Q3 2019 Earnings Call
Earnings Conference call.
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I'd now like to handle the conference to your speaker today, Patty Eisenhaur, Vice President Investor Relations and corporate Communications. Please go ahead.
Thank you and good morning, everyone and thank you for joining us today for a momentous conference call to discuss financial results and operational highlights for the third quarter 2019.
Today's call is being webcast and will be available for replay on the investor section of our website at my mentor pharma Dot com.
Joining me on the call with prepared remarks, or Craig Wheeler, President and Chief Executive Officer, and Michelle Robertson Chief Financial Officer.
Well on our Chief business Officer, and Santiago, a real our Chief Medical Officer will also be available for the Q and a portion of the call.
Following our remarks, well open the call two question.
Before we begin I'd like to mention that are called will contain forward looking statements about financial outlook business plans and objectives, another feature events and developments, including but not limited to statements about the you efficacy safety potency tolerability dosing convenience and market potential and reception of our products and product candidates.
Including their potential as best in class agents.
Development design timelines and strategies for product candidates the design timing in goals of clinical trials and availability timing and announced an update on results I.
Hypotheses regarding certain actions and effects of our product candidates in clinical studies.
Timing of regulatory filings regulatory approvals and launches of our product candidates and products.
Pencil competition in revenues for products and product candidates.
Overall goals and strategies non-GAAP operating expense guidance, including our anticipated collaborative revenues and our cash and cash equivalents. These statements are subject to risks and uncertainties that may cause actual results to differ materially from that was projected east risks and uncertainties, including those described in the slide titled caution.
Mary note regarding forward looking statement included in the presentation accompanying this call and under the heading risk factors in our quarterly report on Form 10-Q , four the poor June 30, 2019th filed with the Securities and Exchange Commission as well as other documents, we may file from time to time with yes.
Any forward looking statements speak only as of today's date and he assumes no obligation to update any forward looking statements made on today's call.
I will now turn the call over to Craig.
Thank you Patty and good morning, everyone.
During 2019, our focus has been on execution of our clinical programs as we advanced our pipeline of novel Therapeutics for rare immune mediated caesars towards proof of concept.
Momenta is leveraging its rich protein engineering heritage and immune biology expertise to develop these programs all of which act on a different mechanism FC biology to combat pathogenic antibodies, a key driver of auto aloe immune diseases specifically.
We'd never Kalamazoo, we are targeting B F CRN receptor, which responsible for maintaining the long half life fiveg anti bodies in circulation and eating the transported by GE across biologic membrane.
[noise] with M. to fight for we have enhance enhanced the violation of ideology with the goal to reduce required doses and IB infusion times as well as improve on a difficult adverse event profile that accompanies I'd be a G. As a standard of care for many RG gene mediated auto immune diseases.
And with them to 30, you have designed an F.C. multiyear essentially three F.C. regions joined together, they're buying be FC gamma receptors without activating them.
Enabling the drug to prevent immune complex is from binding FC gamma receptors and activating the immune system.
Today, we will focus on nipple Kalamazoo and M to fight for.
As both are expected to report proof of concept data next year.
Importantly, both of these agents have the potential to offer significant benefit to patients and to reshape the treatment landscape for a range of rare and large market our gigi mediated diseases.
I'll begin with no Mccallum App R F CRM targeted antibody.
Based on our phase one data, we believe NIPA Calumet has the potential to be a best in class agent, but superior safety efficacy and convenience versus standard of care drugs and other molecules in this class.
We are pursuing three indications.
Senior driver.
Warm auto immune hemolytic anemia in the auto immune area.
And hemolytic disease of the fetus, a newborn or h. DFN in the field appeal maternal medicine.
The first of the NIM Kalamata studies to readout will be by that city EM G. Our phase two study in my Feeney Gratis from which we expect to report topline proof of concept data in the second or third quarter of 2020 .
This study is progressing nicely most sites are open and the trial is enrolling patients as per plan.
We expect these data will provide an important window on the optimal dose that could allow us to achieve greater than 80% Ige reduction observed observed in phase one.
While extending the dosing interval to ease the patient burden.
Ultimately, we believe we will be able to achieve once monthly dosing.
And that the comprehensive dosing data generated from this multi arm phase two could provide a more informative label for positions.
Finally, if our potency advantage translates into enhanced efficacy the bigger effect size may allow us to pursue a smaller phase three study versus competitors.
Importantly, achieving success in this trial would be a strong indicator of potential success in other auto immune diseases.
