Q1 2020 Earnings Call
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Good afternoon, and welcome to the weekend X bio first quarter 2020, <unk> earnings Conference call.
This time all participants are now listen only mode. Later, we will conduct a question answer session and instructions will be given at that time. As reminder, this conference call is being recorded I would now that you're trying to call out over to Mr., Patrick Christmas Senior Vice President and General Counsel Bridgette expiry.
As you may begin.
Good afternoon, and thank you for joining us today.
With that start Ken Mills rejects Bio's, President and Chief Executive Officer, Dr., Steve Nicola, our Chief Medical Officer and visit the system, our Chief Financial Officer.
Earlier this afternoon rejects bio released financial and operating results for the first quarter ended March 30, Onest 2020.
Press release reporting our financial results is available on our website at www Dot rejects bio dotcom.
Today's conference call will include forward looking statements regarding our financial outlook. In addition to regulatory and product development plans. These forward looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted and can be identified by words, such as expect plan that will may anticipate believe.
Good intent in other words of similar meeting.
Any such forward looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the risk factors and the management's discussion and analysis sections of rejects Bios annual report on form 10-K for the full year ended December 30, Onest 2019 and comparable sections.
Oragenics Bio's other filings, which are on file with the Securities and Exchange Commission and available on the Fccs website.
Any information we provide on this conference call is provided only as of the data. This call may seven 2020, and we undertake no obligation to update any forward looking statements. We may make on this call on account of new information future events or otherwise.
Please be advised that today's call is being recorded and webcast. In addition, any unaudited or pro forma financial information that may be provided is preliminary and does not support to project financial positions. We're operating results of the company.
Actual results may differ materially.
I'd now like to turn the call over to Kevin.
Thank you Patrick good afternoon, everyone and thanks for joining us.
On today's conference call will provide a recap of our recent progress advancing and expanding the now technology platform.
As well as expected future milestones, Steve will provide an update on our critical programs and it will provide an update on the financial results for the first quarter of 2020.
And then we'll open the call for questions.
First I want to take a moment to say that I hope everyone is healthy staying safe during the cold 19 pandemic.
We're genex bio we've made some changes to our business operations in order support the health and safety of our employees in the community and we're fortunate that we've been able to successfully advanced our business. During this time.
As always and especially throughout the past few months. Our overall focus remains on the important goal of improving lives through the curative potential gene therapy, and Im grateful that our team has dedicated to this pursue need in these challenging times.
Along these lines we've made important progress in written recent months that region expires, we continue to see the remarkably consistent endurable effects of gene therapy treatment patients with severe Wednesday MD.
If you haven't done so already I highly recommend referring back to our webcast that we hosted on April 22nd in which several leading retina specialist joining us to provide their perspectives on our recently announced data.
Our RG X three one for gene therapy is designed to enable sustained production of anti VEGF antibody fragment NII.
We've now demonstrated stable and consistent results out to two years in the third dose cohort.
We believe this is the longest timeline of continuous therapeutic effects demonstrated in wet AMD patients from a single administration of and anti VEGF treatment.
We also provided additional data from the fifth cohort, which received a higher dose of RG X 304, and in which 73% of patients remain anti VEGF injection free nine months after a onetime administration of our Gx we won four.
In our program, we're thinking carefully of all aspects of clinical management, not just anti VEGF injections are cognizant of the variables that might impact patient care envision and Steve will provide more details on these results in next steps for the program in his remarks.
Beyond our Gx three one for we've continued to drive our internal gene therapy pipeline forward. We previously announced in February we presented encouraging initial data at the Worldsymposium from cohort one the phase one two trial for MPS too.
And we look forward to providing additional data from these patients in mid 2020.
We've begun enrolling patients in cohort to where they're receiving a higher dose of rgs, one to one and look forward to providing interim data on cohort two in the second half of 2020.
We anticipate several other important updates this year, including from our phase one trial of RG X five a one for the treatment of each of each our phase one two trial.
