Prescient Therapeutics Limited (PTX) Earnings Call Transcript & Summary

Good afternoon, and welcome to this focus event for Prescient Therapeutics. We're here today to discuss specifically the PTX-100, which is their most advanced therapy. My name is Patrick Nelson and MD of Rich, I'll host the session, but we're joined by Steven Lee Yatomi-Clarke, who is the MD and CEO of PTX. Thank you for joining us today.

Thanks for having me. Good to be here.

Now we expect the session to run for around 20 minutes. The presentation that's put on by Reach is only suitable for self-directed investors who have got the experience and capabilities to do their own analysis and make their own investment decisions. Any information that's put forward is general in nature. It doesn't consider your personal circumstances and you need to decide yourself whether it's appropriate for you. And the education is for educational purposes only and past performance is never an accurate or reliable indicator of future performance. Prescient has a diversified pipeline of both near-term and emerging cancer treatments across targeted and cell therapies. All of their therapies are developed by and with world-leading partners, including Yale, UPenn, Oxford, Moffitt, Peter McCallum and so forth. But today, this session is focused on the PTX-100, which is currently concluding a Phase IB trial following very encouraging results, and this therapy has the potential to leap into an accelerated approval study if granted by the FDA, which, according to the most recent research report by Petra puts them on the cusp of very significant value creation. Now that's going to be the focus of today's Q&A. Steven is going to start off the session by giving us an update on PTX-100. Most of you will know, Steven. But for those of you that don't, Steven has took over as a CEO of Prescient in 2016 and has overseen its progression from start-up phase. He manages the team in Australia and the U.S. and has been instrumental in the strategy and business development. He has been a collaborator on various immunotherapy research projects. Now Steven, thank you for joining us today.

Thank you.

Firstly, I'm going to ask you to run through an overview on PTX-100 and a bit of a general update, and then we'll move into a Q&A session.

Sure, I can. We through it at a high level and then get into the meaningful stuff, which is the question. So yes, we're at the cusp of a major inflection point. But I realize that some of the audience today hasn't heard about us. So 3 key messages, PTX-100 on a [indiscernible] inflection point on a basis of real data, which is very encouraging. We also provide low-risk exposure -- clever exposure to this nascent field of cell therapy through 2 platforms. We -- obviously won't be a focus of today's Q&A. Look forward to speaking about that another time. And also that we're well capitalized to deliver on some of these milestones as well. You mentioned in your introduction about the people we work with, we license from [ best in ] work with the best. These are household names. There's a little [ sleep at night ] factor with the science. And this is a chart which a lot of people told me looks like a mining curve called a Lassonde Curve. This is a very well described biotech life cycle value chart, if you like. And it describes what happens when there's initial discoveries and there's a lot of value realized based on ideas early on. These are not proven. There's a lot of hype around them. Then you've just got to buckle down and do the work. And here this is very dramatically called the value of death. And there's a lot of attrition during that stage. And that's where we've found ourselves just needing to buckle down and do that work. And the reason we're on the verge of an inflection point is detailed by the Pitt Street report as well was that we find ourselves right here, which is right at the cusp of that real value creation point, which coincides with a lesser risk as well. So it is nice -- it's a nice spot to be and it's the right time to reengage with the story. So again, I'll just touch on PTX-100 first-in-class therapy. It's an inhibitor of a very common pathway in cancer. And it is licensed from a Yale University. So great pedigree. We are focusing on a type of blood cancer that a lot of people may not have heard of which is called T-cell lymphomas, and it's characterized by a high unmet need. It is not a common disease. It's a relatively rare disease. It's called an orphan disease because it's often forgotten by a lot of drug makers. So you're looking at in the 8 major markets, about 27,000 new patients a year. And almost all of those will eventually relapse. There's not a hell of a lot for them. So if you're looking at crudely total addressable market, think of each year, it's about 27,000 patients multiplied by, say, roughly back-of-the-envelope $100,000 for a new targeted therapy to give you a total addressable amount of about $2.7 billion. Now there are 90,000 patients, they need one time that have and this is understated. But what's also understated is probably the price of those drugs and one of the competing drugs in this space for relapsed and refractory PTCL is a drug called Folotyn which is selling for significantly more than $100,000. So both of those markets were understated. So it may not be the largest disease by prevalence, but it is a significant market opportunity that no one's taken out the price of this year. Nothing has really made a lot of headway into this disease. And again, some of the advantages of these orphan drugs, if they're granted orphan drug designation by the FDA listed here chief amongst them 7 years of guaranteed market exclusivity, but also showing that they get higher prices and a more resilient and grow quicker than non-orphan drugs. And we have orphan drug approval both from the U.S. from -- for all T-cell lymphoma. So these advantages are in place. So a summary of the study that we've concluded where we finished enrolling, there's 2 patients still ongoing, which is good for them. We were hoping to roll out the data by now, but it's basically behind us now in this trial. And it was only focused on safety and looking at a couple of other markers, if you like, PK/PD, how it behaves in the body. But it was basically a safety study, and we saw a lot more than that, which is great. So I'm going to go into this, it's led by a T-cell lymphoma expert, I would invite anyone sophisticated or otherwise to be judging a drug in this disease, particularly by 3 metrics: safety, for sure, but overall response rate. which is the proportion of patients that respond and also the duration of those responses. So let's see how we went against those metrics. Firstly, the overall response rate, what proportion of these patients responded at all. And if you look at the top line there, the benchmark is about 30%. Small sample size, but we've got 44% and a clinical benefit rate, there's a proportions of patients who responded and didn't have any disease progression for more than 6 months, 45% versus 66%. So overall response rate tick, how long do they last? This is called a swimmer's plot, the longer the line, [indiscernible] lasted. And we're looking to be for that lucky 30%, you're looking to do better than 3 or 4 months, and you can see we're doing significantly better than that from a duration point of view. So response rate tick, duration tick, how do we go for safety -- this is an illustration of the side effect profile from existing therapies. So this is how often patients are admitted to hospital because of the side effects because of the toxicities of the drug itself. And you can see here the way to read this chart anywhere between 30% to 90% roughly of the time. They're going to hospital because of the toxicities. And we had no SAEs related to the drug. So this alone could be a differentiator. So if you're winning in any one of those 3 things, I think you've got a really good chance. And so far from this trial, we're seeing some really encouraging things. So that's that. I mean, we've shown this case study before, but just a picture tells a thousand words, a patient who had failed with 5 prior lines of therapy. And some before and after shots make no mistake, those clocks, you see are cancerous. So we've got a number of examples of this, patients who have really benefited from this drug called Folotyn and everything else. And so we find ourselves at this point now, which is really where the rubber hits the road in clinical development. Now I'm never minding the 7 years, 10 years in preclinical development. Phase I is it safe? Phase II, does it work? Phase III, how well does it work? Is it better than what's out there. And normally, the FDA or any reg agency will give an approval if you can reach that last milestone like that Phase III. And what's attractive about these orphan diseases, it is a faster and cheaper route to market, you can often get there at the end of the Phase II study. And this is the path that we will be seeking, no promises, but this is what we're going to be seeking is to get there quicker, cheaper and get this to patients a lot sooner.

