Q1 2020 Earnings Call
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Good afternoon.
So the synthetic biologic 2020, best quota Investor Conference call at this time I would like to 10, the color, though the Vincent per on direct that corporate communication at synthetic biologic. Please go ahead Vincent.
Thank you Taylor and good afternoon, everyone welcome to synthetic biologics Twentytwenty first quarter Investor Conference call.
Today, I'm joined remotely by our Chief Executive and financial Officer, Steven Shallcross, Dr., Michael Calico Senior Vice President of research and development and Dr., Vince Wager had a product in corporate development.
Synthetic biologics issued a press released this afternoon, which provided operational highlights and reported our financial results for the quarter ending March 31st Twentytwenty.
Released can be found on the Investor Relations section of our website.
During our call today will provide an operational update on our Gi microbiome focused clinical programs and summarize our financial results, we'll take questions after prepared remarks.
In addition to the phone line. This call is being streamline deal webcast, which will be archived on our website synthetic biologics dot com for 90 days.
During this call we will be making forward looking statements regarding synthetic biologics current expectations and projections about future events generally the forward looking statements can be identified by terminology such as May should expects anticipates intends plans believes and.
Estimates and similar expressions. These statements are based upon current beliefs expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in synthetic biologics filings with the FCC many of which are difficult to predict no forward looking statements can be guaranteed and actual and akshay.
Well results may differ materially from such statements.
The information on this call is provided only as of the date of this call and synthetic biologics undertakes no obligation to update any forward looking statements contained on this conference call on account of new information future events or otherwise, except as required by law.
With that I'd like to turn the call over to Steve Steve.
Thanks, Susan.
Good afternoon, everyone and thank you for joining our 2021st quarter Investor Conference call.
On behalf of the tiered synthetic biologics, we hope you are safe and in good health.
I'm glad to be with you. All this afternoon and I look forward to sharing important updates on our strategy for advancing our portfolio of Gi microbiome focused clinical programs during today's call.
Today, I'll review, our 2021st quarter operational highlights and financial results and go over our updated clinical development strategy, which reflects the rise in impact of Kovac 19, as well as the regional and National response to it.
Our focus now and in the past is the safety and well being of patients. We aim to serve our clinical and research and development partners and of course, the dedicated team here synthetic biologics.
For the better part of the first quarter of 2020, we remain in line to deliver on the timelines and milestones we set out for our Syn 10 in Singapore clinical programs at the beginning of last year.
As we disclosed in the press release earlier today recommendations by local governments hospitals and healthcare organizations to reallocate resources towards battling covert 19 pandemic are having a wide spread material impact and ongoing and planned clinical trials.
This concludes our ongoing phase to be investigator sponsored clinical trial of Syn 10, which is intended to treat irritable bowel syndrome with constipation and is being conducted Cedar Sinai Medical Center in California.
And our planned phase one be two way clinical trials in for no allogeneic hematopoietic cell transplant recipients, which will be conducted by the Washington University School of medicine in Saint Louis.
We support government in hospital policies in efforts to battle the spread of the novel Corona buyers and recognize these policies will vary greatly by region and hospital system.
And while we've experienced some additional delays in enrollment in site visits from our plan and ongoing clinical trials, we believe we've implemented and operational framework, which will allow us to navigate this crisis and ultimately deliver on tangible results and goals we've established for our company.
Importantly, these initiatives will be conducted with a sharp focus on prudent cash management and financial stewardship, including an amended financial plan intended to further reduce our cash burn and extend our cash runway through at least the first quarter of 2021.
This is necessary as timelines surrounding the ability of our clinical development partners to resume clinical trial activities remain uncertain.
With that backdrop I'd like to provide an update on our late stage in emerging clinical programs, beginning with our Syn 10 program.
Syntel is designed to target an underlying microbial cause of constipation and IBSD patients with the goal of normalizing bowel habits without the diarrhea, nausea, often associated with over the counter and prescription therapies.
Last year, we began enrollment in a phase to be investigator sponsored clinical trial. Its intent in collaboration with our research partner Cedar Sinai Medical center to further evaluate the efficacy and safety of Syn 10 in IBSD patients.
This clinical trial was designed with three specific objectives in mind.
