Oncternal Therapeutics - Q1 2024

Executive Summary

• Q1 2024 delivered grant revenue of $0.57M, operating expenses of $9.35M, and a net loss of $8.39M ($2.83 per share); cash and short-term investments were $27.0M, with runway guided into Q1 2025. Management reiterated upcoming data readouts for ONCT-534 in late Q2 2024 and ONCT-808 in mid-2024, positioning the stock for near-term clinical catalysts.
• ONCT-534 dose escalation advanced: the fourth cohort (300 mg QD) is fully enrolled; escalation to 600 mg is expected pending safety review, with initial data targeted late Q2 2024.
• ONCT-808 CAR-T resumed enrollment after protocol amendments (tightened eligibility, enhanced infection monitoring, lower starting doses) following a prior grade 5 SAE at 3×10^6 cells/kg; prior signal at 1×10^6 showed 2 CMRs and 1 PR (Dec 4 cutoff).
• No product revenue yet; sequential OpEx roughly flat QoQ and down YoY as R&D moderated versus Q1 2023. CFO’s Q1 call remarks contained a “fourth quarter” slip for net loss, but figures matched Q1 press release.
• Street consensus via S&P Global was unavailable (mapping error), so estimate comparisons cannot be made for Q1 2024; focus remains on clinical progress and cash runway catalyst window [GetEstimates error].

What Went Well and What Went Wrong

• What Went Well

  • ONCT-534 progressed swiftly: “fourth dosing cohort at 300 mg per day is fully enrolled… initial data readout expected in the latter part of the second quarter”.
  • Renewed momentum in ONCT-808: “study… is open and enrolling patients” after safety-focused protocol amendments; updated clinical results expected mid-2024.
  • Operating discipline: Q1 OpEx of $9.35M vs $12.35M YoY; net loss narrowed to $8.39M vs $11.49M YoY; cash runway into Q1 2025 maintained. Q4 context highlighted R&D savings from winding down ZILO program.

• What Went Wrong

  • Safety event remains an overhang: prior grade 5 SAE at 3×10^6 cells/kg in ONCT-808 necessitated modified eligibility and lower starting doses (0.3×10^6, 0.6×10^6), potentially slowing dose finding.
  • Revenue is grants only ($0.57M), reflecting pre-commercial profile; no product revenue to offset burn.
  • Estimates visibility is limited: S&P Global consensus mapping unavailable for ONCT, constraining beat/miss framing and near-term trading signals from earnings versus Street [GetEstimates error].

Transcript

Operator (participant)

Greetings. Welcome to Oncternal's First Quarter 2024 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance on the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I'll now turn the conference over to your host, Richard Vincent, Chief Financial Officer. You may begin.

Richard Vincent (CFO)

Thank you, Shamali. Good afternoon, everyone, and thank you for joining us today. Joining me on the call this afternoon are our President and CEO, Dr. James Breitmeyer, and our CMO, Dr. Salim Yazji. Today's call includes a business update and discussion of our first quarter ended March 31, 2024 financial results that were filed earlier today. Today's press release and a replay of today's call will be available on the investor relations section of Oncternal's website for at least the next 30 days. Please note that certain information discussed on today's call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We will be making forward-looking statements during this call about future events, such as our business and product development strategies, the timing of our clinical studies, planned interim data updates, regulatory filings, and our cash runway.

Our actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with our business. These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in today's press release and our SEC filings, including our Form 10-Q filed today and our previously filed Form 10-K for the full year ended December 31, 2023. This call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2024. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances occurring after the date of this call. With that, it is my pleasure to hand the call over to our CEO, Dr. James Breitmeyer.

James Breitmeyer (President and CEO)

Thank you, Rich, and good afternoon, everyone. At Oncternal, we are advancing two first-in-class clinical programs targeting cancers for patients with significant unmet medical needs. ONC-534, our novel dual-action androgen receptor inhibitor, or DARI, is advancing rapidly through the dose escalation portion of the Phase I-II study, and we continue to see high demand and engagement from KOLs, investigators, and patients. We believe that by interacting with both the ligand binding domain and the N-terminal domain of the androgen receptor and by inducing degradation of the AR, ONC-534 may address many prostate cancer escape mechanisms to approved AR pathway inhibitors, such as enzalutamide and abiraterone, including many LBD mutations and splice variants, such as AR-V7. We have recently opened several top academic centers to join the Phase I-II study, and the investigators are enthusiastic.

We are also happy to announce that the fourth dosing cohort of the study is now fully enrolled. Patients in this cohort are receiving 300 milligrams of ONC-534 once per day orally. The decision to move to this dose level was made by the study's Safety Review Committee after reviewing data from the patients treated to date, including those at the third dose level of 160 milligrams ONC-534 daily. Based on preclinical analyses, we are optimistic that study participants are receiving doses of ONC-534 that may be within the active dose range for antitumor activity. We plan to share an initial clinical data update for this program late in the second quarter of this year.

