Q1 2020 Earnings Call

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Ladies and gentlemen, please standby your 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.

Let's turn to slide two for forward looking statements.

During today's call will make various forward looking statements.

Yesterday 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 flying all on the nurse and their families safe unchanged.

Since we last spoke in March so much has changed.

Living too and so requirement that has caused profound change from all perspective.

Most important.

Corporate employees have transition seamlessly to working remotely and essential personnel, including research scientists.

Are in the lab I'm practicing all appropriate safety measures social dispensing a staggered wartime on wearing a personal protective equipment.

Despite these challenging times, we continue to advance our program with the ultimate goal of benefit impatient.

Before I reviewed the progress we 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'm incredibly proud I'm privileged to leave such a passion a team.

Even doing this on twisted into time, what has not changed is our adherents to our core operating principles I've outlined on this like three.

I strongly believe that the most important way, we can deliver value to our shareholders and a stake holders.

Sense to what's important goals, we laid out earlier this year.

Because our company and our sign.

Continued to vote.

I'd be work to be calm and key player in the gene and cell therapy market.

<unk>, realizing our mission of improving patient care to our innovative product portfolio.

I'm pleased to report that at this point, we remain largely on track that dog previously disclosed cleaning called time line.

I will provide in more detail update on our clinical program in just a moment.

Arching also wants to underscore that we are on track to cheat. They twentytwenty goals, we 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 a streamlining the organization to focus on health care.

Key initiatives. These corridor included completing the cell several of our non helps us.

Improving operations, both trends over genetics, an exemplary so they are nets contribute there's a risk capital this yet.

Bearing significant adverse impact from the cold at 19 pandemic I'm substantially reducing cash burn I.N.B.P., Tyson, which I believe discussing greater detail later in the call.

In the first quarter of 2020.

Freshly gena spending which includes segment habits out plus on I located corporate costs.

Was approximately 30 million versus 39 million in the first quarter 2019.

Mystic tree was primarily attributable to significantly lower cost full court press function, which were a streamlined to fit the networks focus 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 call.

Another top priority for us it's to unify our health care businesses become one presaging as you can see on the slide for.

We have made major strikes here, allowing us to deployed resources maximize collaboration and a streamlined worked flows more efficiently.

Specifically, we have taken a steps to integrate our health businesses to achieve synergies I vote, the corporate and company level.

We have also streamline 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 the efforts of or held subsidiaries on a pipeline program that we believe have the most potential value.

Externally these closer integration is evidence to our recently updated but site.

Then dotcom.

Which consolidate information on each of the respective program in one place.

Hope that you find it informative.

Honest like five you will note or a strategy for on on healthcare assets.

I'm pleased to record that'd be on making progress in our overall objective to review our capital allocation to both businesses.

Consistently dog bowls to allocate resources in a manual that Beth create value if there's our commitment to reduce non health spending.

We continue to implement additional efficiency measures.

M.B.P. Tyson.

<unk> exploding options to partner or sell the business.

The ongoing coded 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 cup is always have been hampered by wools events.

As a result.

We have made the difficult, but 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 you 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 agreement, David with D.C.O. of N.B. <unk> Titan is no longer with the company.

I want to tank the entire N.B.P. tightened team for their contribution in advancing the other innovative than attained by a conversion platform.

We will continue to evaluate options for this technology.

Another highlight this corridor 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 our health clinic called programs on a slight say.

I am pleased to reaffirm that we remain on track to meet our previously announced schools for redoubts and the other milestones in 2020.

Turning to slide seven on April 20th we announced that the F.D.A. have cleared the investigation on new drugs application to initiate a phase one to trial for P.R. Jan 2009.

First thing class Oscar shop, investigational immunotherapy utilizing that I didn't know worse platform designed to activate their immune system to recognize and target H.P.V. positive qualities.

Actually be positive cancers, we presented a significant health for them in indication such as head and neck. So recalled by general you know towns.

Globally Highway H.B.B. infections cause nearly 5% of all cancers.

P.L.P.N. 2009 leverage is presaging ultravector and I didn't know where platforms.

Up to my H.B.B. antigen design in combination with <unk> with the large payloads capacity and the ability for repeat administration do two very low to non existent Cyril prevalence into human population.