One to generate data dataset of the highest quality in order to provide additional insight into dose response, Atlanta treatment for future pivotal trials.
Second to allow us to Reengage with prospective partners, who found the phase two way data compelling yet inconclusive enough to justify significant investment for phase III development.
And importantly, three to generate this dataset in a cost effective manner.
The phase Twob study commenced last year in enrollment remain ongoing through most of the first quarter.
Unfortunately in late March the unforeseen and unique challenges posed by the global coded 19 pandemic required cedars to temporarily limit all non essential activities, which directly impacted their ability to actively recruit in screen new patients.
As a result additional enrollment for this trial suspended until covert 19 restrictions can be lifted.
With respect to active patients who are currently enrolled in the study Cedars has implemented steps to allow this group to complete the full 12 week treatment period.
We've also taken steps to ensure that data from this group is collected properly and in accordance with the clinical trial protocol and once this active group completes the study we anticipate conducting a futility analysis likely during the third quarter of 2020.
We expect the outcomes from this data readout two in the form a discussion with cedars to determine whether to resume enrollments post covert 19 or whether this study may be completed in the data on blinded.
At this time it is difficult to provide from guidance when or if additional enrollment will resume as it remains contingent upon cedar Sinai is the primary sponsor in Thunder of the study as well as their capacity commence normal clinical trial activities post covert 19.
However, cedars remains engaged with an active queue of prospective study participants who submitted their informed consent forms to begin the trial, but we're able to do so as a result of curving 19.
We remain in close contact with the team at Cedars and look forward to providing additional updates as they become available.
Next I'd like to provide a brief update on our soon for or Ribaxamase program.
Since four as our first in class therapeutic intervention designed to protect the gut microbiome from antibiotic mediated disease diagnosis.
We believe protection of the gut microbiome may play a pivotal role and improving health outcomes for patients administered long courses of intravenous beta lactam antibiotics is part of their treatment plan for bone marrow inside of the lower solid organ transplantations.
Last year, we announced our intention to move this program forward in collaboration with our clinical development partner, The Washington University School of Medicine in Saint Louis in the form of a phase one lead to a clinical trial of Synacor and allogeneic HCT recipients.
Following this announcement, we held a type C meeting with the FDA FDA to solidify the clinical program requirements needed to evaluate the safety tolerability and potential absorption into the systemic circulation if any of soon for an adult allogeneic HCT recipients.
During the first quarter of 2020, we continue to move this program forward intent on its initiation during the second quarter. This year. However in response to the global Cobot 19 pandemic, Washington University is temporary limited non essential activities, which directly impacts planned clinical trial.
Trials, including the phase one beat to a clinical trial of sand for.
We recently had held discussions with Dr. bercy.
Professor of Medicine, and clinical director transplant infectious diseases at Washington University, and the primary investigator of this clinical trial to better understand what's the path forward for Syn for looks like in the face of code 19th.
He indicated that as effect.
Excuse me he indicated that as the effect of covert 19 continues to evolve Washington University. His primary focus remains the health and safety of its patients.
The University is closely monitoring the ever changing situation and is falling guidance from the CDC State Department, It's infectious disease experts at the school of medicine and local in public health agencies.
At this time it has been determined that postponing the initiation of the sin for phase one would be to a clinical trial is the appropriate response to covert 19.
While uncertainty surrounding the long term impact of Cowen 19 makes it difficult to provide a from timeline pulmonary guidance from Washington University suggests we may be in a position to begin this clinical program. During the first quarter of 2021. However, this remains at the discretion of Dr. Berger.
His team at Washington University.
Importantly, differing this program into the first quarter of 2021 further reduces our cash burn as we do not anticipate any additional expense related to this program during the remainder of 2020.
We will continue to remain in close contact with Washington University, and we'll be ready to proceed with this program in the event. It is deemed safe to do so by the universities higher B and the FDA.
Before reviewing our financials I'd like to share a quick update on our son 20 preclinical program.
Since 20 is an oral form of bovine intestinal elephants hospitals or peak IP isn't in indigenous enzyme expressed in the upper small intestine that plays an important role in reducing dji inflammation tightening in the gut barrier and promoting a healthy gut microbiome.
Preclinical studies have been shown that IP diminishes anti inflammatory mediators found in the GI track and serves as an important positive regulator of gut barrier function and microbial diversity.
