What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-03 compared with 2022-08-04 · 74 added, 70 removed, 111 unchanged (56% of the section changed)

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Our Drug Candidate, Onvansertib

Onvansertib, our lead compound, is a novel, highly potent, highly selective PLK1 inhibitor.

PLK1, a serine/threonine kinase, has a well-understood mechanism of action within tumor cell proliferation and is overexpressed in a number of tumors (including colorectal, pancreatic, prostate, ovarian, breast and lung cancer).

In particular, PLK1’s activity in various phases of the cell cycle provide multiple targets for a PLK1 inhibitor to inhibit DNA repair and interrupt cell division, thereby killing tumor cells.

PLK1 inhibition has been considered an attractive target of cancer therapeutics for the last two decades, however past PLK1 drug candidates have failed to show acceptable tolerability and efficacy.

Onvansertib is an oral, small molecule drug candidate that is highly specific for PLK1 inhibition with a 24-hour half-life.

We believe the attributes of onvansertib described below, as well as clinical evidence of favorable safety and efficacy, with expected on-target, easy to manage and reversible side effects, may prove beneficial in addressing clinical therapeutic needs across a variety of cancers:

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IC 50 is the concentration for 50% inhibition), compared to prior PLK1 inhibitors that were pan-inhibitors of several PLK targets.

activity of onvansertib was observed on a panel of 63 kinases (IC50>500 nM), including the PLK members PLK2 and PLK3 (IC 50 >10,000 nM).

• Onvansertib has a relatively short drug half-life of 24 hours, compared to a half-life of approximately 5 days for prior PLK1 inhibitors.

A short half-life allows for flexible dosing and improved managing of drug concentrations to reduce dose-related toxicities.

• Onvansertib is orally bioavailable, compared to prior PLK1 inhibitors that were delivered intravenously, allowing for relative ease and flexibility of dosing.

In vitro studies have shown synergistic effects when onvansertib was administered in combination with different cytotoxic agents including antimicrotubule agents, topoisomerase 1 inhibitors, antimetabolites, alkylating agents, proteasome inhibitors, kinase inhibitors, BCL-2 inhibitors, and androgen biosynthesis inhibitors.

Low or no activity of onvansertib was observed on a panel of 63 kinases (IC50>500 nM), including the PLK members PLK2 and PLK3 (IC 50 >10,000 nM);

• Onvansertib has a relatively short drug half-life of 24 hours, allowing for flexible dosing and scheduling which has shown favorable safety and tolerability across multiple clinical trials;

• Onvansertib is orally bioavailable, allowing for relative ease and flexibility of dosing.

In vitro studies have shown synergistic effects when onvansertib was administered in combination with different cytotoxic agents including microtubule-targeting agents, topoisomerase 1 inhibitors, antimetabolites, alkylating agents, proteasome inhibitors, kinase inhibitors, BCL-2 inhibitors, and androgen biosynthesis inhibitors.

In addition, in vivo combination studies have confirmed the positive results obtained in vitro and synergistic effects have been observed in xenograft models of onvansertib in combination with irinotecan, 5-fluorouracil ("5-FU"), abiraterone, PARP inhibitors, venetoclax, and paclitaxel, while additive effects in combination with cytarabine or bevacizumab have been demonstrated.

There are three ongoing clinical trials in onvansertib in combination treatment:

second line treatment in patients with KRAS-mutated Metastatic Colorectal Cancer ("mCRC"), second line treatment in patients with Metastatic Pancreatic Ductal Adenocarcinoma ("mPDAC"), and in patients with Metastatic Castration-Resistant Prostate Cancer ("mCRPC") showing early signs of resistance to abiraterone.

Combining onvansertib with standard-of-care cancer agents provides opportunities for synergy with many cancer therapies.

There are five ongoing or soon to be activated clinical trials of onvansertib:

two trials (TROV-054 and ONSEMBLE) in second line treatment in patients with KRAS-mutated Metastatic Colorectal Cancer ("mCRC"), one trial in second line treatment in patients with Metastatic Pancreatic Ductal Adenocarcinoma ("mPDAC"), and two investigator-initiated trials in patients with unresectable locally advanced or metastatic Triple Negative Breast Cancer ("TNBC") and relapsed Small Cell Lung Cancer ("SCLC").

