Decoy Therapeutics Inc. (DCOY) Earnings Call Transcript & Summary

Good morning and welcome to this Salarius Pharmaceuticals Business Update Conference Call. [Operator Instructions] Please note that this event is being recorded today. I would now like to turn the conference over to Bruce Voss. Please go ahead, sir.

Thank you. This is Bruce Voss with LHA. Thank you all for participating in today's call. Joining me from Salarius Pharmaceuticals are David Arthur, Chief Executive Officer, Dr. Nadeem Mirza, Senior Vice President, Clinical Development, and Dr. Daniela Santiesteban, Director of Protein Degradation. We also have Mark Rosenblum, Chief Financial Officer available during the Q&A portion of the call. In addition to the recent release of Ewing sarcoma, and FET-rearranged sarcoma, interim clinical data and presentations at recent medical meetings, today's speakers will be referencing posters that were recently presented at the American Society of Hematology Annual Exhibition and Congress. These posters and the accompanying presentations are available at salariuspharma.com in the Investors tab under Events and Presentations. I'd like to caution listeners that during this call, management will be making forward-looking statements about future expectations, plans, time tables and other topics, including statements about the planned future development of its investigational drug candidate seclidemstat and SP-3164. These statements are based on the company's current expectations, and you should not place undue reliance on them. Actual results may differ materially due to known and unknown risks and uncertainties, including those detailed in the Risk Factors section of the company's annual report on Form 10-K for the year ended December 31, 2021, and subsequent quarterly reports on Form 10-Q as well as other periodic SEC filings. Except as required by law, Salarius disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. In addition, nothing in this presentation is intended to imply FDA approval or review of the safety or effectiveness of any investigational product. With that said, I'd like to turn the call over to David Arthur. David?

Thank you, Bruce. Good morning, everyone. Thank you for joining us for today's call, and thank you for your interest in Salarius. Today we are discussing recently announced data and findings on our 2 lead development programs, our protein inhibitor seclidemstat and our protein degrader SP-3164. More specifically, my colleagues and I will provide an overview of what we believe are encouraging interim clinical data recently reported on seclidemstat from our Ewing sarcoma trial and data from the investigator-initiated trial underway at MD Anderson in blood cancers. In addition, we'll discuss the latest developments with our SP-3164 protein degrader program. I'm delighted to have both Dr. Nadeem Mirza and Dr. Daniela Santiesteban, to lead our clinical and preclinical discussions. For today's call, I'll provide some brief comments and then turn the call over to Dr. Mirza who will provide some additional color, including the data that were the subject of an MD Anderson Cancer Center poster presentation earlier this week at the American Society of Hematology or ASH Annual Meeting. Then Dr. Santiesteban will discuss the latest developments in our protein degradation program, including a poster she just presented at ASH and her presentation from the 5th Annual Targeted Protein Degradation Summit in October. In a nutshell, we believe the interim seclidemstat clinical data in Ewing and hematologic or blood cancers are promising. And SP-3164 preclinical data to-date are consistent with or exceeding our expectations. Except for the partial clinical hold in the seclidemstat program, which we are working with the FDA to resolve, we are extremely pleased with our process and our progress. Remember, Ewing sarcoma is a devastating bone and soft tissue cancer that affects children adolescents and young adults. In fact, according to the publication pediatric blood and cancer, after relapse, Ewing patients have a 5-year overall survival of about 13% and a 10-year overall survival of about 9%. Let's pause and think about this devastating statistic. Effectively, only 1 in 10 Ewing sarcoma patients who relapse will be alive 5 to 10 years later. Clearly, additional therapies are needed. With that, let me turn the call over to Dr. Mirza to review our work with seclidemstat. Nadeem?