Even nipple Callum Babs mechanism for blocking F. CRM.
[noise] on last quarter's call, we introduced our warm auto immune hemolytic anemia clinical programs.
Hemolytic anemia is a severe debilitating disease characterized by the destruction of red blood cells due to the presence of pathogenic IBG auto antibodies.
[noise] philosopher Retrocyte results in severe anemia weakness in fatigue.
The unmet need in this indication is significant there are roughly 45000 patients in the U.S.
With most most diagnosis occurring in adulthood and no approved therapies.
As high as 30% of patients with severe hemolytic anemia, our admitted to and I see you.
Where the current standard of care includes rescue blood transfusions.
Corticosteroids immuno suppressant and removal of the spleen.
All of which are associated with significant side effects and negative quality of life consequences.
We believe nipple Kalamata will ameliorate the physical and laboratory manifestations of hemolytic anemia by blocking Fcr unmediated recycling it by GE and reducing circulating levels of antibodies, including the pathogenic auto antibodies that caused that disease.
We have been granted fast track designation in this indication.
Representing a fast to market opportunity and potentially we could be the first fcr inhibitor launched in this indication.
We are exploring the syndication with our newly branded energy clinical trial.
A randomized double blind placebo controlled multicenter adaptive phase two three study.
Designed to investigate the safety efficacy and tolerability of simple telling us.
In patients with primary or secondary hemolytic anemia.
In this study patients will be randomized one to one to one to receive bi weekly or monthly IB infusions, I've never callon up versus placebo.
The trial is expected to enroll 90 patients on a 24 week treatment period.
The primary endpoint is based on the change from baseline hemoglobin level.
Secondary endpoints, including markers of hemodialysis and fatigue scale.
Clinical sites are currently being activated and patient recruitment is underway.
If successful.
It's adaptive phase two three trial could serve as a pivotal study in hemolytic anemia.
We anticipate topline data around the and 2021.
Thanks to the fantastic results from our recently completed infusion study, we have incorporated a significantly shorter infusion time in this trial.
Our infusion study establish the safety and Tolerability of a best in class IB infusion time.
As low as seven and a half minutes for 30 makes per keurig.
The dosing performance that we are seeing brings us ever closer to our goal of providing a patient friendly dosing for this high dose product.
The short infusion time, coupled with what we hope will be our long dosing interval of once monthly.
Will enable us to provide a convenient IB both at home and infusion centers.
I'd also I'd like to update you on our plans for a subcu dosage form we have developed stable high concentration subcu formulation.
Based on the potency we have seen to date, we expect it will be a low volume administration.
We plan to introduce the Subcu form any future trial. Once we have established the dose promote phase two Mg study and with a goal that we it will be available when we launched the product in Mg.
Our third nipple comment about the trial unity is our first trial in fetal maternal medicine.
In area like auto immune disease has multiple potential diseases that could benefit from this therapy.
This trial isn't hemolytic disease of the fetus, a newborn or each DFN.
Where a mothers aloe antibodies crossed with sand and attack the fetal red blood cells.
F CRM.
Yes, the receptor that transfers antibodies from the mothers circulation to the field circulation.
No Kalamazoo ability to maintain full receptor occupancy enables total blockage of pathogenic aloe antibodies from passing the mother Sofias.
We believe enough Mccallum out can make a profound difference in this devastating class a fetal maternal diseases.
Studying h. DFN requires a highly specialized clinical program. This trial is being conducted in especially centers Andre strict protocol to protect the help of both the mother and baby.
The H. DFN program has received fast track designation from the FDA.
A nod to the high level up unmet need in the area and the potential difference duplicate allomap could make.
We are currently enrolling patients with the aim at 15 patients 15 patient study readout in 2021.
The strong mechanistic evidence, including lowering of systemic EISG observed in our phase one study and its ability in our preclinical work to block a central transfer a both pathogenic antibodies and the drug itself highlights nipple callon ABS potential to transform the treatment landscape and H. DFM.
We also believe that proof of concept in this indication would validate our approach in feed on maternal antibodies disorders more broadly.
Given the common mechanisms of all of these diseases.
There are few agents in today's pharmaceutical landscape that have such a broad multi disease potential.
We believe nipple Callum Abbvie as a best in class molecule in the Fcr and class and have built the development program to highlight that best in class profile.
Data to date and the work we are now undertaking have demonstrated that achieves the greatest IBG reduction of any agent.
As a promising safety profile shorten infusion times and with the fetal maternal work, we're doing access to the broadest market any agent in development.