Now, switching gears to ONC-808, our ROR1 targeting autologous CAR-T, we are also happy to announce that the Phase I-II study in patients with relapsed or refractory aggressive B-cell lymphoma, including patients who have failed previous CD19 CAR-T treatment, is again open and enrolling patients. We'd like to thank the team and our investigators for the swift implementation of protocol amendments, which include modified eligibility criteria, increased monitoring for infection, and evaluating lower doses. As a reminder, we recently shared an encouraging initial response signal at the 1 × 10^6 CAR T-cells per kilogram dose, with two of the three patients achieving complete metabolic response and the third achieving a partial response as of the December fourth cutoff date. We expect to report updated clinical results, including data from patients treated with the new dosing schedule in mid-2024.

With this, I will now turn the call back to our CFO, Rich Vincent. Rich?

Richard Vincent (CFO)

Thank you, Jim. Our revenue is currently derived from research and development grants received from the NIH. Our grant revenue was $0.6 million for the first quarter ended March 31, 2024. Our total operating expenses for the first quarter ended March 31, 2024, were $9.3 million, including $1 million in non-cash stock-based compensation expense.

...In the first quarter, research and development expenses totaled $6 million, and general and administrative expenses totaled $3.3 million. Net loss for the fourth quarter was $8.4 million, for a loss of $2.83 per share, basic and diluted. As of March 31, 2024, we had approximately three million shares of common stock outstanding, $27 million in cash, cash equivalents, and short-term investments, and no debt. We believe these funds will be sufficient to fund our operations into the first quarter of 2025. With respect to upcoming milestones, we remain on track for both programs moving forward towards significant data points. For ONC-534, our lead DARI product candidate, we expect to present initial clinical data in the latter part of this second quarter of 2024, with additional readouts in the fourth quarter of 2024.

For ONC-808, our ROR1 autologous CAR T, we expect to report a clinical data update in mid-2024, with additional data readouts in the fourth quarter of 2024. With that, I will turn things back to the operator for the Q&A portion of this afternoon's call.

Operator (participant)

Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Our first question comes from the line of Carl Byrnes with Northland Capital Markets. Please proceed with your question.

Carl Byrnes (Senior Equity Research Analyst)

Thanks for the question, and congratulations on your progress. You know, with respect to 534, in terms of the 300 dose, in the dose escalation study, do you expect to get... You, I think you mentioned that you had full enrollment in that cohort. How many were in that cohort? And then also, would you suspect that you would go to the higher 600 milligram dose, you know, prior to the, mid, excuse me, year-end update? Thanks.

James Breitmeyer (President and CEO)

So we'll have Salim answer that question.

Salim Yazji (CMO)

Yeah. So, actually, we already fully enrolled and dosed this cohort, three patients in this cohort. We're still in a DLT period, and we expect to have SRC happening mid this month, towards the end of this month, actually, and then, if everything is fine, we'll escalate to the next dose cohort, which is the 600 milligram.

James Breitmeyer (President and CEO)

Yeah. So Carl, assuming that everything runs on track, we would have some data from the 600 milligram cohort by the time we announce results.

Carl Byrnes (Senior Equity Research Analyst)

Great. Thanks so much.

Operator (participant)

Thank you. Our next question comes from the line of Hartaj Singh with Oppenheimer & Company. Please proceed with your question.

Hartaj Singh (Managing Director)

Great, thank you. I just got a couple of questions. One is, again, just going back to, prostate cancer. You know, androgen receptor, signaling, the current, you know, when these molecules are given, redosed, Jim, it seems with that ARSI off the first line, the second line, ARSI is given, you've got about 25% responses, you know, maybe a little bit higher, but that's what the academic literature seems to suggest. Is that the way to think about, how, you know, the update could happen in the second quarter, with 534? Is it too early to see, you know, data in-depth like that? And I just got a quick question on follow-up on ROR1.

James Breitmeyer (President and CEO)

Sure. And I'll take that question. So I think that the published data on switching from one existing androgen receptor signaling inhibitor to another would be at the low end of what we're expecting, because, for example, if you switch from enzalutamide to abiraterone, the failure to respond to the abiraterone includes the fact that mutations in the ligand binding domain have developed that the second agent cannot address. So in our case, 534 is active against, for example, prostate cancer that is resistant to enzalutamide. So it would be active in more cases than you would expect from switching from one ARSI to another.

We're also active against splice variants, which have lost the ligand binding domain entirely, and those do not respond to conventional hormone-related therapies at all.

