Q3 2019 Earnings Call
Good afternoon, and welcome to their return next bio third quarter 2019 earnings Conference call.
At this time, all participants are in listen only mode.
Later, we will conduct a question it seems session.
And instructions will be can [laughter] that time.
As a reminder, this conference call is being recorded I would now like to turn the call over to Mr., Patrick Christmas Senior Vice President and General Counsel for Reconnects Bio you may begin.
Good afternoon, and thank you for joining up today with us our Ken Mills rejects Bio's, President and Chief Executive Officer, Dr., Steve Nicola, our Chief Medical Officer, and fit the system, our Chief Financial Officer.
Earlier this afternoon rejects bio released financial and operating results for the three months ended September Thirtyth 2019, the press release reporting our financial results is available on our website at www Dot rejects bio dotcom.
Today's conference call will include forward looking statements regarding our financial outlook. In addition to regulatory and product development plans. These forward looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasts and can be identified by words, such as expected plan will may.
Anticipate believe should intend in other words of similar meeting.
Any such forward looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the risk factors and the management's discussion and analysis sections.
Oragenics Bio's quarterly report on Form 10-Q for the quarter ended September Thirtyth 2019, which is on file with the Securities and Exchange Commission and available on the Fccs website.
And any information we provide on this conference call is provided only as of the date of this call November 5th 2019, and we undertake no obligation to update any forward looking statements. We may make on this call on account of new information future events or otherwise.
Please be advised that today's call is being recorded and webcast.
In addition, any unaudited or pro forma financial information that may be provided is preliminary does not support to project financial positions were operating results of the company.
Actual results may differ materially.
I would now like to turn the call over to Ken Mills, President and Chief Executive Officer Energetics Bye.
Thank you Patrick good afternoon, everyone and thanks for joining us on today's conference call will provide a recap of our recent progress advancing and expanding our now technology platform.
Steve will provide an overview of the rdx three one for data presented at ESMO and an update on our clinical programs and it will provide an update on financial results for the third quarter of 2019.
Well then open the call for questions.
Over the course of the past decade, Regenesis Bios mission has remained clear to improve lives through the curative potential the gene therapy based on our proprietary NAV technology platform. We believe single administration gene therapy treatments can significantly alter the course of disease and many patient populations.
We are committed to work.
Our work with these patients in mind.
We continue to advance and broaden their pipeline across to treatment modalities Avi immediate an antibody delivery and monogenic gene replacement.
Both modalities utilize our NAV technology platform to develop treatments for those suffering from rare genetic diseases and expand treatment options for diseases broadly affecting public health.
We've made great strides in the past several months last month, we presented interim results from our lead program Rdx three one for at the American Academy of Ophthalmology annual meeting.
This included results from all five dose cohorts in the fully enrolled phase one two way trial in wet AMD.
The new data demonstrated a significant reduction of anti VEGF treatment burden, while improving or maintaining vision and retinal thickness. After a single administration of therapy.
Our our study for RG X one to one in subjects with M.P.S. too has enrolled three subjects in the first cohort and we look forward to reporting the initial data from that program at year end with the reminder, rdx one to one.
Our goal is to help patients with severe Hunter syndrome, who have were experience are expected to have CNS manifestations of disease.
Additionally, our gx fiber one is designed to treat patients with each of us age or homozygous familial hypercholesterolemia.
Our study of Rdx fiber one has also completed enrollment in the second cohort and we look forward to reporting the initial data from that program at the end of the year.
Our license partners continue to make important progress for patients as well.
We have seen strong first full quarter launch of Novartis is Jens my for pediatric patients with spinal muscular atrophy or SDMA, a debilitating and deadly disease. So benzema is the first FDA approved gene therapy based on regenerates Bio's proprietary NAV technology platform, which was a major milestone for gene therapy.
And patients and families facing us M&A.
The results are a validation of the NAV technology platform and Novartis is shared that approximately 100 patients have been treated with little Jens most since launch.
No I want to take a moment to discuss an update on the RG X three one for program that was just announced this afternoon.
We've recently received notification from the food and drug administration that they have questions regarding certain commercially available third party surgical devices that are used for the sub retinal delivery of RG X three one fourth.
