Q4 2019 Earnings Call

Good day, and welcome to Celmods fourth quarter and full year 2019 conference call. Today's call is being recorded before we begin. Please note that we will be making certain forward looking statements on today's call.

Including those regarding financial results and statements and forecast regarding anticipate anticipated timelines and expectations with respect to our regulatory.

And clinical development programs as well as other statements that relate to future events.

These statements are based on the beliefs and expectations of management as of today and actual results trends timelines and productions relating to our financial position and projected development programs and pipeline could differ materially.

We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the FCC, including without limitation the risks.

Under the heading risk factors described in our annual report on form 20-F as filed with the FCC and the risks and uncertainties, including in the form 6K filed with the FCC CCGT earlier today.

Got it assumes no obligation to update any forward looking statements or information, which beat as that's their respective dates only I.

I would now like to turn the call over to Allen Baharaff, President and Chief Executive Officer.

Please go ahead.

Good morning, and thank you for joining got some debate conference call.

I'm pleased to be here today without Chief Scientific officer, that's what do you have to yet they need no chief Financial Officer Your question Sir.

Got you wouldn't make no clinical development program, it's whatever or do you know production results for the fourth quarter and full year old 29.

It's always we'd be happy to take any questions. You may have a day conclusion of all prepared remarks.

It's all three three almost study progressive I would like to provide you with insight regarding our progress is one is assisting balls and plans for addressing uncertainty related to the corner virus.

Our most I'd be happy to creep in nine countries today, joining the U.S.C. kinda down from Belgium, UK therapy, Spain, Chile in South Korea, we're expecting the pools in Australia in Mexico, The next quarter in Brazil, and China up before the year end.

Yeah rupture that's been open for one of virus has done for many affected the operations of normal study in South Korea and China.

Hi.

There's publicly reported what's become in these regions are under strict public health restriction in trouble engender, while he's a strict its culture.

Unfortunately in recent days, we started seeing gonna give them some of our your insights and we've seen anything you could be on soon.

And do you people buying eat the current been following trouble. There is no. There is a general on Eagle Bulks every season, maybe could centers.

It's too early to assist the food effect of the growing up crisis.

He left I'm addressed by gotten that it will inevitably affect our ability to conclude recruitment in the weaker no timeframe.

Our approach the mitigating this effect you still celebrated the opening with additionally, we sorry.

I will pick up countries, you count that slowed down some countries.

I wanted to point out kind of course perspective, other than our general and administrative costs, which are quite moderate or clinical expenses directly correlate the patient enrollment and therefore, they had been rolled man. So we do focus burden on the patient already won't be the study.

We're very focused on the showing the quality I'm not that cost effectiveness opened almost study.

I'm quite certain but we are not only life science company witnessing these predominant.

We continued to closely money for the spread of the virus and activity level of all could be putting sorry, we collaborate our response.

In parallel we continue on working both indeed submission during the first half of 2023, the completion of enrollment of the first part of the study no expected by the second quarter or what do you 21 and reporting topline results of the first part of the study by the fourth quarter of 20 point.

[music].

Now moving water execute the team who phase one studies have been initiated earlier this year and additional phase. One study is expected to be initiated later this year.

The first phase one study I think in Bourbon trial called one of the Street was recently completed topline data from this study is expected to be published by the fourth quarter.

Here.

The second study the must buy them study, which is Rodney will shed do first don't think expected you made twentytwenty until kind, who does expect by Q4 lumpy.

We are planning to commence Dick you'd be study.

That's one of these studies currently under if the a review we expect the study would be initiate the second half of your completion by Q1 when you when you want.

Simultaneously, we're continuing to advance our knowledge on our important mechanism of action and its translation in human clinical studies.

So when they stick the bottom cold glycemic control argued that <unk> was expected to be present, the you Bill Youre getting either Congress, which extends should do it would take place in London in April 16 to 1920 Twond.

You're expecting three manuscripts published during when you win.

In my script and talk to our important done regulates if you want that I think.

But in rates seller occupation fabric, Tennessee.

And then at strip of the result of policy would be a risk study and the manuscript been talked and are important improve either glucose and Lieberman studies now should be I am curious and bill regulation, which we submitted recently.

Lastly, I'm happy to inform you that we came to an agreement with 58 when all pediatric study plan would be evaluation of our pool for the treatment of nothing is that reality population.

