Q4 2019 Earnings Call

[music].

Greetings welcome to the video about Pharmaceuticals, Q4, 2019 earned and business update conference call. At this time all participants are in listen only mode of question I met your session will follow the formal presentation, depending which require operator systems. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.

I would now let's turn the conference over to your host Mr. get Lucky CEO. Thank you may begin.

Thank you good afternoon, and welcome everyone to the videos fourth quarter 2019 earnings call.

Black and Chief Executive Officer video biopharmaceutical.

This call will cover in the videos financial and operating results for the fourth quarter 2019, which ended on December 31st 2019, along with a discussion of Golden milestones for 2024 prepared remarks, well open up the conference call to a question answer session with me our call today is our Chief Medical Officer, Dr., Microsoft and our director of Finance and administration.

And Eric eat.

Before we get our formal remarks I'd like to remind everyone. That's always statements on this conference call maybe considered forward looking statements within the meaning of section 27, Hey, The Securities Act Nike 33 as amended its actually 21 E of Securities Exchange Act at Viking 34, as amended that concerned matters that involve risks and uncertainties that could cause actual results.

Differ materially from those anticipated or projected in the forward looking statements words, such as expects anticipates intends plans Ames targets believes seeks estimates optimistic potential goal suggest and similar expressions identify forward looking statements. These forward looking statements relate to the effectiveness of the company.

Bodily fluid based diagnostic test has all the company's ability to successfully commercialized so stressed platform for at least some cancer and the diagnosis and monitoring rheumatoid arthritis. The company's actual results may differ materially from those indicated and these forward looking statements due to numerous risks and uncertainties for instance, if we fail to develop and commercialize diagnostic.

Products, we may be unable to execute our plan of operations are the risks and uncertainties include the company's failure to obtain necessary regulatory clearances were approvals to distribute and market future products and the clinical I B D market failure by the marketplace to accept the products and the company's development pipeline or any other dike diagnostic products the company might develop the comedy.

We'll face fierce competition and the company's intended products may become obsolete due to the highly competitive nature of the diagnostic March at market and its rapid technological change.

[noise] inability to maintain effective internal control over financial reporting the outcome of any pending litigation and other risks identified in the company's most recent annual report on form 10-K, a quarter reports on form 10-Q as well as other documents the company filed with Securities Exchange Commission. These statements are based on current expectations estimates.

Projections about the company's business based in part on assumptions made by management. These statements are not guaranteed a future performance and involve risks uncertainties and assumptions that are difficult to predict forward. Looking statements were made as are the data This conference call and except as required by law. The coffee does not undertake an obligation to update its four.

We're looking statements to reflect future events or circumstances.

I want to start by saying that our comments this quarter, but once again I'd be primarily focused on our ongoing preclinical and clinical research efforts well you a lot at what we have a lot of things going on at the moment I want to keep the discussion focused Oh, we are focused on which is bringing the already product to market.

I'm very pleased with the progress of the company has been making on many fronts.

Rosa, let's go to update you on several key milestones we've hit over the past several months and I anticipate other major positive announcements over the next month or two.

I've always guided the street and our owners you the oil shareholders that we would seek out the right partner at the right time and not let funding be the main deciding point.

We have really called US a lot on the clinical side and on the funding side as well we created we went into the dilution and regain compliance with nice by raising approximately 7.6 million about four weeks ago. There's still would have been considered a good deal in any market, but given what is going on around us. It was truly remarkable when for the company and its shareholders. We now have runway in time to complete the third.

The one trial and complete our partnership discussions I can honestly say more enthusiastic today they've ever been in the 40 years and I've been with the video.

As we narrowed our list of potential partners I assure you that we're getting closer and closer to the finish line.

We have also been moving ahead on a number of different fronts in various areas of the business to bring more products front and center.

The best news is that all the deal making in the radio pharmaceutical sector. It seems that the current market ructions or having virtually no impact on the companys on companies appetite for transactions.

I also once again want to come in my Finance team my regulatory team and certainly last but not least the clinical team for all the hard work. They have been doing we closed towards wanting to faster than I never expected and I've seen incredible pick up in enrollments. It on three as well we're now moving forward with the independent reads to confirm everything and will be speaking with all of you again very very soon.

With that I'd like to turn the call over to Dr. rosell for more details on our development front, Mike. Thank you jet and Hello, everyone has always I'm happy to participate in today's call and provide you with updates from the clinical side.

So I'll begin with the progress are currently running phase Twob trial and already I'm pleased to announce that we have completed enrollment in both arms, one and two of this trial and are more than halfway through recruitment in our three current projections are that this trial will complete this year as scheduled in arms wanting to you might recall, we are evaluating the repeatability.

He reproducibility instability, a bar to Manocept imaging read out in both healthy subjects and in patients with active all right and in the third arm. We are mirroring our upcoming phase three study in order to enable us to obtain data to help validate our power calculations for the phase three as announced previously the interim results on the first two arms were very positive.

Demonstrating low variability of imaging, both within day and overtime those data demonstrated that till manocept can provide robust quantitative imaging and healthy controlled and in patients with active IRA and that this imaging is stable reproducible and can define joints with and without already involved inflammation.

This is fundamentally important to advancing our technology into a successful product in our AG. We have written an abstract on the results of the first interim analysis and submitted it for presentation at the International Conference.

The next milestone is the interim look at the arm three data our plan has been to wait until about half of the arm three subjects had their second imaging event at five weeks post initiation of anti TNF therapy, we are well underway to this milestone and expect those next image that's to be acquired in the coming weeks. We will then complete analysis.

This of these data and have an idea the magnitude of change we might expect to see from baseline scan to five weeks post therapy start in our a subjects I want to make sure to give credit to our clinical trial team.

