Jennifer McNealey - Senior Director, Investor Relations Susan Molineaux - Founder, President and Chief Executive Officer Stephanie Wong - Vice President of Finance Keith Orford - Senior Vice President of Clinical Development

Michael King - JMP Securities Kripa Devarakonda - Citigroup

Good day, ladies and gentlemen, and welcome to the Calithera Biosciences Inc., Fourth Quarter 2016 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 be given at that time. [Operator Instructions] As a reminder, today's program maybe recorded. I'd now like to introduce your host for today's program Jennifer McNealey, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to the fourth quarter and year-end 2016 conference call. Joining me today are Susan Molineaux, our Founder, President and CEO; Stephanie Wong, our Vice President of Finance; and Keith Orford, Senior Vice President of Clinical Development. 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 the 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 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'll turn the call over to Susan.

Thanks, Jennifer, and good morning, everyone, and thank you for joining us today on our fourth quarter and year-end conference call. 2016 was a transformative year for Calithera as our lead product candidate CB-839 entered into multiple novel combination trials and progressed towards Phase II, and CB-1158 advanced into clinical development which led to a collaborative partnership with Incyte Pharmaceuticals for the development and commercialization of CB-1158. In addition to receiving an upfront payment and equity investment from Incyte Pharmaceuticals totaling $53 million in January 2017, we are pleased to announce that subsequent to the end of the year we received approximately $38 million in gross proceeds from the sale of common stock pursuant to our at-the-market offering program with Cowen. Given our year-end cash balance of $51.8 million and the additional upfront payment and equity investment from Incyte and proceeds from the ATM, we believe we are in a strong financial position to drive the development of each of our clinical candidates towards commercialization. We plan to execute our clinical strategy in parallel with maintaining a focused drug discovery pipeline to meet our ultimate goal of developing novel small-molecule therapeutics. Now for an update on our clinical program. First, I will talk about our glutaminase inhibitors CB-839. We continue to be very excited about our new clinical data with our first-in-class small molecule inhibitor glutaminase. Our current focus is on forging a development path in both the renal cell carcinoma and triple negative breast cancer. We are also studying the development of CB-839 in combination with immuno-oncology therapies and are pleased to be working with Bristol Myers in drug collaboration for opdivo, the approved anti-PD-1 antibody. First, RCC, in a plenary session at the EORTC-NCI-AACR Symposium in November new data was presented with CB-839 in combination with everolimus. 15 renal cell carcinoma patients were treated and evaluable for response, including 12 clear cell patients, and three papillary patients. 93% had disease control; one patient had a partial response, one patient had progressive disease, and 13 patients had stable disease. The median progression free survival was 8.5 months and for the majority of patients, their time on CB-839 and everolimus therapy was longer than their time on their prior therapy. In the clear cell patient population the disease control rate was 100%. We continued to enroll patients in this combination cohort as well as a cohort of patients dosed with CB-839 in combination with cabozantinib. We plan to update you on the everolimus combo trial later in 2017. Our randomized Phase II trial of CB-839 in combination with everolimus just planned and expected to initiate in the second half of 2017. In August 2016 we initiated the CB-839 plus Nivolumab combination trial. Checkpoint inhibitors like Nivolumab promote the activation and tumor killing properties of the patients own immune system by activating cytotoxic T-cells. Our pre-clinical combination data suggested the CB-839 would have dual action in the treatment of cancer first by starving the tumor cells and second, facilitating the activation of T-cells in the nutrient deprived tumor microenvironment. This Phase I/II study is assessing the safety, pharmacokinetics and pharmacodynamics of CB-839 and Nivolumab. The study is enrolling patients with clear cell, renal carcinoma who are either naïve to checkpoint inhibitors or who have been treated with prior Nivolumab and then progress. We also have a cohort of RCC patients who are progressing on Nivolumab or failing to respond and who receive CB-839 as an add-on therapy. There are also cohorts of add-on lung and melanoma patients as well. And we are pleased with the everolimus trial and anticipate that clinical data from this trial will be presented in the second half of 2017. Next, an update on our TNBC trial in combination with paclitaxel. New data was presented at the 2016 San Antonio Breast Cancer Symposium in December on 28 triple negative breast cancer patients treated with CB-839 in combination with paclitaxel; 23 patients were evaluable for efficacy. Among the 16 evaluable patients treated with CB-839 doses of at least 600 milligram bid, there were five partial responses for an overall response rate of 31% and disease control response or stable disease in 11 patients, for a disease control rate of 69%. In addition, the combination overcame resistance to paclitaxel in heavily pretreated TNBC patients. There was a 38% response rate and 50% disease control rate in patients who received prior taxanes in the metastatic setting. Population had already been treated with multiple drugs including taxane, so would not be expected that they would responded well to their next therapy. In this population of patients, who had a best responses progressive disease when given taxanes in the metastatic setting before, the response rate of CB-839 and paclitaxel was 38%. This raises an interesting question. It's an addition of glutamine utilization in paclitaxel resistant tumors makes a newly sensitive to paclitaxel with earlier stage patients who had not yet received paclitaxel as a treatment for metastatic disease have a higher response rate if given a combination of paclitaxel in CB-839. This is a question that we would like to answer in future studies. We also observe that four out of five of our responses were in patients self-identified as African-American. This was interesting as others have reported the TNBC tumors have higher glutamine utilization rates than ER positive breast tumors and that the tumors from African-American TNBC patients have higher glutamine utilization rate in tumors from non-African-American. These observations suggest that there may be a higher dependency on glutamine in the tumors of African-American patients, which may help to explain our response rates in this population. It has also been observed that the incidence of TNBC in the United States is higher in African-American women then in Caucasian or Hispanic women. We are interested in continuing our studies in TNBC to ascertain of African-Americans or other patients extremely have high glutamine utilization rates may have greater benefit than other patients from treatment with CB-839 in paclitaxel. So we plan to start a Phase II study in 2017 in metastatic TNBC patients and this study will enroll a balanced population of African-American and non-African-American patients in both the early stage setting where patients have no prior taxane treatment as well as late stage setting. The initial stage of this study will enroll patients in single arm cohort, but we will have the flexibility to amend the protocol. We expect additional data from the ongoing study to be reported in the second half of 2017. Next the arginase program, in January, Incyte and Calithera announced the global collaboration and license agreement for the research, development and commercialization of the first-in-class, small molecule arginase inhibitor CB-1158. Under the terms of the collaboration and license agreement, Calithera has received an upfront payment of $45 million from Incyte in addition to an $8 million equity investment. CB-1158 entered clinical trials in September 2016, and pharmacodynamic data on the first three patients was presented at the Society for Immunotherapy of Cancer or SITC meeting in November 2016. We're excited to be working with Incyte and look forward to additional updates on this program later this year, including the initial monotherapy data to be presented in the second quarter. Before I pass the call on to Stephanie, I would like to highlight the promotion of Frank Parlati, who is named Vice President of Research. Frank joined Calithera in 2012 and someone who might have enjoyed working with in past company as well as here at Calithera. Immediately prior to joining Calithera, Frank was the Founder and Senior Director of Biology at Cleave Biosciences. And prior to that Frank helped scientific roles at Proteolix and Rigel Pharmaceuticals where we work together. With Frank's leadership and the excellent science team we have in place, we plan to continue to develop novel drugs in the metabolic immuno-oncology study. And with that, I'll pass it over to Stephanie for an update on our financials.