We believe there is enormous commercial opportunity here and look forward to updating you as we advance this clinical program for [noise].
I'll now turn to M. Two five for our hyper Sialylated I'd UGI program.
I'd be Archie today generated $4.5 billion in revenue across many indications despite a significant treatment burden for patients.
Specifically I be edgy requires very high doses to demonstrate efficacy.
Which can required two or more days to administer and often leads to significant adverse events.
Our preclinical data show, our enzymatics violation of Ivy I cheese could produce a product with up to 10 times more potent season ideology.
Importantly, the much lower protein mode has the potential to significantly reduce the profile associated with five yaggi.
Yes, as we have demonstrated matter animal models, we can administer a significantly smaller equivalent dose and eliciting an equivalent effect, we believe him to fight for could transform this market in terms of safety tolerability patient convenience and treatment cost.
Also of note with increased potency there is a possibility that by delivering higher doses, we maybe able to enhance efficacy.
[noise] [noise] understanding the dosing ratio in humans is critical which drives the design of our first trial.
We are currently evaluating M to fight for any for part phase one two study designed to evaluate dose equivalents would ideology.
We have completed part a single ascending dose arm in healthy volunteers and we have advanced into part B, a single ascending dose arm patients with immune thrombocytopenic purpura right TP.
M. to five four is likely to be our first the first of our novel programs to reach proof of concept in 2020, which we would plan to announce.
After completing part B of the trial and the first cohort of our part C crossover study to validate the dose we believe as appropriate.
This product if successful could transform the treatment landscape in today's over 4 billion dollar supply constrained IB yaggi market.
We look forward to reporting preliminary data from this program in the first half of 2020 .
We also have much going on in our research groups such as in our Sip set bodies and in novel Biology.
We're not quite ready to talk details about these programs publicly yet, but we will update you on our plans to do so in the new year.
And with that I'll turn the call over to Michelle to review the third quarter 2019 financial results.
Thanks, Craig.
Good morning, everyone.
We reported a net loss for the third quarter, a 45 million compared to net worth 50 million for the same quarter last year.
The decrease was primarily due to a noncash gain we received as a result of our lease modification and lower restructuring costs.
Product revenue, which includes profit share earn from sandal sales if I could talk of chronic was $6 million compared to 14 million same period and 22.
The decrease was primarily due to continued market competition.
Research and development revenue was 840000, a decrease from a million dollars in the same quarter of 22.
The decrease was primarily due to lower reimbursable revenue for the corporate expense.
Third quarter total GAAP operating expenses were $53 million compared to the 67 million for the same period in 2000.
The third quarter GAAP operating.
Included a $14 million game, reflecting a reduction in or at least flexibility in our related write a few faster as a result of our amended we had a 320 Twond Street locations.
[noise] [noise] third quarter R&D expense increased to 46 million compared to 31 million in the same period in 2018.
The increase was primarily due to an increase in manufacturing clinical trial costs and the potential than that and M side for offset in part by lower personnel car. Following the company's workforce reduction in the fourth quarter 2018, and lower lease cars.
Third quarter DNA expense essentially unchanged at 20 million.
For the third quarter of 2019, our non-GAAP operating expense was 46 million, which includes the $14 million gain resulting from the reduction of at least liability.
Our non-GAAP operating <unk> is defined as total operating expense less stock based compensation less restructuring car less collaborative reimbursement.
Finally, we ended the third quarter number $26 million in cash cash equivalents in marketable securities compared to 449 million at the start of the year.
Our third quarter cash position includes the addition of $36 million, reflecting the release of the bond related so the answer stuff. That's the parents sodium injection.
Turning now to our guidance for the remainder of the year, we expect fourth quarter non-GAAP operating expense $50 million to $60 million higher than the 45 to 55 million. We previously provided.
Accelerated manufacturing investment increased legal expenses are expected to contribute to the highest funds.
Despite the anticipated increase in operating expense, we continue to expect our current cash cash equivalent to take us through upcoming proof of concept read out.
As a reminder, non-GAAP operating expenses to find its total operating expenses less stock based compensation less restructuring car Emma collaborative reimbursement.
With that I'll turn the call back over to Greg for closing remarks.
Thanks Michelle.
As stated we are well capitalized to achieve our goals and milestones for the remainder of 2019 and beyond as we head into 2020 .
We will continue to advance our ongoing clinical studies of nipple Kalamazoo nm to fight for proof of concept.
We will continue to drive the progress of our research teams as they work on Sept body technologies and novel biology to identify additional opportunities for pipeline programs.