Thank you, David. As David just mentioned, during sarcoma patients face a bleak future, and we have been working tirelessly to research and develop therapies that have the potential to change that reality. Seclidemstat is a novel oral reversible targeted LSD1 inhibitor, and it is currently being investigated in 2 Phase I/II clinical trials. One trial is sponsored by Salarius in Ewing and FET-rearranged sarcomas and the other is an investigator-initiated trial underway at MD Anderson Cancer Center in myelodysplastic syndromes, or MDS, and chronic myelomonocytic leukemia, or CMML. I'll talk about the Salarius trial first. Earlier this month, we announced interim results from the sarcoma trial, where we believe show encouraging data from 2 subpopulations. One group, first relapse patient showed a 60% confirmed disease control rate in a median time to tumor progression of 7.4 months. In the second group of both first and second relapsed patients that achieved confirmed disease control, there were no disease progression observed. Additional studies are needed, but these preliminary data may suggest that in the subset of patients who achieve disease control and are treated with seclidemstat may maintain disease control longer and potentially live longer without disease progression than when treated with chemotherapy alone. This is where we need to remember that only 1 in 10 patients with Ewing sarcoma who relapsed are alive in 5 to 10 years. It's also important to remember that the primary endpoint of a Phase I study is safety. However, the secondary endpoints and identification of subpopulations may help us understand which patients can be best served by seclidemstat treatment. And this is what we believe we may be seeing among first relapse patients and in first and second relapse patients that achieve disease controls. In the interest of providing the full context and objectivity, I'd like to provide some additional clarity pertaining to the interim during data. As a group, 13 first and second relapse patients were evaluable for confirmed disease control assessment as of October 31, 2022, cutoff date. Of these 13 patients, 5 or 38% achieved confirmed disease control with no tumor progression observed while on treatment with seclidemstat in combination with chemotherapeutic agents, topotecan and cyclophosphamide. Disease control is defined as complete remission, partial remission or stable disease as confirmed by scans at both end of cycle 2 and end of cycle 4 treatment. Treatment duration for all 13 evaluable patients range from 0.7 months to 13.8 months with a median time to tumor progression of 1.6 months. When we look at the subset of patients, as just discussed, we see that first relapse patients had a median time to tumor progression of 7.4 months, which we believe is meaningful. And among patients that achieve disease control, there were no observed progression while on seclidemstat treatment, which we also believe is meaningful. Obviously, the patient numbers are small, but we believe they are very encouraging, especially in light of data from the study presented earlier this year at ASCO by the Euro Ewing Consortium. That Phase III study goes by the acronym rEECur and it showed that in primary refractory, first relapse and second relapse during sarcoma patients treated with topotecan and cyclophosphamide alone, median progression-free survival was 3.5 months, and it was 5.7 months in the high-dose ifosfamide arm. Additional clinical trials are needed, but we believe that this tells us that seclidemstat may make a difference with patients in first relapse and first relapse and second relapse patients that achieved disease control. In 5 first relapsed patients, 3 patients achieved confirmed disease control. This includes 1 patient with complete response who withdrew from the study at 7.4 months. As a reminder, complete response means no more measurable cancer or no more evidence of cancer. One patient with a partial response of 78% target lesion reduction, who subsequently elected radiation treatment at consolidation and withdrew from the study at 13.8 months and 1 patient with stable disease at 12.8 months and continuing treatment. In context of the Phase III rEECur study, we believe these results are meaningful and additional research is warranted. Unfortunately, there was no activity observed in the FET-rearranged sarcoma cohort of the trial with seclidemstat as monotherapy. These tumors share some biology with Ewing sarcoma, and we were hoping that seclidemstat could provide a potential new treatment option. Also, in the FET-rearranged sarcoma arm of our study, there was a suspected unexpected serious adverse reaction, and the study is now on partial clinical hold while we work with FDA on resuming enrollment. Enrollment in the investigator-initiated study with seclidemstat in blood cancer has also been paused while the sarcoma situation is resolved with FDA. Even so, Dr. Guillermo Montalban-Bravo of MD Anderson Cancer Center, Department of Leukemia presented a poster at ASH on the investigator-initiated Phase I, Phase II dose escalation study with seclidemstat in combination with azacitidine and hypomethylating agent. That poster and presentation is also available on our website. The objectives of MD Anderson study are to evaluate the safety, tolerability, maximum tolerated dose and overall response of seclidemstat in combination with azacitidine in patients with high-risk MDS and CMML, who relapsed or progressed after hypomethylating agent therapy. This is also a very sick patient population with an overall survival of 4 to 6 months for patients after failing therapy with hypomethylating agents. In fact, according to the Leukemia & Lymphoma Society, there are 20,000 new cases of MDS each year in the U.S. alone and approximately 25% to 30% of MDS patients have high-risk disease. This is a large patient group with a high unmet need for new treatment options. As presented at ASH, as of October 2022, 9 patients were enrolled with a median follow-up time of 3.9 months. There were no serious adverse events and all adverse events were manageable. Of the 8 evaluable patients, 4 or 50% had objective response, including 1 complete response that went on to receive potentially curative allogeneic stem cell transplantation, 2 marrow complete responses plus hematologic improvement and 1 marrow complete response. The MD Anderson study is still in its early stages and further investigation is warranted. But we believe the interim data is showing promising early signs of activity. In addition to the 50% overall response rate and the patient with potential curative allogeneic stem cell transplantation, the poster presentation included an early probability of survival chart, indicating that an approximate 90% 12-month survival based upon the 8 evaluable patients. Again, the trial is in the early stages and these are small patient numbers, and the projected probability of survival may change as more patients are treated with longer patient follow-up, but we are encouraged by this early data. We look forward to MD Anderson restarting enrollment, if and when appropriate, evaluating additional doses and generating additional clinical data. Now I'll turn the call over to Dr. Daniela Santiesteban, who will update you on SP-3164, our targeted protein degrader. Daniela?

