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

All right. Welcome, everyone, to the 31st Annual Healthcare Conference for Credit Suisse. We're joined today by Kura Oncology. We have Troy here, President and CEO of the company for a fireside chat. We're going to leave about 5 minutes towards the end of the presentation. If there are any questions from the audience. Otherwise, I just keep firing away until the time is up.

But I guess since you haven't had a public presence since the ASH abstracts were released, I know there was a lot of chat. So maybe too much focus on men in the near term, so we can probably start there. If you can just have your intro remarks, what are some of the key learnings from the abstract, and we'll take it from there.

Sure. Yes. And thank you, Tiago to you and to Credit Suisse for the invitation to participate in for the fireside chat. So for everyone in the audience, ziftomenib is our menin-MLL inhibitor for the treatment of acute leukemias. To your question, the ASH abstracts dropped on November 3. And what you saw there was a summary of our experience with ziftometib in Phase Ia and in the Phase Ib dose optimization portion of our COMET study. There were 30 patients in the Phase Ia. There were 24 patients between the 2 cohorts in the Phase Ib. I'll just -- we go through this every year at ASH, but just as a refresher that abstract was a data cut of the early summer, late June. We had just completed enrollment in the Phase Ib. We had announced it on our earnings call in May. So you're looking at an early summer data cut relatively immature. We're delighted that we have an opportunity for an oral presentation at ASH, where you're going to see a much more mature data set including an additional 18 patients dosed at 600 milligrams. To your specific question, Tiago, key takeaways to start with safety. We reported all treatment-emergent AEs, and I highlight that for you because people report safety in different ways. You can report treatment emergent or treatment related. Treatment emergent is all AEs of all grades with no causality assigned. It is a full picture of everything you're going to see on the safety side. Treatment-related is a much more circumscribed presentation where those are subjective determinations. So on the safety side, really, the only thing you see is differentiation syndrome. You do see various manifestations of it. But as you go through the AEs, they are either due to AML, things like sepsis, neutropenia or they are various manifestations of differentiation syndrome. So that's the safety side. We've seen a very consistent safety profile for zifto, we've treated the selected genotypes as well as unselected and it's a very clean compound. It does have DS. I know we're going to get to that. But other than that, there's no cardiotox, there's no drug-related QT prolongation. There's really nothing of note. On the activity side, it doesn't necessarily jump out of the abstract, but I'll sort of tell you what we saw. So we saw a very encouraging activity early on in the Phase Ia, it kind of looks like you lose the signal as your dose escalating and then it reappears in the Phase Ib. And some people have been puzzled by that. But what we experienced is there were 2 things going on simultaneously with zifto. The first is we consistently see a pattern where patient's experience elevated counts, either leukocytosis or elevated blast counts. And initially, as we were dose escalating, the physicians on the study thought that was signs of progression. We've now know that's not those -- that is actually a pharmacodynamic marker of the drug's activity. It is inducing differentiation and the leukemic blasts are leaving the tissue. They're leaving the marrow. They're going into the periphery. But if you're unaccustomed to it and you're doing blood draws every week, it can look like sort of pseudo progression, if you will. So that's part of it. The other part is our ability to manage DS and to get patients through DS. We do see -- this is -- zifto is a very potent compound. It may be among the most potent menin inhibitors out there. We do see differentiation syndrome, the physicians on study have gotten much better at managing. Those 2 together, Tiago, we really figured out the transient counts in early in Phase Ib, that sort of helps explain the narrative. But the big takeaways from the abstract are we did -- we see good safety. We see encouraging activity and most importantly, 600 milligrams is clearly the more efficacious dose. The 2 doses are really equivalent from a safety perspective, 600 is -- there's greater expression knockdown and there's greater activity. And for that reason, we went ahead and dosed an additional 18 patients at 600 milligrams, you will see those additional 18 patients at ASH.

Okay. No, that's perfect. And kind of to build upon the management of DS and what you've learned with the drug so far. Again, it's a relatively small sample size, but based on our conversations, it seems that you have a clear efficacy signal in NPM1 patients versus KMT2-rearranged, right? And this is kind of inverse of what we're seeing so far with the competitor in the same space. Can we just talk a little bit about the potential reasons for that, either related to disease biology or molecule, probably both? And again, it sounds like now that you have a better rest of the DS that's kind of an on-target effect that you see what does that imply for the KMT2 cohort?

