Kura Oncology, Inc. (KURA) Earnings Call Transcript & Summary

So hello, everyone. Thanks for joining us. My name is Jonathan Chang. I'm part of the SVB Leerink Equity Research Team. It's my pleasure to host the management team of Kura. And we have with us today, President and CEO, Troy Wilson. So thank you very much for joining us. For the investors that are joining us, feel free to submit questions or e-mail them to me at jonathan.chang@svbleerink.com. And with that, let's get started. Troy, would you please briefly introduce the company?

Sure, Jonathan, and thank you, and thanks to SVB Leerink for the opportunity to participate and to do this virtual fireside chat. Kura is a precision oncology company focused on developing targeted therapies for the treatment of cancer. We have two programs, KO-539, which is targeting genetically defined subsets of acute leukemia by targeting a protein-protein interaction that is essential for the maintenance of leukemic blasts, and that program is currently in a Phase I portion of the study. We also have a farnesyl transferase inhibitor called tipifarnib. That program is targeting genetically defined subsets of head and neck cancer. We have a registrational study underway there in HRAS mutant head and neck cancer and a planned combination study of tipifarnib in combination with the PI3 kinase alpha inhibitor. Ultimately, we hope to be able to treat approximately 35% of AML with our menin program and anywhere between 20% and 50% of head and neck cancer with our farnesyl transferase inhibitor program, tipifarnib. And then finally, Jonathan, we mentioned yesterday on our earnings call that we're also working on what we call a next-generation farnesyl transferase inhibitor program that's targeting innovative biology, new indications through rational combinations, and we'll talk more about that in the second half of the year. Finally, we're obviously a publicly traded company on Nasdaq. We're based in San Diego and in Boston, and we're well capitalized. We have strong support from our investors. We had $633 million in cash as of yesterday's earnings call. So we're very well capitalized to power through these value inflection points in the next 2 to 3 years.

Got it. I'm going to start to zoom in, and then if we have time, I'll zoom out over the course of the conversation. Now yesterday, you made disclosures regarding plans to amend the KO-539 study based on FDA comments with the goal of determining a minimum safe and effective dose. First question, why did the FDA ask you to determine a minimum safety and effectiveness?

Yes, it's a good question, and it's one that we've been answering throughout yesterday and this morning as we've been with -- on the phone with folks on the buy side. So maybe just, Jonathan, to take a quick step back. When we commenced this program, we began dose escalation in an all-comers AML population, and that was that FDA's direction. We had originally gone to them and said, we'd like to dose escalate in the genetically defined subsets of either MLL-rearranged AML or NPM1-mutant AML. FDA had said, we would prefer you escalate in an all-comers population. So that's what we've done. The only stopping rule in the Phase I escalation is safety. Will we hit an MTD or otherwise find a dose that -- go to a dose that's infeasible? What we found, as we're escalating, is the compound is active at a number of different dose levels, and it has a wide therapeutic window. To this point, we started at 50. We're currently evaluating 800. We're not currently seeing anything from a safety and tolerability perspective that's even noteworthy, much less indicating that we're getting close to an MTD. So that's where we stand. If we were to go simply on the stopping rules from FDA, we could be dose escalating for a long time. In the context of a discussion we had recently with the FDA on the overall program, including the portions for registrational intent, FDA shared with us that in their view, and I'm quoting here from the FDA's minutes, "For targeted therapies, one may exceed the dose with maximal pharmacologic activity before reaching the MTD. Therefore, we recommend instead that you escalate to the minimum safe and biologically effective dose." Now the investment community is very focused on that word, minimal, and thinking, "Oh, my goodness, you must be seeing something or the FDA that's making them want you to go lower." That's not what that language says. What it says is one may exceed the dose with maximal pharmacologic activity. FDA, through our discussions, wants us to identify that dose which is driving maximal therapeutic benefit and then stop. And that makes sense, right? You -- this is a protein-protein interaction. Once you block it, you induce differentiation. You clear leukemic blasts. It's not obvious you're getting a lot more by continuing to dose escalate. So through a discussion with the FDA, we actually agree with them. We don't have enough examples of activity as we're climbing through these cohorts to be able to distinguish, say, 600 milligrams from 400 milligrams. We've cleared both of them from a safety and tolerability, but any activity is anecdotal. It's not enough to say whether the higher dose is actually better. So to conform with the agency's guidance, what we're going to do is to enroll at least 2, possibly more, but likely 2 expansion cohorts, Phase Ib expansion cohorts at a higher dose and a lower dose. In those expansion cohorts, we will enrich with patients most likely to benefit, that is MLLr or KMT2-rearranged AML and NPM1-mutant AML. And we'll ask a very simple question, do you see more better activity at the higher dose than you see at the lower dose? Both of those doses will have cleared safety. Both of those doses will have been sufficient to drive activity. The question is just, have you maxed out your efficacy? With that answer, we'll then have a very robust data set. Those are 12 -- minimum 12 patient cohorts. We'll have a very robust data set to roll into the next portion, which is the registration-directed portion. So Jonathan, just to summarize. Investors and others shouldn't get locked on to that language around minimum safe and biologically effective. What that's FDA language for, go with the dose that is driving maximal therapeutic effect, and then don't go higher. And although people might say, "Well, why wouldn't the FDA go higher? This is oncology." The FDA is saying give the maximal benefit to the patients and then stop because ultimately, I think they know or they hope 539 and menin inhibitors will be used in combination as polypharmacy with thing -- agents like venetoclax, azacitidine, chemotherapy, azoles. You don't want to be giving patients more drug than is needed to drive maximal therapeutic effect. So we're very much doing, Jonathan, what is in line with the agency's guidance. The tox profile is so favorable. Think of this molecule more like what you would think of as a monoclonal antibody than a small molecule. And the challenge we've had, and this, again, is we followed FDA's guidance, we just haven't had enough enrichment through the escalation to be able to peel one dose apart from another. So that's what we're going to do in these expansion cohorts. But there really -- we don't think there's going to be much of an impact on the overall time lines. And in the second half of the year, we'll be able to give investors a very robust update on the recommended Phase II dose and how that's going to then roll into the registration-directed cohorts. So apologies for the long-winded answer, but hopefully, that lays out some of the key points that have been maybe points of question or confusion.