Recent studies and mice suggests that these outcomes may be particularly beneficial in mitigating the effects of aging.
If translated to humans, we believe oral delivery of IP has the potential to treat both G and systemic disorders broadly associated with chronic inflammation.
We are currently pursuing the treatment and prevention of radiation inner apathy secondary to cancer therapy as a first indication with a large unmet need.
During the first quarter, we made significant progress towards the completion of Ivan de enabling toxicology studies assay development and GMP manufacturing that are expected to support our R&D filing for this program later this quarter.
At the same time, we continue to review and evaluate a number of potential clinical indications in which I may provide a significant therapeutic benefit.
We're very excited about this program and has potential to be a value, adding catalyst for our company.
With that backdrop I will review our financial results for the quarter ended March 31 2020.
During the first quarter of 2020, we continue to operate in a lean and efficient manner. We remain focused on prudent cash management and the successfully identified additional areas to further reduce non central operating expenses.
We ended the quarter with approximately $10.1 million in cash and cash equivalents and looking ahead, we anticipate additional reductions to clinical expense as a result of the response to covert 19.
This is due primarily to their postponement of the phase one be to a clinical trial ascend for and allogeneic HCT recipients as we do not anticipate additional expenses related to this program for the remainder of the year.
As a result, we anticipate that our current cash position will allow us to continue our operations through at least the first quarter of 2021.
Now I'll turn to the first quarter financial results.
General and administrative expenses increased by 21% to $1.4 million for the three months ended March 31, 2020 from $1.1 million for the same period last year.
This increase was primarily due to increased insurance cost registration fees and legal costs.
The charge related to stock based compensation expense was $65000 for the three months ended March 31, 2020 compared to $65000 for the same period last year.
Research and development expenses decreased by 32% to $1.6 million should the three months ended March 31, 2020 from $2.4 million to the same period last year.
This decrease is primarily the result of lower Indra probe program costs for the three months ended March 31, 2020, including salary and related expenses.
And reductions, resulting from the 2019 head count reduction and a decrease in manufacturing costs for Syn 20.
The research and development costs incurred during the quarter were primarily related to the investigator sponsored phase Twob clinical study of Syn 10.
We anticipate research and development expense to decrease as a result of the response to the global coated 19 pandemic by our clinical development partners, which has led to the postponement of the phase one of the two a clinical trial of sin for and allogeneic HCT recipients and.
A temporary halt to new enrollment in the phase to be investigator sponsored studies for Syn 10.
The charge related stock based compensation expense was $18000 for the three months ended March 31, 2020 compared to no charge related stock based compensation expense for the same period last year.
Other income was $38000 for the three months ended March 31, 2020 compared to other income of $44000 for the three months ended March 31 29.
Other income for the three months ended March 31, 2020, and 2019 this primarily comprised of interest income.
In closing the fourth first quarter began as a period of progress in key execution is we remain well positioned to deliver on the clinical milestones we set out at the beginning of the year.
However.
We are now in and President at times and like most we are trying to navigate this uncertainty as best we can.
After careful planning, we've realigned our clinical development strategies coordinate with recommendations by government in healthcare organizations, including the actions taken by our clinical development partners in response to a global krona virus pandemic.
Pursing 10, Cedars has taken steps to ensure that active study participants can complete the trial and data can be properly collected.
Again, an interim or futility analysis is anticipated during the third quarter and is expected to informed decisions about future enrollment pending cobot 19.
For seeing for Washington University as postponed the initiation of the phase one be to a clinical trial in allogeneic HCT recipients until the impact of go with 19 can be properly mitigated in a clinical setting.
Initial guidance from Washington University suggests this trial may begin in Q1 of next year.
Preparations to submit to 90 filing for our son 20 programs remain on track for the second quarter of 2020.
And importantly, we expect significant reductions to clinical expense during the remainder of the year to reduce our cash burn and extend our cash runway through the first quarter of 2020.
Despite global uncertainty around covert 19, we had synthetic biologics remain focused on the execution of our strategy of advancing our portfolio of G III and microbiome focused clinical programs.
We continue to support the efforts of our clinical development partners in the healthcare workers around the globe, who continue to risk their own health to help others battling the novel grown virus.
On behalf of synthetic biologics, we thank you.
