Q4 2019 Earnings Call
Please stand by good morning, My name is Shelby and I will be your operator today.
Next time I would like to welcome you all to sell.
2019 financial results conference call.
All lines have now been placed on mute to prevent any background noise falling to speakers remarks, there will be a question and answer session at that time. He May press star one on your phone ask a question.
Please keep in mind, if you're using a speaker phone you must release your mute function to allow the signal to reach our equipment again that star one to ask a question during the question and answer session.
At this time I would like to turn the call overtake Kim Golodetz. Please go ahead man.
Thank you and good morning, everyone welcome to sell see I'm Corporation's conference call to discuss its 2019 financial results as has been cell C owns practice and as noted by the operator prepared remarks will be followed by a question and answer period.
Today's conference call will be archived on the replay will be available beginning tomorrow through April 10th 2020, and the webcast will be available on cell C. Ons website for the next 90 days.
During this call management will be making forward looking statements regarding cell C ons expectations I'm projections about future events generally forward looking statements can be identified by terminologies, such as expects anticipates believes or other similar expressions. These statements are based on current expectations and ours.
Subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission.
No forward looking statements can be guaranteed and actual results may differ materially from such statements. I also caution that content at this conference call is accurate only as of the date of the live broadcast March 26, 2020 cell C. On undertakes no obligation to revise or update comments made during this call.
Except as required by law.
With that said I'd like to turn the call over to Mike altered Dunja, Celsion sounds chairman CEO and President Michael.
Thank you Kim and good morning, everyone.
Joining me today is Jeff Church, our executive Vice President and Chief Financial Officer, who will provide a review of Celsion honest recent financial results in a few minutes.
Also on the call for the Q1 and working from home or Dr., Nicholas Morris, Our Chief Medical Officer, and Dr., Chris sheet onto our Chief Science Officer.
I will try our best to the official with a call even though we're operating from multiple locations I have to say this has been a marvelous technology.
That came up with you folks.
Oh, we're all.
Communicating with our remote executives by zone. So we see them on video we're also on a.
Normal conference phone and Oh, so dialed into the Investor Conference system. So I think we've got to cover from a number of directions try to make sure that.
We are prepared to answer all your questions from the experts in the company.
There's always it's a pleasure to be speaking with you and Thats, particularly true today with so many of you working from home.
And I want to start this morning are with our gene mediated immunotherapy Gen. One and two points from our very exciting announcement that was released this morning jointly with Medidata a world leader in clinical data management.
At this point, it's clear that there is a strong trend of positive treatment effect. When gen. One is administered inter carrier to nearly two ovarian cancer patients with advanced disease.
As compared to a virtual control group of match patients.
Oh that there was provided by many data.
I guess number two a hazard ratio of 0.53 as shown in analysis when compared with synthetic data.
No change statistical significance.
You have to agree that this is quite remarkable what it doesn't stand alone supported with impressive previously published translational clinical data from our phase one experiences.
These two points are derived from comparing matched patient outcomes provided by met a date I got a synthetic control arm.
Which results from the companies with results from the company's completed phase one being dose escalating ovation study.
Then one in stage three and four ovarian cancer patients.
These data showed impressive results in progression free survival or PFS with a remarkable hazard ratio ratio as I mentioned, demonstrating a strong signal of efficacy established in the intends to treat population.
As I said in the press release, we believe these data may warrant strong consideration of various strategies to accelerate the clinical development of the programs for John one in advanced ovarian cancer patients by 58.
And we conclude this if we can make the statement because during our March 2019 discussion of Gen. One as a potential breakthrough therapy candidate with F.D.A. The agency team members noted that preliminary findings for the phase one be ovation study work starting and encouraging.
But however walk to control to evaluate John ones independent impact on the impressive tumor response surgical results and PFS during the call. The agency members encouraged us more than once I'll say encouraged us to continue the Gen. One development program at the consult with the FDA with new findings that may have a bearing on designate.
<unk> such as fast track them break through so we intend to follow through on that.
[noise] to reiterate Gen, one strong and encouraging treatment effect evidenced by comparison with the synthetic control arm suggests it potentially remarkable improvement a PFS and after you recognize endpoint for ovarian cancer and appears to confirm the science behind <unk> ability to recruit the innate and adaptive elements of the immune system to fight.
Malignancies.
These findings are supported with previously published and presented translational data. They clearly demonstrate the problem and changes in the tumor micro environment associated with local regional channel on therapy.
But for those who may not be familiar with the concept I want to give you some background.
No synthetic controllers.
Or S C ace I'll refer to as S series.
Yes, you guys have the potential to revolutionize clinical trials as we recognized early on in our discussion.
With a lot of data.
Particularly in certain oncology indications and some other diseases were randomized control is that core practical and we actually seen some reluctance for patients to enroll in our study if they would be randomize control arm that wouldn't be natural and our study in ovarian cancer. For example, that's a great deal of demand.
On our patients regardless it through the treatment our controller.
So you can understand some reluctance to participate.
Yes, yes, there for a provide a very valuable alternative to organically recruiting patients into the study.
[laughter], she's or form by carefully selecting control patients from historical clinical trials to match the demographic and disease characteristics of the patients treated with the new investigational product in our case John Walker.
