Q4 2019 Earnings Call
Greetings welcome to marriage and Therapeutics fourth quarter 2019 earnings call. At this time all participants are in listen only mode. It question and answers that almost all of the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero and your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to Dan Ferry Lakeside advisors. They can you may begin.
Thank you operator.
Good afternoon, everyone and welcome to our fourth quarter and year end 2019 conference call.
Today after the market close we issued a press release regarding our financial results.
Corporate updates for the fourth quarter and full year 2019.
A replay of today's call will be available on the Investor section of our website approximately one hour after its completion.
After our prepared remarks, well open the call for Q.
Before we begin I would like to remind everyone.
This conference call a webcast will contain forward looking statements about the company.
These statements are subject to risks and uncertainties.
Cause actual results to differ.
Please note that these forward looking statements reflect our opinions only as of today.
Except as required by law, we specifically disclaim any obligation to update we're highest these forward looking statements in light of new information for future.
Factors that could cause actual results or outcomes to differ materially from those expressed.
Our implied by such forward looking statements are discussed in greater detail and our most recent filings on form 10-K.
And our other periodic reports on forms 10-Q SDK.
With the FCC.
I'd now like turn call over to Mirror Jones, President and Chief Executive Officer Bill Marshall.
[music].
Thank you Dan Good afternoon, everyone. Thank you for joining us for our corporate update call for the fourth quarter and full year 2019.
I'm joined today by de on I ask all our our Chief Medical Officer adjacent Libre, Ronnie our Chief Financial Officer.
Mirror June was founded to discover and develop innovative Arnie based therapeutics and is dedicated to translating microrna discoveries into breakthrough therapies that improve human health.
Our extensive knowledge of microbiology and chemistry has enabled us to identify and develop micro arnie targeted drugs that are designed to regulate gene pathways to return disease tissues to healthy state.
Over the past decade, we've developed a broad pipeline, including three clinical stage product candidates, which we believe have the potential to benefit patients across a number of disease areas, such as blood cancer, Pathlogic fibrosis and tissue repair.
We're encouraged by the promising safety and Tolerability profile of our product candidates to date and excited by the preliminary efficacy we've observed for our micro Arnie targeting product candidates in human clinical testing.
Over the years.
We have both embraced and have been humbled by the challenge is developing a new class of therapeutics.
In December of last year, we announced the implementation of a streamlined and more focused development strategy that we believe will allow us to deliver important milestones this year.
Well, we see tremendous promise in many of our programs, we believe that narrowing our development pipeline in order to focus on these programs will help drive shareholder value.
With that as a foundation, let me walk you through each program and provide an outlook for 2020 before handing the call over to Jason to provide a review of our financial results.
Mirror Jens most advanced clinical assets is called <unk>, which we believe it has the potential to become a treatment option for patients suffering from micro Arnie 155 elevated haematological malignancies.
As part of our streamline corporate strategy, we introduced a revised development plan for cobalt Maher said in cutaneous T cell lymphoma or CTCL.
Which includes delivering interim clinical data in 2020 from our modified solar phase two clinical trial.
Under this modified trial design, we stopped the enrollment of new patients and we'll conduct an analysis of topline clinical response this year.
This analysis will provide controlled data to assess the potential observed benefit of callable marson based on disease response in the skin in comparison to veranda sad.
We have enrolled a total of 37 patients in the solar study.
These patients will continue to be evaluated for safety and clinical response in the coming months.
We plan to assess the rate of an objective response in the skin that is durable for four months defined as 50% or greater improvement in the severity of a patient skin disease over the entire body or M. Swat.
The decision to assess skin response as opposed to overall response was driven by the fact that patients allowed into the study only have skin disease, and our verified not to have blood nodal or visceral involvement at study entry.
Improvements in skin disease, or that's intended to reflect efficacy of the drug whereas progression in skin disease reflect lack of efficacy.
We've reserved the ability to obtain follow up analysis for blood nodal or visceral disease as we deem necessary based on the results obtained using M. Swat.
We believe that obtaining controlled clinical data from this cohort of patients may allow for a better assessment of the clinical potential of cobalt marson and provides important de risking for call them, our son as a potential therapeutic in this indication.
We intend for the controlled clinical data from this study to form the basis of determining what additional clinical investigation of Copel marson in CTCL is warranted and what would be required to potentially obtaining regulatory approval.
