Q1 2020 Earnings Call
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Ladies and gentlemen, please standby this conference call will begin momentarily once again, ladies and gentlemen, please stay on the line.
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Good afternoon walking through the presage in first quarter 2020 business update and financial results Conference call.
I'll now turn the call over to Steve Harrison head of Investor Relations. Please go ahead.
Thank you operator.
I'm pleased to be joined today by Dr. Heflin subsidiary, President and CEO Presaging and Tom Samuelson head of financial strategy. Please turn to slide to current forward looking statement.
During today's call will make various forward looking statements.
Investors are cautioned that are forward looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by are forward looking statements.
Please read the Safe Harbor statement contained in this presentation as well as the risk factors contained and pathogens. Most recent FCC filings for a more complete discussion of these risks and uncertainties.
I will now turn the call over to Dr. subsidiary.
Thank you Steve.
I hope that these called flight all listeners and their families say controls.
Since we last spoke in March so much has changed yeah, maybe two and historic moment that has caused profound change from all perspective.
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Corporate employees have transition seamlessly to working remotely and essential personnel, including research scientists.
In the lab I'm practicing all appropriate safety measures social dispensing <unk>.
Wearing a personal protective equipment.
Despite these challenging time, we continue to advance our program with the ultimate goal of benefiting patient.
Before I reviewed the progress being made in the last quarter I would like to reflect on the headway. Our team has made in bringing three first in class drugs from the concept to clinic in the last 18 months.
I am incredibly prob I'm privileged to lead such a passion a team.
Even doing this on precedents with time, what has not changed his ought to adhere into our core operating principles.
Outlined on the fly three.
I strongly believe that the most important way, we can deliver value to our shareholders on a stake holders.
Bench to were important goals, we laid out earlier this year.
Because our company and our signs must continue to vote.
You work to become a key player in the gene and so therapy market.
By realizing our mission of improving patient care to our innovative product portfolio.
I'm pleased to report that that this point, we remain largely on track with our previously disclosed cleaning called time line.
I will provide in more detail update on our clinical program in just a moment.
Our team also wants to underscore that'd be are on track to cheat the twentytwenty goals be laid out on our last call, while preserving financial resources, which would allow us to continue to operate well into 2021.
You have made a considerable progress in as streamlining the organization to focus on health.
Key initiatives. This corridor included completing the cell several of our Nanthealth assets.
Improving operations at both trends over genetics, an exam color. So they are net contribute there's a risk capital this yet.
Firing significant adverse impacts from the cold at 19 pandemic I'm substantially reducing cash burn at N.B.P., Tyson, which I believe discussing greater detail later in the call.
In the first quarter of 2020.
Magenta spending which includes segment habits out plus on I located corporate costs.
Was approximately 30 million versus 39 million in the first quarter 2019.
This victory was primarily attributable to significantly lower costs for corporate functions, which were a streamlined to sit there <unk> of the company.
These numbers exclude the additional cost savings 12 million, which resulted of this sale obsession of or non core value engineering gases, which closed in the first question.
Another top priority for us it's to unify our health care businesses become one precedents as we can see on the slide for.
We have made major strikes here, allowing us to deployed resources maximize collaboration and a streamlined worked slows more efficiently.
Specifically, we have taken a steps to integrate our health businesses to a cheap synergies at both the corporate and company level.
We have also streamlined or infrastructure eliminated redundancy reviews, corporate color and increased communication across our health businesses.
In addition to presaging. These include <unk> presage, an exemplary unprecedented triple June.
We have focused effort of or held subsidiaries on a pipeline program that we believe have the most potential value.
Generally these closer integration is evidence to our recently updated but site faster than dotcom.
Which consolidate information on each of these respective program in one place.
Hope that you find it informative.
Honest like five you will note our strategy for on on healthcare assets.
I'm pleased to record that we are making progress in our overall objective to review our capital allocation to both businesses.
Consistently dog goals to allocate resources in a man was that Beth create value if there's our commitment to reduce non health spending.
We continue to implement additional efficiency measures I.M.B.P. Tyson.
Why exploding options to partner or sell the business.