Can I ask, you mentioned in the previous slides that safety, duration of response, a natural response itself. And you said, if you were able to win in any of these categories, you're a good chance, what do you mean by that?

Well, you need a key differentiator in any of those above what's currently available in order to be attractive enough to take market share away from that drug. So you might have comparable efficacy, for example, but if your safety is better, people will likely to use it or it might be a more toxic drug because it's got a lot higher more efficacy, doctors and patients might be more willing to take it. But if you've got a more efficacious drug that lasts longer and it's safer, it's a little bit of a...

These are the factors also that the FDA would be considering in terms of whether they gave you this -- the move forward.

Yes. They want to see more data. But yes, sure, they would -- they would want to see that. And that's the challenge is to try to replicate this for something that looks like this larger Phase II trial.

Yes. Okay.

Yes. So this is the -- this is why this path is also very attractive for us, and this is why it's significant. Obviously, it's going to be the biggest catalyst in the company's history, regardless of whether this is going to be a registration study or not like a Phase II trial in this disease unmet need for the huge. If we do get an accelerated approval, fingers crossed down the line, it's going to mean basically you can accelerate the clinical development this you can massively truncate the time and money required to develop this drug and add that value if you remember that curve, that Phase II and in Phase III. So normally, it's exponentially more time and money and to be able to remove that requirement from us would be huge. And as I understand it, I think we'd be the only one on the ASX, only oncology company on the ASX with a drug -- an oncology drug in a registration -- potential restoration study. And the first, I think, in 10, 11 years. So it will be very significant for us. And if we get there, we've got the orphan drug approval. So that's why it's significant to us.

Yes. Fantastic. So -- I mean maybe just to step one, go back one step and have a look at like the normal process for a drug to go through to commercialization and maybe even looking back at that in the previous slide, the chart -- but maybe if you could step us through what does that normal process look like?

