Great. Good morning, everyone. Welcome to day two of Oppenheimer's 34th Annual Healthcare Conference. I'm Leland Gershell, one of the analysts on the Biotech Equity Research team, and we're delighted to have with us, as our next company, Protara. Protara is working in the field of non-muscle invasive bladder cancer, among others, and NMIBC, I think we've all seen, has become really an area of intense investor interest, with recent deals done for a couple of companies there. On behalf of Protara, we have Jesse Shefferman, the company's CEO, and I'll be leading a fireside chat to walk through the programs at Protara. Please feel free to submit any questions you may have through Zoom, and I'll do the best I can to weave those into the discussion.
But with that, you know, I think just wanna introduce, you know, Jesse. Jesse's been leading Protara for several years now. This is a company that he founded and has done kind of the heavy lifting of moving a cell therapy that's been used for many years overseas, mainly in Japan and other areas in the Pacific Rim, to the States. So fully GMP compliant, can make their own therapeutic candidate here, and that's now entered into the clinic for NMIBC, high-grade NMIBC. I think maybe just to sort of, you know, kick the discussion off, I mean, this is an area again that we've been seeing a lot of development in recently, but maybe, Jesse, you could sort of set the stage for us in terms of, you know, what's the unmet need there?
What does treatment look like, and, you know, how long do these patients kind of go on in terms of recurrence or, or progression?
Yeah, thanks, Leland, and thank you to the Oppenheimer team for having us. It's a great question. To really cut down, you know, to the heart of it, you gotta be thinking about the non-muscle invasive bladder setting as principally divided between those who are, you know, sort of newly diagnosed, so patients who are treatment-naive, and patients who are treatment-experienced. When we talk about the sort of delineation, as you did, of high risk or high grade, we can talk about what, you know, denotes either of those. Within that context, the standard of care for treatment-naive patients is the BCG vaccine. First developed in the 1950s, reasonably effective at driving a immune response and a complete response, typically, you know, durable to about a year.
Lot of issues with BCG in terms of its availability. It has perpetually been in shortage, and it's also not particularly well-tolerated. And, you know, depending on. You know, if you look at BCG's label, for instance, I think there is a wide range of levels of efficacy and, you know, we can get into what drives that. So you should think about there being about 30,000 incident new cases of non-muscle invasive bladder cancer that are high risk or high grade every year. And, you know, sort of the denominator there of all bladder cancers is about 80,000 new diagnosed cases, so a pretty significant number of those are non-muscle invasive, high risk, high grade. Then we talked about the treatment experienced.
So in this particular type of cancer, bladder cancer is interesting in that it is not significantly proliferative. You do get locally advanced and metastatic cases, and those tend to be of a pretty significant risk, but more likely, we're talking about recurrence with non-muscle invasive. You know, the literature suggests anywhere from 3% to 80% recurrence rate over either three to five years. So if you think about that, you know, not particularly mortal, but very, very prevalent. And so you've got this huge prevalent population. NIH says there are about 720,000 patients living with NMIBC in the United States, or in, you know, living in a state of recurrence or, you know, waiting to recur. And that creates an interesting opportunity in the treatment-experienced BCG-refractory population.
Estimates are about 40-50, depending on who you see or who you're citing, 40%-50% of all those cases will eventually become refractory to BCG, and this is where you're seeing fairly significant development by sponsors like Protara.
Right. You know, there's a certain tumor type called Carcinoma in Situ or CIS-
Mm-hmm
-as it's referred to, that's part of your current, you know-
Yeah
... trial, trial work. Maybe just spend a moment or two, so—you know, some investors may not be familiar with that particular subtype.
Sure. So Carcinoma in Situ, unlike what we call papillary tumors, Carcinoma in Situ exists exclusively below the urothelial lining of the bladder. Papillary tumors are, you know, cauliflower-shaped, and they exist sort of in three-dimensional space. CIS tumors are often called flat tumors. And why that matters is CIS tumors are not typically resectable, whereas papillary first-line therapy is to excise the tumor via transurethral resection. So the reason that CIS is of such interest, most notably in the sponsor community, is it is a, among the most immunoresponsive sort of genotypes or phenotypes of NMIBC. So for those of us that are utilizing an immunological approach, they are a target of interest because they are unresectable.
