.

We also plan to discuss some of the other key elements of the study design, including the primary endpoints and the statistical plan in general. As we mentioned in our talk earlier, our goal is to design a study that is efficient, flexible, as quick as possible, and that offers the potential for an early registration of pelareorep in this population.

John Newman (Senior Biotechnology Equity Research Analyst)

Great. Thank you.

Operator (participant)

Your next question is from the line of Rahul Sarugaser from Raymond James. Please go ahead.

Mike Freeman (Research Analyst)

Hey Matt, Kirk, Tom. This is Mike on for Rahul today. Congratulations on the action-packed quarter. I have a question on the interaction between the two pancreatic cancer trials. Congratulations on announcing your green light on the mFOLFIRINOX trial. I'm curious about, I guess, your go-forward plan with these two trials in mind. The cohort I trial seems to be more advanced than the latter. I'm curious about your staging that you have in mind in respect to registration for those two trials.

Matt Coffey (CEO)

Mike, great question. And I'm glad you asked it because I think there's some confusion around why we would pursue both first-line studies. What we're finding from GOBLET is the earlier the patient, the more robust is the T-cell response. So when we look at pancreatic, they had by far the strongest T-cell response. Anal in the second-line had the next. And by the time we get to third-line colorectal, we met the success criteria, but there's more of a muted T-cell response. So we want to stay in the first-line setting. And there's a really nice paper by Jim Allison that just came out talking about how immunotherapies become more and more ineffective with each round of treatment. So we did want to stay in the first-line setting. Patients with pancreatic cancer, even in the first-line setting, can be quite variable.

Older patients, patients who've had adjuvant therapy, tend to get nab-paclitaxel, gemcitabine, because it's considered to be more I don't want to say gentle, but gentle is the right word. So you're going to see a little bit less than half the patients getting that. And we combine that based on results that we'd had with gemcitabine and paclitaxel in the past and I think did very, very well with that study. Interestingly, those patients were given gem, nab-paclitaxel because I think almost a third of them had received FOLFIRINOX or modified FOLFIRINOX in the "adjuvant phase." But we're not entirely sure it was really the adjuvant phase in the sense that it seemed that they had unclear margins. So they were almost like second-line patients. Also, those patients had a lot of liver mets.

So they were an entirely appropriate patient population to get gem, nab, Reolysin, Tecentriq because they were more heavily pretreated and tend to have more burdensome disease. With this second study, it is randomized to modified FOLFIRINOX, pelareorep plus or minus atezolizumab. Our expectation here is these patients will have much higher organ reserve, will have less pretreatment, and hopefully less liver metastasis. So we can go in there and treat much more aggressively. And it'll be much easier to characterize the role that we're seeing for Tecentriq. But looking at the results we've seen before, Tecentriq does enhance the inflammatory response. We do see greater numbers of NK and T cells in the presence of Tecentriq. And we get a lot less exhaustion markers in the presence of Tecentriq. So we do expect the modified FOLFIRINOX pelareorep arm to be successful.

But we really do expect to see tremendous activity with the addition of Tecentriq because they just work so well hand in hand. And by addressing both groups, hopefully, we become the standard of care for all first-line patients in pancreatic, irrespective of their pretreatment histories or organ reserve. Tom, did you want to add anything?

Tom Heineman (CMO)

Gotcha. Yeah. No, no. I think that covers it. I think the bottom line is that by exploring pelareorep in combination with both of the backbone chemotherapies that are commonly used in this population, it provides an opportunity to treat ultimately the broadest range of patients and to give physicians the most flexibility possible and best options for all pancreatic cancer patients.

Mike Freeman (Research Analyst)

Okay. Very helpful. And quickly, on the data that you seek to present at ASCO coming up, this phase I/II trial with mFOLFIRINOX, I'm curious from where this data derives and what maturity of data should we expect here and I guess the data cutoff date you might be presenting the data?

Tom Heineman (CMO)

Yeah. So just to be clear, the poster presentation that we'll have at ASCO related to the modified FOLFIRINOX study is a trial-in-progress poster in which we outline the details of the study that will at that time be currently enrolling, right? So there will be no data from that study presented at ASCO at this meeting.

Mike Freeman (Research Analyst)

Got it. Thanks for clarifying. I'll pass it on.

Matt Coffey (CEO)

Operator, is there another question? Operator? Well, if there's no further questions, I just want to thank everyone for participating in today's call and for following Oncolytics development. We're optimistic about the potential for pelareorep to make a big difference in the lives of cancer patients. I look forward to updating you on our progress throughout the year, and I wish everyone a great evening. Thanks so much.