Q4 2019 Earnings Call

Ladies and gentlemen, thank you for standing by our presentation will begin momentarily, ladies and gentlemen, thank you for standing by.

Our presentation will begin momentarily.

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Welcome everyone to the Brickell Bio Tech full year 2019 financial results conference call. At this time, all participants are in a listen only mode.

Following some prepared remarks from the company, we will open the call up to QNX. As a reminder, this conference call is being recorded.

Now, let's turn the call over to Patti Bank managing director Westwicke Partners. Please go ahead.

Thank you and good afternoon, everyone. Joining me on today's call or Brickell, Chief Executive Officer, Rob Brown, Chief Financial Officer, like Carruthers, Co founder and Chief operating Officer, Andy Sklar, and Chief Business Officer, Adam, leaving before we begin I would like to remind everyone. This call and webcast.

We will contain forward looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward looking statements to reflect our opinions only as of the data. This call. We were not undertake obligation to revise or publicly release results or any revisions to these forward looking statements.

New information or future events factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail. Our most recent filings on form 10-K, and our other periodic reports on forms 10-Q, an 8-K filed.

With the S U shape.

Now, let's turn the call over to the company's Chief Executive Officer, Bob Brown.

Thank you Paddy and thanks for everyone for joining us this afternoon I.

I will provide a business update then I will turn the call over to Mike to review the financial results, we reported earlier.

Rick was made significant progress since becoming a public company and listening on the NASDAQ in September.

We remain enthusiastic about the potential for soft running bromide as a drug candidates potentially improve the quality of life millions of patients who suffer from primary actuary hyperhidrosis.

For those of you were who are new to the Brickell story, let me provide an overview of the market for hyperhidrosis and why we think softgel named bromide has the potential to become a best in class treatment.

Hyperhidrosis medical condition that causes excessive sweating beyond what is required for regulation of body temperature.

In the U.S. alone there are greater than 50 million people suffering from hyperhidrosis, representing approximately 4.8% of the population.

Over 10 million people in the U.S. suffer from excessive underarm sweating, which is referred to as axillary hyperhidrosis.

The diseases, most prevalent among younger people in the U.S. affects approximately 9% of people ages 18 to 39 and about 70% of people ages 12 to 17.

In summary, 75% of hyperhidrosis patients that indicated that the disease can have a negative impact on their socialize well be emotional in mental health.

Our lead compound soft premium bromide is a novel topical anti corner GIC agent, which was retro metabolic lead design with the intention of enhancing the local therapeutic benefit while reducing systemic side effects.

Soft pruning bromide has a short plasma half life with rapid metabolic de activation and fast elimination potentially leading to a more favorable safety profile or enhanced efficacy at higher concentrations.

To date, there have been 19 clinical studies conducted by Brickell and our Japanese partner Cocky that have included over 1300 subjects.

Over the last year, both brickell in Keqiang announced significant progress in the development of soft chromium bromont.

Two weeks ago, we announced that the results from cut cans phase three pivotal study in Japan were selected for an oral presentation at the late breaking research program during the American Academy of Dermatology annual meeting on March 21st.

While the conference. The subsequently been canceled due to concerns about Corona virus, we expect the data to be released in the coming days.

This will be the first public disclosure of efficacy and safety results from the phase three pivotal studies, a soft chromium bromide Jill.

We previously announced that announced that tuck ins submitted a new drug application for approval of manufacturing and marketing in Japan based on the positive results of this study.

I can also has rights to develop and commercialize soft chromium bromide in Korea, China and certain other Asian countries.

Under the sub licensing agreement with cut can there are royalties on sales milestone payments due to brickell.

In February we announced the Pos that the positive results of our cease to be study with soft chromium bromide in patients with primary axillary Hyperhidrosis were published in peer review Journal of American Academy of Dermatology.

We were encouraged by these by these phase two study results and are pleased with the publication of these data in such a prestigious academic peer reviewed journal.

These results along with cocky ends phase three results give us the confidence to continue to advanced the development of soft chromium Burma.

In January we presented at the dermatology aesthetics and surgical conference the results from that pharmacokinetics and long term safety extension trials with soft bromine bromide gel in the 15% concentration in pediatric patients age ages nine to 17 with primary.

Actually hyperhidrosis.

The pharmacokinetic analysis. This offering me bromide did not show any evidence of drug or major metabolite accumulation.

