Q1 2020 Earnings Call
[music].
Good morning, welcome to the stuff Biotherapeutics reports first quarter 2020 financial results and recent business highlights call. My name is sharyland ever be your operator for today's call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session. During this time.
The answer session. If you would like to ask your question. Please press Star then one on your Touchtone phone. Please note that this conference call is being recorded I will now turn the call over to Henry hub, Sir you may begin.
Good morning, I'd like to remind listeners that management will be making forward looking statements on today's call, including for example, expected timeline and plans for development, that's all dymatize better pipeline programs and discussions related to the Companys financial position in cash runway actual results may differ materially from those indicated by these forward looking statements. This all the various important.
Including those discussed with risk factor section of Stomatitis form 20-F filed with the FCC on April one 2020 Twond.
While we may elect to update these forward looking statements at some point in the future. We specifically disclaim any obligation to do so if our things change now I'd like to turn over to calls really Mccarthy CEO me.
Thank you Henry and thanks to everyone for joining US. This morning to review our first quarter 2020 financial results and recent business highlights joining me on today's call will be Rob Weiskopf, Our Chief Financial Officer, Jim car, our Chief clinical development Officer, and Brian Blakey, Our Chief commercial officer, well also be available for acuity.
Before we move into our clinical update I'll take a moment to discuss the 'cause it 19 pandemic and its impact on our business as well as that broader community is cases in the U.S., including in Massachusetts, where we are they continue to rise we've implemented business continuity procedures and safety protocols that align with guidance from public Health authority.
To keep our families.
And our employees and their families as well as our patient safe, while maintaining the ongoing development of our product candidates and business operations.
Several important clinical and regulatory updates on our Barth program during the first quarter.
Clinical perspective, we announce positive results from our Spiva, a little one natural history comparative control advocacy study demonstrating that compared to natural history controls patients receiving Allen member tied for one year improved their six minute walk test by more than 80 meters as well as improving their strengthen their time to complete the five times that to stand test.
The also presented data at the American College of Cardiology, H.P.C. 2020, virtual meeting showcasing the effect of element per tied therapy. During open label extension on T. markers or cardiac function with significant improvement from based on in the slip of change for left ventricular stroke volume and then left ventricular end diastolic and and it's a solid.
And as well as trends toward improvement and other echocardiographic parameters.
Together. These data suggests that prolongs treatment with only interpreted may lead to cardiac reversed remodeling strengthening our conviction and the potential Ellen member tied to treat the cardio myopathy symptoms of other rarer metabolic diseases, including design and back or muscular dystrophy and friedrichs attack yeah.
From a regulatory perspective, we announced our receipt of rare pediatric disease designation from the F.D.A.
<unk> eligible for voucher upon F.D.A. review and approval for priority review of another product candidate, which would obviously be evaluated to us either to utilize ourselves or to generate nondilutive funds. We also had a productive meeting with the F.D.A.'s division of rare disease and medical genetics at the end of March during which the F.D.A. requested additional.
Data and information, including further analyses from or open label extension trial and additional information on cardiac natural history of the disease. We had requested another type C. meeting this summer to discuss this additional data, which we also hooked to share an upcoming scientific conference. We expect to provide further guidance on timeline to potential.
D submission following that meeting.
Based on these promising clink clinical signals and bar as well as our prior experience in heart failure. We're actively disgusting development plans for element for tied into send muscular dystrophy and friedrichs attacks Ya.
Did submit our phase through protocol for Libors hereditary optic neuropathy at your rent, but as previously discussed we do not planned to initiate that program. This year given purchase station of other programs to my cash perspective.
When asked initiation of our phase one safety study for a next generation clinical stage compound F.B.T. two seven too.
Although we're experiencing some delays and those escalation due to coven, we're progressing or preclinical models and L.S. and multiple system atrophy to inform our selection of our first phase two patient population also in our neurology pipeline, we're progressing preclinical candidates F.B.T. 259, and our new F.B.T. five.
D theory, which targets the therapist as path with Delta implicated under degenerative diseases, such as Parkinson's.