Phase 1b/2 Clinical Trial in KRAS-mutated mCRC

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- USC Norris Comprehensive Cancer Center, The Mayo Clinic Cancer Centers (Arizona, Minnesota, and Florida), Kansas University Medical Center, Inova Schar Cancer Institute and CARTI Cancer Center.

The primary objectives of this trial are to evaluate the Dose-Limiting Toxicities ("DLTs"), maximum tolerated dose ("MTD") and recommended Phase 2 dose ("RP2D") of onvansertib in combination with FOLFIRI and bevacizumab (Phase 1b) and to continue to assess the safety and preliminary efficacy of onvansertib in combination with FOLFIRI and bevacizumab (Phase 2).

The scientific rationale for this clinical trial is based on the two key principles of synthetic lethality and synergy, with the objective of demonstrating a proof-of-concept of clinical benefit within this phase1b/2 trial.

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We believe this synergy occurs because PLK1 can promote the repair of DNA damage caused by chemotherapeutic agents and by inhibiting PLK1, onvansertib leaves damaged tumor cells unable to replicate.

Data we presented on January 18, 2022 provided an update of the ongoing phase 1b/2 clinical trial in KRAS-mutated metastatic colorectal cancer.

• 34% (12 of 35) of patients treated per protocol at the RP2D in combination with FOLFIRI and bevacizumab achieved a Complete Response ("CR") or Partial Response ("PR") (CR:

11 patients);

• 35% (17 of 48) of patients across all dose levels achieved a CR or PR.

Historically, Objective Response Rates ("ORR") of 5-13% have been reported in similar second line patient populations treated with various different drug combinations, including the standard of care chemotherapy of FOLFIRI with bevacizumab;

• 10% (5 of 48) of patients discontinued the trial to pursue potentially curative metastasis-directed therapy (surgical resection or microwave ablation);

• Median Progression-Free Survival ("mPFS") across all response-evaluable patients (n=48) is 9.4 months and has not yet been reached in those treated per protocol at the RP2D.

Historically, mPFS of ~4.5-5.7 months has been reported in a similar patient population treated with standard of care chemotherapy of FOLFIRI with bevacizumab;

• The combination regimen of onvansertib plus FOLFIRI/bevacizumab is well tolerated with no major or unexpected toxicities attributed to onvansertib.

Data presented on September 12, 2022 provided an update of the ongoing TROV-054 phase 1b/2 single arm clinical trial in KRAS-mutated metastatic colorectal cancer:

• Objective response rate ("ORR") across all evaluable patients was 35%, with 17 of 48 evaluable patients achieving an objective response.

Responses have been observed across multiple KRAS variants;

• Median duration of response ("mDoR") across all evaluable patients was 11.7 months (95% confidence interval ("CI"):

8.9 – not reached);

• Median progression free survival ("mPFS") across all evaluable patients was 9.3 months (95% CI:

Historical control trials of different drug combinations, including the standard-of-care ("SOC") of FOLFIRI with bevacizumab, in similar patient populations have shown ORR and mPFS of 5 – 13% and ~4.5 – 5.7 months, respectively.

• A subgroup analysis of patients who were bevacizumab naïve vs patients who had received prior bevacizumab in 1st line therapy showed that patients who were bevacizumab naïve (n=13) had an ORR of 69% and mPFS of 13.5 months , which is well above historical controls.

In contrast, patients previously treated with bevacizumab (n=35) had an ORR of 23% and mPFS of 7.8 months.

Phase 2 Randomized Clinical Trial in KRAS-mutated mCRC (the ONSEMBLE trial)

The ONSEMBLE trial (CRDF-003), is a Phase 2 open-label, randomized multi-center clinical trial of onvansertib in combination with standard of care FOLFIRI and bevacizumab (Avastin®) for the second line treatment of patients with KRAS-mutated mCRC, which will be conducted at approximately 40 clinical trial sites across the U.S.

The primary objective of the ONSEMBLE trial is to evaluate onvansertib’s safety and efficacy in combination with the standard-of-care FOLFIRI/bevacizumab regimen in patients with second-line KRAS/NRAS-mutated mCRC.

The trial is expected to enroll approximately 150 patients who will be randomized 1:1:1 to receive standard-of-care alone, standard-of-care plus 20 mg onvansertib, or standard-of-care plus 30 mg onvansertib, with onvansertib administered on days 1-5 and 15-19 of 28-day treatment cycles.

The primary endpoint of the trial is objective response rate.

Progression-free survival and duration of response will be key secondary endpoints.