Topline data from this phase two trial of cobalt Morrison in CTCL is expected to be announced in the third quarter of 2020.
As part of our broader strategy to assess the potential of Copel medicine to treat Mir 155 elevated blood cancers, we are evaluating callable Mars and in a first in human phase one expansion indication in patients with adult T cell leukemia lymphoma.
Or 80 El al.
Earlier. This year, we were pleased to announce positive data from this trial, specifically in a subset of H.T. Ll patience with the residual disease after chemotherapy or other treatments.
The trial enrolled 15 patients with aggressive sub types of 80, Ll, who were treated with called them arsone by intravenous infusion.
These 15 patients we reported interim data for nine patients who are actively relapsing at the time, a screening and six that had residual nodal or circulating leukemic disease after chemotherapy or other systemic therapies.
We believe the data from the six patients with the residual disease supports the continued development of Cobot Morrison in 80 Ll.
For the six patients the duration of callable Martian Culberson treatment range from 4.5 to 23.7 months, where the median treatment time of 11 months.
Median survival time of these patients was 26 months.
Compared with 7.4 months me median survival time from a large retrospective external.
Oracle cohort based on a Mehta analysis.
Peer reviewed literature, which included a series of studies with 80, Ll patients treated with standard of care over the past 10 years.
These studies included more than 6080 all patients.
In addition, we were also encouraged by the biomarker changes observed in the interim clinical trial data.
Showing that disease <unk> disease stabilization is marked by a decrease in biomarkers of tumor cell activation and proliferation, providing evidence of the biological mechanism of called them Arsone on disease stabilization.
We believed that the overall survival biomarker and safety data, we observed Workover myerson provide a basis for its continued development in patients with aggressive 80 Ll.
We believe that this in that area of unmet medical need considering that these patients have historically had a very poor prognosis.
Based on these data we've focused our call them, our son expansion indication efforts on a T. L L and expect to meet with the F.D.A. in third quarter of 2020 to explore a potential expedited development path for cobalt marson in 80 Ll.
[laughter].
[noise], turning now to our fibrosis programs that are centered on the replacement of my current a 29, which is founded abnormally low levels in a number of Pathlogic fiberoptic conditions.
Mike or any 29 is believed to play an important role in the regulation of certain processes that contribute to fibrosis.
We believe that increasing the levels of my current 29 by administration of ARPU for Hot proprietary micro already mimics could provide benefit to patients with excessive fibrous connective tissue deposition, which has become extreme or pathological in an oregon or tissue.
We're currently developing two distinct micro Arnie 29, mimics Ram Larson and M. RG two tonight for the treatment of various forms of pathological fibrosis.
In the fourth quarter of 2019, we reported interim data from a phase two trial assessing the safety Tolerability and preliminary clinical response for Ram Larson in patients with a history of key Lloyd scars a form of pathological scarring.
These data suggests that Werent Ram Larson was generally safe and well tolerated.
Treatment had no negative effect on healing reported and initial volume reductions and treated quickie Lloyds compared to placebo in a subset of patients were observed.
We will continue our analysis of patient data at the one year primary end point of the clinical trial and intend to report final observations from the study and the second half of this year.
Ram Larsen has also been shown to reduce scarring and hazing after a corneal injury in preclinical studies and as further been observed to regulate Mir 29, pharmaco dynamic and mechanistic biomarkers in the cornea and retina.
We believe that this data expands the potential application of or more Ram Larson to a variety of Okcular fiberoptic conditions.
Consistent with our revised strategy, we may seek a collaboration partner interested in the future development affirm Larson for the potential treatment of cutaneous and or Okcular fibrosis.
As we announced in December of last year, we plan to focus our preclinical pipeline development efforts, primarily on the development of MRG to two nine for the treatment of patients with idiopathic pulmonary fibrosis or IP apps.
In 2019, we reported data in which systemic administration of MRG to two nine appeared to officially reduce X. So they're matrix that possession in a series of preclinical studies.
We believe that this data coupled with previous observations in humans with IP UF support the role of migrating 29 in Pathlogic fibrosis in the long.
We believed that the potential efficacy and safety profile of MRG two to nine positions it as a potentially differentiated approach in IP, yes.
Looking ahead, we plan to report additional preclinical safety and efficacy data during the second quarter of 2020.
