Q1 2020 Earnings Call

Greetings and welcome to Pts Biotechnologies first quarter 2020 financial results.

At this time all participants are in listen only mode Reef question answer session will follow the fall presentation.

If anyone should car operator system certainly conference. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

So I'll turn the conference over to Alex Liberal.

Alex you may now be get.

Good morning.

Hi technologies first quarter 2020, <unk> earnings conference call, an audio webcast with me today are Dr., Frank do you do idle Chief Executive Officer, Dr. Loring Ward Chief Medical Officer.

Earlier this morning, Pds biotech issued a press release announcing financial results for three months ended March 31st 2020.

Encourage everybody to read today's press release as well as Pediatrics quarterly report on form 10-Q, which has been filed with the FCC.

The company's press release any quarterly report is available on P.S. Biotechs web site, a Peter <unk> Dot com.

In addition, this conference call is being webcast at the company's website, we will be archived there for future reference.

Well, we began I would like to caution listeners the comments made by management. During this conference call will include forward looking statements within the meaning of federal Securities law, including the Safe Harbor provisions of the private Securities Litigation Reform Act 1995.

These forward looking statements involve material risks and uncertainties and the company's actual results may differ materially.

For a discussion of risks factors, including among others.

School age of the Cold 19 endemic the impact such trend dynamic may have on the company's business operations financial operations and it was also operation.

These ability to respond to that related challenges, including those noted in this mornings press release and P.S. biotechs filings with the FCC.

Investors potential investors and other listeners are urged to consider these factors carefully in evaluating the forward looking statements.

Her cautioned not to place undue reliance on such forward looking statements.

In addition, the content of the conference call contains time sensitive information that is accurate only as of the data Thislife broadcast may 13, 2020, except as required by law. The company undertakes no obligation to revise or update any statements to reflect the events or circumstances that take place. After the date of this call.

With that I would like to try to call over to Dr., Frank see do I do Frank go ahead.

Thank you, Alex and welcome everyone to Pds Biotechs first quarter Twentytwenty earnings Conference call.

Throughout the first quarter, we continue to leverage the versatility safety and potency.

Novel Vercirnon platform, how should we expanded our pipeline beyond immuno oncology to include the development topic classic transformative preventive vaccines to protect against infectious diseases, such as cobot 19 and influenza.

We believe that burst means the ability to induce a superior range or Brett Oh protective immune responses uniquely positions us to develop differentiated and more effective vaccine against these infectious diseases.

Let me quickly provide you with some background on our proprietary burst in your technology, which is the foundation of all our vaccine and immuno oncology programs.

When paired with disease specific proteins versus means design and April effective programming, our immune system to better I recognize that specific pathogen or cancer.

The immune system this enabled us to protect.

And to fight the disease as well as to potentially provide long term protection against the specific disease.

First immune has demonstrated powerful ability to activate and both the preventive and the therapeutic on our immune system to effectively recognize disease, causing agents.

The therapeutic comprises a component of our white blood cells called a T cells.

Activated killer T cells have the ability to identify and to kill infectious pathogens and cancer cells.

First immune has also demonstrated the powerful ability to activate the prevented or defensive our immune system to generate what are known us neutralizing antibodies.

Bursting meals unique ability to train the immune system not only to generate an effective defense against specific infectious pathogen by generating antibodies, but also to mountain effective killer T cell attack.

Typically against the pathogen presents a promising opportunity to develop transformative vaccines, but may better protect against infectious diseases and related pandemics.

We recently initiated preclinical testing, our Corbett 19 vaccine candidates to by the way the levels of both antibody and T cell induction.

We look forward to sharing the results of those studies when they become available.

Our goal is to advance cope with 19 vaccine into human trials as quickly as possible.

And we are currently in active discussions with both government agencies and Ngls to determine the most expeditious path forward.

[noise] simultaneously, we remain fully committed to our immuno oncology programs, including our three planned phase two studies.

Oh, Pts Oh, one to one in human papilloma virus associated cancers, which we hope to initiate when safe to do so.

Last year, we reported follow up clinical outcome data.

From our previously reported phase one human clinical trial, Pds, Oh, one or one.

[noise] Pds Oh, one no one is being developed a sudden immunotherapy.

Treat advanced human papilloma virus associated cancers, such as head and neck, you know in cervical cancers.

The study demonstrated successful translation.

From preclinical animal models to humans.

Reverse immune novel mechanism immunological programming and activation.

This phase one study was an open label.

Dose escalation safety study that included 12 patients with high risk cancer, causing HPV infection and pre cancerous lesions off the service.

Three patients received a one milligram dose.

We received a three milligram dose and six received the highest dose of 10 milligrams.

In the original reports it analysis.

He demonstrated the PDL, one or one was immunologically active all three test the doses.

The three and 10 milligram dose is really resulted in about 20 fold increase in the number of HPV attacking killer T cells.

This was quantified in blood drawn within approximately 14 days of treatment.

There were no observed dose limiting toxicities or long long term safety concerns any dose.

Based on the demonstrated ability of the PD Oh, one to one monotherapy to safely generate high level circulating killer T cells.

We conducted at post hoc retrospective evaluation.

Nicole outcomes, which was reported at the society for immunotherapy of cancer Unwell meeting in November 29 team.

In this respect retrospective analysis Pds Oh, one on one demonstrated complete lesion regression in at least 60% off the bottom local patients.

First evaluation post treatment, which was early August 123 months after treatment.

