Q4 2019 Earnings Call
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Good morning, Ladies and gentlemen, my name is Catherine and I'll be your conference operator today.
I would now like to welcome everyone to the Liquidio technologies fourth quarter and full year 2019 financial results in corporate update conference call.
At this time all participants are in listen only mode. Following the presentation, we will duck the question and answer session and instructions will be we will be provided at the time for you to queue up for questions. If anyone has any difficulties hearing the conference. Please press star zero for operators system at that time.
I would like to remind everyone that this conference call is being recorded.
I'll now hand, the call over to Jason Adair, Vice President corporate development and strategy.
Thank you Catherine and good morning, welcome to Acquity This fourth quarter and full year 2019 financial results corporate update conference call.
Today's call will include forward looking statements pursuant to the private Securities Litigation Reform Act 1995 based on current expectation.
Such statements represent management's judgment as of today may involve significant risks and uncertainties that could cause actual results to differ materially from expected results.
Please refer to liquid is filings with the FCC, which are available from the FTC at Www Dot as you see that go forward from liquid is web site at Liquidio Dot com for information concerning risk factors that could cause such differences and otherwise affect the company.
I'd now like to turn the call over to Neal founder CEO for everybody.
Good morning to everyone and thank you for joining us on the call with me today, our rich cats, our Chief Financial Officer, Dr., Robert Cigna's Senior Vice President of product development and program lead for like you wait six one and Jerry Thomas Senior Vice President of commercial.
This morning, I will summarize our recent accomplishments and provide an update on our two pipeline programs like you wait six one and like you 865.
Rich will provide a brief summary of financial results for the fourth quarter and for full year 2019, and then I'll conclude our prepared remarks and open the call for your questions.
2019 was a year a tremendous progress for the company and its lead program like you Eightsix one.
As a reminder, 861 isn't inhaled dry powder formulation of treprostinil across the cycle on analog used to treat pulmonary arterial hypertension or ph by targeting to pulmonary arteries. We believe that 861 has the potential to maximize the therapeutic benefits of treprostinil by safely delay.
Bring higher doses directly into the lungs, using a convenient pong sized dry powder inhaler.
Over the course of the year, we steadily executed on our clinical operational and regulatory activities ultimately leading to the company's first in da submission in January of this year.
We believe that clinical information included in India addresses the FDA guidance for potential approval under the father five the two pathway.
Specifically.
Our inspired trial enrolled more than 100 ph patients in clearly established the safety and Tolerability profile of our print enabled dry powder formulation of Treprostinil.
By including patients naive to process, the cycling and those switching from Tyvaso. We help establish that like you wait six one can be comfortably added at different stages of a patient's disease and treatment regimen.
We also collected safety data on a wide range of doses, including dose levels that are comparable to twice the amount in the maximum recommended dose of tyvaso.
We believe the convenience and dose range of 861 will enable patients to easily initiate and maximize the length of treatment on inhaled therapy.
Secondly, we confirmed that Treprostinil exposure from LNG wait six one is comparable to tyvaso the reference listed drug.
We recently presented data at the 14th annual pulmonary vascular Research Institute or PDR I conference that demonstrates a 79.5 microgram dose of like you Eightsix one is comparable to nine breadth of Tyvaso.
This positive pharmacokinetic comparison and healthy human subjects may also be reflected in the high rate of sustained treatment that we observed in the tyvaso transition patients from inspire.
And finally, we included several exploratory endpoints to help inform the FDA and the medical community on the potential treatment benefit using like you Eightsix one.
We saw a positive trends and duration of treatment quality of life six minute walk distance and assessment of changes to New York Heart Association functional class, we will be sharing complete sets of these data at upcoming annual medical conferences and publish manuscripts later this year, including an oral presentation in April.
As a 40 of annual meeting of the International Society for heart and lung transplantation and a recently accepted late breaker poster at American Thoracic Society in May.