Work diligently literally day and night in order to keep things moving as efficiently as rapidly as possible, while maintaining quality and integrity of data and provide evidence to you to let you know that the team here is performing at a high level. One. Good example of that is in our recruitment rate evidence suggests that typical recruitment rates in North America in Western Europe.

For phase, two and three trials and IRA or about <unk> 0.4 subjects per month per principal investigator. This means it typically takes about two and a half months for specific site to recruit one subject in these trials our recruitment rate in our current trial is 1.2 subjects per site per month at all.

On three rate has increased significantly in the in the last several months as Jeff alluded to so much. So that we are optimistic that we can complete enrollment into that arm before too long.

With that rate of 1.2 per month per site, we're enrolling at about three times the typical rate across our a trials and across pharma companies, both large and small and all of that with a relatively lean, but obviously efficient team and a protocol in arm three that is actually a difficult one to recruit into compared to many other already trial.

Designs.

We will continue to enroll into arm three of this trial and are planning for the start of the phase to be comparative study of our imaging read out to histopathology from the joy to patients with already as well as the phase three.

We are well positioned for the phase three since most of the sites that are currently recruiting into the ongoing phase to be will be rolled right into that trial and so the logistics and strategies for recruitment will be established.

Our current plan is to initiate that comparative imaging to his still path phase Twob study in the upcoming quarter.

This study will primarily enroll subjects in the UK, where our principal investigator the world's leading position in snowmobile tissue biopsy of patients with our a is located and where there is a network of academic centers that also have specialists in this domain.

We'll have at least one site in the U.S. as well we've spent many months preparing to initiate this trial and are well under way to having all needed approvals and contracts in place to begin.

Got pushed out the start of this trial, while we made sure that we'd have the financial resources to run it adequately while also finishing up the current phase to be and beginning to phase three.

Recall that this phase Twob trial isn't required for FDA approval in the initial indications that already that we are going for but we believe it is critical in order to achieve qualification of CD to us six at the biomarker for Ari as well as to engage with possible pharma partners for a few some trials of their new alright.

Our plan at this time for the phase three is to be ready to begin following meeting with the FDA with our interim analysis wanting to results in hand. So we can be sure. We are fully aligned on the phase three objectives and targets and that first patient first visit should happen later this year.

We have also been working to further refine our quantitative method for determining the amount of localization of two manocept in the joints a both healthy subjects in patients with already as you know this is our key read out and the foundation upon which all of our indications that are a rests at the time of our first interim analysis, we evaluated both them.

Yes. It originally proposed following our prior phase two study as well as a modified method, we developed as we looked at old and new data rolling it.

It was the modified method that provided the best result, we believe we have made significant improvements in the analysis method and we'll continue to refine it with data from the currently running trial in preparation for the phase three.

Directly related to this we recently converted the so called to Manocept uptake value Provisional patent application to anyone application as part of this conversion we made significant revisions to the original claims with our newly discovered improvements in quantitative methodology. The goal of course is to optimize the imaging read method to provide.

The lowest variability mope, most robust quantitation possible.

In other indications, we've now completed patient enrollment in imaging of all subjects and our NIH funded study in cap as the sarcoma as outlined in the studies title in this trial, we sought to evaluate the safety of escalating doses up to Manocept by Ivy injection and perform a comparison to subcutaneous injection in HIV.

Patients diagnosed with Ks you might recall that Ks cells Express the CD tosix receptor that our technology targets and so from both the diagnostic imaging perspective, as well as a therapeutic perspective, it makes sense to pursue it as an indication as well as the continued impact it has an HIV infected people both in the U.S.

Dan in particular throughout Africa.

We have had our site close out and database lock in this trial and are waiting the final biopsy results No safety signal was detected and we completed a comparison of subcu injection to IB injection in these patients as planned.

Final read of clinical assessment, damaging will take place shortly qualitatively what we have seen is excellent localization of Ks lesions and visual as digitalization of the lymphatics following full analysis and wrap up we hope to open up discussion with FDA about the path to NSN da and Ks before too long.

We also have the atherosclerotic plaque imaging study at MGH in Boston.

Dr. Greenspun, there, it's continuing to run this investigator initiated study that we provided support of funds for to look at the ability of till manocept to detect plaques enriched with activated macrophages.

This is building upon the work we published with them already that provided evidenced supportive of this in HIV infected patients and firming up risk score matched healthy controls we've had regular uptake discussions with him and his team and they have completed an internal milestone in the study looking at imaging results via different routes of administration the data.

We have seen are in line with the earlier published work and supportive of the hypothesis that till Manocept can provide an excellent signal to background read of so called soft plaque in the orders of these patients we are having internal discussions on what specific indications in cardiovascular disease to go for and what the next trial might look like.

And we have engaged with external possible partners as well to help support. These studies once our trial plan outlined is finalized we will request a meeting with the FDA to discuss.

This work also lines of course with the phase one grant we have with the NHL beyond that we have in support of our collaboration with the University of Alabama at Bermingham looking at gallium 68 till Manocept for pet imaging plaques preclinical studies are ongoing and we recently received the first data set.

As we outlined at our press release about this this project fits in with our existing pipeline of atherosclerosis and will enable us to test to manocept as a pet imaging agent and compare it to asked 18, FDG pet imaging, which is a widely studied method of looking at macrophages and plaque, but one which we believe as significant deficiencies and compare.

Chris until two Manocept.

On the therapeutic side, we have preclinical study plans in place and if that our kick off meeting for the research collaboration with I envy the clinical stage immuno oncology company that we recently announced a research agreement with.

Remember the purpose of this collaboration between our two companies as to conduct preclinical studies to evaluate the commentary effective our proprietary activated macrophage targeting compounds along with their T cell activating platform based on our discussions with I am be I'd expect the first study to begin shortly along those lines.