Thank you, Susan, and good afternoon, everyone. [Calithera's] 2016 and well capitalized decision, which will enable us to drive both of our clinical programs to meaningful value inflection point. And for our financials cash, cash equivalents and investments totaled $51.8 million at December 31, 2016 compared with $71.9 million at December 31, 2015. Our year-end cash position does not reflect the $53 million from Incyte proceeds from $38 million raised through the ATM, also which were received subsequent to year-end. Research and development expenses for the full-year 2016 were $27.7 million, compared with $23.7 million in the prior year. The increase of $4 million was due to an increase of $2.3 million due to higher employment related expenses and an increase of $1.7 million primarily related to the advancement of CB-1158 to a Phase I clinical trial. Research and development expenses for the fourth quarter of 2016 were $6.6 million, compared to $5.8 million for the same period last year. General and administrative expenses for the full-year 2016 were $10.6 million, compared with $9.1 million in the prior year. The increase of $1.5 million was primarily due to higher employment related expenses, including stock-based compensation expense. General and administrative expenses for the fourth quarter of 2016 were $3.0 million, compared to $2.3 million for the same period last year. Loss from operations for the three months and year ended December 31, 2016 was $9.5 million and $38.0 million respectively. For financial guidance for 2017, Calithera expects that its cash, cash equivalents and investments will be between $95 million and $105 million at the end of this year, exclusive of any funds arising from new collaborations or partnerships, milestone payments, additional equity financings or other new sources and capital. And with that, I will now turn the call back over to Susan.

Thank you, Stephanie. And with that operator we're happy to open the line for questions.

[Operator Instructions] Our first question comes from the line of Mike King from JMP Securities. Your question please.

Hi, guys. Thanks for taking the question and congrats on the progress. It's really simple, I know Stephanie you gave the year-end cash expectations, but I just wondering if you could comment about how long the cash runway will last to because by our calculations, it's a pretty long time, but I'm not sure if our expectation should be that costs will begin to ramp up as you expand your clinical programs?

Thanks, Mike. We are currently expecting our cash to losses through the end of 2019.

Okay. And could you just comment about your thoughts on spend at least over the next 12 months, just as far as is there an inflection coming or how should we think about that?

Well, our operating cash burn will be between $40 million and $45 million based on our cash guidance with $95 million to $105 million.

Okay. All right. Thanks very much.

Thank you. Your next question comes from the line of Kripa Devarakonda from Citi. Your question please.

Hey, guys. Thank you so much for taking my question and congratulations on all the progress. My first question was about the PD-1 combo trial with CB-1158. Can you talk a little bit about when you plan to start that and if there is any particular indication that you're going to focus in initially? Is there any likelihood that we might see combo data by the end of this year? And then I have another question about the CB-839 cabo trial.

Sure. So timely question on the PD-1 start that does depend on us completing a dose-escalation single agent phase of the study, which is ongoing right now and once we get to the recommended Phase II dose for 1158 at the end of that dose escalation, we would be prepared to start PD-1 combination trial, which would require a little bit of dose, the escalation and then up to full dose 1158 plus PD-1. So it's hard to say exactly when the PD-1 combination trials would start, but our current expectation is that they would start in the second half of this year and we would not expect data on the combination until 2018.

Okay. Thank you. And just curious about how the enrollment for the CB-839 cabo trial is progressing and if we expect to see data by the end of this year?

That trial is enrolling, again it's a single-arm trial. We may have some safety updates by the end of the year, but I would not expect to have PFS numbers on those patients because they just started enrolling very late last year, so not this year, but 2018.

Okay. Thank you so much.

However, just to extend my answer to your question, we do have plans and have talked about our plans to start a randomized cabozantinib plus CB-839 versus cabozantinib alone trial in early 2018. We are using the cabo - combo trial primarily to obtain safety data on the combination.

Okay. That's very helpful. Thank you.

Thank you. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Susan Molineaux for any further remarks.

I just want to thank you all for listening and we look forward to seeing you soon.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.