Q1 2020 Earnings Call
He's he's gonna judgment to says the operator today's conference is scheduled to begin momentarily until that time your life. So they can be placed on music how old they keep their patients.
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Good morning, ladies and gentlemen, and welcome to the achieve life Sciences first quarter 2020 earnings conference call. At this time all participants are in listen only mode. Later, we would that take question and answer session and instructions will follow at that time if.
Anyway, she require assistance during the conference. Please press Star then T. Rowe undercut show telephone.
As a reminder, this conference call is being recorded.
Now, let's turn the conference over to your host Ms. Jamie's, He knows executive Vice President and Chief.
Thank you Ashley and thanks, everyone for joining up on the call today from a cheap we have Rick Stewart, Chief Executive Officer, Dr., Cindy Jacobs, Chief Medical Officer, Dr., Anthony Clark, Chief Scientific Officer, John message, Chief Financial and operating officer I'd like to remind everyone that today's conference call contains forward looking state.
Based on current expectations. These statements are only predictions and actual results may vary materially from those projected please refer to achieve documents filed with the FCC concerning factors that could affect the company copies of which are available on our website I will now turn the call ever direct.
Thank you Jamie.
Before we begin the discussion of often scooter activities I'd like to take a moment to address the challenging times, we're experiencing globally.
Results of the Kirby 19 pandemic flu.
And can don't see is go out to all those we've lost loved ones, well, whose health and wellness that's been directly impacted by the elements.
We're living in a new era facing many unforeseen disruptions and challenges.
The way of life.
We are living to conduct business in new ways and also the importance abstaining virtually connected with friends family and colleagues.
We're facing unprecedented times it shouldn't be test resilience, we were right. We remain hopeful well also proud to be positive industry. This is working diligently to expedite the development of Koby 19 testing and treatments.
She was fortunate in that as a multinational organization were accustomed to working in the virtual environment with the exception, but being able to travel to meet with each other and many of you were conducting business as normal.
We are cools cadninety waiting to get back to compete 19 on the initiate initiation about phase three clinical development program.
The health and safety about trial participants health care providers and employees will continue to be a number one priority.
The impact of Jobete 19, and individuals with pre.
Existing conditions.
It's actually is pulmonary disease. He is now more important than ever assessment used to quit.
We believe in the potential upside you seem likely to help them to do so.
In addition to our clinical trial sites about see all right well.
We continue to anticipate initiation of a first phase three.
Okay two trial.
Second how can this yeah. This is of course subject to financing and confidence in our ability to conduct this trial in a manner the safety participants.
Okay providers.
From a regulatory perspective, we have now submitted.
To the FDA will requested nonclinical data, allowing for clean finnegan treatment about six and 12 weeks in the upcoming phase three or two trial.
We did not observed any new safety or toxicology signals when evaluating the 13 or 26 of treatment in these nonclinical studies.
Subject to final review by the FDA phase three trial will be ready to initiate.
As a reminder, the old good two trial will address three key factors.
Number one the evaluation of the higher <unk> milligram dose seems like you said the clean.
Number two the simplification of the dosing schedule, given only three times daily leading to ease of use and number three the extension of the treatment duration to six and 12 weeks expects you to yield better and more durable efficacy results.
The extension of the dosing period to six weeks in the phase three trials who'd have significant benefits.
He will allow us to measure the primary endpoint of four weeks of continues abstinence well patience is still receiving cycle cynically.
This was not possible with the 25 day treatment period in the Orca one trial.
That's documented in the literature measuring efficacy well patients are on treatment typically results in higher quit rights.
Shifting towards other opportunities to say similarly, as a treatment nicotine addiction.
As previously discussed we initiated an agreement with free mine, an organization that decision life science companies with non dilutive financing opportunities.
Through this partnership we recently submitted to the grant application for funding of a phase two clinical study to evaluate the potential for side you seem to clean as a nicotine cessation treatment, but vapors an E cigarette uses.
If these non dilutive financing is granted this study will be the first multicenter double blind randomized placebo controlled phase two study conducted in daily nicotine cigarette uses seeking to quit.
These trial enrolled approximately 150 adult subjects eight sites throughout the United States.
The number because an E cigarette uses continues to grow.
Reported in the Annals of internal Medicine in 2018 has reached nearly 11 million users and the U.S. alone.
Which nearly half the age of 35.
<unk> E cigarette some banks have historically been viewed the safe and combustible cigarette Smith on reduction that long term safety remains controversial.
These products Olson sustain addiction, many papers and now seeking to quit nicotine completely.
