Q4 2019 Earnings Call
Ladies and gentlemen are conference is scheduled to begin momentarily. Thank you for your patience increase continue to stand by.
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A question and answer session will follow the presentation, if anyone should require operator system. During the conference. Please press star zero under telephone Keypad. Please note. This conference is being recorded I'll now turn the conference over to carry back Vice President Investor Relations administration hats off to give you may begin.
Thank you operator, I'd like to welcome you to our conference call. This morning with me today is our chairman and CEO Dr. Shanker mercenary, our CFO RJ Subramanian, and our Chief Medical Officer, Dr., Dan Jorgensen.
Earlier. This morning, we issued a press release with our business update in 2019 financial result.
We encourage listeners to review the press release, which is available on the oxygen website at www dot oxygen dot com.
Call is also being recorded a replay will be available on the investor section of oxygen website for approximately 45 days.
Before we begin our formal comments I'll remind you that various remarks, we make today constitute forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Including statements related to our financial outlook, our ability to raise capital on terms acceptable to us.
Our product development plan for our product candidates, including the result, and timing of any future preclinical studies and clinical trials for such product candidate.
And our ability to close the neocart asset sale and the timeframe associated with such close.
These forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectation and forecast.
And can be identified by words, such as expect.
Plan will may anticipate the leave estimate.
Coming should intend and other words of similar meaning.
Any such forward looking statements are not guarantees of future performance.
These risks are described in the risk factor section in the 10-K, which will be filed after the market slows today.
Any information we provide on this conference call is provided only as of today of this call March 27, 2020, and we undertake no obligation to update any forward looking statements. We make we may make on this call on account of new information future events or otherwise.
I'll now turn the call over to our chairman and CEO Schenker mercenary shanker.
Thank you Kelly good morning, everyone.
Thank you for joining us this morning.
We are living and unprecedented times as most people we are here to talk again.
Participating practicing social distancing and our team is working remotely.
Means that for this call that not all in one location. So please bear with us they get to Q and they section.
As we coordinate would respond.
I could just three product.
Portfolio, which is insured portfolio diversification introduce risk with the laser focus on 90 season to date will provide an update on the progress on for rocket 300 phase three clinical trials for patients with arc nerve graft versus host disease.
The last our breakthrough Marty familiar gene therapy platform and the recent publication in nature gene therapy.
Sanjay will then she and highlights for 2000 19 billion financial results and our business development activities before Lucky Wendy.
The entire management team and our advisors have been strongly focused on creating long term value for all shareholders.
Most advanced program. These walk you through Congress.
Treatment, all fockler graft versus host disease or would you be HD for sure.
As a reminder, well gvhd severe chronic I'll take them indices. The doctors in up to 60% I Love you wouldn't model transplants teachers and represents a critical unmet medical need.
Presently there is no approved it would be a treatment for well gvhd, whereas the fluff and only company received orphan drug designation from the if you would you use d. and we are also.
The company to come back phase three clinical trial in this patient population.
Our phase three trial will continue to enrol loved through mid March we shared in December that we had reached 50% awful blonde enrollment and I'm pleased to share but as of March 20 <unk>.
We have completed all 95% off were planned enrollment.
Currently we have mark screening Newpage <unk> due to Gordon 19 pounds.
On a go team is working closely with or sites to address the impact to our clinical trial, putting patient safety force.
Oh.
We have arranged for each patient monthly supply of 30 medication to be shipped directly from the slight dislike the patient rather than risking and in person visit to pick up the medication.
In addition, it decided he's not willing or able to conduct in person follow up visits we are using worked through 'em visits which may include wanting to use to continue the safety checks built into the protocol and to collect endpoint data.
One of those flights that are conducting in person follow up visits they haven't process in place to minimize the risk to the patient.
Vertical has built in windows that don't eat assessment was it.
So there is some flexibility as to the exact date of the Paulo, Brazil, other if he's done remotely or in person.
As of right now because we are a hurdle for scheduled for enrollment we didn't anticipate having topline results from this study before the end of the either.
The situation is rapidly changing however, and we will continue to monitor its impact on our clinical trials.
Now I'd like to talk about Oh gene therapy program.
We're pretty excited about modified a gene therapy platform, which has the potential to treat.
But I do you have inherited retinal diseases with a single gene therapy product.
Marty for gene or master jeans, as we'd like to call them nuclear hormone receptor gene.
The need to play a vital role integrating many functions within the retina and are able to restore normal function in the original.