We're having good discussions with other players in the therapeutics based about possible collaborative efforts.

Using funding from our NH Therapeutics Grant, we have made significant steps towards synthesizing a robust reproducible and scalable therapeutic construct that can then be tested in human studies. We've also made significant strides into making a next generation of our molecule that we think will provide for improvement in certain.

Agnostic in therapeutic applications.

We also have received positive results from our mechanism of action studies of our doxorubicin containing construct in cell culture and in preclinical models and we aim to hold a pre I indeed meeting with the FDA This year.

We expect to submit manuscripts for publication this year covering these mechanism of action studies as well as the synthesis more.

This month, we will be converting another provisional patent application in this case that therapeutic patent to anyone application, we expect to file at least one new provisional patent application this year on improvements in chemical synthesis.

Finally, we have also initiated work on new therapeutic constructs with payloads other than dexamethasone docs are rubis.

So those are just some of the highlights of the last quarter that we wanted to touch on through this update we remain largely focused on the are a pipeline and moving that toward submission to the FDA, while we continue to support and push for progress on or other diagnostic and therapeutic indications as always I want to thank the team here for their tireless efforts to.

Keep things moving our CEO Jed for allowing us the space an opportunity to achieve these goals and our network of clinical trial sites and academic research collaborators for all of their hard work. Thank you now I would like to turn the call back over to Jeff. Thanks, Mike now, let's move over to the financial updates with Erica.

Thank you Jeff.

As a reminder, our consolidated balance sheet statements of operations and statements of stockholders' equity have been we stated as required for all periods presented to reflect the April 2019 reverse stock split as if it had occurred on January Onest 2018, our consolidated statements of cash flows were not impacted by the reverse stock split.

Total revenues for the fourth quarters above 2018, and 2019 or $119000 total revenues in 2019 were $658000 compared to 1.2 million in 2018.

To your decrease decrease was primarily due to a decrease in license revenue related to the assembly of the company's any the 46 94 technology, which included a non refundable upfront payment in 2018, coupled with a reduction in grant revenue related to small business innovation research grants from the National Institute of Health.

Supporting Manocept development.

Research and development expenses for the fourth quarter 2019 are 1.7 million compared to 854000 in the same period of 2018.

R&D expenses in 2019 were 5.3 million compared to 4.2 million in 2018.

The increase is primarily due to net increases in drug product project development expenses, which includes manocept diagnostic until Manocept development costs offset by decreased Manocept therapeutic and any of these 46 94 development costs.

Assuming expenses for the fourth quarter of 2019 were 1.2 million compared to 1.4 million in the same period of 2018, SGT expenses for 2019 or 6.3 million compared to 7.7 million in 2018.

Decrease was primarily related to the resignation of the company's former CEO in 2018, coupled with net decreases in salaries and bonuses Investor Relations General office expenses and taxes and offset by increased legal and professional services primarily related to the litigation with the company's former CEO.

Nobody is net loss attributable to common stockholders. The fourth quarter of 2019 was 2.8 million or 15 cents per share compared to 3.2 million or 33 cents per share for the same period in 2018.

Our net loss attributable to common stockholders for the full year 2019 was 10.9 million or 76 cents per share compared to 16.1 million or $1.89 per share for 2018.

Finally in a very ended the fourth quarter of 2019 with 1 million in cash and investments.

Disclosed in Nobody's recent filings with the FCC the company executed funding transactions totaling $7.6 million proceeds during the first quarter of 2020.

And with that I'll turn the call back over said.

You are ACA once again I just wanted to thank everybody for calling in wanted to thank the team for all the hard work and more importantly, I just want people to know how hard everybody's working here how diligence our clinicians have been working on enrolling more and more patients into the study and really just how excited everybody is here.

To get the other trials off and running and really moved this product forward into the approval stage with that I'd like to turn it over the operator to open up the today.

Thank you at this time, we conducted a question and answer session. If you would like to ask questions. Please press star one on your telephone keypad confirmation. So indicate your line is in the question Q you mean Prestart you. If you will let your move your question from the Q.

For participants using speaker women and maybe lesser to pick up your answer for person start keys, one moment, please pull for questions.

Our first question comes a lot of Jason Mccarthy with Maxim Group. Please proceed with your question.

Hey, Joe This is Michael Accuen, which on for Jason Thanks for taking my question.

So.

For the first first question I have a couple here like to see if you could kind of help break down the the Tc till pathway forward, particularly surrounding the.

32 phase Twob study that one looks pretty interesting, let's see what the market for Tc till looks like in the minimum case. So like just the 31 33 studies versus if you can actually demonstrate that correlation to immuno Chris histochemistry with the 32 study.

Well I'm going to take part of it on the let Dr. rosell take the other part in our estimates so we've been going over market sizes, and that's something that's in our presentation. We have those two bottles. We do think that conservatively at North America alone 31, Slash 33 gets us and a half a billion range and then opening up.

Uh huh.

Typing and everything else, probably gets us somewhere into the billions of dollars a half range in North America alone just remember you're looking at a base of $50 billion in revenues for the already therapeutics a market that really doesn't have any.

Any diagnostic that is really objective and more importantly, the way that we've already been working in terms of the pricing and how were how aggressive we're going to really marketed we do think that we're going to be able to capture that share. So we think the 31 really opens it up especially since the anti TNF are the de facto the main go too, but 32, especially with some of the stuff that Dr.

The Rosemont talk about in a minute.

Really really widens it because there's so many different options out there and I think what our investors really need to understand I think it's still lost on the stock I guess because of the history and all the other stuff is the fact that this is an area that has lots and lots of treatment options, probably the most treatment options of anything out there and yet there is no.