Of RG X 111 for the treatment of MPS, one and our Rdx 181 program for the treatment of steel and two disease as well as our return research programs in hereditary angioedema, Neurodegenerative and neuromuscular diseases.
Lastly, construction of our GMP production facility here in Rockville continues.
The facility is expected to be operational in 2021.
We expect that facility to enable us to strategically scale production, while continuing to ensure high quality for patients.
So with that I'll turn the call over to Steve for a clinical and regulatory update.
Thanks, Ken.
As you've mentioned last month, we announced updated data from our phase one two way study of RG X three one for for the treatment of wet AMD.
We reported that the gene therapy continued to be well tolerated at all those levels and that we're now report of ocular inflammation beyond what is expected following routine attracted me.
The latest efficacy update with focused on the two year data from cohort three of the study.
Patients in this cohort received 60 10 genome copies pry and now at two years after administration of RG Ecpthree 14.
Demonstrated markedly improved visual acuity and stable retinal thickness as well as significantly reduce need for anti by Jeff intraocular injections and stable protein expression.
50% of patients within this cohort did not receive any anti VEGF injections over the full two years of the study and one additional subject did not receive injection starting nine month. After the administration of RG X three one for.
We saw an impressive improvement in visual acuity with an increase of 14 letters in both the full cohort as well as the for patients who did not receive anti VEGF injections in the second here the study.
This improved vision and durability of anti VEGF activity is particularly meaningful as real world evidence has shown us that patient commonly lose vision over time, even with current standard of care.
And finally cohort three showed consistent protein production over two years, giving us confidence that the transduced sales in the retina have been producing the RG Ecpthree 14 protein at a steady rate throughout the study.
We also provided an interim update from cohort five.
73% of patients were anti VEGF injection free over nine months.
We're very pleased with these results and look forward to additional efficacy data at the one year time point.
We will use this data to then finalize the design of the pivotal program for our Gen 314, which we expect to initiate in the second half at 2020.
We're also planning to start trials of Archie X 314, using the in office Super Croyle delivery approach in 2020 for both wedding empty and diabetic retinopathy.
We look forward to providing additional information about these trials over the coming months.
Turning to our rare disease portfolio data, thus far from our phase one two trial up our Gxfour hundred 21 has been encouraging as patients in the first cohort demonstrated consistent and sustain reduction in heparan sulfate and the CSF and available data support early signs of neuro COGNA.
It is stability.
We look forward to providing additional data from these three patients in mid 2020.
Meanwhile, enrollment in cohort two at a higher dose level continues and is expected to be complete in the first half of 2020 with interim data expected in the second half of 2020.
Recruitment screening and additional site Activations are ongoing in our phase one two clinical trial evaluating our gx 111 for the treatment of NPF one.
Recruitment in this trial had been previously focused on an initial patient over the age of 18.
But the protocol with recently amended to allow enrollment of patients as young as four months of age.
We expect to provide a program update in the second half of 2020.
We also anticipate updates from our phase one two trial of RG Ecpfive, a one for the treatment of HR page in the first half of this year.
We have several other study programs headed towards the clinic, including the AG and neuromuscular programs.
And I look forward to providing additional details in the coming month.
With that I turn the call back over to Ken Ken.
Thanks for that summary, Steve.
For Genex has an extensive footprint in the gene therapy space, and we're always purposeful and developing partnerships with key players in the space to continue to realize the potential of now technology.
Our now technology is currently being applied in one marketed product and more than 20 additional partnered product candidates.
We continue to track the positive progress of Novartis digital Jens now, which uses the naveen vector.
Novartis has stated that theyre treating about 100 patients per quarter in the US based on their current launch we're encouraged by the success that the novartis team in reaching patients.
I believe that this is among the most successful launches of gene therapy, So far and believe that a demonstrates the transformational impact now technology can have on the treatment of genetic diseases with significant unmet needs.
We were also pleased to see the positive regulatory developments in Japan, and Europe, this quarter, which signal additional validation in the technology across the globe and importantly for the entire gene therapy field Novartis recently published additional detailed data for the Intrathecal delivery Ipsogen.
