Whitehawk Therapeutics, Inc. (WHWK) Earnings Call Transcript & Summary

Good morning, everyone. I am Frank Chang from the Morgan Stanley Investment Banking team. And before we get started, I have to quickly read the following disclaimer. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So I'm pleased today to be joined on stage with Interim CEO and CFO of Aadi Biosciences, Scott Giacobello. Welcome, Scott.

Great. Thanks, Frank. It's great to be here.

To kick things off, Scott, would you like to spend a few minutes kind of at the beginning to give us an overview of Aadi's financial status, cash position, runway and recent progress?

Yes, sure. So just a little information on our company. So Aadi is a Commercial-Stage Precision Oncology Company focused on Re-engineering mTOR inhibition. So we have a product, our product is based on a nanoparticle albumin-bound platform and our product is nab-Sirolimus, or called FYARRO. From a cash perspective, the company is well capitalized. We have about $135 million in cash and short-term investments as of the end of our second quarter, and that takes our runway into 2025.

Great. For those who aren't familiar with the disease, could you maybe give us a brief overview of your first approved indication PEComa and then as well as an update of the current commercial progress?

Sure. So -- our drug FYARRO was approved by the FDA in November of 2021. It's approved for Advanced Malignant PEComa. This is an ultra-rare, very aggressive sarcoma that is oftentimes misdiagnosed. It's a very severe sarcoma and average life expectancy is around 12 to 16 months. It generally appears in middle age and can present anywhere in the body. And so we -- after approval in November, we actually launched the drug in February of 2022 and the commercial launch is actually going very well. In our last quarter, we had $6.2 million in sales and the launch to date, which was through the end of the second quarter, we had more than $27 million in sales. And albeit it's a small indication. But to give you an idea, analyst estimates in that first [ quarter ] were $3 million to $4 million. So we've really gotten out of the gate really, really well. And when I say ultra rare, this impacts, we estimate 100 to 300 new patients per year in the U.S., and that's incidence. So it is a very small indication and really, we're the first approved therapy there.

Yes. Congrats on the progress. So in addition to PEComa, what's exciting about the Aadi story is the potential to go after key oncogenic drivers within mTOR pathway. Could you give us an overview of the rationale for targeting TSC1 and TSC 2?

Sure. It actually came out of our AMPECT trial, our Malignant PEComa trial. So that trial, we had around 34 patients and one thing -- one of the things was noticed about 25 of those patients actually had NGS reports. And the way you identify the TSC1/TSC2 mutation is through -- it's on -- it's standard -- on the standard NGS report. And so what we noted is there are about 25 patients in that AMPECT trial that had NGS reports and of those, about 14 of them had the TSC1, TSC2 mutation. So the response rate we saw in those patients was actually 9 out of 14 responders, which was around 64%. So that was a very impressive response rate and it started pointing us in the direction towards TSC1, TSC2.

Okay. Yes, that's very impressive. So I guess what are some of the incidence rates for TSC1 and TSC2 mutations? And kind of which cancers?

Yes. So TSC1/TSC2 it's a very large opportunity. It actually -- the mutation occurs in 1% to 2% of all cancers. And so we shared some information last year at AACR that shows that it's in -- that mutation, those 2 mutations combined are kind of in the top 6 or so of cancer genes. And that represents, we estimate, north of 10,000 new patients per year on an incidence perspective. So it's a large population. As far as the types of Histologies that you see, TSC1 and 2 they are a little bit different, although there are similarities, but you see lung cancer, endometrial cancer, pancreatic cancer, bladder cancer, Hepatobiliary, so all of those are probably the top types of cancers that you would see.

Do you plan -- do you have a specific approach to these cancers and have any plans to prioritize?

Yes. So I think at this point, we're conducting the trial. And I think as far as how it would target will largely depend -- be data dependent and based on what we actually see in the trial. I think this is a tumor-agnostic trial. And so if approved, I think the competitive environment for each one of those cancer types can be very different. So you could have breast, for example, which is very competitive. You may have some other cancers that are not as competitive. And so it would be hard to say if you target. I think our trial is to look at all of them and see where we see the best results. And then we'll have to see what that data says to figure out how we approach and target.

Yes. Okay. Great. Maybe moving on to data a little bit. Could you give a quick overview of the data? I think you mentioned the AMPECT trial already, but maybe some of the early encouraging data that was presented at ASCO as well.

