Q1 2020 Earnings Call

It may 7th 2020, and can be found on the investors section of our website SSR pharma dotcom, if you've not received this release or you would like to be added to the company's distribution list. Please email me at IR EPS of RF pharma Dot com.

This call is being webcast live in one hour after the call a replay will be available on the company's website and will remain available for the next 30 days a telephone replay will be available through may 14th.

Today's conference call and webcast contain forward looking statements within the meaning of federal securities laws, including statements regarding the company's strategy goals product candidates clinical studies and financing matters.

Such statements are subject to significant risks and uncertainties, including those described in our press release issued today Thursday may seven 2020, and our recent SEC filings on form 8-K, 10-K and 10-Q.

Actual results or performance may differ materially from the expectations indicated by our forward looking statements due to those risks and uncertainties. We caution you not to place undue reliance on any of the forward looking statements, which speak only as of today, we will take analyst questions at the end of the call. However, we incurred shareholders to submit questions by email to IR app.

Of our pharma dotcom time permitting we will address these questions alongside any others that we've received today joining me on the call today or Rob Nebel, Chief Executive Officer, the drill Cowdery, Chief Medical Officer, Dave Laronde, Chief Financial Officer, and to nearly <unk> of the guidance President and Chief operating Officer, I'll now turn the call over to Rob.

Thank you Ryan and thanks.

Thanks, everybody for joining us on the call. This afternoon appreciate that.

I wanted to start by saying that the swaps. The walk spreads are going forward to impact all covered non team. We've enjoyed a strong start to than your year. This is a testament to the commitments and talents with my colleagues has allowed us to navigate these unchartered waters with confidence.

Hi on future.

Well no one knows how long certainty of the situation loss. So Vars Board management team alongside our employees remain focused on our mission.

Good backdrop recovered about team and our commitment to patients has never been more important and that commitment is reflected in everything we do.

With regard to our programs, we've got him off to continue discussion with the FDA about call it to.

We believe we now have a design for this confirmatory study, which we grew will share the detailed review in a few minutes.

We are grateful for the collaborative nature of our conversations with the agency and I'm confident that we have aligned on a feasible studies is on.

Several successful you evaluate the efficacy and safety of more predicts and makeup.

Additionally, we strengthened our pop on the new phase three assets that gives us another shots on goal to grow and expand our business.

We have always sort to develop new therapies as address unmet therapeutic need for open one diseases and now with the addition of Oklahoma to our late stage pipeline, we have another opportunity to bring a drug candidate to market. The could transform the standard of care for patients who have no other treatment options available.

One of the oil companies have been impacted by the pandemic to some extent.

We believe we can navigate the challenges we now face with to evolve.

Cynical studies in cystic fibrosis, specifically the phase three avail in phase two encore studies.

Due to practical limitations correspond with marketing concerns both studies stocks enrolling more patients at the end of March.

And in adherence to the FDA guidelines best efforts are being made to adopt those who are already enrolled to continue in study treatments and sizes protocols.

I'm happy to report that these efforts are proving effective.

To date, we've been able to keep the majority of patients in studies through close collaboration with the research centers and Byerlein telemedicine, because that's where possible.

In this regard we are monitoring situation closely.

And continue to follow guidance governing bodies about starting to conduct.

Fortunately, we reach numbers close to our target enrollment in the avail study.

Which is evaluating area bank and methicillin resistant Staphylococcus will Mercer lung infection.

Enrollments in the adult population competed with 55 patients out of the targeted 50.

The primary analysis population and that is the younger patients between six and 21 years of all of age enrolled 133 patients out of the target of 150.

While we remain hopeful enrolling fewer patients will have some impact from the studies mystical power.

However, we won't have a more accurate estimate does that impact until this study is complete.

We continue to expect topline results in early 2021 and look forward to sharing those data with you then.

Exploratory uncle study with nearly often road with 14 patients out of a total of 30.

Starting enrollment due to co. The 19 concerns was clearly a disappointment.

But we believe the data from these 14 patients will provide valuable information on the safety and potential efficacy of most predicts and onto the close my proprietary or will continue lung infection.

Once encore concludes we will determine next steps with NTM program.

Which also includes the recently completed phase II Optima study.

I am pleased to report that were on just reacting to the challenges because of 19 has created we are also contributing to the fox against the should benefit.