The ongoing cope with 19 pandemic under current state of the energy sector are especially challenging for the prospect an operation of this business.
We expect that progress thing these non health platform will require significant capital and efforts to secure such <unk> have been Hanford My world events.
As a result.
You have made the difficult like necessary decision to suspend operations in R.M.B.P. Tyson facility and minimize the expense of the operation while continuing to maintain the potential value of the platform for a brighter economic situation.
Specifically, we have taken a steps is significantly reviews.
R.M.B.P. Tyson workforce and to cut operating costs.
At the same time prioritizing the preservation of intellectual property and technology.
I also want to announce that by mutual like Lehman, David where D.C.O. of N.B.P. Tyson is no longer with that company.
I want to times, the entire N.B.P. tightened team for their contribution.
<unk> innovative and attained by a conversion platform.
We will continue to evaluate options for this technology.
Another highlight this quarter was the upswing in financial performance at trends over genetics due to their combined impact of expanding the commercial dairy business and achieving operational efficiency.
Sending now to update or health clinical programs on a slight sake.
I'm pleased to reaffirm that we remain on facts to meet our previously announced schools for redoubts and the other milestones in 2020.
Turning to slide seven on April 20th the announced that the F.B.A. have cleared the investigation on new drugs application to initiate a phase one to trial for P.R. Jan 2009 at first thing class Oscar shop investigational in a therapy neuter.
Thing that I didn't know where slacks form designed to activate their immune system to recognize and target H.P.V. positive solid too much.
It's be be positive cancers, we presented significant health burden in indication such as head and neck. So recalled by general an anal towns.
Globally Highway H.B.B. infections cause nearly five per cent of all cancers.
In 2009 leverage is presage and also Baxter and I didn't know where platforms to optimize H.B.B. antigen design in combination with the school realizing Novak together with a large payloads capacity and the ability for repeats administration do too.
Very low to non existent zero prevalent into human population.
The clinical testing of P.R.G.N. 2009 has demonstrated robust H.P.B. antigen specific immune response and potent anti tumor activity as a monitor up here and in combination in humanize mouse models had on their cancers.
Please now turn to flies eight.
The phase one portion of this study will follow three plus three goes installation to evaluate the safety appears in 2009 administrative as a monotherapies.
To determine that they come in the face to those followed by an evaluation of the safety of the combination of P.R.J. in 2009, and the investigation old by functional fusion proteins and 70 824.
Patience, they've recurrent or met a static H.P.B.S. wilted cancers.
The fish to portion of this study will evaluate P.R.G.N. 2009, as a monitor p. or in combination with M. 70, 824 in patients with newly diagnosed as stage two or three actually be 16 positive qualifying jail task.
P.L.P.N. 2009 is under development through a quantitative research and development agreement or credo within the laboratory abductor Jeffrey shown at the National Cancer Institute.
These crazy to has allowed presses into rapidly on cost effectively at lunch P.R. Jan 2009 to the clinic.
Save one to clinical trials will be conducted at the M.C.I. and we'll be led by Dr. Julius This trial inductive James Galling.
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Turning to slide nine.
From that'd be are on track for initial data readout from I.P. arm of our phase one clinical trial P.O.G. and treat thousand five in ovarian cancer during the second half of these yeah.
I'm happy to announce that we have complete that those things off the dose levels to have that I.P. on of these trials. We are very encouraged by our ability to successfully manufacture quote truck or tea and today, we continue to have hundred percent manufacturing six.
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<unk> Center had placed a temporary paws on non cold. It 19 phase one clinical trials due to the medical sensors prioritization open up coded mind seeing patients at the hospital.
P.L.P.N. 3005, what part of these park.
It is important to know that it was neither related to safety issues, nor any study relate to cope with 910 infection.
Today I'm pleased to announce that'd be out amongst the first try to have the pause lifted and are actively recruiting again.
I've seen on a slide 10, we believe this is in part due to the characteristics of our class won't.
The centralized manufacturing advantages.
On lack of lymphodepletion treatment to patients prior to offer a car.
T administration.
Unlike conventional cawsey old truck costs T. cells do not use lentivirus and does not require long x. knievel expansion in large manufacturing facility.
Instead.