Yes, sure. So the -- so I have mentioned the AMPECT data, and that's an important one. We also had an Expanded Access Program around the AMPECT trial. And we did have patients with TSC1 and TSC2 mutations that had cancers outside of Malignant PEComa. So, the first example I gave was were Malignant PEComa patients who were in the AMPECT trial. This is expanded access to patients who had other cancers. And we had, albeit very small numbers, there were 8 patients, but in those patients, we saw 5 out of 8 responses. And again, very small end, but we did see responses there. As far as types of cancers there, we -- there was an ovarian. There were definitely some sarcomas, and I believe there's an endometrial also. There were a fair number of sarcomas because when we conducted the AMPECT trial, it was done in sarcoma centers. And so that's why we're running the broader trial. But the initial look from that data was actually very encouraging.

Got it. Could you discuss the safety profile?

Yes. So as you know, mTOR inhibitors have been around for quite some time now. And our safety profile, FYARRO is administered via IV and we're able to get -- we believe in what we've shown in preclinical models is the ability to get more drug to the tumor and therefore, enhance tumor inhibition. But we've been able to do that with a similar profile to oral mTOR inhibitors. And so it's a very well-known profile. You have stomatitis, some mouth sores, et cetera, but things that physicians have been actually dealing with a while. So it's a very well-known safety profile that they're very comfortable to treating.

Okay. Great. And obviously, with the small end and the efficacy you've seen and the good safety profile, do you expect these results to generally repeat -- be repeated in the upcoming registrational data? What's your expectations on that front?

Yes. I would say it's difficult to say. I think the one thing -- that's why we're running the broader trial. So I think if you look back at the data that we had in the EAP, the difference will be the larger trial is going to be on many more patients. And also, we expect more tumor types because, again, the trials being conducted across all types of centers, not just sarcoma centers. So I think it's hard to say. But we're certainly encouraged by what we saw back then.

Great. As we just discussed, you're undergoing a registration-directed trial in TSC1 and 2 mutated cancers. I guess, maybe if you can give us an overview of the trial design and patient eligibility and as well as an update on the trial status?

Sure. Yes. So we're -- PRECISION 1 is the name of our trial. It is a Phase II registration-directed tumor-agnostic trial. It has 2 arms to the trial, one arm for TSC1 and one arm for TSC2. There are 60 patients in each arm, and each arm is independently evaluable for registration, which is important because you potentially have 2 shots on goal. The trial started enrolling in March of last year. And we are on track and expecting to complete enrollment in the spring of 2024, which is right around 2 years from first patient in. The key eligibility criteria ar,e, when you have to have the TSC1 or 2 mutation, which is identified through the NGS panel. You also have to have metastatic or -- or locally advanced disease when you have to be ineligible for surgery. You also have to be mTOR naive. And so -- and lastly, you have to have failed standard of care for whatever cancer tumor you have. So those are the main eligibility criteria. And as you know, we're going to be sharing some initial -- an initial look at 40 patient data in a preplanned interim analysis towards the end of the year, and we're looking forward to sharing that information.

Yes. I guess on that specific point, could you speak to about when and where you might be expected to present the initial data?

Yes. So we've said it will come before the end of the year. So later in the year, it will likely not be at a conference just from a timing perspective. So it's going to be a company press release or event. So that's the plan right now. We did share earlier in the year some information on an early look at some demographic information on the trial. And so what we've said there is that we had seen a relatively even split in TSC1 and 2 the two arms and also saw more than 15 different tumor types in the trial. So we're very encouraged by that.

Right. And what level of detail do you expect to announce by year end?

Yes. So what we've said in this announcement, we'll definitely share some response information. We're not able to share response by tumor type. You have to be careful because it's 40 patients in the aggregate. So it's about 1/3 of the trial. You want to make sure you're not doing anything to bias the trial in any way, shape or form. So it would be more on an overall response perspective. We also share, obviously, of those 40 patients, how many were TSC1 and TSC2. We'll also give an update on the tumor types that we're seeing in the trial. And it's important with the FDA tumor agnostic guidelines that are out there to make sure that you can get a broad enough distribution of tumor types in your trial.

Yes, absolutely. Moving on a little bit. Can you discuss the recently announced expansion of the pipeline into endometrial cancer and neuroendocrine tumors? I think it will be also great to kind of understand the strategy and rationale for those upcoming Phase II trial.

Yes. Sure. So yes, we're really excited to announce some new programs, and we did this on our second quarter call. Last year, we had been spending some time trying to decide what are the next indications. And so we landed on endometrial cancer and neuroendocrine tumors. And it was the right -- we felt it was the right time to move into some new programs given the fact that PRECISION 1 is on track and enrolling well. And we look to complete enrollment relatively soon in the spring of next year. So the rationale behind endometrial cancer and obviously, this was us looking obviously, internally, but also having discussions with key opinion leaders. There's history there with mTOR inhibitors in endometrial cancer, particularly combined with anti-estrogens such as letrozole. So our trial is a combination of our product, nab-Sirolimus with letrozole. Everolimus, there has been data with Everolimus and letrozole that's out there that sits in second line in endometrial cancer. As I've said previously, we believe we have a superior mTOR inhibitor. So I think we can drive improved results compared to what is out there. The other interesting thing that's happening in endometrial cancer is there's been a recent change in the first line, frontline standard of care with chemo plus immunotherapy now being in that first line instead of just chemo. What that's done is it's created, I think, an opportunity in second line, but also the Everolimus data with letrozole showed that less chemotherapy is actually better for the drug. And so they had very high durability and response in chemo-naive patients. So I think that if you combine just the opportunity in second line and also take into consideration the change in that frontline treatment with less chemotherapy, I think it makes a lot of sense for us to be in there. And that opportunity, we estimate around 7,000 or so -- in sense of patients per year in second line. So we think it's a really interesting opportunity for us and when we're excited to be kicked off. And that program will kick off actually in Q4. It is a Phase II open-label study. It's a Simon's 2-Stage, so there'll be an initial 10 patients followed by a second cohort of 19 patients. And we're hoping to have initial data on this in the second half of next year.

And the NETs?

Yes, yes. And so then on the neuroendocrine tumors, kind of a similar rationale there, right? There is a history of mTOR inhibitors there as monotherapy, so Everolimus is there. While the response rates have been not very high, nonetheless, these drugs are used that are recommended in guidelines. So again, it's a similar thought. We have what we believe is a superior mTOR inhibitor and can drive, we think, better results there. And so that would be the plan to show superiority initially for purposes of publication, but we'll kind of see where the data takes us for that program. Similar to endometrial, it's a Phase II open-label study, Simon's 2-stage design with first cohort, I think, of 12 patients and the second of 9. And again, we would look to hopefully have some initial data from that trial sometime in the back half of next year also.

Okay. Great. In addition to both of those trials, you recently announced the dosing of our first patient in the Phase I/II combination trial for KRAS solid tumors with MIRATI. Could you give us an overview of that? An update on that as well?

Yes, sure. So this trial came about -- there had been some preclinical data that we had was interesting with adagrasib and nab-Sirolimus. And so I've been talking to MIRATI about potentially entering into a program, which we've done. It's a collaboration for a combination trial of our product nab-Sirolimus with their product Adagrasib or Krazati. It's a Phase I/II trial in patients with KRAS G12C mutant solid tumors. As you mentioned, we had the first patient into that trial just last month. And I -- don't expect to have any data out of that probably until next year. But obviously, an interesting opportunity and it's one of the things that's really nice about nab-Sirolimus, I think there's a lot of opportunities for combination strategies around the drug.

Okay. Great. We covered a lot. I guess, Scott, is there anything else that you'd like to highlight for investors as we head into the exciting fall and end of the year?

Yes. I think this has been a year of operational execution for us. And I think we've done a -- a really nice job. I think if you step back and look at us as a company, right, we're a commercial company. We've taken a drug through FDA approval and launched. And I think we're having a -- what's a very impressive launch, albeit in a very small indication. We've got a registration-directed trials due to readout in the near term. So again, plan their complete enrollment in the spring. There's a 6-month follow-up requirement. So we would hope to have final data around the end of next year, so fairly near term on that trial, which I think represents a significant opportunity for us. And again, a reminder, 40 patient data coming before the end of this year. So people will get a look at that. We've got the 2 new programs, which I think is exciting. It shows a few additional legs to the stool for us. I think in areas where there's technology has been proven and an opportunity for a superior drug to come in. And so I think overall, from an operational perspective, the company is very well positioned, and we look forward to sharing more information with everybody by the end of the year.

Perfect. Well, thank you. Great. And thank you, Scott, for taking the time to speak with us today.

Yes. Thank you for having me.