So if you administer a medicinal treatment, you can start to think about what your efficacy is at about three months. We just based on the way our onset of action works, we tend to focus folks on six months, and that's also, you know, where your regulatory endpoints exist. You know, all of us are sort of pursuing a primary endpoint of complete response at any time up to six months. And so this is where everyone is, you know, kind of doing their exploratory work in NMIBC, because you have that much faster readout than papillary, where you have to kind of wait almost 24 months, according to FDA, to delineate what response was surgical and what response, or what duration of response, if you will, is, you know, driven by your medical treatment.
Got it. Got it. And, yeah, let's talk a little bit about, you know, your candidate TARA-002, and you touched on BCG. This is an immunopotentiator, that's like BCG in some ways, and in some ways it's different.
Yeah.
It is a cell-based therapy. It does have, as I mentioned, quite a bit of experience ex-U.S. Maybe if you could just sort of recap kind of for us how that story, you know, evolved and what positions this is-
Yeah
would be a very ideal strategy.
So the story is really a great one, and it it's down to the great team that's here at Protara. So when we first, you know, kind of decided what Protara's strategy was gonna be, we often cited this phrase: "We wanna find the next Revlimid." You know, the theory was that you could look at, in the spectrum of drugs that have been interrogated in humans, you know, around the world and internationally, and in many cases, perhaps some of the underlying understanding of the core biology of some of those products might have changed or might have been, you know, sort of rethought. And we were especially focused on immuno-oncology, and immuno sort of active agents that have been utilized before. We found an asset in Japan called OK-432.
OK-432, and hence TARA-002, is a genetically distinct strain of Strep pyogenes, so a pathogen that has a well-conserved sort of, modus of attack on the human body, driving, you know, sort of an innate and adaptive immune response. It has been used or had been used by Chugai Pharmaceuticals as adjunctive therapy to chemotherapy, for many years in the 1970s and 1980s. At first, OK-432, this pathogen, which is interesting in that Chugai was able to work out a way to engineer out the streptolysin toxicity, but retain all of the antigen-presenting properties of the pathogen, right? So you've got the signal without the, sort of the side effect, if you will. And so, you know, you can administer this product, systemically, and that was actually the main means of, administration by Chugai.
Anyway, Chugai used it to reinvigorate the immune system of chemotherapeutic patients following a course of chemotherapy. Over time, they saw a survival benefit, so they ran the comparator study, chemo versus chemo plus OK-432, and saw distinct separation of Kaplan-Meier curves. Some of that data, we are fortunate to have in our own, you know, IND as a result of the comparability we've demonstrated between 002 and OK-432. But over time, eventually, Chugai got a label for adjunctive use in lung, gastric, and head, neck, and thyroid cancer, and a couple other cancer-related indications. So clearly, some activity against solid tumors, and we thought: What if this just came off of a bench somewhere? How would we introduce this into the burgeoning world of Immunotherapeutics?
We quickly realized, A, you've got sort of a modality overlap with BCG in bladder, non-muscle invasive. Non-muscle invasive tends to be one of your most immunoresponsive tumors. We benefited from a rich body of literature generated mostly in the academic field of people interrogating OK-432 and other solid tumor types besides those which were on the label in Japan. We're able to find in the literature up to about 350 patients who had been successfully treated with OK-432 in non-muscle invasive, and so that's what drove the original idea to bring it here to the NMIBC market.
Terrific. Good. Yeah, and so you've been diligently advancing that in high-grade NMIBC. I think it was around two years ago that we saw the sort of IND get cleared, and-
Mm-hmm
... you started to enroll patients. You've seen some pretty interesting results.
Mm-hmm.
Maybe, just kind of, you know, give us a couple of the highlights of what you've been seeing so far in your studies.
Yeah. So, you know, you led with that we are like BCG, but in many ways we're not. And that was borne out, I think, by the first complete response that we saw. So we, because we have not administered OK-432, either in Japan or, for any regulatory purposes, administered OK-432 or 002 directly in the bladder intravesically, which is the preferred, as you know, means of administration for, bladder, treatments. We needed to run first a, an animal study, a acute toxicology study, and then we had to do a, dose escalation study in humans. And in that dose escalation study, when you're really just looking for your dose and safety, we actually managed to enroll three CIS patients. And the first of which demonstrated a CR.
What made that interesting was that that first CR was a heavily pre-treated BCG refractory patient. So as you're kind of as the thesis of, "Hey, we are learning new things, scientifically about old mechanisms," is playing out in real time, the first place that we see it happen is in a patient that you would have thought would have been refractory to our drug, but in fact was a responder at half of the RP2D. We were able to dose a couple of naive patients as well, and in both those naive CIS patients, we saw what appeared to be dose dependent tumor regression.