[noise] associates have been shown to mimic the results of traditional randomized controls. So the treatment effects of an investigational product like Gen. One can be visible by comparison to the S.G.H. bass.
Synthetic control groups may advance.
May help the scientific validity of a single arm trial like ours.
And in certain indications reduce time in cost and expose fewer patients to placebos, where existing standard of care treatments that may not be effective for them.
Got it data I'd have to say is been a terrific partner to work with they are unique in a very unique position to create fit for purpose synthetic controls because of access to a pool of more than 6 million patients for nearly 20000 previous clinical trials.
I'd like to conclude on this topic.
Well with a very important quote from Dr., borys and I often local inside the patients that gen. One arm of the ovation study virtually demonstrated the doubling up there have control of their cancer when compared to the synthetic control arm.
Although these findings are not statistically significant due to the small numbers. They are impressive nonetheless close quote.
Dr Force.
[noise] for current randomized phase two ovation to study of events ovarian cancer will commence in the second half of 2020. Following the de Smbs safety review of patients treated edge of it like 100 milligrams per meter square.
This study is designed to demonstrate a 33% improvement of PFS.
Over the current standard of care PFS is the primary endpoint for the study.
Moving on now I, just want to repeat something I've said.
In past the conference calls.
And more true today than ever.
The company's fundamentals are sound.
We have every confidence in our trials are investigators and collaborators are product technologies and most importantly, our employees.
Despite this.
<unk> 19 turmoil Celsius, it looks for with laser focus to the balance of 2020 here that we have every reason to believe will be transformational for patients.
The medical community and for investors.
This is because 2019 has positioned us well.
In addition to the.
Recent spate of news on Jan one aspect of news included orphan designation, if you recall.
That's very encouraging data from the.
First a phase one section of the ovation to study.
Suggesting that a gen one.
Provides a superior oh outcome.
From a surgeons and read removing a cancer, resulting in an RF zero.
Resolve to score when the.
The lesions are removed from the patient interval the bucket bulking surgery.
So in addition to all this could those all last year, we made outstanding progress with her ongoing evaluation of Thermodox in primary liver cancer or H.C.C. hepatic failure carcinoma as it's no.
You will recall that our.
Pivotal 556 patient global Phase three study the Optima study in HCC was fully enrolled at August 2018.
It's almost two years ago.
So we're now looking forward to the second of two Preplanned interim efficacy analysis now playing for the first week of July this year.
This interim analysis will follow a minimum of 158 does.
And we have maintained a strong balance sheet.
Right got cash is king.
Timing for the modest equity raised that we priced at the very end of February could not have been better.
And our evaluation of the market's volatility we felt it was prudent to add a small amount of cash reserve to the balance sheet.
We did so with a few institutional investors that have demonstrated an understanding of our technology and the potential for success of our global phase three Optima study.
Along with the sale of the last of our New Jersey net operating losses. Later this year, we now have additional cash the buffer most future uncertainties.
Into assure an operating one runway well into the second quarter of 2021, and the final read out if it's necessary.
Optima study.
[noise] also point out that we have fewer than 30 million shares outstanding.
By using creative investor friendly approaches to raising capital we have minimize dilution over the past few years.
All that together with a tight and focused spending in cash management.
You know where.
Execute our budget controls very well.
Sure cash reserve and our ability to manage capital and spending.
Along with a positive trial, either optimization will provide extraordinary I'll repeat that extraordinary returns for investors.
It bears repeating the execution of our clinical development programs have been methodical in rigorous I've been telling you for quite some time that our fundamentals are sound I'll repeat it again.
That should expect no you should expect no material operational surprises from us.
Our meetings with various regulatory agencies have resulted in no significant issues and in fact have been quite encouraging as shown in our recent orphan drug designation.
Our Gen one from the yeah right.
[noise], our manufacturing strategy is solid.
And our focus on redundancy during the pandemic for example has served us well.
Our cost of goods is enviable, we will deliver high gross margins still matter the region of or market.
And each of our two investigational products has blockbuster market potential by any standard and measure.
With one trial on the cost of generating important and potentially transformation reached a transformational results. The optima study.
[noise] going I'm moving Oh, we expected and received good news in early November 29 team from the first interim analysis from there from our phase three Optima study as we had guided investors. The DMC unanimously recommended that the Optima study remain blinded and continue according to <unk>.
Protocol.
The recommendation was based on a review of safety that data integrity from all patients enrolled in this multinational double blind placebo controlled pivotal phase three study.
Based on the maturity of the study and a high bar for Unblinding. The study for success. The guidance that we provided repeatedly was unambiguous, we said that it was possible, but not probable that's a threshold at 128 us and with only 21 months median time on the study.
But it would not be probable that the study would meet the threshold for success that being a hazard ratio of <unk>.
0.60, and a p. equal to 0.001.
[noise] the data did show however, the median PFS and overall survival owe us events are tracking closely if not identical with the trends observed in a sit at a similar point in time and the subgroup of 285 patients that we followed for three years prospectively from the company's earlier phase three each day.
This prospective subgroup demonstrated a two year overall survival advantage and a median time the death of more than seven and a half years and as the basis for the current study designed the Optima study protocol design.
