Good day, and thank you for standing by, and welcome to the Second Quarter 2021 Kura Oncology, Inc. Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Vice President of Investor Relations, Mr. Pete De Spain. Thank you. Please go ahead, sir.

Thank you, operator. Good afternoon, and welcome to Kura Oncology's Second Quarter 2021 Conference Call. Joining me on the call are Dr. Troy Wilson, our President and Chief Executive Officer; and Dr. Marc Grasso, our Chief Financial Officer and Chief Business Officer. Before I turn the call over to Dr. Wilson, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to Kura's filings with the SEC, which are available from the SEC or on the Kura Oncology website for information concerning risk factors that could affect the company. With that, I will now turn the call over to Dr. Troy Wilson, President and CEO of Kura Oncology.

Thank you, Pete, and thank you all for joining us this afternoon. I'm extremely proud of the progress our team has made across the pipeline over the past several months, underscoring our focus on operational execution. This progress is highlighted by the first patients dosed in the Phase Ib expansion cohorts with our menin inhibitor, KO-539, a clinical collaboration with Novartis to evaluate tipifarnib in combination with the PI3 kinase alpha inhibitor, alpelisib in head and neck squamous cell carcinoma and nomination of KO-2806 as the lead development candidate in our next-generation farnesyl transferase inhibitor program. Now let's take a closer look at the progress within each of our programs, beginning with our menin inhibitor, KO-539. We continue to have strong conviction in KO-539 and its potential to be both first-in-class and best-in-class menin inhibitor. This confidence is supported by the results from the Phase Ia dose escalation portion of KOMET-001, our Phase I/II clinical trial of KO-539. These data showed promising single-agent activity in an all-comer population of patients with relapsed or refractory AML, including patients with NPM1 mutations and KMT2A rearrangement. We're also encouraged by the clinical activity observed in patients with other co-mutations, including a complete remission in a patient with a SETD2 RUNX1 mutation. We believe these patients may represent a potential third expansion cohort, a differentiating feature of our program. KO-539 also demonstrated a favorable safety and tolerability profile with no evidence of QTc prolongation, another important differentiating feature of the program. Given the wide therapeutic window, KO-539 demonstrated in the Phase Ia dose escalation portion of the study, we've now advanced to 2 Phase Ib expansion cohorts a lower dose of 200 milligrams and a higher dose of 600 milligrams, each comprising NPM1 mutant and KMT2-rearranged relapsed and refractory AML patients. These two doses…

Thank you, Troy, and good afternoon, everyone. I'll provide a brief overview of our financial results for the second quarter 2021, along with guidance for the full year 2021. I invite you to review our 10-Q filed today for a more detailed discussion. Research and development expenses for the second quarter of 2021 were $21.1 million compared to $13.7 million for the second quarter of 2020. The increase in R&D expenses was primarily due to increases in clinical trial costs, development and manufacturing activities related to our KO-539 program, clinical trial costs related to our registration-directed tipifarnib trial, noncash share-based compensation, personnel costs and other expenses. General and administrative expenses for the second quarter of 2021 were $12.6 million compared to $7.5 million for the second quarter of 2020. The increase in G&A expenses was primarily due to increases in personnel costs and noncash share-based compensation. Net loss for the second quarter of 2021 was $33.7 million or $0.51 per share compared to a net loss of $20.5 million or $0.40 per share for the second quarter 2020. As of June 30, 2021, we had cash, cash equivalents and short-term investments of $567.5 million compared with $633.3 million as of December 31, 2020. The cash balance as of June 30 reflects the spend of $6.6 million to repay in full our existing debt facility at a reduced prepayment fee leveraging our strong cash position. Looking ahead, we anticipate our operating expenses for the full year 2021 to be in the range of $130 million to $140 million as we continue to invest in the clinical and preclinical development of our pipeline, important drivers for our future growth. We expect our net cash used in operating activities for the full year 2021 to be in the range of $105 million to $115 million. Based on our current plans, we continue to believe that our cash, cash equivalents and short-term investments will be sufficient to fund current operations into 2024. With that, I will now turn the call back over to Troy.

