Protagonist Therapeutics, Inc. (PTGX) Earnings Call Transcript & Summary

Good morning, and welcome to the Protagonist Regulatory Update Conference Call. [Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Jami Taylor. Please go ahead.

Thank you, Jason. Good morning, everyone, and welcome to the Protagonist Therapeutics conference call and webcast to discuss the removal of the FDA clinical hold on the rusfertide development program. I am joined today by Dinesh Patel, PhD, President and Chief Executive Officer; David Liu, PhD, Chief Scientific Officer, Head of Discovery and Preclinical Development; and Paula O'Connor, MD, Senior Vice President, Clinical Development. With us on the call today are also Dr. Suneel Gupta, PhD, Chief Development Officer; Dr. Samuel Saks, MD, Clinical Development Advisor; and Don Kalkofen, Chief Financial Officer. On the call today, Dinesh, David and Paula will cover their prepared remarks. Then, we'll open the call up for questions for which Suneel, Sam and Don will also participate. Earlier today, we issued a press release describing the removal of the FDA clinical hold and related information. This release as well as the webcast presentation will be available on the Investors and News section of our website at protagonist-inc.com. Before we begin our formal remarks, I'll remind you that various remarks we will make today constitutes forward-looking statements for purposes of federal securities laws. They include statements about our plans and expectations regarding various programs. Actual results may differ materially from those indicated by our forward-looking statements, so we encourage you to review the Risk Factors section of our most recent periodic report filed with the SEC. I'll now turn the call over to Dinesh Patel, President and Chief Executive Officer of Protagonist. Dinesh?

Thank you, Jami. Good morning, everybody, and thank you all for joining us today to discuss the...

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Okay. Excellent. Good morning, everybody. This is Dinesh Patel, CEO of Protagonist Therapeutics. And Jami, thank you for introducing the call and the subject matter to everybody. And thank you all for joining us today to discuss the lifting of the FDA clinical hold that was placed about 3 weeks ago on the rusfertide clinical development program. Before we dive into details, I want to thank our exceptional R&D team for their outstanding work to fulfill the FDA's request and to help resolve this clinical hold in record time. Our complete response to the FDA is a reflection of Protagonist's strength of execution and total dedication to patients in need. I would also like to thank the clinical investigators for the understanding of this brief suspension of dosing and for their willingness to resume the ongoing and planned studies with rusfertide. We are ever so grateful to the FDA for the efficiency, attentiveness and care with which they approach the resolution of the clinical hold. Protagonist is indeed fortunate to have a strong working relationship with the agency and to have the breakthrough designation that has supported an expedited process and resolution. As noted in this morning's press release and as summarized on Slide 2 of this deck, we received written notification from the FDA on October 8, Friday afternoon, indicating the removal of the full clinical hold and the allowance to resume dosing in all clinical trials of rusfertide. Our clinical team working with our CROs will coordinate with investigators to submit amended documents to the ethics review board and reconsent the patients. We have always been in ongoing consultations with our investigators throughout this process. Depending upon each site and local rules, we expect dosing in most patients to resume as rapidly as possible. We have also received additional feedback and our plans for Phase III registrational trial of rusfertide in polycythemia vera are on track. Going forward, we have established a few cancers surveillance rules in the interest of patient safety, including new stopping rules and have augmented regular dermatological examinations. As you know, the initial trigger for the FDA clinical hold was a signal finding in the RasH2 transgenic mouse model. On this point, I will now turn the call over to David, who will offer clarity on the specifics of the RasH2 signal. Following David's remarks, Paula will present more information on the 4 cancer cases that have been detected across the entirety of our rusfertide clinical trials in over 160 patients over 3 different indications, namely beta thalassemia, hereditary hemochromatosis and polycythemia vera. Paula will speak to conclusions we have arrived at in the process of reviewing these cases with the FDA, along with the most recent comprehensive review of the safety database for all events including suspected unexpected serious adverse events or SUSARs. After Paula's presentations, I will offer some closing remarks, and we will then open the line for questions. David?

