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 Yanan Zhu - Wells Fargo Securities Jonathan Chang - Leerink Partners Greg Harrison - Citi

Good day, ladies and gentlemen, and welcome to the Second Quarter 2017 Calithera Biosciences Incorporated 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] I would now like to introduce your host for today's conference, Jennifer McNealey, Head of Investor Relations. Please begin.

Thank you. Good afternoon, everyone, and welcome to our second quarter 2017 conference call. Joining me today are Susan Molineaux, our Founder, President, and CEO; Stephanie Wong, 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 our 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 Quarterly Report on Form 10-Q 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. And with that, I will turn the call over to Susan.

Thanks Jennifer. Good afternoon, everyone and thank you for joining us today on our second quarter 2017 conference call. At Calithera, we are building an integrated biotechnology company that develops novel small molecule drugs targeting tumor and immune cell metabolism pathways for the treatment of cancer and other diseases with unmet needs. Tumor metabolism and immuno-oncology have emerged as promising new fields for cancer drug discovery and recent clinical successes with therapeutic agents in each field have demonstrated the potential to create fundamentally new therapies for patients. Our drugs are designed to take advantage of the unique metabolic requirements of tumor cells and cancer-fighting immune cells, such as cytotoxic T-cells. By building a pipeline of novel therapeutic product candidates, we believe we are creating multiple opportunities to positively impact clinical outcomes for patients and drive the development of each of our clinical candidates towards commercialization. Recent highlights of the second quarter include the presentation of clinical trial results of CB-1158 a first-in-class small molecule arginase inhibitor. In an oral presentation at the American Society of Clinical Oncology and the advancement of CB-839 into Phase II clinical trials in renal cell carcinoma and triple negative breast cancer. Yesterday, we announced the opening of a randomized Phase II trial in patients with relapsed metastatic, clear cell renal cell carcinoma. This trial compares treatment with our glutaminase inhibitors CB-839 and AFINITOR also known as everolimus to treatment with everolimus plus placebo. The initiation of this study marks an important milestone for our Company. As it is the first randomized trial of CB-839 and the trial that we believe has the potential for U.S. Food and Drug Administration registration and approval. In recognition of the lack of treatment options available to patients with relapse metastatic renal cell carcinoma. The FDA has granted Fast Track designation CB-839 in this setting. We have also opened a Phase II trial of CB-839 in combination with paclitaxel and triple negative breast cancer. Looking forward to the coming months. In the fourth quarter, we plan to present the initial results of CB-839 dosing combination with Bristol Myers Squibb's Opdivo nivolumab. And we plan to present an update on our TNBC program. And update for both the everolimus and the cabozantinib Phase Ib clinical trial results in RCC is planned for early 2018. And with that, I will turn the call over to Keith for an update on the pipeline.