Thank you, Marc. Before closing, I'd like to take this opportunity to welcome Carol Schafer and Dr. Helen Collins to our Board of Directors. Carol brings more than 25 years of experience as a trusted strategic and financial adviser to the leadership teams of growing biopharmaceutical companies, most recently as Vice Chair of Equity Capital Markets at Wells Fargo Securities. Helen joins with more than 25 years of medical experience, most recently as Chief Medical Officer at Five Prime Therapeutics, where she oversaw the development of Bemarituzumab, a first-in-class anti FGFR2b antibody for the treatment of patients with gastric cancer. Carol and Helen each bring a unique perspective to the Board, and we look forward to their contributions as we work to bring our oncology drug candidates to market, expand their use to larger patient populations and create value for patients and our shareholders. I also want to take this opportunity to express my sincere appreciation to Robert Hoffman for his many contributions throughout his 6 years on the current Board of Directors. We're deeply grateful for his service as a board member and as Chair of our Audit Committee. On behalf of everyone at Kura, we wish Robert well in his future endeavors. Now before we jump into the question-and-answer session, let me lay out our anticipated milestones for the remainder of the year. Initiate the current Phase I/II study of tipifarnib in combination with alpelisib in the fourth quarter of 2021, complete enrollment of 24 evaluable patients in the KOMET-001 Phase Ib expansion cohorts by the first quarter of 2022, determine the recommended Phase II dose of KO-539 by the first quarter of 2022, submit an IND application for KO-2806 by the end of 2022. With that, operator, we're now ready for questions.

[Operator Instructions]. Your first question comes from the line of Jonathan Chang from SVB Leerink.

First question, can you provide more color around how the dose levels are selected for the KO-539 expansion cohorts?

Sure, Jonathan, and thanks for the question. So the guidance from FDA that is now sort of colloquially known as Project Optimus instruct sponsors or guide sponsors to identify the lowest dose with maximum biologic and clinical activity. And in its guidance, FDA is moving expressly away from maximum tolerated dose in the context of targeted therapies in oncology. So the push is towards lower doses, not higher doses, MTD being kind of a relic, if you will, of the old chemotherapy days. With that being said, it was pretty clear that the low dose of 200 milligrams once daily was right because we saw robust activity. That activity was highlighted at ASH in particular, a couple of responses among NPM1 mutant patients, one with a CR that was MRD negative, other being in NMLFS. When comes to the higher dose, we really faced a choice, was it 600 or 800. And given the limitations of the Phase Ia study, the fact that it wasn't genetically enriched for KMT2A and NPM1 mutant patients. We didn't really see a difference between those 2 doses. The difference enough to justify going with 800 versus 600. Those two doses looked sort of consistent. And per the FDA's guidance, if that's the case, you go with the lower dose. So we're now at a point, and we're actively enrolling in the Phase Ibs, as I mentioned in the prepared remarks, at doses of 200 and 600. We expect that both of those doses have good safety and tolerability. They're very clean. We think either dose could potentially be a good going-forward dose. The Phase Ib study is now explicitly an efficacy study, and it will allow us to both select an RP2D and begin to compile patients who we believe are going to be eligible to be included in the population for registration.

Understood. And second question, how should investors be thinking about the cadence and the substance of 539 updates for both the escalation and expansion portions over the remainder of 2021 and in 2022?

