Q3 2019 Earnings Call
My name is Jackie and I'll be your operator for today's call.
All participants are not listen only mode.
We will conduct good question answer session. During the question and answer session, maybe you've had a question.
And one on the Touchtone phone.
Let's turn the call over to mature and they have.
You may begin.
Thank you and good morning, I'd like to remind listeners that management will be making forward looking statements on todays call, including for example, expected timeline and plans for development.
Another pipeline programs expectations related to our collaborations with alexia expectations for discussions and possible opportunities that will partners collaborators and discussions related to the Companys financial position.
Actual results may differ materially from those kinda give any sort of statements as result of various important factors, including those discussed in the risk factor section I felt like us to 20.
<unk> filed with the FCC April 2019.
While we may elect to appease work as David said somewhere in the future, we specifically disclaim any obligation to do celebrate use change.
Now I'd like turn over called Iran, Mccartney still CEO right.
Hello, and thanks, everyone for joining us this morning for our inaugural earnings call.
Please join me I'm doing welcoming Rob Weiskopf, our CFO , who joined our team in September after with that I can car, our chief clinical development Officer, and Brian <unk>, Our Chief business Officer, who will be available for Q and <unk>.
I'd like to take a few minutes highlight the progress itself has made over the last few months as these concluded dosing in our pivotal primary mitochondrial myopathy study, we've announced significant improvements in heart function with long term therapy in our bark program. We've progressed development of our pipeline with SBT to 17 now.
Poised to enter the clinic expanded our team in preparation for our first potential product approval and taken strides towards the collaboration with Aleksey on that we believe positions out strongly for successful launch.
We are committed to improving a lot that patient suffering from diseases as mitochondrial dysfunction with that we prioritize three main goal delivering alimera tied to patients rapidly expanding our pipeline of mitochondrial medicine and scaling our commercial organization in an economical and efficient way.
Our agreement with Alexia on is intended to facilitate all three of these goals athletes disclosed aleksey on has an option to a 50 50 U.S. co promote and full X U.S. commercialization rights with respect to PNM and any other indications approved for subcutaneous I don't remember tied administration, we build.
Leave that this partnership could be transformational for style.
With our deep experience in orphan mitochondrial disease and extensive relationships with key opinion leaders and advocacy.
Let's see on substantial car, so foothold and track record and successfully launching products in the rare disease space.
We expect to be able to deliver our member tied more rapidly to patients within and more notably outside the U.S. as well as to accelerate our time to peak your revenues and achieve deeper market penetration.
With that $30 million upfront payment received from Alexia on in conjunction with the option. In addition to substantial additional payments expected in conjunction with option exercise near term milestones and co development payment. We believe we are about resource to expand our pipeline development initiative.
Yes, and built our commercial infrastructure, we are working closely with Aleksey on as we prepare for pivotal data from our phase three and then power three study expected in January of 2020.
In terms of our own Precommercial belt, we've made a number of key hires during the third quarter and we're continuing to expand our team going into year end, our medical science liaison team is onboard and actively meeting with the experts in the neuromuscular neurology field with strong feedback engagement from the over 100 specialist.
Not so far this year. We've also made great strides furthering patient awareness and engagement through our educational website. The charge dotcom featuring interviews with articles by and videos of Mito patients our systems integration work and supply chain planning are well underway. So that we are poised to watch Allen separately.
Post approval.
As a quick reminder, and then power three enrolled 218 patients with primary mitochondrial myopathy and is evaluating the safety and efficacy of Allomap retied versus placebo over a six month treatment period. The family of primary endpoints comprised of the six minute walk test and fatigue was informed.
By our Q prior studies in this patient population and we can meet either primary endpoint with a P value of 0.0 to five robots are both primary endpoints with a P value of less than 0.05 for the six minute walk weve enrich the phase three patient population to include the most likely respond.
It's on the six minute walk past, we've employed a CRL specializing in six minute walk test standardization and we powered the study with 90% confidence to see a P value of 0.0 to five or less with a 30 meter improvement from baseline versus an expected decline of approximately 10 meters as informed by.
The natural history that we've collected.
For fatigue, our second.