The subgroup hypothesis I'd like to say in the trial design, we're independently confirmed by the NIH and their independent review of the intensive treated population focusing on all 432 patients with single lesions in the age study that represents almost 65% or the study population.
Importantly, the SEC of to prepare the second of two Preplanned interim efficacy analysis will take place after a minimum of 158 does this milestone as fast approaching as we said.
[noise] built at the P value and a hazard ratio for success at 158 tests is 0.0 to two.
The value and 0.70 hazard ratio.
And compares favorably to the P value of hazard ratio observed in the 285 patient in the from the children, Dave five patients in this prospective subgroup was 0.0 to.
And 0.65, respectively, so to be clear.
Said another way.
The bar for success is lower than what was seen.
In the prospect of heat study subgroup analysis.
So as I said and I'll say it again I remain very optimistic that we have a much better chance for success.
At the upcoming second interim analysis and the D. It following the dam sees review.
[noise] Oh, if this study does not meet the standard for success and 128 debts.
We uniquely have another opportunity a third bite at the Apple If you will we have a final look if the data falling 197 patient deaths.
At this point the bar will be much lower.
The P value and hazard ratio required for positive trial at the final analysis are 0.043.
And 0.75, respectively, which is even further below the values of observed in the prospect if he study subgroup and certainly bodes well.
Horse successful trial.
[noise], if it's necessary say it again.
We anticipate.
This final endpoint analysis will occur during the first quarter 2021.
So I just want to repeat what I said to be clear I know in one through a a number of values.
So let me if for those who work follow.
Oh, yes.
And in the heat study subgroup.
We noted a hazard ratio of 0.65 with a pea equaled <unk> 0.02.
For the upcoming second interim analysis. The bar for success is a hazard ratio of 0.7 with the P. Equals 0.22, I hope that's clear the bar for success is much lower.
The upcoming second interim analysis.
But what we observed in the heat study prospective subgroup that we followed carefully for three years.
Okay, and I just want to give you a quick note or an update we've had some questions about the impact of the covert 19 and our operations.
I'd like to mid just let me start by saying Oh, we anticipate no material impact.
From the sub pandemic.
[noise] <unk> study as you know as are many sites in China.
Oh, we have fallen very closely under Dr. bourses careful watch.
Oh, the corners for like the corner viruses had limited impact on the study population, we know that a few other hospitals restricted monitoring for a short period of time those hospitals are now open for monitoring.
Oh, the very had few handful of patients who had they have had at the late visit for follow up now two years into the study a delayed visits are now being schedule, we anticipate torque for follow up with the.
[noise] sorry about that.
Where were now anticipating a that they will are being scheduled for follow up we don't expect or any of the data to be.
Compromised in any way for the upcoming.
Interim analysis.
A second because the trial sites in the U.S. our limiting.
Patient enrollment for new trials.
Our timing for startup of the phase two ovation to study I'd say may be impact.
Reemphasize, maybe impact we don't know for sure, but I can't imagine if it's just so I can't imagine that it would be for more than a month or two.
Well keep you posted as the situation develops.
[noise] I'd like to talk briefly about manufacturing for both Thermodox and Gen. One.
My letter to stockholders issued in early March I addressed manufacturing in the redundancies that we have smartly put in place.
Well, our manufacturing partisan China can supply our lead compounds that are very attractive cost.
With the new capital that we raised we're in a better positioned to financially access Oh this redundant capability in the United States from our U.S. and European suppliers.
To work with these watching suppliers for years and [noise].
Our car for that.
That's a they are capable of supporting [noise].
Our clinical research and commercial requirements for Thermodox as well as our clinical supply requires for John one.
I do want to note that the covert 19 has had some manageable very manageable impacted our Chinese supply for Gen. One.
And as a result, we chose to use our backup source for the Theraplas polymer from the U.S. supplier rather than rely on China used the Chinese supply.
[noise] finally, while we continue to prepare for success in December 2019, we signed a memorandum of understanding with officials from the hung show you on Echo My <unk> Economic development agency to establish a subsidiary in the you had district of Hong Joel the capital of China's Xinjiang Province.
The area is located in one of China's most important biotech hubs.
For the Chinese government has made development of advanced medical technologies that address unmet patient needs a high priority.
There are numerous financial incentives that will be made available because its subsidiary from the Chinese government, we intend to take advantage of those financial incentives.
The primary purpose of the subsidiaries to commercialize innovative cancer therapy, starting with Thermodox.
In addition to China, the subsidiary will focus on all nearby developing markets.
Including the Philippines, Malaysia, Thailand, and Vietnam Hisun, our local manufacturing partner is expected to provide and that came nominally viable thermodox cost structure.
Registration of this subsidiary is virtually complete we expect it to be operational within the next month or so.
Can we have begun writing the N.D.A.M.A. for Thermodox in HCC. Our goal is to have suffered habits officially prepared to complete a filing and no more than six months of Unblinding. The Optima study.
[noise] before I turn the call over to Jeff Church to review our 2019 financials are one emphasized that the company is well positioned for success or fundamentals are solid and the evidence and endorsements supporting our clinical trials are nothing short of remarkable before right.
