Q4 2019 Earnings Call
You'll be on hold to the call begins. Thank you.
Thursday
Dead dead dead dead.
Good day, and welcome to the president conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero after today's presentation. There will be an opportunity to ask questions to ask a question. You may press * then 1 on your touchtone phone to withdraw your question, please press * then two. Please note that this event is being recorded. I will now like to turn the conference over to Steve Suk some please go ahead sir. Thank you operator 2019 business and update call Steve Harrison vice president of a choice relations, and I'm pleased to be joined today by dr. Helen Salisbury president and CEO president and Tom Samuelson Vice President of Finance.
During today's call as seen on flight to we will make various forward-looking statements investors are cautioned that are forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by our forward-looking statements.
please
Need the Safe Harbor statement contained in this presentation as well as impress engine most recent SEC filings for a more complete discussion of these risks and uncertainties. I would now like to turn the call over to dr. Helen Salisbury Helen Steve, please go to slide three. I'm extremely pleased to be here today as we have made great progress since our last Public Presentation at JP Morgan Healthcare conference in early January. We enter 2020 with renewed optimism about our ability to deliver on our aggressive goals and add value to shareholders.
Press agent mission is to improve patient care through Innovative Gene and cell therapy based approaches. I will review our carefully curated portfolio off of unique solutions to unmet needs in health in Greater details or approaches are novel and designed to treat conditions that are both difficult to treat and not limited treatment options for patients before we give a quick recap of the divestments and transactions that enabled us to advance towards our goal of becoming a dedicated Healthcare company. I thought it would be useful to provide a recap of how far we have come in such a short time as shown in a slight Tremor in Q4 of 2018. We started on the path to becoming a stand-alone Healthcare company by reacquiring the right store oncology birth.
from our former partner
In just under a year we advance to programs from inception into the clinic and developed a pipeline of promising product candidates immuno-oncology autoimmunity and infectious diseases. We also took the necessary steps to expand on an already robust ip68.
Finally, we Consolidated the majority of our operation in our Maryland headquarters and continue to bolster our scientific team here. I believe the transactions that occurred over the last several months put us firmly on the path to being able to devote our resources to advance or Health Care Act become a major player in the Gene and cell therapy field as you may recall this included divesting the majority of interactions. Non-healthcare both sets my appointment as a seal a name change from interaction to precedent and Associated a stock ticker change to PGN.
we also
Told our position in aquabounty for approximately 21.6 million told our 50% interest in in viral flight to our former partner darling ingredients for 12.2 million completed the sale of several assets including or non held subsidiaries Tech Okanagan specialty fruits egg boil and Ireland holding for a combined 53 million plus certain contingent payment right off these now divested non-health businesses accounted for forty six million in net cash operating expenses and capital expenditure in 2019 and raised $35 million in capital through the issuance of equity.
Through the financial transaction we achieved or previously stated cash position gold allowing the company to deliver on several value-creating my son's in 2020. Furthermore. We are happy to report that the going concern qualifier has been removed from our financial statement based on combination of our cash position and reduced spending. The anticipate current capital on hand will allow us to operate well into 2021.
Light of our transition to a more Health Focus company. We are evaluating all aspects of our operating structure and will provide updates in our next quarterly call concurrently. I want to acknowledge the contributions of General Bostick and prep of interaction bio-engineering and Tom Reed founder and CSO of interaction. Both of whom are no longer at the company. We thank them for their contributions and services. Moving ahead. I want to share how we plan to manage presage and going forward on the next slide.
It's like four, please.
We're going to focus firmly on Healthcare. We have aligned the entire company to operate in accordance with four key principles.
first
Is adhering to strict fiscal responsibility. We will responsibly allocate Capital to maximize value creation for stakeholders bought this car responsibility for us is not just about saving maintaining cash and cutting costs. It is also about allocating resources to the right areas to create value. You will note that in 2019. We spent forty three point seven million on our two most advanced Healthcare subsidiaries presaging and actor bio collectively the health portfolio spent significantly lower than or non Health portfolio.
The second operating principle is actively managing your portfolio with strict adherence to data-driven go and no-go decisions.
Correct. It's focusing on rapid execution moving are valuable portfolio of assets quickly into the clinic and advancing them into registration enabling your studies in accordance with the appropriate scientific clinical and Manufacturing standards, and finally forming a strategic partnership to advance or divest Assets in our portfolio where appropriate noting or fiduciary duty to operate in the best interest of shareholders.