Real diagnostic all the treatment options are expensive all of them have side effects and more importantly, all of that mechanisms of action and without a proper diagnostic and monitoring tool you're flying blind and so its give everybody at anti TNF to start or or let's start with something else, let's do something else, but so where the insurance companies push the anti TNF.

Because of their tiering.

Our diagnostic is going to change all that and no changes for the better so lot of the pushback is well once the humira people, possibly be angry that's not that's actually the exact opposite of what our diagnostic it's going to do because our diagnostic is going to say simply those who are getting better stay on their current treatment those who arent get them off of it as soon as possible.

Okay, so they're not exposed.

Over the fears going on right now with Corona virus is mainly for individuals like myself and other people on biologics because you have a compromise immune system and so if your immune system is compromised Andrew medicines, not working I mean, why you on the drug in the first place our diagnostic is going to be able to eliminate that and that's why we're so excited and that's why the dry.

Its market is so large that dr. Rosa could shed a little bit more light on the sort of the differences in how the market changes with those two sets of trial, yes. So just did a very good job. There. So 31, the currently running phase to be as well as the phase three we're looking at a change from baseline to five weeks scan and whether or not that is predictive on outcome what.

The comparative study to the path of biology will give us.

The is the pathway typing or sub typing the mapping too.

Those different sub types based on just one scan potentially the baseline scan and so that looks like it's gaining in importance and why is that it turns out that.

From this these this plethora of different biologics and different therapies that are out there there are growing.

Publication number of publications out, they're suggesting that different path and types or sub types respond differently to different biologics and if we can tell a physician rheumatologist at the time that the patient comes in gets a first scan what sub type of disease. There. This particular patient might have than they might build.

The rollout for example, an entire class of drugs. The insurers would love that the patients would love that because they wouldn't have been put on one of these biologics that potentially as very severe side effects and.

And of course, the position would like it as well because you get the person under the right drugs sooner rather than later so and this is all throughout those different path. The type so it turns out that.

The more we can give the physician information about the sub type of disease. The better that physician can then prescribe a medication for that person along with the fact that we can then monitor if the patient is receiving a benefit from that particular drug that is then prescribed so as John said that are really opens up and expands the market quite a bit.

So.

All right, yes. Thank you and then actually I'd like to tie that in to the enrollment speed that you've got to seeing because it's pretty impressive I'd like to see if you could comment maybe on some of the reasons why could be going so much faster than the average.

Especially considering that there are their typical difficulties with cross disciplinary therapy. The diagnostic could this be indicative of the unmet need in the market out there for reliable imaging agent that can help informed treatment decisions and all right.

So I'm going to let Michael handler before I start I. Thank you for that question and I'm glad that you as an outside person has recognized the enrollment speed because I felt don't because I always I've always getting on the clinical team constantly and having been shown the numbers and looked at the average is I am very impressed with with the job they've done but that doesn't mean I'm happy.

And with them I still continue to yell at then every single day and and make sure that if we don't have patients enrolled everyday it's not a funding the office, but I'll, let dr. rolla I had to handle the rest of that we don't restaurant oral care because they're gone the next day.

Appreciate it so yes, so thats a great questions I think you've hit upon something there. So there are there are two sides to this answer one is we haven't experienced clinical trial team, who who not only have done work with new video and in our first our eight trials, but in the field in general in so there's a lot of experience here and expertise.

And how to engage with sites how to choose the right sites to engage with and how to continue the engagement process, because you really need to theres kind of a fine line of being.

Talking to the site communicating with them from the pie is down at the coordinators down to the the staff who may be do the the actual exams themselves. The imaging exams for example.

And bothering them too much. So so I think this group is really good has been really good at figuring out that happy middle that place, where we keep the pie is engaged we let them know that we're thinking of them, it's important to us as well as the staff kind of downstream from them and the second half of this is exactly as you said, what we're seeing is oh.

Recognition, both from the new med side, the imaging side as well as from the rheumatologist that Theres, a theres a need and an opportunity here the rheumatologist see the great need for their patients than in their practices and every time, we speak to them and we speak to them all at least monthly the pie themselves that is we hear this from them and how they are.

Cited about this and they ask us how isn't recruitment going what can they do to help increase it what we learn from them and they learn from Austin from other sites that we bring that in from it we bring that information from other sites to them and then on the new med side, they're interested in having another tool in there in their tool kit right to apply in the U.S.

Yeah.

As nuclear med physicians and so they want to play a role in this as well and so they're excited about that so so indeed, we've got a really good team here, who who know what they're doing and who engage the right sites and engage them appropriately and then we've got in excited group of ice both on the rheumatology side as well as the new med side.

Yes, I have some bias you're of course, but this team has really been around the field for awhile and I've seen teams in large and small companies and this is kind of an 18 here I think that that's doing a really bang up job and so we will want to make sure we give them appropriate credit so.

Alright. Thank you for that I, just got one more kind of more of a.

Housekeeping question I, just like to confirm on some of the timeline. So so for arm. Three you guys said that you you meant that 50% enrollment Mark and you should have the raw data coming in.

The next few weeks, so should we expect to see that that actual data around mid 2020, or so and then when you infant anticipating the full data from 331.

Yes, so the.

Indeed, we're just over half of the subjects enrolled in the in arm three and we're waiting on just a handful of small handful of those to have their five weeks scan several of them about their 24 their 12 and 24 weeks scans whats will only be helpful for us in terms of looking at these data. So the plan is once those rolling in the coming weeks.

And we're actually going to be working on it before then but of course once all the data. Our end then we'll crunch those numbers given to our statisticians and that will take all of that the final number crunching. The statistician analysis will take some weeks I don't want to promise on timelines there, but we'll do our best we're setting up things so that we can achieve our goals.