I would like no concern to Colbert, you've touched installed our CFO.

You all financial results for the fourth quarter and full year of 29.

Alright, Thank you Alan and good morning, and thank you for bringing up today.

Wanting a we'd be providing who got financial results for the fourth quarter and the full year to sell the Nike.

For more information seems like that's all I know the fault and form 20-F.

Today, we did you see which among other things provides a summary of stuff.

[music].

Our net loss for the three in 12 months ended December 31st we saw they might be <unk> point, Threemillion and 20.5, you're gonna be compared with a net loss of 3.7 9.9 million for sports.

Selling anything.

Results are our loss per share for the 312 month ended December 31st How's it been nicely for 39 Fad per share a 97 cents per share compared to 80 cents crusher fall centsper share for the course.

And then anything.

We have no revenue for the 12 months ended December 31st the southern at night.

But the $2 million during 2000 and they seem not here the revenue wasn't connection we don't license agreement I mean, you fun.

Research and development expenses for the three four months ended December chunky, Calvin and making.

Well, the 7.4 million an 18 point.

It's compared with 2.7 read and 8.3 meaningful decline.

2018.

All R&D activities have increased during the 2019. Many of you did the preparation initiate vending machines you know there are more study.

Turning now to GSK are generally the mixed ready access for the 312 month ended December 31st 2019 Wells up 1.3 billion and 4.2 million respectively.

<unk> zero 1.5 million cult like following them sort of course.

2018 <unk>.

The decrease primarily resulted from a decreasing salaries and benefit [laughter] due to lower you rent going.

During the 312 month ended December 31st without a 90, we had a net financial income of zero point, Threemillion and 1.9 million in affecting me versus 0.50.

In drinks itself and then maybe.

The Greek industry yourself to our existing comfortable financially.

Finally, our cash balance as of December 31st 2000, and Nike <unk> cash cash equivalents short time deposits market ago, marketable securities and restricted cash although 70 lifepoint.

With that said operator, please provide instructions for the Q and a portion of Oracle.

[noise] [noise]. Thank you at this time will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad a confirmation Tom will indicate your line is in the question can you.

You May proceed start to if you'd like to remove your question from the care for participants you think speaker equipment. It may be necessary to pick up your handset before pressing the star Keith.

Our first question comes from the line of you asked me real money with Roth Capital Partners. Please proceed with your question.

She team. Thank you for taking my question and thank you for the update and we hope you're safe and sound. Most important thing I outlined I want to find out can you give a little bit more color on what are the backup countries that you're referring to for opening additional sites.

How many additional sites do you think would be needed and is there any additional costs associated to get so its site up and running and then the second part of the question as we would love to hear an update in regards to discussions that you have been having in regards to partnerships at U.S. correct, you're up to the extended you can see.

Take about at and thank you for taking my question.

Thank you you mean.

So as to pick up countries.

Good evening, Australia.

In China, well preliminary when I'll pick up at least and we will not going to open. These countries for the first part of the study you for the first 1200 patient enrollment of the first responder patients.

We've now accelerated the or the regulatory submission.

We are engaged we engage with the local.

Regulatory affirmed which would work under our CFO role Covance and in order to accelerate the pool when no regulatory approval in Brazil, we submitted a I agree I envy to the Chinese authorities, the NPV and Australia.

He is a also advancing and are they.

Track, there Oh approval for regulatory approval. So I expect that's up around July wouldn't be able to start recruiting patients in Australia.

Looking ahead, we have a still at least of other countries, including Argentina and some in.

Eastern Europe, which we keep as a that we've done the due diligence and a feasibility on or maybe I and we keep those four mainly for the second part of this study but needed we would.

Oh, it's also accelerate.

Both country and be sites as well.

We tried to give it to the number of the sites I tried to stick to the numbers that we've reported before somewhere between 150 underpin 60 sites.

We are carefully monitoring the activity of the size and I can tell you that he will not hesitate a closing sites, which are underperforming equal wouldn't see I switch a hum.

Hello screen failure.

And of course before they randomize the first patient we closed the site.

So the balance of the sites is going to stay the same.

I mean, it's not the cost of adding additional sites. He is negligible comparing to the a then that you're keeping both sites open for the duration of the study. So we try to keep as we've always said a very efficient number and Oh.

And then make sure that all sites are a highly highly performing sites.

As to the second part of your question.

Unfortunately.