With the inspired data closed in the end da submitted we will continue to actively treat us patients in an open label extension study and European patients in a study to assess their hemodynamic dose response relationship to Eightsix one.
Concurrent to these ongoing studies, we are diligently preparing for the FDA response to our India submission and successive interactions to support the approval of 861.
We feel well prepared to address the FDA has questions having had the benefit of previous onsite interactions during their visit as part of the emerging technologies program as well as the clear responses to our questions in the pre NDA meeting correspondence.
Well it six one represents the near term value for liquidity, we have continued to advance our pipeline.
Like you 865 is a print formulation of due to the came to treat local post operative pain for three to five days with a single administration.
During 2019, we completed our initial Nonclinical studies in soft tissues and bone healing.
Results were acceptable and not statistically different from controls and multiple soft tissue studies. However, as we reported last quarter. We're conducting additional studies to help determine a new adverse effect a level on bone healing.
Complete results of the ongoing Nonclinical studies are expected during the second half of 2020.
And we'll inform our ability to initiate phase two proof of concept studies.
Additionally, we have recently initiated a new program to develop and inhaled products leveraging the proof of concept as demonstrated with like you wait six one in which each print particle has a precise uniform aerodynamic size and shape for deep on delivery, we are evaluating multiple molecules in early stage formulation and.
We will provide an update when a lead candidate has been identified.
I would now like to turn the call over to rich to review, our fourth quarter and full year financial summary, Thank you Neil I'll start with the our fourth quarter results revenues for the three months ended December 31st 29 team were zero that compared to <unk> point 6 million for the comparable period in the prior year.
The decrease I think everyone will remember we recognize fully the 8.1 million of deferred revenue.
In connection with our GSK collaboration during the second quarter.
Of 29 team.
R&D expenses increased slightly to 8.2 from eight.
That was primarily due to a modest increase in non clinical expenses related to 865.
Good day increased significantly from 2.3 up to 5.8 and that was driven by commercial related spending for the six one program.
So in summary, then our loss from ops was 14.
This quarter versus 9.8 in the comparable period last year again, mostly related to the commercial expenses from 861.
And then some increase in non clinical expenses for made six five.
Interest income was 0.1 and that compared to point to in the.
Comparable period last year interest expense was 0.6 compared to point to in the comparable period in the prior year.
So in total than net loss was 14.5 versus 9.7 as a result of the factors I mentioned above we ended the year with cash and cash equivalents totaling 55.8 million.
And that reflected the completion of our ATM sales as well as our private placement towards the end of the year.
Which collectively brought in just north of $30 million on a gross basis.
I'll turn now for the full year results, which I'll just recap briefly.
Revenues for the year were 8.1 and that compared to 2.7 for the prior year.
As I mentioned, we recognize the full rimmer remaining deferred balance.
Deferred revenue of 8.1 related to our GSK collaboration in the second quarter of 2019.
And that then was reflecting the cost of sales line as well because we have license payments due to you and see.
So that number was 0.84 2019 as opposed to 0.1.
For 2018.
R&D expenses were 40.5 million for the year that compared to 28.7 for the prior year and that was driven primarily by 861 clinical program expenses as well some increase in the 865 program expenses, but predominantly 861.
DNA for the year was 13.6 compared to 8.8 again, primarily related to commercial spending on 861.
Loss from Ops, then was 46.8 and that compared to 34.9 as a result for the factors that did I just mentioned.
Interest income 0.6 that compared to 0.3 in the prior year interest expense 1.4 that was compared to 19 million for 2018, but that 19 million was an anomaly.
It reflective in large part the conversion of 27.4 million of convertible notes into shares of series D preferred stock prior to the IPO.
So net loss then in total for 2019 decreased to 47.6 million from 53.1.
That was driven by the.
The interest expense.
Did I mention the increase in revenues.
And partially offset of course by increase expenses related to six one both R&D and commercial.
As well as an increase in Nonclinical expenses for 865.