We look forward to continuing to update you on our progress in the weeks and months ahead.
Now I'll turn the call back to Vincent for questions.
Thank you Steve tailored we'd like to open up the phone line for questions would you. Please describe the procedure to ask questions for our listeners.
Thank you.
I wish to ask a question please correct.
One on your telephone and what's your name to the end out.
I wish to cancel your question. Please press Star then at the honest speakerphone. Please pick up the handset so ask your question.
Your first question comes from James Malloy from Allianz.
General partners.
Please go ahead.
Hey, guys. Thanks, taking my question and certainly from unprecedented times.
And some real challenges.
You guys going forward I know that.
Given that you have given sort of the best guidance.
And the hospitals, giving you the best guidance if again.
At this time.
Given sort of how things have progressed, and we think silicon valley.
There is with the hospitals are and how.
I really think those guided the guidance.
Guidelines are potential restarting knowing that this is this fibers history impacting difference.
So the country in different ways.
So so thanks for asking the question Jim.
Paul Law of do the best to give you my opinion and maybe Vince has an opinion as well.
So we have regular discussions with the team at Cedars and the team and wash U.
And interestingly, although there both in different locations.
There are also sort of citizen and large population centers. So as we watch this all unfold you know every night on and the various note news networks.
I think we're getting the best information that we can at this time on what's going on you know sort of in a macro level.
And then the hospitals individually they've taken their internal resources and they're focused on dealing with this matter the micro level. So.
Unless we see some dramatic changes my expectation is that we will see significant movement from the guidance that we've given but if you know.
On the other half head of the coin things change.
You know and a more positive light, perhaps the guidance can be change and we'll get back on track sooner than later.
I guess, maybe on the since then the interim look in the third quarter for the futility analysis.
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How much should use should turn of the need to keep the ruling.
What's the what's the expectation for final data.
It should that be the case.
Let me I'll hand, it off the Vince and let him take a.
Take that one.
So the short answer is that depends on the results of the analysis. So I think as a case, where we can say.
That we guarantee that the results would come out in this timeframe. The interim analysis will do two things frozen will tell us if the study it looks like it's worth continuing.
And then we havent discussion to be had which.
The study Saddam is going to Cedars Sinai about the ability to go forward and and.
The length of time, the investigators feel comfortable advancing the study.
We still don't know yet.
Whereas cedars Sinai the institution is.
In terms of bad Pan Kevin 19.
Actions and recovery from that from the.
Having to deal with it the I'm kind of at 19 measures.
Sorry, I was actually on our web call. This morning, and one of the.
Correct to say to sign on one of the operation. During just so I was asked a question about when they would get back to normal and they are working through all of the things I need to do and has quite a list and so I wasn't able to give any specific guidance on that and so we don't now.
When the study might kick off if we decide to.
Just on again.
Understood and principally the times to be sure just quick clarification as equal the call you said you cash to.
First quarter 20, if we do see for of course, we won new business or.
Right to get us at least through the first quarter of 2021.
Perfect then.
Hey, guys it applied for receives any.
Can you.
Small business loans or cash the payroll protection things that have been enacted.
So we've taken a position in our company that since were public entity that these funds are better suited for folks that really need them. We haven't laid off any of our staff, we don't intend to.
And there's a lot of other folks that I think need need those types of funds more than than than we do.
Understood. Thank you taking the questions.
Thank you.
Your next question comes from Jason Mccarthy from Maxim Group.
Please go ahead.
Hey, guys as Michael accumulates online for Jason. Thank you for taking the question.
Hey, Mike.
Those are the first one is a bit more high low.
The ongoing pandemic the anti infective space overall seems like you might be getting.
More attention that we havent seen in on in past years, especially these patients are being heavily treated.
With antibiotics to Brent secondary bacterial pneumonia, which is one of the major caused the debt.
So looking at that antimicrobial resistance could also be bottom to get greater focus. So my question is.
As more patients receive antibiotics and am our comes into greater focus is there a possibility that ribaxamase.
Attracts a partner or get some excel or development gets accelerated towards those larger indications.
I'll I'll.
Ill take a first stab at that and then maybe Vince can relay some of our discussion that we had with Dr. to Bercy I think you're right, but it's still isn't changed.
