Protara Therapeutics, Inc. (TARA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to day 4 for the final day here of the 43rd Annual JPMorgan Healthcare Conference. My name is [ Tavon Wilson ], and I'm associate in the healthcare group based in New York. This morning, please introduce the team here at Protara Therapeutics. They'll provide a presentation on the company. And with the team, we'll have Jesse Shefferman, who's the Chief Executive Officer; as well as Protara's CFO, Pat Fabbio; and Chief Scientific Operations Officer, Jackie Zummo. With that, take it away.

Thanks, [ Tavon ], and thanks to all of you for being here at 7:30 in the morning on day 4 the JPMorgan conference. We're grateful to JPMorgan for inviting us, and we'll spend some time talking through all 3 of our programs today. A lot of you may be familiar with our NMIBC program. We have a rare disease portfolio as well that is also in late stage. We want to make sure that we spend some time with that as well. So thank you for being here. Just a quick word, standard forward-looking statement disclaimer and we'll move on from that. So as I mentioned, Protara has 3 different programs across oncology and rare disease. In oncology, we are in a Phase II study that is designed to be registrational. in non-muscle invasive bladder cancer for patients who are BCG-Unresponsive. We are also enrolling a study in -- or we plan to enroll a study in BCG-Naïve patients in 2025. In addition, we will begin a program with systemic priming in BCG-Naïve and BCG inadequately treated patients, where we will begin to explore the unique characteristics of 002 on and its predecessor compound OK-432 where this is the only bacterial immunopotentiator, used as a therapeutic in the world that can be administered systemically. And we believe that, that is a path to comparative and competitive advantage in NMIBC moving forward. We want to make sure that we spend some time on the rare disease programs. We have IV Choline Chloride for parenteral support. This is a Phase III program where we are beginning to stand up sites for a pivotal study where the approvable primary endpoint is 8-week PK. This is a rare disease program that would address potentially as many as 40,000 patients in the U.S. and tens of more thousands of patients around the world. We have orphan drug designation. We have IP to 2041, and again, an addressable patient population of about 40,000 in the U.S. We also have our TARA-002 program in lymphatic malformations. We'll go through this program but lymphatic malformations are our idiopathic malformations of the lymphatic system that happened in utero, it affects about 2,000 kids every year. And the -- in Japan, the predecessor compound 2002, OK-432, also known as Picibanil, is the standard of care for lymphatic malformation patients. We have rare pediatric disease designation. So upon approval for this product, which is currently in Phase II, we would be awarded a priority review voucher. This gives a sort of a visual representation of how the portfolio stacks up. Obviously, a lot of work in the oncology setting. But I wanted to note that as you look across this portfolio, the sort of unifying factor is that all of these assets were brought into the Protara portfolio, having generated data in humans before we took them on. So these assets, in our view, are derisked in some way or another, whether it's through human data. In the case of 002, the predecessor compound OK-432 has been utilized in 250,000 patients globally in oncology indications and also in structural malformations disorders. IV Choline came to us with a Phase II data package ready to go. And as we said, 002 has been treated -- has been utilized to treat lymphatic malformations patients in Japan since the mid-1990s. I'll pass the mic to Pat so he can kind of talk through our catalyst-rich 2025 and beyond.

Sure. Thanks, Jesse. You'll see here that at the end of last year, the data that we announced really supports and drive a number of near-term milestones. Most notable midyear will be interim data from our ADVANCED-2 study in 12-month evaluable patients. And then by the end of the year, we will be reading out futility analysis, 25 BCG-Unresponsive patients 6 months evaluable. We have a strong balance sheet with the cash from the recent financing at the end of last year, $102.7 million, we have runway into 2027 and we have common share equivalents of about 46.7 million shares. So let's talk a little bit about the unique history of TARA-002. We're honored to have a member of our partner team, Chugai joining us here in the audience today. 002 is an investigational, genetically distinct strain of strep pyogenes that is inactivated while retaining its immune-stimulating properties. What makes that unique among the very few other bacterial therapeutics out there is that it is fully inactivated, meaning it's not attenuated. And of course, as you start talking about the utilization of a bacterial therapeutic in the NMIBC setting that rhymes very closely with the standard of care of BCG. But one of the things that we'll start to build the case that this is a cousin to, not an identical treatment as BCG. 002 and its predecessor, Picibanil, OK-432 are fully inactivated, which means you can dose these systemically more than once. You can do a single priming dose of BCG, but you cannot do more than 1 systemic dose. We can utilize 002 systemically over and over again in the same patient. We manufacture 002 under GMP conditions from the same master cell bank as Chugai's originator therapy, OK-432, which is approved in Japan for lymphatic malformations as well as a number of oncology indications, including head and neck, thyroid, gastric and lung cancers. One of the fun things that you can do is get on Pubmed type in OK-432, and there will be over 2,000 distinct articles and case series, case reports published on its use in oncology setting as well as in structural informations. Protara has worldwide rights to the utilization of that master cell bank, excluding Japan and Taiwan, which gives us significant freedom to operate. And again, we're grateful to our partners at Chugai for all of the support that we've had from them over the years. Maybe as we sort of start talking about data and mechanism, I would like to pass the microphone to our Chief Scientific Operations Officer and my Co-Founder, Jackie Zummo, to talk through why 002 is like BCG, but why it's not like BCG.