Yes. Well, firstly, it's a very, very long time. That's drug development, and it just takes time. It's gotten a little bit quicker over the decades due to technology. That's basically what it is, a start-off discovery in a lab and often in academia, not necessarily. And that basically starts with in vitro testing, petri dishes and whatnot. Now you screen for your candidates. Some of those might make it into animals. This is all preclinical testing, and it's all necessary. You might have a candidate there. Most of the fails around them, for those candidates that make it to that, you really have to do a whole body of work to get it into humans. Now we're talking Phase I, Phase II, Phase III. That's clinical trials in humans, and that's where it's super important because that's when you discover where it's safe. And you got to do an enormous body of work to make sure that it is safe to go into humans. So you got to do a lot of preclinical work to enable that. Then you do Phase I. Is it safe, now you escalate the doses and work out? Is it safe how is it behaving in the body. Phase 2 is then if it looks to be working, well, doesn't look to be working pretty much is that? And that's when you can say that's the inflection point because you know that it's safe. You know the composition of the drug, you know how it behaves in the body and it looks to be working. That's when people sit up and go, okay, okay, this is -- it's unfolding right now. we're about to find out how well this works. Is it real? And is it better than what's available. And that is when people are really sitting up because that's like the 90-minute mark of the movie. you know what I mean. So -- and that is where you normally get the hugest value gains that end and commensurate lowering in risk. Obviously, it's risky all the way through, including once it's on the market, sales risk and everything, but all of that development risk it goes down as it progresses and the value create goes up, and that's where we find ourselves.

Yes. Yes. So where you find yourself now. So what -- where are to that point? Where are you on, I guess, this time in a year, where it sits on the chart. But what have you achieved to date?

Yes. Well, all of that stuff, all of the things that you don't get credit for in the background necessarily because not all of it's announceable, but they are all necessary to get this drug into humans to test it and to find the right disease, to find the right subgroup of people, all of that's done. So this is the combination of probably a couple of decades worth of work, especially for our founding scientists to came up with the idea that to interrupt this cancer pathway in this way is going to be good and to have that in this right type of disease and to be able to prove that it is just an enormous body of work and looks to be working.

Yes. And in context of the where the FDA orphan drug designation comes in. Now what does that mean at this moment in time for you guys.

Orphan drug designation. It is reward for hard work and is that it's basically saying we will protect you. If you're going to stick your neck out and go after this disease that's not that huge, what we're going to do is make it worthwhile once you get there. So that if we get an approval regardless of patent status, regardless of anything else, we're going to stop people copying what you're doing for 7 years and all the other protections around.

Okay. So now that you're in this position but also there's an element of the fast track [indiscernible] can you tell us about what an accelerated timeline could look like compared to the normal process.

Yes. So an accelerated approval is a scheme that the FDA gives to bring this to patients sooner. It's basically exactly what it says. They will accelerate the approval of the drug. So normally, it's at the end of the Phase III, which is a much bigger study. And under an accelerated approval, they will subject to them seeing the data and all the asterisks around that. At the end of Phase II, they will give that, you will still need to do the Phase III study, but post-market. That means you can monetize that drug sooner. But you'll still need to do what they call a confirmatory study, which is equivalent of a Phase III. I don't know if there's a time limit on that. But what it does, it removes that pressure because the drugs are already on the market. and then you can do your comparator, so your confirmatory study post market approval. So it's very, very enriching from an NPV basis.

Yes. And so what does that mean from a you saved.

My goodness, yes. It could be in oncology, then that could be 5 to 7 years and over $100 million depending on the indication. Yes, it's massive. It's massive and at the end of that to be -- to invest that time and money with uncertainty as well at the end of that process as well. So to remove that time money and uncertainty and have that then you can do the confirmatory study at the back end is enormously beneficial.

Yes. So this upcoming FDA meeting. Is this a potential watershed moment for the company? And is that where you potentially can learn where they're going to be fast track or not?

Yes, that's right. It will be a watershed moment. They're going to be looking at the protocol. I just want to [ Prescient ] expectations. The FDA will never for anyone just give a rubber stamp and say, based on your Phase I data, we're going to give you a fast track approval. But what they do is to be able to give you the guidance and said if you follow this and subject to that more data being available falling in line with what we've agreed we can potentially give you an accelerated approval. So it is making sure that you're on the same page with the regulator. That's important but it's not like you're going to get a rubber stamp straight out of the gate.

So the decision making sort of more gradual over time. Is that right?

Yes, that's right. But they want to make sure that you have -- it's almost like the government is not going to give you a driver full driver's license as soon as you turn '18, the same thing, so they want to make sure that you're on the right page, you've got the right protocol that you've answered all the things so that when -- as the data unfolds, it's acceptable to them.

Right. So now it's just pretty much shareholder cap on. But what would be the milestones that shareholders will be looking for looking at progress.

Yes. So we can give feedback when we have that FDA meeting. But again, it's going to be more along the lines of we think we're on the right path here. The real moment is going to be when the trial opens, it's like the equivalent in mining is when that -- when you're starting your drilling campaign here we go. And that trial is underway because then it really changes the category of company that you're in and the types of people who will then look at you because you're in the Phase II study and the potential even more than that. So -- and we're looking at that, that will be on and it'll probably in late July or something like we will look to have that trial open. We're probably going to start here in Australia and then look to open it up elsewhere.

