Q3 2019 Earnings Call
Good afternoon, and welcome to the after next third quarter 2019 financial results Conference call. At this time all participants are on the listen only mode. Following the formal remarks, we will open up the call for your question. Please be advised this call is being recorded at the company's request at this time I'd like to turn the call over to Nick.
Let's senior director of corporate development and Investor Relations that after next.
Next please proceed.
Thank you operator, good afternoon, everyone and welcome to after Nexus third quarter 2019 financial and operating results conference call before.
Before we dive then I'd like to extend a warm welcome to the newest research analysts to initiate coverage on the company where to go from Wedbush Securities who initiated coverage in the third quarter, we're glad to have to join us Laura.
You may have seen.
This morning, we announced the initiation of two studies in chronic pain and this afternoon, we issued a press release with a third quarter 2019 financial results along with business highlights and upcoming milestones. Both of these releases are available on our website under the investors and media section.
Today on our call Norbert Riedel, our president and Chief Executive Officer, or do you recent business and clinical <unk> highlights, including the study initiation as we announced this morning.
And then Ashish Connolly, our Chief Financial Officer, and Chief Business Officer Review the financial results. In addition, Andy Kid, Our Chief operating Officer, Katherine King Our senior Vice President of clinical development are with us for the Q a portion of the call.
Before we begin I'd like to remind everyone that statements made during the conference call include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results could differ materially.
Any forward looking statements are made only as of today and we disclaim any obligation to update. These forward looking statements. Please see the forward looking statements disclaimer financial results release issued issue today.
And the risk factors and the company's current and subsequent filings with you actually see.
It's now my pleasure to turn the call over to Norbert.
Thank you Nick and good afternoon, everyone. We appreciate you taking the time to join our call today.
I am proud of all achievements in the third quarter since the first few weeks of the fourth quarter.
In particular on the kidney coupons, we have accomplished a lot.
With the study initiation to known to the press release, we issued this morning.
We now have the phase two studies underway across the company another pipeline.
And began to start one more very soon.
Once we initiate our phase two studies and why it's four or five baked into coming week.
We will have accomplished one of a major goals for the year.
Namely to help fourth creates two studies ongoing but your hands.
Or any other yosef significant patient needs.
These studies I couldn't tell the importance to the advance because of all pipeline.
Hi, I'm very proud of the execution by our team to get us to this point.
On today's call is I will focus my remarks on discovery initiation.
And then Ashish will get the financial overview.
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Now, let's jump into the details of the phase two studies, we announced earlier today.
In painful diabetic peripheral neuropathy.
Initiated a 200 patients study.
We are conducting this study or cost approximately 20 sites.
All of them in the United States.
Based on the data from Ohio study, showing all bucks to fix it advanced ppm patients.
We are enrolling patients who has had a longer duration of taking CPP and.
We are evaluating daily dosing of 50 milligrams up and why it's two nine to five versus placebo.
In a parallel design.
Importantly, we are not allowing patients to be taking your components in it or do you think maybe patron doing this study.
Yes be sold later separation from placebo in patients into clean up in the pilot study who were not on the concomitant medication.
And we were able to get it really could these patients.
Suggesting it will not be a hindrance on study enrollment.
The primary endpoint does that change from baseline inpatient reported average daily pain.
Well by a 12 week periods.
Do you think the 10 point numeric rating scale.
And why this is a phase two study.
The primary endpoint is consistent with the typical and putting them registration studies for new what pelvic pain.
So the data from this study could be highly informative for late stage development.
We also evaluating other symptoms as secondary end points into studies.
Other than extending from four weeks to 12 week.
Focusing on patients with advanced disease.
And not allowing couldn't comment in energy seeks.
This study is very similar in design to our previous study in this indication.
Based on our past enrollment experience.
We expect to read out in late 2020.
Or early 2021.
In fibromyalgia.
We initiated the 300 patients study with a design that is compatible took a DPN study be Justin.
We are using many off the same couldn't it could study sites.
The primary end point if this study in this study is the change from baseline in evidence daily pain.
A 12 week period on the at night.
We also looking at several other symptoms of problem LG Chem secondary endpoint.
We are not to alone you saw from commentary that you think medication.
The primary difference in this study compared to the GP and study.
That's a problem al just study has a clear them rather than to.
And therefore, a 102 additional patients.
Given that all are probably a problem al just study was designed to optimally evaluates nor imaging Biomark huh.
We did must be robust dose ranging in that study.
Therefore in this follow a problem I was just study we are evaluating daily dosing at close to dose levels.
50 milligram.
And 100 milligrams and why it's too late to fight.
We have to placebo.
Within holding more patients in this study we expect to eat out into first half of 2021.
If it later than do Kid.
Let's now please give discounts and why it's seven eight suite.