And we look forward to the progress if im 710, our bio similar idea program Mylan misleading as we move towards market formation in the 2023 timeframe.
As well as our end to 30 program at Cfls, leading which should have additional data sometime next year.
Thank you for joining us and I'll now turn the call back over to the operator to get the QNX underway.
Thank you as a reminder to ask the question you need to press star one on gets telephone.
To withdraw your question press the pound <unk>.
They send viable we compile becoming a roster.
And our first question will come from the line of Danielle barrel from Piper Jaffray you may begin.
Hi, guys. Thanks for the questions. Craig you said last quarter that you enrolled 20 patients about 20 patients in the I'm GE trial curious if you could tell us how many additional patients were added in Threeq you and then for EM to 54, you have the preliminary data one could parts being the first cohort a part C.
Can you remind us what you're looking for in part B to justify moving to part C and will you update the street when they start artsy.
Sure. Thanks for the question first on last quarter I don't think we gave specific patient numbers there were speculation by by questioners on the on the numbers, but our trial enrollment continues as per plan and so where we are still confident in the guidance ever giving it a second third quarter or read up that trial.
So overall, it's going going quite well.
On part B a into into part C. Part B is a dose escalation.
In in patients and so what we're looking for his understanding of the ratio of.
Our drugs to I'd be at GE in terms of where the equivalent doses because part b a small cohorts. We have a part C that has two doses that we would take for choosing not to part b to really confirmed the dose a that was the right dose in humans to understand the ratio between him to fight for an Ivy Ajay.
But what is the ratio that you need to see in part D to justify starting parts C.
Well, what we said in the past is that there's you know this is this as a product that actually could be very very beneficial add a lot of different dose dose ratios.
And so if you look at that if you look at the ratios. If if were in the seven to 10 range, we need very little I'd be I'd to be able to cover a lot of diseases that I've yet is GE is treating today.
So there's a lot of ways, we can do it including working to buy biagi ourselves without supplier agreement and launching the product ourselves there are.
Places, where we were more likely need.
Partnership and lots of plasma supplier because the amount we'd have to buy and I kind of quantify that night four to four to seven range, where there's still would be a very very powerful agent for.
Anybody if we could reduce the volume by that much.
And I thought that them, we'd have to really see if it's if it's more comparable type yet you, obviously I haven't they affect we would hope it would have so we kind of see all the way down from your three or four all the way down to 10, what we've seen in animal models is very attractive to just potentially could be different strategies for us depending on the ratio because of the I've yaggi sourcing requirements.
Thank you and our next question will come from line of debit card Cilla from Stifel. You may begin.
Great. Good morning, Thanks for taking my questions and congrats on the progress. So I'm just a couple questions. So first just following up on some of the comments regarding the Subcu version I guess is it fair to say that we'll get some specifics on the Subcu version by the end of 2020, and then just two questions on M. to 54, so just a follow up to the previous question so well.
We get the data on that you plan to present for cohort B in the first part of a cohort C.
What's that data gonna look like how should we interpret these results like how are you gonna presented and then beyond just highlighting Ivy I G. You know what other areas can you take this platform and to create some value for the company. Thanks.
Sure. So let me just kind of go through those questions in order. Thanks very much for them. So first on on our on comments I'm Subcu, we really can't tell you exactly where we're going to come out with Subcu. Our goal is to really truly understand dosing in this molecule and you know that.
Trial design that we've had and we can go through a more de took a santiago sure if you'd like to go through more detail that we put in.
We will have a subcu we have developed a formulation we will have a subcu available at launch for AMG.
Form of delivery, but you really need to understand your dosing intervals and dosing durations et cetera.
So we're going to be very very careful to make sure we can optimize that potential for us, but you can assume.
That we have a high dose formulation, we've already talked about a high concentration formulation and with the potency that we've seen that we will have a very competitive subcu when we do introducing.
Okay second on cohort M 254 cohort C.
You know that that really will be the results of what we're seeing in terms of comparable.
Dose dose equivalents to M to fight for an idea g. So the goal of the trial the whole logos trials to be able to go forward too in this indication in other indications with them to fight for at an appropriate dose.
And so we're looking at trying to understand what that dose ratio was and so that's what we'll be reporting in patients Nabil sell the safety data will come along with it.
Nor designed to actually show any superiority. So this is not at this is not a superiority trial. It is a dose equivalents trial to show the ratio change that's what we should see out of that.
The study.
Other molecules pick the blood products and so we've been exploring those in the in laboratory and have some pretty interesting opportunities going forward, but nothing that were really ready to put into the.
