Jennifer McNealey - Senior Director, IR Susan Molineaux - Founder, President & CEO Will Waddill - SVP & CFO

Mike King - JMP Securities Paul Matteis - Leerink Matthew Andrews - Wells Fargo Securities

Good day, ladies and gentlemen, and welcome to the Calithera Biosciences Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call maybe recorded. I would now like to introduce your host for today’s conference, Jennifer McNealey, Senior Director, Investor Relations. Please go ahead.

Good afternoon, everyone. Welcome to Calithera’s third quarter 2015 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; and Will Waddill, our Senior Vice President and CFO. Before we begin, I would like to remind you that today's discussion will include statements about the company's future expectations, plans, and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the Risk Factors section of our annual report on Form 10-K, which is on file with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Please note that this call is being recorded. With that, I will turn the call over to Susan.

Thanks, Jennifer, and good afternoon everyone. Thank you for joining us today on our quarterly conference call. The third quarter was quite productive at Calithera. We have presented multiple abstracts to review at medical and scientific meetings as we continue to move our clinical programs forward. Most recently, this past week end, at the AACR-EORTC-NCI meeting we presented updated data on the solid tumor, dose expansion, monotherapy cohorts for our lead product CB-839. CB-839 is a first-in-class selective and important inhibitor of glutaminase and is the only glutaminase inhibitor currently in clinical development. CB-839 continues to demonstrate single agent solid tumor clinical benefit across a variety of solid tumor studies and in addition we have seen our first objective response in the renal cancer patients treated with CB-839 as the monotherapy as well as further signs of durability and a continuation of our positive safety profile. For our lead immuno-oncology program, we presented the first preclinical data. That's for CB-1158, our oral inhibitor of arginase. CB-1158 is a small molecule inhibitor with the potential to treat cancer by blocking the immunosuppression of the tumor microenvironment. The data at this weekend demonstrated first that we have single agent antitumor efficacy in mouse model; secondly, that we increased the synergistic efficacy with checkpoint inhibitor anti-CTLA-4 and anti-PD1 and, third, that we have tolerability as a single agent and in combination with checkpoint inhibitors in our animal studies. At Calithera, our three programs targeting glutamine, arginine and glucose metabolism are interrelated with each program targeting a different aspect of tumor-specific metabolism. With these programs we believe that we have multiple opportunities to positively impact clinical outcomes for cancer patients by building a pipeline of novel therapeutic product candidates. So let’s begin with a more detailed update on CB-839, our most advanced product candidate. Again today, in Boston, we presented data from our CB-839 solid tumor study and this was our first update since the day that we present it at the American Society of Clinical Oncology or ASCO meeting in June with more patients now enrolled in the dose expansion cohort. The new data presented by Dr. Funda Meric-Bernstam from the MD Anderson Cancer Center demonstrates stable disease across the variety of tumor types as well as a single agent partial response in a renal cell carcinoma patient who had been treated for over five months and remains to this day on study. This patient who had three prior therapies showed a 32% reduction in target lesions by RECIST with generalized shrinkage of target and non-target lymph node metastases. Among the evaluable patients with RCC, 60% or nine out of 15 had either a partial or stable disease lasting at least three cycles with four patients remaining on study today. Of note, the partial response has triggered an expansion of the RCC monotherapy cohort. The data in RTC showing a favourable stable disease rate of 60% and a single agent PR is prompting us to focus additional attention on this tumor site as we move forward. Among efficacy-evaluable patients across a range of solid tumor types treated on the current dosing schedule, which is twice-daily with food, 22 of 50 patients or 44% experienced stable disease or better. Five stable disease patients currently on study have been treated with CB-839 for over eight months without progression. This include two patients with triple negative breast cancer, one renal cell carcinoma patient, one mesothelioma and one IDH1 mutant chondrosarcoma patient. Overall, we are very encouraged by these results and are continuing on our plan to explore the potential for CB-839 in combination with other targeted agents across multiple tumor types. We are also pleased to see the CB-839 continues to be very well tolerated. Of particular note, the rate of Grade 3/4 alanine aminotransferase or ALT elevation was 1.5% observed in the most recent BID with food cohort, and that was