The fabric small vapors interesting switching we recently conducted a survey we'd like to be up in approximately 500 uses.
Teammates or E cigarettes.
Looking specifically at individual only bank nicotine approximately 70, 574% indicated that they intend to quit vaping within the next three to 12 months.
Those who intended to quit even sooner within the next three months roughly half stated that they will be extremely likely to try and new prescription product to help them do so.
Adding grounds approval on the outcomes of the study we believe psyche cynically could be the first prescription drug.
Bring a new options and nicotine vapors, an E cigarette users who are ready to quit for good.
Now before I turn the tool over to John for a financial discussion I want to get a brief update on the timing of the Ralph Lauren study.
As you May recall. This is an investigator led studies being conducted by assistant Professor Nike Walker and the New Zealand National Institute upheld innovation.
The trial is a single blind randomized controlled noninferiority trial to evaluate the safety efficacy and cost effectiveness, so actually cynically compared to the ironically and the mowery indigenous population.
The results of the route wore a trial are equally weighted.
The first head to head devaluation to determine whether such as cynically, it's at least as effective as but radically and will provide insights.
The safety profiles compare in this population.
We applaud Dr. walk is athletes conducting these challenging real well trial and expect the data to be submitted for presentation at a medical conference later in the.
I'll now turn the call it the John to discuss the recent financing an after school to results.
Thanks, Rick.
But we announced the completion of a private placement that resulted in gross proceeds of approximately 1.9 million prior to deducting placement agent commissions and offering expenses.
The financing was the result of inbound interest from existing investors and was substantially oversubscribed.
I had to be kept at the maximum amount allowed under the NASDAQ in FCC rules based on the structure of the transaction.
The additional capital will help to maintain momentum out of critical path activities.
I'd also like to provide an update on our cash balance as of March 30, Onest 2020, and also our operating expenses for the first quarter 2020.
As of March 31st the company's cash cash equivalents short term investments and restricted cash were 12.2 million.
Turning to our statement of operations the company incurred a net loss of three point Threemillion for the quarter ended March 31st 2020, as compared to a net loss of 5.9 billion for the quarter ended March 30, Onest 2019.
Research and development expenses in the first quarter 2020.
Decreased to a total of 1.5 million compared to 4.1 million in the first quarter of 2019.
General and administrative expenses for the quarter ended March 30, Onest 2020.
Were 1.8 million compared to 1.9 million in the quarter ended March 30, Onest 2019.
As noted previously had highlighted during our call in March we expect our quarterly operating expenses to remain lower in advance of initiating the phase three development upside is gonna claim.
That concludes the summary of our first quarter financial results I would now like to turn the call back over to Rick.
Thank you John.
Continued momentum.
Besides you cynically program for the treatment of nicotine addiction remains impressive.
The additional data driven from the ROE trial is important as it will be the first direct comparison between such cynically and the current current market leader Chantix.
We recently reported 2019 global sales just shy of $1.1 billion.
The nonclinical data required to commence the oil cut too.
Okay. Two phase three trial has not been submitted bereft <unk> review preparations for the started the phase three trial continue with the age leading K wells.
We remain optimistic.
First phase three trial will commence in late 2020, Cobiz 19 and financing permitting.
Thank you again for joining the call operator, please open the line to questions.
Ladies and gentlemen, if you have a question at this time. Please press Star then in upper one on your touched on telephone. If your question has been answered or you based or maybe yourself from the Keith Please press the pound key.
Your first question comes from Michael Higgins with Ladenburg Thalmann.
[noise] [noise] good morning, guys. Thanks for taking my questions [laughter].
Appreciate the update first wanted to ask is on Barbara when do you think you'll get results. How do you think will be presented and what kind of a forum.
You can give us any clarity on that'd be helpful. Thanks.
So yeah. Thanks, Michael.
You know our expectation is the results will be available later in the I think we said on the fourth quarter and coal, but you know the the trial being challenging.
But the visibility we have so far is it'll be available.
Later on in the I'm pretty much we can give you.
Thank you indication them back about do you think its importance cannot be underestimated given it really this is the first time, but slightly cynically and ironically, no chantix have been compared to the head to head.
Yeah. He's a non inferiority study so our expectation really is that we're looking to see the.
Cynically, he's a leased as good as chantix in terms of efficacy.
But I think given the the metro analyses the being conducted historically, primarily by the Kaufman group.
We would like to think that the superiority of side of things like cynically, Betsy Champix will be maintained.
[laughter] is it possible that we see that certainty in September.
Yes, yes, it's possible yeah.