Which is shown improvement in motor function and achievement of motor skills following treatment.
I'm excited for the additional progress to come from this program.
In addition, we recently announced another exclusive worldwide license agreement with Ultragenyx, extending our company's existing gene therapy partnership.
This agreement will enable the ultragenyx team to apply our NAV technology, Aviate and 89 vectors to the development of a new gene therapy for a rare metabolic disorder and provides further validation of the breadth and depth of our intellectual property portfolio.
Throughout the remainder of this year, we also anticipate regulatory updates from our partners like our dentists therapeutics now part of a stellus for their gene therapy candidate for X linked Maya tubular my empathy, which uses our NAV aviate vector.
The promising milestones and achievements from our partners as well as a progress in our own internal pipeline provide additional validation the proprietary now technology platform and further demonstrate the transformational impact that can come from a onetime administration of gene therapy.
With that summary, I want to turn the call over to debt for review of our financials.
Thank you Ken.
Style ended the quarter on March 30, Onest 2020, with cash cash equivalents in marketable securities totaling.
Points.
Dollars compared to $400 million as of December 31st Thank you.
The decrease was primarily attributable to net cash used in operating activities of $35.6 million in cash use of purchase property and equipment.
$4.6 million revenues were $17.6 million.
The three months ended March 30.
Compared to $900000.
Period in 2019 increases.
Attributable to $10 million of royalty revenue recognized on net sales of Xeljanz, while in the first quarter 2020.
2 million.
The license revenue recognized from new licensing.
I wanted to Ultragenyx during the period.
Sales of Xeljanz mall.
Commenced in the second quarter of 2019, Regeneron spire is eligible to receive a milestone payment of $80 million form of access upon the achievement of $1 billion in cumulative net sales of zales Denzel.
As of end of the first quarter 2020, Dave reported over $530 million net sales. So we are lower than halfway to that milestone.
Research and development expenses were $37 million for the three months ended March 31st 2020 compared to $25.2 million for the same period in 2019 increase was primarily attributable to personal related cost as a result of increased headcount leverage.
Turing facility cost expenses associated with conducting clinical trials for lead product candidates and externally sourced services for pre clinical regulatory and manufacturing related activities.
General and administrative expenses were $14.8 million for the three months ended floods, 31st 2020 compared to $11.6 million for the same period in 2019 increase was primarily attributable to personal related costs as a result of increased headcount.
And professional fees for advisory and other services.
Net loss was $40 million or one dollar an eight cents basic and diluted net loss per share for the three months of March 31st 2020, compared to a net loss of $32.2 million or 89 cents basic and diluted.
Net loss per share for the same period in 2019.
As of March 31st 2020, we had approximately 37.2 million common shares outstanding.
Based on our current operating plan, we expect the balancing cash cash equivalents in marketable securities of $356.6 million to form the completion of our internal manufacturing capabilities and clinical advancement of our product candidates into 2022 with that I will turn.
As we call back to Ken to provide final thoughts.
Thanks for that updated.
So next week as the American Society of Gene and cell therapy Conference and we've announced number of scientific posters and presentations that will be shared our research and development team continues to demonstrate a deepen impressive knowledge and Avi discovery characterization delivery.
And significant experience and expertise in process development production at large scale. So we look forward to participation with our industry partners friends and colleagues highlighting some of the work next week as well as continuing to share new data from our ongoing research throughout 2020.
Finally.
As I've worked with our team to continue to pursue our mission for patients balance the challenges in dealing with the cobot 19 pandemic.
We've also reflected more on how the potential gene therapy treatments can help ease the burden on the medical community. While also protecting patients' families caregivers, even larger communities from certain risks involved current treatment options during events like what we're experiencing with this pandemic.
There are many patient populations that rely on traveling regular access to treatment and medical care facilities for injections or infusion center importantly, medically necessary.
Site saving lifesaving medicines.
Single administration gene therapy treatments can deliver important alternatives in moments, where travel and access is restricted healthcare resources are limited product supply is maybe threatened.