substantially reduced relative to 16% of those at ASCO. We plan to further update you on CB-839 at the upcoming American Society of Hematology or ASH meeting in the first week of December where CB-839 will be highlighted in four poster presentations including an update on our AML trial and follow the poster presenting our myeloma trial. We also remain on track to enrol six combination trials with CB-839 with data emerging from these trials in mid-2016. These include CB-839 plus paclitaxel in patients with triple negative breast cancer, CB-839 plus Everolimus in renal cell cancer, CB-839 plus erlotinib in non-small cell lung cancer, and CB-839 plus Dexamethasone, and plus Dexamethasone and pomalidomide in patients with multiple myeloma and, finally, CB-839 subject cytogene in acute myelogenous leukemia or AML. The goal of these cohorts is to evaluate safety and potential utility of CB-839 when used in combination with these drugs. And again, we expect the initial out on the combos to be evaluable in 2016. Next is our arginase inhibitor immune-oncology program. We believe that drugs targeting immune-oncology including metabolic checkpoints have the potential to be transformational in the treatment of cancer. Earlier in the week on November 6, we presented data at the AACR-NCI-EORTC meeting showing that CB-1158 is a highly selective orally bioavailable small molecule inhibitor of human arginase with nanomolar potency. Arginase is an enzyme secreted by myeloid cells in the tumor micro environment that blocks the activation and proliferation of affected T-cells by depleting them of the nutrient arginine. We presented data demonstrating that the arginase inhibitors CB-1158 has single agent efficacy in mouse tumor model. Inhibition of tumor growth with the company by a rapid increase in the local concentration of arginine and the induction of multiple proinflammatory changes in the tumor microenvironment. CB-1158 when administered with anti-CTLA-4 increased CB-8 positive T-cell infiltrates in the tumor. The addition of CB-1158 to anti-CTLA-4 and anti-PD1 significantly inhibited tumor growth in a mouse model that was resistant to the dual checkpoint inhibitor therapy alone. CB-1158 was well-tolerated as a single agent and in combination with checkpoint inhibitors in these animal studies. We are very excited about the significant progress we have made in our CB-1158 program and remain on track to file an investigational new drug application or IND in the first half of 2016. We are planning initial trials as a monotherapy with the ability to move into combination therapy as quickly as possible. Similar to the IDO inhibitors there is a rationale to combine 1158 with other immunooncology therapies that target T-cell activation such as CTLA-4 and PD-1 antibodies. Finally, in the quarter, we also announced the addition of Dr. Sunil Agarwal to our board of directors. Sunil is currently Chief Medical Officer and Senior Vice President at Ultragenyx Pharmaceuticals and we welcome Sunil to the Calithera board. Our near term anticipated milestone includes the following: for CB-839 participation in the GTC Novel Cancer Therapeutics Summit next week where we will have a presentation update on CB-839 preclinical data, hematological Phase 1 clinical trial data by year end 2015, and initiation of six CB-839 combination expansion cohorts by year end and combination therapy data in mid-2016. For CB-1158 we plan to file an IND on our arginase inhibitor in the first half of 2016. And with that, I will pass it over to Will for an update on our financials.

Thank you, Susan. Calithera finished the third quarter in a strong financial position with sufficient capital to drive our first-in-class programs to the benefits patients and investors alike. As for our financials, our cash, cash equivalents and investments as of September 30, 2015 were $81.9 million compared to $102 million as of December 31, 2014. The decrease was mainly driven by cash used upon operating activities and clinical development of our lead program CB-839. Research and development expenses for the third quarter 2015 were $6.8 million compared with $3.9 million in the prior year, an increase of $2.9 million which was primarily attributable to higher expenses associated with the advancement of CB-839 in the Phase I clinical trials and investments into the company’s arginase inhibitor program. General and administrative expenses for the third quarter of 2015 were $2.2 million compared to $1.3 million in the prior year. The increase of $0.9 million was primarily due to the higher employment related expenses including stock-based compensation expense and professional service fees relating to the company’s cost with operating as a publicly traded company. Loss from operations for the third quarter was $8.9 million. Lastly, we are increasing our year-end cash guidance as we now expect to have cash and investment balances of at least $70 million at the end of 2015 exclusive of any licensing milestone payments or funds arising from any additional equity financings, collaborations, or other new sources of capital. And with that I will turn it back over to Susan.