And they have placed the phase one two way study on a partial clinical hold.
As I mentioned earlier, we have completed dosing of all subjects in that study and I want to be absolutely clear that the fts concerns are not related to the gene therapy itself.
We also are not aware of any surgical delivery device concerns or complications from our study.
Were from other groups using similar surgical delivery devices.
We are conducting a review of readily available and substituted will alternatives for these devices should they be needed.
And we're working with the FDA to further understand their concerns.
As a result, we do expect the delay of the initiation of the phase Twob study in wet AMD, the and the filing of the I Andy planned for the Phase two study of Rdx three one for for the treatment of diabetic retinopathy until the first quarter of 2020.
Now rejects bias formula for success has been driven by breakthrough science talented people sound capital management, and a disciplined execution of our plans.
We remain committed to making the potential of one time gene therapy, a reality for patients and working through this process is no exception.
We are driving forward on an expanding pipeline of internal programs designed to address both chronic and rare diseases and it's an incredibly exciting time to realize the full as potential of the NAV technology based gene therapy.
With that I'd like the current turn the call over to Steve for a clinical and regulatory update.
Thanks, Ken.
Im pleased to share advances in our internal programs across off from a logic CNS and liver directed therapies.
I'll begin with our RG X 314 program for the treatment of way empty a disease that affects more than 2 million patients in the U.S. Europe and Japan.
Patients with wet AMD, usually require anti VEGF therapy as frequently as every month indefinitely to prevent vision loss.
Continual long term therapy with inter ocular anti VEGF injections is a burden to patients and families and many patients struggled to comply with the recommended therapeutic regimen for current anti VEGF therapy is leading to under treatment and ultimately vision loss overtime.
Our gx 314 utilizes the NAV aviate vector to deliver and transgene encoding and anti VEGF antibody fab to potentially halt the proliferation of blood vessels in the retina.
As previously announced we presented interim results from the Rgs 314 phase one two way dose escalation clinical trial in subjects with wet AMD.
At a show in October of this year.
The phase one two study enrolled five cohorts with 42 subjects in total.
The subjects in the study were chronically treated with anti VEGF therapy prior to enrollment in the study across all cohorts. They had an average annualized rate of 9.6 injections prior to entry.
Subjects had received up to 13 anti VEGF injections in the year. Prior the most any subject can get as physicians are only able to treat with anti VEGF injections every four weeks.
Our Gx 314 was well tolerated in all five cohorts with no drug related serious adverse events and most adverse events were assessed as Michael.
Importantly, there were no clinically determined immune responses or drug related ocular inflammation.
Importantly for RG X 314, we did not screen out subjects with aviate antibodies and nearly 50% of subjects in the study did have aviate specific neutralizing antibodies, but no effect on subject response to our Gen 314 in subjects with those antibodies was observed.
At one month post administration of RG or 314, we saw a dose dependent increase in protein across all cohorts three.
Three of the subjects in the third cohort continued to be anti VEGF injection free one and a half years after our Gx 314 administration.
And after one and a half years continue to have stable RG Ecpthree 14 protein levels.
In cohort three subjects have continued to demonstrate sustained visual and anatomic outcomes over one and a half years with an average increase in visual acuity of nine letters and an average decrease in central retinal thickness of 40 microns.
These results are in the backdrop of a significant reduction in anti VEGF treatments.
Impressively, 50% of these subjects have not had to receive any rescue anti VEGF injections over a year and a half while at the same time, demonstrating sustained improvement of visual acuity and decreased retinal thickness.
Initial data from cohorts, four and five which had 12 subjects. Each were presented for the first time at a show.
Demonstrated stable to improving and retinal thickness and 75% of subjects in cohort five remained anti invent injection free anti VEGF injection free up to six months. After our Q3 14 administration.
It's important to note that our retreatment criteria. In this study are fairly liberal in the sense that rescue injections were allowed for any fluid or disease activity at the investigators discretion.
These criteria included increased new or persist in fluid in the right now a.
Vision loss of five letters or more associated with fluid or new art to their hemorrhage.
So even with this low bar for re treatment, we have seen a significant reduction in anti VEGF injections.