In addition, I would just like to mentioned that looking ahead into 2020, we will seek to continue to strengthen the balance sheet by evaluating multiple funding options, including non dilutive financings issuance of new equity and potential partnerships with companies that could offer strategic and commercial synergies with.
Six one.
Now I'll turn the call now back to Neil.
Thanks, Rich I'm, having reflected on the major accomplishments in 2019. The company is laser focused on our task at hand in 2020, which is to seek FDA approval of 861 as the first dry powder inhaler for the treatment of ph.
We're very excited for the year ahead, and look forward to sharing more details of progress specifically, we intend to first seeking FDA acceptance and filing of the 861 in da submission.
Present, and published full datasets from the inspired trial throughout 2020.
Prepare for commercialization of 861.
And advance our pipeline programs to their individual key stage gates.
So with those objectives in mind I'll now turn the call over to the operator, and we're happy to take your questions.
Thank you.
If you would like to ask a question.
Please press star one on your telephone to withdraw your question press the pound key again, if you would like to ask a question press Star one.
Our first question comes from.
Liana.
That's helpful with Wedbush Your line is open.
Thank you for taking my question and congratulations on your progress.
Thanks Leon.
For the 79.5 microgram of eight one how many how many inhalation does it take to get to that level.
Rob you want to.
Take that this question.
Yes, good morning Liana.
And our in our studies, we advised one did to breast per.
Capsule inhalation.
Okay and then.
The patients that had been on it for 18 months.
They plateaued in their response or do they continue to improve.
We continue to analyze the data as it comes in and right now we believe the patients who are on 861 chronically are receiving clinical benefit.
Okay.
And then for the European Trail mentioned in the press release.
And can you estimate the time to data.
Yes.
Rob again, so we are actively enrolling patients in both France, and Germany, and we are targeting completion by the end of 2021 for the chronic portion of the study and the acute portion having.
Completed in the first half of 2021.
Okay and then.
How should we think about.
Opex in 2020 versus 2019.
In.
2020, you can expect operating expenses to increase somewhat.
We will be doing some.
Work on the commercial side as I alluded to.
And so that will that will drive up gionee somewhat.
R&D will be.
It depends on exactly what studies, we undertake exactly what times, but right now the on I think it's safe to assume.
May be somewhat down, but but ballpark roughly even.
Okay and then my last question is.
For the preclinical.
The loan candidate what's your purpose for that what kind of disease are you looking forward.
Well liana somewhat consistent with on with what we've done with Eightsix. One these with the five of five be too high value candidates.
And so we want to build off of expertise, we built with Eightsix, one and capitalize on that we're looking at several candidates and we'll keep you posted as we continue to make advancements there.
So you're thinking it pulmonary hypertension.
That in other areas. So it's not specific to any one area, but we're looking at what we consider a high unmet need areas that potentially can change the landscape with our technology like we're doing with Eightsix one.
Okay. Thank you very much.
Thank you.
Our next question comes from Ken Cacciatore with Cowen and company. Your line is open.
Hey, guys. Congrats on all the progress real exciting you're coming up but just was wondering if you could help frame for us what it would take for you all to bring it six one to market on your own in terms of Salesforce size could we do have real official launch here could be do things a little bit differently. So that you are able to forget to market with without partnering.
And then also is that it therapeutics does seem to be continuing to study type base. So it had some interesting results in the interstitial lung disease population and that seems like to someone like me a good opportunity potentially for you all as well. So can you talk about what it would take to be able to piggyback on that type of day.
Could you get your label expanded or what kind of study would you have to do to be able to.
Capitalize on that opportunity as well thanks, so much.
Hey, Ken Hey, good morning, its Neil outs I'll take the first question you popped out there and I'll on I'll kind of segue into what Rob handle on the second one.
That.
Kind of step start out with we're very excited about the commercial opportunity here ahead of us with Eightsix one from the beginning and as you know one of the things Thats been intriguing as Youve stacks up against other pharma launches this would be.
On in the realm of what we would call a commercially efficient launch.