The matter of.
Having the conduct a pretty large clinical trial to get a program like this over the line and that would require us ultimately recruiting.
That dozens and dozens of sites around the world in order to to accomplish that but I think you're you're thinking about this is right on and.
We'll see we'll see what happens.
You want to talk about some of the comments Eric had about the specific transplantations.
Yes, I think the.
But the opportunity to write backs remains to be used and populations what antibiotic users going up.
This is very encouraging you know we like to see that we don't.
Hi, good prediction about partnering at cost because.
That whole area is still.
Still still bank as far as People's interest in treatment surprises preventatives versus focus on kind of non today, and then and I'm sure that your question is very astute who else is thinking about allocating some novel 19, So I think as an education around potential partnering.
Requirement.
If you look at things like the Gi.
Symptoms that are associated with things like that.
They are aggravated by antibiotics that that's the write backs amaze sweet spot is preventing that GE damage caused by antibiotics.
In hypothetically that should encourage further interest in the products.
We have.
Holds true not just for how to maximize but across interest in anti biotics I'm, making anti biotics better insights on and prevention and I'm prevention is key I think with timing. So we havent something that prevents that damage and good could help it's just a question of.
Resources and.
I think the ruling pondering population coming to the reorganization that these are all part of the same antibiotic strategy to be able to deliver the best anti body care with that with the greatest safety as possible preventative outcomes for any secondary infections and other things like that.
Alright. Thank you. Thank you and minimum so the next one is on on Syn 10, you know you're expecting that.
Not futility analysis in the near future so.
I'd like to see I guess, a two parter first off what sort of results would would you figure than a prospective partner would need to see in order to consider the data compelling and then could you give us an idea of how many patients have already been enrolled you study in like the size of that futility analysis.
Okay, which guidance.
So what are the auto Todd what we hear from partners is they looking for something differentiated and we so we have to show that we.
Differentiated it clearly.
Well, what does the efficacy out of the trial in terms of the symptoms.
That does weight when looking to see if we can get a better.
Dennis respond rate on a dose response, we didnt get announced first phase two study and so we would like to say efficacy in a dose response and ideally it some other added.
Benefit something useful.
Yes that for example, we even in the study to date, we've had no incidence is an area. So that is that's potentially benefit if it holds up in.
Blinded.
The analysis, but.
Those are the result of things that partners are looking for the futility analysis, we have enough patients and to decide whether or not the studies should keep going.
Whether or not we're actually seeing meaningful signal.
We will have to wait until had announces done before in calculates what length of time in number of patients we might be looking at to continue the study if thats what is required them and if the futility analysis somehow gives us some terrific.
That's a futility analysis that was very limited.
We can evaluate that in the overall scope in the overall context of what's going on with the hospitals and clinical trials and clinical chocolate dissipate mission and determine how loans to go and how many more patients unaided.
Alright, Thanks, and then just.
I'm sorry, Regan continue not go ahead go ahead I'm sorry.
Just a.
So so I'll ask questions going to be on DM. The Gvhd trial and so now that you know initiation is back is expected in.
First quarter 21.
I'd like to see obviously.
Anything goes on track with co bid would it be reasonable to expect data from that trial emerging around year end to 21.
We if we were to engage in the first quarter 2021, we could possibly have at least one of the three cohorts report out some data.
And we'll see what happens.
Things turn out to be.
Better and we start to get through this difficult period much more quickly theres always a possibility.
Of starting.
This trial before then in the meantime.
We're still doing work on the program.
We are near completion on.
Aligning.
With wash U in establishing the safety data monitoring committee.
Setting up all the necessary databases.
We submitted the final revisions of the protocol to the FDA and we're waiting for that that period for that for the FDA to review that to pass and once that happens it will be hand it off.
Back to wash U.
For their IB to go through their filed for approval. So we are we are continuing to work on the program. So whenever we get the green light we'll be prepared to.
Advance into the clinic.
Alright, Thank you very much.
Thank you there are no further questions at this time I would now like to hand, the call that same show cost for any closing remarks.
Thank you and thank you our shareholder base for the support that you continue to give us.
We I.
I think.
Finger, making tremendous progress across the board with with all of our programs.
We look forward to.
Future news flow and updating you on our continued progress thanks, again and stay safe.
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