Thanks, Susan. Let's begin with a more detailed update on CB-839, our most advanced product candidate. We are currently focused on forging a clinical development path for CB-839 in 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 a drug collaboration for Opdivo, also known as nivolumab and renal cell carcinoma, melanoma and non-small cell lung cancer. First, RCC, yesterday we announced the initiation of CX-839-005, a Phase II randomized, double-blind, placebo controlled trial designed to evaluate the safety and efficacy of CB-839 in combination with everolimus versus placebo with everolimus in approximately 250 patients with metastatic, clear cell RCC who have been treated with at least two prior lines of systemic therapy, which must include VEGFR-targeting tyrosine kinase inhibitor and at least one of either cabozantinib or an active PD-1 or PD-L1 inhibitor. Patients will be randomized in a two to one ratio. The primary endpoint is progression-free survival assessed by an independent review committee, overall survival will be assessed as a secondary endpoint. The multi-center international study will be conducted in the United States, Europe, and Canada. The FDA has granted Fast Track designation to CB-839 in combination with everolimus for the treatment of patients with metastatic RCC, who have received two or more prior lines of therapy. We have also opened a Phase II trial known as CX-839-007 in CB-839 is dosed in combination with paclitaxel in TNBC patients. Four single arm, open label, cohorts of African American and non-African American patients will be treated in both the early stage setting, where patients have no prior taxane treatment, as well as the late stage setting, after prior taxane therapy in the metastatic setting. The primary endpoint of this trial is objective response rate. We planned to present data from the TNBC development program in the fourth quarter of 2017 with additional data to be presented in 2018. We are also continuing to enroll our Phase II trial known as CX-839-004 in which patients are dosed with CB-839 in combination with anti-PD-1 agent nivolumab. Checkpoint inhibitors like nivolumab, promote the activation and tumor-killing properties of the patients' own immune system by activating cytotoxic T-cells. Our preclinical combination data suggests that CB-839 could have dual action in the treatment of cancer by first 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. This study is enrolling patients with clear cell RCC who are either naive to checkpoint inhibitors or who are treated with prior nivolumab and then had disease progression. We also have a cohort of RCC patients who have disease progression on nivolumab or are failing to respond to nivolumab, and who then receive CB-839 as an add-on to their ongoing nivolumab therapy. There are add-on cohorts of non-small-cell lung cancer and melanoma patients as well. The add-on trial design is of interest to us because these cohorts are looking at patients whom are currently progressing on or failing to have a response to an anti-PD-1 therapy. Therefore, we believe any responses observed in these patients dosed with CB-839 plus nivolumab would be clinically meaningful. We continue to be pleased with the enrollment of this trial, and we anticipate that the first data from this trial will be presented in the fourth quarter of 2017. Next, the arginase program, CB-1158 is a first-in-class immuno-oncology metabolic checkpoint inhibitor targeting arginase, an immunosuppressive enzyme in myeloid-derived suppressor cells or MDSCs responsible for T-cell suppression. We have confirmed that arginase-expressing MDSCs are found by immunohistochemistry in a wide range of tumor types including non-small cell lung cancer and both adenocarcinoma and squamous histologies, and number of gastrointestinal cancers, head and neck cancer and bladder cancer. CB-1158 is being co-developed with insight and co-development, co-commercialization collaboration we announced in January of this year. In June 2017, in an oral presentation at the American Society of Clinical Oncology, data were presented from the first 17 patients with advanced solid tumors dosed with CB-1158 as a single agent. Plasma levels of arginase were inhibited greater than 90% in all patients, and in 10 of 11 patients plasma arginine increased 1.5-fold or more. CB-1158 was generally well tolerated with no drug-related serious adverse events. The trial is continuing to enroll patients in the dose escalation phase of the study which will be followed by expansion cohorts in pre-defined tumor types and development of the combination of CB-1158 with an anti-PD-1 antibody. We are pleased with the progress of CB-1158 is making in the clinic and look forward to future updates on this program. With that, I'll pass it over to Stephanie for an update on our financials.

Thank you, Keith and good afternoon everyone. Calithera ended the quarter in a well-capitalized position, which will enable us to drive our clinical programs to meaningful value inflection points. Our cash, cash equivalents, and investments totaled $208.2 million at June 30, 2017. Revenue was $7.3 million for the three months ended June 30, 2017, and represents the portion of deferred revenue recognized this quarter from our agreement with Incyte. Research and development expenses were $10.1 million for the three months ended June 30, 2017, compared with $7.8 million for the same period in the prior year. The increase of $2.3 million was primarily due to an increase in the CB-839 program, including for Phase II start-up activities, as well as investment in our early stage research program, partially offset by decrease in the CB-1158 program including Incyte's co-funding of development costs. General and administrative expenses were $2.8 million for the three months ended June 30, 2017, compared with $2.7 million for the same period prior year. The increase of $0.1 million was primarily due to increases in professional services and higher personnel-related costs. Net loss from operations for the three months ended June 30, 2017 was $5.2 million or $0.15 per share. 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.

Thank you. [Operator Instructions] Our first question comes from Mike King of JMP Securities. Your line is open.

Hi, good afternoon, guys. Thanks for taking the question. I wanted to first ask you about the 005 study. Since the treatment paradigm for RCC has basically been abounded over the past couple of years and recent introduction of CABO as even accelerated that. Just wondered how you're thinking about what kind of expected PFS you should have a target patient population and maybe you can help us understand, where that benchmark is and talk about the study results that you guys looked at to help you kind of levels that what the PFS number ought to be in control?