Next 12 months will be transmit transformational for the company our shareholders our employees and most importantly, the doctors and patients who benefit from our research in our products now I'll turn the call over to Jeff.
Thank you my.
Detailed himself Fianc full year 2019 financial results were included in the press release, we issued yesterday evening and in our 10-K, which we filed last night after market close as Mike stated, we made significant progress during 2019 in developing their lead products.
We continue to focus on its fishing cash management opportunistic and minimally dilutive financings and careful attention to our cost of goods and our supply chain, all of which position us to execute our strategy and achieve our goals.
As of December 30, Onest 2019, Celsion has cash investments and deferred tax assets totaled $16.7 million subsequent to yearend. We raised an additional cash proceeds of $6 million from the sale of equities, including 4.4 million in net proceeds from a registered.
Direct offering price at the end of February as Mike indicated earlier, we opportunistically strengthened our balance sheet to buffer against the potential for continued erosion of our share price in the face of Mart market uncertainty.
We expect to receive the $1.8 million deferred tax benefit from the sale of our New Jersey net operating losses in the second quarter up 2020.
We have an additional $2 million in future tax benefits remaining under the New Jersey tax are typically transfer program that we expect to monetize later this year.
Current cash plus future planned sales of our New Jersey, Anna Wells will extend or operating runway into mid 2021. Importantly, this is well beyond the final data read out of the Optima study, which would occur likely during the first quarter 2021.
Our capitalization table includes 29.3 million shares of common stock and only 3.8 million warrants, which have an exercise price above our current market price.
With respect to future funding flexibility, we have a 75 million shelf registration.
Statement on file with the FCC to sell registered shares at the appropriate time, we have over $60 million remaining under that registration. We also have a traditional aftermarket facility with Jones trading that allows us to raise money at an opportunistic fashion with no warrants and a very low commissioner fate.
They used to the ATM facility is under the complete control of the company.
Turning now to our 2019 financial results for the year ended December 30, Onest 2019 tests have reported net loss of $16.9 million or 77 cents per share [noise].
Compared with a net loss of 11.9 million or 68 cents per share for the year ended December 31st 2018 operating expenses were $21.1 million for 2019, which represented a 2% decrease from the 21.6 million in 2008.
18, more specifically research and development expenses for 2019 were $13.1 million up 10% over 2018 recall in 2018, we recognized a favorable impact of an 800000 dollar credit resulting from cost concessions negotiated with the <unk>.
But he's lead CR ROE for the Optima study [noise], excluding this one time credit.
Clinical development cost for the Optima study were 4.1 million in 2019. This was a decrease of 1.4 million over 2018. This 25% decrease was primarily due to the completion of enrollment up the Optima study in August 2018, which resulted in lower monthly see arose.
During the follow up phase of the trial.
As the Thermodox program continues to advance we incurred regulatory costs related to an NDA preparation activities in the amount of $1.1 million.
In 2019 compare with regulatory cost at $300000 in the prior year.
Cost associated with production Thermodox were $1.5 million. During 2019. This compares to 1.1 million in 2018, as we completed registration batches at our contract manufacturing organizations, assuming the successful outcome of the Optima study costs associated with the ovation to study.
Were $600000 in 2019 compared to 400000 in 2018 cost associated with research and development activities for Gen. One and Theraplas for $3.3 million in 2019 compared to $2.8 million in 2018 note that in.
The current year, we expanded our manufacturing capabilities with the goal of reducing the manufacturing cost for Gen. One for our planned clinical study requirements going forward General administrative expenses were 7.9 million tight in the current year compared to 9.7 million in 2018.
This 1.8 million dollar decrease was primarily due to lower stock compensation expenses in 2019 compared to prior year. Other non operating expenses for 2019 include a not a noncash gain of $3.2 million net of a 400000 dollar churn.
Charge for the issuance of warrants related to an amendment for the potential milestone payments for the Gen. One ovarian cancer product candidate. This compares to a noncash charge in 2018.
$4.5 million related to impairment of certain in process research and development assets related to the company's Glioblastoma cancer product candidate offset by 3.6 million dollar reduction and the earn out liability related to milestone payments for the same program.
The company realized half a million dollars of interest income in 2019 compared with $400000 in the prior year.
In connection with air venture debt facility with horizon.
We entered into in June of 2018, we incurred interest expense of $1.4 million in 2019 compared to $700000 in 2018 during the fourth quarter of the a current year the company recognized.
At $1.8 million income tax benefit, resulting from the sale over in New Jersey net operating losses.
During the fourth quarter of 2018, we recognized a significant $10.4 million income tax benefit, resulting from the sale of air cumulative New Jersey anti wells for the tax years 2011 to 2017. The company has approximately $2 million remaining under the program.
I am I'm moving into 2020.
Net cash used for operating activities for we're 20 million I.
I heard I'm, sorry, $20.3 million in 2019 that compares to $7 million I'm in the prior year cash utilization in 2018 included that 10.4 million dollar cash proceeds from the sale ever and the wells, while the up the cobot 19 pandemic caused the delay in this year's program.
Resulting in the anti wells not being received and where you expect to have them received in the second quarter of 2020.