Since January we have a line or portfolio a streamlined our operations and optimize our organizational structures to improve operational efficiency, especially at the corporate level. We will continue to take additional efficiency measures across the organization and we'll update you on our prom dress.
I strongly believed that the most important way we can deliver value to shareholders is to create value to patients through Rapid development of Novel Therapeutics that are safe effective and address unmet medical needs in a fiscally responsible manner.
Before moving on to a review of the anticipated 2020 milestones for president on the next slide. We want to discuss our strategy for the remaining money on health assets.
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Our subsidiary MBP Titans technology platform has the potential to upgrade natural gas to higher-value carbon outputs through our methane biochem and platform.
We prioritize our health portfolio the board of directors and I are committed to significantly reducing or non Health spending specifically for MVP to this end. We have already implemented efficiency measures at MVP to achieve this goal. I have already significantly reduced their Capital requirements compared to last year.
We will.
She knew to evaluate further efficiency measures that support its ongoing operation while establishing clear fiscal guard rails on this page.
Our goal is to partner or ultimately sell this business whatever we do will be in the long-term interest of our stakeholders and adhere to our mission. We will continue to update you on our decisions when we have new information to share.
Another non Health business in our portfolio transfer over is the industry leader in advanced reproductive Technologies for the cattle industry dead.
Considered divestiture of this non Health business, but ultimately elected to retain it because we believe it has more value than the authors we received them.
no less
We continue to strategically evaluate options for this business. In the meantime. However, we have implemented efficiency and cost reduction measures such that we will not contribute any additional Capital towards transfer over and expect transfer over to return to being a net contributor of capital to press again this year moving to the next slide. You can see the breadth of our Healthcare organization.
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The new president in 2020 with a promising portfolio of investigational Gene and cell therapies under the new one precedent. Umbrella a.m. Is our transformative Ultra karti. I didn't averse immunotherapy and actor biotics therapeutic platforms, which are a focus on developing Innovative therapies and immuno-oncology infectious diseases and autoimmune disorders wage also are advancing an Innovative approach from our subsidiary triple Gene in heart failure.
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moving to the next slide. We see the breadth and the value of our clinical portfolio which includes our internal as well as partners programs including a later stage, its Assets in phase two and phase three clinical trials too important things to remember about our portfolio or that first month. We are advancing unique programs that represent substantial therapeutic class Innovation and second. We expect most of these programs to have important, read up in 2020 following the release of new data. We intend to assess and further prioritize our pipeline to optimize cash resources.
Beyond this clinical pipeline, we also have a portfolio of Novel preclinical assets that will be assessed and funded according to strict science and database-driven Analysis.
Significant goals for preclinical assets for 2020 is to initiate a Phase 1 trial of p r g and 2009 are new of the shelves at the University of Minnesota p in hpv-positive cancers.
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Before reviewing are many exciting milestones for 20 20. I want to take a few moments on the next slide to provide an overview of one of our most promising took a few platforms Ultra card key.
We believe it's holds the promise to revolutionize the car T landscape and provide benefits to patients and the healthcare system at large for the following reason.
First unlike conventional karti Ultra Car T cells do not require lentivirus and long ex Vivo expansion in manufacturing facilities instead Ultra. Karti uses non-viral rapid overnight manufacturing at hospital this overnight manufacturing jobs the potential for repeat dosing of ultra karti to patients as well this manufacturing approach We Believe brings the convenience of allergy pack Administration to autologous treatment without the potential risks associated with the allergen a car therapy.
second
Unlike conventional karti Ultra Car T cells Express membrane-bound. I'll 15 which provides higher potential to expand and pervert in Vivo and to maintain a younger less differentiated State conventional car T cells have limited potential for expansion after birth in the situation do too long manufacturing process that requires T cells activation and expansion outside. The body halogen a car T cells are even more faith in that persistence potential since they are foreign and risk rejection by patient's immune system and the occurrence of graft-versus-host disease furthermore. I've followed you make yourself requires severe limp or depletion of patience, which also limits antigenic spreading potential.
We Believe membrane-bound oil fifteen provides are Ultra
Talk T cells with a higher potential for expansion and persistence and patience after Administration than conventional karti.
Start we have built or Ultra karti platforms such that all modified T-cells Express a kill switch this engineering provide us with the ability to selectively eliminate Ultra Car T cells by administration of a kill switch activator in the event of toxicity that's improving the safety profile.