Significant promise <unk> targeted therapies to treat <unk> disorders, and we're eager to Sarah <unk> updates regarding or preclinical initiatives. Later this year with that I'll turn the call over to our C.F.O.s, Rob Weiskopf to review the financial results for the <unk> quarter Rob.
Thanks, Rooney as I do all for joining us to the.
Or or a role so like you know phenomena work of our boys and one person.
Fish into if equivalent.
<unk> <unk> at March 31st 120, compared to 40 million.
2019. Additionally April we secured 20 million and a product placements reserve morning, So I was injured investments.
This one using as well <unk> implemented.
<unk> reduce costs.
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<unk> operations into 2021.
Aren't the expenses were 9.8 million for the three months I didn't mark for the first 2020 compared to 14.3 million to see if you're using 2019.
Decreases primarily due to a 1.7 million decreases employing consultant costs offset by.
0.5 million increase trivial.
Restructuring at 1.5 million, increasing political costs, the time trials 1.3 million decrease contract manufacturing.
0.3 million decreases discovery related expenses due to time activities and is 0.2 million decrease in regulatory costs.
The expenses were 5.3 million for the three months I didn't Mark 31, 2020, compared to 4.2 million for the same period and 2019.
<unk> administrative expenses was attributable to a 0.8 million increase in professional fees.
Activities.
Operating isn't public company.
One 7 million increase unemployed and consultant related costs, primarily driven by if your views compensation expense and point 4 million increase and employee cost attributable to our strategic restructuring.
These increases were offset in part by a decreases 0.9 million precommercial activities.
<unk> 30 degree positioning.
Other expense was your point 5 million for the three months I did March 31st 2020, compared to 24.7 million for the same period and 2019, the decrease and others. Those primarily attributed to a nonnative 22.7 million loss and extinguishments of the associated with the conversion of convey.
Suitable nodes and ordinary shares in connection with or 2019 I view.
4 million decreasing interest expense related to the convertible to 0.3 million changes here is all you want liability.
Increases were off sit in part by 2.7 million change and fear value gain on the derivatives liability associated with convertible debt 0.1 million decrease interest income.
The last of the three months ended March 31st 2020 was 15.5 million or or so.
<unk> lost this year as compared to 43.2 million or 20 cents basic and diluted net loss for sure for the same period and 2019.
Decrease losses, primarily attributed.
The 22.7 million noncash loss associated with the conversion convertible those connection with a 2019 IPO decreased operating costs of 3.5 million and a net decrease in other expenses of 1.5 million.
That altering the call back to reading.
Thank you, Rob well, sorry open up for question I want to reiterate the health and safety of our patients armed plays in our community as our top priority as mentioned earlier ongoing pandemic have brought into sharp focus the risk that our immune compromised patients and their families face every single day, which only serves to strengthen our teams commitment to bring.
Safe effective treatment to patients suffering from diseases involving my to control the function.
Would not be achievable without the hard work of our team and the support of our shareholders with their continued encouragement we look forward to a promising, albeit challenging you're ahead with that I'd like to open the line for question.
Thank you we will now began to question and answer session. If you have a question. Please press are then one I never touched on phone if you're using your speaker phone she needs picked up your hands that first before per family members.
Once again, if you ever question actually first started the one on your touched on phone.
Our first question comes from Chris Mary from your wine is open.
Hi, good good morning says Chris rock from the more.
Thanks for taking the question or be neat and and congratulations from all your progress I I was wondering if you know just based on a lot of investor interest <unk>. If you could perhaps we'll operate on your ongoing F.T.A. discussions with respect to eat a bar path forward and and.
And you know I understand you probably can't sure.
A lot, but but just in terms of their request your ability to meet their requests and then finally, maybe some scenarios that that you see emerging some sort of these discussions.
And then finally like Oh.
Wrap up and when we see meeting minutes, they give us a a path forward here. Thank you very much.
Great. Thanks, so much crap.
We did have.