Against the background of a pandemic thats taxing the global health care resources, the unprecedented levels, even more apparent to me that our single administration treatments have the potential to also create safer and more robust system for care.
The medical community in the biotech financial community should be doing everything possible to support and expedite single administration treatments, especially for large an at risk populations.
We continue to make strong progress advancing key programs broadening our internal gene therapy pipeline after more than a decade of steadfast effort and focus we remain dedicated and committed to improving lives through the curative potential of gene therapy.
With that happy to turn the call over for questions operator.
At this time because I'd ask a question. Please press star then about a wide and your telephone keypad and your first question comes from Gena Wang with Barclays.
Thank you very much for taking my question.
72, only solution on band leading data.
Data.
Thank you.
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Other competitors so.
I'd like to ASCII regarding does typically though.
Eight.
Initiation first topic here and also to clinical data first cohort data by the end this year I'm just wondering what.
Thank you.
Regarding the patient numbers.
Correct.
Six stations in the data, we ppt shared with them.
Hi, Gina Steve Eric Thanks, Thanks for the question.
Yes, as you mentioned our guidance is we continue to target starting our suprachoroidal.
Delivery development program first with a wet AMD.
That a and to kick that study off by the end of the first half of of this year and we still are guiding towards having interim initial data.
At the end of the year, we haven't actually disclosed how many patients we have in the study and other details and we look forward to providing that later.
But.
Certainly we stand by our guidance of giving an update based on.
Some of the data that will have as of the ended the year one of the nice thing the wet AMD the indication as well.
We already have a good handle on.
Wet AMD d. in terms of looking at the appropriate types of endpoints, both anatomic functional and treatment burden endpoint.
That weve.
Talked about in the past and very recently with our recent data update in our sub retinal delivery program. So it we have a good.
Handle on those types of endpoints I think you can envision similar types of data readout.
Your next question comes from covalent Musa, which chardin.
Hi, Thanks for taking my call and congrats as well on the two year durability data for three one floor.
Had a couple of questions on the potential for inflammation per year in office superstore idle approach.
Obviously, there's a lot of benefiting going in the office, but some would argue theres greater potential for inflammation and without approach. So.
One two questions is do you agree with that assessment and then second given that we've seen very recent and very early results with Intravitreal gene therapy, using extended courses prophylactic steroids addressing issues, maybe adjusting its early issues of inflammation with the several nuomi caps.
By the MD and also our key.
Those results, though we do they motivate you to use and extend the course of prophylactic steroids per year.
Yes, Michael injector programs.
So those two questions on very quickly.
Novartis, just said that Theres multibillion dollar potential fulfill gensler yet.
David guidance, and you've got obviously up to 10% of that.
Could you cover what they said in various public forums on the timing of around.
Guidance.
Steve maybe I'll, let you start with the three one for questions. Okay that makes sense.
A couple of Thats a great question.
Super create all delivery.
Is it different route of administration, then sub retinal sub retinal as the gold standard that's where we have the most efficacy and safety and clear demonstration that there is in inflammation associated with sub retinal.
Gene therapy.
And that obviously.
We're very excited about for our lead program with sub retinal delivery suprachoroidal the in office.
Potential delivery, there, where we still are anatomically delivering very close to the target tissue of the ARPU in the photo receptors.
But you raise a legitimate.
Question, what do we know about immune privilege or lack thereof, and the potential for inflammation historically, there's been inflammation scene and immune response with suprachoroidal delivery of earlier generation.
These factors such as Avi to an AB five one of the things that got us very excited about suprachoroidal delivery with our proprietary Nab technology is actual preclinical data in both small and large animal models.
Where we've seen.
No inflammation with Suprachoroidal delivery of Aviate vector.
Including our Gx three one for in multiple studies, so that gets us.
Comfort that perhaps there is less of a risk of inflammation with Super Bowl delivery that exists with.
Intravitreal if for example.
So with Intravitreal, we know.
Historically.
Universally really with preclinical and clinical experiments that at the doses that you have to give.