These findings were consistent with previous investigational evaluations in adults.

So probably bromide was safe well tolerated you know over 24 weeks of treatment in this clinical trial.

The majority of pediatric subjects had no treatment emergent adverse events and there were no severe or serious adverse events. These findings are important since the incidence of hyperhidrosis is relatively high in the pediatric population.

We're also pleased to share that earlier this year, we completed the in life portion of our Multicenter open label Phase three long term safety study of topically applied salt chromium bromide gel in 300 subjects with axillary hyperhidrosis.

This 52 week study was designed to evaluate the safety local tolerability and efficacy of two concentrations 515%.

Chromium gel, we look forward to announcing these top line results suit.

For those who are who may not have been following our STC filings and press releases.

Closely through the last few months in October 2019, we will we announced that our licensor vote. Our labs filed a complaint against the company in Federal Court in connection with an alleged breach of our license agreement. We subsequently filed the arbitration and counterclaims against the license or participated in mediate.

Sure.

Following mediation, we announced a settlement with voter labs in February we felt that resolving this dispute was on balance in the best interests of our stockholders and allowed brickell to continue to advance of premium bromide without the cloud of litigation.

Looking ahead, the next step for the development of soft premium bromide in the United States is to initiate the phase three pivotal trials. The plan phase three program is expected to come to consist of two identical studies of approximately 350 patients each across 40 or 40 to 50 sites.

The studies will be multi center randomized double blinded vehicle controlled evaluating the safety and efficacy of topically applied soft premium gel in the 15% concentration.

Subjects will be treated for six weeks with a two week follow.

The co primary efficacy endpoints agreed to the FDA are the proportion of a set of subjects achieving at least a two point improvement on the patient reported outcome scale called H. DSMB mdx from baseline to the end the treatment.

And the change in grab the metrics what production from baseline to the end of treatment.

Importantly, we achieved statistical significance at the 15% concentration on both of these endpoints in our dose ranging phase Twob study.

We haven't given guidance on the start of the two phase three studies, yet, but as we move through the year I look forward to reporting on our progress.

I will now turn the call over to Mike for others for a financial overview Mike.

Thanks, Rob and good afternoon, everyone on the call I appreciate the opportunity to provide a summary of our fourth quarter and full year 2019 financial results.

I also encourage you to read our full consolidated financial statements and Mdna contained in our annual report on form 10-K for the year ended December 31, 2019, which can be accessed through our investors section of our website once filed with the FCC later this evening.

Starting with cash and investments we ended 2019 with 11.7 million in cash cash equivalents in marketable securities.

In addition, we prepaid 4.9 million to third party clinical research organizations in anticipation of commencing the phase three pivotal studies for softer and bromide.

Net cash used in operations was 14 million for the fourth quarter and 36 million for the full year 2019.

Turning to revenue, we recognize revenue of 700000.

For the fourth quarter, and 7.9 million for the full year of 2019, this compared to 2.5 million and 10.9 million respectively for the comparable periods in 2018.

The decreases were primarily due to the completion of the Kotkin funded research and development activities by the first half of 2019.

Also in 2018, our revenue included a 5 million dollar payment from pocket.

Research and development expenses totaled 6.6 million for the fourth quarter and 20.2 million for all of 2019 up from 13 million in 2018. This year over year increase is primarily due to the additional clinical study activities, including the.

Phase three long term safety study and drug supply costs associated with soft front end bromide.

Now moving to general and administrative expenses DNA expenses totaled 4.9 million for the quarter and 12.2 million for the full year of 2019.

This compared to 1.7 million and 6.4 million respectively for the comparable periods in 2018.

The increased expenses in 2019, largely came from merger related costs legal and settlement accruals and recording of noncash stock option and impairment expenses.

And with that I'll ask Hester the operator to open the call up for questions actor.

Thank you at this time it would be conducting a question and answer session. If you like to ask the question. Please press star one on your telephone keypad confirmation tone will indicate your line is in the question Q you May press Star too if you would like to remove your question from the Q participant using speaker equipment and.

May be necessary to pick up your handset before pressing the star Keith one moment, please while we poll for questions.

Your first question comes from line of Leland CRE show with Oppenheimer. Please proceed with your question.

Hi, good afternoon, or actually my question and congratulations on making all the progress.