As a reminder.
The development of MRG Twonine for I.P.S. is supported in part by a grant in collaboration with the National Institutes of Health and Yale University, We are grateful for their support of this important program.
With regard to MRG 110.
During the fourth quarter of 2019, we announced data from two phase one clinical trials in normal human volunteers in which administration of MRG 110 was observed to increase and your Genesis as demonstrated by increased perfusion and histological markers.
Of Neo and your Genesis as well as reduce alpha smooth muscle act in the expression, which has been shown to correlate with activation of my of fibroblasts.
A total of 65 subjects were exposed for up to three weeks in these studies and MRG 110 was shown to be generally safe and well tolerated with no evidence of unwanted distal and your genesis acute inflammatory toxicities or significant abnormal.
Ladies and the liver kidney or blood and no injection site reactions.
We believe that MRG 110 may have the potential to be used for the treatment of heart failure and other conditions, where patients may benefit from increased vascular flow and accelerated healing such as in patients with high risk of poor wound closure.
Well, we've not announced future development plans for MRG 110, we may seek a new development collaboration for this product candidate in the future.
Before I turn the call over to Jason I want to say that I'm very proud of the work that everyone on the marriage in team, including our employees advisors consultants service providers and vendors have put into developing a pipeline of clinical stage microrna targeted product candidates.
Which we have observed to be generally safe and well tolerated with proof of mechanism data in humans and in some cases preliminary clinical proof of concept.
We continue to believe that this generates mirror agents technology and demonstrates the capabilities of our team to develop micro arnie targeted product candidates.
With that I will now turn the call over to our Chief Financial Officer, Jason Leverone.
Thank you Bill and good afternoon, everyone.
Today's press release reported our fourth quarter and full year 2019 financial results.
Please note that these results are unaudited as of this call and we plan to file or audited financial statements with our 10-K later this week.
We ended 2019 with 26.8 million in cash cash equivalents and short term investments. This compares to 62.5 million at the end of 2018.
Net cash used in operating activities was 7.8 million for the fourth quarter of 2019.
36.1 million for the full year 2019.
Based on our cash cash equivalents and short term investments as of December 31, 2019.
And after giving effect to the additional proceeds we received after year end through today, we believe that our current cash cash equivalents and short term investments will be sufficient to fund our operations into the third quarter of 2021.
Moving to operating results today reported revenue of 0.9 million for the fourth quarter of 2019 compared to 0.5 million in Q4 2018.
And for the full year revenue was 4.5 million compared to 8.4 million in 2018.
The decrease in revenue for the full year 2019 was primarily due to a $3.7 million development milestone payment we earned under our prior collaboration agreement in 2018.
Research and development expenses were 8.4 million for the fourth quarter of 2019 compared to 8.2 million in Q4 2018.
And for the full year R&D expenses were 34.8 million compared to 30.4 million for the full year 2018.
The increase in R&D expenses for the full year 2019 was primarily due to increased clinical development activities associated with the phase two solar clinical trial of Copel marson.
And increased personnel related costs, including restructuring charges.
These changes were partially offset by decreases in tech since fees and other miscellaneous expenses in 2019.
General and administrative expenses were 2.5 million for the fourth quarter of 2019 compared to 2.7 million for Q4 2018.
And for the full year, Gina expenses were 11.6 million compared to 11 million for the full year 2018.
The increase in DNA expenses for the full year 2019 was mainly due to increases in personnel related costs, including restructuring costs and increased legal expenses.
Recall that in 2019, we began implementing two phases at a cost restructuring plan to streamline our operations reduce cost and focus our development efforts.
As a result of this cost restructuring program, we recorded 2 million of restructuring charges. During 2019, which 1.7 was record R&D expenses and zero point Threemillion was recorded two gene a expenses.
We expect to incur an additional 0.2 million restructuring costs related to this plan and the first half of 2020.
Finally, our net loss for the fourth quarter of 2019 was 10.1 million were 31 cents per share.
This compared to 10.3 million or 33 cents per share for the fourth quarter of 2018.
And for the full year 2019, our net loss was 41.9 million or $1.34 cents per share this compared to 32.7 million or $1.10 cents per share for 2018.
That concludes our premier prepared remarks today with that I'll ask the operator to open the call for questions.