With the potential to Advanced Precision medicine and disrupt the current karti landscape our vision for the ultra karti platform is to build em validate a library of Ultra Car vectors to provide personalized autologous karti treatment for any cancer patient in Iraq and cost-conscious manner during 2020. We expect to report numerous data sets and Achieve new milestones.
Slide 9, please looking at our Advanced assets 3005 is the first Ultra karti in solid tumor targeting ovarian cancer in Phase 1 clinical study. We currently are enrolling the 2nd cohort for the IP arm birth date. We continue to have hundred percent manufacturing success and the preliminary findings regarding Ultra karti kinetics which includes expansion and persistence in patients treated in the lowest dose cohort are very encouraging.
We know that everyone is eager to see these early data points, and we share their excitement. We will continue to evaluate the appropriate time to provide additional details presently to provide an initial read out from the IP arm in the second half of 2020. We are all planning to present preclinical data for $3,500 at an upcoming medical meeting later this year.
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3006 is the first Ultra Car T therapy to be evaluated in hematological cancers. We recently received orphan drug studies from them for this program. We are currently enrolling the second cohort for the non lymphodepletion arm and the first cohort for the nympho depletion are long as we 3005 we continue to have hundred percent manufacturing success and the preliminary findings regarding ultrakatty kinetics from the file are very encouraging expect to provide an initial data read out in the second half of 2020.
We are very excited about the face to trial for ages zero one thirteen for oral mucositis in head and neck cancer with our partner oragenics as we believe that it will further validate or actor biotics platform across multiple indications.
using
Platform in partnership with oragenics. We are targeting oral mucositis as severe and painful side effect of chemo radiation therapy, especially in patients with head and neck cancer. There are currently new drugs approved to prevent this condition in the cancer patient population as a result. The F has given this program Fast Track is status which validates the urgent need for a treatment ages zero 13 is formulated as an oral rinse off and used as a mouthwash to deliver the triple oil Factor one gene which prevents mucosal tissue damage and induces subsequent home of the lining of the mount.
Based on the encouraging phase one data ages of 113 is currently in a phase 2 trial enrollment in this study was completed in the 4th quarter of 2019 and we are looking forward to reporting interim data from The Phase 2 trial in the first half of 2020.
So expect to report interim data from an ongoing clinical trial of Ages 19 in type 1 diabetes patients ages are 19 is a girl in class disease-modifying antigen-specific immunotherapy for the prevention delay or reversal of type 1 diabetes with packaging results in preclinical studies currently ages zero nineteen is in a phase 1B to a trial the face to 8% of the time is now enrolling an interim data readout is expected in the third quarter of 2020.
Another exciting asset in our portfolio is ionex and 4001 and novel gene therapy for heart failure patients, which is being developed by our majority-owned triple, Jean subsidiary. We expect to complete the trial by the end of 2020.
2009 is an off-the-shelf add in Reverse immunotherapy product candidates designed to activate the immune system to recognize and I get HPV positive solid tumors. This program is currently under development through a Cooperative research and development agreement off with dr. Jeffrey Sloan and world-renowned investigator in in oncology at the NCI. We expect the NCI to start dosing patients in 2028.
Now turn the call over to Tom Samuelson to provide a financial update. Thank you Helen and good evening, everyone. There's three key points that I would like to address today. First is Helen mentioned. We've made material progress in narrowing the company's Focus to our core Health Care programs and reducing our other Capital requirements a critical component of this pivot was the divestiture of a number of our Legacy bio-engineering assets, including our shares and aquabounty 486.8 million hours plus certain contingent payment rates and the sale of $35 million dollars of our common stock. The business is sold in these recent transactions accounted for forty six million dollars in 2019 segment adjusted ebitda losses Capital that can be redeployed towards our Healthcare Assets in 2020.
Please recall that segment.
Ada top which is more fully defined in our 10-K is generally the sum of net cash operating expenses and capital expenditures the proceeds from these transactions combined with the company's cash and short-term Investments on hand provides sufficient Capital to remove the going concern qualification from our 2019 financial statements month. We've adjusted our 2019 and prior financial statements to reflect the effects of these businesses as discontinued operations team.
