Q3 2019 Earnings Call

Greetings and welcome to the Battle Com Pharmaceuticals third quarter 2019 find financial results Conference call.

At this time all participants are in listen only mode. A question and answer session will follow the formal presentation.

If anyone should be acquire operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.

I'd now like to turn the conference over to your host Mr., Robert coal Westwicke IR.

Please go ahead Sir.

Thank you Gerry good afternoon, everyone and thank you for joining US with me today on the call is Rick Fair Bella comes President and Chief Executive Officer, and Atabak Mokari Chief Financial Officer later during the Q, a nice session Aaron Foster head of research will also be available.

Earlier. This afternoon Bellicum released financial results for the third quarter ended September Thirtyth 2019, if you have not received this release or if you would like to be added to the distribution list you can do so on the Investor Relations page of the company's website.

As a reminder, todays conference call will include forward looking statements made under the private Securities Litigation Reform Act of 1995, including statements regarding our research and development plans clinical trials plans regarding regulatory filings review and approval of our product candidates commercialization X.

Dictation and our financial outlook. These forward looking statements involve a number of risks and uncertainties and reflect our opinions only as of the date of this call. We undertake no obligation to revise or publicly released the results of any revision of these forward looking statements in light of new information or future events.

Actual results may differ from those indicated by these forward looking statements due to numerous factors, including those discussed in the risk factor section of our Form 10-Q for the quarter ended September Thirtyth 2019 filed with the Securities and Exchange Commission and now I will turn the call over to Rick Fair Mellott comes President and.

CEO .

Thanks, Robert Good afternoon, everyone. Thanks for joining us.

On our call today I'll provide an update regarding the progress we've made to focus the company exclusively on our go car pipeline, which is the basis for our recent financing.

I'll also provide an update on our efforts to identify partners for yourself and our manufacturing facility.

Let me begin by highlighting our go car platform driven by our inducible Mighty 88, and CD 40, Activations, which what we call I M C.

As a next generation car platform, we believe I am see may improve upon current generation products in several ways.

First costimulatory molecules, Mighty 88, and CD, 40, and hence cell proliferation and persistence.

Second our preclinical research suggests I M. C may modulate the tumor microenvironment by overriding comment inhibitory pathways, such as PD, one P.G.E. too and TGF beta.

Third we believe I M. C may enhance hosting me an activity the compliment go car efficacy by inducing pro inflammatory cytokines.

And finally, because I am see is driven by our switch technology, we can control the timing and frequency of cell activation through the infusion of our small molecule remained you said.

In our dual switch product candidates, we improved controllable ability further by incorporating our cast besides safety switch, which can be used to manage acute toxicities quickly.

These control features me enable clinicians to better manage the benefit risk profile of pace of treatment.

With that background on the platform I'll now provide an update on our go kart pipeline.

Our first go car T product candidate BP XXL, one targets prostate stem cell antigen or P.S.C.A.

Our initial target indication is pancreatic cancer as P.S. yeas upregulated in cancer cells, and approximately 50% of patients.

At the ASCO annual meeting in June we presented clinical trial data that showed further evidence that our go car technology can boost expansion and persistence a T cells and production of pro inflammatory cytokine patients treated with just a single Dennis ever made you said.

There were no dose limiting toxicities observed an adverse events associated with PBX six to one order right remedies said, we're generally mild to moderate.

Well the single dose schedule of religious it in this study was intended to evaluate safety and not optimized for efficacy. Some clinical activity was observed a bit 13 patients evaluable for efficacy who receive treatment with BPX sixa, one and a single dose of or maybe you said eight patients were 62% achieved stable disease.

Including three with tumor shrinkage of up to 24%.

Based on these encouraging results, we advanced the trial to enroll the next patient cohort cohort five C to evaluate repeat remain you said dosing.

As a reminder, I M. C was designed to be activated on a regular basis.

Our preclinical experience suggests that regular remains the dosing can reactivate and expand to go car T cells over time without creating T cell exhaustion maximizing the clinical efficacy potential.

As we initiated cohort five seed we've experienced a delay in enrollment.

There are freed three primary reasons for this.

The first has to do with the eligible patient population.

Prior to opening this cohort we amended the protocol to recruit only second line patients with pancreatic cancer.

The intent here is to enroll them or homogeneous patient population in which to evaluate potential efficacy signal compared to the very late line patients we enrolled in dose escalation.