Pre clinical testing of P.R.G.M. 2009 has demonstrated robust H.P. the antigen specific immune response and potent anti tumor activity as a monitor a p. and in combination in humanize mass models had on the cancers.

Please now turned to flies eight.

The phase one portion of this study will follow three plus three doses solution to evaluate the safety appears in 2009 administrative as I'm on a therapy two determined as they come in that face to those followed by an evaluation of the safety of the combination of P.R.

In 2009, and the investigation old by functional fusion proteins and 70, a 24 in patients with recurrent or met a static H.P.B.S. Sophia that cancers.

The fish to portion of this study will evaluate P.R.G. in 2009, as a monitor p. or in combination with M. 70, 824 in patients with newly diagnosed as stage two or three actually be six composite these auto fine G.L. task.

P.R.G.N. 2009 is under development through a cooperative research and development agreement or credo within the laboratory abductor Jeffrey shown at the National Cancer Institute.

He's crazy to has allows presses into rapidly on cost effectively at Lance P.L. Jan 2009 to the clinic the phase one to clinical trials will be conducted at the N.C.R. and we'll be led by Dr. Julius trial inductive James Galling.

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Starting to slide nine we reaffirm that'd be are on track for initial data readout from I.P. arm of our phase one clinical trial, P.R.G. and 3005 and ovarian cancer. During the second half of these yeah I'm happy to announce that we have complete that <unk> that dose levels too.

All of that I.P.R. of these trials, we are very encouraged by our ability to successfully manufacture quote truck or tea and today, we continue to have hundred per cent manufacturing success.

<unk> Center had placed a temporary paws on non cold. It 19 phase one clinical trials due to the medical sensors prioritization open up <unk> <unk> patients at the hospital.

P.R.G.N. 3005, what part of these pop.

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 tries to have the pause lifted and are actively recruiting again.

I've seen on a slice 10, we believe this is in part due to the characteristics of our class won't.

The centralized manufacturing advantages.

And lack of liquid depletion treatment to patients prior to all truck hog.

Administration.

Unlike conventional cost too old truck costs t. cells do not use lentivirus and does not require long x. weible expansion in large manufacturing facility.

Instead cultural cause he uses nonviral rapid manufacturing got the hospitals, allowing for the treatment of patients the day after gene to transfer.

Me view this as an important competitive advantage in a post cold it's 19 rules.

Now moving to slide 11.

The P.O.G.N. 3006 trial continued to enroll and today has not experience any cold at 19 related introduction.

The trial was initially structure to doze patience in non Lymphodepletion on.

Followed by then lymphodepletion or at least that those two of them.

I N.D. has been Amanda and the F.D.A. has allowed us to concurrently those stations in both times. We are currently enrolling patients in Bozeman for depletion anonymous with depletion arms and are excited to compared them and today, we continue to have hundreds person manufacturing.

Success, we remain on track for initial data readout and looked at the kinetic in the second half of 2020.

I will now go back too revealing the rest of our portfolio honest like 12.

I would like to move onto <unk> aging did a one three which is a partner with all the agenda.

Oragenics recently announced that early top line results of the face to clinical trials of H.T. 013 to prevent or on their <unk> into head and neck cancer patients receiving chemoradiation he's not demonstrate a statistical significance on the primary end points.

Up severe all near <unk> <unk>.

Relation when compared to close to.

We look forward to hearing from the company as developments become 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 be to a clinical study in the <unk> quarter of 2020.

Ages there one nine is a first in class disease modifying answering the specific investigation of Indian or therapy for prevention delay or reversal of type one diabetes.

<unk> disease modifying treatment.

That is currently mannix true lifestyle modification and diet combined with 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 did a one nine plus anti C.D. three antibody separately. So much in patients 12 to 17 years of age.

These stuck or you cause is neither do to any study related issues nor is based on any studies related covert 19 infection.

We decided to do these other abundance of caution given to immunosuppressive nature of <unk> against the background or evolving coded 19 condoms.

Another sightings assets you know portfolio is 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 turned to call over to Tom Samuelson.

If financial Aussie.

Thank you how good afternoon to everyone on the call.

As previously reported 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 requirements by an estimated $46 million based on the aggregate expenditures incurred in 2019.

Please per call that segment $8, which is fairly defined in R.F.D.C. filings is generally the sum of net cash operating expenses.

Capital expenditures.