Yes. So I think good questions. So you have -- and you expressed it in your question, you have 2 things that are intersecting. You have 2 very different drugs between us and our competitor. And you have 2 very different diseases between KMT2A and NPM1-AML. Let's start with the differences between the 2 drugs. Our drug is dosed once daily. It has time-dependent accumulation. It reaches levels of exposure in plasma that are a multiple sort of think of 5x, the cycle 1, day 1 exposure. It is highly protein bound, and it is highly tissue penetrant. It is so effectively; you are bathing all the organs in the patient continuously. In contrast, our competitors compound is dosed twice daily, relatively rapid uptake, relatively rapid elimination, much more of a sort of sinusoidal exposure, time exposure relationship, not highly protein bound, I think approximately 60% protein bound and not terribly tissue penetrant. So 2 very, very different drugs in the way that they interact with patient anatomy and physiology. Now let's talk about the diseases. NPM1-mutant AML, which is 85% of the target population looks like what physicians and investors and others think of as traditional AML, like FLT3 like IDH. It's predominantly a disease of the bone marrow and the periphery you don't get a lot of tissue involvement. NPM1, it looks more like sort of the classical AML we've seen. KMT2A-rearranged AML is very different. Its clinical presentation is very different. It's highly invasive, it's highly aggressive. By the time you treat a relapsed/refractory AML patient who has KMT2A-rearranged AML, they have disease everywhere in every organ. In fact, we have physicians who've done autopsies of these patients who say, do they open them up and there's disease in the joints, there's disease in the lymphatic system, in the muscle. So now we're as NPM1, that's not the case. The final thing Tiago is think about how typically docs are sampling for activity. They're doing weekly blood draws. And then when the accounts get below 5%, they'll do a bone marrow aspirate. They don't typically -- maybe they'll do a bone marrow aspirate at entry, but they're not doing weekly bone marrow aspirates. If you don't go looking for that extramedullary disease, you're not going to find it. But it's still there, and it's one of the things that we believe is driving relapse. So in our experience, NPM1, although it is the more classical presentation, it's the harder target. The connection with the biology is a bit more tenuous, it has been tougher to treat. The KMT2A-rearranged AML is more susceptible. The tumors are more sensitive. I think the reason you're seeing that inversion that you described it between us and the competitor is we -- I think we will have data that is as good as, if not better than our competitor, we're seeing a very strong signal in NPM1 more than 50% of the patients dosed in the additional 18 are NPM1. So we're seeing good engagement. The KMT2A is blunted by the fact that you're pushing so hard on the tumor, you're pushing through the differentiation syndrome. So you either need to back off a bit. You have a Ferrari, and you can only go 55 miles an hour, or you need to manage the DS aggressively. And you'll see when we -- after we have the alignment from the FDA, the path that we're going to go forward. I'm confident, and I think we're confident that we have the potential to drive potentially best-in-class activity in both genotypes, but we may do it a little differently than our competitor because the drug is a little different and the diseases are a little different.

Got it. And you kind of alluded to the FDA interactions. And again, now that we have some data in hand and ASH is around the corner, I think the market has come down a little on that. But you alluded to potentially different strategies across the 2 subtypes. So what exactly do you expect to get out of the FDA interactions? Do you expect to get asked for any additional dose-finding work across either of the subtypes? I'm curious about what would be an optimal outcome here. And I'm assuming also trying to get sign off for the potentially registrational cohorts or new trials starting in 2023. So can you kind of recap those interactions and the expected outcome?