Sure. Hi, Mike. So great question, in terms of the landscape, you're right. The RCC landscape has certainly been changing over the past couple of years due to the introduction of PD-1 therapy as well as cabozantinib. I think the bulk of the development that's happening now is really the development of IO therapies in the frontline setting, typically in combination with other agency either other IO therapies or with TKIs. So we would expect that activity to continue to evolve in the early lines, the first and second lines of therapy. I think everolimus will continue to be an option as patients move through those lines of therapy. So IO therapy and TKIs and then often patients will come back to prior therapies. The combination with CB-839 is being developed in that third to fourth line space after TKI, after PD-1 and in that setting will be an attractive option. To your question about expected everolimus sort of activity based on data reports in the literature, we would expect a PFS in the range of 3.5 months for that population and so that would be the threshold that we would want to significantly improve upon. And I'm forgetting I'm sorry, the second question was…?

When I was saying - what kind of recent data are you basing your decision on given that some of the studies even with currently available agents is all by current treatment standards. So what I'm trying to figure out is how you guys are derisking your study design and increasing your odd success.

Right, so from the perspective of our own data I get so on the one hand the data that were basic it on it in terms of our own data is a continuation of data that we presented back in November of last year that study has continued to enroll and those data as we mention will be presented in early 2018. So in terms of our own data but those are the data that will - that we have been basing our assessment that those data are substantially better than the expectation in terms of published literature for everolimus in the third line and beyond setting. In addition, I think the other piece of those data and it was presented at that time and the fact that what we're seeing is an improvement of comes in patients relative to their prior line of therapy. So that gives us strong confidence that what we're seeing in the combination of CB-839 plus everolimus is an improvement upon what they've seen in their prior therapy which as you know when we typically expect patients to do worse on subsequent lines of therapy. So that's some of the data that were basing the decision on.

Okay. Thanks for that. On 839 of dated that you percent later this year I'm just wondering if you can give us some insight into kind of the format that will see what readouts will you provide et cetera again just to help us understand what we should expect? Thank you.

Sure. So as I just mentioned with RCC we will be updating the enrollment the patients that have enrollment to the 001 study and those were data were last presented at the triple meeting Munich in November of last year. So those data will be updated we have additional patients RCC patients entirely clear cell patient population that's been enrolled. We will be providing response rates and providing an updated PFS result that will be more mature than the data presented at that time. In terms of triple negative breast cancer will be presenting data from the TNBC program that will include response rates and as those data we been looking across different populations so analyzing that data based on prior taxane therapy based on raise and we will give an update that will look like we similar to what we presented at San Antonio in December. And then for the 004 study which is the PD-1 combination and that will be our first presentation of data across from that study as you know that study has five cohorts, three our RCC cohorts, one is the melanoma cohort, and one of the non-small cell lung cancer cohort and we expect to be presenting data across all of those cohorts we've been rolled to all of those and we would expect to have above 40 patients of data that are distributed across those cohorts primarily looking at response rate at this point in that population.

Okay. That was just kind of - appreciated. And do you think that will - do you think you might be able present that [indiscernible].

Yes, that's the timeframe and which we're looking to be presenting the data in that fourth quarter timeframe.

Okay. Perfect. Thanks so much.

Thank you. Our next question comes from Jim Birchenough of Wells Fargo Securities. Your line is open.

Hi, thanks for taking the question. This is Yanan in for Jim today. A few questions. So first on the 1158 Phase I dose escalation status. Are you building more patients at 150 make level or and also are you planning to go higher on the dose.

Yes, so that dose escalation is under way and we will be continuing to escalate until we see either - any kind of a signal that might be a safety signal that needs - that forces us to stop or until we have sufficiently hit target to have the pharmacogenomics activity that we need. So we do plan on continuing to enroll into that 150 milligram cohort.

I see. And in terms of the urinary orotic acid elevation, I recall you have clarified that it is not clinically meaningful, it's just the biomarker for urea cycle capacity. Is there anything in the dose limiting toxicity criteria that maybe related to urea cycle, for example maybe ammonium is a marker to look at rather than orotic acid?

Yes. So you're exactly right, so orotic acid is a biomarker for inhibition of the urea cycle and it's very sensitive and very low sort of clinically insignificant levels of your urea cycle inhibition, we will see some orotic acid elevation. In terms of other biomarkers, we're also following ammonia and we're also following blood urine nitrogen as other potential more clinically significant markers of urea cycle inhibition. So those are also being followed and will be considered in the selection of the dose.