Mom continuing operations are two 120, 20, and Q1 2019 segment aid to dial losses, plus corporate costs, which are not allocated the 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 unallocated corporate expensive.

She is largely by eliminating redundancies and decreasing professional fees.

Despite continued advancement on our multitude of clinical and preclinical programs in on ecology, and then you know Gee, we maintain the comparable quarter over a quarter segment EBIT Ah there and this plan.

As Helen alluded to beforehand, we made it difficult decision to dramatically decreased expenditure towards the M.V.P. tidy, which required $36.7 million in 2019, and 8.8 million during the first quarter of 2020.

And 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 increase by approximately 1 million.

Segment, a bit dot at exemplar and active biotherapeutics also improved by point 9 million 10.4 million, respectively over the same quarter last year.

On March 31st 2020, weird cash cash equivalents and short term investment of approximately $149 million and anticipate these funds to last well into 2021.

In closing.

Enacted many of these operational improvements during the first quarter and US we expect to see even greater impact in our Tutu results.

Would also like to note that as as the case for every organization today the 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 Helen for concluding remarks.

Thank you Tom.

320, 20 expects to report numerous data sets and achieve neumeister. So as you can see on the slides Cook team.

In closing our call today, I want to confirm our confidence imprecision potential to transform the health care landscape is are innovative and focus portfolio.

Despite the current challenges presented by call that 19.

Continue to deliver on our clinical plans.

Confirm our financial guidance for 2020.

We are committed to managing accompanying financially prudent.

Fiscally discipline and transparent manner by reaching got data driven go no go decision early in the development process.

To achieve our mission of bringing all potentially transformative treatment options dictation.

But that we will not open the line for question operator, Please began.

Oh <unk>.

Thank you Kevin joining us today for our Q. and a session will be held and.

Tom who you just heard speak inner C.F. over externally.

I'd like to turn it better operator, who will symbol to Q. now.

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Ladies and gentlemen, still a question or comment at this time. Please cross the stars on the one key on your touch tone telephone. If your question has been answered used to work for soft from the two please press the pound cheap.

<unk> yourself the two questions on follow up.

The first question comes from <unk> J.P. Securities.

Uh-huh right. Thanks for to see requesting <unk> that's on all the progress.

Maybe just starting off on Ah 2009, you you discuss what you've seen preclinically with the combination with with the <unk> and how we should think about the the potential for more therapy aspect to see or signals of asks you in the study versus you know the combination.

How do you think about the combination for other other central combinations.

Yeah. Thank you very much <unk> excellent question actually what the in collaboration with M.C.I.N. studies that have been done and see I mean, if I really did the efficiency and advocacy.

P.R. June 2009, and number of the human eyes mouse models I'll head on neck <unk>.

It has been actually quite encouraging the their home did and reduction or it's stabilizations of the tumors that we have been in and number all different indications.

It should be positive ones of course and in combination we have seen enhancement.

Also in to the to live live action of the two most Oslo as the activation in.

The importance of the combinations will be calling 20 huh, if we divide functional molecule is that actual news and also targets. They teach you see the pathway, which and number of indication that did basically kit.

Inhibitor on not functional then we then my food T.G.S. data <unk> <unk>, then additional actual mood and that one of them, they're very important designs on but Oh, oh, especially of all off the shelf in therapy yeah.

The way that is designed we are using in the clinic window of opportunity between especially being a thing to design at the time that patients on not just using and.

When I think this is going to be very exciting.

The excitement industrial we believe that P.L.P.N. 2009, and we have seen in monitor eating indications that.

Positive, but also in combination not only with yeah.

Current functional molecules that may have with it.

Why was also with our some of our own portfolio molecules that exists and we have done studies and we believe that this would be very exciting molecules to move forward and it's very unique as it was mentioned because we need both oh truck back.

Especial antigens design all of Gorilla I've been oversupply home, which allows us to.

Those number of times.

As well <unk> launch a table.

And this makes the P.L. June 2000, those <unk>.

And we're looking forward to this one.

That's great Helen Thank you.

She just the for.

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 process easier now successfully completed or I I guess, maybe to put a different way how far away.

On the path or you to to having confidence that are very high sunset success rate is sustainable in a multi sons are seven.

Right excellent <unk>.

<unk> P.L.P.N. 2005 done, but Hutchinson pretty solid tumors on P.L.P.N. 2006, or <unk> Moffat cancer Center. This was very important for us that the money pass came from the <unk>.