Yes. Great question. So the way we're thinking about the Phase I experience is, the Phase I is primarily a safety study -- the Phase Ia, excuse me, is the safety study, the Phase Ib is really an efficacy-driven study. The Phase Ia is now close to enrollment. We got out of it, I think, what we were expecting. The molecule is safe and well tolerated across the range of doses. We're seeing anecdotal activity but there are limitations. And the limitations are -- it's not genetically enriched. A number of patients are not efficacy evaluable. But despite that, we continue to see encouraging signs of activity, including in patients who had progressed on a prior menin inhibitor. And that we thought that was noteworthy. The Phase Ib is explicitly in the KMT2A and NPM1. Our goal, Jonathan, as we said in the prepared remarks, is to have the Phase Ib cohorts fully enrolled by the end of the first quarter of next year and to be in a position where we have identified the recommended Phase II dose. We'll do everything we can to meet or exceed that timeline. But given the -- given what we're seeing in the screening queue and the pace of enrollment, we think that's a good base case projection. Our intent is to provide qualitative updates on the study throughout the remainder of 2021. Those will include -- and you've gotten some sense of that today from the commentary. Initially, you're focused on site activation, you're focused on the screening funnel, then you're talking about, are we actually recruiting patients to the 2 arms? We are. I think we'll be able to give guidance both on enrollment and qualitatively, what are we seeing, right? I don't think we're going to be able to call out specific patients for the very reason that this -- It's our hope and our intent that this data will be considered for registration by FDA. So we have to treat it with some sanctity. But I think we'll be able to provide guidance on enrollment and on activity. Are there differences between the arms? That's our intent is to provide qualitative guidance. And we'll look to present the 1A and the 1b together as the full Phase I experience at an upcoming medical or scientific meeting.

Understood. And if I can just sneak in one more, mostly because I don't think you'll be able to [indiscernible] this, but in the chance that you can, can you expand on what you mean by the early signs of clinical activity in the Phase Ib expansion cohorts for 539?

Sure. I mean there are a number of measures of that, including disease stabilization, improvement of performance status. But the most notable one, Jonathan, is reduction in blast counts. And I should just leave it at that. Again, we don't want to be cherry picking data. What we want to do is to leave you and the others on the call with an understanding that from our perspective, the fact that what we're seeing, it's early, it's preliminary. But what we're seeing in the Phase Ib reinforces that the dose selections of 200 and 600 were the right dose selections.

Your next question comes from the line of Peter Lawson from Barclays.

Troy, just on kind of data disclosures that we may get this year. Would we get anything around durability from any of the previously treated patients where we've seen them?

Yes. Peter, I think we're going to have to wait until we disclose the full Phase I experience. We have been thus far impressed with the durability, but it's early days. It's -- this is a handful of patients, the data is preliminary. I think we don't want to pick and choose. We need to look at durability in the context of the full clinical package. And it's our intent to enroll the 1b as quickly as we can and be in a position to talk about both the safety and tolerability and the efficacy profile of 539 as quickly as we can at an upcoming future medical meeting.

Got you. And you've mentioned a patient that progressed on a prime menin inhibitor. So you kind of see any signs that you can potentially retreat with menin inhibitors?

Yes. So a couple of comments, Peter. Yes, it's actually plural, patients, not just one. I think it's -- what we're seeing is evidence of clinical activity. The -- just to be clear, right, let's draw a distinction between the mechanism of action and then what one might do in a registrational context. So that gives us confidence that just as you say, even in patients who have progressed upon treatment with a prior menin inhibitor, you're still seeing evidence of clinical benefit. That's fine for 1a. We're not expressly excluding those patients from the Ib in all likelihood, they will be excluded from the registrational study because it goes both ways, right? You don't want to bias in favor of patients who might be more likely to respond, you also don't want to bias in favor of patients who -- you may have exhausted that mechanism of action. So I think that data is anecdotally important. And it's one of the pieces that gives us confidence that we have a best-in-class menin inhibitor. But I think as we go forward, I wouldn't be expecting us to enrich in a lot of patients who've been on prior menin inhibitors is the way I would say it.

Your next question comes from the line of Tiago Fauth from Credit Suisse.

I guess just a follow-up on tipi, if you could provide any commentary on AIM? And how enrollment trends are tracking there? And related to that, how much has genetic screening in that indication has evolved over time. And how that may play a role in the future combination studies? And since we're kind of the same topic, if you could provide any detail on how 2806 could actually differ from tipi, in a sense that we'll be able to address more indications, explore additional combination approaches? What are some of the features that you expect to improve upon?