What this means these dogs with one Martin Flyer automatic energy.
We now have the potential to treat multiple diseases as opposed to the <unk> approach of treating one be fees all genetic defect with one rig.
Preclinical data for gene therapy product candidate arc youthful hungry was published in nature gene therapy earlier this month.
Q4 hundred come to southern functional Caulfield nuclear hormone receptor gene <unk>.
Then award to target cells in the original using them exactly.
The publication detail.
It's because the results in FY <unk> unique most models offer ignite is pigmentosa our RV.
Underwent administration off and Mark <unk> by sub retinal injection the five RP moral tested the present did five different form so our Pete.
Peter you six be associated RP.
To form so or dobson associated RP.
LIBOR congenital amaurosis and hence that's gone syndrome.
30 demonstrated the potency often model modify your gene therapy to elicit.
<unk> spectrum therapeutic benefits and already an intermediate stage itself RP.
One of the biggest advantageous for Martin for gene therapy platform is that.
Has the potential to eliminate.
The need for individual genes replacement and gene editing strategies and made it will usually rice.
You got to be treatment for eye diseases.
And we had a good written on these innovations such as RP effort over 1.5 million people worldwide.
Or 150 gene mutations had been associated with RP and this number represents only 60% of the RP population.
The remaining 40% of RP patients cannot be genetically diagnosed making it difficult or double up and you would you want treatment.
We believe our mortified you better be has the potential to eliminate the need for developing more than once at the individual products and boy one treatment option for all ought be patients.
As a reminder.
In September of don't be 19, we entered into a strategic partnership that comes you know bio.
Elephant talk youthful hungry.
I don't see nobody else is responsible for all CMC development and manufacturing of clinical supplies.
Moving on associated costs this partnership for whites oxygen greater flexibility, but its capital resources.
Nobody else is located in China, and we're pleased to share the team dairies back at work.
We don't anticipate any immediate impact door oral timelines, we continue to evaluate the global trying to make and any potential impacts this may how the future.
We continue to plan for the commencement of at least one last week clinical trial for Q4 hundred inpatient into Twentytwenty one.
Now before I don't recall over just wondering I just wanted to share how excited I am about the potential offshore pipeline and the value proposition. It may bring to shareholders in both the short and long term.
By addressing read on those so I'll make diseases, we bring hope to patients.
Grid treatment options.
I would model during the call owed to Sungy to provide an update on all 2019 financial and business development activities Sanjay.
Thank you shopper and good morning, everyone.
Well, maybe want to think states during the sound to me.
I will now provide an overview of key financial results for the.
We ended the year on December 31, 29, <unk> cash cash equivalents and restricted cash totaling $7.6 million compared to $1.8 million on December 31 2018.
[laughter] our research.
And development expenses for the year into 2019, what $8.1 million compared to $10.3 million in 2018.
The decrease was primarily driven by lower expenses in 2090 related to the off Q3 hundred program.
General and administrative expenses for the on into 2019 or $6.1 million.
Compared to $5.8 million in 2018 defense was driven by increasing consulting fees and public company insurance expense, partially offset by lower employee costs.
The net loss for the year into 2019 was $20.2 million compared to $18.2 million in 2018, and the increase was primarily driven by an increase in the change in the value that'd be the liabilities offset by a decrease in interest expense as though that the decrease in operating expenses.
We ended the year, but 52.6 million shares outstanding.
All but <unk> each onto the Cds be and the C.D.C. Warren.
The size in the fourth quarter up last year.
In November and December we repurchased approximately 121000 shares until.
Next I'd like to provide an update on the Neocart after that we acquired from Mr. Jim.
We're continuing to have discussions with Medicaid they've made some changes to their leadership and have reiterated their strong interest in the Neal caught that.
We're also engaging in discussions with other parties, who have expressed preliminary interest in the assets.
This week, we closed an additional half a million dollar loan.
Hi loan agreement.
We currently have sufficient cash to fund our operations into June up this year.
We will need to raise additional capital and are currently evaluating our financing options, including certain non value defined funding.
We will update the market with our progress once we close any additional transaction.
We also continue to explore collaboration sort of pockets it's related to the assets in our portfolio that can provide value oxygen and our shareholders.
But that we will open up the called for question.
Later.
Thank you ladies and gentlemen.
And at this time, please press star and the number one key on your telephone.
Once again that is star then one to ask the question.
Our first question question.
Come from.
Well I'm a cool.
Okay.