This means we're now screening patients undergoing first line treatment was median time to progression can be significantly longer up to seven months, depending on first line therapy.

We currently have patience in screening who've tested positive for P.S., EA, but will not be eligible to enroll until they progress from their first line therapy.

The second reason for delay has been some logistical challenges and opening new sites in processing tumor samples. We've worked through these issues as they have arisen and now have three sites actively screening patients in a fourth initiating now.

The third reason has been screen failure rate.

Had a modestly higher rate in this cohort of patients who are either P. S. C. A negative or is tumor sample was inadequate to determine PSC a status.

So then consistent with prior cohorts and is based on a small number of patients. We don't expect this to be a persistent enrollment problem.

[noise], we've undertaken numerous measures to increase screening and enrollment, including addressing the logistical issues I mentioned.

Identifying and hoping you say.

That said the delay in enrollment we now project interim results for this cohort in the second half of 2020.

[laughter] any interim we intend to present, new translational data from cohort five be at a medical meeting early next year.

These data are expected to provide new evidence on the proposed mechanisms of action of volumes, the activation and BPX excel, one including cell expansion and persistence cytokine production tumor infiltration and modulation of the tumor micro environment.

Based on the data we've seen so far we remain optimistic about XXL. One is a product candidate and as a proof of concept for our go car platform.

Now, let's turn to BPX Xothree pellet comes first dual switch product candidate, which has been designed to target solid tumors that express hurt too.

We're excited about our dual switch platform given its potential for the combination of efficacy and safety benefits.

We selected her to as a target for VX six centsthree, because it's a thoroughly validated target antigen for cancer therapy with clinical activity and reasonable safety observed an academic car T trials targeting her too.

These previous her two car T approaches have been limited by modest efficacy and off tumor on target toxicity.

We believe our dual switch technology may be uniquely suited to improve upon these earlier efforts by driving greater efficacy through M.C. signaling and managing toxicity via our hours which platform.

Earlier this year, we submitted an I.M.D. application for BPX excess three the FDA has requested additional preclinical data to better characterize the potential risk of off tumor on target toxicity and potential mitigation strategies before clinical trial can be initiated.

We are engaged in discussions with the FDA to align on a plan to address their request. We will update you further in our plans an estimated timelines once we aligned with the FDA.

Turning to our third go car product candidate, we've revised our plans based on a combination of factors emerging scientific findings encouraging preclinical clinical process prior progress and the resources that we have available to commit to this asset.

For those of you follow this closely I'm sure you've heard US talk about our third pipeline program Heme car T candidate there was advancing try Andy.

Based on our progress and research we have greater conviction that our technology can provide unique benefits to allogeneic car T and car NK cells.

We've decided to reallocate the resources dedicated to this third program to an allogeneic off the shelf car provide program.

[laughter] theoretical benefits of allogeneic cell therapy are clear potential for increased activity of immune cells from healthy donors instead of cancer patients.

Faster and more certain time to treatment greater scalability, greater convenience and potentially lower cost to name a few.

There are also important limitations to overcome.

Poor expansion and persistence of these cells may reduce response and durability.

Allogeneic cells may cause gvhd and genetically modifying these cells to prevent this may impair their function.

They can also be difficult to manufacture at scale.

[noise] go car platform is designed to address many of these lists limitations driving cell expansion and persistence and enhancing host immune activity to potentially increase response and durability, while providing control mechanisms to help manage toxicity.

We're excited about the potential for an allogeneic go car and we'll update you on our plans for this new program at a future calls.

For those of you attending the since he meeting later this week, we will be presenting a poster with some of our car and take preclinical data.

Data show that Mighty 88, CD 40 signaling improves and eight NK cell cytotoxicity, which has the potential to improve efficacy against tumors expressing variable levels of target antigen.

Further the data illustrate that MC signaling synergizes with transgenic IL 15 production to improve car NK cell nvvault proliferation, and persistence enhancing tumor control and multiple tumor models.

As poor proliferation, and persistence have been limiting barriers to the development of effective NK cell therapies. We are encouraged about the impact MZ signaling may have in this setting.

Now I'll provide an update on our partnership discussions first with reversal.

Concurrent with our positive data announcement in July which included a thorough strategic assessment of the program. We came to the decision to identify a partner to further develop and commercialize this product candidate.