Second we reported fourth-quarter and full-year 2019 revenues of 17 and ninety point seven million in Consolidated Financial results from continuing operations, as we continued our shift from the business model focused on collaboration and Licensing revenues to one wholly focused on our internal program primarily off human health despite pivoting away from a collaboration model. We continue to own the rights to certain Legacy milestones in royalties any of these if successful could result in additional sources of capital for us without requiring any further obligations on our part.
fourth quarter
And full-year segment ebitda losses including corporate costs were 37.8 million and 144.4 million dollars respectively name Daniel losses included only Thirty point two million dollars at precedent and thirteen point seven million dollars at actovia among are retained bioengineering entities MVP Titan and trans OVA genetics accounted for 36.7 million and 6.3 million respectively as Helen mentioned. We are fully committed to reducing spend at these entities and have already implemented efficiencies that should substantially reduce their Capital requirements going forward. I would further highlight that the affirmative or forty six million dollars in segment ebitda losses from transacted assets. Do not include an allocation of General Corporate costs, which we do not allocate the particular segment.
more details
Some segments information can be found in the financial discussion in our 10-K.
Third the 2019 Consolidated loss attributable to precedent shareholders of 322.3 million or $2.09 per month includes 116.2 million or $0.75 per share associated with the discontinued operations. We further incurred a non-cash impairment charge of 29.6 million dollars for the write down of Goodwill associated with our trans OVA genetics subsidiary as discussed. We've initiated efforts in twenty-twenty to improve the financial performance of trans OVA genetics going forward.
Including the financial component of our call. I will again reiterate that precedent is wholly committed to deploying our precious Capital towards our highest value Healthcare Assets in 2028, and Beyond. We look forward to providing regular updates as our targeted value generating Milestones are achieved. I would now like to turn the call back to Helen for concluding remarks. Thank you Tom and closing our call today. I want to confirm our optimism about President potential to transform the healthcare landscape with our Innovative and focused portfolio. I think you will agree that there has never been a more exciting and promising time at president.
Express agency
You have my commitment to manage your company in a financially prudent fiscally disciplined and transparent manner with the page month goal of achieving our mission to bring novel treatment options to patients.
If we do this, all of our stakeholders will benefit that will now open the line for questions operator, please begin. Thank you. We will begin the question-and-answer sessions to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys to enjoy your question, please press star, Please limit yourself to one question and one follow-up. If you have further questions, you may re-enter the question to you at this time. We'll pause momentarily to assemble our roster.
And our first question will come from Jason Butler of JMP Securities, please go ahead hi. Thanks for taking the questions and for providing jobs and the updates Helen first one just on the car T trials for both 3,500 3006. Can you frame for us how we should think about them later this year in terms of patient numbers and maturity of of data and and maybe if not specifically in terms of numbers then in terms of how it can inform me that are potentially progression to pivotal studies. Thank you Jason. Good evening. Actually. We are very excited for this upcoming Monday the first of all in regard to the ovarian cancer the IP arm and in regard to the ml that we have, non lymphodepletion arm to report fraud.
As you might have seen in order.
Trial currently are 3 + 3 + 3 there are three Doses and as we finish this doses we obviously will be reporting on with the safety and the dose which are the Paramount aspects of the phase one. But at the same token as we have always emphasized what is the most important thing for us is also show that are Manufacturing in Vivo directly in patients to show the persistence and also the expansion of T cells. So we are looking forward to show some of the interim data by the second half of 2020 and Thursday. It's quite exciting for us as we go through this journey and we continue to then expand these patients through phase 1B.
Great, and then I had a question on 1/3 and the interim results upcoming. How should we think about the the the magnitude of choice of fact here in terms of what would be clinically important to patients and then in terms of the oral mucositis endpoint, can you still says about subjectivity of the endpoint and how how how long you're you're controlling for that and any expectations for either reduction in analgesic use or a potential to prolong radiation dose? Absolutely. Thank you. So are actually the ages of 113 is a very exciting program for the platform of actor bio. As you know, our actual bio platform uses our elected delivery mechanisms for delivering different proteins specifically to them you Coastal. Yep.
in the case of the oral mucositis, this is
Devastating disease the especially after the treatment of head and neck cancer patients with chemo and radiation. There are tremendous ulcers in the mouth which is quite painful and and currently there is really no treatment for this in the phase. One of the studies that was done. We have designed the elective in such a way that it delivers a gene that protects and also stimulates the lining of the mucosal lining of the mouth and we had very exciting results in the first phase one showing reduction in the ulcers and actually the level of the pains and now we had entered and actually finished enrollment of the patients in 2019 in a phase to that it's done in a randomized fashion. So there is a placebo arm wage.