Sure, Tiago. Three good questions tucked in there. So let me take those in turn. AIM-HN, just to remind everyone on the call, we made a major amendment to the protocol last year, where we did 2 things. We removed some of the impediments to enrollment and we expanded the patient population to include all HRAS mutant patients. That meant we have to enroll up to 100 evaluable patients to fully meet the registrational total. But -- and we also did this, I should say, in the context of the pandemic. We did see a very significant dip in primarily in screening of patients during the pandemic. Now that the -- at least the first wave of COVID is behind us, and we've had the chance for these protocol amendments to work their way through we've seen an improvement and uptick, Tiago, in enrollment. We're still not in a position where we can give guidance. One of the things that we've been experiencing is we have a conversion rate on the study of approximately 30%. So that means out of 10 HRAS mutant patients identified, we can get 3 of them on the study. And that really relates to the fact that these patients are pretty fragile in the second and later lines of head and neck squamous similar to what -- similar to any trial, you want to put good high-quality patients on but that means we have to screen and thus identify many more patients. The team is doing a terrific job of that. The study is just kind of quietly marching along. To your second question, which relates to the first One of the challenges in head and neck in contrast to AML or, say, lung cancer is that genetic screening is not standard of care. Typically,…

You did. You answered them all.

Your next question comes from the line of Ren Benjamin from JMP Securities.

Congrats on getting the dosing started for the Phase Ib expansion. Maybe just 2 questions for me, Troy. One, piggy backing off a previous question regarding the patients who progressed on prior menin inhibitor. I guess, I typically would think that maybe they couldn't stay on the drug due to toxicity issues as opposed to resistant mutations coming up. Am I thinking about that correctly since they're responding to another menin inhibitor or are there key resistant mutations that maybe KO-539 may be inhibiting at the same time?

So I think, Ren, this is still an evolving story. We're not aware of mechanisms of resistance to menin inhibitors in the form of point mutations. These are not like tyrosine kinase inhibitors, where you can develop a gatekeeper mutation or something. But it's important to note the patients who come on to our study have active progressive disease at the time they come on the study. So it's not that they were discontinued from another study due to tox. It's that they actually progressed and then came on to our study. And I don't -- we were -- this is still kind of an open question in our mind, right? It is will patients respond to 1 menin inhibitor when they perhaps progressed on another. I think what it potentially does is it reinforces this notion that given the wide therapeutic window, we can push the dose very hard on this compound. And that's been demonstrated both by -- these are anecdotal reports. We don't want to make too much of them, but also the fact that we have seen activity outside of the MLLr and the NPM1 mutant context. And that ultimately may best be addressed through combinations. But we've said very consistently, we believe we've got the best-in-class safety profile. We believe we've got the ability to push the dose. The biology is evolving, but I think we're encouraged, and we'll get a much better read on this in the Phase Ib, which is actively enrolling and setting us up for registration.

Got it. And then just my final question on the Phase I current study. Can you just give us a little bit of color on the trial design here? Do you have to started redosing tipi with a fixed dose of alpelisib or are both changing in dosing? And how -- about how many patients per phase, if you will, for the Phase I dose escalating as well as the Phase II.

Yes. Good question. So in fact, I'll draw your and everyone's attention. We've added a new slide to the corporate presentation that is a schematic of the current study. It doesn't speak, Ren, to your question of specific numbers of patients, but it does at least show you the initial schematic for the doses. And what you'll see is that alpelisib is held constant. It's dosed continuously and tipi is dosed every other week, both being dosed as they typically are. I'll just remind everyone that the preclinical studies that were conducted showed evidence of clinical -- or showed synergistic activity at doses that were below the dose of each drug as a monotherapy. So we dialed them both down by, I believe, to approximately 70% of the monotherapy dose, and you're still seeing better activity of the combination. It's going to take -- it might take some tinkering, Ren, in the study to get the dose and schedule right. There -- where you don't know until you try it, it's difficult to model these toxicities. But our team has done a significant amount of work preclinically to show that there are a number of different doses and schedules. You can give them both continuously. You can give them both intermittently that will drive activity. And that will give -- our clinical team and the investigators, the flexibility to be able to go in there, and the trial is a very elegant design. For example, Mollie Leoni, our VP of Clinical Development, took the lead on developing it, and Steve and Dale also weighed in on it. But it allows you to change the dose of both drugs and it relies on the extensive safety databases of both drugs. So we're hopeful that gives you a fairly efficient chance to get to a recommended dosing schedule for the combination. And given, Ren, that we're in the genetically selected population, namely either PIK3CA mutant or PIK3CA amplified we might get some early indications of activity, although the study is not explicitly designed to have an efficacy endpoint. Any efficacy similar to comment, any efficacy at that point would just be -- would be anecdotal and tell you, you're going directionally in the right direction. But that's summarized in our corporate presentation and over the next few months as we lead up to the kickoff of current, which again, we're expecting in Q4, we'll give more color on exactly the sizing of the study. It's going to be pretty typical with what one would expect.