We're now planning to initiate the phase Twob trial for wet AMTI in the first quarter of 2020.
The phase one two way data from the ongoing RG X 314 trial in wet AMD will be used to support final trial design, including patient numbers and dose selection as we finalize the plans for the surgical delivery device.
With the FDA.
We also plan to file an eye Andy application for a phase two trial evaluating RG Ecpthree 14 in subjects with de are in the first quarter of 2020.
Meanwhile, we continue to evaluate in office delivery of Rgs 314 to Super Choroidal space using clear side, Biomedicals, FCS micro injector and expect to announce clinical plans in 2020.
That this route of administration could allow for the treatment of an expanded population of patients with wet AMTI AMDR by providing access to gene therapy treatment in all settings that patient care.
This route of administration May also allow physicians to treat positions with diseases like D.R. earlier in the disease course, with RG X 314.
Last week, we exercise our option to fully licensed the SCS micro injector for the delivery of a the factors.
Next I'll turn to our gene therapy pipeline for the treatment of monogenic diseases, including our labor directed and CNS directed programs.
In our leverage directed program, our gx fiber one for the treatment of homozygous familial hypercholesterolemia, we have completed dosing of subjects in cohort two of the phase one two clinical trial evaluating our gx fiber one with prophylactic corticosteroids.
We expect to report interim data by the end of the year, which will include safety and efficacy endpoints such as lifted outcome measures.
Turning to our CNS programs, we completed dosing of subjects in cohort one in the phase one two clinical trial evaluating our gx 121 for the treatment of MPS to via Intracisternal delivery direct to the CMS.
We expect to report interim data from this trial by the ended the year.
The primary and secondary endpoints of this trial include safety and Tolerability change in Biomarkers as measured in cerebral spinal fluid serum and urine and change in Neurodevelopmental parameters.
The subject recruitment and additional site Activations are ongoing and our phase one clinical trial bar Gtx 111 for the treatment of MPS one.
We're pleased to report that last month, our Gx 111 was administered to a patient with MPS one outside of our current protocol through an investigator initiated study at the children's hospital in Orange County.
As of November 4th the therapy has been well tolerated.
Turning to our Gx when 81 for the treatment of seal into batten disease, We now expect to file and I ended the year for an equivalent for the first in human clinical trial in the second half of 2020, following additional preclinical development and analyses to support clinical development.
We will continue our diligent work to drive these programs forward and we look forward surprising you with updates on our progress.
With that I turn the call back over to Kevin.
Thank you Steve.
Present, Ics bio has an extensive footprint in the gene therapy space and our scientific innovation could potentially bringing many breakthrough gene therapy treatments to market through our own product candidates as well as the product candidates developed by our licensee network.
As of October 30, Onest 2019, our technology was being applied in more than 20 partnered product candidates in development and 15 of these partner product candidates. We're in active clinical development.
We continue to see progress in expansion in our partner pipeline. For example in July we granted a nonexclusive license to Pfizer for the NAV Avi nine vector for the development and commercialization of gene therapies for the treatment of Frederick's of taxi.
In the fall of 2019, our partners that are dentist therapeutics are expecting to complete enrollment of the pivotal expansion cohort of their trial of 81 32 in subjects with X linked Mio tubular my apathy with the BLE planned for mid 2020.
And of course as I mentioned earlier Novartis is old Gen PSMA, which also uses the naveen nine vector had a strong first full quarter launch.
You see as licensee programs progress and achieve commercial efficacy and safety milestones in their development. They further validate the broad application of the NAV technology platform and provide additional data that collectively drive the advancement of the Avi gene therapy space.
You can please refer to our press release issued earlier today for specific updates on other external partner programs.
Finally, construction of our cgmp production facility in Rockville, Maryland continues as planned.
When completed its expected to support production of NAV technology based vector that scale up to 2000 leaders using our platform suspension cell culture process. The facility will be designed to meet global regulatory requirements and is expected to be operational in 2021 importantly, the additional manufacturing capacity.
Utilizing our platform process will allow us to more efficiently advance development programs from research stage to the clinic and ultimately to patients.