Depending on who you benchmark in how you do that this looks like on order of 50 or less kind of sales representatives.
But we're looking at that very closely to see what would be optimal there. Obviously, it's the thread the needle approach of making sure. We're doing what we need to do from a sales and marketing standpoint, and that same time watching our expenses, but Jerry Thomas and her team and then on this for quite some time.
And we feel very well prepared as we move down the spike or as you would imagine already had extensive.
Market research and execution types of discussions as we move into this year and are really looking forward to next year.
We are very encouraged I'll kind of segue into your second question very encouraged by the work that just recently came out from United on degree three population, we think Thats a step forward for patients based on on what we know and I'll, let rob speak to that in a little more detail.
Good morning, Ken.
Yes.
Echo Neal the first when we heard the topline data the first thing I thought about what a great day for patients.
The topline data supporting benefit in this very difficult to treat form of pulmonary hypertension, and we are encouraged because we believe this this suggests that inhaled delivery tree process, all the local inhaled delivery of tree profitable.
Showing benefit where other drugs have failed in the past.
I am and the companies interested in seeing the detailed data, obviously, especially how they dose than what kind of adverse events were seeing and the details of the data and as far as liquidity as key Terry will discuss this with the FDA.
Once we complete our current group one end da review right now we're focused on getting 861 approved for group one ph.
Thanks, so much.
Thank you again, if you would like to ask a question. Please press star one.
We have a question from search filter with Needham Your line is open.
Hi, good morning, Thanks for taking my question.
Can you talk a little bit more about the.
Attention study for the inspired trial.
How many patients have moved on to that part of the trial and what you're tracking besides the safety.
Sure. This is Rob again, good morning search so as you know most of our patients continued chose to continue treatment with 861 and the extension study.
We assume they're pleased with the benefit every snubbing the ease of administration and also you know there.
Continued their continued maintenance.
As we reported earlier, 80% of our inspire patients remain on drug to be on month poor.
And in fact, some as Neil mentioned earlier past 18 months.
This data will be shared as we report data out later in the year as and we do.
Yeah.
These patients continue to do well I just want to amplify that.
Okay.
And then.
Can you just talked about the I guess a continuation of.
Of the park Kens question on the type based so just the current mark market opportunity.
Vehicle sales have been pretty stable for the last here is how do you think.
Six one can disrupt that market and how you approach that.
Yes, Hey, good morning, Surgeons, Neil Yes, so obviously we.
Continue to look at kind of the same thing you are there and it's been encouraging to see the stability of time, they say three time.
We see Eightsix, one is a big step forward for patients kind on two fronts, one obviously convenience.
The ability to use a simple to use dropout or inhaler versus a nebulizer today is a real step forward for patients, but I think really encouraging to us is it's not only that at the whole treatment paradigm as demonstrated by the inspire study.
You know, we've had really robust data to show that.
Patients are willing to use a dry powder inhaler earlier in the disease process. When you think about trying to get and inhaled prostacyclin locally into the long, which is ideally where you wanted me to begin with as Rob share does that add on segment of patients and the data that came from that were very encouraging to show earlier use and then maybe.
What a patient would consider with a nebulizer and obviously the down the downstream impact is tremendous too we feel.
Based on our ability to dose higher so from a quality of life is as we demonstrated some of our exploratory endpoints patients can continue forward with a simple to use dry powder inhaler to deliver price the cycle on for a longer period of time before having to be tethered to some form of parental medication in later stage disease. So we see it.
As it's not just kind of a static opportunity today that we see with the sales were looking at but also an ability to expand beyond that with clinical use up based on the data that we have from inspire.
Yes.
Thank you.
Thank you and I'm showing no further questions at this time I'd like to turn the call back to Mr. Neal follow for any closing remarks.
Thanks, very much to everyone for joining us on the call today. We appreciate everyone's continued interest in investment in Liquidio and.
We will update you on our progress throughout the year. So hope everyone has a great day and thanks again.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
Okay.
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