Panbela Therapeutics, Inc. (PBLA) Q3 2023 Earnings Call Transcript

Panbela Therapeutics, Inc. (NASDAQ:PBLA) Q3 2023 Earnings Conference Call November 9, 2023 4:30 PM ET

Company Participants

James Carbonara – IR

Jennifer Simpson – CEO

Sue Horvath – CFO

Conference Call Participants

Jonathan Aschoff – ROTH MKM

Operator

Greetings, and welcome to the Panbela Therapeutics Third Quarter 2023 Earnings Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, James Carbonara, Investor Relations at Panbela. James, you may begin.

James Carbonara

Thank you, operator. With me on the call are Jennifer Simpson, Chief Executive Officer; and Sue Horvath, Chief Financial Officer. Before I turn the call over to Dr. Simpson, please note that statements made on this call that are not historical facts may be forward-looking statements. Significant risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements are detailed in the company’s annual report on Form 10-K and supplemented by subsequently filed quarterly reports on Form 10-Q as well as in other reports that the company has filed with the SEC.

Any forward-looking statements made on this call are made only as of today’s date, and the company does not undertake any obligation to update or supplement any such statements to reflect subsequent developments.

Now I would like to turn the call over to Jennifer Simpson, CEO of Panbela. Jennifer, please proceed.

Jennifer Simpson

Thank you, James, and thank you, everyone, for joining.

I will begin the call with a review of our clinical development program, recent accomplishments and upcoming milestones. Sue will then follow with a review of the financial results, and then we will open it up for Q&A. So let’s start with our Phase 3 initiatives, specifically the ACQUIRE global clinical trial. ASPIRE is a global randomized, double-blind, placebo-controlled study designed to assess Ivospemin, or SPP-101, in conjunction with gemcitabine and nab-paclitaxel for patients with untreated metastatic pancreatic ductal adenocarcinoma.

During Q3, we initiated enrollment in both the U.K. and Germany, successfully activating all intended countries for the ASPIRE trial, which are now actively enrolling patients. Additionally, in July, the independent Data Safety Monitoring Board, or DSMB, completed its scheduled safety review for treated patients in the trial and recommended the study’s continuation without any changes. This achievement, alongside the full activation of all countries and DSMB’s green light, provides substantial encouragement as we propel the trial forward. We anticipate interim data around mid-year 2024.

Addressing familial adenomatous polyposis, or FAP, Panbela is dedicated to working with the FDA, EMA and the FAP community to move this initiative forward, aiming to introduce a novel treatment option for FAP patients. Upon securing consensus on a global registration plan from the FDA and EMA, we intend to progress this endeavor while adhering to our existing cost structure. Simultaneously we’ll assess avenues to optimize the value of this asset. Shifting focus to the PACES trial, it’s our Phase 3 double-blind, placebo-controlled study of Flynpovi. This trial aims to prevent the recurrence of high-risk adenomas and second primary colorectal cancers in patients diagnosed with stage 0 to 3 colorectal cancer.

The PACES trial receives funding from the MCI and is being performed in conjunction with the Southwest Oncology Group, also known as SWOG. The study’s purpose is to assess the combination of eflornithine and Sulindac in reducing the 3-year event rate of adenomas and second primary colorectal cancers in patients previously treated for Stages 0 through 3 colon or rectal cancer.

We’ve successfully cleared a plan futility analysis and will continue the study. Transitioning the Phase 2 studies. In July, we disclosed that we would be receiving a total of up to $9.5 million in nondilutive funding through the divestiture of assets from the eflornithine pediatric neuroblastoma program to U.S.

WorldMeds. We look forward to collaborating with U.S. WorldMeds in the ongoing FDA review of a new drug approval. Panbela has already received an initial upfront payment of $400,000 and stands to receive further payments as U.S. WorldMeds achieved key milestones related to eflornithine’s clinical advancement, regulatory approval and commercial sales.

