Rain Enhancement Technologies Holdco, Inc. Q3 FY2021 earnings call

• Milademetan and RAD52 programs: Rain continues to advance milademetan and RAD52 programs. The Phase III trial, MANTRA study for mila in liposarcoma is proceeding as planned. The MANTRA - 2 study is expected to dose the first patient shortly and will enroll 65 patients in a tumor - agnostic basket study. - Reprioritization of clinical strategy: Rain reprioritized its clinical strategy for the third planned study towards Merkel cell carcinoma (MANTRA - 3) for reasons including new non - clinical data showing efficacy, prior signs of activity with MDM2 inhibition in Merkel cell, and a larger addressable market. - R&D day: Held an R&D day with prominent key opinion leaders across various treatment specialties, highlighting opportunities for milademetan in different cancer types.

For the third quarter of 2021, Rain reported a net loss of $18.4 million compared to a net loss of $10.4 million in the third quarter of 2020. Research and development expenses were $15.3 million in the third quarter of 2021 versus $7.9 million in the third quarter of 2020, primarily driven by milestone fees related to the initiation of the Phase III clinical trial. General and administrative expenses were $3.2 million in the third quarter of 2021 compared to $0.6 million in the third quarter of 2020, due to increases in various third - party costs. As of September 30, 2021, Rain had $150.1 million in cash, cash equivalents, and short - term investments. Rain projected full - year 2021 operating spend to be approximately $50 million to $60 million and year - end balance of approximately $137 million to $147 million in cash, cash equivalents, and short - term investments.

• Projected full - year 2021 operating spend is approximately $50 million to $60 million. - Projected year - end balance of cash, cash equivalents, and short - term investments is approximately $137 million to $147 million. - MANTRA - 3 is expected to start in the middle of 2022, enrolling 34 patients in the U.S. in the second line or later settings among patients relapsed to checkpoint inhibitors. - MANTRA - 2 is expected to provide an interim update in the second half of 2022.

• Forward - looking statements involve assumptions that may not materialize, and actual results could differ materially from those anticipated. Risks are described in Rain's quarterly report on Form 10 - Q for the quarter ended March 31, 2021 and subsequent filings with the Securities and Exchange Commission.

Q: Could you be a bit more specific about what you saw in the recent MANTRA - 2 data from the Dana - Farber for the Phase II in Merkel cell carcinoma? And regarding the basket trial, what happens if you have multiple biopsies and you get originating MDM2 copy number with some biopsies below and others above the copy number of twelve threshold?

A: Bob stated that the compelling data for Merkel cell was demonstrating potent activity of milademetan in multiple preclinical models including patient - derived models showing significant tumor regression. Richard said that for the basket study, they will accept local testing as a criteria for entry, and all patients entering will have their tumor tested to address potential heterogeneity.

Q: Regarding the basket trial, what happens if you have multiple biopsies and you get originating MDM2 copy number with some biopsies below and others above the copy number of twelve threshold?

A: Richard said they will accept local testing as a criteria for entry, and all patients entering will have their tumor tested and that will provide how much heterogeneity across the sites and to some extent address potentially the heterogeneity that may be seen within sites.

Q: Based on the observation of the MDM2 application across different tumor types, how should we think of the mix of the tumor types in this study? And what would be your registration strategy?

A: Richard said the study is open to all tumor types, and at present the strategy is tumor agnostic. Avanish added there is anecdotal data from the Phase I trial of milademetan with high level of MDM2 amplification showing tumor regression in different tumor types.

Q: Do you have a sense of the average copy number amplification that you see there? And whether it frequently meets that threshold of being mutually exclusive with p53? And is there any plans as part of the MANTRA study to sort of retrospectively look at that?

A: Bob said in dedifferentiated liposarcoma, average copy numbers are around ten to seventeen copies per cell, and the relationship of mutual exclusivity with p53 holds up in multiple populations. Avanish said yes, they are going to review tumor samples and look at MDM2 copy number, p53 status and other biomarkers as well in the MANTRA study.

Q: What needs to happen to commit to exploring that positive signal that you've seen preclinically and take that into the clinic?

A: Richard said they are considering the GATA3 continuously and will articulate when they make a decision on whether a complete sponsored study or another manner of evaluation is most appropriate, taking into consideration financial resources and cash runway.

Q: Clearly you prioritized this MANTRA - 3 studies partly because of the opportunity, but can you just help us frame that a little more specifically, how you think about the size of that opportunity?

A: Avanish said around 3000 patients in 2020 statistics, growing quickly, 80% are MDM2 dependent, and about a third are amenable to systemic therapy on an annual basis, with a patient population of systemic therapies per year of between 1000 to 1500 patients.

Q: How would you think about framing out the kind of the clinical bar mix of tumor types and lines of study in that basket trial? And given the interim readout will be about twelve months from now, do we expect most response rates or will you be in a position at that point, given kind of pace of enrollments, at least early indicators of what durability of responses?

A: Robert said for MANTRA - 2, they don't fully know what the FDA would consider approvable for an agnostic indication but feel response rates in the range of 40% with durability in the range of 5 to 6 months would be meaningful. Richard said they plan to have a meaningful follow - up, waiting till they have about 4 months worth of follow - up data to consider responses in terms of clinical lab durability.