[Operator Instructions]. Your next question comes from the line of Phil Nadeau from Cowen and Comp.

Congrats on the progress. First, one question on 539 Phase Ib. The cohorts, do they have a minimum requirement for the number of MLLr patients that are enrolled? Or will it just be, first of all, patients and whether it's NPM1 or MLLr doesn't particularly matter?

Yes. Phil, thanks for the question. It's actually -- it's the latter of the options. So there is no explicit requirement of either NPM1 or MLLr. The trial has a mechanism to ensure that the 2 arms are balanced so that you don't end up with all the NPM1 mutant patients in 1 arm and the MLLr in the other arm. But it's going to largely be what we get. If the early indications are continuing, we're seeing a good mix of both populations. Quite a bit different than what we saw in the Phase Ia. But of course, we're now operating at potentially many more sites and everybody is expressly looking for these patients. So I think that's the kind of color, Phil, we might be able to provide a bit more qualitative updates in the months ahead.

Perfect. Then second question is a follow-up to an earlier one. When you were choosing the doses to advance into the expansion cohorts? You talked about the safety and clinical efficacy. Were you also able to look at things like the chemogenic gene expression, for example, MEIS1 gene expression? And was there any difference between the various doses that were tested in the Phase Ia?

So we've looked at that as an exploratory end point, Phil. It's a good question. And the answer is, we're looking at it. It really didn't factor into the dose decision. The dosing was driven, first and foremost, by safety and tolerability and then secondly, by clinical efficacy. We didn't use any kind of surrogate biomarker to factor into that decision. That is work that we're doing, both to help inform the development in MLLr, and NPM1 mutant subtypes, and also to understand -- What -- how do you think outside of the MLLr and NPM1 mutant populations and where else could you go. But those are exploratory and not really gating at all either on the selection of the two doses for the Phase Ib or I think ultimately what will come out in terms of the determination of the RP2D once we have the 24 evaluable patients enrolled.

Got it. And then last question is actually on that determination of the receded Phase II dose. With 12 patients in each cohort, each patient is approximately 8% of the cohort. So what is a clinically meaningful difference in response between the cohorts. Can you give us some sense of how you're thinking of what would differentiate 600 milligrams versus 200 milligrams, given the relatively small size of the cohorts?

Yes. It's a really good question. And it's one that I've asked, both Mollie Leoni, who is now leading this program. She's now the clinical lead for the menin program as well as Steven. And the short answer, Phil, is you kind of know it when you see it. There isn't an explicit difference that one needs to see. If you don't see a meaningful difference, they look roughly the same. FDA's very strong guidance will be go at the lower dose. That being said, you will have the ability to either dose up or dose down as you need to. Only if you really see a striking difference either one way or the other, will you select it. If the 2 cohorts run out and they look comparable in terms of CR/CRh and safety and tolerability and the other parameters, I think the consensus is you're going to go with the lower dose. And I will say, I'll reiterate this again, I've said it, I'd say it whenever it gets asked. I think we have good confidence that either of these doses is a good going forward dose. This is really now a question of refinement and is one of them -- what is the optimum dose not only for this study, but this dose will then set the starting point for all future studies, which is why it's important to take the 24 patients and really get it right because it becomes the cornerstone of the program and the entire development plan rests on it. And I think the team has it well in hand.

There are no further questions at this time. I will turn it back over to Dr. Wilson for any closing remarks.

Thank you, operator, and thank you all once again for participating in the call today. We're going to be at the Wedbush Virtual Healthcare Conference next week, and we'll look forward to speaking with many of you then. In the meantime, if you have any additional questions, please feel free to contact Pete, Marc or myself. Thank you, and have a good evening, everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.