Thank you, Will. And with that, operator, we are happy to open the line for questions.

[Operator Instructions]. Our first question will be coming from the line of Mike King from JMP Securities. Your line is now open.

Hi, guys, thanks for taking the question, I apologize in advance for any background noise sitting at Logan on this call. Thanks for spending time with us this weekend much appreciate that. Susan, I was wondering if you could answer a couple of quick questions about clinical candidates, so for 839 just wondering if you might help us understand what the results that you guys presented over the weekend how those might compare with targeted agents either TKIs or M2 inhibitors in a similar patient population?

You are referring to CB-839, correct?

Correct.

Well I think that the goal of the studies to-date has been to demonstrate that CB-839 has lost the activity as a single agent across a variety of solid tumor types, and I think the stable disease that we’re seeing particularly the stable disease that's durable is quite meaningful in the heavily pretreated population, and certainly achieving with a PR with monotherapy of 839 demonstrates clearly to us that the drug has biological activity in a solid tumor setting.

Right. Now that's helpful, I agree with your analysis there. And then on 1158, just wondering how crucial is it for you guys to understand single agent activity when in fact this is going to be hopefully accompanying checkpoint inhibitors and enhancing the response and durability all the good stuff from checkpoint inhibitors, is there a way to bypass that or are you determined that you want to get single agent activity LXDX (phonetic) for proceeding?

We have to do of course a dose escalation single agent therapy in patients before we can proceed the combination, but to echo what you’re saying we are focused on combination therapy. The mechanism of CB-1158 as our mutant checkpoint or metabolic checkpoint is pretty well understood and it's quite clear in the biology that this would be an agent that would combine well with a checkpoint inhibitor, either to target a population where you are looking for deeper response and when you add it to checkpoint inhibitors or to target a population that is relatively resistant to checkpoint inhibitors and that 1158 would have the role of removing the inhibition so that T-cells could go help and activate.

Okay, great. Thanks for that, and then one final quick question. Do you plan on having announcing any developments with your Hexokinase program within the next 12 months? Thanks for taking my questions.

Thanks Mike. At this time, we don’t have any further plans for announcing data on Hexokinase. That may change in the future.

Thanks.

Thank you. Our next question will be coming from the line of Paul Matteis from Leerink. Your line is now open.

Hi, this is Jeffrey Lin [phonetic] on for Paul Matteis, thank you for taking my question. First of all, you gave some indication on RCC would be prioritized but given in light of the new objective response, where do you place RCC in terms of their priority list both as a single agent? And as an additional question how will that accelerate the combination studies, you mentioned one with Everolimus but what about with cabozantinib, PD-1 et cetera?

Yes. We already have planned Everolimus trial before we got some of this new data and that has continued our focus on RCC. So we are contemplated doing additional studies that is combinations with other agents in Everolimus. There is a rationale to go ahead with other agents like tivantinib but the new agents cabozantinib and PD-1 are at the top of our list to consider and we do have studies with immunooncology agents which we will talk about at the ATC meeting in very shortly in a week, and then we will continue to look at Cabo as a possible partner as well. So say for RCC Everolimus and the ongoing trial is of great interest to us and the most likely combination that we would consider after that is actually in IO agents.

Okay. And then last question on the IO agent, the mechanism looks very similar to IDO and we have some preclinical data from Insight on the IDO and especially with in combination with the PD-1, so do you have -- and there is from the data looks like there is some limitation on the IDO PD-1 combination in terms of the immunotherapy naïve subgroup, do you foresee a similar result with your IO combination or do you believe that the product maybe differentiated enough that you could also use it in the immunotherapy pre-treated population?