Thanks, Jesse. So mechanistically, 002 and BCG are similar. They both are bacterial immune potentiators that drive a Th1 pro-inflammatory response. They both have preference to M1 polarization. But where they differ is in that 002 is a nod to TLR2 agonist, BCG is a TLR4 agonist. We've actually conducted nonclinical studies to compare directly 002 to BCG. And what we found is that 002 results in a significantly stronger tumor cell killing compared to BCG and it's got a higher upregulation of key proinflammatory cytokines and chemokines, including (TNF)-alpha and interferon gamma. We believe that these important mechanistic differences between 002 and BCG support the meaningful efficacy that we've seen to date in with 002, both in the BCG-Unresponsive as well as in the BCG-Naïve setting.

Thanks, Jackie. So we'd like to now talk you through the data that we released most recently on December 5 at the SUO Conference Society of Urologic oncologists, where we published data on a pool of both BCG-Unresponsive and BCG-Naïve patients. The data that we produced on the Naïve side is the first time a sponsor outside of immune checkpoint inhibitors in NMIBC has published on the Naïve setting. And so I'll have Jackie talk you through sort of some of the findings of the data and some of the exciting opportunities that the data represents.

So the data set includes 20 patients who are valuable at 3 months, 18 patients who are evaluable at 6 months and 3 patients who are evaluable at 9 months. There are 5 patients in the BCG-Unresponsive cohort and 15 patients in the BCG-Naïve cohort. The time of this data cutoff was November 19. Across all patients, 002 demonstrated a 72% 6-month landmark complete response rate and a 70% complete response rate at any time. And the pivotal cohort of BCG-Unresponsive patients, the CR rate was 100% at 6 months and 80% at any time. In the proof-of-concept cohort of BCG-Naïve patients, the complete response rate was 64% at 6 months and 67% at any time. While we don't expect that our response rates in the BCG-Unresponsive setting will remain at 100%. As we enroll more patients, what we're encouraged by is that we do believe that even if it came down to where we are in the BCG-Naïve setting, this is still a very effective drug for non-muscle invasive bladder cancer and is also very competitive in terms of what from other investigational drugs and also in line with the data that we know about BCG.

So why don't you talk us through the swimmers plot here.

Yes. So I think the important thing to look at from the swimmers plot is that reinduction with this drug for patients who are not early responders at 3 months, results in about 83% of patients being able to be salvaged and to be able to convert to month 6 complete response. It's very encouraging to know that, that opportunity exists for those patients. In addition to that, we did have those 3 9-month patients. And those patients, 2 of 3 or 67% were continued responders at the month 9 time point.

So as we take a look at this, one of the things that stands out to us is the power of reinduction salvage. At 80%, that is miles higher than some of our competitors who tend to see reinduction salvage rates in the 50s. We believe that this may come in some, but note that every time you reinduce a patient, statistically, it's an independent event. You are no more likely to be reinduced because of what came -- what happened in the last patient that was reinduced. And so we actually would -- we feel that there's a chance that, that reinduction salvage rate might carry itself through as the data set gets larger through '25 and '26. So a quick word on safety?

Sure. So from a safety perspective, this is a very or drug. We have seen most of our side effect profile is really attributed to, one, either mechanistic response that you would expect from an immune tenting drug like this, which is sort of flu-like symptoms. And then the fact that this is an intravesical administration, a lot of them are instrumentation related. So very clean safety profile so far and it's consistent with what we know about OK-432, which, as Jesse mentioned, has a has hundreds of thousands of patients that have been treated.