Thank you, Nadeem. I just returned from ASH in New Orleans, where I presented a poster highlighting preclinical data on SP-3164, our targeted protein degrader. The poster is available on our website, and I encourage you to review the data that I will be discussing on the call today. First off, it was great to be back at ASH in person. The conference was very well attended this year, and it was wonderful to reconnect with colleagues and to see the latest data from exciting preclinical studies and clinical trials. Before I get to the ASH data, let me take a moment to introduce SP-3164 to the callers who may be newer to the story. SP-3164 is our novel cereblon-binding molecular glue protein degrader. It works by interacting with the cereblon component of an E3 ligase and thereby inducing recruitment of select proteins, which then leads to their ubiquitination and their subsequent degradation. SP-3164 degrades the hematological transcription factors, Ikaros and Aiolos. These transcription factors play a critical role in the development and progression of certain cancers like lymphomas and multiple myeloma. In other words, SP-3164 works by helping to flag cancer-promoting proteins for degradation or destruction. This allows the cancer cell to eliminate the unwanted proteins that are promoting the disease progression, thereby inducing cancer cell death and helping to treat the disease. SP-3164 is a stabilized preferred half of a widely studied and clinically active protein degrader called avadomide. Avadomide exists as a 1:1 mixture of 2 interconverting species. So half 1 species and half another. Yet it is only one of these species that is a desired active anticancer species. We developed SP-3164 to exist as a stable active species. And as such, it has its own composition of matter of patent. One question we routinely receive is why avadomide, why the preferred half and why the excitement. The answer is that avadomide is an extensively studied drug with an established safety profile. In published studies, it has already demonstrated encouraging single agent in combination therapy efficacy in non-Hodgkin's lymphomas and other hematological malignancies. With SP-3164, we believe that we are developing the preferred half or a better version of avadomide. To that point, in our ASH presentation, we discussed our preclinical data that demonstrated SP-3164 causes efficient and rapid degradation of Ikaros as compared to avadomide and lenalidomide, which is also known as Revlimid and is an approved agent. This really demonstrates SP-3164's potency. We also demonstrated that the other unwanted species or unwanted half had no degradation activities, thereby confirming that with SP-3164, we have what appears to be the best part of avadomide and potentially can improve upon avadomide's already demonstrated therapeutic characteristics. We also presented data demonstrating SP-3164 significant anti-proliferative effects and several non-Hodgkin lymphoma cell line and showed its single-agent antitumor activity in a diffused large B-cell lymphoma, or DLBCL for short, mouse model. In this study, SP-3164 was superior to lenalidomide. And once again, we confirmed that the unwanted species or the unwanted half, which for those of you that may be looking at the poster online is called SP-3165, had no antitumor effects. In addition to single-agent activity, we presented data in an in-vivo DLBCL model, demonstrating robust combination activity with rituximab, a drug routinely used to treat lymphoma. SP-3164 augmented rituximab's activity and resulted in complete tumor regression. 50% of the mice had no palpable tumor after 4 weeks of treatment, which were very exciting results. Additionally, the combination of SP-3164 and rituximab performed significantly better than the combination of lenalidomide and rituximab, which is an approved regimen by the FDA for the treatment of other non-Hodgkin's lymphoma. So why is this important? Well, because according to the Lymphoma Research Foundation, over 18,000 new patients with DLBCL are diagnosed each year in just the U.S. alone, and about 40% of these patients relapse from standard of care treatment. At ASH, I saw that while there are a lot of encouraging treatments being developed in the relapsed/refractory setting, there still remains a high unmet need in this patient population. In addition, published avadomide clinical data shows that in DLBCL patients with an identifiable gene signature, avadomide was more efficacious and resulted in clinically meaningful improvement in overall response rate compared to patients without that gene signature. This indicates that Salarius may be able to select for patients more likely to respond to SP-3164 treatment, and it may allow for a potential precision medicine approach in a high unmet need population. In addition to the poster, we plan to post a video of the poster presentation on our website, if you'd like to learn more about this study. Earlier this year, we also presented SP-3164 data at October 5 annual targeted protein degradation or TPD for short, Summit in Boston. While our ASH presentation showcased SP-3164 potential in lymphoma, our TPD Summit presentation highlighted its potential in multiple myeloma and also showed some additional characterization data. Again, I encourage you to take a look at the slide presentation from this conference that is also available on our website. The preclinical data presented at the TPD Summit showed significant tumor growth inhibition in an in-vivo study, including a statistically significant improvement over the approved drugs, lenalidomide and pomalidomide, also known as Revlimid and Pomalyst. Preclinical data showed that by eliminating the unwanted species of avadomide, SP-3164 may lead to improved activity and safety, as demonstrated by the lack of anticancer activity with the unwanted species or SP-3165 and its potential role in supporting tumor growth in this model. To summarize these presentations, we believe that SP-3164 may ultimately have a place in the treatment of lymphoma and multiple myeloma. To that end, we have completed the FDA pre-IND meeting process, and we plan to file an IND application with the FDA during the first half of 2023 and then begin our Phase I clinical trial shortly after. With that exciting note, I'll turn the call back over to David for additional comments. David?