Great. Thank you very much for that, and thank you for sharing those minutes. That's very helpful. Just to triple check, can you clarify whether this was the result of some safety signal that was observed as a result of some problems of PK?

Yes, I appreciate that. No. So we have gotten -- this is a good question, right? The larger question is, is there something you're not telling us about what else is in those minutes? Just to be clear, Jonathan, with you and the audience, there was nothing in -- relating to safety and tolerability, nothing related to metabolism, nothing related to pharmacokinetics in the minutes that are driving this decision. This is 100% a very simple question. You have good safety and tolerability at a range of different doses. You have evidence of clinical activity at a range of different doses. How do you pick one versus the other following that FDA's guidance? It's 100%, Jonathan, relating to maximal pharmacologic activity, which we all believe will correlate with maximum therapeutic benefit for the patient. Nothing else relating to safety or any of those other parameters you asked about.

Understood. How should investors be thinking about a dose-response relationship with KO-539? So as you -- I mean, you've escalated up to 800 now. I mean, what -- I guess, what was the rationale for escalating up to 800?

Yes. So let's start with the rationale and then address the question on the dose response, right? So the rationale, again, was this is a safety study. We try to -- if we get hints of activity along the way, those are encouraging. They're anecdotal. This was always designed as a safety study. Safety was the stopping rule. It wasn't efficacy. It wasn't a receptor occupancy or menin engagement. It was safety. We did -- and we've disclosed this in our ASH update at the end of 2020. We did see what you might interpret as a dose response early on. And that is, if you think about we had a patient at 50 milligrams, 100 and 200. The patient -- and those were when we were doing single-patient escalations early on. The patient at 50 milligrams had evidence of tumor lysis syndrome, which is evidence of biologic activity. It's not clinical benefit, but it's -- it tells you you're engaging the system. The patient at 100 milligrams, who was an AML patient with a SETD2 RUNX1 co-mutation, that patient had a CR, I believe, in cycle 3. That response continued. The patient then progressed. We dose escalated to 200 because by that time, we cleared the 200-milligram cohort. The patient went another couple of cycles, and ultimately came out of the study at cycle 8. So you're seeing evidence of clinical benefit, but you are seeing some breakthrough. The patient at 200 milligrams, we had 2 patients actually. One was an NPM1-mutant patient who had failed 7 prior lines of therapy. And we detailed this. This is all available on our website. That patient had a complete remission, so-called no measurable residual disease, MRD negative, by the end of the first cycle. When we gave the ASH update, that patient was still in response with an MRD negative CR. The other patient, who was also NPM1, had a -- what's called a morphologic leukemic free state as best response. That was a short-term response but still clinical benefit and clinically meaningful. You can imagine, we're looking at every patient over time. That 200 cohort is certainly more robust activity than what we saw at 100. So I think, Jonathan, we're seeing kind of a dose response there. Then it gets a little fuzzier. There isn't enough examples. Once you get an MRD negative CR, how do you do better than that, right? You don't know if activity at higher cohorts is better than what you're seeing at 200. We are seeing evidence of clinical activity as we've climbed [ 2 ] additional cohorts. But the challenge we have is we're getting -- because it's all-comers, we're getting perhaps one patient per cohort. The rest of them have various mutations that are likely not responsive or less responsive. And so it makes it difficult to say if that dose response continues. I would just put it to you that if you can drive a durable CR that's MRD negative at 200, anything above that, you're going to ask yourself the question, okay, right, am I getting more efficacy? And this goes to the FDA's question. So I think from our perspective, we would feel comfortable moving forward at 400, at 600, potentially at 800. But FDA has challenged us, and we're up to the challenge, of which of those doses drives maximum pharmacologic activity. And I think we can sort that out with these Phase Ib expansions. And we'll do that in the -- in -- we'll do that in relatively short order this year.