I think it’s a differentiated mechanism for IDO. The only similarity is that they both work on T-cells to prevent them from activating through a nutrient sensor but the circumstances under which you have an arginase block is different than the circumstances under which you have an IDO block. And arginase appears to be quite ubiquitous across all the solid tumors we have looked at where we have human tissue samples, we have seen arginase staining myeloid cell. So they are present in actually newly diagnosed patients as well as metastatic patients. And the data in the literatures suggest that the myeloid component of tumor cells and the arginase component of tumor cells just increases with later stage cancer. So we think we have been effective both in newly diagnosed population and effective in later stage population based on the data from us and from the literature today.

All right, thank you very much.

Thank you.

Thank you. Our next question will be coming from the line of Matthew Andrews from Wells Fargo Securities. Your line is now open.

Hey, good afternoon. Hi Will, hi Jennifer and Susan. Thanks for the chance to ask a couple of questions. On 839, just based on your preclinical data there is a clinical activity in renal cell come as a surprise, if you look back at some of the preclinical slides from your corporate deck last year and interestingly enough I didn’t see any related to renal cells, I was curious what your thoughts are about the data set with 839 in renal cell this time?

Yes, if you just look across at tumors that are just derived from different tumor types and done in standard homograph mouse models, we know the agenda for renal, we do have some data with some renal cell lines like just like we had with other solid tumor lines and we didn’t see a difference. However, we do know that renal cell, clear cell carcinoma in particular, has demand for glutamine that comes from the DHL mutation and that pathway has been mapped extensively by others. So it’s possible at least for the clear cell reaction that you have glutamine that is genetically predetermined. But I would say that our wide testing of CB-839 in a variety of solid tumor types was undertaken because the therapy is new and is difficult to count on preclinical data to tell you where to go in the clinic, and so we are happy to find somewhat empirically that renal cell carcinoma is more sensitive to glutaminase inhibitors than other tumor types and we'll go with the data in the clinic.

Just a couple on 1158, so arginase has been a challenging target. Could you discuss how 1158 is different from previous attempts for drugs that failed in targeting this enzyme? And then what were some of the key challenges Calithera was able to solve and why do you feel confident of 1158 address those challenges at least based on your animal data to-date?

Arginase has been difficult to drug because if you develop an arginase inhibitor that's competitive with arginine you are dealing with the substrates that's highly charged. 1158 is competitive with arginine. So it’s the properties as the molecule that we altered to make it in early biosaleable drug that was really key to our success. The molecules, it's not difficult to make an arginine analog that's potent but it’s difficult to make an arginase analog with the right drug property in particularly oral bioavailable. So we are very confident that the molecules that we made that are orally bioavailable our 1158 and other closely related analogs are a real step forward and allow us to give into oral therapy to patients and in oral therapy that we expect to be very well-tolerated given those limited cell permeability of the 1158 and again we think it’s a major step forward for being able to go into the clinic with something that I think is quite unique in terms of its physical properties.

And then just lastly for the Phase 1 study that will start next year, beyond determining dose and safety, what is the go – no go decision relative to efficacy, do you just need to see an immunogenic response with an increase in CD-4, CD-8 or you really need to see some sort of stable disease is better as monotherapy? Thanks.

We are doing a fairly intensive biomarker look at early stage in the clinic in order to make sure that we are seeing CD-8 response or some kind of immunogenic response to the drug. So I do think that is very important. And then with the combination therapies able to attend upon the design of the specific trials, what the hurdle that we are looking to go past would be for specific combinations with checkpoint inhibitors in specific tumor types.

Thank you. And at this time, I am not showing any further questions. I would like to turn the call back over to Susan Molineaux for any closing remarks.

Once again, thank you for joining the call today. In closing, we look forward to seeing you at ASH as well as Investor conferences after the New Year. Thank you and have a good day.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.