Which is in development does it set up people posttraumatic stress disorder, well Pts.
In the long as a whole host phase two study in patients is ongoing.
The project reporting data from this study into second half of 2020.
The studies evaluating and why it's 73 versus placebo.
Approximately 150 patients because pts fee.
The primary endpoint is the caps five.
Which assesses multiple symptomatic domains of P.T. as he across its upscale.
We are very interested in the effects in each of these symptomatic domain.
Which would help us characters I see efficacy seek to within like seven a clean and inform the next steps in clinical development.
And now lets touch on invites four or five feet.
Which is in developing for the treatment of copies of impairment.
We are on the coast initiating a phase two study or find ways full five eight.
They really evaluating safety and efficacy in patients because my hope to these impairment associated with Parkinson's disease.
We are excited about each of all told them.
And this one is no exception.
Based on our outstanding clinical data with this compound.
We believe and why it's full probably paid could could present it to paradigm shift.
In the treatment of the company's impairment associated with Parkinson's disease.
We look forward to provide you further details on this study once a tested initiated.
In addition to the progress across all pipeline I want you mentioned a few other important highlights since our last call.
Huh.
Hi, I'm very pleased they talk to lead to a Sherman joined our board of directors.
Dr. Sherman said that the FDA for 30 years.
Most recently as principal Deputy Commissioner.
The agencies highest position not politically appointed.
Second.
We have multiple preclinical posters and publications.
This highlights the remarkable foundational times that underpins our platform.
And I'm really proud of the work out what team accomplished leading to these publication.
Third.
The positive results from our phase two problem I was just study.
Evaluating the effect of invites Tonight to fight on imaging Biomarkers and patient reported Simpson.
Well accepted as a late breaking presentation at the American College of Rheumatology annual meeting.
The data was presented at the meeting in Atlanta today.
And is available not all website.
With that I'll now turn the call it over to Ashish to come volatility for the financial results.
Thank you Norbert.
Starting with the balance sheet, we ended the third quarter with $114.2 million into cash and cash equivalents compared to $150.6 million at the end of 2018.
We are in a strong financial position to execute on our pipeline programs and we expect our cash balance to be sufficient to fund our anticipated operations into 2021.
On our income statement revenues for the third quarter were zero point $9 million.
Unchanged relative to the same period in 2018.
These revenues are related to our research collaboration agreement with Allergan and.
And importantly, we are not reliant on these revenues to fund our operations.
As we seek to advance our compounds in development for underserved CNS conditions. The bulk of our spend is directly attributed to research and development.
R&D expenses were $11.8 million for the third quarter.
This was in line with the $12 million and R&D expenses for the same period in 2018.
We expect R&D expenses to increase over the next few quarters with the initiation of the three additional phase two studies. Moreover discussed.
We reported DNA expenses of $4.5 million for the third quarter.
Compared to $3.8 million for the same period and 2018.
The increase was primarily driven by cost related to employee compensation and professional fees to support ongoing business operations.
Finally, we reported a net loss of $14.8 million for the third quarter compared to a net loss of $14.2 million the same period and 2018.
With that I will turn the call back over Norbert.
Things Ashish.
Before we open for acuity I would like to some of ice where we are advancing our pipeline of novel CNS product candidate.
Weve and why it's two nine to five.
You know if two phase two studies underway.
London painful DPN, leading out in late 2020 or early 2021.
And the other intangible manager of eating out into first half of 2021.
Within why activity suite, we are on track to report stayed up from the ongoing phase two PTSD study.
The second half of 2020.
For anybody that's full five eight the initiation of the phase two study in patients with Parkinson's copies of impairment is imminent.
We are executing well across all a program.
It was very soon have for phase two studies ongoing.
And expects to have data from these studies over the next 12 to 24 month.
Operator, we're now ready for Kristen thanks.
Thank you as a reminder to ask question you wouldn't each press star one on your telephone to withdraw your question. Please press the pound.
Our first question comes from the line of Marc Goodman with FCB Leerink. Your line is open.
Yes, good afternoon interest a few questions about the TPN trial that you're getting going here. So first of all you talked about advanced patients.
Can you give us a sense of how advanced I know in the past you've talked about the data was was pretty linear with respect to the longer you go to better off the data wasn't the post hoc analysis I'd be curious how long that was and then.
You mentioned, some secondary endpoints you'd be looking at but could you just be a little more specific on which ones you're looking at in in the third question is you're doing the 50 milligram dose can you just remind us.
Why you're comfortable with the 50 milligram dose why not.
Why not to do a little dose ranging here just given the post talk analysis was and you know small numbers of patients. Thanks.
Okay. That's it thanks, Mark so we have shifted the audience before that you know analysis of the P to P. P and study as you mentioned.