Your line is open.
Thank you. This is our came from.
[laughter].
I'm glad to hear.
Yes, obviously, there's a crazy.
<unk> five times as.
Shawn Colo, stating.
Couple of quick questions from my end.
I'm going it's nice to see that a enrollment.
Ill.
Meeting.
And expect a deadline.
Trying to get a publication of these data from the occupancy hundred study.
But your and would you provide some additional color.
Yes.
Walked is that in the protocol.
The amount of time and need to put a follow up once a patient comes on board.
And also.
Let's say in the book because that is that.
The month delay.
The final person talk they needed population.
Oh, how much if any.
I'd be on the trial.
Yes. Thank you, Okay I will let a Dan answer. The question then please go ahead.
Thank you for the question.
Yeah the.
He has monthly visits so once a patient has enrolled they return or ex they returned for a visit every month and that therefore, they have a day 28 day 56 day 84 visit that lasted the day 84 around three months. It's one of the primary endpoint data are collected.
The there are visit windows, there sometime around each visit gives us a little flexibility for the patients to come back.
But we feel that.
The patients have been coming back up until this point of time, we're doing everything we can as shanker mention to ensure that we do get that endpoint data and they do receive their safety checks during the slowdown due to the krona buyers.
Now you. Your second question had to do with a delay and what we can do about it.
In terms of.
The timelines for getting our data by the end year well as Shanker mentioned, we're ahead of schedule with the enrollment going into the pandemic. If you will that puts us in pretty good shape.
We're very close to having that way and enrollment number.
If we do have too if we can't restart quickly and it takes a while to restart I do believe we are still in good shape, because we can stay caught up on all the monitoring that has to happen.
And all the patients for all their visits such that when you additional patient or patients come in once the slow down is lifted we would be ready to to be doing the monitoring and everything else necessary in real time on those patients.
[laughter] thank them for that a quick follow up on adjusted it.
You know.
I don't know Africans, who can answer this question, but.
Anything on on the dropout rate you're not doing during this period, just just just to see if.
People are dropping out outside.
Treatment itself, because hope in convenience or anything else a choice here that would come in 19, so that it doesn't.
[music] up the statistics for your finally comes to analysis of the data.
Oh good question so they basically.
First of all going into the pandemic the dropout rate was very low less than 5%.
Which was very good very encouraging and that's a testament to the clinical team and the sites in terms of patient retention and in terms of quality of data.
Now wants the pandemic started and basically that's around March for for most of the sites.
That's when they started to close down screening and enrollment for example, but of course, we are having those extra visits for those who already are in the study.
So.
Fortunately.
The impact has not been great so far.
To get to your question on the enrollment has been dagger. It's it's you know at its peak, we maybe had six or seven patients enrolled in one over a one to two week period. So you called out.
Maybe four days from the date of enrollment or screening for each one of the subjects quite a one to two week window around that you can see that there's flexibility in terms of those follow that that's important allows us to be focused on each and every patient that's due for a follow up visits so far only.
Two patients.
Our at risk right now as we speak.
Terms of getting their day 84 endpoint data, but as Shanker mentioned, we are putting policies and processes in place to obtain those data remotely.
And that means we also make sure the patient has a drug supply. So so right now the impact that has been minimal and we're following it on a daily basis and we're following each and every subject at each and every site, but so far so good.
Thank you. Thank you very much what color one last question from me Shankar HM.
A.
Big collaboration going on with Johnson bio <unk>.
<unk> is is a company in China and I think.
You know the last couple of weeks.
They have stayed.
Johnson Bio stated that they would get involved in the corporate night in drug development.
So how that's between did resources in any way to do the work that they need to do for.
Program.
Good question, Okay, we would have been into constant communications with them and their workforces mostly back.
And I think you're absolutely right, they're working on very very important who had 19 vaccine.
In the end up I mean that in addition to that they'd workforce in the last few weeks. These completely back to work and currently there is no impact on program ended there continue to work on Okcupid hunger <unk>.
And we closely monitor the situation as time goes on.
Thank you thank you gentlemen.
Uh huh.
Thank you Okay. Thank you operator next question comes from the line.
Mike.
Chardan Your line is open.
Yes, Thanks, Shaker, you've had a nice piece of the world that for Gvhd.
I'm just going back to me the Gvhd somewhat back in October I know you had a meeting with the Hum investigators to discuss best practices.
Seems like that's helped things can you can you talk about that what was implemented and what's resulted in this nice piece of enrollment obviously him up until the mid March period.