While we continue to have discussions with potential strategic partners. It's unclear. If an agreement will be reached as a result, we've decided that it's in the best interest to Bellicum shareholders deposit Riva sell related activities until a partner has been secured.

Turning to our manufacturing operate relations as a reminder, we built our Houston manufacturing facility to support our early car T programs. The reversal phase three clinical trial, an early commercialization the U.S.

Given our decisions on Riva sell our facilities substantially under utilized with a significant fixed cost base.

Preserve capital for our go car programs, we're actively pursuing a partner for the facility with the goals of reviewed reducing operating costs, while maintaining critical viral vector and cell therapy development capabilities and dedicated manufacturing capacity.

With that I'd like to hand, the call over dotted box to review our financials.

Thanks, Rick Bellicum reported a net loss of 32 million for the third quarter of 29 team and 83.5 million for the nine months ended September Thirtyth 2019, compared to a net loss of 23.8 million and 70.8 million for the comparable periods in 2018.

The results included noncash share based compensation charges or 1.6 million for the third quarter of 2019, and 3.7 million for the comparable period in 2018.

R&D expenses were 14.3 million and 51.0 million for the third quarter and nine months ended September Thirtyth 2019, respectively, compared to 16.4 and 51.4 million during the comparable periods in 2018.

The reduction in expenses third quarter of 2019 resulted primarily from reduced expenses related to reversal and reduced general R&D expenses, partially offset by higher expenditures related to the go-cart platform.

General and administrative expenses were 9.2 million and 24.39 for the third quarter. A nine month ended September Thirtyth 2019, respectively, compared to 7.0 and 18.0 million during the comparable periods in 2018.

The higher expenses in the third quarter 2019.

Relative to the comparable.

Comparable period in 2018, or primarily due due to an accrual of severance costs arising from reductions and reversal related activity.

Now turning to the balance sheet as of September Thirtyth cash restricted cash and investments totaled 106.9 million.

And the third quarter, we had a cash burn from operations of approximately 19 million, which was a decrease from prior quarters given the steps we've taken to streamline the organization.

In August the company announced receipt of aggregate gross proceeds 69.6 million, including gross proceeds of 57.5 million from an underwritten public offering and a 12.1 million private placement option fee related to its private placement of up to 70 million an additional potential gross proceeds.

Based on current operating plans Bellicum expects the current cash resources will be sufficient to meet operating requirements into 2021.

Now I'll hand, the call back over to Rick.

Thanks out about in closing we've made significant progress this quarter and repositioning the organization to focus on our go car platform.

We remain very excited about the potential of our go-cart pipeline and look forward to reporting progress on these programs as we head into 2020 I'll now open the call the questions operator, Thank you.

This time will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone wouldn't indicate that your line is in the question Q you made press star to if you'd like to remove your question from the Q.

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One moment, please probably pull for questions.

The first question, it's an honor the Lee Landenburg. Please go ahead.

It's clearly there.

I'm, sorry, I didn't seem to be answering.

We have a question from Steve's seed House Raymond James. Please go ahead.

Yes, Hi, this is Daniel and that the Olin on for Steve sit House Ah. Thank you for taking the questions I just have a couple of <unk> first with respect to BPX <unk> 6.3.

So you have the request for additional information can you provide any sort of updated timeline for the program and debut. This reclass, that's something that you're going to address fairly quickly or I'm going to need to run in additional preclinical studies any color would be yeah, I guess, what's your thinking yes. Thanks for the question Daniel Unfortunately, we cant.

Provide any additional color at this point, we're actively in discussion with FDA and I think it'd be premature to comment. So we'll certainly provide additional guidance once we've.

Completed those conversations and have an agreed plan.

Alright, great. Thank you and I have a follow up question about there you will sell activity. Just so you mentioned that you will be I'm putting.

These activity just on hold until you find the partner.

Can you provide a little bit more details on what that would translate to financially going forward, how should we be thinking about that.

Yes, I'll, let data back answer that.

Sure so size Youll recall, our our quarterly burn historic over the past a 12 to 24 months has been in that.

As in the $20 million range than that and loaded to mid $20 million per quarter.

And following.

Number of activities, including pausing Weve, it's all related activities.

And and other initiatives that we that we discussed.

We expect that to add to be reduced.

Hi pretty substantially.

Closer to the.

Add to the mid teens kind of range.