Reductive meeting with the F.D.A. This is a rare disease the medical genetics Division, which is really it's and you did this and that was formed out of inborn artist of metabolism. This will be this with our first face to face or actually ended up being by phone meeting with that division that we had on the bars programs. So this is.
Really the first time, we have the opportunity to sit down and talk about all the data that we the math.
Did division was interested in seeing some additional analyses of the open label extension data, including analyses two weeks 72 of open label extension and so that's something that we expect to provide and talk through with the division who played a at an upcoming type C. meeting and the other area keen interest for the division.
One was a better understanding of the cardiac natural history of the disease as you recall, we've seen improvement in stroke volume as well as as just talking and diastolic volume in these patients really suggestive of reverse cardiac remodeling and in order to put those in context from an F.D.A. perspective, I think there's an adult.
Needs that you know the based on our conversations is the recognition that those types of echocardiographic parameters would not be subject to any kind of expectation on bias them and we are talking about open label assessments, but F.D.A. recognizes that those parameters would not be affected by by by S., but it is important to really contextual.
I suppose in the overall course of natural history for example, with those changes be expected or would they not.
That's some data that we were really hoping to be able to gather for the F.D.A. and does it turns out both through our <unk> Oh, a one protocol, which is the natural history data stuff from Johns Hopkins as well as some additional natural history data that we've been able to access we do believe we now have natural.
History data on what happens with cardiac volumes in bar syndrome, as part of the normal course at the disease that should help to throw essentially into relief. The unexpected changes that we're seeing in our trial anything that the meaningfulness of those.
That's all I'm really data that we hope to brand talk to the F.D.A. about this summer I. We we've people if they talked about scenarios for this bars program and I think you know we've talked about a best case the base case in a worst case with the best case being full approval of base case being accelerated approval under some part h.
In which case the echo parameters would be quite important that surrogate endpoints potentially predictors of of long term clinical benefit and and the worst case already communicated to us by originally the division of neurology was the potential to look at a randomized withdrawal or collect some additional data.
We we don't think that randomized withdrawal makes sense given the structural changes that we're seeing in cardiac endpoints. We did not hear the division disagree with that during our meeting they did ask us whether there would be any potential to collect additional data from a pediatric trial or even.
In in our ongoing expanded access program.
On the pediatrics tied quite frankly, we we've explained to the vision that wouldn't be possible. The age group that would be of interest. There there are less than 15 patients in the United States that would be eligible to participate in a trial.
And and obviously very challenging to enroll pediatric trials, even when there are many more patience and not available. So all of that really really brings us towards you know better educating the F.D.A. about the cardiac natural history of the disease and we have never collected the data. So we feel that we're in a good place to do that.
Okay and then just.
To to maybe elaborate <unk>.
<unk> yeah.
Moved.
Potentials submission and your interactions with at the age when the division and so is there this or some level of those.
Errors and metabolism divisions are getting up to speed relative your prior interaction.
They'd be impacting the cadences those interactions and secondarily.
I think you mentioned it could just clarify that cardiac natural history, that's well, but well established as you in terms of these bars patients and and and high recall correctly or not.
Actually trigger there could be presented previously at a conference it decline.
Or six starts to decline over time, and there's really no expectation for sort of improvement stuff or or really stabilization. The cohort. Thank you.
Sure. So I'll take I'll take the question didn't order and I'm in a ask him to to weigh in on the last part of that so in terms of our interactions in the case and some of the interactions with the division this has been.
This has been a little bit of a roller coaster, but actually we we do think that we've got a very good dynamic with the current staff at.
That the temporary disease and medical genetics. So we started in the division of Neurology last spring, we moved to inborn errors and we had a written response meeting with them over the fall inborn errors has really been rechristened rare disease and medical genetics division. So some of the folks do are interacting with in written.
Attractions over the fall are now in the newly Chris <unk> disease, and medical genetics condition, including the assistant director somebody who we've not only interacted with in our prior correspondents, we've interacted with her around or expanded access program and we've actually met with her at the P.M. at that might have control.