Thank you both, Nadeem and Daniela. We and I am incredibly fortunate to have these types of scientists working at Salarius along with approximately 2 dozen other talented scientists and other professionals from across the organization. While we believe the recently released clinical and preclinical data position Salarius for success, a question I often receive is when will enrollment restart in the seclidemstat trials. Well, ultimately, the answer to this question lies with the FDA, but I can report that we have received FDA written communication on this topic, and we are actively preparing answers to the questions asked by the FDA. After preparing these answers and amending our clinical protocol, we plan to review the information with our investigators and outside experts prior to submitting a response to the FDA in the first quarter of next year. Upon receipt of a response, the FDA typically responds to the company within 30 days with an acceptance or additional questions. As I've mentioned previously, we are actively working to understand how best to restart our seclidemstat trial to generate additional patient data. In addition, we believe 3164 builds upon a strong avadomide profile and has already shown in animal models, superiority to lenalidomide and pomalidomide, including showing tumor regressions in diffuse large B-cell lymphoma when combined with rituximab. We are looking forward to getting 3164 into the clinic and understanding how our next-generation molecular glue can best benefit patients and also understanding the impact of 3164 when used to treat patients with a defined gene signature. Before we open up the call to your questions, I want to mention that the annual JPMorgan Healthcare Conference is right around the corner in early January. We plan to have an active presence in San Francisco, meeting with potential investors and prospective development partners to discuss the exciting data across both our programs. Please contact LHA, our Investor Relations firm, if you would like to arrange a meeting. So with that overview, my colleagues and I are ready to take questions. I'd like to turn it over to the operator.

[Operator Instructions] And our first question here will come from Hunter Diamond with Diamond Equity.

I appreciate the update today on some of the science. I just want to take a different route and discuss more of the financial impact of the clinical hold and the advancement of the TPD asset just in terms of what that means for the burn rate and the financials of the company?

Let me make a short comment, then I'll turn it over to Mark for some additional color. Ironically, going on partial clinical hold actually reduces our spend as we're not enrolling any additional patients. So we're in a position where we believe we received some very promising data on seclidemstat our burn has dropped, and we're currently working with the FDA to understand how best to restart our program, the Salarius sponsored trial in sarcoma and also provide MD Anderson with the information they will want to see in order to restart their program. Mark, would you want to add a little color commentary to that overview?

Yes, just a couple of items. When you think about seclidemstat, largely, our project is largely complete with regard to the heavy lifting and the heavy spend for seclidemstat. So when we forecast 2023, it's significantly lower for seclidemstat spend. 3164 is a little bit of a different story in that we launched in 2022, and we're making very quick progress. But a lot of the heavy lifting has been or will be completed in 2022. And our spend in 3164 for next year is largely about the same as it is this year. So lower in seclidemstat flat, perhaps slightly higher in 3164 is what the company has forecast.