Yes. Okay. So let's say you go into an accelerated registration study path all way along. Like what are the -- from an investor perspective, I guess, what does success look like at the end of that half.

What's the commercial opportunity is, I think, is what you're asking. Well, no one owns no drug has dominated this disease yet. So the field is still relatively open. And there are people coming. Make no mistake, we had one competitor drop out of the race last week actually said they had efficacy issues, and we've invested heavily in a European company and didn't quite make it, so they withdrawn. So no one owns this space yet. So this total addressable market of, call it, $3 billion, you only need a small part of that to make that very worthwhile. So -- and again, the ability to take market share and the ability to price the drug high is going to be dependent on those 3 factors, basically, how well it works. If you've got a marginal drug, you won't be able to take too much market share and you probably won't be able to get away with pricing at too high.

Yes. So maybe I'll probably have to simplify this question, but who makes it -- who sells it? And how much do you sell for?

Yes. Well, ideally, we've got a partner that says we like orphan diseases, we like T-cell lymphomas. We will take that burden from you. So ideally, it is a partner coming in who will be in charge of manufacturing and distribution. And we can say that we might decide to keep other jurisdictions, but...

Yes. And if you go on an accelerated program, then it means does that start Phase II? That sort of ownership...

Our people -- certainly, the conversations start to ramp up there, and that's a little bit linear in that respect. And the data unfolds more people will come to the table. Again, these niche diseases aren't like bigger disease the way everyone is in. There's only -- of all the pharmaceutical companies in the world, only a small proportion might be interested in T-cell lymphomas. But those that are there are there. And there are certainly a lot of people wanting to get into this space because they see this unmet need, it's a little bit of a Honeypot indication as far as that goes. So yes, it will certainly attract more interest as the data unfolds and the regulatory path becomes clearer.

Very good. You mentioned some time ago on the webcast Neuren, which is ASX stock code in EU. As an example of Australia biotech success and Stuart Roberts from Pitt Street actually brought up, this is the same case when we interviewed him, maybe tell us about nearing and what parallels you draw here to PTX.

Yes. Loose parallels, and it's been a stunning success, [indiscernible] no doubt about that for patients and shareholders. But it wasn't an overnight success. In fact, I was involved in the early days, Neuren is a listed company in my former role and know what they've gone through and the absolute roller coaster that was. But eventually, if the data unfolds the way you want, then they show what is possible. I think the analogy I was drawing , and I don't profess to know much about Rett syndrome. It's certainly not oncology. But what it shows is that what you can do in a disease where there is an unmet need and you're at that tail end of the trial -- the trial process in a registration study, the data unfolds in an unmet need. I mean it can be explosive growth. And the analogy I draw is that we're almost at that same stage that they were just a few short years ago, where we're starting a journey in an unmet need. We got early data. So that's why we're proceeding. We'll see what that looks like. But if we can show good data in these diseases of unmet need is at the point end of these trials, then that's in front of us as an opportunity. So that's the analogy I draw. It's an immediate one that Australian investors should be very proud of. And unfortunately, there's not too many oncology peers to point out where that's happened. But certainly, Neuren has showed what's possible in these diseases of unmet need.

Very good. How far do your current funds get you on this part that you run at the moment and when you have to raise.

Yes. Well, luckily, we're not raising money right now. So we've got certainly enough money, I think it was over $18 million in our last report, certainly enough to take us deep into this current clinical trial. So it's certainly a relief to not have to raise funds in this challenging environment.

Based on the Pitt Street report we read recently and discussion with them, it seems that at least in the next couple of years, PTX-100 is going to be the main focus for you. Is that a fair statement?

Yes, I think so. necessarily so. It just so happens that our most mature asset is showing really compelling data. We're in a risk-off market and have been now for 2 years. So you just have to do responsible portfolio management, and that's what's happened. We've got other assets that are emerging, but are still getting attention, and we're still progressing, necessarily, the focus has got to be on the most prospective and most mature asset.

Beautiful. Thank you very much. Much appreciate, taking the time, Steven. We're going to do a full page turn of the PTX-100 deck in the coming weeks. And in that invite, shareholders and investors to come along and ask any questions they may have, but you can always e-mail in if you've got any questions or straight at the investor center as well. But again, thank you very much, and I'll leave the last word with you.

Thanks. That was fun. No, I think it's -- with PTX-100, it is the combination of a lot of work, and I'm so pleased that it's coming together in this way. Bottom line is it's the right drug for the right pathway and the right disease. And for investors, it's also at the right time and you're getting it at value prices as well, but it's where that right part of the curve. So very, very pleased to welcome you investors in the Journey. So many thanks.

Excellent. Thank you.

Thank you.