We are in discussions with the University of decent in Germany to supply our driver for investigator initiated clinical study in covered non team pneumonia.

The placebo controlled multicenter study will assist potential efficacy of most predicts and preventing progression of cobot notching ammonia to acute respiratory distress syndrome way rdx is serious lung condition that causes respiratory failure and has a very hospitality rate.

Scientific me. The study is based on the belief that prior to the development of a Rds inhale GMC assess may stimulate the innate immune system function, leading to improved gas exchange reduced morbidity and less need for mechanical ventilation.

We are happy to support academic research institutions, which are exploring the scientific potential of our investigational drugs to address this whole process.

You can find more information on the design enrollment criteria and other details on clinical trial and spoke up once the posted.

Because this is not the Savoro sponsored study.

We're not in control of this execution other than supplying Margaret exa matching placebo.

Therefore cannot provide you with additional details on the timing of enrollments were anticipated completion.

Alongside patients in the healthcare community.

We look forward to learning the results of this exploratory study and a proud to play a role and advancing the research and knowledge needed to help combat this pandemic.

Looking forward, we havent exciting busy year plan and we'll focus on our main priorities, which are advancing our phase three programs.

In a strong cash position and believe we are adequate adequately resourced to execute our strategy and deliver long term growth.

With that ill now hand, the call back to the Drool, we'll update you on our key R&D priorities for Twentytwenty.

Thank you Rob.

Hi, everyone.

It is nice to be speaking with you again.

The direction for the will lead program more complex.

Gains sleep.

Our number one priority is to finalize plans for in Paula.

I'm pleased to report, but following discussions with FDA, we now have a good understanding propane paula to subject to sorry.

We expect it to be a 48 week double blind placebo controlled study with the two arms.

Well go drinks trended micrograms administered once daily.

Compared to placebo.

The lung function test or confusing capacity for carbon monoxide, audiophile, which is a gas extrusion regime that showed nice separation between drug and placebo in being bombed out study will so as the primary endpoint.

In parallel to.

The deals feel endpoint will be supported by pretty secondary endpoints.

We believe measure direct patient benefit.

Those endpoints wrong.

George you're just reflect questioning you Oh next year our Q.

Including those two out of Q talking school.

She our Q active with your company.

Good.

Exercise capacity using a treadmill distressed.

Yes, yes, Q3 compliments.

Richard symptoms.

Activity and impact.

Sure Good local school combines all three.

And was the key secondary endpoint and in Palm.

Demonstrated good effect.

Well Impala too.

If you separate out she outdoor activity.

As it is most applicable to your pet.

And also worked well and Impala.

While the efficacy endpoints will be a sense at week 24, four primary out license.

The direction of the study will be 48 weeks.

The reason for business is because the 48 week supercomputer treatment.

Will help us to better support but do they will it be okay perfect.

Well as long term safety, the drugs, which is intended to be administered.

Chronic kidney.

At a high level. This is the design of in polymer too.

Our <unk> <unk>.

Please be advised the final protocol is still being determined as you walk through additional details on the study.

Once the protocol has been finalized we look forward to updating you on back.

Well or the details of the study, including timing when it started to start.

And sample size.

In the meantime, rentals initiating internal operational activities that can be completed now.

In order to get the study up and running as soon as possible for living the Finalization of the protocol.

Yeah, what do you excited by this progress appreciative of the hard work like insightful contributions for clinical team and external clinical exports.

We're anxious to initiate the study that we believe we come from the potential moga drugs to treat yep.

No I would like to shift gears and time your attention.

On the U.S. phase three program.

In late March.

Okay, and the global rights to develop and commercialize problematic.

Late stage investigational inhaled Superflux Wilson.

While we waited for the treatment Oh, my cystic fibrosis wrong cactus is older and see if b.

This program fits well within especially a nice pipeline inhaled investigational drugs.

Good thing or from lung diseases, I, just particularly compelling that's there is substantial unmet medical need.

With no approved pharmaceutical treatment options available.

For more than 150000 patients in the U.S.

Oh, Mick could represent a blockbuster opportunity for Sabrina.

We're pretty excited about the potential of this late stage programs and believe it does a nice complement to our although there were lot funded programs.