Excellent thanks very much.

Yes.

As a reminder, if you would wish to ask a question press star one on your telephone keypad that star one.

We now have a question from RBC Lee Landenburg.

Hi, Thanks for taking my question, sorry, I forgot it a I'm new to my phone.

Uh huh.

So.

Lets questions about.

Yes.

You mentioned, a number reasons, but could you have a me better understand the reason.

The challenge to open Society, you mentioned a biopsy or.

Why do you try to more difficult to open more sites and other trials.

Yeah, Thanks for takes or their quest I'd say the logistics of the opening were some one off things that that they probably are not.

Chronic or or consistent as mentioned all the sites are open in three you're actively screening.

The logistics around.

Tumor biopsy, our our lab tests currently requires tumor blocks and what we've heard from one of our sites is that it's difficult for them to procure tumor blocks from from some of their referring physicians that slides are easier when the process of evaluating our diagnostic diagnostic to ensure that we're kinda slide.

So so thats really the logistics issue around tumor samples.

And I'd say right now the screening rates risk we have three sites screening.

Consistently and fourth one coming on line now and are looking for two to four additional sites for the next phase in the study.

Got it okay. So my how many patients enrolled or scallions screening kind of process.

We currently have no patients enrolled in this cohort, but we have as mentioned multiple patients who are PSC a positive but still on first line therapy, and ER and again, a very I would say brisk screening rate at the moment. So we expect to be able to enroll into shortly.

Got it.

Well the cohort the why would be data.

Early twenties warranty.

What are kind of pay off in two weeks now how many east Mpos I mean, you looks maybe you have biopsy data could be Danny Rea mico tumor micro environment.

Correct, Yes, we have biopsies, you'll recall that patient cohort five be had five patients. So you will see depending on the analysis different numbers of patients that were at.

All or a subset of those five patients so.

Certainly preliminary data, but but but interestingly, we look forward to sharing.

So every patient had a biopsy.

I believe we at biopsies from all of the all five of those patients.

Aaron maybe you can comment on that.

Yes, we do have we do have biopsies weve currently evaluated three out of the five.

Looking for.

Car infiltration and some other characteristics of the biopsy.

Okay great.

All right last question I know you already mentioned.

Went too much PBX.

Three I'm, just curious because they're the multi bow to car T ought to be testing can unique and youre the simplicity have.

I also wage.

50 additional 50.

All right if guar right. So can you help them understand what's the.

But picking a reason for after data have more extra can sir you just regular more data or are these days.

Sure read and by that.

Thanks for the question magazine, and it's a logical one.

I would say, we designed our contract very carefully to try and increase the activity of her two directed car T therapy, you'll recall that the academic experience, which has been driven largely by Baylor College of medicine until lesser extent by a center in China has seen activity, but not not really clinically meaningful activity and so we were looking to increase.

The the potency.

And we really we really did that through a couple of design features we've used to higher affinity binder.

Single gene variable fragment than.

The Baylor construct and of course, we've incorporated our AMC, Activations, which which is the core technology the company and.

Is intended to drive expansion persistence modulation of the tumor microenvironment greater activity.

I think it's really based on those two novel features of this construct that that the FDA has asked questions about.

Potential off tumor on target toxicity, we certainly reinforced that we have the.

Safety switch incorporated in the vector so that it should patients experience toxicities, there's a way to manage that.

But also reminded in our dual switch construct that the safety switches a modified version of cast aside.

Which doesn't use or maybe you said activate it but uses tens or elements and so we don't have a while we have great preclinical data showing this to safety switches work identically, we don't yet have clinical data supporting the efficacy of the Thames Sirolimus driven safety switch. So I think those are probably the variables that the FDA is waiting their thinking and again.

Are engaged in dialogue with them to to work through those questions and make sure that we can answer them rigorously.

Got it okay. Thanks, very much for taking my questions.

Thanks.

There are no further questions in the queue at this time I'd like to turn the floor back over to Rick Fair for closing comments.

Thanks, Jerry Thanks, everyone.

Thank you participating today as always I'd like to thank our passionate team affiliations. Our collaborators are investigators for all their efforts, including and most importantly, I would say our patients and families who participated in our trials. They inspire our effort here each and every day. Thanks have a great evening.

This concludes todays conference and you may disconnect. Your lines at this time, thank you for participation and have a nice evening.