Total cash provided by financing activities. They were approximately $7.8 million during 2019, and an additional $6 million out was raised in the first quarter 2020, we anticipate that our cash usage for the.
First quarter 2020 will be approximately four and a half million dollars. This is in line with their to their 2020 annual operating budget, which calls for keeping expenses in cash utilization well less than $4 million per quarter on average over the course of that you're 2020.
Ill now like to I turn the call back to Mike you Jeff.
Well I hope that you can see that sell 10 continues to make great progress in both of our clinical programs.
With the Optima study now I'm looking forward to vary so hey, a second.
Two interim analyses this interim analyses, having great potential ought to be successful.
And the Gen one.
A very important immunotherapy is showing.
Some significant potential in ovarian cancer.
Our confidence in Gen. One there's not been misplaced.
As we can see from the data that we've been sharing with you over the last several months and we look forward to continuing if not accelerating our clinical research in ovarian cancer.
No just close by saying I have always been proud of our employees and their dedication to sell she on inpatient health.
And this time of social distancing.
I'm, even more problems as they continue to put patients first.
But it seems like you know, they're not separating out the P values are still kind of you know still in the higher side. You are any reason I mean, again small numbers and you've got different dose or doses, there, but any thoughts there you know why that hasn't nishu sood impressive and yet it there seems to be a fairly broad.
Yeah, I think a won't be cautions that the Acorn people are the many data people gave us right from the beginning is because these are very small numbers that the P values, we would expect not to be significant and what we're looking for here are strong.
Right.
And that's certainly what the hazard ratio was are giving us. The these numbers are just you know with 15 to 18 patients that were looking at these numbers are really too small to expect anything in terms of a P value once we get into the phase two study design, where now we have over 100 patients I think we could see more robust results.
Yeah.
Uh huh.
I'd like to answer that.
So when we look at.
Other companies, who have pursued breakthrough therapy on small ends.
Oh, we see a similar kind of a presentation or the a clinical benefit as determined by the hazard ratio appears to be.
Quite large so the magnitude of affect the treatment effect appears to be quite large.
But typically not not enough and nor to stayed at with a statistical confidence.
None of that's there Mike and again.
The other either Thermodox and second interim which were expecting can you just walk us through its not wants to be positive what would be the next steps just over the next sort of let's call. It three to six months and in terms of the next steps could cobiz Nineteentwo no. It's not a you know your scenario plan.
Yeah, let me start by answering the second question first I don't see how the the covert virus would in fact, our plans going forward, assuming we have a positive thought a trial result.
Oh, the <unk> he made at the time associated with prepping the.
Ah documentation for the end da submissions in China in United States in the M.A.N.
Europe is not insignificant, although we have a very accelerated a schedule as I said earlier in my prepared comments, we've begun writing the yen D.A., Andy if we're using a common technicals domenick cama.
Common technical dock given approach so essentially writing the Andy a and B M. A for Europe at the same time.
So our the next steps we've we've planned out the very carefully almost at a collect gantt chart like fashion.
I mean, just assume we we've put the agency I noticed a about a week before we hold the up the DMC meeting.
Ah that we are holding a DMC meeting and we may have some.
Results to discuss with them. If the results are positive the agencies on notice that the they will be receiving a call from us we let them know that we have a positive trial.
And that though we expect to Unblind the study.
I will give them an opportunity to comment on that but.
Theres don't walk, though no doubt in our mind, there is no and ambiguity here or that a positive interim.
Analysis, but oh itself in a successful trial recognized by all the regulatory agencies that have a prove their trial.
We will that immediately or a request a pre NDA meeting it usually takes about 30 days to schedule.
It give us enough time to format the data in slice and dice all of the various scenarios from the studio trial results to present to the agency in a fashion that gives them confidence that we have oh successful trial with clean data to move forward.
Oh once we have the end at the a hefty his comments and of course wait at this point, we proposed be proposing.
What the label would look like.
Ah once we have their comments other than we Oh complete the a and D.A., we expect that whole time or to take no more than it probably depends on the agencies input we expect to take no more than six months.
And I'm hopeful that it could be quite less but that's our target no more than six months from the time that we I'm going to study.
Following that a you know we have fast track designation from the a few us a F.D.A. fast track designation provides us with the ability to request priority review, which we would expect to achieve.
In a face to face meeting or with a C.N.P.A. Ah that's the new acronym for the Chinese FDA to see F. <unk>.
In the face to face meeting with the and N.P.A. that Dr. Boris had about a year and a half ago.
They gave us a commitment to review the.
And then D.A. application with a high priority and a six month turnaround.
So that's our expectation immediately we go into high gear that began producing launch quantities of inventory.
We're already advising our vendors and our suppliers, we have three of them and their suppliers of raw materials.
Oh, what are called a forecast outlook would be.
Oh, we've been meeting with them on a regular basis and if it's a covert 19 business and interfered with our travel plans. We are would've had some definitive production plan. So I expect to have those someplace in the second half of the year.
So Ah that's a that's so for the most part that's the plan a there's a lot of other activity that goes on obviously we'd be.
Staffing up this small little group here in.
Huntsville and Lawrenceville.
Could use some additional commercial resources, obviously once we move forward and I'll just say this one last point a there are more than one pharma companies you could alter your medicine cabinet and see some names.