We expect our manufacturing network to be capable of supporting early and late stage programs, including those which may require large scale dr. supply.
With that I'd now like to turn the call over to fit for review last quarter financials.
Thank you Ken Regenerates bio ended the quarter on September Thirtyth, 29 team with cash cash equivalents and marketable securities totaling $417.1 million compared to $470.6 million as of December 30, Onest 20.
18, the decrease in cash cash equivalents and marketable securities. During the nine months ended September Thirtyth 2019 was primarily attributable to $82.2 million with net cash used in operating activities. During the period, partially offset by an unrealized gain of 20.
$9.4 million related to our marketable equity securities of prevailed therapeutics.
Revenues were $14.7 million for the three months ended September Thirtyth 2019, compared to $5.3 million for the same period in 2018. The increase was primarily attributable to $9.2 million of royalty revenue recognized during the third quarter 2019 related to net sales.
As of Xeljanz, while commercial sales of Xeljanz, one and commenced in the second quarter of 2019, and we're also eligible to receive a milestone payment of $80 million from of excess upon the achievement of $1 billion in cumulative net sales of Xeljanz well.
Research and development expenses were $35.7 million for the three months ended September Thirtyth twinning 19, compared to $18.5 million for the same period in 2018. The increase was primarily attributable to personal costs. As a result of increased headcount laboratory in facilities costs.
In external expenses associated with conducting clinical trials and manufacturing related services.
General and administrative expenses were $12.4 million for the three months ended September 30, squinting 19, compared to $9 million for the same period. In 2018. This increase was primarily attributable to personnel costs as a result of increased headcount.
Net loss was $34.6 million or 94 cents basic and diluted net loss per share for the three months ended September Thirtyth 2019.
Fair to net loss of $19.2 million or 56 cents basic and diluted net loss per share for the same period in 2018.
Based on our current operating plan Zenix found now expects its balancing cash cash equivalents in marketable securities to be at least $365 million as of December 31st 29 team.
With that I will bounce and turn the call back to can provide final thoughts and review our upcoming milestones Namus state.
Thanks, David.
The past quarter marked a highly productive an exciting time for the company. After a decade of steadfast effort and focus we remain dedicated and committed to improving lives through the curative potential of gene therapy.
Before we close I'd like to take a moment to recognize the ongoing excellent work for our employees partners clinical trial investigators and of course, and especially every patient and family has chosen to participate in our clinical trials.
With our innovative science inspire people in partners and strong cash position, we continue to feel well position to achieve future milestones and advanced therapies for patients with significant unmet medical needs.
With that we will now open the call for questions operator.
Ladies and gentlemen, if you have a question time. Please press Star then the number one key on your touched on Pelephone.
Thats. Your question, that's been answered or UN carrier move yourself from the Q. Please press the path.
Please wait well the color Q for Texas.
Our first question comes from the line of Channel Wong from Barclays. Your line.
Thank you for taking my questions on the first question is regarding the partial clinical hold for the program.
Just wondering what exactly is this surgical device and avoid that used across all the patients.
Hi, Gina it's Ken Thanks for the first question.
As we mentioned we were recently informed by Sta.
But there are assessing aspects of the surgical delivery device.
Specifically the devices that are third party devices commercially third party devices that are available in that we have used for the surgical delivery in the phase one two way study.
But we're still working with Sta to determine the exact cause and the precise elements of their exact concern so.
In the meantime, FDA has placed the trial on a clinic partial clinical hold even though the patients have already been dose with the onetime gene therapy.
I should clarify that you know the regular assessments in safety monitoring of all subjects enrolled continue and continue to be performed as normal has been a fully enrolled study where really the last intervention was delivered about six months ago.
So we're not aware of any delivery system concerns we didn't report any concerns or complications from the phase one two lease study ourselves. So we're waiting for Sta to provide more details.
So for the other alternative surgical device you mention how comparable.
Okay.
Compared to the previous one and then do you also need to work on dose finding.
Before using this new device.
Yes, I think we don't again, no precise concern that FDA as it relates to the device.
And the third party devices I think what we have been able to do is.
Start to work internally to assess.
