CASI Pharmaceuticals, Inc. (CASIF) Earnings Call Transcript & Summary

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Wonderful. Thanks for everybody to joining CASI's Update Call. So we felt -- this is Dr. Wei He, Chairman and CEO of CASI Pharmaceuticals. We felt it's important to give our investors an update on the new programs we have just licensed in. I apologize a little bit ahead of time. I'm talking too much and lost a little bit by voice. With that said, with all the typical disclaimers, let's go to Slide #3. And joining my -- the call will be our CFO, Weihao; and our CMO, Alex, is on the call. So it's a real quick call. CASI highlights. CASI is really a commercial stage company. We really -- our first drug launch, we really did very well with our very well-organized commercial team. Our 2024 year projected revenue is around $15 million. The data should be announced -- the actual number should be coming out soon. And we are projecting 50% growth in 2021 for our first product. And what I always say, it's always the most difficult part of building biotech company is to launch the first product. With our first product launch, we now have truly builded a fully integrated pharmaceutical company. We actually have another molecule for transplant called Thiotepa. We are initiating regulatory submission and registration studies in China in 2021. But one of our most exciting program is the Chinese domestic CD19 CAR-T therapy. We are on track to -- this therapy, not only that, the breakthrough therapy designation in China, we are actually on track to file NDA in 2021. And we obviously have a few more molecules that we have updated our investor that BI-1206 is a molecule we licensed from Bioinvent. We have announced the Phase I trial data. We have 6 responders out of the 9 evaluable non-Hodgkin's lymphoma patients in the Phase I study. Very encouraging data. And our CID-103 anti-CD38 antibody is planning to start a Phase I trial in Q1 2021. So today, the real purpose of this call is to update our investors with CB-5339, which we think this is a really broad branch hemological malignancy and solid tumor drugs, and it already started 2 active Phase I trials in dose-escalation trial. And with that said, I'm going to let Alex to give investors an overview of CB-5339, which we are really quite excited about this molecule. And we'd like to share the update with our investors. Alex?

Good morning. My name is Alex. I'm the Chief Medical Officer of CASI Pharmaceuticals. I'm going to take you over the next couple of minutes through and provide you the background and the status for this very interesting and potentially first-in-class program. We help -- can you advance the slide, please? So the valosin-containing protein is the target for 5339. This -- the p97 role in normal cellular physiology is to maintain protein homeostasis. And you can consider the p97 target to be a cytosolic protein chaperone, which in conjunction with a large number of cofactors and adapters, separates polypeptides from mobile cellular structures, such as protein assembly complexes, ribosomes, membranes, et cetera. This is an ATP-dependent enzyme. And when you disrupt the p97 target, it also induces a DNA damage response. So it interferes with the cell's ability to basically fix any DNA damage. Cancer cells, because of their altered metabolism and proliferation properties, et cetera, are differentially sensitive to inhibition of the VCP p97 target. The lead product, 5339, it's a second-generation small molecule inhibitor. It has the potential for a broad range of hematologic malignancies and application in solid tumors. And currently, there are 2 ongoing Phase I dose-escalation study. An AML MDS study sponsored by Cleave, our partner. And the NCI is conducting a solid tumor and lymphoma trial, which has recently been initiated. Next slide, please. Now as the p97, when it removes these polypeptides off of a mobile cellular structures, it often targets these polypeptides, they're taken away and degraded in the proteasome system. So this effect leads to an interference with endoplasmic reticulum associated degradation. This process is critical to protein homeostasis. And its inhibition results in an irreversible -- irresolvable stress state, which drives the solid tumors and multiple myeloma cells into a death spiral. There is substantial potential to combine the 5339 with other multiple myeloma therapeutic agents and other targets in the unfolded protein response. Next slide, please. Now when we consider the other, I think, very important mechanism of action, that is the interference with the DNA damage response. P97 is responsible for releasing polypeptides from chromatin. And many of the p97 chromatin targets our substrates have been identified, including RNA polymerase, all complex transcriptional repressor alpha 2, DNA helicase, double strand DNA break repair, protein, et cetera. So that this is a very unique target that has the potential to substantially alter the therapeutic effects of other chemotherapeutic agents in patients who are undergoing -- in patients with AML who are undergoing treatment. So this is what I would describe as a secondary key critical mechanism of action for the 5339 compound. Next slide, please. When we were undertaking the due diligence, one of the very attractive preclinical aspects was the broad -- the potential broad application as illustrated here, in 138 different cancer cell lines, the 5339 had a substantial treatment effect. Of course, this is an in vitro sensitivity assay. But the AML and multiple myeloma cell lines were probably the most sensitive across multiple different experiments testing the 5339 activity. In solid tumors, there were with high levels of protein turnover. There was also a substantial level of activity, giving us encouragement that the 5339 could have application across multiple different solid tumor subtypes. The next slide outlines the ongoing Cleave-sponsored Phase I study in AML and MDS. This is a classical design, first, an accelerated titration and then a 3 plus 3 dose escalation, with potential expansion in both the refractory/relapsed AML and the moderate to high 30, intermediate to high-risk MDS, with the ability to expand the study and look at combinations in both the AML and the MDS indications once the recommended Phase II dose is reached. The design is very straightforward. To date, the safety profile has been very consistent with what was observed in the preclinical toxicology studies. The 5339 has been well tolerated. There has been no evidence or clinical findings of the off-target visual toxicity that was associated with the first generation molecule. The PK data set is coming in in a dose proportional manner. And the company has not yet announced any of the safety or efficacy data set. But suffice it to say that there was adequate data. And then working with the Cleave management team, there was -- it was very easy to support the acquisition of this asset. The next slide, please. This provides the rationale to look at 5339 or assess 5339 in patients with acute myeloid leukemia. The VCP/p97 inhibition clearly results in DRD of a damage repair disruption and that cascades into accumulation of DNA damage and cytotoxic, genotoxic stress inducing cellular apoptosis. 5339 has demonstrated a strong level of activity across multiple AML cell lines, and synergistic additive activity in conjunction with standard of care chemotherapeutic agents and other targeted agents in the preclinical setting. So there is, I think, a very good rationale to move this molecule forward in both the AML and MDS indications. Now that's the end of the scientific introduction. I will now turn the presentation back to Wei-Wu.