Activation of the trial is expected in Q4 2022, with topline data anticipated in 2H 2024.

Phase 2 Clinical Trial in mPDAC

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The trial is expected to enroll approximately 45 patients.

Phase 2 Clinical Trial in mCRPC

TROV-053 is a Phase 2 open-label multi-center clinical trial of onvansertib in combination with abiraterone acetate and prednisone in patients with mCRPC, which is being conducted at three clinical trial sites - Beth Israel Deaconess Medical Center, Dana-Farber Cancer Institute and Massachusetts General Hospital.

This trial is now closed for enrollment.

The primary objective of this trial is to observe the effects of onvansertib in combination with abiraterone and prednisone on disease control as assessed by Prostate Specific Antigen ("PSA") decline or stabilization after 12 weeks of treatment in patients with mCRPC showing early signs of resistance to abiraterone.

The rationale for this trial is based on the Mechanism of Action ("MOA") of onvansertib and abiraterone acetate and the synergy of these two drugs when used in combination in pre-clinical experiments.

Onvansertib inhibits tumor cell proliferation by inducing G2/M (mitosis) arrest and consequently cell death.

The combination of onvansertib and abiraterone acetate synergistically increases mitotic arrest and cell death in prostate cancer cells and has demonstrated significantly greater tumor growth inhibition than either drug alone in vivo .

Data presented on April 8, 2022 at American Association for Cancer Research ("AACR") Annual Meeting provided evidence of the safety and efficacy of onvansertib in combination with abiraterone.

Disease control increased with increasing dose density of onvansertib from 29% to 45% of patients achieving PSA stabilization and from 53% to 75% of patients with radiographic stable disease;

Arm A (n=17) – onvansertib 24mg/m 2 days 1-5 in 21-day cycle to Arm C (n=20) – 12mg/m 2 days 1-14 in 21-day cycle.

Median progression-free survival ("mPFS") increased with increasing onvansertib dose density from 4.1 months in Arm A to 13.2 months as of the data cut-off date in Arm C patients.

Genomic analysis of ctDNA showed a correlation between alterations in two key genes of the PI3K signaling pathway—MTOR and PTEN, which appears to underly increased pathway activity, and sensitivity to onvansertib/abiraterone combination in mCRPC patients with early abiraterone resistance.

The treatment regimen of onvansertib in combination with abiraterone/prednisone has been well tolerated.

Preclinical Data

On April 8, 2022 we announced the results of preclinical studies evaluating the anti-cancer activity of onvansertib in combination with the PARP inhibitor ("PARPi") olaparib in PARPi-resistant patient-derived xenograft (PDX) ovarian cancer models.

The results were featured in a poster presentation at the AACR Annual Meeting.

Data showed the combination of onvansertib and olaparib providing statistically significant survival benefits compared to treatment with either agent alone in three PDX ovarian cancer models.

Two of the three PDX models studied were cisplatin-

sensitive with a mutated BRCA1 gene, while the third was cisplatin-resistant with wild type BRCA1.

The onvansertib-olaparib combination was also shown to be well tolerated in mice.

Preliminary data presented on September 12, 2022 provided an update of the ongoing CRDF-001 phase 2 open label clinical trial in mPDAC:

• Preliminary data from 5 evaluable patients showed 1 patient achieving an initial partial response (PR) and 3 patients achieving stable disease (SD);

• The 4 patients achieving SD or PR remain on study;

the fifth evaluable patient discontinued treatment due to disease progression and an additional 3 patients remain on study awaiting their first post-baseline scan;

• Additional data is anticipated in mid 2023.

Phase 1b/2 Investigator-Initiated Clinical Trial in TNBC

A single-arm, Phase 1b/2 trial of onvansertib in combination with paclitaxel in patients with unresectable locally advanced or metastatic TNBC is open for enrollment at Dana Farber Cancer Institute ("DFCI").

In Phase 1b, approximately 14-16 patients will be treated with different doses of onvansertib in combination with a fixed dose of paclitaxel to determine the maximum tolerated dose and RP2D of onvansertib.

In Phase 2, approximately 34 patients will be treated with the selected onvansertib RP2D in combination with paclitaxel.

The primary endpoint of Phase 2 of the trial is ORR, with PFS included as a secondary endpoint.

Preliminary data from the trial are expected in Q4 2023 or Q1 2024.

For more information, please visit NCT05383196 at www.clinicialtrials.gov .