So, you know, at our RP2D of 40 KE, which is the measurement of cells in the vial, at 40 KE, we saw a significant reduction in disease burden of that patient and sort of gave us the what we needed to take the product into three studies, looking exclusively now at efficacy, and those are all underway. And I'm happy to talk through those as well.
Yeah, no, I think, please do. I know you've got kind of two studies, and then there's, you know, sort of the EXP?
Mm-hmm.
Kind of just want to sort those out for, for the-
Yeah.
Yeah.
So look, as we were getting academic sites on board in the dose escalation study, it became obvious to us that something had changed about oncology sort of study startup timelines at academic centers. The IRB process was, in certain cases, as long as 15 months. We thought to ourselves that we're going to move out of this dose escalation pretty quickly into a phase II study, and we really want to make sure that the Mayos or the Dana-Farbers or the whomever of the world, who were subject to sort of classic academic IRB, maybe even cancer committee, we didn't want to get them into our, you know, nine-patient dose escalation study and then have 15 months of silence.
So under that protocol of the phase IA, which was only going out to three months of observation, we added an expansion arm of 12 patients. Let's say 12, give or take, depending on you know, timelines and such. The purpose of that was really to just continue to give the academic sites, under the original IRB, the ability to gain experience with our drug and with CIS patients. So that is CIS all comers in terms of BCG exposure, only out to three months, and it's really our view is that, you know, the only conclusions we should be drawing from that is that the drug is active and that we are able to generate significant responses in patients.
And we have articulated to the street that we will release interim data in the form of the EXP study in the first half of this year. We are also running a phase II, that's sort of a phase I B2. And I'll sort of go with what is designed to be registrational. We talked about this, you know, clamor for CIS patients who are BCG refractory among sponsors of NMIBC innovative therapies.
The reason for that is, in 2018, the FDA, acknowledging that there was really limited options for patients who were refractory to BCG, created guidance that, basically stated that a single-arm, open label study that demonstrated, CR at any time up to six months with a key primary- a key secondary rather, of duration of response out to 12, is sufficient for traditional, not accelerated, approval. Right? So as fast as you can enroll that kind of a study, you know, you do because, it's a pretty fast path to registration.
The problem is now that we have, you know, let's call it five or six sponsors all in that space chasing that guidance, paradoxically, it's become slower to enroll those patients because, A, the epidemiology works against you, CIS is only 10% of the total, and B, it works against you again because only about 40%-50% of patients are refractory to BCG. So acknowledging that that would be a slog, and one that our team is doing a great job with, we also in the ADVANCED-2 study added a proof of concept arm in BCG-naive patients. We started to see competitors move into that space. I think CG's got a study getting teed up there. J&J's got a study teed up in the naive setting.
You know, look, frontline is where you want to be if you're treating cancer patients. And so, we're looking at naives, and we're trying to tease out from that 27-patient cohort of naives, a, what is an appropriate enrollment population for what would likely be a randomized controlled study for registration? And do these patients perform biologically differently than BCG unresponsive patients who may or may not have trained immunity from, you know, whatever previous immunotherapies were used for them? So again, there we're not only looking for results, but we're looking for, you know, clues as to potential differential biology there.
Yep. Yep, and in advance, too, you built in kind of a, you know, patients receive an induction, and then there can be a reinduction course, right? So maybe just-
Yeah
-shed some light on kind of what that means.
Yeah. So, you know, I like to talk about. So we've done an enormous amount of non-clinical work, right? If you are saying that, you know, your modus operandi is to take established mechanisms and then figure out new things about them, we have run a sizable non-clinical program quietly behind the scenes, which we'll reveal, you know, some of the findings from that to the world, probably in the middle of the year of 2024. But, you know, kind of one of the things that we've learned is that TARA-002, which is really well-tolerated, and that's the key piece of feedback that we've gotten from physicians who have good experience with the drug, really, really well-tolerated, and that matters for your elderly population.
I think that's a function of, it's got a pro, I won't say a prolonged, but it has a longer onset of action than, you know, sort of dropping a attenuated BCG into the bladder and watching it go. And so as we think about that, prolonged onset of action, it became obvious to us that, you know, one of the things that we've seen competitors do, include sort of reinduction at three months for non or partial responders, would be very wise for us to include in our studies as well. So that's what gets us so excited about both arms of ADVANCED-2, is that all partial and non-responders at three months will get a course of reinduction.