Disease workshop at the F.D.A. sponsored basketball. So we definitely think that you know the cadence and the interaction and the response of nets is all there with the F.D.A. In fact, you know the F.D.A. with encouraging us to come back and have further dialogue was you know really <unk> and knowledge the benefits.
Patient seem to be deriving from the therapy, and and just really encouraged us to to continue this dialogue and further meetings, which is again why we submitted the types you request for another meeting.
Just a cardiac natural history that actually is not that well established in bars. What is established in bars is the fact that 90% of patients have cardio my apathy and that is by by far the leading cause of death and that disease and as you know really there's nobody that's there's maybe one or two patients.
I've ever survived into their fifties to this is a life limiting disease, but the why of it it isn't super well established and particularly when you focus on cardiac volume and so with that maybe L.S. gym to comment a little bit on what <unk>, what we've seen versus what we're now in covering from these natural.
History cohorts that we've been able to access Jim.
Sure free happened to comment about this so.
And so since you know, we've we've observed improvements in stroke falling so during each construction.
Relatively more blood so [noise].
During stroke.
What we've observed in natural history says this is an unexpected finding so.
Not expected to increase naturally so based on our observations of two different databases is really mention there's a a database from Johns Hopkins would be part of our old one protocol, but we have access to additional data external data that allows us to bench marker data so again.
The improvement in court function that we were observing is not expected naturally.
The why of that or why is that important so in the setting of both so you're due to reduce destruction function for example.
Injunction fractions.
Oh, it very closely and it's a marker of of clinical decline so yes those down.
Noises and tennis about whether or not there's thursday compensation. So strokes volume is simply.
Part of the instruction freshman Crazy you drunk from fosters for flying divided by hand, I phone line. So we're seeing a measure of.
Performance, but it can be.
Associated with each option fraction, so what we're seeing as improvement.
Which is not expected naturally and we think that is important because we expensive that can relate to.
Especially longevity of the position on there for maintaining performance.
<unk>.
But that goes with them if I need.
Just to test with respect to the mechanism of action did you have some clear ideas about the mechanism directly impacted the heart or is this potentially to you know patients more energy.
There is.
Level of physical activity enough at higher level activity, maybe have it's positive benefit on their cardiac function or is is that sort of.
Not all possible. Thank you.
Okay.
Sure. So I think it's the last part of of.
Partially because I think is the opposite.
Actually observing.
Increasing correlation with predict performance and functional capacity. So I think is actually and this is recognized from the southern part for trying to put him out to see the.
Particularly during exercise the improvement in.
Volume for example, some form so I think what what is contributing to the improvement in some of the functional findings that we're seeing is an improvement in performance.
It's a good we're seeing increasingly apparent trend.
Finding that is proclaim as soon as more strongly correlating, we 72 with with the performance of six wouldn't want to for example.
I'm, sorry, I missed some experiments.
Making the mechanism exactly yep.
That's right yet.
Some mechanistically.
No doubt with some of the under John It's maybe improving relaxation, which I think would be detected in the volume.
For example, but I think long term what we've seen is is the these.
Impact on the hurt the financial impact.
Some time depends who said the log retreats about a dump them. So.
[noise] it's.
Then observed in the selling for sort of the reducing oxidative stress and have long term benefits. So perhaps it's it's the reduction in reactive auction species that are playing a role just the fact that there's some other boats homeostasis that occurs which is why we say sorry.
Hi purchases in the first place, it's better able to support what color says to feed the heart Bhutto's, which is a a mel adaptive change so perhaps it's just restoring something about it all balance.
Of course, some of this is speculative but based on what we know about the mechanism. It. It is somewhat intuitive that a longer duration of treatment would come for more benefits and that's that's in keeping with.
Usually a reduction oxidative stress.
Mm.
Great. Thank you.
<unk>.
Hi next question <unk>, some Jasmine Rahimi with rock capital. Please go ahead.
Hi team colon free as means congrats on the progress and Hooker Susan sound really cells at times, but we've two questions. This morning first with the progress made in the U.S. can you walk the password protected in bars in the U.
Are with us any progress so far and second can you just we'll just do your framework.
For evaluating prototypes muscular dystrophy <unk>.