Yes. So to be clear to everyone, the interaction is a Type C meeting. That meeting is scheduled between now and ASH. The reason we did a Type C meeting is if you don't ask for a formal meeting, the FDA has no obligation to respond. I should say the FDA can respond to you in whatever time it chooses. By actually doing it in the context of a formal meeting you have a process, there's a choreography, you used to admit a briefing book, and the FDA responds to you by a given date. So as a matter of best practice, we requested a Type C meeting. People might say, why wasn't it Type B in the FDA's view, we used our Type B meeting when we met with them to discuss the Phase Ib study to satisfy the requirements of Project Optimus. So the next meeting was we'd asked for Type B and they said no, type -- do a Type C. So it's a Type C meeting. I think you appropriately characterized it. It's really about the Phase I experience with the recommended Phase II dose in the 2 genotypes being kind of front and center and then the Phase II monotherapy forward plan. And we are actually very much in favor of a meeting for a couple of reasons. Number one, in our experience, the FDA have been great partners, they were terrific in helping us navigate coming off of clinical hold. They seem very excited about menin inhibitors and AML. They're very interested in differentiation syndrome. It's just -- they are the regulator. It's important to get their buy-in early on. It's important to get their buy-in on a registrational study, unless you have breakthrough therapy designation. This is the last time you talked to them prior to a pre-NDA meeting. So you really want to take full advantage and get their feedback. You asked what is the ideal outcome. The ideal outcome is they give us a safe to perceive letter on the proposed Phase II protocol because in that protocol is the recommended Phase II dose, the statistical plan, the null hypothesis, how we would treat companion diagnostics and on and on and on. So that would be the ideal outcome. You asked, would they -- would we expect them to request additional dose finding, I think we'd be surprised if that were the outcome. It seems to us very clear. And I think I had said this, I had previewed this before the abstract dropped that the answer was pretty clear. And in fact, I heard from some investors, it was really clear, like we would have liked for it to be a little less clear. But it was extremely clear, 600 is the preferred dose. The greatest risk to patients at 200 is that you're underdosing them. That's what the data clearly says. Could the FDA come back with additional work? It's possible. I think it's unlikely. I think what's more likely is that the FDA just wants to engage the data because they're interested, because Project Optimus is an incredibly important initiative and they want to do it right but we will be prepared. Our team has done a significant amount of scenario planning. We'll be ready for any question they have, any additional data cut that they want. We're looking forward to the meeting. I hope at ASH, we'll be in a position to say to you. These are the key takeaways from the FDA interaction, and we're good to go.

And you alluded to the ASH event a couple of times. It is turning out to be a big, big event for the company. So we're going to get data from additional patients. That's great. We're probably going to hear for the first time on plans for registrational cohorts. On the backdrop, you have Bristol with equity investment at a premium that allegedly already seeing all those data. You already kind of set the bar a few times, and you indicated you expect to see as good, if not better, efficacy relative to competitors. So it's kind of hard to qualify or to go much further than that from in terms of setting expectations for ASH. But again, in terms of the event, what additionally we're going to get in terms of either clinical trial designs and how clear that answer is going to be when you compare it to competitors. And the caveat to that is, again, all the data you're going to be providing is that the potentially go-forward dose for registrational cohorts. So there it's always tricky when you're trying to compare across trials but, yes can you kind of set what you think is the stage for the ASH event?

Yes. Yes. Thank you for the question. So -- and there's a lot in there. So when we say that we believe it will be as good as, if not better. Yes, we're looking at efficacy. We're also looking at it holistically at the program. And we were very pleased to have Bristol-Myers Squibb make an equity investment in Kura at a premium in advance of both the FDA interaction and the ASH data. I think investors, Tiago often look to trade around data catalysts, right? Pharma and the FDA look much more holistically at drugs. They have not only the luxury but the necessity of thinking strategically. So everybody acknowledges that this is a disease of polypharmacy. You have to get into combination in both genotypes and beyond. That is how you were going to offer patients either long-term durable remission or a cure. Yes, you need to have potentially best-in-class activity, but let's not skip over safety, let's not skip over combinability. And it was very clear. We don't have QT prolongation. We are not a CYP3A4 substrate. We have no predicted DDIs, drug-drug interactions. So I think -- and when we show you and you asked like what will you see at ASH, you'll see not only the headline number that everybody wants to hang on but we'll show you an example of a patient with KMT2 or rearranged leukemia whose stable disease. You will look at the PET scan and say, "I can't believe that stable disease. And it's -- the patient has a tiny bit of extramedullary disease in a rib. That's why the patient is still stable disease and not a CR. But you have to look at the drug in totality. Yes, the CR/CRH rate is where it needs to be. We'll talk about development strategy but I think we feel increasingly good that we will not only be able to seek approval as a monotherapy, but we will be the preferred agent in combination. And that's ultimately where this game is going to be won or lost is in the early relapse and in the frontline. And I don't -- I can't speak for BMS. I don't want to speak for them, but I do believe this is an organization that are professionals at discovery, development and commercialization of cancer therapeutics, I can assure you they looked in totality and holistically at what is potentially a best-in-class profile. So we're going to show a lot of data between the oral presentation and our investor event. I think people will come away and say, the most important thing 30 patients worth of data at the recommended Phase II dose. You'll be able to fully annotate safety, you'll be able to fully annotate activity. We'll walk you through our development plan and how we plan to go quickly and get this to the market and to patients and then let the data speak for itself.