Cause he uses nonviral rapid manufacturing at the hospital, allowing for the treatment of patients the day after gene to transfer.
Reviewed this as an important competitive advantage in a post cold it's 19 rules.
Now moving to slide 11.
The P.R.G.N. 3006 trial continued to enroll and today has not experience any cold that 19 related introduction.
The trial was initially structure to those patients in non Lymphodepletion arm, followed by their lymphodepletion or at the set those level.
I N.B. has been amended and the F.T.A. has allowed us to concurrently those patients in both times. Yeah. Currently enrolling patients in boats Lymphodepletion and non Lymphodepletion arms and are excited to compared them and today, we continue to have 100% manufacturing.
Success, we remain on track for initial data readout and look at the kinetic in the second half of 2020.
I will now go back too revealing the rest of our portfolio on the slide 12.
I would like to move on to <unk> aging 013, which is a partner with all the agenda.
Oragenics recently announced that early top line dissolves of the phase two clinical trial of H.T. 013 to prevent or on the <unk> into head and neck cancer patients receiving chemoradiation did not demonstrate statistical significance on the primary endpoint.
Up severe all near <unk> relation when compared to placebo.
We look forward to hearing from the company as developments becomes available.
Turning now too ages are one nine as noted in early of Investor update.
Presaging bio remains on track to announce entrance data for the first cohort of phase one v. two a clinical study in the terror quarter of 2020.
Ages there one nine is a first thing class disease modifying answering the specific investigation in in a therapy for prevention delay or <unk> type one diabetes.
<unk> disease modifying treatment.
Is currently Mannix true lifestyle modification and diet combine that is large enough insulin.
We have implemented at temporary part two randomization for the last remaining study cohort of this say to a study.
Which is the combination of ages in one nine plus anti see these three antibody separate lives on that in patients 12 to 17 years of age.
These stuck already cause is neither do to any study related issues nor is the based on any studies related cope with 19 infection.
We decided to do these other abundance of caution given the immunosuppressive nature <unk> against the background of evolving covert 19 tandem.
Another sightings assets, you know portfolio, he's I.N.X.N. 4001, and all those gene therapy for heart failure patients.
Which is being developed by our majority on press Gen Triple jumps up to do.
Expect to complete the phase one tribe and provide top line data by the end up 2020.
I will now time to call over to Tom's Samuelson.
If financial Aussie.
Thank you Howling and good afternoon to everyone on the call.
As previously recorded in our last quarterly conference call, we close the sale of $65.2 million in legacy Bio engineering assets and 35 million in our common stock.
These transactions not only provided presage end with substantial additional capital, but also significantly reduced our 2020 requirement by an estimated $46 million based on the aggregate expenditures incurred in 2019.
Please per call the segment Aber Das which is fairly defined in R.F.D.C. filings is generally the sum of net cash operating expenses.
Capital expenditures.
Continuing operations are Q1, 2020, and Q1 2019 segment eight dollar losses, plus corporate costs, which are not allocated to individual segments.
Totaled approximately 30 and $39 million respectively.
A large component of this reduction of approximately $9 million or 23% was a 7.8 million or 43% reduction in our on allocated corporate expensive achieve largely by eliminating redundancies and decreasing professional fees.
Despite continued advancement on our multitude of clinical and preclinical programs in our ecology, and then you know Gee, we maintained a comparable quarter over quarter segment.
They're in his plan.
Telling alluded to beforehand, we made the difficult decision to dramatically decrease expenditure towards the M.V.P. type, which required $36.7 million in 2019, and 8.8 million during the first quarter of 2020.
In the second quarter, we are already significantly reducing these expenditures ultimately to and leave those required to preserve the I.P. in technology.
At trends over genetics revenues grew quarter over a quarter by 12% to $16.8 million, while segment EBIT dot increased by approximately 1 million.
Segment, a bit dot at exemplar and active biotherapeutics also improved by point 9 million and point 4 million respectively over the same quarter last year.
On March 31st 2020, weird cash cash equivalent in short term investment of approximately $149 million and anticipate these funds to last well into 2021.
In closing we enacted many of these operational improvements during the first quarter and that's we expect to see even greater impact in our Tutu results I.