How they call your mouth, you benefit to translate thinking in particular questions.
Sure absolutely so I'll ask Brian to speak a little bit further on a tour our thoughts the on the E.U.M.. We do you think that birth being an ultra rare disease and there are patients suffering from that in the E.U. would you know that would be at market that we would certainly explore our top line thoughts are really too turned to the E.U.
After we have U.S. approval, Brian anything to add there.
No I think to like we're looking at both in E.T. expanded access program something that we could maybe get reimbursement from but also looking at the potential for partnerships as well and works boards that though.
Yeah, and then in terms of our evaluation insertions and backers muscular dystrophy. There there have been done you know there's been some examples preclinically certainly I'm in and X. planted tissue heart tissue from back or a patient's where we stand in preventing mitochondrial function with l. and never tied.
But more broadly what we're doing there is meeting extensively with advocacy groups as well as convening.
When advisory Board of top T. opinion leaders in the cardiac space in in the disease area, specifically and we're convening that over the next couple of months gyms been working extensively on that.
Really neat and fresh out potential protocol design, we would expect to go into the F.D.A. with that design and so.
And I'll ask Jim to to comment on and expand on this but one of the things that we think it's really important in what we see in the birth data and particularly to the extent, where we're seeing potential surrogate endpoints such a stroke flying is really laying that foundation for a broader cardio my apathy franchised to get some alignment with the.
You just see around the potential for these endpoints to service surrogates, which we then think could also be informative as we expand out entities.
Larger populations of descends and Becker, Jim anything I Miss there.
No I think you talk shit eloquently ring.
Great. Thanks.
Thanks, Paul.
Okay or not.
Thank you know our next question comes from Matthew Luciany with B.M.O. capital. Please go ahead.
Hiring you. This is a nice on on from that thanks for taking a question.
I have a question on dry M.D. seems like the timeline for enrollment has mouthing push to hear 2020.
You just walk us through your assumptions around the call it 19 in path.
You know what have you seen that you know pushing the [noise] timeline now into here on 2020.
You know what needs to happen too.
Totally complete involvement by your and plenty plenty.
Perhaps get data out in is a fair to assume you're on 21.
Thank you.
Sure. Thanks now for the question. So you're in 2020 is really our best guess as you can imagine the patients that we're I'm rolling on or dry age related macular degeneration trial are elderly patients. This is obviously an at risk population in the current pandemic and and many of the sound like practices.
Is.
Really limited their staff to essentially essential visits and to screening new patients doesn't fall within that category and it was considered to be you know just just too risky to take on that activity.
Over the past several months now we are over two thirds enrolled in that trial, which gives us some advantage and we are seeing but say it's a cup you know several of our sites have actually started screening again over the past few weeks, though we are seeing activity wisdom, there I think that what's driving our assumption of your rent is.
Some conservative assumptions that these practices, maybe open slowly on that some of the academic centers, Duke obviously with the state of our phase one clinical trial for example.
We do have other academic centers that were also working with in addition to retina specialist and so we're assuming that some of those academic centers and institutions may also be opening more slowly as they prioritize their internal resources towards pandemic management, but with that said we have sites throughout the country.
Even if space or turning on kind of regionally and different pockets, we think that were well balanced there and we think that the private practices will be up in screening again I'm going into the summer and that's really what's driving our year ends. This is a one year clinical trials. So you know as long as we are fully enrolled.
Little bit ahead of year end I guess, we would we would have data in 2021.
But you know, we'd obviously need a month or two on two you know to close that the trial and get the data on once we've announced complete enrollment. So I think you know that something it's hard to get precise guidance on and so we have our last patient enrolls, but it's it's something will continue to watch closely and I do expect will be in a position to give more refined guide.
On this next quarter once we see how reopening emerges across the country.
That's very helpful. Thank you and in terms of the new C.T. to some two and 259.
Give us some color on what kind of a pre clinical data we are expected to see.
Sure for to put into you'll remember that we had done some work aniston one model of air left where we saw improvement in survival improvement in Europe fill in that light chain, which in the biomarker of.