Primary endpoint, our phase two trial of 30, PNM patients demonstrated an approximate 20% reduction in fatigue with a P value of 0.000 stack. So we believe we are overpowered on this endpoint.
Well, we believe that achieving either of these endpoints would carry tremendous value to patients whose primary symptoms are debilitating fatigue and exercise and intolerance. We're confident that we have designed the trial to maximize the likelihood of success on both endpoints.
Encouraging new data from our ongoing Barth open label extension trial, which suggest that the longer duration of therapy element for tied therapy may provide greater benefit to patients gives us confidence that the longer six month duration of mpower three versus only one month of dosing in our phase two may further amplified there.
Pubic signals.
Speaking of bar, you'll be seeing a few upcoming presentations that data from the extensive TD and three D. Echocardiogram protocol, including this weekend at ha.
This is an ultra rare and lethal disease, and which early mortality is typically due to cardio myopic day. After 36 weeks of therapy during the double blind an open label portions of our task power trial, we observed a statistically significant improvement from baseline and average cardiac stroke volume.
Volume as you know measures the amount of blood pumps by the Hearts left ventricle per contraction. So this finding implies an improvement in cardiac function. Importantly, these improvements were observed in the vast majority of patients included in the trial.
We're looking forward to discussing these new data and our plans natural history study with the FDA, we received feedback from the FDA regarding our natural history protocol in which we're comparing data from historic controls to our open label data there and natural history study of this nature does not account for expectation by around subjective endpoints.
We do think it may be informative, including particularly in the context of the cardiac improvements and Weve informs the FDA that we'll be prepared to discuss data from that protocol with them. When we meet front end of phase meeting early next year, we look forward to providing further updates following our indices meeting.
We're continuing to progress our ophthalmic indications as well we expect to complete enrollment every claim to be our phase twob clinical trial evaluating the effective alimera tied in patients with geographic atrophy associated with dry MD. During the first part of 2020 visual function endpoints include the luminance visual acuity for low like this.
In which we've discussed with the FDA as a primary efficacy endpoint. We're also looking at geographic atrophy progression measured by optical coherence tomography and fundus Autofluorescence, we plan to submit our phase three protocol for element for tied in labors hereditary optic neuropathy, our second ophthalmic program by yearend.
Finally, we're thrilled to move on new product candidate SPT to seven two into the clinic SBT to seven two is an orally bio available mitochondria targeted product candidate with significantly greater blood brain barrier penetration than Allomap are tied it is being evaluated for neurodegenerative indications we recently.
Presented data from a mouse model of HLS, demonstrating significant sustained function prolong life span and decrease in neuro fill in that light chain, a biomarker of accidental damage and mail nice following treatment with SBT to seven too.
We're also expanding our rich library of over 100 proprietary compounds as well as advancing preclinical studies of lead candidates within that pipeline and we have continued to grow our discovery team to support those initiatives.
Now I'd like to introduce our CFO , Rob Weiskopf, who will review the financial results from the quarter.
Thanks, rainy and thank you all for joining us today research and development expense for the three months ended September Thirtyth 2019 was 9.8 million compared to 16.2 million for the same period in 2018. The decrease was primarily due to a 3.4 million net decrease in clinical trials to timing trials that ended in two to.
18, as your point Fourmillion decrease in discovery related expenses due to timing of their activities and a $3.4 million decrease in contract manufacturing. These decreases were offset in part by increases your point 8 million in employee and consultant related costs.
Turning to general administrative expense was 6.3 million for the three months ended September Thirtyth 2019, compared to 4.8 million for the same period in 2018. The increase in administrative expense was primarily attributed to an increases your point 6 million in employee and consultant related costs.
I appreciate in part with build out of the pre commercial and compliance functions 0.5 million of professional service or activities related to operating as a public company has zero point fourmillion in pre commercial activities, including building market disease awareness.
Other expense was your point 4 million for the three months ended September Thirtyth 2019, compared to 1.7 million for the same period in 2018, the decrease and other expenses, primarily attributed to 5.5 million decreasing interest expense related to convertible debt, which was converted into ordinary shares in conjunction.
With our initial public offering.