Thanks, Dinesh. I invite you to turn to Slide 4. As Dinesh noted a moment ago, the FDA's full clinical hold was initially triggered by a signal from the accelerated 26-week RasH2 transgenic mouse model, indicating benign and malignant subcutaneous skin tumors. While this model is designed to show carcinogenicity signals, and is prone to show many types of cancers including liver, lung, sarcomas and lymphomas, significant rusfertide-related effects on the incidents or types of neoplasms were noted only in the skin subcus, i.e., nonmalignant squamous cell papillomas and malignant squamous carcinoma tumors. In these mice administered at doses manifold higher than the human dose. The signal, in this case, just barely reached the threshold of significance and please note that we do not see an obvious dose response relationship. In nonstatistically significant incidence of malignant squamous cell carcinoma in 1 male mouse and in 1 female mouse was considered rusfertide-related because of the morphogenetic relationship with nonmalignant squamous cell papillomas and the statistical significance for the combined findings. As disclosed on September 17, the RasH2 signal prompted a reexamination specifically of all cases of cancer and generally of the integrated safety database for all rusfertide clinical trials. I would like to remind everyone that this reexamination following a preclinical observation is standard practice and as per guidelines. I'll now turn over the time to Paula to walk us through that reexamination process and its conclusions.

Thank you, David. Please turn your attention to Slide #5. Among the 160 patients treated with rusfertide across all of our clinical studies in all indications, there were 4 cancer cases observed while on rusfertide. Two were observed in our PV program, 1 in our hereditary hemochromatosis program and 1 in our beta thalassemia program. The details of these cases are listed on the slides you see here. I'll review them one by one, calling attention to the timing of the PV patient cases specifically. Subject #1 is a 54-year-old female with beta thalassemia. The patient had a history of liver iron overload and nonalcoholic fatty liver disease. Her liver was nodular and scarred to an extent suggesting cirrhosis of the liver, for which she underwent routine MRI surveillance of the liver. Approximately 9 months after starting rusfertide, a routine MRI revealed a mass in the dome of the liver, following which the patient was discontinued from study. She was subsequently diagnosed with the cholangiocarcinoma of the liver. The event was assessed as not related to drug. Subject #2 is a 71-year-old man with hereditary hemochromatosis. A CT scan performed prior to dosing with rusfertide revealed the lesion in the tail of the pancreas. A biopsy was performed 13 days after initiation of study drug, revealing adenocarcinoma of pancreas. The subject was then withdrawn from the study. The event was considered to be a pre-existing condition because the pancreatic mass was visible on a scan performed prior to the receipt of rusfertide. The event was assessed as not drug related. Subject #3 is a 73-year-old female with polycythemia vera with a history of multiple skin cancers, including basal cell carcinomas, melanoma and squamous cell carcinomas for which she underwent routine skin surveillance. In the 2 years prior to study entry, she had 14 squamous cell carcinomas identified. Two months after the initiation of study therapy, the patient was examined and found to have 3 new squamous cell carcinomas, each of which were considered nonserious. All three lesions were in situ and removed by curettage and electrodessication. The pathology report indicated that they were not invasive, and the event was downgraded to non-serious. The subject continued to participate in the trial until the onset of the clinical hold a few weeks ago, and the event was recently changed from not drug related to possibly related. Upon reexamination, the case was reviewed as unrelated by the investigator. Finally, Subject #4 is a 65-year-old male with polycythemia vera treated with hydroxyurea for 6 years. The patient's past medical history was otherwise notable for thyroid cancer treated with radioactive iodine. After about 8 months on study, the subject noted ongoing cough, exertional shortness of breath, weight loss and drenching night sweats. A complete blood count revealed a 11% blasts in the peripheral blood. A bone marrow biopsy revealed polycythemia vera with residual foci of myelofibrosis and progression to blast phase of acute myeloid leukemia. Treatment with rusfertide was stopped. The investigator initially assessed this case is not related and upon a reexamination, continued to review it as unlikely related. The sponsor has initially assessed it as not related, but upon reexamination marked it as possibly related. Next slide, please. On the slide in front of you, you see the critical clinical hold response elements. As Dinesh mentioned earlier, the first elements were an update of critical materials, namely an amendment of [ our ID ] and the informed consent with the RasH2 findings and the information on the 4 clinical cases. Subsequently, we conducted an extensive review of the entire safety database for suspected unexpected serious adverse events or SUSARs, new cases of cancer and any new signals -- safety signals. Importantly, no new cases of carcinoma and no new safety signals were identified. In light of the RasH2 findings, we have put in place a number of new measures to enhance patient safety. These include the incorporation of new subject and study stopping rules based upon the development of any cancer. The incorporation of cancer surveillance rules, including a requirement for augmented regular dermatologic examinations and cancer surveillance based upon age, gender and disease risk. Finally, the Phase III study of rusfertide in PV will exclude patients who have had invasive cancer within 5 years. There are no other required changes to the Phase III inclusion or exclusion criteria. The kind of changes we have made or implemented can be found in many standard protocols. As always, we are committed to conducting our studies with the highest degree of rigour. With that, I will now turn things back to Dinesh.