As rapidly as possible, we do we tried to do things smartly and efficiently here. So the statisticians are ready and waiting they know what they're going to receive they've already got the programs written so we've got all these pieces in place already so there will be ready once they receive the data to do things rapidly. So yes, it'll take some weeks or a matter of a couple of months.

There are so but give or take up plus or minus there. Some some number of weeks so that will be in it looks like if we get the at the rate we're going in terms of recruitment and enrollment into the arm three we optimistic we think maybe we can get all of those subjects enrolled maybe it by the end of April right again don't hold me to it but thats the way things.

Looking as of this moment on this phone call that that is achievable. So then if you remember the protocol design, we've got maximally a six month follow up scan in those patients if they don't drop out of the study earlier, because they've gone off their anti TNF alpha and they might about half. The subjects. We expect will go off earlier, so if they follow up that way than.

We'd be we'd have six months plus April right. So we imagine all those data are going to be in.

By the end of this year.

Then we'll do our analyses of the full dataset of arms, one two and three and then we'll write up our clinical study report and you'll be one of the first to know about it you that the Royal you. So.

Well, thank you very much and I'm looking forward to any future progress. Thanks for taking the questions again.

Thank you and thank you.

Our next question comes the line of Vernon Bernardino with HC Wainwright. Please proceed with your question.

Hi, guys. Thanks for the from the question then.

Thats on the progress.

It looks like.

You got a lot of since summing up as far as the phase to be an entre and definitely looking forward to be.

The mid twenties Tony.

Lead out.

So my questions were also related to the enrollment rate and the.

The three times typical rates so congrats on that to the team.

Mike.

The sense of pays us.

Joel.

And I guess related to the question does.

The fire analysts.

If you're going to spend a little further the unmet medical need there.

Seems like it could translate to market opportunity have you had additional thoughts as to whats.

That may translate into or is that already built into your.

Occasions as far as the market opportunity is concerned.

Well I think it's built in we and that can comment on this further we do we've known for quite some time that theres, a great medical need and our Kale wells that we've contacted over the last several years in the rheumatology space have told us about that and so I think at our models, we built in a fairly rapid growth rate that actually conservative.

Based on our discussions with these rheumatologist and now our experience in this kind of trial. So indeed, there is a great medical need I mean, just to revisit this and maybe already understand this well.

Right now the in the treatment of our a it's a it's a trial and error approach right. Some of it is dictated by cost so.

Very often for example in the UK you must put a patient on a methotrexate, even though there's a decent chances that won't do a bit of good but because it's super cheap to put a patient on methotrexate, you've got to start them on that and then you have to wait a few months determine if that is even working and then you can seek approval to go to a biologic that is basically.

In the model in the U.S., although some health insurance companies are starting to recognize that may be going through these cheaper non biologics isn't always the best case scenario, even for them and their own costs.

Our cost burden. So we're hearing more from rheumatologist that there are some flexibility there, but really there they're kind of blind here are there going on kind of sense of smell. So it's a it's a trial and error of different drugs.

And you have to wait to see if it's working.

About half the time these drugs any particular drug won't work on any particular patient and then you won't know that for maybe three to six months and bad things are happening in that time period potentially to the patient and so and things might be getting worse and then you have to repeat this again with another trial and error you've learned something from the first time. So maybe you go to some.

Thing else, but they're really shooting in the dark and so rheumatologist are very excited about this and I think we are seeing this in part of you know we're seeing this played out in our clinical trial enrollment rate.

Yes, and it's it's a good point, because I think that as as a lot of our shareholders and I can see the list on the call everybody uses dial that is and it's been involved in the company for long time. This is something that has really progressed over time to just looking at diagnosis just looking at that to realizing working with the K 12, the thing that we.

Stressed when we talk with everybody is that when we got Lymphoseek approved I wasn't here, but it was sort of a different pathway was it's a great drug remains a great drug is growing nicely in the U.S.

We're looking forward to having some growth in Europe, and a very near future as well, but more importantly, it was not necessarily done the right way as then we get the right K wells when we were doing the trial as we've grown with these trials its all because of what we got as the feedback from RK.

Well what would they prescribe what do they want and that's how we've taken.

Struck down the path that is going down is very different than what we were talking about just a few years ago, which is why the phase II was structured differently than it probably should have been but the way. We're looking at it now it's something that is creating a lifetime value of a customer that's what the K while wants and also we're taking the next step by making it all digital as you know.

And so this allows for patient portability, but also allows for really.

To be able to build on using all the great digital stuff that's out there using all the innovation and be able to than have this data bank that will serve the patients well and serve the product well as it grows and more and more data comes in so this is this is seriously something that is going to grow over time, we do not actually factor in the value of the.

Data into our estimates so thats one thing that we are we're keeping a very conservative look at by not actually considering the value that at this juncture about we understand that the monitoring aspect of things is really what all the K wells want and Thats why the trials are structured the where they are yes. That's this is Mike thats exactly the right point that Jed made.

We are the trial design itself as well as the phase three we incorporated the feedback from the K 12, and this is the kind of trial that that they all have focused on and said this is what we need.

End of the imaging assessment time points.

There is virtual.

Anatomist agreement on the design of this trial infected I think it is unanimous.

Which is amazing and they're all very excited to see the result so.

So.

So I guess the other three times, so cyclical raise doesn't buy full amount assessing this can likely be translate into realize look on the global.

Yes, my expectation would be the fact that they are so excited enthused about this and working so hard to recruit should translate into the.

What they want to implement in their clinical practice absolutely.

Thats very exciting then my other question is.

You had mentioned.

Version of the.