And see if he is a growing medical problem.

The diseases characterized by a b shows it's like a lump infection.

Inflammation and structure little lung damage.

Patients with M.C.S.P., I'm sick and can experience good dickoff.

Dr Sputum.

And exacerbations, which can lead to hospitalizations.

Imaging the disease, it's difficult, especially given that I have no approved medicines.

And we believe it is important to continue advancing drug candidates what does your boss taking disease.

I, probably program was attractive to us because it's pretty brisk development efforts have yielded a wealth of information.

It's actually provide us with a guide for the future confirmatory study.

I pulled me, what's your Bollywood Ted into phase three clinical studies, well, all but three and Autobytel.

In the torque low 582 patients randomized two to one for drug and placebo.

On the time to first exacerbation, which was the primary endpoint you can be used to studies.

Treatment with Topolanek did not result in a statistically significant differences from placebo on protocol specified and alliances for all the big pre.

Marginally missed statistical significance in Autobytel for.

Well Oh from Alabama.

Company, who previously owned the program.

So why did his review and reeducation Oh, the pulmonary exacerbation events.

I'll be cool did show statistically significant difference for the time to foster collaboration.

Subsequently following an agreed upon process with the FDA.

I think independent third party evaluation of the GAAP out also concluded that arbitrage pool should statistical significance.

With regard to an important secondary endpoint.

Frequency off exacerbations.

Separation between drug and placebo as.

It was seen in both studies with the robust effect demonstrated in our bid for.

<unk>. So the one of a region also bacteria load, which is dk efficacy measure antibiotic effect there wasn't there most of the benefit showed in both studies.

And favorably.

The public, let's consider safe and well call. It a cat into orbit studies, which is important.

As many off label inhaled antibiotics currently used to treat and CRP poorly tolerated.

And can cause tightening in the air base.

Based on that as those of the arbitrage studies.

Discussions between a dime and they have to here as well as I Wouldnt assessment, which we will vary quite good afternoon.

We believe that one successful confirmatory study would be required to court approval in the U.S.

We have learned a lot from previous developing programs.

Allow us to optimize the next study design.

Extensive data from the Orbitz studies.

Well as other previous studies off inhaled antibiotics, why does with the gradual knowledge, but can be applied to the future development program.

So trials.

Enrolling patients with historically high number if exacerbations and using frequency off exacerbation as the primary endpoint rather than trying to forecast examination.

Operationally.

Our next steps will involve speaking the day. After you could just goes there probably my personal for confirmatory study.

This is the process and accounted for most people did latrine collection. It will take some time to ensure we get it right.

Progress is made and key decisions are finalized we will communicate with you.

As you can imagine we tweak phase two programs to manage you have a lot of important work to do an exciting times ahead I.

I can tell you that we have the court expertise to execute on our plans.

And for implementing additional processes and procedures to ensure collaborations with maturity within our out in the organization.

Twentytwenty is sure to be a productive year I.

I love to end the call or what's the Dave who will provide you with a frightening shouldn't uptake.

Thanks for the rule and Hello, everyone.

I'll start by updating you on our cash position as of March 31st 2020, we had cash cash equivalents in short term investments of approximately 105 million.

With approximately 25 million of debt.

Under our current operating plan, including the anticipated second tranche of 46 million from our December financing.

We believe we have sufficient capital to fund planned operations well into 2022.

With respect to our quarterly result, so ours net loss for the three months ended March 31st 2020 was 15.4 million or 27 cents per share compared with a net loss of 12.1 million or 34 cents per share for the three months ended March 31st 2019.

Research and development expenses were 13.2 million for the three months ended March 31st 2020, compared with 10 million for the three months ended March 31st 2019.

The increase was due to 5.4 million related to the acquisition other development and commercialization licensing rights to a poll Nick.

This upfront license expense was partially offset by decrease development costs associated with mode of action or make any amount of 1.7 million in half a million dollars respectively.

General and administrative expenses for the three months ended March 31st 2020 were 3 million compared with 2.8 million for the three months ended March 31st 2019.

The increase was primarily due to noncash stock based compensation charges personnel costs in corporate insurance costs.

I'll conclude my remarks by reiterating that our cash position enables us to execute our strategy and deliver long term growth.

Now I'll hand, the call back to Rob.