Phase 2 Investigator-Initiated Clinical Trial in SCLC

A single-arm, two-stage, Phase 2 trial of onvansertib monotherapy in patients with relapsed SCLC is open for enrollment at the University of Pittsburgh Medical Center ("UPMC").

The trial is designed to enroll 15 patients in Stage 1, with the study proceeding to Stage 2 if 2 or more Stage 1 patients achieve an objective response.

Stage 2 is designed to enroll an additional 20 patients.

The primary endpoint of the trial is ORR, while key secondary endpoints include PFS and overall survival.

Preliminary data from the trial are expected in mid 2023.

For more information, please visit NCT05450965.

Critical Accounting Policies

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2022 and 2021

Total revenues were $91,000 for the three months ended June 30, 2022, as compared to $68,000 for the prior period.

Three Months Ended September 30, 2022 and 2021

Total revenues were $93,000 for the three months ended September 30, 2022, as compared to $86,000 for the prior period.

Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

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Research and development expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2022 2021 Increase (Decrease)

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Total research and development $ 6,009 $ 4,154 $ 1,855

Research and development expenses increased by $3.3 million for the three months ended June 30, 2022, compared to the same period in 2021.

Research and development expenses increased by $1.9 million for the three months ended September 30, 2022, compared to the same period in 2021.

The overall increase in expenses was primarily related to chemistry, manufacturing, and controls ("CMC") and clinical pharmacology for studies to support the development of our lead drug candidate, onvansertib.

Salaries and staff costs increased primarily due to additional hires in senior management and our clinical operations team.

Salaries and staff costs increased primarily due to additional hires in senior management and our clinical operations team (research and development average headcount grew by 73% over the comparative period).

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2022 2021 Increase (Decrease)

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Total selling, general and administrative $ 3,077 $ 2,930 $ 147

Selling, general and administrative expenses increased by $0.2 million for the three months ended June 30, 2022, compared to the same period in 2021.

Salaries and staff costs increased due to merit increases and higher headcount.

Selling, general and administrative expenses increased by $0.1 million for the three months ended September 30, 2022, compared to the same period in 2021.

Salaries and staff costs increased due to merit increases and higher headcount (average headcount grew by 27% over the comparative period).

Facilities and other costs increased due to higher insurance costs and the amending of our operating lease.

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Net loss and per share amounts were as follows:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands, except per share amounts) 2022 2021 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 43,333 39,552 3,781

The $3.7 million increase in net loss attributable to common shareholders was primarily the result of an increase of operating expenses for the three months ended June 30, 2022, compared to the same period in the prior year.

The $0.07 decrease in net loss per share was impacted by the increase in basic weighted average shares outstanding resulting primarily from the issuance of approximately 3.8 million shares of common stock and common stock equivalents from July 1, 2021 through June 30, 2022.

Six Months Ended June 30, 2022 and 2021

Total revenues were $165,000 for the six months ended June 30, 2022, as compared to $140,000 for the prior period.

The $1.7 million increase in net loss attributable to common shareholders was primarily the result of an increase of operating expenses for the three months ended September 30, 2022, compared to the same period in the prior year.

The $0.03 increase in net loss per share was impacted by the increase in basic weighted average shares outstanding resulting primarily from the issuance of approximately 3.8 million shares of common stock and common stock equivalents from October 1, 2021 through September 30, 2022.

Nine Months Ended September 30, 2022 and 2021

Total revenues were $258,000 for the nine months ended September 30, 2022, as compared to $226,000 for the prior period.

Revenues are from our sales-based or usage-based royalties on other intellectual property licenses, unrelated to onvansertib.

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Research and development expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 Increase (Decrease)

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Total research and development $ 20,665 $ 11,552 $ 9,113

Research and development expenses increased by $7.3 million for the six months ended June 30, 2022, compared to the same period in 2021.

Salaries and staff costs increased primarily due to additional hires in senior management and our clinical operations team.

Research and development expenses increased by $9.1 million for the nine months ended September 30, 2022, compared to the same period in 2021.

The overall increase in expenses was primarily related to CMC and clinical pharmacology for studies to support the development of our lead drug candidate, onvansertib.

The increase in stock-based compensation is primarily due to additional stock option grants to employees granted subsequent to the prior period.

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Selling, general and administrative expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 Increase (Decrease)

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Total selling, general and administrative $ 10,103 $ 8,003 $ 2,100

Selling, general and administrative expenses increased by $2.0 million for the six months ended June 30, 2022, compared to the same period in 2021.