In the Corona viruses also delaying.

Discussion.

We were holding.

And as you can understand a there's nothing to report to be tapes and when I. When I have some people report before we would report that the market. The immediate you report the market.

Thank you Tim.

Thank you. Our next question comes online so Steven seed House with Raymond James. Please proceed with your question.

Good morning, Thank you.

I just wanted to clarify a few things from your filing.

Thanks for the clarity on Oh, the impact of the CRO viruses, that's obviously top of mind right now forever on and just regards regarding sort of the comments in your pilots. So you mentioned still if the Arbor study initiation is dependent in part on an island. The that you plan to file with the idea that has similar language.

For a foreign regulators regarding commencement of the study outside the U.S.. Obviously armor was initiated in September. So I was just hoping you could clarify.

What that I envy is referring to and just the status of any requirements.

With the FDA to begin or continue to enroll armor.

So thank you for questions, even maybe a I did not make it clear.

We don't have the I N D is only for China, what do we did not have an I.N.B. in a in a red study. So that's the only a country would you need an eye and be in all countries. Other places we up with varying our anyway. So we are waiting for the USA or easily we want.

To make sure that everything that has to be finished on time, including carcinogenicity studies are the preclinical studies phase. One study all of these are both the cold and discussions with the aggregate ongoing to ensure a thought one the detail of the almost study.

Published.

We can meet and be a a very promptly and this is why we tried to what we give a guidelines on.

He did they have some additional fleet that we believe we'll get an M.D.A. and what we believe that we would have been topline data from this study.

Okay. Thank you all appreciate that.

You also much of the filing just you highlighted on the call. The phase one studies that are ongoing some data from two of them I believe in Fourq. Your 20, and then from one of them in the first quarter of 21.

And your annual filing just mentioned a certain regulatory agencies in Europe.

Our requiring additional clinical studies prior to initiating armor and those jurisdictions. So I just wanted to.

Clarify if those phase one studies are gating factors for some of those jurisdictions in Europe or if this is.

Separate.

Again. Thank you. So thank you for clarifying question no. We have no request no special request from any of the countries and then you can see most of the countries, but anything in this study I already gave us that approval and he said the study a phase one studies on this very who are studies.

All the N D.

Perfect. Okay. Thank you.

I was interested or to read also sounds like you guys have entered into a research and often agreement with an academic institution to acquire product candidate preclinical.

Research on that candidates currently ongoing so I was hoping you could just talk about that product and clarify if it's a notch product.

So so this is still very early stage you still in preclinical.

Stage, and we're doing a local preclinical work in order to make these compounds as the phase one ready and we will communicate obviously, the a cost would be that either game.

Our negligible and a this is why we'd love to report them separately and up part of the R&D costs or but the general R&D cost Oh God amid a once we get closer to I envy well, we would communicate.

The compound the implication.

And.

And so.

Clinical plan for these compounds and most probably for you all have enough to win or should you had been a in coming quarters. This year.

Okay. Thanks, very much all thanks for taking the questions.

Thank you see.

Thank you. Our next question comes from line of at RC with H.C. Wainwright. Please proceed with your question.

Hi, Alan and.

Thanks for taking my questions. So a few for me first I just wanted to.

Clarifying confirm your timeline.

For armor, you mentioned too few 21, and I missed exactly what that was on the topline results a fourq you 22, just given.

They are ongoing and likely ongoing disruptions at various sites from coated.

Wanting to also confirmed at this point from your perspective, given the flexibility that you have with additional sites.

And so forth that you do not expect or any sort of timeline delays at this point.

This is correct I mean as I stated before they may be a we may slide one quarter or some from or Q3 that I've communicated earlier.

We have a change the or did they come Q4, 2022, well we dealt with the study and a we're doing the old utmost to keep the region, though.

Hi, Enbridge and said well my opening new sites and by using some of our makeup countries. So it's too early to make any clearer.

A.

It does give you a very clear timelines, but we believe that we are able to maintain the original a timeframe of cost them into the end D.A. The first half of a 2023.

Okay. That's helpful. Thank you and then.

I I missed actually what you had mentioned in your prepared remarks around diesel next month.

So we have publication or even though that was accepted for presentation, but on they didnt electronics, Oh, RM coal AADC they target values based both on our arrest study and our preclinical study and.