It's a few questions on the upcoming phase threes, if you determine the the dose that you'll be testing in phase three and also how long patients will be treated before they are evaluated the primary endpoint [noise].

Yeah, Hi, Leland. Thanks for the question, Yeah, we are going to take into the phase three.

Only the 15% dose and that's really based on the results that we saw during the phase Twob study.

In the study will be the the the treatment part of the study will be six weeks with a two week washout period at the end of that so what will do is would be measuring at the beginning and then obviously at the end of that six week period [noise].

Okay, Great and then in terms of.

And or regulatory proceedings apparent today.

Filed with one of the timeline for them to be approved a pure or have those are sure. Thanks.

Sure. So they filed at the end of last year and the the typical approval timeline in Japan for regulatory approval is 12 month.

After gaining regulatory approval then there's an additional period of time to gain pricing approval and that's that's normally a quarter.

Okay, great. Thanks, so much taking my questions and Oh left to them.

Thanks.

As a reminder, if you'd like to ask the question. Please press star one on your telephone keypad.

As a reminder, if you like to ask a question. Please press star one on your telephone keypad one moment, please as we pull for questions.

Your next question comes from line of around must silver silver Roger with H.C. Wainwright. Please proceed with your question.

Hi, Thanks, very much for taking my questions I just wanted to get a sense of what do you anticipate will likely be the granularity of market information that you would get once the product is formerly commercially available in Japan.

Are you going to get much visibility on how the product performs if as and when it actually is a is rolled out over there.

Hi, Rob it's Rob Thanks for the question, Yes, it's a it's your your where.

We've built a really strong working relationship with can you know over the years the sharing of work across the geography has been very productive for both parties and saving costs and not duplicating work and I, obviously, we'd expect that to continue as we hit the commercialization phase we have already.

He shared information back and forth about market market research et cetera, and we fully expect to have.

Clarity into the product performance in Japan, now that said, obviously, it's their sales in their products. So what will be reporting out will be dependent on what their communicating in Japan, which sometimes can be a little different but we expect to have a really good feel for.

How their products doing and what the kind of experienced as people are having on the product in Japan.

Okay, and then just a couple of other clarify Detroit points.

If I remember correctly, the U.S. program is using the 15% dose, but the Japanese trial on that use the 5% is that correct.

That is correct that the U.S. programs targeted that 15% and can't has studied the 5%.

Okay, and then could you comment on the degree to which having a 42 day and point my position you favorably from a commercial prospective against for example, Kubrick so versus the 20 to 28 day endpoint that I believe that your Brexit label.

Yes, I this is.

Obviously speculation because until you get the data from the study you don't know, but but the study was designed this way to give ourselves the best chance of getting quality data, especially given the gravimetric endpoint can be yeah, a bit a bit tricky the designs of our phase two in their work, though were done kind of concurrently so I don't.

<unk> they the at that stage, there both being developed and relatively similar periods of time, and we didn't want to change our and points or timing in our phase three relative to our phase. Two is you know the fewer and fewer changes you can make the better off you are whether they'll be a competitive advantage because of that or not I think I really don't know.

But we were but we like our endpoint we like the fact is the same and when we used in in phase two just to make sure that we have as few changes as possible.

Okay, and this is perhaps a bit of a sensitive topic, but I was wondering whether you could comment at this juncture on you know any exploratory discussions you've been having with folks who might be willing to step into the place of novaquest, particularly with regard to helping you get through.

[noise] conclusion of U.S. clinical development with Dr. Onea. Thank you [noise].

Yeah, Yeah, Yeah, you're right. It is offensive thing in this sense, obviously, we're not going to share or.

Where we are who we're talking to at this at this stage, but needless to say revenue lots of conversations with lots of different parties to look at how to.

Build up the now the resources, we need to be ready to conduct that phase three study.

Okay. Thank you so much.

Ladies and gentlemen, Weve reached the end of our question and answer session I'd like to turn the call back over to Mr. Rob Brown for any further or closing comments.

Thank you for taking the time this afternoon to listen to our update we remain committed to building on these results to hopefully bring life changing medicines to patients in need we recognize that the current situation with respect to the Corona virus presents a challenge for all of us.

When it take this opportunity on behalf of the whole brickell team to wish the best everyone on the call into your families. As always please feel free to reach out to us at any time with your questions. Thanks.

Ladies and gentlemen, this does conclude today's call you may now disconnect. Your lines. Thank you for your participation.

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