So a quick word on the interesting data in Naïves. I think we get a lot of questions, where does 002 kind of fit in, in the NMIBC landscape. Of course, we know BCG-Unresponsive is a smaller epi, and it's a more competitive landscape. In that setting, we've got early data here and we believe that we are beginning to make the case that we're through sort of a threshold of relevance as it relates to efficacy. And that if we can continue to sort of produce the type of results that we've seen so far in earlier set of patients, that might put us in a very competitive stance relative to some of the further along novel therapeutics in the BCG-Unresponsive setting. But then next question is, okay, you're generating data that is in line with, if not better, than BCG itself, in the BCG-Naïve setting. So is there an opportunity there? And I want to make sure that we're articulating sort of what -- where we see that opportunity. I don't think you ever replace BCG, right? But based on claims analysis that we've run, we know that -- there's a little bit of COVID in this, but over the past several years, there's been roughly about 12,000 patients every year that either can't get, don't tolerate or refuse BCG treatment. And so our view is that the opportunity in the Naïve setting is as an alternative to BCG. And so if you're thinking that your addressable patient population there is somewhere between 12,000 or 15,000 or 10,000 patients and you can penetrate half of that, that's several thousands of patients in the Naïve setting, where you are offering a real alternative to BCG. Remember, it's not just that the efficacy that we've demonstrated in Naïve is in line with BCG. We are safer and better tolerated than BCG and easier to administer for both the patient and the practice. And as we talk about those components, you start to touch on what we think answers the question that I'm sure -- that I know we get all the time and might be on everyone's mind is where does 002 fit in, right? You're about a year behind a couple of further along independent developers of non-muscle invasive bladder cancer treatment. And what is it about 002 that differentiates it? Our observation from other sponsors out there developing drugs in the NMIBC setting is that there are sort of 2 plausible investment cases around NMIBC development assets: complex, high response rate therapeutics and sort of easy, low burden therapeutics, low burden on the practice, low burden on the patient, fast administration time, geared towards the community. So our administration time is 15 minutes. There's no thought time it can be administered -- it is administered via catheter. So that is -- that obviates the need for the physician to actually be in the room and can be administered by a nurse. In fact, the administration of 002 is rate limited by how quickly a nurse can insert a fully catheter, right? The patient doesn't have to stay for 2 hours after administration because, again, 002 is inactivated. There is not a risk of BCGeosis. There has never been a case either in the U.S. or in Japan of sepsis in the use of 002 or OK-432. So from our perspective, the patient goes home, there's no urine bleaching, there's no special protocol post, and there's no special protocol pre-administration. So we hit that sort of profile. And at the same time, we believe that we have started to make the case that we have efficacy rates that are in line with some of the competitors out there that are a little bit ahead of us. And so as the only broad-spectrum immunopotentiator being developed in this field, we offer a different mechanism than either the targeted immunotherapies or the enhanced chemotherapeutic that populate the development or approved armamentarium. And really, that's where we think we make the case for 002 as not just being another piece of the puzzle but a highly competitive option for physicians in both the unresponsive and in the naive setting. So our plans, as we mentioned for 2025, is to continue accelerating enrollment of our BCG unresponsive patients to give a sense, the data that we presented in December came from 7 sites. We now have 25 sites up and running and believe that, that will create a hockey stick effect in our enrollment of BCG-Unresponsive patients. We need to confirm our protocol design for a registrational study for BCG-Naïve patients and hope to have that confirmation from FDA in the first half of this year, enabling us to commence the BCG-Naïve study by the middle of the year. And then finally, where our blue sky opportunity exists is in systemic administration. Imagine where -- a world where after we've demonstrated that a single priming dose followed by a normal induction course intravesically, produces an earlier onset of therapeutic effect. Well, if that acquaintance of the adaptive immune system with the antigens presented by 002 is active. Imagine a world where you can take transurethral administration of maintenance doses off the table and replace that with subcutaneous doses of 002. And that's the world we want to move towards because that's where once you're sparing lots of bladders, the residual unmet need is that the route of administration for bladder cancer is heavily burdensome to the patient. And so how do you go from a part of the story to leading the story. Is you lean on competitive advantages like our ability to dose systemically, and there'll be more to come on that in 2025 and beyond. So with about 20 minutes left, I'd like to spend some time familiarizing everybody with another incredibly important and high-value component of the Protara portfolio, which is our 2 rare disease programs. I'll start with IV Choline and then we'll talk about lymphatic malformations, which is very near and dear to our heart. So IV Choline is the root substrate in the synthesis of phosphatidylcholine. phosphatidylcholine is the most ubiquitous phospholipid in the body. For those of you that want to go back to your college biology, phospholipids are ubiquitous in the creation of membrane like structures and cell structures, right? The cell membrane is constructed of phospholipids. And of those, a vast majority are phosphatidylcholine. You and I get choline sufficient enough to synthesize phosphatidylcholine from the food that we eat. But patients that are on parenteral nutrition, i.e., they receive their nutrition via a central line do not get Choline and nor do they have the absorptive capacity in the small bowel to take in choline and synthesize the phosphatidylcholine. There are a number of underlying etiologies that drive the need to be on parental support. But our estimate is that there are about 40,000 patients in the United States, about 35 adults, about 5,000 pediatric patients who are on what we would call chronic TPN, on parental support for more than 3 days a week and on for more than 6 months in a year. The most notable downstream clinical sequela of choline deficiency is liver complications. That's because the very low-density lipoprotein particles that transport triglycerides out of the liver are wrapped in an envelope of phosphatidylcholine. So if you have very, very low phosphatidylcholine it's difficult for VLDL to transport liver triglycerides out of the liver. But there are other clinical sequela as well associated with choline deficiency. But before we embarked on a clinical program, the FDA gave us the green light in 2018 actually to go into a Phase III study looking at liver endpoints. We wanted to make sure that we knew where these patients were and that they actually did demonstrate a homogeneous series of sequelae in the liver from choline deficiency. And I'll have Jackie talk you through what we learned from an observational study aimed at finding these patients and understanding sort of what they need in terms of choline replacement therapy.