What may be a concern and what we know about our internal delivery system is that it's entirely comprised of commercial third party devices and if the FDA has concerns once we learn more about the specifics of their concern we feel pretty confident.
And that several of the components in the device system could be exchange with something that also maybe commercially available.
Okay.
My last question is regarding Coleto injection, we do you need a new I'd.
For next year.
Chow and what goes what do you split this trial and also will you. Please clean existing 88 neutralizing antibody for bad delivery.
Hi, Jane and thanks for for the question. This is Steve so.
We'll be updating our.
Plan and providing information on the plan for Super Corrado delivery.
As far as your question of whether you would need a separate I endear not not necessarily.
Certainly treating the same type of population that were treating under the existing I Andy.
As far as dose.
We feel pretty comfortable at least in a general sense of the range of dosing based on the preclinical data, we have where we see very comparable transduction and also protein expression with similar.
Concentration and volume of drug given Supercross, Italy compared to what we've seen sub Bradley, but it is a different space, where the drug would be delivered although still very close to the target tissue.
And Thats what are the reasons, we're excited about supercross at all so I think based on the full dose ranging that we've done with sub retinal delivery that gives us a good starting point.
In terms of thinking of what type of dose ranging we do for supercritical.
Okay, and then lastly pre existing.
Hey, neutralizing antibody.
Yes. So we're currently evaluating that aspect so as as you know with sub retinal delivery.
A relatively immune privilege space.
We can dose sub Brett only independent of of what the neutralizing antibody statuses of patients and Thats one of the several positives of the gold standard current.
Approaches sub retinal delivery with Suprachoroidal delivery it still remains to be determined whether neutralizing antibodies status would be.
Relevant in terms of treatment in that setting so thats one of the factors that we're evaluating currently.
Thank you very much.
Our next question. Our next question comes from the line US money so far from ESB Leerink. Your line is open.
Hey, Thanks, taking my question.
Hi.
So I'll start with one quick one from this.
When we think about year cash and securities balance estimates for the end of the year.
What assumptions are included in those projections for Zogenix royalty.
And what assumptions are how much values baked in for the prevails shareholdings in assumption that prevail sales water right, where it is or that theres. Some other value assumption you're making.
I have a quick follow up.
Sure Manny so as it relates to prevail our assumption is that they will maintain its mark to market value that we recorded as of 932019.
And then as it relates.
Xeljanz mall.
Yes, all we can go off of is the limit the guidance that novartis provided.
As it related to their expectations for Q4 sales.
Perfect that that that answers my question, which is is the presumption that have remained flat Q over Q as for the guidance. So you've got my follow up.
Thanks, and I'll hop back in to Q.
Thanks, Mike.
Your next question comes from the line of Matthew Harrison from Morgan Stanley Your line.
Hello. This is cost us on FOTA, Matthew I have two questions on the MPS programs, but it got to being added TX 111, when seller, we expect to see it data updates from this program.
So our MTS programs will be updating at the end of the year.
So this is for both 111 in 121.
Well weve.
Announced today that we completed recruitment in the first cohort of the MPS two program, so theres, where we have patients.
But we will be updating at the end of the year. We also did announce that we dose to or not we but.
A separate treating investigator.
Treated patient in the NPS one program under an investigator initiated study.
Okay. Thank you and to one question for out of Dx 181.
I believe you had previously planned and I had the hi, Andy submission by the second half of 20 to 29 and now you have multi too and that led to date can you. Please give us some information about what you need to do before your 70 to 90, Andy Thank you.
Yes so.
We have a preclinical program Thats currently ongoing so we havent disclosed any information based on the interim status of the data that we have but suffice it to say that we still need additional completion of a various preclinical work before we'd be able to proceed.
Okay. Thank you.
And again, ladies and gentlemen.
The question at this time. Please press Star then the number one key on your touched on telephone.
I'm showing no further questions at this time I would now like to turn the conference that Ken enough for his closing remarks.
Thanks, everyone for participating today, we continue to be encouraged by the progress that we've made in the third quarter and look forward to a strong close to 2019 and keeping everyone apprised of continued updates internal programs in the non technology platform. So have a great rest of the evening.
Yeah.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful you may all this.