Do you know when the submission deadline is for that I think there has to come then from the pie in New Zealand correct.
Yeah, you bet exactly it depends entirely on not only Walker <unk> <unk> I think given Cobiz 19, the they have been moving the submission dates around a bit so I'm not entirely.
Later on exactly when they submission date is.
Okay I'm sure it sums he's he's looking at.
And the importance of this study in the whole field of smoking cessation and I'm sure. She led to get it out and they stayed conference. So.
Make sense there [noise].
Question on Orca too in this start there and the congrats there given the.
In fact over how are all having here from called the 19.
And your I think I saw your starting in second half of the year, what adjustments to make the to the trial design.
You account for the FDA guidance.
And.
How does that trial come together thanks [noise].
Okay.
Well actually you're going to have that when I was just cindy.
Yeah, actually where I'm working with our CRL as far as said any changes in procedures that would become very tool I think the communication with the sites right now are the most important as far as when they're ready some sites there ready now sometimes well.
To be ready later, so as we go through this our communication with the site [laughter] and with a virtual procedure is that if a covered outbreak comes later in the fall while we're in the trial those are the things that we're evaluating right now as far as the overall design of the study now.
Thing will be changed.
Okay very helpful.
Right I'm thinking that theme of the ongoing pandemic I assume and as we've been hearing it takes.
Some resources away from government officials working on on wherever they were working on towards this for the most part.
How's that affecting your efforts to start in the evening study.
In your conversations with government officials. Thanks.
I'm sorry in two years as far as starting the architecture study.
He dating study I guess and Bailey.
Yeah, well right now we have submitted the grant and we don't know as far as if it is going to affect the timelines for the reviewing but present their guidance as far as the ruling every viewing for this granted should be later this year.
So we do expect that we would know by fall or corridor for.
Okay Shield.
Yeah.
No it's been a flavor to that Mike.
When we started discussions with the K wells.
On the concept of using side the Synuclein Oh, you cigarette uses and papers, we got a tremendous amount of enthusiasm from them.
I think that's principally because of some of that control to see the surrounded.
Yes, we understand there is a significant harm reduction.
In comparison to combustible cigarettes, but I think some of the issues that we're confronted through the middle of last year with respect to decide it makes a debate, but also I think increasingly with Cobiz 19.
Questioning.
Some of the issues that are related to smokers and.
A potential increase prevalence of Kirby 19 to that also apply to E cigarette uses and bankers.
[noise] makes sense appreciate it thanks guys.
Your next question comes from Jim a lawyer, but alliance global partners.
Hey, guys. Thanks, taking my question.
A question on talking with the Orcas study you work order to trial enrollment over the summer then and I know that the prior study.
Yes enrolled like sort of as the new years coming in Winterbourne I think you'd be in everyone's.
The new you're going to quit smoking not really helped enrollment is that how does that impact or not in fact, this sort of the different at time at time of year on getting the trial enrolled expeditiously again, assuming a covert 19 allows the crowds I'd be enrolled at all.
Yeah. So let me just make a correction we're not in rolling right now over the summer the summer months, we're looking at 'em Reevaluating in September October for whether we would start slow enrollment it'd be very much then went to the orca one where we would have sites. If it if we were to open.
Started following enrollment Dod just before December the holiday season, and then ramp up immediately after the new year.
We have 15 sites.
Five I'm actually are experienced with York a one so those five sites I might have faster enrollment as far as relief so not a slow enrollment. So all of these factors are being looked at as far as at the end of this year.
Okay. So many ways similar timeline on their own for Fourq once that's okay correct.
Can you speak a little bit too.
He's run any parts of this trial, the bathroom or virtually it seems like this maybe this can be trials would lend itself nicely to that.
Yes, and actually we're looking at the obviously F.D.A. wants to have vital signs as far as the safety. So we're looking at situations, where there would be hum nurses. It would go with a they couldn't come into the clinic and other virtual processes for the clinics and.
In that regard.
The see or other we're working with has already been performing covered testing in studies, so they're getting claim experience with a lot of their virtual procedures. So we're really taking a lot of guidance for my CRL on this one.
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And then maybe last question the non dilutive for the VP, Charlie just talking about somebody to grant.
What sort of the number they need given where the grant covered all the drove most of the girls huh.
So the the graph is actually it covers for three years up 2 million a year.
As for US when we are running a trial usually the costs are primarily that first year.
So, but we didn't cap over the 5 million and then it runs into the second year. So we're looking at a grant that would.
Support to the pretty much the predominant a site costs and some of our costs as far as personnel on for the two years it would run.