Salaries and staff costs increased due to merit increases and higher headcount.

Selling, general and administrative expenses increased by $2.1 million for the nine months ended September 30, 2022, compared to the same period in 2021.

Salaries and staff costs increased due to merit increases and higher headcount (average headcount grew by 37% over the comparative period).

The increase in stock-based compensation is primarily due to additional stock option grants to employees granted subsequent to the prior period.

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Net loss and per share amounts were as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands, except per share amounts) 2022 2021 Increase (Decrease)

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Weighted average shares outstanding — basic and diluted 43,291 38,501 4,790

The $9.5 million increase in net loss attributable to common shareholders was primarily the result of an increase in operating expenses for the six months ended June 30, 2022, compared to the same period in the prior year.

The $0.19 increase in basic net loss per share was impacted by the increased net loss attributable to common shareholders and the increase in weighted average shares outstanding resulting primarily from the issuance of approximately 3.8 million shares of common stock from July 1, 2021 through June 30, 2022.

The $11.2 million increase in net loss attributable to common shareholders was primarily the result of an increase in operating expenses for the nine months ended September 30, 2022, compared to the same period in the prior year.

The $0.20 increase in basic net loss per share was impacted by the increased net loss attributable to common shareholders and the increase in weighted average shares outstanding resulting primarily from the issuance of approximately 3.8 million shares of common stock from October 1, 2021 through September 30, 2022.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities for the six months ended June 30, 2022, was $16.9 million, compared to $10.2 million for the six months ended June 30, 2021.

Our use of cash was primarily a result of the net loss of $21.4 million for the six months ended June 30, 2022, adjusted for non-cash items related to stock-based compensation of $2.2 million, amortization of premiums on short-term investments of $0.6 million, and release of clinical trial funding commitment of $0.1 million.

Net cash used in operating activities for the nine months ended September 30, 2022, was $24.4 million, compared to $15.7 million for the nine months ended September 30, 2021.

Our use of cash was primarily a result of the net loss of $30.0 million for the nine months ended September 30, 2022, adjusted for non-cash items related to stock-based compensation of $3.2 million, amortization of premiums on short-term investments of $0.7 million, and release of clinical trial funding commitment of $0.1 million.

The net change in our operating assets and liabilities was $1.4 million increasing cash used in operations.

At our current and anticipated level of operating loss, we expect to continue to incur an operating cash outflow for the next several years.

Net cash provided by investing activities was $26.0 million primarily related to sales and maturities in excess of purchases of marketable securities during the six months ended June 30, 2022, compared to net cash used in investing activities of $130.7 million for net purchases of marketable securities during the same period in 2021.

Net cash provided in financing activities was $0 during the six months ended June 30, 2022, compared to $20.5 million of proceeds from the sale of common stock and proceeds from warrant exercises for the same period in 2021.

As of June 30, 2022, and December 31, 2021, we had working capital of $118.9 million and $139.6 million, respectively.

Net cash provided by investing activities was $31.1 million primarily related to sales and maturities in excess of purchases of marketable securities, offset by purchases of capital equipment during the nine months ended September 30, 2022, compared to net cash used in investing activities of $122.7 million for net purchases of marketable securities during the same period in 2021.

Net cash provided in financing activities was $75,000 from the exercise of stock options during the nine months ended September 30, 2022, compared to $20.5 million of proceeds from the sale of common stock and proceeds from warrant exercises for the same period in 2021.

As of September 30, 2022, and December 31, 2021, we had working capital of $111.5 million and $139.6 million, respectively.

We have incurred net losses since our inception and have negative operating cash flows.

As of June 30, 2022, we had $122.0 million in cash, cash equivalents and short-term investments and we believe we have sufficient cash to meet our funding requirements for at least the next 12 months following the issuance date of this Quarterly Report on Form 10-Q.

As of September 30, 2022, we had $114.3 million in cash, cash equivalents and short-term investments and we believe we have sufficient cash to meet our funding requirements for at least the next 12 months following the issuance date of this Quarterly Report on Form 10-Q.

Based on our current projections we expect that our capital resources are sufficient to fund our operations into 2025.

Our drug development efforts are in their early stages, and we cannot make estimates of the costs or the time that our development efforts will take to complete, or the timing and amount of revenues related to the sale of our drug candidates.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis