Oncternal Therapeutics - Q2 2024

Executive Summary

• Q2 2024 results were in line with expectations for a development-stage biotech: grant revenue rose to $0.80M, OpEx held near $9.7M, and net loss was $8.6M ($2.89/share). Cash and short-term investments were $21.4M with runway into Q1 2025.
• Clinical execution advanced: ONCT-534 (DAARI) escalated through the 1,200 mg cohort with no dose-limiting toxicities (DLTs); initial clinical/biomarker data guided for Q3 2024 and additional readouts in Q4 2024.
• ONCT-808 (ROR1 CAR-T) is open and enrolling under revised protocol; management expects a clinical data update in Q4 2024; no DLTs observed in the current cohort.
• Guidance timing shifted later vs prior quarter: ONCT-534 initial readout moved from late Q2 to Q3 2024; ONCT-808 update moved from “mid-2024” to Q4 2024—near-term stock catalysts hinge on those data readouts.
• S&P Global Wall Street consensus for Q2 was unavailable for ONCT; therefore, no beat/miss determination versus estimates can be provided at this time.

What Went Well and What Went Wrong

• What Went Well

  • Dose escalation and safety for ONCT-534: “We have not observed any dose-limiting toxicities or other concerning side effects… sixth dosing cohort…1,200 mg… now fully enrolled.”
  • Program momentum and timelines reaffirmed: “We plan to share an initial clinical data update for ONCT-534 later in the third quarter.”
  • Cash runway reiterated: “$21.4 million in cash… and no debt… sufficient to support our operations into the first quarter of 2025.”

• What Went Wrong

  • Timing delays vs prior guidance: ONCT-534 initial data moved from late Q2 to Q3 2024; ONCT-808 update moved from “mid-2024” to Q4 2024.
  • Continued high OpEx for a pre-revenue company: total operating expenses were $9.7M in Q2, with R&D at $6.6M and G&A at $3.1M.
  • Limited disclosure on 808 enrollment magnitude; management declined to provide counts in Q2 Q&A, which can frustrate visibility into program breadth.

Transcript

Operator (participant)

The Oncternal Therapeutics second 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 during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Vincent, Chief Financial Officer. Thank you. You may begin.

Richard Vincent (CFO)

Thank you, Diego. 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 second quarter ended June 30, 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, August 8, 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. Jim Breitmeyer.

James Breitmeyer (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. ONCT-534, our novel dual-action androgen receptor inhibitor, or DAARI, continues to advance through the dose escalation portion of the phase 1-2 study, and we continue to see strong demand from investigators. As a reminder, preclinical studies showed that ONCT-534 inhibited prostate cancer cells through both the ligand binding domain and the N-terminal domain of the androgen receptor, and it also induced degradation of the androgen receptor.

Thanks to this novel mechanism, we believe ONCT-534 may address key prostate cancer escape mechanisms from currently approved AR pathway inhibitors, such as enzalutamide and abiraterone, which include multiple LBD mutations as well as splice variants such as AR-V7. The clinical trial is proceeding well.

We have not observed any dose-limiting toxicities or other concerning side effects, and we recently announced that the sixth dosing cohort of the study is now fully enrolled. Patients in this cohort are receiving 1,200 milligrams of ONCT-534, administered orally once per day. 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 the third dose level of 600 milligrams ONCT-534 daily. We plan to share an initial clinical data update for ONCT-534 later in the third quarter. Now switching gears to ONCT-808, our autologous ROR1 targeting CAR-T product. Our phase 1-2 study in patients with relapsed or refractory aggressive B-cell lymphoma, including patients who have failed previous CD19 CAR-T treatment, is enrolling and treating patients.

There have been no dose-limiting toxicities observed in the current dosing cohort. We expect to report updated clinical results, including data from patients treated with the new dosing schedule, in the fourth quarter of 2024. With this, I 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 $0.8 million for the second quarter ended June 30, 2024. Our total operating expenses for the second quarter ended June 30, 2024, were $9.7 million, including $1.4 million in non-cash stock-based compensation expense. Research and development expenses totaled $6.6 million, and general and administrative expenses totaled $3.1 million. Net loss for the second quarter was $8.6 million, for a net loss of $2.89 per share, basic and diluted. As of June 30, 2024, we had approximately 3 million shares of common stock outstanding, $21.4 million in cash, cash equivalents, and short-term investments, and no debt.

We believe these funds will be sufficient to support our operations into the first quarter of 2025.

With respect to upcoming milestones, we are looking forward to the following updates. For ONCT-534, our lead DAARI product candidate, we expect to present initial clinical data in the third quarter of 2024, with additional data readouts in the fourth quarter of 2024. For ONCT-808, our ROR1 autologous CAR-T, we expect to report a clinical data update in the fourth quarter of 2024. With that, I will turn things back over to the operator for the Q&A portion of this afternoon's call. Diego?

Operator (participant)

Thank you. At this time, we will conduct our 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 that 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 your handset. Once again, to ask a question, press star one. We'll pause for a moment while we pull for questions. Our first question comes from Carl Byrnes with Northland Capital Markets. Please state your question.

Carl Byrnes (Managing Director and Senior Research Analyst)

Thanks for the question and congratulations on the progress. With respect to the clinical data update for ONCT-534 in the third quarter or late third quarter, to be specific, what do you expect? What should we be expecting there? So safety data, which would be inclusive of the 1,200 milligram dose. Would we be also potentially expecting PSA reduction numbers? And if so, would that be through the first 5 cohorts or all the cohorts? And then I have a follow-up as well. Thanks.

James Breitmeyer (CEO)

Go, go ahead, Salim.

Salim Yazji (CMO)

Yeah, Carl. So, I mean, with regards to what we would expect, we would expect to present a safety data for sure, and plus some of the PSA parameters, probably will be an early one, because, you know, based on the follow-up period will be not too, not too long.

Carl Byrnes (Managing Director and Senior Research Analyst)

Great. And then the additional clinical data in the fourth quarter, what might that consist of? Thanks.

Salim Yazji (CMO)

So in the fourth quarter, the additional clinical data will be probably more of a longer follow-up, more cohorts, I mean, you know, if we have. So I think I think we'll be more advanced than what what we're gonna be showing in the third quarter.

Carl Byrnes (Managing Director and Senior Research Analyst)

And then finally, with respect to 808, how many patients, if you could disclose, have been enrolled and with the update that you anticipate in the fourth quarter, how many subjects might that be, cover? Thanks.

James Breitmeyer (CEO)

Yeah, Carl, we haven't disclosed the enrollment on the CAR T program yet, but I think as you know, and as we show in our corporate deck, we have revised the dosing regimen with the CAR T, which we found were very active T-cells. And we have enrolled patients under the revised and amended dosing scheme, and we're not seeing any dose-limiting toxicity.

Carl Byrnes (Managing Director and Senior Research Analyst)

Great, thanks. And again, congratulations on the progress.

James Breitmeyer (CEO)

Okay, thank you.

Operator (participant)

Our next question comes from Kemp Dolliver with Brookline Capital Markets. Please state your question.

Kemp Dolliver (Director of Research and Senior Analyst)

Great, thank you. You know, with regard to 534, and this question's admittedly speculative, but is there any possibility you would move to higher dosing cohorts after you get the data, particularly from the sixth cohort?

James Breitmeyer (CEO)

So, Kemp, it's a great question, and so we are, we're collecting a lot of data on these patients. And so we have pharmacokinetic data. We've got some interesting and novel biomarker work that we're doing, and then, of course, the efficacy and the safety. And so, decisions about dosage levels for any additional cohorts will be made with the Scientific Review Committee based on the totality of available data.

Kemp Dolliver (Director of Research and Senior Analyst)

Okay, that's helpful. And then, again, on the same theme, are there any practical limits with regard to administration if you go to higher doses?

James Breitmeyer (CEO)

We have, we're using a 200 milligram tablet, and so it is perfectly feasible to give more than 6 tablets a day for if the data suggests that we should go higher.

Kemp Dolliver (Director of Research and Senior Analyst)

Great. That's all I have for the moment.

Operator (participant)

Thank you.

James Breitmeyer (CEO)

Thank you, Kemp.

Operator (participant)

There are no further questions at this time. I'll hand the floor back to Dr. James Breitmeyer for closing remarks.

James Breitmeyer (CEO)

Thank you, Diego. So as you can tell, we remain encouraged with the phase 1 results from our clinical programs and are looking forward to clinical data updates with you in the coming months. So I'd like to thank you for joining us today, and we look forward to updating you throughout this year. Thank you and good afternoon.

Operator (participant)

This concludes today's conference. All parties may disconnect. Have a great evening.