Thank you very much taking the questions.
I can't for any questions. Please press Star then number one I know telephone keypad and your next question comes from John Vandermosten with Zacks.
Good morning.
I wanted to start out with.
Just some examples of the hurdles that you may face due to the Corona virus I've I've heard that in many cases.
The critical trials can continue but noncritical ones cannot and I think it's mostly on a state by state basis can you just give some clarity on how that might go forward.
[noise] well with our different sites various state.
Obviously, we're relying on the sites to let us know as far as their ability and to safety for their subjects in the trial. It's always a first priority and at this time, we have not heard that any of our sites would not be able to participate.
Okay, Great and those five sites you mentioned before previous callers question.
How much of the volume to those five do have the total population enrolled.
Hey, it's not about Arca, one we pretty much had the side for pretty much equal they all they all met a there quota I mean, if it's a pretty active as far as Ah.
They each figure that's 20 to 40 subjects. They they can do easily so we have to really limits. The number of site sometimes the on these studies because they don't want to participate unless they can have you know and equal share. So it's really interesting.
Even with these trials, we don't have a problem with enrollment in that regard as far as one site not participating are enrolling as well as another.
Okay and.
Just remind me whether or not that the breath test will be given every visit is that is that or is that required every visit yes. It well. This they get the C.L. monitoring absolutely. That's on a weekly in every clinic says that now that is something that can be virtualized too as far as like we could get seal monitors.
As you know for patients. So those are all the type of things that we're looking at as far as if someone could not come into the clinic.
Okay, great great. Yeah, that's great. It can be a conversely on looks like Pfizer as far as I understand it. There. There are chantix is coming off patent. This month, what is the competitive environment going to look like for the rest of the year.
For that.
Well, that's an interesting one John because they just intelligence says the perhaps that is only the first of the patents to expire.
We we believe that they've still got.
Probably protection and maybe into late 2022.
Yeah, we are expecting frankly, it anytime you know some kind of generic competition, but nothing lace intelligence as it might actually be a little bit later than we had six actually expected.
What we are expecting frankly, when that generic arrives for generics could be it'll be one to start off with a six month exclusivity.
We are expecting a probably a reduction in price by potentially.
And when the second one arrives it'll come to equal out to somewhere around about the $700 cycles and treatment level and then subsequent to that we'll just have to see where the market goes.
I think it'd be positions side, you see Mclean.
Yeah in comparison to the Moronically I think all major advantage is obviously the reduced side effect profile scientists in a clean.
I think you know the lack of Noser vomiting.
Useful notion promising but we see we said cynically really does provide me with a very significant advantage.
We believe the knowledge on promising is a one of the causes of the or.
Noncompliance, what we're seeing win with a burn a claim but also.
The shortened treatment you read into another advantage for Saxenda clean.
Yeah, we'll have a single prescription over a six week period. This is a vertically which currently has three prescription over its 12 week treatment period.
So I do think that even in a genericize environment, we have.
Some pretty significant advantages.
As to be put into contact that on average it takes a smoker between eight and 11 when she tends to be successful. So there will be like it continuing cycling between yeah, but running clean.
You see Mclean, maybe even nicotine replacement, but I do believe but yeah. We do have some advantages as the new entrant.
Okay.
And Pfizer made a brief comments about chantix on it on his call I think they.
Suggested that because people aren't going to the doctor that.
Since were down during the current of Iris, but are they anticipated them to come back strongly perhaps even more strongly and before I just to get the concern over you know susceptibility to.
Run a virus, if you're a smoker, what what a any any thoughts on that as I felt like a fair assessment or any additions to to what Pfizer had said.
Based on on what they're seeing in there and their trends.
And then just me up.
Well, what I see the resetting smoking cessation markets.
I think the real concern is has been and we'll continue to be what is the effect.
Smokers up Koby 19 are they more severely affected.
Yeah susceptible to Cobiz 90.
I don't think certainly.
Well I'm sitting here in the UK, we've seen a significant increase in smoking cessation prescriptions over the last two to three month.
So I do believe that once.
The landscape stuff to settle the will be a significant upswing in.
Yeah and interest in smoking cessation treatments.
We aim to be part of that program.
Because we can get back.
Great. Thank you Rick and thank you Sandy.
I'm showing no further questions at this time I would now hand, the conference back to Rick Stewart for closing remarks.
Well I'd just like to say thank you for your interest in a cheap life Sciences, and we look forward to updating you again on a second quarter results. Thank you very much.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and happy Wonderful day, you may now disconnect.
[noise].