Thank you, Paula. In closing, I want to emphasize how pleased we are with the outcome of this process, especially considering what it means for our ability to advance the rusfertide clinical program forward. We are sincerely grateful to the FDA reviewers for the urgent care, efficiency and the attention that they have given to this matter over the last 3 weeks. We chose not to share details of the clinical hold when it was placed 3 weeks ago. And instead, decided to make our interaction with the FDA as our top and only priority on this subject matter. That approach has served us well since the hold has now been lifted in a very short duration of 3 weeks. And we are now able to make full disclosure of our nonclinical and clinical safety-related findings. In terms of next steps with rusfertide, patient safety has and will always continue to be our top most priority. Rusfertide holds the potential for offering a very favorable, clinical benefit versus risk to patients with excessive erythrocytosis or iron overload-related diseases like polycythemia vera and hereditary hemochromatosis, respectively. As discussed today, we plan to present our recent findings from the ongoing Phase II clinical studies at medical conferences this year, and we remain confident in our ability to commence a Phase III study by the first quarter of 2022. We are deeply thankful to our clinical investigators and to the patients participating in our rusfertide studies. And to all those who have shared our conviction in rusfertide's potential to someday improve the lives of those who can benefit from it as an approved therapy. This concludes our formal remarks, and we will now open the line for questions. Operator?

[Operator Instructions] Our first question comes from Anupam Rama from JPMorgan.

I wanted to confirm that the FDA did not ask for any additional preclinical work beyond the 2-year RasH2 carcinogenicity GLP study that you had already planned and noted in the slide.

Thanks, Anupam. The short answer is your assumption is correct. We haven't been asked to do any additional nonclinical work.

The next question comes from Chris Howerton from Jefferies.

Excellent. Well, Dinesh and team, congratulations. Really happy to see this result so quickly. I guess just 2 quick questions for me. First is on the randomized withdrawal portion of the Phase II PV study is obviously some pausing in the dosing there. Does that affect the interpretation of those results? And how should we be thinking about that readout in particular? And then the second question I have is if you could just paint a little more picture or more color rather on what would constitute the readout for HH at AASLD, that would be appreciated.

All right, sure. So Anupam (sic) [ Chris ] in the context of HH, what I would say is that we might as well wait until we present the data at the conference. It's only a few weeks away. In terms of the Phase II PV study, I will direct the question to Paula.

Chris. So as you know, the duration of suspended dosing was of a very short period of time. We will continue to collect data as we have, and we institute dosing on a rolling basis. There have been 24 patients, who've already completed the randomized withdrawal and our subsequent conduct will be detailed after we have actually reviewed all of the existing data.

In terms of HH, as you know, we are under embargo. So that limits our ability to share anything.

Okay. Got you. All right. Well, again, congratulations to you, sir.

The next question comes from Gobind Singh from JMP.

Congrats on the news. Just 2 from me. On patient #3, I believe they had PV and they had a new finding of maybe 2 cases of SCC. I was curious how long did they have PV? And can you say anything about if they were on background of Jakafi at all because of the known risk factor there with skin tumors? And then I guess just piggybacking on one of Chris' questions here. Can you share at all how many patients may have been actually impacted, maybe they needed rusfertide, but they couldn't get it and that might even be something that you could talk about at a later point down the line. That's it for me.

So in terms of the second question, we will try to offer as much clarity as possible when we get an opportunity to present the data at upcoming medical conferences. In terms of the patient #3, Paula, if you would want to add anything more than what has been shared at this stage.

Sure. So Gobind, I can't tell you the exact number of years that this patient had PV, so sorry about that. They were not previously on Jakafi. When we look at the cases of squamous cell carcinoma, they had 2 individual episodes. In each case, we saw 3 specific lesions that patient stayed on study after the detection and treatment of those lesions and recently came off during the whole period.