Who have taken a very serious interest in the commercial opportunity for thermodox. So we'd be spending some time I'm sure discussing those opportunities and their potential for shareholders and the company.
Oh, Great. My Thanks, and then just last question on a you know.
It goes to jump for keeping on squeezing more money a you know non we're as little as possible in the non dilutive sensitive the company, but can you just kinda give us an idea what would be seen too with the with the number pieces that you had 130 plus.
Starting the second how long do you expect not to run you know just just a rough idea how long will be a woman peak and how long will.
The actual the evaluation period run well that.
Yeah, It's a little more cloud isn't it was just the last quarterly conference call and that's largely because it's a corona virus issue [noise].
You know we.
Well, we have initiated this study in nine investigator sites all of them. A you know a large hospitals and dealing dealing with preparing for an influx of a number of patients.
We also have a 16 more sites, including two in Canada. There are ready to go after they have thought they have their foot on the gas pedal and are ready ready to go when we say go however.
We know that a number of those hospitals will not start a new trial.
I will not start a trial until this suck cove it a 19.
Pandemic issue is behind them so.
So it's really hard to give you some some.
Solid guidance, but here's what we've been thinking.
Or is that it will or won't once we get the thumbs up from that the SMB will initiate the balance of the trial sites in the U.S. Encana that'll bring if the 25.
Our expectation is that a each of those sites will enroll a approximately a one patient every two or three months Oh, we expected that complete enrollment. It's a 118 patients added to the 12 patients who recruited a phase one.
We expect to be able to it as well the maybe you can do the math yourself roll the study and about a 12 month timeframe or less.
But that could be a that the timeline could be influenced by the reluctance of some of these a clinical trial sites to initiate a study until there I'm convinced that their workloads that it's called it [noise].
<unk>.
Ah workload that doesn't distract them from a good quality clinical study.
Great. Thank you Mike I appreciate all the all the like all the answers.
Thank you. Thank you very much.
Well take our next question from Matthew Cross Jonestrading.
Morning that they've got good morning, <unk> things go sticking a couple of questions from me and congrats on the progress I guess, particularly for Virgin one.
So I I was also kind of picking up on with her talk just bring up earlier about the the response rate in there were the or or I, suppose and for the hundred milligram dose and definitely hear what you're saying as far as kind of you know patient numbers work with because looks like historically.
I'm glad to see the the trend and or zero resections fruit for the low dose.
Ah groups the high dose.
But was also wanting to drilling a little bit on the or zero rate for on a dose by dose basis, because it looks like you reported in the first nine patients at 78% or zero resection, right 100, milligram dose, which I guess, it's kinda between what you saw the 100% <unk> at the 79 dose in the <unk>.
Six person at the 61 milligram dose so just trying to kind of maybe see what we're missing that gives you confidence that the 100 milligram per meter square doses and <unk>. The most effective one you've started so far I'm it should be taken into into part two of accretion too.
And kind of in related follow up to that I guess can you kind of remind us exactly how you came to the conclusion of establishing a remote <unk> premier square as they carry forward dose, whether that's driven by safety or PK PD.
And if there's still some potential to continue dose escalation, it's going to confirm that dose response and the ideal regimen for part too I know you you haven't report any deal to use those for into situations. So just trying to speculate a little bit about that.
Yes, so I want to try to answer the second question first and then.
I hope or Nick you got all of that.
On the.
Oh the.
Dose dependent are zero responses.
Oh, so it's just the the maximum dose that we're considering at this point is 100 milligrams per meter squared.
I don't think there's any plans or.
To increase the dose further although we have a.
A meeting with our medical Advisory group here in the next few weeks.
To discuss or what the next steps are for the trial and really and much of it has to do with making sure that.
There are no.
The meeting that does it make sure that there are no interferences with starting up the study that we just talked about.
So what our plans have been to a halt oh the [noise].
Oh.
Dose escalation nurse or or or conclude dose escalation that 100 milligrams per meter squared largely for the practical reasons.
Well this is a very high volume, while thought DNA plasmids with a very large volume of till you want.
So our [noise].
Our sensors this becomes a very practical issue more than a medical I wish I don't believe are there any D. L. T. So we've seen any deal teams at the higher dose, but dealt with that I'm, just kind of turn it over to neck and [noise].
If a if you need a if you need some exact numbers Nick I have thought I have the breakdown.
The patients at 61 7900 milligrams per meter squared.
Yeah ours <unk>.
Yeah. Thank you Mike I think the best answer to that question is that at our highest doses. We are consistently seeing a good are zero rate, particularly against historical controls and from the early data that we're seeing and Neil vision to study where the country.
All groups seems to be acting very much like we see and other studies and the patients that are getting to the a gen. One are consistently getting our zero resections again. This is an interesting indicator for us and it's very positive the surgeons are reporting that they feel that.
The patients that are getting the gen. One are a better to be second to clean the tumor out of them and so we're a we're very encouraged by this data. So I think it's the consistent numbers of the our zero at the highest dose is where we feel comfortable and moving forward with 100 milligrams per meter squared dose and then just the.