How nice the translation of the and mechanical Boston <unk> mechanism of action translation from any must I mean for human data. These data with what was accepted so easily but it's a we own a waiting I mean, I hope that it either was big Big takes place.

Probability that it would be only virtual so we may be able to delever. These ah presentation by webex old or any other form but his presentation would come out around that time, not nonetheless, because it actually is ready and we'll make sure how to communicate it to the public.

Anyway, a massive.

Well that eco publication, but this seems like I think it's a it's a very big data showing the effect of I'm, calling in not living eight when seen outpaces the night.

He a very good I would say diabetes manipulation by Algonquin in our nation.

Other with the mechanism of action disappointing.

And it's a very good paper in these notes together, there's everything answered before.

He gets paper for publication, yeah waiting for the edges that too.

Okay, that's exactly what the results since the first time to to actually translation.

<unk> was action as Ive unclear to the clinic and bad news and.

You more publications will follow ons at Tinsley shut off the list a mechanism of action to the clinical that he thought you know that's when we.

We will see a hope for me in Ah I don't know itself.

Okay, great. Thanks for the extra detail they are very appreciated.

To to make right if I.

Phil.

Just two more quick ones if I could.

You mentioned.

Some progress or with the agency in terms of your design for a pediatric study a if you could share any details.

Hey, that'd be great and then lastly, Ah with your current cash at 75.6 million what is.

And your view the cash runway at this point thanks again.

Okay. Thank you Ed. So we have agreed as I've noted before we've agreed with the it'd be able anelka drastic plan.

We wouldn't be starting oh by the end of the fear.

The necessary toxicology studies and the first a clinical study would start shortly after the completion of fit for our or Alamo, which is or the end of 2022.

And then we of course agreed on I mean, it can be viewed the study design useful first for 12 to 19 and six to 12, and then a waiver for full earlier for younger patients.

So all of that he's agreed.

I'm lines protocols and Ah I hope, we'll be able to move forward for these very important indication.

Other questions remind me what gives me.

I guess, but it's got to guess <unk>. So our there's no change in our view about the cash balance study cost remain the same [laughter] and we feel very very closely on budget.

As I said before it needs based on activity so be it should not increase.

As you can see from our balance sheet. So a previous year and we look also own our budget for the for next year.

Our burn rate.

So which is an unrelated to ER to the study remains the same about $1.5 million EUR per.

Well, there and I hope that.

I would still be able to generate.

With a very conservative.

Investment I mentioned investment that we used the for the money that.

We have a that covers more or less the burn rate for oh for the for the quarterly burn rate.

Great. Thanks, so much hole, so even if they're even if the reason even if the reserves or a one or two quarters of delay.

ER, we burned wouldn't be the burn rate I think that most of it can be offset by the financial income.

Understood.

Thank you. Our next question comes from line of Kristen Cusco with Cantor Fitzgerald. Please proceed with your question.

Hi, good morning, and thanks for taking my questions. The first is what do you think will be the main advantages for your company. If you are not the first on the market, meaning which criteria are items well you internally beyond the look out for that could help pave the way for Aramchol if approved.

Okay. Thank you Christian I will let me take before Youre permission to thank you can see I think that I'm confident that is not actually competing with any of the candidates that are currently I'm. Karen. Thank you. So people can leave out the LIBOR is namely targeting psychosis.

Kevin I couldn't be the facts and they are targeting mainly tight range and a at the beginning they will side with the asked me that has more.

Rick Hsu deteriorates to ask for.

You tell me no pines key what's going on with telling people know, but if they will maybe how does they will be approved.

That targeting made me leases that.

Well I'm, calling is targeting leaving aside and hybrid thing. If you look at the mechanism of action. If you look at that correctly, because I'll leave that for example, we definitely some piece of paper that they published.

Effects on Lx, two salad with a college and production, which is comparable to I'm gone, which were very black because it was translated to put them into clinic showing a lot asked about probability of success for us as well and I'm on the other hands. We he has a very good.

Effects in our Clinique and from mechanism why did you on needs as fast as well. So we are.

Hi me, we can actually say and that definitely shown a good effect on either side I think like Oh said he got for example, and we are showing a very good effect on leave this happens well.

Which hopefully we will see was either so we will maybe not this once the market.

I'll be the Centstwenty show and in fact on neither staff at the same time as neither side buzzy targeting both.

Ballooning utilities and needed by busy targeting both we believe this we will be defense tend to show.