[Operator Instructions] Our next question here will come from Ahu Demir with Ladenburg Thalmann.

This is [indiscernible] for Ahu Demir from Ladenburg Thalmann. I have 2 questions. My first one is with our SP-3164 demonstrate antitumor activity in multiple myeloma, in vivo at fifth TPD Summit last month. And we also see SP-3164 exhibit in vivo antitumor activity in the lymphoma model at ASH. Could you please give us some information on the coming new trial? And has the company decide on any indication to focus of the trial be a basket trial? And the second question is, we saw there's potentially a new trial to start in the fourth quarter this year, evaluating seclidemstat in combination with our checkpoint inhibitor in OBGYN cancer. Would you please give us some information on this one as well.

We're happy to. So welcome to the call. Thank you for stepping in and helping out Ahu on the Ladenburg front. Let me take your questions in reverse order and then ask possibly Daniela and Nadeem to add a little color to my overview comments. As background, there -- we've seen some very promising what we believe is very promising preclinical data in the use of seclidemstat to unmask tumors that were previously hidden and potentially work very well with checkpoint inhibitors. We originally began working with the HonorHealth system in Phoenix, Arizona. Unfortunately, during COVID, they ran into operational issues and were unable to get the trial up and running. We've subsequently been approached by another organization who wants to pick up that trial and run with it. And we're currently working with them to transfer the IND and work with an organization to ensure the supply of a checkpoint inhibitor. So the short answer to your question is, we ran into an issue with implementation at the organization that had requested the investigator-initiated trial, and we're in the process of transitioning to a new organization. So stay tuned, and we hope to have more information on that sometime next year. Your second question related to the clinical program relative to 3164. At a -- we have not yet submitted our protocol to the FDA. And in fact, we will be holding advisory boards later this year with lymphoma experts and multiple myeloma experts to best understand the type of trial we are going to want to run in our Phase I, Phase II study. Generally speaking, in the Phase I dose escalation portion, we want to be able to enroll patients quickly and understand the safety profile and established maximum-tolerated dose. And many times, you will allow a broader inclusion criteria. As we move into dose expansion where we are evaluating a larger number of patients at the maximum-tolerated dose, many times, you begin to focus in on a much -- on a smaller number of different patient types. And I would imagine we will follow that standard and well-established process. When you look at the available data from avadomide, what you see is -- what we believe we see is some very promising results in non-Hodgkin's lymphomas. And as Daniela mentioned, there's some -- we believe there's very promising data in patients with DLBCL with a specific gene signature. In fact, those patients had a significant increase in overall response rate. So one could infer that by looking at those patients early on, we are taking the -- a really good approach, what we think is a very viable approach to understand the efficacy of the drug and the potential for precision medicine. So I would share with you that there's more to come in the very near future. But if you look at the data, it would be reasonable to expect us to pursue at a minimum non-Hodgkin's lymphoma and really develop a strong initial data set for 3164. So that's my overview comment. I'm looking at Nadeem to see if he'd like to add any additional color.

No. Thank you, David. I think you've captured it quite well. Just to add some more context, as a Phase I, as David mentioned, we'll have a more broader patient population in hematologic malignancies and to actually get to the recommended Phase II dose as quickly as possible. And then once we determine the recommended Phase II dose, we have plans to do some expansion cohorts in what would -- you would expect these agents to work in, including lymphomas and multiple myelomas and maybe some others as well. So stay tuned. We are right now working on the synopsis. So we have time lines to achieve. And so we -- hopefully, we'll be able to provide you some additional information as soon as we get the feedback from our advisers on -- specifically on a patient population. What we want to target is an unmet need patient population so that we get to our objective faster and then potentially have a good path for future development.

Did we answer your question?

Yes, that's very helpful.

Okay. With no remaining questions, we will conclude our question-and-answer session. I'd like to turn the conference back over to David Arthur for any closing remarks today.

Thank you. Our goal with today's call was straightforward, and that is to provide you with the opportunity to understand the important data that has been announced in recent weeks and to understand why we are so excited about Salarius' prospects. I hope we achieve that goal and that your understanding of our work is enhanced and that you join us in looking forward to the future of seclidemstat and 3164 with enthusiasm. Thank you all for your time and attention. We look forward to keeping you apprised of our progress and expect continued announcements throughout 2023. Best wishes for a holiday season, happy holidays and a healthy new year. Good day to everyone. Be safe.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.