So I really linear progression in duration of TV.
And those plans to full five age, which we believe mechanistic Healy makes perfect sense.
In that over time, a chronic disease stage states like DPN establishes us tongans conga sense for manifestation in so consistent with that data we will it applies tee us that patients will have had four years so longer.
Of duration off of DPN.
To your second question end points. The primary endpoint is consistent with what that he is looking for these kinds of studies, namely.
Well its daily pain scores.
We have secondary pain scores very much aligned with what the message that's in the previous studies. So those would be baby was paying paid on walking.
Ah yes, yes, the key measure of additional endpoints, we are looking for.
And then regarding goes.
Just as a reminder, them you know a previous studies, we looked at it tends to focus those screens. It was actually a dose ranging study.
10 milligrams 50 milligrams and 200 milligram.
And consistent with our preclinical data real observed that the 50 milligram dose was the most effective dose.
It is therefore, the dose that we selected to conducted this study.
Yes, the most effective stores.
And that again builds on the learnings from the previous stuff.
And maybe one additional points to mention again, you said, we are not a allowing patients to take concomitant medications.
Because based on our previous studies, we also noticed that we see a better at this point.
In the absence of calling mats and we know from that C. B study, but keep that'd be tend to readily fine tend to be cuso's patients because about south.
I'll tell you how do you believe you suddenly well not uncommon Matt.
So I really significant population.
My first answer your question.
Thank you appreciate it.
Thank you and our next question comes from the line of Gary Nachman with BMO capital markets. Your line is open.
Hi, good evening, its rothsay on forgetting [noise].
[noise] on fibromyalgia can you provide any thoughts generally on what kind of clinical profile and improvement on Deanna rescue would need to demonstrate to nine to five can differentiate it from America.
So I can share with you that football is the D P and study as well as the problem I also study.
We have taken a conservative approach in how we powered the study.
To that to find in them into studies.
What we consider to be statistically significant and.
Particularly as well as clinically meaningful as well as differentiated hold fights for the compounds in both indications.
Okay, Yes.
Yeah, and maybe just at the primary end points here as I mentioned is also average daily pain.
But in problem ALJ, if we have a number of other miss doesn't have to do this.
Her teeth that have to do this problem is that may sound. So overall, a quality of life of these patients. So a bit more comprehensive then you had unpleasant bps.
And definitely well no no solely to ask you, but no. We have is definitely from Boeing.
Problematic and DPN, that's Tonight to five is very safe in both patient population was no serious adverse events the point isn't an overall.
80.5.
Really consistent plus what we saw into placebo book.
Okay. Thanks.
Will there be any sort of interim analysis for either the advance DPN fibromyalgia trial and then the funds for Ashish how should we thinking about the ramp in R&D expenses now with multiple trials running.
Yeah. So there will be no interim analysis in either one of these two studies.
And then with regard to R&D expenditures Oh, we expect that there should be a tick up in R&D expenditures over the next few quarters consistent with the initiation expenses associated with initiating three phase two studies and then it should level off.
And support our guidance consistent guidance that our current cash should fund our anticipated operations and execution of these programs into 2021.
Thank you.
Thank you and our next question comes from the line of low Youssef with Cat Colin.
Line is open.
Hello. Thank you for taking my question just a couple of questions on the phase two five imagine trial you initiated.
In terms of pace of enrollment.
How long do you think it'll take to finish enrolling that study and you'd mentioned that it'll take place and perhaps and most of the same site. After <unk> P.M. study.
Many sites overall and went off at the exclusively done in the U.S. Thank you.
Great I'm glad you asked that because I don't make its to mention that yes. The problem. I was just study will also be exclusively conducted in the U.S.
And we offer a timeline that says that we should be able to lead pellets is studying the first half of 2021.
It is our current projection if doing enrollment we notice that that is not consistent with our projected time enough today, we would've caused to make you a rail sets in the course of this study but for now they do so working assumption based on all the paradigm with US we have evaluated.
And.
For TPN, though when you mention to you it will be the until 2020 or the beginning of 2021, because it is the smallest study, but like licensed study exclusively doesn't do it.
Thank you.
Thank you and our next question comes from Laura Chico with Wedbush Securities. Your line is open.
Thanks. Good afternoon. Thanks for taking my questions I have a couple on 73 in PTSD and I might've missed it so I apologize I mean in here, but did you I could you give us an update on where you're at in terms of enrollment progress and 73, and just curious I think you'd previously talked about perhaps that read out coming towards that.
Earlier part of the second half 20 any updates on that front.
So on the enrollment is going well.
I'm, just going out as anticipated and therefore, we are feeling to the timeline that we offer the second half of 2020.