Reiterate what Mike was saying earlier and what you're asking earlier, yes, I can confirm the safety of the drug of Gen. One looks very very good we've had no. He hints of a deal see if we wanted to we probably could go to a higher dose but between all the data that we're getting now if you look at the total.
Many of the data looking at our zeros looking at the safety and looking now at how it compares against as well matched synthetic control arm. It's certainly means we have a strong signal of you know pursuing this further with regulatory agencies and pursuing further in our phase two study so I'm looking at the Big picture.
Our I think we'd have some pretty solid data here.
And to give you some apart [laughter] numbers in response to your question.
So at the 61 milligram dose it so two or three patients had an EUR zero.
But the 79 milligram dose its five of five patients had an arm zero.
100 milligram.
So said seven of nine patients having our sir.
If that ever just to add 80, I believe it's 80 or 82%.
Got it and it totally agree that it did it does look great support and as far as you know maybe not even increasing a dose, but you know I talk about maybe more tweaking the dose given that as you. Just you just give us the numbers <unk> the b, both your our and our zero for for the 79 milligram group.
It was just a little bit smaller than than 100 with six weeks business versus nine did was you know better on both fronts I'm, especially I think getting five at a five on the or zeros. So just you know it was considering whether I'm speculating little bit about whether you'd going back to that that was made any sense or if you really thought that you know this I mean I know it.
We're in per meter square does might perform similarly with with little a few more patients like what you saw 100, but just going to threaten those ideas out there.
And it but I.
Oh I'm sorry this.
Yeah, I was just gonna say tweaking.
The I mean I'd have to rely on certainly our medical advisors and Dr., Boris but Oh, we just seem to me yet attempting to tweak the dose with these small numbers. We we are.
Might not arrive at the.
Any better results than we currently have.
Sure absolutely yeah understood.
And then I guess one last one for me was just about I'm kind of looking ahead to two ovation to went in PFS results. It gets over trying to extrapolate a little bit from what we're now seeing that you released today.
The <unk> compared to synthetic control arm. So you've stated for part two ago vision to that hazard ratio required.
You need to see a 33% improvement in PFS or that's what you're aiming to see for for the primary endpoints and I just wanted to confirm whether that would translate to a 0.75 hazard ratio and if and if this would be adjusted at all if you know discussions with the FDA regarding breakthrough designation and potential modifications to the to come in control.
Based on the synthetic data permitted data whether that would would tweak in any way hazard ratio you'd be looking for for success.
Yeah, well it could I mean that could it could but and of course, what we rely on is the the P value.
Really it so the I mean, if we just chasing significance at a lower number than a we've.
So I wish they had a successful trial I, but I'd just to your first point I take some liberty's some layman liberties with interpreting.
Hazard ratios, but I'd say, a 33% improvement or it is Ah I I mean, a a hazard ratio of <unk> 0.75, although I get scolded occasionally by Dr., Boris that that as a oh, a liberal translation, 33% as a quick will transition of 75% hazard ratio, but it.
Easier for me and sometimes for other people don't understand.
So Nick if you have anything you want to add to that.
Yeah, Thanks, Mike and I think that's a great question you know, we just saw the data I'm a synthetic control arm just a few days ago. So we're still digesting. It. So I think you make some great points will there be I think where you're going with a question is we'll there'd be some adjustments maybe to our study number because.
This data from synthetic control arm is still exciting I would say, maybe and HM I would just say you know.
Keep on watching this channel because we'll have we hope to have discussions with the FDA see how they feel the impact of the synthetic data is honor assumptions and I'm also as you know we'll be reporting quite regularly on the findings of our phase two data because its open label and so there might be some adjustments because of this excite.
Data and you know, we look forward to discussions with regulatory authorities.
Yeah, I know it did that Oh it I'd like also to add to that is a it is our intention as I mentioned in my prepared remarks.
<unk> is to review these data with the agency.
So as a follow up at that they encouraged us to have a in our earlier discussion on breakthrough designation.
The goal of of the a meeting is really twofold is one is due to we qualifies for a designation like that.
I would hope that we do my mistake. This data is quite compelling.
But.
Yes, the second part of it is a in it assuming we do as how can we accelerate this program.
And we have a a number of thoughts on how to do that.
And you May have Oh asked a question about one area, where we could.
Conceivably reduced the time to get at positive result in this phase two study.
Got it no I appreciate all that and put them and I hope for the best with the <unk> regulators and those discussions I'm probably the they see the did as positively as a I think we all do thanks guys.
No and I'd, just a it'll before I go to the next question right. So the.
Ah we're in a some pretty new territory here, we think very exciting territory or using a synthetic control arm or as a basis to compare the treatment effect of or something like John one.
Is a it's been discussed for a long time, it's not novel along the Oh, the theoreticians to discuss a innovation and Oh, Hey clinical trials.
But we have a very good opportunity here to a break some new ground and I think a given the up to the posture that are the agencies taken recently, Oh I I expect that we have a well have a very productive discussion.
So yeah top rated can go onto the next questioner.
Well take our next question from Jason Kolbert with Dawson, James <unk>, Hi, guys Ah I know, it's almost an hour. So I'll keep this brief I just wanted to go through the 128 versus 158 death that you saw in the interim the first interim versus the second so I can really pin down the timing.