I found on health as well as improved function and so we're actually looking at 272 in a second to model the L.S., which is the T.D.T. 43 bottle and so we're hoping to have you know data out in not model around to the end of this year I'm. We're also looking at the compound in a model of multiple says.
Atrophy, it's really it's it's a it's a <unk> at the parkinsonian like <unk> not Buffy model instead of that data hopefully will also have out around your friends 259, we're looking at it for peripheral neuropathy. So we're looking at it in a model of struck them read choose for exploring other you know <unk>.
Pain models, there and then our 550 theories were really and hit to lead optimization, but also very excited about the potential about series, which is mechanistically quite differentiated from L. and apartheid.
Sounds good but thank you very much for your question I mean.
[laughter].
Thank you for your questions.
[laughter].
Our next question comes from V. channels with H.C. Wayne. Please go ahead.
Oh this is my off with each.
Congratulations on the cover but if they came into my questions. Just a couple of kinda Harvard clarifying question in terms of the timeline the buff syndrome discussions with the F.D.A.
Could be N.B.A. submission the second off the 2020 d. delayed by cope with mine team.
The car.
In Boston Grove stations.
Leaving element eliminate.
And it's so.
Update on the like.
Mm.
Thanks to your questions <unk>. So in terms of the R. and D.H. admission timeline, if assuming we have a productive meeting. This summer we would still expect to be able to submit r. and D.A. This year.
We don't expect delays in not associated with cover 19 and in terms of bars patients on drug yes. There are eight patients to remain in the Bartho Open label extension. We also have barth patients in our expanded access program and so we are continuing to.
Collect data certainly with respect to the open label extension patience. The week 72 data from open label expansion at something F.D.A. has asked us to brief them on at our meeting this summer.
That data, we've actually already released in scientific presentations and prior presentations. In addition to the week 72 data. We do have some patients you've completed week 96 covered 19, there will delay some some some visit so we wouldn't at this point, we're we're not sort of I'm sure when we'll have.
You know that complete week 96 data for example, but you know as as the open label goes on we continued to take data cuts similar obviously continuing to update the F.D.A. We are seeing continued improvement says Jim mentioned at all of that later data points.
Hmm, Thanks, very much grew up again.
Thank you.
<unk>.
Our next question comes from Mari Ray Crock, what Jeffries. Please go ahead.
Hi, This is Kevin string for Maurie I, just wanted to expand on the pre clinical data for S.P.G. 272.
You talked about before in terms of Austin I must say are there any plans to do studies nonhuman primates for this preclinical data and then in terms of strategic partnerships and possibilities with this program. What are you thinking in terms of that thank you.
Oh sure no great question. Thank you at this point, we have not made plans to do studies nonhuman primates, and we're doing you know early and well established models in the diseases of interest, but it's something that we could certainly consider depending on the data that that comes out of those of those studies.
And then beyond that.
In terms of.
Sorry. Your second question was partnering opportunities there there there is that there isn't there has been some interesting to seven to.
Two seven to differentiate from Elmer <unk> in a in a couple of different ways. It more potent <unk> and we see higher concentrations through the broadband barriers to better concentrations in the C.N. on better concentration potentially with that also in in other membrane protected compartment, such as the retina and so with that.
There there has been you know some interest in some early conversations around partnering I'm, Brian anything to add there.
No the conducted right <unk> really kind of discussions or interest, but we'll wait for more data.
Exactly.
For US you know, we we do think that near degenerative diseases are a bit in front of frontier for mitochondrial targeted therapeutic many of the nerve degenerative diseases haven't known mitochondrial components and so you know we're excited to explore that more robustly with with this class of compounds as.
Well as with our 550 class.
Great. Thanks <unk>.
Thank you.
Mm.
Once again have you do have a question. Please crestar then one on your touched on the phone.
And at this time, we have no further audio <unk>.
Yeah.
Great. Thank you very much. Thank you everyone fridge. Thank you for joining us today.
They.
Thank you ladies and gentlemen.
He's conference. Thank you for participating you may now disconnect.
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