Q4 2019 Earnings Call

Greetings and welcome to RPL fourth quarter in full year 2019 financial results Conference call.

At this time all participants are in a listen only mode.

And what's your car operator systems during the conference. Please press Star Zero I know telephone keypad.

This conference is being recorded.

Please to turn the conference over Gina merits, Vice President Finance for Happy I think you may begin.

Good morning, Thank you for joining us for air Peos fourth quarter and full year 2019 earnings call. Joining me on the call today from Air PEO, Its Joseph Gardner, President and founder.

Good morning, RPL released financial results for the fourth quarter and full year ended December 31st 2019. If you have not received a news release or if you would like to be added to the company's distribution list you can do so on the Investor Relations page of our website at <unk> Dot com.

I'd also like to remind you the remarks made on the call. Today includes forward looking statements about Airbus Yeah.

Such statements May include but are not limited to those related to air appeal and its business and its product candidates, including 8-K, B 9778, ERP 15, 36, and the bi specific antibody absent the clinical development plan. Therefore.

And therapeutic potential thereof, and the intended benefits from air Peels collaboration with Gossamer bio Inc. for GBS zero zero for.

Each forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.

A more complete description of these and other material risks can be found in air Peos reports filed from time to time with the FCC.

Air PEO does not undertake any obligation to update publicly any forward looking statement, whether as a result of new information future events or otherwise.

I will now turn the call over to our President and founder Joseph Gardner Joseph.

Thank you Julie and good morning. This is Joseph Gardner President of air people from sort of.

Welcome to todays conference call on airfields 2019 year end financial results.

I'm very excited to share with you our 2020 plant rear view.

As a company announced in October we are exploring various strategic alternatives to maximize shareholder value.

And to continue these efforts.

However in light of the strong feedback we've received from key opinion leaders investigators and prescribers. We've also decided to conduct a phase two trial other topical formulation of AK being earned 770 in glaucoma.

Which we expect to read out data and the first quarter of 2021.

Fortunately LPL isn't a very strong financial position to support this program with cash and cash equivalents of 38.5 million as of December 31st 2019.

Please recall that we announced topline data from a phase one be trial, how big could be 9778 in glaucoma in January.

But I will recap briefly here.

In a cohort of 43, glaucoma patients, where baseline contract or pressure, where I will be ranging from 17 to 27 millimeters of Mercury. We saw a 1.58 millimeter of Mercury incremental reduction in diurnal itll be on day seven when they could be nine from somebody was added Wednesday.

Early on top of existing standard of care costs are going and treatment.

In fact, we saw statistically significant improvements in IP at all time points measured after pay for it.

These data are consistent with our previously reported discoveries about the mechanism of action of it could be 9778.

I would show increased tied to activation insulin now and lowered our I O P.B., a decreasing resistance to outflow from the Ari and the statistically significant I hope you lowering signal.

Which we also saw into previous sequential phase two studies.

Oh systemically Ddos it'd be nine seven so many an awkward or tens of patients with diabetic retinopathy.

Based on these preclinical and clinical data and extensive encouraging external feedback from scientific experts. We believe the recently completed phase one be data in glaucoma.

Topical drops so they could be learn something somebody to be very promising.

Critical piece to point out is that the drug produced statistically significant reductions in I O Pete on top of standard of care across grant or B.

When compared against both baseline and placebo subjects.

Our clinical advisors suggested that the magnitude of these effects were not only clinically meaningful but also potentially best in class a.

Jumped up therapies.

Equally important the data suggests a favorable tolerability profile for a topical drug candidate.

Including a lower incidents of hyperemia, no systemic safety concerns.

Which is a clear differentiator in today's market.

Our objective is to develop a differentiated drug with equal or better efficacy than competing products that is also distinguished by better Tolerability profile.

We believe the phase won't be data support moving forward into a phase two study in glaucoma to confirm these encouraging results in a longer clinical study of 28 day duration.

Which we intend to designed to be in line with phase two trials of recently approved glaucoma agents.

Have sufficient cash available to support the study and provide a significant runway after reporting topline data in early 2021.

We believe that glaucoma is an important opportunity.

As many of you know Barack Obama is a serious condition of the are affecting 2.7 million patients new U.S.

Commons, a leading cause of blindness worldwide.

As a progressive optic nerve Roxy that is associated with increased arc intraocular pressure, where I hope he.

[noise] multiple longitudinal studies have shown that I hope you lowering slows progression of isn't wellness.

Increased I hope you can go a common is caused by increased conventional outflow resistance.

Due to increased contractile tone and stiffness of the trabecular meshwork.

And changes in the conducting social I'm going to.

The conventional outflow pathway and slumps canal represent the mean dream that remains fluid from remember they are.

The most widely used glaucoma drugs her topical eye drops and do not address the pathology of the conventional outflow pathway.

Prostacyclin analogues increased drainage via the media square.

Right.

And the older drugs like beta blockers Alpha agonist and carbonic anhydrous inhibitors reduce food production production.

However, none of these drugs, specifically target the conventional outflow paraphernalia slums going out.

We believe sets up big potentially attractive commercial opportunity great KBR and some 70, if approved as a once daily tolerable eye drop to be used as adjunct therapy in an extremely large markets.

Drugs used in conjunction with cross the grounds either is adamant therapy werent fixed dose combinations represent roughly 33% of the market for glaucoma therapy.