The two manocept uptick quantitative image analysis.

Application is there.

Perhaps an idea.

That could translate into.

Hi, Mark.

Market opportunity if anything.

Yes, so the that quantitative method is actually the nuts and bolts of what will be offerings. So that is the means that will be the that forms. The foundation of the algorithm that we will be employing through our central reading laboratory to read these images. So it plays an integral role in the product itself and our a and.

As a little bit of a teas.

It's written broadly enough and the fundamentals of it are broad enough that it actually might be.

Have significant value and other domains related to imaging quantitation and I'll just leave that at that.

Okay very exciting.

Im looking forward to.

Yes.

And next several weeks and yes, the exciting progress.

Tomasic phase to be into phase three congratulations. Thank you. Thank you learn it.

Next question. Our next question comes a lot of Michael private Investor. Please see with your question.

Thank you for taking my call. Good afternoon, gentlemen, so I have two different questions. I guess, the first question is pretty short.

I'd like to know whether Mr. Scott.

Or any entity or person affiliated with him was the purchaser of the Ohio judgment that the company disclosed last month.

He was not nor was it any entity affiliated with him. Okay. Thank you very much for that.

Second question is a question.

Management is probably.

Tired of getting and I understand that management is said on several times that they will not make you deal with respect to our a with any partnership with any partner.

It doesn't recognize the full value of the.

Central product, but I guess from sitting here as a shareholder who's been in the stock for a significant period of time.

I guess I'm trying to understand is why it seems like deadlines keep getting pushed out.

In the Q2 call back in August of last year.

I think management said that securing a partnership with the right partner in to the right terms is a primary goal for the company's still in 2019.

Then in October when the company announced the interim results.

I think things were said such as we received quite a lot of inquiries is assisted in moving the ball forward. This should lead to other positive things in a very quick manner.

On the Q3 call then in November a couple of weeks later.

I want to ensure all our investors. The best is yet to come we have made major milestones on the horizon will do everything in our power to make sure. We achieved our goal is in a timely manner.

We're not going anything slow us down and I mean, I could go on and on but I'm just trying to understand why it seems like these deadlines keep getting pushed out and I guess one other related question, possibly from Mike is also on the Q3 call.

I believe he said at the start of the phase three does not have to be when the phase to be is over and the company was expecting to stagger. Those two results if I understood comments earlier today.

That has now possibly changed that the company would like to finalize the take the phase to be trials.

For initiating phase three or.

Really finalizing any partnership discussions so I'm just trying to understand why these deadline seem to keep getting pushed out.

Michael Thank you for the question and so all things first part and I'll let.

That's a rosell handle the second part I would say that the Youre correct. This is something that we've been talking about we have had.

Discussions I did it for full disclosure I thought about a year and a half ago, we were going to have a deal.

In the end the terms I thought were not.

Appropriate for what we wanted we had another offer which.

Was was pretty good with a very large company, but once again I.

I think the the issues with what we've gotten offered so far and this was a year ago and not now with what's on the table today.

We're more the you're running out of money you can't finished this trial and there's no way you're going to all the issue any equity Theres no way, you're going to be able to raise any money you're screwed.

Let's let's make a deal.

And that's just not the case I mean, we've been able to.

Find.

Find investors get more investors bring more money into the company by thinking creatively and now I can tell you that the term sheets that are on the table right now are for bigger numbers.

We are we have multiple companies doing.

Third party paid research now on the Companys third party valuations of the product to confirm that one of those companies has actually confirmed what our numbers are.

Unfortunately, they pay for it so you don't get access to that report, but they have confirmed it and we are further along than we've ever been and the numbers have all been discussed and we said this is what we want this is the terms of of the milestones that we want and this is what's going to take to do that and we're not going away were off of that I'm not.

I'm really really you know strenuously want to say that we're not going to make a deal just to make a deal we've had that opportunity.

We've said no. Thank you too.

A few parties already.

And we are in discussions right now with the ones who are the most interested and those terms I think are quite favorable for us and for the partner as well because we do believe theres a lot of value in this product.

And the partners that we are talking to understand that and.

We are really getting very close.

To to that to that announcement I mean, I think that unfortunately, the one thing is being a little company versus a big company. We are somewhat at the whim of board votes internal meetings and these independent third party valuations, but with all of those coming to an end I do expect that we're going to have something to discuss.

The market in a short order now I don't want to be like the expert with Alan Greenspan's financial statements and everybody analyzing every single word and saying well if you say that it means.

Two weeks or whatever I do expect to have something within the near term and Thats why I said in my opening remarks within the next two or sell months.

Thank you for then I'll, let dr. rosell handle the other side of the question unless you want to unless you out of response.

No I appreciate I appreciate the candor and then the response.

Yes. So thanks, Michael this is Michael.

Nice to speak with you so the.

The good question the phase to be we're still planning to stagger. These right. So it is not the case that were that.

Colleges the policy size, if I was not clear we're not waiting until the phase to be that's currently running it's completely finished or all the data and before we start the phase three rather what we're doing is we're waiting for the instrument at both of the interim looks to be fully and so the first one that we announced in October as well as in this the one that relates to the armed.

Three that we should be happy having coming up there fairly soon then once we've looked at those data what you have to do to request that you request a meeting with the FDA. The kind of meeting. This is others. There's a minimum of 60 days between the time you requested in the time they give it to you doesn't have to be at 60 days, but thats the minimum.

And so we don't want to ask for that meeting until we have the data in hand to know what that we're going to be talking about really in final and fully we want to do the smartly. So what I'm doing is projecting out. So the idea is we'll start the phase three will we will still be recruiting into the currently running phase to be or not recruiting into but by that point will just be.