Based on what we've seen from competitors such as ImmunityBio, CG Oncology themselves, and even, you know, in the guidelines in the AUA, all of those. You know, if you're activating the immune system, either broadly as we are, or very specifically, as is the case with, let's say, checkpoints or CG or Ferring, you know, reinduction tends to be a pretty good way to salvage a significant proportion of patients who aren't immediate responders at three months.
Yep. No, it makes complete sense. Just, you know, as we've been referencing BCG, people are familiar with BCG, less familiar obviously with TARA-002, and that's, BCG is not an entirely benign drug, right? And there are certain issues there, and-
Mm-hmm
-you have to use kind of like the toilet, I think, in a special way. Does- how does that, you know, carry over or not to, to OO2?
So look, I think the primary differences between TARA-002 and BCG are, A, down to sort of how these bugs have established themselves in sort of the evolutionary chain. And, you know, I'll remind you, Leland, of the very first, you know, high school biology class, where you took a cheek swab with a you know, and you deposited that on agar and warmed it up, like whatever growth medium, and you came back the next day, and whichever, you know, bacteria doubled the fastest, colonized the growth medium. And this is the sort of stuff that matters, right? Like, for pharma folks like us and others that are using bacterium as actual therapeutic agents. BCG has a 16-hour doubling time.
As a result of that, being propagated on an organic medium, what we understand is that those batches get contaminated a fair amount by competing bacteria. Because of the long doubling time, you don't know if your BCG has one versus the others for three months. By contrast, 002 has a two-hour doubling time. In fact, lately, we're getting it down to below two hours, and we can manufacture about 10 million vials every two weeks. So our manufacturing is really how we started this whole project, 'cause remember, we needed to demonstrate that we could manufacture OK-432, right? So we started by saying: "We know this is an active drug, now we've got to be able to make it." So we've already been at, you know, inspected by FDA. We've never failed a batch.
Our CMC program is very far advanced. I'd say it's probably the most advanced component of our program for this TARA-002 project in NMIBC.
So that's-
And then just down to tolerability, you know, I think it's really. It's still early. We aren't in, you know, vast numbers of patients yet, but what we have come to understand, both from our experience with TARA-002, but also the 65,000 patients treated with OK-432 in Japan, is that this is a very, very well-tolerated drug. We've had very few, if any, Grade 2 AEs in our study, you know, versus BCG, which drives sort of a very rapid granulomatous type of immune response. And, you know, you're right, it's an attenuated bacteria, and so handling is an issue both pre- and post-administration.
Terrific. It would seem that, you know, combination with some of the well-known kind of immuno-oncology, PD-1, PD-L1, could make a lot of sense.
Mm.
Here, I think you guys are doing that sort of in the non-clinical or preclinical side.
Mm-hmm.
Maybe just, you know, spend a moment on that and, you know, could we see clinical entry of a combination, you know, in the foreseeable future?
Yeah. So what I would say, one of the. Look, you and I have talked about this, Leland. In many respects, I would just I would characterize the NMIBC market as immature, and that's as a function of there just aren't a lot of options out there before you are forced to sort of, you know, think about radical cystectomy, right? But as new agents come in, and as these agents span modalities, as they span sort of tolerability profiles and efficacy profiles, I believe that what we can expect is that this NMIBC market will become very mature like other oncology markets. And one of the things that characterizes most oncology settings is that drugs are used and therapeutics are used in combination with others.
So if I'm right, and we're headed to this looking like other mature oncology indications, then you're gonna be seeing combos, I think, more and more. And of course, several of our, you know, compatriots out there, you know, you know, running NMIBC programs, have done combo studies themselves. What we love about TARA-002 in that framework is that we do not have overlapping toxicities with any other modality out there. You could combine ours with CG Oncology's product. You could combine us with Adstiladrin, any of the checkpoints. Of course, it makes sense to sort of boost the entirety of the immune system when you're, you know, kind of knocking back the checkpoint pathways, right? At the other end of the spectrum, though, this drug started as adjunctive therapy to chemo.
So there, you're starting to think about things like UroGen's Jelmyto product, which is very intriguing to us, in the low-grade and intermediate risk setting, or, you know, J&J's TAR-200, which is a, you know, a novel gemcitabine. So as you look across this landscape of different options that hopefully will soon be, you know, in the armamentarium for Uro-oncologists, we think about TARA-002 as a natural add-on or adjunctive therapy in addition to mono in almost any possible setting out there.