I would also like to note that as as the case for every organization today.
Effects of the ongoing covert 19 pandemic will continue to impact our company.
We advise you that further developments with respect to depend on it may have an adverse effect on our operations.
I would now like to turn the call over to Alan for concluding remarks.
Thank you Tom.
Hearing 2020 expect to report numerous data sets and achieve new mines. So as you can see on the slide 13.
In closing are called today I want to confirm our confidence imprecision potential to transform the health care landscape is are innovative and focus pork for you.
Despite the current challenges presented by cope with 19.
Continue to deliver on all clinical plan.
Confirm our financial guidance for 2020.
We are committed to manage is our company in financially prudent.
Fiscally discipline and transparent manner by reaching got data driven go no goes decision l. in the development process.
To achieve our mission of bringing all potentially transformative treatment options to patients.
But that we will not open the line for question operate there please began.
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Thank you Kevin joining us today for our queuing they session will be Helen.
Tom who just hurts big inner C.F.O.s <unk>.
I'd like to turn it better operator, who will symbol to Q. now thank you.
In general we still have a question or comment at this time police person stars in the one key on your touch tone telephone if your question us, but that's where do you wish to work for so from the two please press the pound key.
<unk> yourself the two questions on follow up.
Or first question comes from <unk> J.P. Securities.
Uh-huh right. Thanks for to see requesting right. That's on all the progress maybe just starting off on 2009, you you discuss what you see preclinically with the combination with with the than traps Alpha and how we should think about the the potential for more therapy Africa.
The or signals the desks in this study versus you know the combination how you think about the combination for other other central combinations.
Thank you very much <unk> excellent question actually what in collaboration with M.C.I.N. studies that have been done on T.I.V. evaluated the efficiency and advocacy.
P. On June 2009, and number of day Humanize <unk> Hovanec H.T.V. positive.
It has been actually quite encouraging data from the reduction court is stabilizations of the tumors that have been in and number all different indications.
It should be positive ones of course and in combination we have seen enhancement.
Also into the tumor deduction of the tumors Oslo ads that activations in.
The importance of the combination could be currently huh is needed by functional molecule only bad actually and also targets that teach ya female pathway, which number of indication that.
Basically tickling inhibitor are not functional then we then like he put P.G.S. data <unk>, then additional <unk> and that one of the very important design, but oh, oh, especially of all off the shelf.
In the clarity is the way that it's bizarre and we are moving in the clinic window of opportunity between especially being a thing to design at that time back patients on August using <unk>. When I think this is going to be very something and that one was dead.
Excitement when this him we believe that on appeal June 2009, and <unk> and indication for the positive but also in combination not only with yeah.
Current functional molecule that may have.
As in life, but also with our some of our own and Cook polio molecules and <unk> and we have done studies and we believe that this would be very exciting long kill him to move forward and it's very unique as it was mentioned because we need both.
Ultravector.
Special I think in design or gorilla.
<unk> phone, which allows the two.
Those number of times.
As well <unk> launch a table.
And this makes the P.L.G.M. 2000 <unk> <unk>.
And they're looking forward to this one.
That's great. Thank you.
But what she just the for for both the 3005 and 3006 programs you reiterate it again, you're you're maintaining the 100% manufacturing success rate can you can you give us a sense of of what this represents in total number of patients or manufacturing processes, you've now successfully completed or.
I I guess, maybe put a different way how far along the path or you to to having confidence that are very high says that success rate is sustainable in a multi sons are setting.
But.
Excellent.
<unk> P.L.P.N. 2005, <unk> <unk> <unk> Hutchinson pretty solid tumors on P.L.P.N. 2006, four and Luckily tumors A.M.L. patients Moffat cancer Center.
Was very important for us that done past came can be duplicated number of this one place and <unk> at this point, we have shown that I'm going through a wall Bob in either of these sensors. They have a cheese hundred percent manufacturing despite of that.
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Facility. So we are very confident and we have now both are we also recorded this call for P.L.P.M. 3005, we're really excited we have finished the buttons. So cohort at this point and the also.
<unk> finished as the first cohort in Lymphodepletion in the second cohort Oh I'm sorry.