Following up those subjects, who are already enrolled in arm three of the trial, but there will be a staggered there and so in terms of the timeline of that I think.

We've evolved a little bit in our the plan here in terms of what we would want to bring data wise to the FDA and so maybe that is push things out a little bit as well as even though our overall recruitment rate is super stellar to be Frank with you. There was a period of a couple of months late.

Maybe in Q3, Q4 last year, where the arm three.

Enrollment had lagged right and so they are the sites were recruiting greatly into the arm too and the reason for that is most likely it's an easier arm to recruit into and so I think folks maybe even the coordinators underground were pushing more for recruitment and that arm than the others. We set a folks we met with the pie that.

Continue to speak with them and said we.

Make sure you don't neglect that other arm and then everybody will kind of reawakened and that enrollment now is is going great guns. So so there was that as well, but we're not waiting until the end of the phase to be before we start the phase three does that answer. Your question does thank thank you very much appreciate that you're walk yes.

One question.

Once again, if you like Thats question. Please press star one on your telephone keypad.

Our next question comes a lot of micro Sheila private Investor. Please proceed with your question.

Yes. This is Mike again, thank you for taking my question and Thanks for Congress call. The question. So far have been excellent I appreciate those people at that.

First I'd like to say, Jeff Congratulations on that really low discount rate you got on that accounts receivable. So that was very impressive.

Thank you Mike.

Yep.

Now we talk in Generalities and lab missed Mike result.

Also in Brazil in the.

Press release, you said, we have I on the net interim result.

[music].

On the timing outlook. What you talked are you thinking that the next interim results will be in the next couple of months or is it longer than that.

Yes, I mean, that's what we're shooting for so we've got the we've got the number of subjects that we'd like enrolled and we need to follow up the we need to have those five weeks scans and from the last few who haven't and then like I said, where it will be beginning to analyze those data on a rolling fashion and we need the analysis done and then the statisticians and were.

Trying to position it so that we can do this most expeditiously right because we're excited to see whose results and of course, you folks are as well we're excited to get them. In so we can then prepare our questions and discussions with the FDA, but but I would say that you're you're correct on the timeline. So we'd like those within the next couple of months.

Okay now earlier in the prepared remarks, you said going to the FDA out in the pick Petri for our a later in the year does that are you implying late in the year or maybe after the mid year.

Oh no. So so the idea is it might be probably be right around the mid year right. So if we get those data in.

You know in within a couple of months like I said, we've got the 60 day period from the time you request a meeting with the FDA till they give it to you so that might put us into the summer.

Then once we've got all the.

The go ahead, the blessing that we believe we're going to get from the FDA because remember we've met with them all along the way they've been in line with our thinking or we want to show them. The data from these the pilot arm of the of the currently running trial that mirrors, the phase three as well as the repeatability reproducibility and stability data.

Because we're using those to set our benchmarks for what the objectives and endpoints will be in the phase three inexact aligned with what they recommended we do but we need some numbers for that right. So we're going to bring those to the table to the FDA, we're preparing even as we speak we're setting up.

Sites for the phase three so once we get that response from the FDA. It. All systems are go then we'll start to engage the machinery at full operation to get that phase three going.

Yes, yes in the press release, it said that the funds that use received from the recent financings and accounts receivable. So would that launch you include the net critical trial, how far do those funds launching into the start of the RFP three do they get you ended the start of the our Eightpointthree.

Oh, yes, yes for sure I mean, I think that these funds and remember things are going.

Things are going to change when the interim results come as well so we'll adjust for that but these funds if everything else remains equal in the same.

Definitely get us into the phase three and also probably get outside the launch of the 32 as well we're just working on the logistics on the 32.

So thats something that.

That we are going to two to push forward as well I think that it gives us a very nice runway to get those things going without having to rely on anything else in the near term.

These trial. This is Mike Rosell. These trials that by the way. That's how you say my last name Rosell I'd like to ask how to say your last name you call in all the time and I appreciate it and I don't know how does that your last name, but one second we these trials may be less expensive than you think they are weve map these out.

And with everything else aside I'm not going to give you the exact numbers, but they are significantly less than your typical.

Clinical trial Thats, one of the beauties of kind of an imaging based trial, rather than a large scale therapeutic trial.

Anyway, how do you say your last name exactly please.

Rick Kelly, Mike Rick Kelly Wow that was not what I was doing so thank you for that.

Yes.

You have another.

I try to pull people so I call over be track down yes, I have just a couple more I appreciate what you're sharing you shared a little bit on the Ks imaging.

Trial.

Incomplete and your next steps, but one of interest also is the Cape Ks therapeutic trial, and I and the timing that's been in the.

Courts for quite a while.

Are you still playing a share to go to the FDA for an eye in D. on Ks therapeutics or not or can you share that.

Yes, pre I'd meeting anyway, so the.

Those data are actually very strong data. So weve continue those studies from the the funding of that grant with you CSF and as I mentioned in my notes here that my scripted comments, we plan to be writing those up we may actually be presenting those at an international meeting before too long, but actually very exciting and so we think we're going to be in a good.

Positioned to to meet with the FDA and yes, theres a lot going on with a small team, but I would I would like to go to the FDA before the end of the year with yes.

Okay, and I have three more questions. If you don't mind keep adding quick.

Okay, and then kind of get into the days world a little bit has there been any further subjects injected in the.

Pretoria, Jenny 68 trial TB Carl.

Yes, so the update there is mike's ASCII and I'm really booked during his name, but anyway, thats I'm going to say that can do it he he's a nuke med physician there who's running that investigator initiated trial. He's done a handful of subjects I think at last count he had injected.

Seven subjects and what he'd what his current role in conclusion was based on those pilot data that he'd want to do increase the mass dose and potentially the radio label amount of gallium 68 on these and then go forward and do more subjects. So that he could increase the signal you'd also been working towards Optum.