The treatment on which is quite important and one aspect that is quite exciting based on the phase one data FDA has given us a fast-track for this month indication currently and the this is would be the first proof of this platform actually for active bio which I also have exciting trial ongoing in the t1d type one diabetes, which we are anticipating to actually report on in second half of 2020 using a similar actually platform but delivering approach insulin and as well as well ten which suppresses the immune system, but actually it helps the onset of it reduces downside of diabetes and we had a very encouraging preclinical data off.
the phase one day
And now the phase 2A will be recorded in second-half.
Okay, great. It's helpful. And then just one last Financial question and sorry if I miss any of the prepared comments, but should we expect any further charges? And if so, how should we think about those in terms of cash versus non-cash spend so currently I think we are not expecting any further reorganization charges and and and as we mentioned by the end of January, all the assets will transfer to Thursday security and currently we do not expect anything in that lab.
Okay, great. Thank you for taking the questions. Sure. Thank you, Jason.
Again, if you have a question, please press * then 1 hour. Next question will come from, calling from a t Wainwright, please go ahead.
Thank you. This is okay from Steven Wright. Good evening. Helen a couple of quick questions, you know for the unknown oncology assets a G80 one nine and i n x n 4001 what what do you plan for these Assets in the long-term? The reason for that question is as you can imagine as these assets get into late-stage development. They could become cash-intensive because of the large clinical trials that you you would need to conduct these be assets that can become currency in terms of out-licensing. Thank you. Okay, great question. So we agree. We have a portfolio. Maybe I should just first give a few minutes on the reason that we have a port phone number.
that we have the strength of
Portfolio is that we are not one drug Product Company is becomes very important because when you are one drug Product Company basically despite what the science might be on might not be you are committed somehow, but the way we have arranged our portfolio is that it's in such a manner that wage earners ties and making go no-go decision based on data and we know the attrition of the portfolio and therefore it's very very important that we keep a fiscal responsibility with very very laser-focused decision-making to address our portfolio in regard to the assets that we have highlighted. Year. Actually. This has been a principal Factor behind it. We are looking at our data. We are evaluating the rest of the data that comes and its totality.
And then there will be this.
Asians make that if these assets will go to the next levels of development or not. However, what is very important as a fourth pillar that I mentioned as part of what principle is a strategic partnership and this is very very important for us in our portfolio and to your point obviously and I'm going to fax this over and over again. We will not take every asset forward ourselves. We will also look into a strategic Partnerships with that will bring the most value for our shareholders. And I think this is a pillar for us that it would allow us to manage or portfolio according life and make the decisions with the right partners with the right speed and with the right cash to make these things and move them forward and definitely as you home.
this is one of our
strategic responsibility and platforms that we have for these assets
One one of the question of of a similar vein the the two non health hazards that you discussed about in the in your life in their remarks and though you did state that you know at some point it would get diverted. Is there a time point where do you think you would divest especially when they're currently giving you some revenues which could help in your in your pipeline development? And so once once the pipeline gets certainly mature stage would that time be the right for for that amount of those two months? It's so far Titan subsidiary as currently we obviously are not receiving revenues from this subsidiary page.
However, we are as mentioned.
We are committed to make sure that we are fiscally managing these subsidiary and the final end point for us is to partner or sell this month. It's as far as time is concerned as you know, last year. We have David Witte with us who is currently managing the strategy for Life partnership in due time. We will be actually reporting on that aspects in regard to transfer over. You're absolutely correct. This is a subsidiary page that has been mentioned. We have already implemented sort of fiscal measures here that would allow us the trans over to bring Capital back to press again this year. And this was one of the reason that as we basically raised our hundred and seventy-five Million Dollar Club
January we saw
That there was no rush in divesting this asset any further at that moment especially due to the last year the challenges that very often Market hot and by making it cash positive. Actually, you're absolutely correct this can add value but at the same token we have our Focus directly on health and expansion are held assets. And what we will be doing is strategically looking at all of our options with having a huge responsibility in regard to transfer over and ensuring that transfer over is Cash positive for the rest of presage.
Thank you, and thank you for taking my questions. Thank you. Okay.
again, if you have a question, please press * then 1
again, if you have a question, please press * then 1
this concludes our question-and-answer session. I would like to turn the conference back over to Helen stops for any closing remarks, please go ahead ma'am. Thank you for taking the time to join us for our busy on Pipeline update. We look forward to providing you with updates in the coming months and have a wonderful evening. Thank you again.
The conference has now concluded thank you for attending today's presentation. You may now disconnect.