Thank you if you would like to ask a question. Please press star one and your telephone keypad.
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Our first question is from comedies Yazdi with Wedbush Securities. Please proceed.
Hi, This is comedies on CRE Liana for Copel Mars thing Hcl discussions with FDA would be the potential best case for an expedited development path in your view as an second question.
How we'll R&D expenses, comparing 2020 to 29 team. Thank you.
Hi comedies. Thanks for the the question, let me touch on the first a aspect all that Jason address the second aspect [noise].
Really our goal and what we've been working hard out as is really developing that kind of historical control. You know proposal and this is really what's been a impressive to us or apart right should I say depressing is that despite 10 years of sort of developing different therapies against patients with 18.
Well one finds in these highly aggressive forms is a very consistent.
Poor survival for these patients of about seven and a half months and it's very closely.
Hi, there isn't a lot of variation and at.
What we observed in the the studies and what we've reported to date is that you know in the patients that we've looked at we've got a set of patients they've got kind of baseline prognostic indicators that are consistent with poor outcomes in the in the disease and we've seen a.
No eight basis pretty impressive improvement in overall survival progression free survival [noise].
Importantly, biomarkers associated with the reduction in you know the poor prognostic biomarkers.
In addition, the compound remains culberson remains to have a very nice safety and Tolerability profile. So it really the what we're building is then that's the the case to discuss with the FDA. We hope to then gain guidance on the you know likely size.
The logistics around conducting the trial and the likely time necessary to move toward something that would allow us to move to accelerated approval again that will be driven based on discussions with the FDA and it's difficult for us to anticipate the outcomes, but we're hopeful give.
Then the rarity of this disorder its poor prognosis.
And the lack of really any meaningful therapies in this area.
And also a couple of Marsans, rather nice safety and Tolerability profile that they would be.
No.
Interested in helping US move this in an accelerated manner towards availability for patients in need and Jason I'll, let you address.
Sure. Thanks, So in terms of R&D expenses, you know, we did see or year over year increase in R&D expenses, but if you. If you look at this fourth quarter. We had a decrease we reported 8.4 million R&D expenses in the fourth quarter, which was down from 9 million in the third quarter of 2019 and.
Really under our average for the year, which is roughly 8.7 million. So you know going forward I continue to expect.
R&D expenses to decrease on a quarterly basis from the from the base of 8.4 in this quarter as we proceed with solar and report data in the third quarter and also as a as a result of the restructuring we announced in December.
Hi, Thank you so much.
Our next question is from John Miller with Evercore ISI. Please proceed.
Hi, Bill Thanks, taking my question I guess, a we got updated cash guidance today that you have a runway through Threeq you 21, I guess I wanted to get a sense of exactly what that covers obviously, we've got solar reading out. This year, we've got some more data from ongoing trial, but when a when you talk about a runway through.
Through Threeq you 21 are there new trials.
Food and that runway and what additional catalysts are you going to get through with that.
And then just to follow up on that meeting with the FDA I seem to recall that last guidance was that you could have that meeting into Q and now you're guiding to it in Threeq. You. This year. So was there a delay and your ability to get in with the FDA to discuss that accelerated path. They CLL.
And then just one last one.
MRG to two nine a with show is gonna get additional preclinical updates to give us your I guess what is the timing into the clinic, there and when could we start to see an eye Indian and getting upticks in people with that new focused program. Thanks.
Thanks, John [noise].
Great questions as usual so the guidance in terms of the the cash runway really takes into account our ability to.
Continue to execute deliver the topline data in the CTCL study continue to conduct the work necessary to prepare for and conduct the meeting with the FDA moving forward as well as sort of supportive a general and administrative expenses.
Generally support the company. So that's the focus it doesn't include additional clinical work that would be something that would be looking for additional financing to add to in terms of the meeting with the FDA, what we sort of sort of altered our guidance really on when we anticipated to here.
Back from the FDA. So we have been working hard you know I I think one of the more important things in one of the the things that gave a meaningful compared or for the results. We've seen so far in 80 Ll has been the Mehta analysis that we've done and developing a real world database.
We are working you know very stringently on developing our strategy and our discussions with the agency and we remain on track to delivering in.
The results of those discussions in the third quarter. So it may have just been when we anticipated having the meeting versus when we anticipated hearing more about the outcomes at that meeting no significant delays other than just you know being rigorous in the way, we're putting the package together.