An increase in interest expenses year point 1 million offset in part by 4.3 million change in period over period fair value adjustments of the derivative liability associated with the convertible debt.
Net loss was 16.5 million or 0.4.
For basic and diluted net loss per ordinary share for the three months ended September Thirtyth 2019, as compared to 22.7 billion or 33 cents basic and diluted net loss per ordinary share for the same period in 2018.
Finally, turning to cash cash equivalents were 37.2 million at September Thirtyth 2019, and in October 2019, we received the $30 million payment associated with the Alexia option in share purchase agreements announced on October 10th 2019 with that.
I'd like to turn the call back to read.
Thanks, Rob before we open up for questions I want to reiterate again, how pleased we are with the progress we've made not only over this past quarter, but throughout the year as we look into 2020 I'm confident in our team's ability to continue this momentum and transition successfully entered commercial stage company, we look forward to finishing the year on a strong.
And to reporting back on our various upcoming milestones in the following months.
Thank you again for taking the time to join and I'm happy to open up the call for questions.
Thank you we will now begin the question answer session. If you have a question Lisa Star then one your Touchtone phone, maybe we should be removed from the Q. Please press the pound side or the hash key if you're using a speaker phone you may need to pick up the handset first before pressing the numbers once again, if you'd have a question. Please.
Sorry, I had one on your Touchtone phone.
And our first question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.
Good morning Iranian team.
First of all congratulations on all the progress this year.
And thanks for taking my questions I had a couple of operational ones and then some pipeline so maybe I'll start with the operational one.
Regarding the Aleksey on option can you provide any more color on.
I guess, you mentioned an option payment and then a near term milestone one that option was most exercise.
Could you anticipate any of those.
Occurring over the course say the next 12 months.
Yes, we could.
And I certainly on on option exercise and then those near term milestones, we do anticipate the potential for significant near term milestones over the next 12 months.
And can you order of magnitude goes in terms of size right maybe relative to the upfront.
So it would be it would be at at a multiple of the upfront amounts and we're not giving specific guidance.
On.
The amounts that are do you as we've discussed with the lexie on but what Weve indicated previously and I can reiterate again that we do believe that with the payments coming in from the legacy on transaction over the next 12 months, we will be positions strongly for commercial launch.
Okay perfect. Yeah, I figured you would give us actual numbers that's okay.
But that helps.
Maybe moving onto the pipeline.
First of all with regard to element per tied and Mpower three and then par three.
Can you can you give us any color on.
Patients that have been enrolled with regard to the six minute walk test enriching paradigm. How do you feel if you look across a patient population on a blinded basis about call. It the quality of patients to use that word but.
Hi, yes.
Absolutely Jim maybe I believe we've given I think we previously shared on the baseline six minute walk data, so which was successfully enriched and maybe you can speak to that a letter.
Yes, so the baseline.
Six minute walk past performance was 330 meters.
And we have we've shared that it seems to the time versus in the past. So that certainly is reflective of our desire to focus on the low walkers.
We do believe that based on our previous experience with the drug and that the phase two population that's a low walkers respond better but also just as important from my perspective as the fact that.
They display less variance between walking so we win in a couple of ways I focusing more walkers, there's less variability.
When they walk and again, we feel like they respond better to treatment.
Okay, Yes that makes sense appreciate the added color with regard to data timing could we still anticipate.
Ill first quarter and can you provide any color on any granularity with regard to that first half of the first quarter or anything and then is there any other additional non clinical work that you could anticipate to enable and Andy.
OPEC in the Q.
Great. So good questions. We are expecting data still in January of 2024, our manpower three.
Clinical data that we do expect still to be on track for January for announcing that data.
And we are not anticipating further nonclinical work.
To enable our end da submission.
Perfect. Thanks for they added information.
Great. Thanks for the question SaaS.
Thanks.
Thank you. Our next question comes from Christopher Mari with Memorial. Please go ahead.
Hi, good morning, Thanks for taking the questions.
Gradually arent that cardiac.
Hey, guys data set.
Yeah.
Thats really purchase.
Really.
Away.
So I was wondering if you could.
Maybe on number one mark file things like production.
That could read through here.
Thank you.
And that trial are you strategy.
Aged.
By cardiac involvement.
Indication.
To this drug would have better.
Whether six.
The key patients.
Cardiac involvement.
Okay.
Quantify for us.
And then that base.
Yes.
Thank you.
Sure. Thanks, Chris.
Take some of the first part of that and then ask Jim to kind of elaborate and with respect to the bark trial. We are really excited by the improvements are seeing and cardiac function as you as we said thats really the leading cause of early mortality in that disease, and it's a very tough disease.
We have seen strong correlation between the improvements in cardiac function and improvements in fatigue six minute walk muscle strength in open label extension and one of the things I think that where that trial is really informed us as too I mean, this is a very sick patient population, but the longer duration of therapy on the greater the magnitude of those improvements occur.
All of those endpoints. So when we look forward to Mpower, three and where we're treating now for six months versus only a month in the prior trial and only five days in the one before that we do think that that longer duration of therapy may be important in terms of amplifying therapeutic benefit on fatigue as well.
Now as on.
Six minute walk test.
You asked about cardiac involvement in the Mpower three clinical trial so.
We didnt, we really weren't capturing.
A cardiac endpoints in that trial.
Jim can speak a little bit to the fact that frankly across the whole mitochondrial disease population.
Cardium apathy is really a leading cause of early mortality, but in that particular trial. We are focused on the skeletal muscle function Jim.
Correct crest as Rina mentioned, there was no particular focus on the patients with primary medical from apathy that had a come comminutes cardium apathy.
So we were frankly, we're indifferent to the cardiac status.
Based on the literature, one can expect that 20% to 40% of patients with mitochondrial disease could have a coexisted cardium apathy likely secondary to the domestic central disease. So this I think we'll be of key interest to us moving forward, but.
With respect to the phase three trial, we did not pay particular attention to the Cardium, obviously that may have been co existence.
Okay.
Thank you congrats on a quarter.
Yes.
Thanks, Chris.
Thank you. Our next question comes from Matthew will achieve with BMO capital. Please go ahead.
Hey, guys. This is not on for Matthew So two questions from me and congratulations on the progress so far.
Can you just.
Give a little bit more specific color on the.
How is actually on can help you.
Bring forward the peak sales and deeper penetration is that as a function.
Similar.
Call point.
Actually since a lot.
Also has a commercial footprint and the rare.
Neurology space.
So like maybe similar call points and then the second question is for SBT to some too which looks very interesting.
And I know that the the deal with Blackstone is for.
His product and this this is an oral agent, but is there a possibility like are they are they waiting on maybe phase one phase one two data before they can extend that option also to SPT two seven too.
Thanks.
Thanks.
I'm going to answer your second question first and then turn it over to Brian the option that Aleksey on has its only to subcutaneous element retied. They do have the potential to extend that to a local ophthalmic formulation development retied, but SPT to seven two and all of our pipeline assets other than element for tied our.
Outside of the option arrangement with Aleksey on so those are all fully owned by style and there is no option that elect and currently has to expand any rights into that pipeline that we own.
So with that I'll push push over to Brian to speak to the commercial synergies. So now that we're we have been working diligently with election multiple meetings, they've been very professional and very good to work with I think we have around 30, some teams already up and running to make sure that were engaged and working Synergistically I think three key areas.
We're going to assist us in and going faster and deeper and penetration in the US market. One is with payers they've already engaged with payers on the orphan area for there.
They're therapies and will help us because they have relationships, which will be hiring new people to go in there I think secondly, as you mentioned neuromuscular Reni. It said that we have started to get into that area pretty significantly and we certainly know the mitochondrial care network and we know the mitochondrial docs, but they have that footprint and then to the neuromuscular.
Specialist so that should assist us and third.
We have been working closely and consistently with the Mito action and the you MDF as far as the patient advocacy groups and I think that from speaking with election. They have great lakes, a target patients, particularly ones that may be earlier in their journey in their patient journey and accelerating that purchase patient journey into.
Activation diagnosis and treatment.
Very helpful. Thank you.
Our next question comes from the time with HP. Please go ahead.