Our clinical team takes a lot of pride in execution. And clearly, there has been a lapse of 3 weeks. But I would say that there has been a lapse of only 3 weeks. So our intention will be to make the currently ongoing studies as normal as we possibly can.

Congrats again.

The next question comes from Yasmeen Rahimi from Piper Sandler.

Team, first of all, I want to congratulate you for getting the clinical hold lifted off in a very quick manner. And two, congratulate you also for really a transparent presentation this morning. So I have a number of questions for you. Maybe the good place to start off would be. Can you provide me with more details on the type and the frequency of the cancer surveillance and the dermatological findings that you'll be conducting for the Phase III. And what do you think the impact of that could be potentially on enrollment? And b, is there a potential that this could also end up some sort of language in the label? And then I have a follow-up.

Those are excellent questions, Yasmeen, and the ultimate granularity in our answers will come after the study protocol has been finalized, but what I can say in broad strokes is like we expect the effect on enrollment to be minimal, if at all, any. And I think as we have noted, that is about the only major change, we believe, we have at this stage in our inclusion/exclusion criteria.

Maybe the second question for you is, is there any opportunity to start or continue the open-label portion of the study? Or given this clinical hold dosing cannot resume in the open-label PV study?

Go ahead, Paula.

So Yasmeen, there are a couple of questions still on the table. I do want to address your first one about surveillance. So first and foremost, I want to make it clear that as part of our trial conduct to date, we have always surveilled patients and their skin. In light of this finding, however, we will do some augmented surveillance, which will really be guided by the patients' past history of disease. So we will do at least one augmented dermatologic exam per year. We will also do other surveillance for all other cancers as per age, gender and previous disease history. As Dinesh has already said, these are fairly standard across studies in the oncology space. And we do not anticipate that they're going to have any impact on enrollment. As to your second question about patients and the open-label extension, we will certainly begin redosing patients on a rolling basis after they've been reconsented. We anticipate that patients will be moved into the open-label extension phase of the study and any sort of discussion regarding the randomized withdrawal or other will occur after we've actually reviewed the data that we've continued to collect while we have been on clinical hold.

And then maybe a third question for you is I know Tracy has done a wonderful job on depicting the commercial opportunity in PV. I would be very much interested in understanding what population of the PV group has been cancer-free in the last 5 years. I just want to understand the new inclusion criteria and what that impact would be in the addressable market.

Yes. I think our qualitative remark for now is we expect the impact to be minimal, but it's a fair question. And we obviously will get more than 72 hours, which we have gotten so far to dig into the details of that matter and then we can answer it more accurately. Go ahead, Paula.

Yasmeen, the one thing that I would have you remember is that a 5-year exclusion of invasive cancer is fairly standard across clinical programs and as such, would not really expect any significant changes. This is not just a rusfertide inclusion/exclusion criteria.

The next question comes from Joseph Schwartz from SVB Leerink.

Congratulations from me too. I was wondering if you, at the company or perhaps the FDA were able to establish whether these rodent models have a higher propensity to show cancer than humans in your evaluation? Was that sort of an exercise undertaken? And then I have a follow-up.

Yes. Joseph, let me direct your question to David Liu in terms of whether there's rodent RasH2 mouse model, will it have a higher propensity or sensitivity.

Joe. This model is, in general, used as a signal detection. So across any or all types of cancers for which this model has shown historically to demonstrate, and as I mentioned, liver, lung, sarcomas, lymphomas are the common ones. In regards to comparison of incidents in the general human population, that is an ongoing set of relationships that are being done across the industry. There is no necessarily a one-to-one correlation. I don't think the model was built to answer that. And it will be the weight of evidence in terms of both this study results as well as our 2-year rat carcinogenicity study results that will formulate as well as the ongoing assessment of the human cases. So all of that together will inform everyone.

Yes. And what I would add Joe is that clearly, going forward, we'll be doing more work to understand if a hepcidin hormone mimetic may have extra sensitivity towards the model. As we highlighted, we have already done 6-month tox studies in rats and 9-month tox studies in [indiscernible] ahead of our Phase III initiation plans. Those studies are very clean. And as we also mentioned, we already had plans for doing 2-year rat carcinogenicity studies anyway. So we'll be gathering more information over the next 2, 3 years as we progress into the Phase III studies.