Terrific. I think, you know, we've got a few more minutes left, and I think we should touch on the other indication for TARA-002, which is lymphatic malformations.
Mm-hmm.
Very, you know, very rare, but, you know, significant, you know, condition-
Yeah
... and one that's really lacking kind of good therapy. It's either kind of surgery, you know, or I think there's some use of, you know, to probably-
Off-label sclerosants, yeah.
Yeah, those drugs. So-
Yeah
... I believe you have actually, well, or Chugai has a Japanese approval for OK-432 in LMs.
Yep.
You guys are pursuing that here. You've begun a trial-
Mm-hmm
... which, should be FDA approval-enabling, and also could get a Priority Review Voucher should that get approved, which you could then potentially monetize. Maybe just spend a moment or two on what that trial is, looking at and, and-
Mm-hmm
... what the opportunity in LMs is for TARA-002.
Yeah, so you nailed it. OK-432 has been and remains the standard of care in Japan for lymphatic malformations. Just, you know, lymphatic malformations are, you know, significant overgrowths in the lymphatic sort of architecture, driven by somatic mutations in the AKT, PI3K, mTOR pathway. So there's no reliable pattern of familial inheritance, but it does seem to be sort of a disease that manifests in utero. And typically, you know, you see diagnosis by age of, you know, no later than two or three years of age. And basically, you know, this is a what it drives are these massive malformations of, you know, in and around areas where lymph nodes tend to exist.
You know, typically, you've got these kids walking around with, you know, 4 cm, 5cm, 6 cm, 8 cm, 10-centimeter, you know, large, bulbous malformations hanging off of their neck or what have you. There's about 2,000 live births per year in the United States, and we estimate that the sort of warehoused or, you know, prevalent population numbers above of about 20,000-25,000 patients in the United States. We are trying to do exactly what Chugai did in Japan. We lean on a very large study that was conducted by the University of Iowa, a 27-center compassionate use study, 550 patients. We have the rights to that data.
And what we learned is that if you administer OK-432/ TARA-002 directly into the lesion, after four treatments, if your lesion type is macrocystic, which is the majority of them, the University of Iowa demonstrated about a 83% complete or substantial response, which means between 69% and 100% resolution of the lesion. And if you think about kids going to school every day, living with this malformation, if you can offer them four shots, eight weeks apart, you know, hopefully be able to offer them 69%-100% resolution of that lesion, you're giving them a new lease on life, and that really motivates us. So, we are working with FDA on the most expeditious study that we can.
Right now, we are running a 29-patient study, basically looking at various age strata of pediatric patients, so from 18 to six, from six to two, and then from two to six months of age. As we clear those, three patient safety sentinels, we can then begin enrolling the efficacy population, that corresponds to that age category. And so takes a while. You're in the academic setting. It's harder to enroll older pediatric patients, but what I can tell you is that there is a lot of demand to get into the study among patients who are more newly diagnosed, and have not learned to sort of live with their lesion over a, you know, long period of time.
Finally, with that, so that's a nice, regular kind of, high, let's say, high impact, high quality of life impact, product that, you know, should generate reasonable revenues for us. And, you know, augmented by the Rare Pediatric Disease Designation, which we picked up in 2021 for the product.
Excellent. And then, just a quick financial snapshot. You guys have, you know, cash balance, maybe to share, a little-
Yeah. Yeah, listen, we have really, you know, tried to manage our cash as prudently as possible. We currently, the last time we released publicly any information on our balance sheet, we had it was the third quarter results of last year, $76 million on the balance sheet. And if you look at sort of our ongoing burn rate, we're at about $40 million of burn each year. So this you know, this cash balance that we currently are working with carries us well into the second quarter of 2025.
Excellent. Well, you know, given the you know, as we touched on earlier, the CG Oncology very successful IPO kind of kicked off you know 2024 in the therapeutic space. And then just this morning, you know, enGene had a multiply oversubscribed-
Mm-hmm
-$200 million financing, which started, you know, I think at, like, a tenth of that level.
Mm-hmm.
So it kind of expanded and blew up, which is again, I think, a really strong sign of investor interest in NMIBC, and I think bodes very well for Protara. So Jesse, thanks so much for joining us, and it was a great discussion. Thanks, everybody, for-
My honour.
... tuning in and listening in.