This agreement not only broadens our range of partner supported programs, but also holds the potential for significant development milestone payouts. We warmly welcome U.S. WorldMeds to our network of partners dedicated to advancing our product candidates. One final item on this program and partnership. After the quarter ended, the FDA’s Oncology Drug Advisory Committee, or ODAC, noted that there was sufficient evidence to conclude eflornithine, or DFMO, reduces the risk of relapse in pediatric patients with high-risk neuroblastoma who are in remission and have completed multiagent, multimodal therapy.

This recommendation is the first ever ODAC approval supported by a clinical trial that relied on an external control arm, using patient-level data extracted for another trial. The FDA stated that the high unmet medical need for patients with neuroblastoma, a specific external control data source, and the results of the propensity score matched analysis impacted their willingness to consider an external control design in this circumstance.

We view this ruling as additional validation of the potential clinical efficacy and safety of the drug and value that we expect to derive from its continued development. Staying with Phase 2 trials. In September, we entered into a clinical trial agreement for a Phase 2 trial in castration-resistant metastatic prostate cancer, or CRPC.

The goal of the androgen and polyamine elimination alternating with XTANDI, or APEX trial, will be to evaluate a treatment with a combination of DFMO or eflornithine in high-dose testosterone will improve the prostate-specific antigen, or PSA, response rate in patients with metastatic CRPC compared with historical controls. The study is actively enrolling. Leveraging preclinical models that demonstrate a potential role for polyamines in androgen-resistant prostate cancers, this clinical trial will determine if the addition of eflornithine to the treatment regimen will demonstrate further efficacy in these difficult-to-treat patients.

If the trial is successful, it opens the door for combining polyamine-targeted therapies, such as eflornithine and Ivospemin, with bipolar androgen therapy, or BAT therapy, as a new treatment option for metastatic CRPC. There is a huge unmet need for new therapies for castration-resistant metastatic prostate cancer patients. Previous clinical studies demonstrated the efficacy of BAT as a monotherapy and its ability to sensitize to subsequent androgen inhibition.

Preclinical studies show that super physiological levels of androgen can upregulate orienting decarboxylates, suggesting a role of eflornithine as a combination therapy. The trial will determine if modulating polyamines can enhance the efficacy of BAT therapy in these patients. Continuing with Phase 2 investigations, the Phase 2 trial for CPP-1X, or eflornithine, overseen by Indiana University School of Medicine and financially supported by the Juvenile Diabetes Research Foundation, or JDRF, continues to enroll patients. JDRF stands as the foremost global entity propelling transformative breakthroughs for type 1 diabetes. We are enthusiastic about backing the newly launched Phase 2 trial for early-stage type 1 diabetes run by Indiana University School of Medicine and funded by JDRF.

The objective is to create innovative and effective treatments for patients facing significant medical challenges. This trial, based upon the recently published Phase 1 trial and preclinical data in the Journal Cell Reports medicine investigated the mechanism of polyamines and polyamine inhibition by CPP-1X on beta cell stress that plays a role in the onset of type 1 diabetes. Results showed that DFMO, or eflornithine treatment, may preserve beta cell function, reflected by C-peptide levels in patients with type 1 diabetes through the modulation of urinary polyamines, in particular putrescine.

According to Sims et al, although therapy of type 1 diabetes has improved, the morbidity, mortality and costs continue to impact the quality of life for those affected, highlighting the need for safe and effective therapies that address the underlying pathology. In Phase 1 development, we have three programs that we will be starting.

We have an ongoing clinical trial partnership with Moffitt Cancer Center, focusing on a Phase 1/2 program tailored for patients with STK11 mutant non-small cell lung cancer. Initially, the Phase 1 trial aims to establish the highest tolerated dose of eflornithine while also assessing its effectiveness. Subsequently, we plan to progress into a Phase 2 efficacy trial.

We expect to have data from the Phase 1 trial early next year with the intention to commence the Phase 2 trial immediately following completion of this Phase 1 trial. Concurrently, our second Phase 1 program that’s commenced later this year or early next year will center on the assessment of Ivospemin in the platinum-resistant ovarian cancer demographic.

This effort exemplifies the company’s continuous partnership with Johns Hopkins University School of Medicine. Additionally, we have an ongoing collaborative research effort with the University of Texas MD Anderson Cancer Center, focusing on the evaluation of polyamine metabolic inhibitor therapies in conjunction with CAR T cell therapies using preclinical models. This research aims to determine whether treatments involving eflornithine and/or Ivospemin can enhance CAR T-induced cytotoxicity against CD19-positive large B-cell lymphoma cell lines.

A metabolite panel, predominantly consisting of polyamines, was identified as a predictor of limited response to anti-CD19 CAR T cell therapy in cases of relapsed/refractory large B-cell lymphoma. Moreover, there is an observed upregulation of the polyamine uptake transport system in both large B-cell lymphoma and multiple myeloma.

These findings collectively indicate the potential for a targeted polyamine therapy in conjunction with CAR T therapies. Recently, we announced that an abstract about SBP101, or Ivospemin, and CPP-1X, or eflornithine, research in multiple myeloma cell lines has been accepted for an online publication on the American Society of Hematology, or ASH, meeting site and will be printed in the November supplemental issue of the journal Blood. Panbela places significant emphasis on polyamine modulation of the immune system.

Our initial clinical proof of concept involves polyamine therapy combined with a checkpoint inhibitor for STK11 mutant non-small cell lung cancer patients. We are enthusiastic about extending this research collaboration to assess the potential advantages of polyamines in immune modulation for hematologic malignancies. Lastly, we’re in the process of collaborating with key opinion leaders to complete the protocol for the neoadjuvant pancreatic investigator initiative.

We’re also in the final stages of obtaining the required institutional approval to launch this trial by the end of the year. Briefly turning to IP. We fortified our intellectual property portfolio, announcing the issuance of new patents in China and Australia for claims of a novel process for the production of SBP-101, developed in collaboration with Syngene International Ltd. Additionally, we announced the issuance of a new patent in Chile for claims of a novel process for the production of Flynpovi, developed in collaboration with Sanofi.

In closing, despite a very challenging biotech market, we are committed to advancing our development program for the benefit of patients around the world. To summarize our projected milestones, as we continue to progress with our development initiative, we foresee the initiation of a neoadjuvant pancreatic cancer trial and an ovarian cancer trial by end of year, early next year. We anticipate the Phase 1 non-small cell lung cancer data early next year, which will guide the Phase 2 segment of a non-small cell lung cancer trial expected to be initiated immediately following the Phase 1 trial.

Our focus for the FAP program is to obtain feedback from the FDA and EMA for global harmonization on a registration protocol. Additionally, we anticipate data on our polyamine metabolic inhibitors in combination with CAR T therapy in preclinical lymphoma and multiple myeloma models. Finally, we look forward to the interim analysis of the ASPIRE trial midyear 2024.

To sum up, Q3 and year-to-date, we have seen remarkable progress. We are eager to continue creating value for our shareholders as we move ahead in the coming months and into 2024.

I will now turn it over to Sue.

Sue Horvath

Thank you, Jennifer.

General and administrative expenses were $1.1 million in the third quarter of 2023 compared to $1.3 million in the third quarter of 2022. Research and development expenses were $6.7 million in the third quarter of 2023 compared to $2.3 million in the third quarter of 2022. All share and per-share amounts of our common stock presented here and in our report 10-Q have been retroactively adjusted to reflect the reverse splits completed in January and June of 2023. Net loss in the third quarter of 2023 was $7.8 million, or $2.69 per diluted share compared to a net loss of $4.4 million, or $257.36 per diluted share in the third quarter of 2022.

Total cash was approximately $0.9 million as of September 30, 2023. Total current assets were $1.9 million, and current liabilities were $8.9 million as of the end of the quarter on September 30. Total noncurrent assets consisting primarily of cash deposits held by our contract research organization were $8.7 million. As a result of the CPP acquisition in Q2 of 2022, we added debt and accrued interest to our balance sheet. During the quarter ended September 30, 2023, no debt or interest payments were made.

The principal balance remaining on the notes is $5.2 million, and there is approximately $172,000 of accrued and unpaid interest on the balance sheet. Looking to the cap table. As of September 30, 2023, we had approximately 3 million common shares outstanding. And including shares reserved for options and warrants, we were at a total of approximately 7.1 million shares. The shares reserved number includes all outstanding equity awards, including stock options, which were held primarily by insiders, and all warrants to purchase common stock.

Our cash used in operations for the nine months ended September 30, 2023, totaled approximately $22.2 million. The quarterly burn rate for Q3 was approximately $6.7 million and included approximately $1 million paid to our CRO for incremental deposits. Cash used in operations for the nine months ended September 30 included approximately $3.7 million in payments necessary to secure supply of standard-of-care chemotherapy agents for the ASPIRE trial as well as $2.1 million in total payments made to increase those deposits held by our CRO for future clinical trial costs. On November 2, 2023, the company induced certain warrant holders to exercise their warrants for cash. Gross proceeds received from this exercise totaled approximately $1.9 million.

Approximately 2.1 million new shares were issued from this exercise, and the holders received new warrants, and the exercisability of those warrants is pending stockholder approval.

Operator, can you please open the phone lines now for Q&A and poll for questions?

Question-and-Answer Session

Operator

[Operator Instructions] And the first question today is coming from Jonathan Aschoff from ROTH MKM. Your line is live. Please go ahead.

Jonathan Aschoff

Thank you, guys. I was wondering, Jennifer, can you help us better understand what’s required to unlock any of the remaining $9.1 million from the Florentine divestiture to U.S. WorldMeds, stuff like estimate of timing and for even the first milestone, just gross estimate?

Jennifer Simpson

Yes. So it’s tied to approvals and commercial sales and some other statistical advancements. What I can tell you is that they had an ODAC meeting on October 4. And as I mentioned in the remarks, it was a positive vote, and that then typically signals communication with the FDA. And about four to six weeks from that time is when we would anticipate that they will hear from the FDA. So if it is a positive vote for approval, then that would start the clock, and we probably are looking at some time to bring in funds not until next year, but at least it will be on the horizon.

Jonathan Aschoff

Did the 41-patient Phase 1 trial results that you presented at Endocrine Society and then later published, did that impact the enrollment of the JDRF trial at all? Was there any bump-up from that?

Jennifer Simpson

I’m not sure if I can say specifically. What I can tell you is that we have a great partner in Indiana University, and it is a multisite center. And they have been actively enrolling. So I would anticipate that would enroll relatively quickly just because of their commitment to this study.

Jonathan Aschoff

Okay. That is it. Thank you very much.

Jennifer Simpson

Thanks so much, Jonathan.

Operator

Thank you. Your next question is coming from Joe Pantginis from H.C. Wainright. I’m sorry, Joe Pantginis, my apologies. Joe, your line is live. Please go ahead.

Unidentified Analyst

Hi. Thank you. This is Josh on for Joe. So I had a question about Flynpovi. I was wondering if we could get any color on the extent of the discussions that you may have been having with potential partners.

Jennifer Simpson

Yes. So thanks, Josh. One of the things that we think is really important is, first, to have that global harmonization for the registration pathway. So we’ve been in dialogue with the FDA, working on the EMA. Once we have that, that is probably a more optimal time to have those discussions because then we can have in our hands what is needed to get an approval for that indication. So I would imagine that we’re hoping to kind of wrap that up either by year-end, early next year, and then we’ll be very active in seeking someone to help us with that.

Unidentified Analyst

Perfect. Thank you so much.

Jennifer Simpson

Sure. Thank you.

Operator

Thank you. And there are no further questions in queue. At this time, this does conclude the Q&A session and today’s conference call. We do thank you for your participation. You may disconnect your phone lines at this time, and have a wonderful day.