Fair, fair enough. And perhaps we can step back a question that is related to the competitive landscape and also commercial opportunity because one of the earlier pushbacks of almost any targeted agent is how big the opportunity is in relapsed/refractory setting. You alluded to a couple of times that moving that to earlier stage is going to be crucial to materialize the class benefit. But the initial concern is, again, if you're going to have 5 assets within the same class, and it's a relatively small relapse/refractory setting commercial opportunity, that doesn't really square up. We have not seen any actual data besides Syndax. It felt like it was pretty crowded and now we definitely does not feel like that. So are we missing anything in terms of that competitive landscape, and when you're thinking about the commercial opportunity, like how big could this be, either in the relapse refractory setting and again, moving frontline, that should be manyfold potentially greater, right? So ...

Yes, that's right. So first of all, in terms of the opportunity, it's approximately 7,000 patients a year in the U.S. It's probably 2.5x that globally. Just as you say, there's -- the big opportunity is you don't even have to go to frontline. Can you go to relapse and keep patients on drug for a year or 2 years? We have the patient you saw it in the abstract, the patient with NPM1-mutant AML who had an MRD-negative CR, who was on therapy for 100 weeks as of the data cutoff. She's unusual, but she's unusual in that she was the first patient. This is -- these agents or at least ziftomenib seem to drive more durable responses than perhaps what we've seen with other agents. And remember that we're treating patients that patient had failed 7 prior lines of therapy, including, I think, a FLT3 inhibitor and venetoclax. So the fact that you are seeing durable responses post the previous targeted therapies is extraordinary. That -- people forget about that, they think we're comparing apples-to-apples. We're 2 or 3 lines of therapy on and you're getting better CR/CRH rates. So the combination of deeper responses, better durability, this is a multibillion-dollar opportunity. This -- you really want to be able to move the AML landscape to where myeloma is, where lymphoma is, and that seems achievable. What we've heard from physicians is that menin inhibitors have the potential to be transformational. As to your question about competition, drug -- I've said this all along, hey, drug development is hard. This is a novel mechanism. This is a protein-protein interaction. I -- until somebody posts clinical data at their recommended Phase II dose, I don't consider them a competitor. I just don't. And I would be surprised if out of those initial 5 or 6 you see more than 2 or 3. I think we are in a very good position. The other thing to think about is as we and Syndex move into registration and ultimately to the market, the window under which you can develop a menin inhibitor starts to shrink because nobody wants to be running studies in patients who have failed prior menin inhibitors, that's going to be a white-hot nightmare. So the opportunity will kind of naturally take care of itself. I think we're -- there are a lot of reasons to be bullish about ziftamenib and menin inhibitors in particular. And again, I don't want to speak for BMS, but I have to believe that was part of the calculus, right? This is -- and many people will say the most exciting thing to come along in AML since venetoclax, and we're delighted to have them be a part of it.

Perfect. Shifting gears a little bit here because I know, again, given the catalysts and the data release expected there's too much focus perhaps on menin. But in one-on-one meetings and when we talk to you sound just as excited with the farnesyl transferase inhibitor platform. So can you kind of catch us up there because, again, it feels like it is right now completely overlooked, you could not sound more constructive on that. So...