Got it. Thank you. And for the Opdivo 839 combo data at [safety]. Are we going to see the add-on cohort data as well?

Yes, absolutely. So we have five cohorts and three of those cohorts will be add-on cohorts, one for each indication that we're studying, so there will be one add-on cohort for melanoma, one for RCC, and one for non-small cell lung cancer.

Yes. So this design is quite intriguing because it enrolls patient who either are progressing or have failed in nivolumab and then you give both the nivolumab and 839 and there's no gap. I assume no big gap in nivolumab used in those patients. So could you help us think about in terms of what is considered activity because these patients are progressing or failing, so presumably even stable disease could be considered promising? And also just from that perspective because of this unique design in terms of regulatory potential, because this - if you see some activity there, it is pretty impressive activity. So if that happens what is your regulatory strategy in there? Thanks.

So you're absolutely right. I think the design of the study is exactly as you have kind of interpreted it which is that those add-on cohorts are meant to be a very high bar to see activity. Certainly responses in that population would be very interesting and so we've designed the study to focus on response rate as the primary endpoint, but you're right. I think even a significant signal of stable disease would also be interesting. So we are looking at the totality of the data, but response rate is the primary endpoint. I think responses are unequivocal in terms of how one would interpret those, but stable disease is also of great interest. From a regulatory perspective, it's too early to really discuss the regulatory strategy, but it's an excellent point that you make and something that we're certainly aware off.

Great. That's very helpful. Thank you.

Thank you. Our next question comes from Jonathan Chang of Leerink Partners. Your line is open.

Thanks for taking my questions and congrats on the progress. First question, I may have missed this part in the prepared remarks that when should we expect to see an uptick from the 839 everolimus Phase I combination and RCC?

Yes. That data will be presented in early 2018 and along with that we will be including data from the cabozantinib combination. As you may know, we've enrolled a number of patients with CB-839 plus cabozantinib in order to evaluate the safety of that combination. So we'll be able to combine data of the cabozantinib, combination data with the everolimus data and present both of those in early 2018.

Okay. Just so make sure I understand this right, so I think originally you guys guided to the everolimus combo data in second half 2017 as well as cabos safety data at the year-end 2017. Is the certain new guidance that anything to read into there or is it just the opportunity to fine the right conference to present both at the same time, any color there?

Yes, I think actually the later point is exactly right. So we wanted to be able to combine with the cabozantinib data and give a reasonable dataset on the cabozantinib combination and do it at the most appropriate conference.

Okay, great, helpful. And then on 1158, when might we see the next update on the monotherapy portion of the study? And any color as to progress on initiating the combination portion of the study?

So in terms of the data that will come out, this is now as you know we're developing in collaboration with insight. So this will be a joint decision that will be decided with them. So at this point we don't have any guidance on that, but that will be something that we that we discuss with inside as we move forward and the progress of the study has been going very well. So we would expect to - as I mention as we select a dose - recommended Phase II dose for the monotherapy will move into both the monotherapy expansion cords as well as into the PD-1 combination. We are quite pleased with the progress of the program.

Great, thank you.

Thank you. Our next question comes from Robyn Karnauskas of Citi. Your line is open.

Hi, this is Greg Harrison on for Robyn. Thank you for taking my question. Just wondering how do you feel about your positioning after some of the recent failures of checkpoint inhibitors and how these failures in the space changed your strategy at all?

So in terms of changing the strategy, no it hasn't. We were actually quite happy with our positioning with regard to - so our strategy as you know it includes combinations with everolimus and cabozantinib, which in the RCC space, which are unaffected by those data and then our combination data with PD-1, the way we've designed these studies is to look for activity in patients that have failed prior check point. So if in fact we're able to generate impressive activity in that setting I think that would be sort of an unequivocal win that we can move forward with.

Great, thank you.

And I have no other callers in the queue at this time. I'd like to turn the call back over to Susan Molineaux for closing remarks.

Thank you. And we look forward to seeing you at upcoming Investor conferences. Good afternoon.

Ladies and gentlemen, thank you for your participation in today's conference. You may disconnect. Have a wonderful day.