Hartaj Singh (Managing Director)

Great. Thank you, Jim. And then, the other question is just on ROR1, if is there any color or updates you can provide on the durability of those two, you know, CRs that you saw in December? And thanks for the question.

James Breitmeyer (President and CEO)

... Sure. Salim, do you want to comment? We're, Hartaj has to wait, I know, but you can speak in generalities.

Salim Yazji (CMO)

Sure. So, you know, we're not gonna go into the details, but, as you know, the patients that we've been treating in the cohort one, those patients who failed multiple prior therapy, including prior CD19 CAR T, as well as some of them, CD79 and bispecific treatments. Those are very heavily pretreated patients, and usually the expectation of those patients is very low and short progression-free survival. So to answer your question, I think we are enthusiastic about what we are seeing, about the durability of this response, but take in consideration that we have very sick, very heavily treated patients.

Hartaj Singh (Managing Director)

Great. Thank you. Really appreciate that. Thanks for the question.

Operator (participant)

Thank you. Our next question comes from the line of Robert Burns with H.C. Wainwright. Please proceed with your question.

Robert Burns (Managing Director of Biotech Equity Research)

Hi, guys. Thanks for taking my questions and congrats on the progress. Just two questions for me regarding 808. So I know that in the current trial design, it's only Phase I in which you're looking at the CD19 failed CAR T patients or those who are, or ineligible for CAR T, CD19-targeted CAR T. I was curious whether you would also try to explore that in Phase II, or are you trying to go for a more broader population? And then secondly, with regards to the modified eligibility criteria, how do you think that that is going to help from a safety profile perspective?

James Breitmeyer (President and CEO)

So let me start with the safety question, Rob. So we're responding to the unfortunate case of a Grade 5 toxicity in a patient earlier in the dose escalation. We think we learned some things about that patient that we can use to improve overall safety for the rest of the study, which is what you're asking. So for example, we were no longer allowing bulky disease, which that patient had. We're lowering the upper age limit. That patient was 80 years old.

And, we're taking a number of measures to try to detect and have treated any kind of occult infection, which, as I'm sure you know well, infection is the number one cause of non-tumor death in patients who have undergone CD19 CAR-T therapy because they've had their B cells obliterated by the therapy. So, with these, these are the three measures that we do feel will add to the many safety measures that were already built into the study. So, your first question was suitable for Salim, except I've forgotten what it was. So if you could repeat it, please.

Robert Burns (Managing Director of Biotech Equity Research)

Yeah. So I know in the first, in the Phase I portion, you're allowing for CD19 failed CAR T patients, but that's only for the Phase I. Are you also thinking about considering looking at that population specifically, given the unmet need there?

Salim Yazji (CMO)

Yeah. So actually we, you know, as you know, we are still in the Phase I, but we are learning as we go. I think at the Phase II, we're probably gonna expand the patient population based on what we see in the Phase I. Yes, to answer your question, I think if we see signals from those patients in Phase I, we're probably gonna expand that population.

James Breitmeyer (President and CEO)

Yeah. Yeah, and the protocol allows CD19 failures in Phase II, while FDA required us to have either CD19 people who had failed CD19 CAR T or patients who were ineligible or had refused it in Phase I. So, we're removing that restriction for Phase II.

Robert Burns (Managing Director of Biotech Equity Research)

Awesome. Thank you.

James Breitmeyer (President and CEO)

Thank you, Rob.

Operator (participant)

Thank you. Our next question comes from the line of Kemp Dolliver with Brookline Capital Markets. Please proceed with your question.

Kemp Dolliver (Director of Research and Senior Analyst)

All right, thanks. And just to continue with the 808 discussion around the enrollment criteria, and admittedly, you know, this is early on, but based on the changes you've made, and the, whatever other data you looked at in making those decisions, how are you thinking? Does that have any noticeable difference on the addressable market that you'd previously estimated?

James Breitmeyer (President and CEO)

Kemp, thanks for the question. And, no, we don't think that the modified eligibility criteria changes the addressable market.

Kemp Dolliver (Director of Research and Senior Analyst)

Great. Thank you.

James Breitmeyer (President and CEO)

Thank you.

Operator (participant)

Thank you. We have reached the end of the question and answer session, and I'll now turn the call back over to CEO James Breitmeyer for closing remarks.

James Breitmeyer (President and CEO)

Thank you, Shamali. Overall, we are very encouraged and pleased with the pace of execution in both our clinical programs, 534 and 808, and the enthusiasm of our investigators for, for these studies. We're looking forward to potentially significant clinical data updates for both programs in the coming months. Thank you for joining us today, and we look forward to updating you throughout the year.

Operator (participant)

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.