Right. That makes sense, very helpful. And then do you have a sense of when this kind of a preclinical carcinogenicity signal, when that is -- when that ultimately lands on the label for a product versus when it just isn't mentioned? Or do you have any metrics that you can offer us? Have you discovered any useful rules of thumb that can help us envision whether or not this sort of information will be end up on the package insert hopefully when rusfertide makes it to market.

I think, I mean, clearly, there are too many variables, and we'll be rich with a lot more data over the coming years, both the clinical data as well as the nonclinical data. And it's really the cumulative data package that will ultimately dictate what ends up in the label. Paula, you want to add something? Sorry, Suneel, go ahead.

So typically, there are lots of products in the market. We counted about more than 100, which actually have this observation in the animal tox section listed as a negative or a positive comment; more importantly, where the observations were positive and they're on the market. So it does happen and it's recognized and mentioned in the toxicology section.

Go ahead, Paula.

And then I think the most -- I shouldn't say the most important thing, an important thing is when a physician is actually making the decision about how he or she is going to treat their patients. They will be considering not only what is in the risks and in the toxicology section, but also the activity and the benefit they anticipate seeing in their patients. So this risk/benefit analysis that will be conducted routinely by physicians as they're making their decision to utilize the product. And so yes, this finding will likely be in our label. However, the impact will be based upon the activity in light of these findings.

Makes sense.

The next question comes from Douglas Tsao from H.C. Wainwright.

Can you hear me now?

Yes.

Okay. Sorry about that. And great news on the hold being lifted. Just a quick one for me. Just curious in terms of if you know how many patients had treatment in the ongoing studies interrupted because of the hold? And to the extent that you're able to reintegrate them if there's a protocol in terms of just sort of recommencing dosing? And how do you sort of account for any potential sort of phlebotomies or events that might have been caught due to the fact that a patient missed a dose.

Suneel, go ahead.

So we expect about 75 PV patients whose dosing was interrupted between the 2 clinical trials of PV we're doing.

Okay. Great. And is there anything being done to retitrate them or just recommence dosing? Or are they just being sort of censored from the study?

So no, there will be -- we have actually restarting rules. We need to look at the -- make sure they do the consent form and then making sure their doses are right, and we will retitrate them up. We have already laid out and submitted to the FDA the restarting rules.

Yes. And Suneel, is it fair to say that almost everybody who wants to will be put on open-label extension?

Certainly, that's our thinking. People who will be -- everybody will be given an option to restart into the dosing where majority of our trials, as you know, are actually open-label extension with a brief randomized withdrawal portion. Otherwise, predominantly, they are open-label extension anyways.

Yes. And that we would like to point out that in our -- that the major Phase II PV study with 60-plus patients, we do have 24 patients that have completed the randomization portion in its entirety. So -- and this is a possibility down the road we may look at adding and randomizing additional patients in the study, as we evaluate all the data.

The next question comes from Timothy Chiang from Northland Capital.

Dinesh, congrats on the news this morning. I wanted to ask you just post your discussion with the FDA and the lifting of the clinical hold, has the FDA indicated to you at all any sort of additional requirement for a long-term safety study in your discussions? And also just wanted to just confirm that you really only have one pivotal study requirement still post the lifting of the clinical hold?

So these are very good questions. And I think in terms of the long-term safety, we are not aware of any additional requirements at this stage. We already shared with you that we already had plans for the 2-year rat carcinogenicity study, which we are planning to kick off early next year. In terms of the pivotal study, currently, we are focused on this new Phase III study as the registrational study. And of course, through the breakthrough designation that we have, we will get a chance to have numerous interactions with the FDA and to get clarity on what is the total data package that would be required for filing an NDA down the road.

Okay. And maybe just one follow-up. I'm looking on ClinicalTrials.gov. And I guess you guys had run a safety study in beta-thalassemia patients with PTG-300 in the past.

Yes. That's a very good point, Tim, because ultimately, when you are looking at the safety data, it's the cumulative data from all studies that one has done with the drug that comes into consideration. So yes, that's helpful to us towards creating the safety data package for the drug.

This concludes our question-and-answer session. I would like to turn the conference back over to Dinesh Patel for any closing remarks.

Thank you. Obviously, this is a great day for everybody. Thank you all again for your engagement and support and especially to the FDA and our internal teams for working so productively and efficiently through this process. We look forward to moving full speed ahead and to hopefully bringing this promising investigational therapy to patients as soon as possible. This is a great day, both for Protagonist and for the patients. Thank you, and have a great day.

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