With that either Avi two or or other.
Factors that you have to give a high enough to have diffusion to get to that back of the guy that target tissue and through the.
Internal limiting membrane barrier that invariably at doses, where you get good transduction, you also see immune mediated inflammation and we continue to see that frankly validated in any preclinical experiments are clinical data that's come out with Intravitreal administered.
Ration.
Invalids is turning to the question about soldiers and I think what we've seen most recently between.
Novartis is update at their last earnings call and then they have to update around new data that was presented mdna is that.
For the I'd Route of administration Thats of course currently approved in being marketed.
Facilitating the sales numbers that were seeing based on the US approval theres been some regulatory events in Japan, and Europe, specifically, they pointed to that indicate that.
Reimbursement is coming in other jurisdictions as early as the end of the first half of this year. In addition, with respect to.
The new Intrathecal data that we mentioned earlier in the call. The there was an update on the strong study showing improved outcomes as described and Theres then guidance from Novartis that BLE.
I would be filed or equivalents I guess worldwide as early as the second half of 2020 or into 2021. So we continue to be really encouraged by the data by what we're seeing in terms of the uptake of the use of gene therapy again, I think we're looking at less me.
Long if not the most successful launch for gene therapy to date and are liking to see the regulatory and commercial milestones that are emerging.
Your next question comes from many for their hard with STB Leerink.
Hey, guys. Thanks, taking my question ill start with.
SCS question.
Using the Suprachoroidal delivery do you expect that all comers designed to be reasonable and practical.
From an efficiency perspective, you know this is something that certainly is going to be in the tens of millions.
Overall over the life for the program.
And finally on your points about the.
Ah questions, rather about the status of the E.D.U. on a license agreement. So that's right I mean, I think you know your first part of the question I mean, if an agreement, which you know effectively our agreement with A.B. Yona status is terminated right now there's no license that I'd be own it has and there's.
No royalties that would come to rejects on the basis of a terminated license agreement, but as a result of the reached by viewing for their failure to pay there are outstanding amounts due to us that will be expecting payment for.
I can't for any questions. Please press start and end up I have wine and your telephone keypad and your next question <unk> Morgan Stanley.
Hello, everyone <unk> cost us <unk> to question from Moscow won the Lady to want going to one and that was wondering what type of data subtle we expect a.
The second half of trendy trendy and whether you gotta planning to disclose big baseline agents levels up the patients.
And then I can move to the second question.
Yeah. So.
One would.
You'll you'll recall we completed.
Recruitment of the first cohort and we've given preliminary data there, where we think you're a proof of concept in terms of heparins healthy reduction in the C.F.
We have a announced than was previously we'd be giving an update.
Later this half of the year and we also have second cohort.
Recruitment ongoing so we looked to be able to give an update on a result from nacco aboard the second half this year.
And they will you be disclosing the baseline they just living so the patients or you can.
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You guys can do and my last question you don't V.A.D. program I was wondering what these maybe before you out a big to select the county, and denounce hitting the second hopped on to be trendy and you.
Yeah, I think the the research group is to a point, where you know there's been.
Science in research going on to optimize all the different components of the construct including sort of promoter and transgene elements. I think we were pretty locked in even when we announce the program that the vector type was going to be a v. eight so you know I think it.
Point in time, I think we even have a poster next week sewing showing some of that science at at A.S.G.C.T.
You know, it's really just sit down selection of some of the different you know variations of the construct for expressing that anti kallikrein inhibitor antibody.
And moving that into you know full scale farm and talk studies that will support the I.M.D. cost us so that's going to be the next step.
Thank you.
Style wine for any questions.
And then I know for that questions. At this time I would now have to call back to Ken males.
Well, thanks, everyone for joining today again hope that everyone stays safe in well in.
Situation and through the apparently entries that are occurring we're eager to see everyone. Soon when we have the opportunity no. We're all feeling that a bit and appreciate everyone participating today look forward to providing you all with future updates have a great night.
Second Clay said A.'s comprehensive. Thank you for your participation you may now disconnect.
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