For the solution and as you mentioned, we have <unk> allowance, but now we from concomitantly <unk> from cars and so.
All of these there a number that patients as your 10 I didn't do this studies or three plus three.
Three plus three and so we have up to this point have a dose number of patients in either of the trials on behalf not have any money.
Which allows <unk> the composition.
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Okay, Great and then if I can just squeeze in the last one for.
More or Rick and service I Miss in in some comments before but can you quantify the costs savings that you think you can capture from from M.B.P. tightened with with the reductions your.
In place for for 2020.
Oh.
Yeah.
So thanks to the question, Jason So we're not giving specific guidance on an exact number for 2020, what I can tell you is reiterating just that the 2019 segment to die for M.B.P. was $36 million.
And 2021 with approximately.
$9 million so.
Allow you to sort of draw the conclusion from there for now.
Okay, maybe Jason one thing that I can try we have significantly with you.
Basically the cost the N.B.P. Tyson. So this would be reflected in the next <unk> I think.
Okay, great place on thank you very much Sigma questions.
Thanks.
For the next question comes from Swayampakula right.
But this is okay from C.W.
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A couple of six lessons or the first one you know you're talking about some changes on the P.O.G.M.C. 006 study.
Can you.
Water additional changes have you or are you proposing.
Sort of the concurrent dozing operations and bombs.
Okay. Thank you are to Ah, Okay Ah in regard to the P.R.G.N. 3006, <unk> I and do that we had and was discussed with the S.T.A.B.S.R. a week that.
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Arm.
To obviously look at that manufacturing ability as well as the same ski.
And ask the we were going to finish that phenomenon for decreases then we will thought that <unk> I I can't imagine that it's by that's designed that would have seen yeah, Ah basically moon and long, it's like a time between the two.
Oh.
I'm really excited that we are going good tool to burst cohort for we've been known for depletion not only shown that manufacturing ability and hundreds person manufacturing success, but also the safety results that we have seen.
And then then what allows <unk> F.P.A. and now we send concurrently basically is all patients, which obviously it allows us to.
On the day and move more rapidly as well as a gift to the comparison.
Of normally depletion and with the teams.
Okay thing to remotes, there's going to be quite a bit of data coming up in the next couple quarters across four up your programs <unk> trying to focus a little bit on the diabetes program. They're just really expecting you know some engine laid on the third quarter.
Do a question what sort of you know earlier data would be C. and also with this kind of I'm trying to figure out what how how do you learn to take this program forward.
You know keep turning can you do it a yourselves or humid.
Lives from.
Collaborators. So that you can you can finish the program in terms of completely new to the too late stage as well as trying to commercialize it.
Sure concurred.
So in the go to ages are one nine of course data for in Maine, and <unk>, especially in a place to way that compares the ages it'll one nine and both in adult and adolescent and by itself as a monitor yeah. Then of course in combination with.
Okay <unk>.
And the first <unk> that'd be will be recording on from a phase one would be on to safety <unk> Oh than molecules and also the some of their pharmacokinetic and <unk>.
And the interim data, obviously people, who said there as bombs in six months observations of the patients that they haven't received as you know do smaller too. It's basically a delivery I'll 10 also <unk> installing and type one diabetes.
Yeah onset of disease, which is very important distinction don't have really there's no therapy accepted diet as well as the insulin eventually and I think this would be exciting their readout from a six month and then eventually that would be ended up on the 12 months.
That we wouldn't be able to allow us to see the platform in monotherapies as well as in combination with.
Yeah, I see to me and then based on that this decision, making me where you go ask what else is trafficking for <unk> I would address this in general artist <unk>.
<unk> evaluation of of course full you we've been concept.
<unk> see in mind and that therefore, we looked at all of our strategic.
Possibilities in front of our time of course, all these partnerships.
<unk> yeah. So these things will be evaluated then I mean move on this is not really.
Cobra This is I cross or quickly.
Thank you thinking of <unk>.
Thank you I say.
And I'm not showing any further questions at this time.
Right. Thank you.
Ladies and gentlemen supposed to include today's presentation you may not disconnect. Another wonderful does.
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