And then on the energy to two nine front, we have you know as as we reported.
This is a next generation Microrna 29, mimic it's more highly chemically stabilized it's got a targeting lagging on it we've seen some very encouraging highly reproducible results in reducing fibrosis or whether that's the biomarkers of the act.
Actual histological read outs in things like bleomycin, but more importantly, and and more of what we've been focused on recently is really those studies in precision cut human lung slices. So we're doing you know additional work in that setting the meaningful kind of preclinical systems.
Typically precision cut human lung slices, we're doing a lot of a pharmacokinetic pharmacodynamic analysis understanding dosing more understanding longevity, we want to really look at the safety profile of the compound and this has all been done in a sort of an exploratory settings setting the stage four.
Moving towards the I Indy, enabling studies, so I would just kinda differ I guess I'm, giving you some real guidance on when we would anticipate hiddink hitting clinic, a until the point, where we've got a better feeling of you know what were the most recent observations and we report that.
As well as a the likely studies that will need to the cut docked prior to first dosing in humans and will obviously be updating our guidance on that regularly.
Okay. Thank you very much.
Thanks, John.
As a reminder, just star one on your telephone keypad, if he would like to ask a question. Our next question is from Matthew Kumar with Robert W. Baird. Please proceed.
Hi, everyone Jennifer on term they do.
A few questions or I could you maybe elaborate on the parameters for the color Myerson CPPL analysis, and what might define sort of go no go decision on that.
Then I have a follow up question on a cash on light, but I'll be on them.
Okay, and I'll I'll, you know, let Jason handle the second question. Thanks, Jennifer the for the the question.
What we're going to be looking at you know, we basically have converted the analysis at the.
From a futility analysis to an interim analysis. So we're gonna be looking at at topline data is really an in interim look an efficacy rather than you know whether or not the studies and shouldn't simple simply continue based on a lack of futility. So with that in hand, we're going to be looking at the objective response rate with fee.
Four months the durability in the skin. If you remember the you know we in the phase one studies, we had a we had really looked at a variety of different parameters. We looked at different doses different routes of administration, but what we had settled in on was what we carried forward into solar so at the three.
100 milligram.
IB infusion a dose what we saw was you know in the neighborhood of a 50%.
Active response rate with four months of durability in the skin.
In that first study with a with a smaller number of patients.
And the compared are used in this study is veranda stat burned OSAT is an approved agent in the area.
So that we do have a pretty good feel for what the potential performance would be based on a study in which it was using a comparator a couple of years ago and you know if we're in a stat basis I mean, if a if cobalt marson hits in the neighborhood of what we saw in.
Phase one study Inverness that performs that as it had a we would then have a result that could provide statistical significance.
It would then guide on what you know sort of additional odd number of patients we need we still think.
If we would think about the original number of patients in the solar trial, we would lose some powering but it would still position us well and really the you know it's going to be data driven as you know the performance of other agents in this area is less than stellar.
But some of the more commonly used drugs in this class of patients. The one be through three is in the neighborhood you know anywhere from sort of 5% up too.
Something around 16%.
And so we believe that there's an opportunity for an agent that would have performance similar to what we saw in phase one with called them Arsone to provide a meaningful benefit in this area that we think has high unmet need but as I said will be data driven and you know really focused on making some key.
Chris but decisions on future development path.
Great. Thank you that's really helpful. And then I just wanted to clarify for that the cash runway on that you just spoke about does that assume new trials, sorry for El Al and does it also include a possible we start for recruitment installer.
Thanks, Jennifer so the cash runway.
But board has not yet incorporate a capital allocation to additional trials and co Morrison in terms of either a restart of the solar trial as you pointed out or the next study from 18, well I think were really looking forward to discussions with FDA.
FDA later this year to really help support validating sort of defined the next steps up for that program as well as the data we were going to report in the third quarter Brickell Morrison and CTCL.
Great. Thank you so much.
We have reached the end of our question and answer session I will now turn the call over to del Mar show for closing remarks.
Great.
We want to thank everyone for taking the time this afternoon and for your support as we work to bring life cheese and changing medicines to patients in need.
We hope you have a great afternoon.
Bye bye.
Thank you. This concludes today's conference you may disconnect your lines at this time and thank you for your participation.