Thank you David Thanks to the drew earlier.

Sorry, I wanted to leave you with just one thought and that is so far is not defined by any one of our programs.

Focused isn't gathering and strengthening the components required to become the orphan lung disease company.

Leading the development of the desktop lot of drug candidates targeting multiple rare respiratory diseases.

Well I would love to drug development process to be Fakkah three late stage programs. We continue to see decision take shape and a more committed than ever to getting drugs to market.

To the hand patients.

That is my 2020 and beyond would be all about operational excellence, ensuring we have the rock process in place to execute our strategy.

We do thank you all your continued support.

And the off Chuck the operator to open the call analysts' questions.

Thank you do well now begin the question and answer session to ask a question you May Press Star then one or your Touchtone phone.

If you're using the speakerphone, please pick up your handset before passing the keys.

Withdraw your question. Please press Star then too.

This time, we'll pause momentarily to assemble our roster.

And our first question will come from Michael Higgins with Ladenburg. Please go ahead.

Good afternoon. This is Edward marks on for Michael I. Appreciate you taking the questions I'm just two quick ones from me I'm wondering what the timing on the discussions with the FDA for the and C. F. B program as you're looking to initiate that trial.

Yes, Hello. This internationally, we will be expecting to do this discussion or as a priorities. During this year, but given the fact that a there may be a several interactions are we can't really give specific guidance as to when exactly we will be.

Report that clear outcomes.

Okay. Thanks, and then looking at Impala to with the caveat that was provided in the prepared remarks about how is the design isn't 100% solidified yet I'm. Just wondering if you could talk about any changes if any that are being made in this trial versus the first Impala trial.

Hi, Michael could you. Please go ahead with that.

Sure.

A couple of highlights I would like to point out.

Broadly the trials or similar.

Hi, there so good friends of ours, but intermittent dosing, which wasn't impala.

Which was not as robust what the continuous dosing.

As being dropped so they impala too we love to treat brink arms the continuous dosing.

And that's a sample.

The primary endpoint for in Paulo was.

Yeah gradient, which is a gas exchange measure.

<unk> Impala too.

The primary endpoint rebid D L field, which is also a gas extra information.

The placebo controlled treatment period for the Impala was six months.

Well impala to the placebo controlled keeping PBR it would be 48 weeks. So these are the high level differences. Thank you.

Thank you that's all for me I appreciate it.

I'll now turn the call over to Andy Ericsson. Please go ahead.

[laughter] you question.

My email so I'll just speak the first one for me and will come in 19 impacts to start to be Apollo to Oh, sorry for the study conduct.

[noise] well it is really a little too early to know that right now a if things get back to close to normal in the coming months, then probably not but.

But having said that there is of course, the possibility of a second wave of Corona bars later in the air which is why we really need to make our study as Colin proof as we can.

This would for instance include designing options that allow participation in this study with less frequent visits to hospitals or care providers.

An assessment of endpoints accordingly, as much as possible.

And again so on this topic, we will now much more as the planning progresses and hopefully have more clarity also on what to expect in terms of the pandemic progression as the year continues.

Thank you [laughter] you.

Thank you. Our next question will come from UGI, John with Jefferies. Please go ahead.

Hi, Thanks for taking my question No I had one question about the imposed study to you in policy study well he Pat.

Well, it's the trial design going to be Frank Lori you will have you guys had any discussion about it if you sign me any thank you.

But who are conceptually the trial design.

It is unlikely to be different because impala.

Same across the work, including Yeah, Matt.

As far as interaction with other regulatory bought is we will get back to you. Once we have those interactions and have firmed up the protocol. Thank you.

Yeah.

Our next question will come from Lisa Bayko with JMP Securities. Please go ahead.

Hi, Thanks for taking my question, maybe talk a little bit about patient selection and what kinds of patients jumping honing in on specifically for the Uh Huh study. Thank you.

The Piceance mill and abroad sounds very similar to the Impala study.

I think they would have to have a diagnosis oh path, which is altogether and this is altria immune path.

They would also have to have the antibody.

To justify the Okay me.

'cause it collection.

And the primary endpoint, a b B L C O <unk>.

We would look to enrol patients who were impaired.

But the LCR so that they have got room for improvement.

Also the highlights rich or they can sure right now thank you.