That's segment is currently estimated at 2.1 billion nobody over 6 billion per year or a global glaucoma market.

Based on the public signed supporting the role of tied to the maintenance of funds can now we believe that it could be 9778 has the potential to become the first disease modifying therapy for glaucoma.

Let me repeat that we believe it could be nicer when somebody has the potential to become the first disease modifying therapy for arc home.

And we are very enthusiastic about this opportunity for shareholders.

We expect to initiate dosing of patients for planned phase two trial.

It could be 9778 in the third quarter of this year.

Now in addition to the glaucoma opportunity I also want to summarize our pipeline of tied to activators and other assets.

Which we continue to explore strategic alternatives.

Your feel has pioneered the field of tied to activation by developing both small molecule and antibody drug candidates that actually tied to.

Hi, too is a receptor tyrosine kinase uniquely express and best friend of video. So in all basket shirt and importantly is also expression slims going out in front of the eye.

We have learned over the years that tied to activation stabilizes basket true in a variety of settings as demonstrated by our publications.

Oh Appeals tied to activators has the potential to treat multiple diseases, where the underlying pathology is driven by unstable vessels.

These diseases include diabetic nephropathy in addition to guard Colm.

And the recently completed phase to be study time to be.

It could be 9778 demonstrated the ability to lower proteinuria.

As measured by decreasing urinary albumin.

Great and then ratio by about 20%.

And this replicated a result that we had found in a previous phase two study.

The decrease in proteinuria suggests that it could be 9778 and or other tied to activating drug ERP 15 36.

They have the potential to improve kidney function and diabetics potentially delaying progression to kidney dialysis.

The Companys second asset ERP 15, 36 is the humanized monoclonal antibody.

Served to activate tied to receptor is in a dose dependent manner in preclinical models.

There are people believes air P. 15, 36 holds the potential as a monthly or biweekly systemic therapy to treat diabetic complications, including diabetic nephropathy.

The company's third asset is a bi specific antibodies that binds both bed Jeff.

NVE PTP.

Which inhibits the Jeff activation and activate is tied to.

This by specific antibody has the potential to be an improved product for treating wet age related macular degeneration and diabetic macular edema.

These antibodies would be dose intravitreal eat into the guy in the same fashion as the current anti VEGF drugs like idea and most centers.

Lastly, the company has a fourth pass that it could be for nine to four now known as GB zero zero for.

Which is not related to try to activation.

The drug candidate is a hypoxia inducible factor activator that is being developed for all sort of flight as fire partner Gossamer.

And as currently completed a phase won't be trial.

Under the terms of that agreement air Peos eligible to receive payments upon the satisfaction of milestones.

And royalties upon net sales of this product if it is approved and commercialized.

We thank you for your attention during this call. We're very excited about the prospects for appeal and believes that our glaucoma program could be transformative for the company.

I'll now turn the call back over to our VP of Finance Gene America.

Thank you Joseph the earnings release details our financial results for the fourth quarter and year end 2019, So I won't repeat for you what is written in the release.

For those interested you can find additional details on our operations results in financial condition beyond what is it it what is in our press release in our 10-K, which will be filed at the end of the day. However, I'll take this time to quickly point out a couple of items.

Let me start with the income statement.

For the three months ended December 31st 2019, our net loss attributable to common stockholders was 4.4 million down from 8.5 million in the same period in 2018.

Operating expenses for the fourth quarter of 2019 were 4.7 million compared to 8.9 million for the same period in 2018.

For the full year ended December 31st 2019, net loss attributable to common stockholders was 23.3 million compared to 10.4 million for the full year ended December 31st 2018, the approximately 13 million dollar increase in net loss.

Year over year was attributable to the 20 million dollar upfront payment. We received from recorded as revenue in June 2018, as part of our license agreement with Gossamer for AK before nine to four which is now known as Gpcrs here for.

Operating expenses for the full year ended December 31st 2019 were 24.4 million compared to 31.3 million in 2018, the approximate $7 million decrease in operating expenses year over year was attributable to actions taken.

By the company in 2019 to lower expenses, including some clinical trial wind down and restructuring.

Research and development expenses for the year ended December 31st 2019.

Creased by approximately 5 million or 28.2% to 12.8 million from 17.8 million for 2018.

This was the result of decreased spending on our lead candidate it can't be nice 778, primarily for the time to be trial in diabetic retinopathy, partially offset by increased spending on our glaucoma development program.

General and administrative expenses for the full year ended December 31st 2019 decreased by approximately 3.7 million or 27.7%.

<unk> point 8 million from 13.5 million in 2018.

This decrease was primarily attributable to decreased stock compensation head count reductions in general office expenses.

One quick note on the balance sheet, our cash position at December 31st was 38.5 million and we have no debt.

That concludes the financial summary at this time I will turn it back over to Joseph for final comments Joseph.

Yes, Thank you Donna.

I'd like to thank everybody for participating in this morning's call.

We are looking forward to sharing topline results from the phase two trial in glaucoma patients in the first quarter of 2021.

If you do have questions you can direct those to the company via email or the phone line again, thanks again for participating and we're very excited about the plan for 2020.

Have a great day.

Thank you. This concludes today's conference you may disconnect. Your lines is this time and thank you for your participation.