Understood. Let me sneak in a couple submitted questions before I get back to my questions. So the first question is, is there a precedence for determining a minimum safe and effective dose in oncology?

Sure. So yes, so again, what I would refer you to, maybe 2 answers to that question. Typically, this isn't an issue, right? Why isn't it an issue? It's not an issue because for many targeted therapies, they go immediately into the targeted population. Think of the KRAS inhibitors, right? They didn't go into any KRAS mutant. They went into KRAS G12C, and they escalated, and so they were getting 3 to 5 patients per cohort. For drugs that are going into all-comers, those typically have toxicity. And even the other -- there's another menin inhibitor where they were seeing evidence of toxicity fairly early on. So this is a unique situation where, again, at the FDA's request, we went into an all-comers population, and we're -- we have such clean safety that it may be challenging to reach an MTD. The best analogy, Jonathan, are monoclonal antibodies because as we know, you can dose monoclonal antibodies to the point where they're precipitating out in the blood. People typically use other criteria. They'll use efficacy. They'll use target engagement as a way of selecting the dose. It's challenging to select doses. And you want to give enough monoclonal antibody that you cover the target. This is a protein-protein interaction inhibitor. We're not targeting catalytic activity, right? We're not targeting an enzyme. This is not a kinase inhibitor or a GTPase inhibitor, the way the KRAS are. This is -- you're trying to block 2 proteins. We are following various biomarkers, such as gene expression. But in our view, given that efficacy is the endpoint in the pivotal, let's go off of efficacy, right? Let's not use a surrogate that may or may not be a good predictor of efficacy when we can use efficacy. And Jonathan, just to make the point, we have planned all along. Our plan previously had been, let's get to an RP2D, and then let's go into expansion cohorts in these genetically selected populations. The twist here is rather than going at 1 dose into 2 genetically selected populations, we're going forward with probably 2 doses into combined genetically selected populations. It means you have to wait a little bit longer to say this is what your actual RP2D is. But that's why I say there isn't really an impact on the time line. So this is to your specific question. I don't know that there's a direct analog to what we've seen, but this is commonplace outside of the oncology division, and it's also fairly common with agents that have wide therapeutic indexes -- indices, excuse me, such as monoclonals, where you may not ever reach an MTD, you stop dosing for other reasons.

So the next submitted question, what are the lower and higher doses you plan to use for the expansion cohorts?

Right. Yes, good question. So right now, where we are is we haven't determined the lower and the higher dose. We have a range of potential doses. I think the lowest end would be 200. That might not -- you might actually want to step up to 400, but we saw good encouraging activity at 200. The upper bound will likely be defined by 800 if we clear that. But I want everyone on the call to understand, this is a work in progress. This is something that we're doing the work internally, and we need actually feedback and input from the safety review committee. So we have a safety review committee, of which we participate as sponsor. But the Phase I investigators on the study, we want to make sure we get their buy-in on the dose selection for the Phase Ib expansion. What I can tell you is it's likely to be on the lower end, 2 to 4; on the higher end, 6 to 8. But understand that, that decision actually rests with the safety review committee. And when that's happened, we'll find a way to communicate that to folks so that they understand what we're looking at and what went into it.