There was a time ziftomenib was completely overlooked. You couldn't get anybody to ask about it. And now it's like 24/7 ziftomenib, which is fine. That's again, this is the game that we play. So I am very excited about the farnesyl transferase inhibitor programs. And I'm excited for a couple of different reasons. I think we have -- it's taken us probably 5 years. I think we have figured out the killer app for FTIs. And the killer app is when we started working on FTIs, I started the company around tipifarnib and around farnesyl transferase inhibition, we naively thought, "Oh, we need to go looking for oncogenes and oncogenic proteins that are farnesylated. That was a good idea, but there's really only 1 HRAS. What we didn't -- what I never could have imagined at the time is you have the right tool, i.e., a farnesyl transferase inhibitor, but you've got to think about the target a little differently. It turns out there are a number of farnesylated targets [indiscernible] that are uniquely farnesylated, that are critical to driving drug resistance to targeted therapy. And this is work that we've done. It's work that our collaborators at INSERM have done. There's another couple of groups in academia that have contributed. What you're seeing, you saw the very first kind of hint of data with a tipifarnib palliative patient in our current study 81% tumor reduction after 1 cycle. PIK3CA mutant head and neck, heavily pretreated, nearly a CR after 1 cycle. And I think the reason for that is you've effectively created a super PI3-kinase inhibitor. That study continues. We're working on developing an optimal biologically active dose. We think there is no approved targeted small molecule targeted therapy in head and neck. If you go past that and you look at what we're doing with osimertinib and other targeted therapies, that's different proteins, but the same idea. How do you take these big money targeted therapies like EGFR inhibitors, ALK, BRAF, KRAS, TKIs and make them better? And so I don't think FTIs were ever meant to be monotherapy. It took us a few years to figure out how to use them properly. But the preclinical data is stunning, and I have a pretty good track record, me and my team of taking promising preclinical data and translating it to clinical value, KRAS-G12C, menin. I like where we are. And we will, this quarter, get our IND on file for 2806. This will be the first farnesyl transferase inhibitor in almost 20 years. It's -- if tippy is -- it's a much better FTI. We're going to hustle it through and then we're going to take it into a series of combinations. And I can't think of a direct analog where you have a drug that can aid so many different targeted therapies in lung, potentially breast, potentially renal cell, that's what has us excited. We've got work to do. Rome wasn't built in a day, but you're going to get early looks, and you are -- from a business perspective, you're taking good drugs and you're making them better. And you're giving patients clinical benefit and you're doing smart life cycle management, like all the arrows are going in the right direction. So it's exciting time. We'll talk more about that in '23 and '24. We were fortunate we had $462 million in capital, including the $25 million from Bristol and the $10 million from Hercules. We've got more than ample capital to clock through ziftomenib milestones, our FTI milestones, I think Kura is going to be a very exciting position end of this year into '23 and '24.

Just a quick spot shack there are any questions on the audience. Otherwise, I'll ask my last one, we can wrap up. So to your point, you have a substantial cash position. You have some flexibility at the same time you're talking about between the 2 franchises, let's call it, running potentially several concomitant registrational trials. At what point does it make sense to look for a bigger partner or perhaps licensing deals or anything like that? Capital doesn't seem to be the key constraint right now. What could be the constraint going forward and how you're thinking about that strategically?

Yes. I put that in what I call my bucket of extremely high-class problems. I do think it's likely we're going to end up in a situation where we have the potential to run multiple Phase II/III registration-enabling trials. You can tell from the Bristol announcement, we are in active dialogue with folks all the time, right? This is a business of relationships. We have a very talented BD team. We are actively considering it what's important Tiago is for the next, call it, 12 to 18 months, there's a lot of early Phase I data generation, signal seeking, think about zifto plus van, Zifto plus FLT3, the current study with alpelisib, the osimertinib study you'll see, I think, an additional study after that. That can greatly substantiate the value proposition, and it can give us a framework to talk to partners about what's needed to maximize the value for patients and how do we maximize the commercial potential. And at that point, the partnership or other sort of strategic transaction will -- that will be in the cards. But those discussions -- if you're doing stuff that people are interested in, those discussions are happening all the time.

Fair enough. I think we're out of time. Yes. So again, I want to thank you for joining us on our conference and for the fireside chat. Always a pleasure.

Thank you as well. Thank you.

Thanks, my pleasure.