<unk> and <unk> at this point, we have shown that I'm going to throw the ball.

In either of these sensors they have achieved hundred per cent of manufacturing despite all the different sizes.

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 there.

Cohorts at this point.

And we also have finished as the first cohort in your links with depletion <unk> in this second cohort Oh I'm sorry.

For the condition and as you mentioned, we have received allowing by <unk> <unk> <unk> they from cars and so.

All of these there a number that patients as you can imagine these this studies or three plus three.

Three plus three and so we have up to this point have a dose number of patients either of the trials on we have not have any money.

Yeah.

Allows the comfortable.

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Okay, Great and then if I can just squeeze in the last one for.

Them or or Rick and service I Miss this in in some comments before but can you quantify the costs savings that you think you can capture from the from every p. tightened with with the reductions your.

But in place for for 2020.

Oh.

Yeah.

So thanks for the question, Jason So we're not giving specific guidance on an exact number for 2020, what I can tell you is reiterating.

2019 segment, you to die for M.B.P. was $36 million.

The 2020 Q1 was approximately.

$9 million.

Yeah.

Allow you to sort of draw their conclusions from there for now.

I'm, Okay, maybe Jason one think that that kind of <unk>, we have significantly reduce.

Basically the cost the N.B. <unk> Tyson. So this would be reflected in the next <unk> I think <unk>.

Okay, great place on thank you very much Sigma questions.

Thank you too.

For the next question comes from Swayampakula for.

But this is okay from two w.

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A couple of questions are the first one you know you're talking about some changes on the P.O.G.M.C. 006 study can you.

Sellers water additional changes have you or are you proposing all sort of the concurrent those single operations and bombs.

Okay.

Ah Okay Ah in regard to the P.R.G.N. 3006, <unk> I and do that we have and.

With the S.T.A.B. would start we've been nominated for the pleasing arm.

To obvious me look at that.

Manufacturing ability as well as to 16.

And ask the we were going to finish that <unk> then we will.

<unk> I I can imagine that it's by that's designed that would have seen yeah, Ah basically mean and long it's like a time between the two oh.

I'm really excited that we are going good too dispersed cohort for at least in on him and for depletion not only shown that manufacturing ability at 100% manufacturing success, but also the safety results as we have seen.

Men men, what allows <unk> S.T.A. and now we can concurrently basically enrolled patients, which obviously it allows us to not only day and move more rapidly as well as that I get to the comparison.

Of normally depletion them with the change.

Okay thing to remote there's going to be quite a bit of data coming up.

Next couple quarters across four up your programs.

<unk> trying to focus a little bit on the diabetes program, they're just you're expecting you know some into laid on the third quarter.

Took wasn't what sort of you know yeah.

Data would be C. and also with this kind of I'm trying to figure out what how how do you learn to pick. This program forward you know keep turning can you do it a yourselves or humid humid from.

Collaborators.

So that you can you can finish the program in terms of completing your too too late stage as we will have trying to commercialize it.

Sure concave so it'll go to agencies are one nine of course that are on in Maine and.

Especially in a place to way that compares the easy to one nine and both in adult and as the lessons and by itself as I'm on a theft. Yeah. Then of course in combination with down <unk>.

And the first I read about that they will be recording on from a things one would be on to safety.

<unk>, all then molecules and also this almost as long ago kinetic and then dry.

The the in from data, obviously people, who said there and find in six months observations of the patients that they have received as you know do smaller to basically they live where I am 10 also <unk> insulting.

As type one diabetes at the onset of diseases, which is very important distinction somehow.

There's no therapy accepted diet as my blessings.

And I think this would be exciting readout from a six month and then eventually that would be a readout on the 12 months.

We wouldn't be able to allow us to see their platform and monotherapies as well as in combination with.

Yeah, I see to me and then based on that the decision was the main where I found out this trafficking pool.

<unk> I would address these in general Oddest <unk>.

<unk> evaluation of of course full you with that concept.

<unk> see in mind and that therefore, we looked at all of our strategic.

Possibilities.

And of course, all these partnerships.

<unk> yeah. So these things will be evaluated then as we move on this is not really.

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I cross or <unk>.

Thank you. Thank you know <unk>.

<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 disconnecting over wonderful does.

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