Thank you for taking my question.
Justin So far outweighs says that.
Yes, this meeting for RC drilling first quarter 2020.
First quarter 20 Twond.
Hi, we're hoping first quarter, we we don't have specific guidance to give on that but we would anticipate that it could be within the first quarter, yes, I mean really kind of depends on the FDA calendar more than ours.
Okay got it.
At this point do you expect any potential revenue for a number for time 2020 at all potentially.
Generally from post.
Use of it in Boston growth and primary microphone collapse.
Yeah, I mean it obviously this is all regulatory timing dependent but we still think that theres the potential for revenue in 2020 for Alan appetite, yes.
Okay.
Regarding the.
The commercial rights.
Hi, the Youre stuck lixilan could potentially.
Okay.
Great.
Reviewed any geographies, we just got big.
Professor preferentially targets initially.
We would at least so we havent.
Discussed in depth with them, but based on our preliminary conversations we would certainly expect Europe given their significant footprint there.
Okay. Thank you.
Our next question comes from Murray Link with Jefferies. Please go ahead.
Hi, everyone. Good morning, and congrats on the progress and thanks for taking my questions.
Just wondering for that the board meeting with regulators in the first part of 20 order the potential outcomes from bad I guess would I would they potentially decide approval around that timeframe or would they set a producer date I guess, what should we expect coming out of that meeting.
I mean, it's really an end of phase meeting for US to review all the open label extension data with the New Division that we're sitting in so we actually Havent had a face to face meeting with the new division, yet we had correspondence and interaction.
But this will allow us to go in and review all of our open label extension data, which is getting stronger and stronger and particularly with the cardiac data, which frankly is not on the FDA radar, yet thats new data that we've really just announced so.
What we would expect coming out of that meeting is really just informing our path forward you do we need a pre Andy a meeting before we file the NDA do we go straight to end da.
But it's really just to kind of introduced the agency to the full data set from open label extension.
Got it okay. Okay, and then for I mean, let's see an update call. You mentioned you Unilife Chandler, both blinded to the phase three data, but just wanted to clarify.
If either you or Lexia and had a the access to pooled blinded data as the study.
Advances.
Yes, I mean, we'll we'll obviously before database lock be conducting blinded data review to make sure that we've accounted for any missing data really just as part of normal housekeeping around that close out of a trial, but that's something that is yet to occur.
Okay.
Okay and then.
I'm guessing you can provide to any more specifics around timing for when like John would make an option decision after the phase three readout.
I'm wondering if it's fair to assume this would happen before regulatory approval decision is made.
Or if you could talk about potential.
Isms for election to extend the opt in timeframe in one whether this could be extended to after a regulatory decision is made.
And so.
No we wouldn't it we would expect a decision to be made before regulatory regulatory decision is made based on the terms of our agreement and we do not anticipate any mechanisms for extension at this time.
Got it Okay. My last question just on light Joe and farm.
If theres any highlights from that be three protocol that that you want dimensions.
I would be interesting.
I am not anything in particular, I mean, we did have a meeting with the FDA, where we talk to them about endpoints. So I think this is just to kind of reflect our discussions with the FDA about endpoints FDA was very interested in multiple parameters of visual function based on our phase two data certainly.
He is supportive of looking at visual field, which as you know and ally Joanne being a disease of central vision on the visual field becomes very important for those patients also interested in color vision based on phase two data as well as the fairly robust.
Patient perception of change video protocol that we shared with FDA, where a number of patients were reporting improvements in color vision materially impacting their quality of daily life. So I think that the purpose really of the protocol submission is to just really reflect those discussions with FDA and a protocol the division.
We have ophthalmology at the FDA is is very engaged and very collaborative with sponsors and say we think it's important that we continue that strong that dialogue and alignment before initiating the study.
Got it okay. Thank you for taking my questions.
Sure.
Once again, if you do have a question. Please press Star then one on your Touchtone phone.
And at this time, we have no further questions.
Great. Thank you everyone. So much for joining the call today look forward to talking to you.
Early next year.
Thank you.
Thank you ladies and gentlemen, this concludes todays conference. Thank you for your participation you may now disconnect.