Now, it's way too that we'd be a very clean safety and tolerability profile of our cool.

I think that all the drugs that knowledge development, which are showing a very high effect on needless that.

But have some safety or concerns.

We'll did given at the end of the day as induction maintenance for short term.

<unk> cost reduction to people that are on coal as we see that for the time being is the only drugs, which is suitable for for only a long life treatment for or not because the lucerne and fibrosis and prevention for progression capabilities, we didn't benefit does the absolute bid for reversing.

I believe this as we've seen a in our this study.

Okay, great. Thank you and then I think you know is making a decision today regarding the status of the conference, but outside of that which conferences or events do you hope to attend later this year and what might we expect to there.

Yes.

We would try and we.

My philosophy is I'm coming to go any party didn't uninvited too. So a anywhere that are all conferences, we will try to make as many as.

Bank conferences supports and we have today, a 11 analysts covering the garden Ed So a they quite limited exposure from the different Oh financial institutions Ah, but certainly the occupancy just recently came from not starting in a you'd though.

Presented in both standard enough, while making broken in a in and in London and.

There are number probably important not conferences that showed that later this year, we are already registered who most of them and I hope or with I. I. I believe is the high likelihood that are easily is not going to take place.

ER I hope that the up to that or when it gets warmer we'd get nexsan business.

Great. Thanks for taking my question.

Thank you Christian.

Thank you, ladies and gentlemen, as a reminder, she'd like to join the question Kim. Please press Star one telephone keypad. Our next question comes from like Jason Mccarthy with Maxim Group. Please proceed with your question.

Everyone. It's a day upon the line for us for Jason. Thanks for taking my question just Oh question here, so with the or with back countries being used and with them potentially different regulations in place in these countries I just wanted to see if you did you guys foresee any changes in R&D expenses as a result at least I change.

Just or if you guys expect to see any differences in the ease with which patients might be recruiter for the study.

So the philosophy that there. Thank you first of all Jason for the for the question. They philosophy that we have taken from the beginning he that we have set up a very clear budgets are that for old sites and we have not they'd be a bid for any of them we have.

The not just for U.S. sites, and we have a budget for European sites anywhere the budget for the rest of the word sites and he's got different budget.

And.

We have what here to the.

Keeping up the a and when when you're negotiating with a we decide I have to say that they respect that and they understand that we have a fiduciary duty to other sites. So when we say that you're not paying any other sites more than we are willing to bet you are the usually accept our.

Our budget. So I don't see that we are any of that the budget is going to change according to the different buckets and different.

And as I said before.

We are actively managing our Ah sites and he sites, which are and we already gave a warning to certain sites, which are we're not performing a they did not have swinging and oh didnt enough screening and Oh, we have gave them.

Very clear message that we will not hesitate.

Close decide if we don't see he would be which are as planned and just as a reminder, our budget and our strategy plan.

Recruitment strategy plan, he's built a blip them up you've done a lot of war based on our arrest study, which we had more than 80 sites together with the data that we have from the three also other large phase three studies that had been completed.

So we know who are the best performing sites and we're working with sites that we are sure can be good performers and hence make it makes me very efficient study I think that they need the costs when when they are a cost of these studies and to increase when you are.

Need to hold a couple of hundreds of Oh, sorry, so like four or 500 sites that we've seen some of the study and a those that are self decides to only randomized one patient I think they're very very costly to hold for the duration of the study. This is something that we.

We are trying to avoid.

It's all costs.

Great. Thanks for that a judicial clarity and then I just want to make sure I got the stands for the armor study you guys playing on completing enrollment by two Q 21, and you guys expect topline data by Fourq you 22 is that correct.

That's correct.

Okay, great. Thanks, guys.

[noise]. Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. RF for any final comments.

<unk>.

So I would like to thank you all for joining on this so it's not that easy day on the on the financial markets and I really really appreciate all of up your in gunmen. Appreciate so I I feel no screen that they use a very high attendance of a investors and analysts. So we appreciate very much real quick.

Can you supported by mid or we are planning a booth presence. We haven't we have allowed boosted he's done its booth five one too for anyone who would come to easily London on the 16 to 19, Oh <unk> I Hope this was going to take place and if not we wouldn't try to do our utmost to meet you Oh.

On the NDR are doing they want the travel it wouldn't be free and a and B. This will be effusion. Thank you very much for joining today.

Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.