Well, thank you, Alex. We are just very excited to share with investors that the CASI progress with our first drug on the market. We are expecting to have another 1 or 2 drugs approved sometimes in 2022. But we are also building a very, very strong pipeline of innovative compounds, just like the CB-5339. And we think with this portfolio of assets, sooner or later, CASI will become a very meaningful fully integrated pharmaceutical company. Thank you so much. We would like to open up for questions.

[Operator Instructions] Our first question is coming from the line of Leland Gershell with Oppenheimer.

Thank you, Wei-Wu, for the update. I just wanted to ask 2 questions. First, as we look forward to CNCT19 becoming available in China. If you could maybe just walk us through the steps and the time lines that may be involved in terms of NRDL listing? And also with regard to Thiotepa, I wanted to ask, it's -- I know it's used for multiple cancers. Just wanted to ask kind of what the path -- the development path you see for that? If that will be for a specific indication or label will be -- will allow for use in multiple malignancies?

For the -- so unfortunately, my -- I'm not hearing you that clearly. So you -- your question is on CAR-T 19 and Thiotepa, right?

Right. So the CAR-T 19 for the NRDL, just kind of the steps to getting listed there and the time lines and then Thiotepa, what's -- how you're develop -- how you look forward to developing that? And will it be able to be used for the spectrum of cancer is that it's used for? Or will it take time to kind of have label expansions? Just as we think about the China regulatory environment?

Yes. So right now, our guideline for the CAR-T 19 is we are -- our partner, Juventus, is conducting the pivotal trial. And our understanding is very much on target to file the first indication sometime before end of this year. So -- and we expect, if all things goes well, we expect -- this is obviously not that predictable, we expect to launch the drug around mid-2022. That's our current understanding. But obviously, CDE or NNPA can always delay that process. But that's our internal time line to push this molecule forward. Does that answer your question?

Well, I was going to ask, once it's approved, is it immediately -- the National Reimbursed Drug List, is it immediately placed on the NRDL with the price or is there additional steps?

Yes. So we are probably not expecting to have immediate reimbursement in the first 1 or 2 years, just like our EVOMELA. So our EVOMELA is already launched over 4 years. We are still not -- we're still not getting into the national reimbursement. Right now, it's all self-pay our EVOMELA. We expect our CAR-T 19 will be self-pay for at least a year or 2. Because initially, our current GMP manufacturing capacity is only about 2,000 patients. So if we -- if our demand is way over 2,000, we can't even meet that demand. So we think we will be able to find 2,000 self-pay patients first year, we launched the CAR-T 19. And we will slowly negotiate with the national reimbursement to get into the national reimbursement. Is that something?

Yes. No, understood. That makes sense.

We will obviously...

Initially, the pricing -- yes. Yes. Go ahead.

Go ahead. I was going to address -- I'll address this Thiotepa question when you're finished.

Yes. Go ahead.

So Leland, on the Thiotepa, as you are aware, Thiotepa is used as a preconditioning regime for allogeneic stem cell transplant. The initial indications will follow that exact path in beta-thalassemia, AML, et cetera. And it will be determined at a later point in time how we will proceed with the potential label expansion. But we will focus our resources on 2 of the primary indications, which will complement our commercial activities in China.

[Operator Instructions] The next question comes from the line of Nathaniel Calloway with Edison.

I have 2 questions just about the new acquisition, CB-5339. My first one is just for Alex, I guess, I'm just wondering, since this is a drug involved in protein homeostasis. Should we expect its clinical profile to resemble, say, proteasome inhibitors? Is that something that is a reasonable assumption? Or should we expect something different? And then my second question about the program is, since you're involved in -- you're going to be involved in the development in rerunning trials in China, just wondering what sort of time line you envision for starting those clinical trials in China?

So for the first question regarding the safety profile, will it look similar to proteasome inhibitors? Difficult to say. On the first blush, understanding the ongoing studies, I would say no. However, if we look to the future for combinations, especially if we can use this in conjunction with the proteosome inhibitor in patients with multiple myeloma, obviously, we will be dealing with the safety profile of the intrinsic proteasome inhibitor also. So I'm very confident that as a monotherapy, the safety profile is going to look a little different than what the classic proteasome inhibitor safety profile has been developed over the past few years. In terms of the time lines, the first step is obviously to assemble the package, to get it translated to Chinese, to get that package submitted. And we will be undertaking a pre-IND equivalent meeting with the Chinese Health Authority. As this is a new molecular entity, we want to make sure that we get the authorities buy-in, just as we would request a pre-IND Meeting in the United States. So depending upon that review process and how fast we can get things in, I am hopeful that we can start participating in the global trials and other requirements in China within the next 12 months.

[Operator Instructions] Everyone, I'm currently not seeing any questions coming through. Would you like to make any additional concluding remarks before we end today's webcast?

Well, yes, thank you so much. And thank you for listening into this update call. CASI, we have assembled a very wonderful team, and we're moving one compound after another onto the market. And you will expect to see both commercial and clinical progress as we move forward. And thank you very much for your support.

Ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation, and you may disconnect your lines at this time.