To fight for wood with isolation technology.
Thank you.
Thank you and our next question will come from line of every Joseph from JP Morgan you may begin.
Hey, good morning turnaround for Eric I'm, just curious and stuff like that.
It's definitely amended to incorporate.
Well now.
And if so.
The real work feedback or any safety or Tolerability concerns there and then secondly, you have the a extension study for her and she currently ongoing I think.
No I'm, just hoping you calling on.
The study understanding.
Thank you.
As shown raising our most needed I was just study.
Great and then just the extension studies.
Uh huh.
Oh Im sorry.
Yeah, we were we don't comment specifically on the numbers of patients. Each other we don't comment on that but they are growing I suspect it's.
Okay. Thank you.
Thank you.
Next question will come from Oh, Brandon Folkes from Cantor Fitzgerald, you may begin.
The hospital based approach targeting patients admitted to the eyes, you would you look to get patients potentially on in two ways. One before any <unk> admission any color would be helpful. Thanks.
Those places out all patients we are aiming for patients that that transfusion dependent on this study on these patients out in mythology.
Clinics, so that's where we are focusing our or patient search for this study.
Great. Thanks.
Thank you make right.
Our next question will come for line Oh Schroeter from BTG you may begin.
Question on 254 and.
Your confidence to go it alone just your thoughts I think G periodically gets supply constrained and you would be a competitor that worry you do you feel like you'd need to be on the inside.
In humans, we don't need that much Ivy edgy and so there are it's a it's a complex market with some very large players, but there's lots of smaller players that we could potentially source IBG from it we have a very high potency versus I'd be Ajay <unk>.
If we're in the range, where we have to buy a lot of material, we're going to be in the range, where we need to actually buy from one of the larger players, which means a partnership would probably much much preferred.
Also you know those larger players would there you know that those larger players have massive plants for their IPO G.
They could actually put this technology into their IB Yaggi production plans and that would also give them a good cost advantage.
Making the product. So so it really depends we do have you know kind of a two pronged strategy for that but it really depends on what we see in the clinical trial.
The opportunity to actually partner with one of the big guys. When there is there's really three of them and and this would give anybody who got it if we have those kind of ratios and advantage could be a very very attractive partnership for us.
Yeah, and then very quickly on the way how trial are all the dose is set for at some level could buy bastardi change that.
No the doses on it so we will do anything with other systems. We've got this season will be made about the stoping one of the dose arms.
Yes, Tom we we don't.
We will not done those it because it will be actually blinded to well habits. So they would be a blended disease.
I'm good Ted will continue yeah, and Tom what I was going to say the part of the reason that we didn't adaptive trial here as we wanted to get it going before we hit all the full results of UBS VMG dosing study. So we have we have pretty good beat in terms of what the dosing behavior is and so we actually chose two doses with an adaptive adaptive design in this trial.
Craig maybe if you could help clarify some of the timeline to the way. How study is successful for nipple column that you think that you can file so or that could be the basis for filing so could could that be potentially on the market by the end of 2022.
You know I think it really is up to the results of the trial. We've designed this trial and power just trial with enough patients that it could be an approvable study depending on the results, but the empty obviously doesn't tell you that ahead of seeing the results.
So if that were the case, if we see that the potency of a small will translate into the efficacy. We think it can in this disease than yes.
We're looking at the trial results.
Around the end of 2021, and it's possible to see it about a year into the market, yes, and Craig <unk> and that would be ahead of the timeline for LNG most likely.
Yes, it would because mg will be a phase two and then a phase three so yes, it will be.
And then for end to 54 just curious.
Sure well established dose equivalents.
Your plan to then and that would obviously be Nike would your plan then as you move into all other indications with wedge potential registration studies or would you be then moving into additional sort of proof of concept studies and in other indications.
Yeah, we're still considering that obviously, having that having that knowledge of what the dose ratio is gives us a pretty good idea of what we will be able to accomplish because idea GE has as paid that path and so you can look at IP, which is primarily in acute indication you can begin to looked indications like see I D P, which at the largest indication where.
He sells them and so we're exploring all of that right now.
So you could see us move directly into registrational types of studies or or or or go directly into a phase out short base to do a phase three but we're we're not quite there to be able to talk about that specific designs yet.
Okay and you expect after we get the proof of concept data next year would be into position pretty quickly to sort of come up at that hurt.
[laughter].
Okay, great. Thank you so much.
Okay. Thank you welcome them.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating even though disconnect.