Yeah. Thank you Kate since Oh, Chief Medical Officer, Dan is on the line and let him answer that.
Please go ahead.
Oh, that's very good question and were again very encouraged by.
The enrollment since that time backing the fall we were evaluating very closely every single site. In this study in terms of their their ability to enroll patients into the study and also what challenges are obstacles that they would have and of course nobody has ever done to study like this before so.
It was all new to everyone and it turns out each site had its own unique challenges and obstacles and then there were some challenges and obstacles that cut across the site course. This is a rare disease to begin with so those patients had to be identified a there's no I see the nine or 10 coatings. So you could not use any type of.
Hi, mapping or database.
To find those patients as it turns out those patients have to come from the oncology clinic that is the bone marrow transplant center at each one of the academic institutions and that means we had to forge a very strong relationship between young colleges.
And the ophthalmologist who are the principal investigators for the study.
And each site had its own sort of way of doing that we worked very closely with them. We also found a way to you know spend even more time with the sites that were having a issues finding patients and then other sites are caught on very quickly and those are the ones that really helped us in Atlanta.
Last month or so in terms of getting new enrollment.
Okay, Great and then in terms of the follow up.
If you're doing these.
Absolutely.
I'll talk about how you.
Maintain the quality if you will have the assessment of cited symptom.
So as far as me quality, obviously extremely important so we have a team of monitors in the monitors Fortunately had kept up with everything all the monitoring that had to be done going into the pandemic and now based on yeas recommendation.
We are switching over to remote monitoring and all of the sites.
Well, our onboard with that and of course, our monitors are on board with that and have the requisite training for doing that type of monitoring so we're maintaining the quality.
Of the program in terms of monitoring.
In addition, we are making sure that important <unk> data.
Endpoints for example, the safety data for example are collected at all of these virtual visits that we'll have to do until the time. The ban is lifted if you will and we can see patients in person again, so those virtual visits will be accompanied by a telephone call perhaps more than one.
The phone call just to make sure that the patients are doing fine that the data that we need are collected a in that data are the highest quality.
Okay, and then switching to the major gene therapy paper, a lot of really interesting and good working that paper.
Shake.
What's next in terms of additional animal model.
<unk>.
A good question, Okay I think.
As we indicated in the paper, we already covered in all four animal <unk> actually animal models and but.
And what we're planning to do these well continue nobody will you know is working on the manufacturing side.
You should do you know going into it to toxicology studies this year in the U.S. and what we're trying to do these finish up the preclinical toxicology studies, what we agreed on with F.D.A. into those studies are being negotiated and then next to your as planned we were planning to the new.
You should piece one slashed do they clinical trial. So the trick question or two components right. One these getting the Tox studies done and then finishing up the manufacturing for clinical supplies. Those are the two key components that need to go into R&D funding.
And.
In terms of.
Working with the labs.
The.
Talk studies, how how's cobot 19 impacting their ability to it.
Do though.
Yeah, Great question, Okay, I'm, just like anything else our employees.
Safety is our top priority and at the same time.
We do how some buffer again, we're closely monitoring the situation just like a everywhere in the U.S. I'm worried I'm not sure Dunmore and Pennsylvania and again around US no people, who are working with those some of the labs are working on on it that he would it not on schedule. So.
We will continue to monitor and hopefully you know situation improves in the next month or two there should not have measured in fact, but just like any other pharmaceutical company. When it was very difficult times I mean, the good thing is you know.
He honor to work with the casino bio.
These guys are doing a phenomenal job.
Working on knock on wood 19, like seen indeed, a difficult times.
No there is a real hope and they are really passionate about gene therapy program and the as I mentioned to you know arc is.
A question.
Back and imminent that really supporting us so they'd manufacturing work is going on and again when we closely monitor Oh plans for clinical.
Or Aki 400, and we'll keep you disposed.
Okay very good that's all I have thing.
Thank you and once again, ladies and gentlemen.
A question at this time.
Please press Star then one key on your telephone once again the star one question.
I'm not telling further questions at this time.
Called.
Thank you.
Thank you operator, thanks to everyone for taking the time to join the call. This morning.
We are dedicated to filling significant patient needs by bringing to market transformative therapies for rare or underserved <unk>.
We look forward to providing further update in the coming months. Thank you and have a great day.
Thank you ladies and gentlemen concludes todays conference you may disconnect your lines.
Thank you.
Have a wonderful day.
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