When we're going to see that data. Thanks.
Yes so.
The Oh, we are on the cost of fall, reaching the a threshold for the second interim analysis Jason.
In fact, we are testing we had that from the DMC meetings. The meeting of course, because two of our two or you have seen members are not U.S. So residents. One is in Barcelona, if the author of the parcel on a clinic criteria for evaluating and treating a liver.
Cancer patients, that's a professor love it.
Oh, he's in Barcelona, the other one one other at a.
<unk> highly regarded the.
Clinical research or a in a and liver cancers and Toronto. So it's been a public has been it's been dealing with their schedules.
And so we expect a frankly they have this.
DMC meeting or on the first week of July.
Not yet or do we got to put all the.
You know that's not all that the I's and cross all the taste, but that's when we expect to have it I'm very confident we'll have enough events.
To a hold a successful meeting at that point.
And your question.
Again to ask a question please press star one.
Well take our next question from Tomorrow with the Cline capital markets.
Oh, good morning on but thanks for taking my question.
I would like to fly, but explode with regard to a synthetic on Boulder date.
What would be that but I am line in terms of communicating this would that be.
But oh in terms of <unk> <unk>, Brian do you think Oh, we didnt like him back to a day you did a possibility to include more synthetic a clinical basin. So I'd say control or do you think a there'll be some reduction in didn't want to treat that bacon.
That.
Yes, so I, even with the let me answer your first question the timing for discussing this with the agency. So there's a bit of a protocol here. The with many companies are requesting breakthrough designation. The agency is set up a screening committee.
Thats screening committee as the group that we met with in our first discussion.
Oh, I think a right just off the top of my head. The Oh, we have to provide them with our a white paper request. It's just it's small document a relatively small doctorate, but we have to provide them with a request and expect to get a response from them within 30 days of receiving the document or we're going to go.
To work right away here once weve digested all this.
<unk> Kumar and put together, our white paper request and submitted to the up agency just as soon as possible I can't give you an exact date, but I would guess it wouldn't be more than a couple of weeks.
So given that we would expect to response for the agency. If if we were to start the clock, though probably about six weeks.
There are there are numerous benefits of that a crew to accompany that receives the.
A breakthrough designation.
The as we see it I mean, the opportunity for us to discuss.
Variety of strategies for accelerating or at the trial is so I mean first and foremost on our list you know conducting clinical research for US. The includes not only the overhead but also the direct costs associated with.
Treating patients.
So the short of the timeline financially better off for the company of course.
For a medical community weaker results sooner so that's an objective.
Part part of that or our ability to be able to shorten the time line would be a hefty A's agreement that we can include patients.
On the synthetic database.
As a part of our control arm I think we've talked about it internally, we don't think it would be wise to replace one for one all of the.
Patients that are what we would organically recruit instead of control.
Wow, we've talked about a 50 50 split.
The goal of what Chuck would be not only we'd have a control on a control if you what.
Well, we're a half are they control arm patients would be the.
Ah synthetic control arm patients the other half fourth organically recruited.
Give us some confidence that the results that were seeing or not.
I mean, our true or looking for the truth.
So that that would that's one way to a reduced the time and the cost, but you know obviously to the cost for.
The virtual patient is less than a cost for a <unk> candidly recruited a treated patients and that it reduces our timeline so that would be one of many of our objectives and discussing just very encouraging.
Result that.
Oh, we announced today.
Oh, okay.
Okay. Thanks.
Thank you.
And we had no more questions in the queue at this time.
Okay, well yet.
He ran up a little bit, but I think it was all worthwhile think a tour thanks to our analysts for the.
Questions, we really do appreciate it and we hope we thought clarified oh.
Oh Youre all your concerns and.
Provided some additional guidance I wear off we're very excited I can say with without question a you know the.
John One program is now.
Added some additional validation to what we've been seeing all along.
Oh, you know what are the translational data that we've.
Oh.
Generated from our first phase one piece study I think is oh on it on ambiguous, there's no doubt that the at the mechanism a fortune one works well and that the immune system all of the virtually all the elements city and system I.
Well I have been recruiting recruited in a way.
To modify the tumor microenvironment took problem yet.
Other they seem to support a in some dose.
Dependent analyses they seem to support an improvement in clinical benefit I.
I know there's been some concern about that.
But now the so with the comparison to the synthetic control arm. A we are become extremely confident we take this is a breakthrough for ARQ <unk> development program and we're looking forward to we're reviewing it with the agency and presenting it to the investment community and more.
Each of US we digest it.
[noise] all that being said Oh, we are excited about that but that that this year could be an extraordinary year for the company.
As I said, we're planning a very early in July for our second interim analysis, a threshold for success suggest to us to end the maturity of the patients out of studies suggest to us that we have every chance of being successful or with a blockbuster therapeutic for primary liver cancer.
All that being said or the.
Our prospects that we have can make a huge difference in the lives of cancer patients and we look for too.
Our work in that and that area on a personal no I want to thank you all very much a please stay safe and ER as I tell everybody in this difficult time period at a peak kind to one another.
So that will conclude our call off.
This concludes today's call. Thank you for your participation you may now disconnect.
[laughter].
[laughter].
[noise].