My thing and we cubist with them we we.

We didn't directed because it's an I asked but we gave them our thoughts as well and he can do with them as easy as he thinks.

We gave us some ideas about maybe an optimal imaging window as well based on what are you had shared with us and so as far as I know what he's been doing currently is he's writing up our revised protocol to change the mass dose the radio label dose and maybe the imaging time to get an optimal imaging window and imaging material.

And then he'll go forward more with the pilot study, but those that study is indeed progressing so.

Okay. What's the next the last question.

Evolves around viruses.

And you've done a lot of work on the preclinical trials on Zika and Dan Gate.

And you had some really good results on Mt, one or two and empty too old to in preclinical trials, which you were at.

Getting data together.

Do you think with all the.

Concern with the.

Grown a virus that there will be any grant funding available to help you push these forward or is that not in the off.

No absolutely there could be grant funding to push these forward looking forward and those preliminary data are very compelling in the at least Isis domain as well as in Dengate, but to be Frank we are prioritizing what we're putting our efforts forward on and we don't want to.

I think maybe.

I wasn't here, but I think maybe there was a little bit of shiny object syndrome in the past and we don't want to replicate that kind of history. The company. Since we are a small lean and mean machine and we want to focus on the biggest targets, where we think we can bring the biggest impact most rapidly right and then as we grow we can expand out into these other areas, but indeed, there are compelling data and those don't.

Mains and it is something that that we're monitoring not too to use the.

Theres upon their somewhere with people being monitored for cross device, but we're we're of course aware of these things and the possible grant funding in these domain. So disease area, you expect making any I mean, I know you're trying to be focused and I understand all that but with grant funding we are building.

Gained some third party services to help you anticipate any funding coming through on that or do you even apply rainy.

We'd have to we have to talk about that in terms of applications because you're right. Once you get the money you can you can involve third parties.

Who might do a great majority of the actual physical work, but of course it takes some intellectual input to get the graph to get them funded so we're trying to focus on the things we're focusing on for the reasons that I said, but again, it's not that it's a thrown aside because for some promise there. So we're going to keep looking at that.

Okay and last question is a big big tent the umbrella type question and I think you get at all times, yet when you go to these various conferences.

Is there any pending competition.

The Manocept platform that you know that is out there or that is pending.

Not that we've seen and believe me we have some very diligent shareholders and individuals on our team I'm talking about you.

Who have been very you know aware of looking at that I mean, we look at everything out there we're constantly.

Really going through to find out if theres anything out there and there really isn't anything out there and so we're going to continue to.

Pushes product forward, obviously, so we are in the market, but as of now there's really nothing else out there that can that can do what we do or or is in testing I think that what's what's always been interesting to me is obviously you see the different multiples. Although now mark has been going all the multiples are compressing.

But you see the different multiples when diagnostic and therapeutic we also see another thing you see a very very large focus in the news today about diagnostic testing and how important it is and how important is to stay ahead of that I think that this really brings a focus back to companies like ours.

Saying, we have a corona virus test because we don't.

Our.

We're really focused on all ray.

Not that we couldn't pick up the virus. If you wanted to with our technology, but that neither into there, but you know there is a focus on diagnostic testing, especially in an area where.

Things like Pandemics at break cause massive stress to the healthcare system and anything that can possibly lower the cost burden to this system will be something that more and more will be not only embrace but insisted upon and that's why we're really excited about the technology. That's why we're really pushing it.

With that invite other competitors into the market potentially but theres nobody thankfully right now who has what we have and that's why we are moving forward to.

To really getting us to market, we keep on pushing the IP our team here.

Dr. Ralph.

Is constantly filing new IP to make sure that we protect all of our patents and enhance all of our pads and that's something that we're going to continue to do.

And so we are very excited about it I mean, unfortunately with what's been going on in the market and the world, We hope and pray for everybody safety, but it has once again brought a focus back onto the diagnostic space, which serves a very very critical critical role in and our health care system, Yes, Mike This is Mike.

Yes.

Well go unlike yugo no no I was just going to say this big umbrella. This big tent focus on no pending competition mitigate in my view. The fact that it may take a little longer to get all your RH subjects tested it may take longer to get a partner with a win win that is a real mid.

A gating factor so yes, everybody would like a partner faster everybody would like a win win everybody likes the trials faster, we're all human and that's what we would like this this is a real mitigating factor and I think it's something that adds great value that's not recognized.

No I think your this is Mike Rosebel, you're absolutely right, Mike and what I was going to say is not only do Dave Ralph in jet and others like yourselves spend our nights scanning the literature in the world looking for what else is going on in this domain I can say, maybe you'll be interested in this is part of these partnership discussions, particularly in the are a domain we've had very high level people.

At very high level places and very smart people do a lot of their own due diligence and and they've asked us our thoughts on the competitive landscape and we've told them, but we think and none of them have come. They have all said again unanimously you're right. There's nothing on the horizon that does what your stuff does not going to have.

And in any near term Miss ever so thats really encouraging and we've heard that from these independent folks who have a reason to be critical right and they come back and say theres nothing out there. So it's always inspire some confidence in us, but we're not.

We still want sleep well.

Right.

Hey, congratulations thanks for the very informative call so far and thanks for all your hard work and.

And ladies.

Thank you.

Dead, we are there any other questions. There are no further questions at this time and I'll like to turn the floor back over to management for any closing remarks.

Okay, well, we just want to thank everybody for calling in.

As always if anybody has any other questions. They can always email me.

Or call at anytime and.

Just.

Just want to might look forward to speaking to you guys again in the very near future. Okay have a great day.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and a wonderful day.

[music].