At this time I cannot give you all will not give you any sort of like further details house to win in that second half of 2020, let's let's get through the study and then and follow up calls we can probably give more color in precision but at this point.
Yes, they did the timeframe that belief is most applicable.
Okay. That's helpful. And then I guess, just two more so with data potentially rising in mid 2020 or Im sorry second half 2020.
It could you just remind us on the powering assumptions and the study I know you're using a rather unique design here that incorporates every randomization, but if we could just kinda revisit that criteria how it impacts your interpretation.
Yeah. So this study it's actually a study that is largely a study for us to do some pick the evaluation seapass finding its approximately 150 patients as I've mentioned it has two doses of seven eight feet. It looks that kept school as well.
And it's tough Scansafe. The kept score to then we didn't use those data points to inform into design. It's the next study we plan to do.
I think for though and you anything else you want to after that.
Oh, Yeah, Norbert I think I'm really it you're right. It's an exploratory study I'm, we're looking at or a range of different endpoints and sub scores as well as to total caps five so I think to think of this study is being kind of a binary outcome with a particular powering is not there.
Right way to look at it I think we think it adequately powered to provide a signal I think we'll look at the totality of the data and examining that signal I'm not only what we find in the caps five on the sub scores, but also a safety and another data and and proceed accordingly, given that this is obviously.
A first in human study for the molecule and indication.
Very helpful. I guess, just wrapping up a PTSD Oh, we were looking back at some of the literature and several across a few publications that discuss seasonal influences on PTSD admissions and one study found to be a actually indicated.
Higher admissions during the spring and summer. So I guess, just kind of stepping back how at all might seasonality impacts the study and just how do you possibly account for that.
And you will you announced the true yeah certainly.
Yeah. So I think there's there's seasonality in quite a few different indications. Its if there's there's there's seasonality to some degree and chronic pain as well I think with respect to this particular study it is a four week.
While you're waiting period, so I think with respect to the any individual patient we wouldn't expect seasonality to make a difference.
With respect to whether or not I'm symptoms fluctuate.
Over the course of a year or so for the total population of patients I don't think that really I should have a significant impact on enrollment either I mean, this is really a chronic condition.
And I think given the population that we're studying a which is not just the military population, but the broader civilian population as well and the duration of the study we don't see that is having a significant impact.
Thanks very much.
Thank you and our next question comes from the line of Jessica stay with JP Morgan Your line is open.
Oh. This is you call on the call for Jessica. Thank you for taking your questions. I know you touched the I touched on this a little bit in my prepared remarks, but could you walk us through those decisions to evaluate the two doses, but you're looking out in a phase two fibromyalgia trial and then following up on that is there any recent nothing but a different.
And also to nine to five will show benefit between DPN fiber studies.
Yes. Good question, so I I answered by going back to the TPN studies. So the DPN study as I mentioned Gokul looked at the 10 50 and 200 Homo a preclinical work, we anticipated that 200 would be a higher dose than necessarily and would likely begin to show.
So what we know to be an any the.
You shape close this ponds, meaning then that goes gets off to a higher it's always we actually.
See I left well known pizza defect.
That's how we actually evaluated the TPN study and how the 50 confirmed very much won't be anticipated preclinically into problem. I was just study. It was a short study was only two weeks of exposure you studied spend tens to hundreds.
The 20 milligram dose was not sufficient to separate from placebo.
In the patient reported outcomes to 200 was.
But.
When we look at the DPN study, we as pets relates to believe that 200 milligrams is a high adults then we would want to administer a whole bunch fell 14 week period of time plug for this particular study and so that's why we decided that 50 and 100 was the appropriate dose.
To your second question in what is today, a pool set up piece for T P and as well as problem I also.
The same ddos is generally plus clients and used for these patients. So I do not to make an assumption at this point that it different dosing regimen will be needed.
Bonds, we actually gets to a commercial use of he said.
If this molecule in these two indications but.
TBD off course, which is also wasn't good this study.
But at this point to answer your question specifically.
I can only refer to existing therapies and there's no just seems to be five when TPN after dosing.
Okay. Thank you that was helpful. And then just one more question in the prior imaging study in Fibromyalgia would you remind us if this study allow subject to be on call commitment mats.
Yes, we do feel okay concomitant medication is that.
Okay. Thank you.
Thank you and I'm showing no further questions at this time I'd like to turn the call back over to Norbert for any closing remarks.
Thank you operator.
And thank you all for your questions and for taking the time to join US This afternoon.
I am hopeful this call today has given you a sense of all positive outlook for the company.
And insights into the meaningful capital if that lie ahead of us.
We look forward to keeping you updated asked me continue along the path.
Bringing novel therapies to patients in need.
Thank you again, please enjoy the rest of your day.
Thank you for joining US today, you may now disconnect.
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