These results were remarkable us most patients way infected with multiple high risk HPV types.

The initial clinical study of P.D.S., Oh, one to one monotherapy provided early clinical proof of concept that allows us to rapidly and strategically develop all pipeline.

Clearly our lead immunotherapy candidate, Pts Oh, one no one.

Oh Pds a one to one consist of Versum yume with proprietary mix offshore proteins from human Papilloma virus type 16.

Oh, it's PV 16, it's the most the virulent and high risk type of HPV.

And is by far the most prevalent genotype one patients with HPV associated cancers.

The formulation averse immune and HPV proteins when administered by subcutaneous injection.

Programs the immune system to recognize.

And to attack the cells in the body.

Expressing all containing these particular proteins.

Currently approximately 43000 patients are diagnosed with HPV associated cancers every year in the United States.

In men, primarily manifest as head and neck cancer and the woman I've said before cancer.

You know you know penile Viking all involved but cancers are also associated with it you PV infection.

And while there has been a significant uptake in HPV vaccine.

This is unlikely to significantly affect the rates up HPV related cancers over the next decade or more.

This is because a number of factors.

First HPV is by far the most prevalent sexually transmitted agent worldwide.

About 14 million new infections in the United States every year.

Secondly, current HPV vaccines are only preventive.

And have no therapeutic benefits.

These vaccines are only effective if a given before the individual yes infected with the virus.

Third the progression of the disease from infection to cancer, it's extremely slow and could take over a decade.

That's a result, its has been projected the most of the patients who will be diagnosed with cancer over the next 2010 to 20 years may already be infected with the virus.

And the current vaccines as I mentioned earlier will not prevent progression to cancer.

In fact head and neck cancer has recently been described as a silent epidemic.

Due to the dramatically increasing incidence of the cancer, primarily due to HPV infection.

The incidence itself anal cancer have also been reported to be honest steep rise.

So with this summary, I'll now hand over to Dr. learn what our Chief Medical officer to walk through next steps in advancing Pds biotechs oncology and infectious disease pipeline.

Learned a hub handover to you.

Thank you Frank and good morning, everyone.

As we look ahead, we remain committed to the initiation of our three P.S. I want to one phase two clinical programs addressing advanced HPV associated cancers.

However, due to the current 19 pandemic, we are unable to provide exact timeline for when these trials will be initiated.

Let me quickly highlight for you. These three studies.

The first trial is a phase two study that will evaluate the efficacy and safety a P. S. A 101 in combination with Mercks anti PD one therapy keytruda in the first line treatment of patients with recurrent or metastatic HPV 16 positive head and neck cancer.

Darkly the vast majority of combination studies have been designated for second or third line treatment. So we're very excited about the ability to address this cancer into first line therapy setting with the standard of care for recurrent or metastatic disease.

We believe this presents several distinct advantages and opportunities.

We're honored to collaborate with Merck and plan to initiate this study when safety do so.

Our second planned phase two clinical study, it's being run by the National Cancer Institute. This trial will evaluate P.S. or one on one in combination with two well recognized immunotherapies did have shown strong promise in ongoing clinical studies.

I'm 70, 824, I functional checkpoint inhibitor and NHS Io 12 and immune cytokine.

Both owned by M.D.C. Renault also known as Merck kg a in Europe.

This clinical study is a result of highly promising preclinical data generated with this triple combination at the National Cancer Institute.

The third planned phase two clinical study is being run by a leading cancer Research Institute.

This phase two trial was studied the combination of P. D S. One on one.

And standard of care chemo radiation in patients with locally advanced surgical cancer.

We are working closely with both institutions to determine when these two studies can safely began and we look forward to providing an update when available.

In addition to our work with PD, Yes, I want to one we recently announced expansion of our cooperative research and development agreement with B and C. Guy to initiate studies of Pds Oh, one out three for the potential treatment of ovarian breast colorectal lung cancers.

In which overexpression of the muck one protein in the tumors is associated with a high degree of unmet need.

Yes, Oh, one or three combines person mean with novel short sequences from the book one protein developed by the laboratory as tumor immunology in biology at the National Cancer Institute that are highly recognized by our immune system and can be used with first immune to program at all.

Our our killer T cells to better recognized at attack these cancers, which expression Nok one.

The muck one protein is highly president can multiple tumor types and it's been shown to be associated with drug resistance and poor disease properties prognosis.

Under our expanded agreement with the M.C. I, we're collaborating to conduct preclinical studies of Pds or what else three and potentially human clinical studies in combination with other therapeutic agents.

Now that we've discussed our immediate priorities in immuno oncology I'd like to highlight next summer of our recent activities pertaining to our robust pipeline specifically for infectious disease programs.

The versatility adverse you mean and its application in infectious disease is one weve always plan to develop as evidenced by our recent collaboration with Pharmacore into broken Latisys.

As to cope with 19 pandemic continues to unfold the development of vaccines has taking center stage.

Our versus new platform has demonstrated the ability to activate both the preventative and therapeutic arms of our immune system, which presents the potential to provide a greater breadth of long term protective immunity.

We currently have to development programs in the infectious disease states that are moving forward rapidly.

Our leading infectious disease program.

Yes, Oh, two or three is advancing as a vaccine design to potentially provide long term and broad protection against covered my team.

Diversity mean platform when paired with a viral antigens induces both protective neutralizing antibodies as well as attacking killer T cells.

And very importantly, memory T cells, a strong T cell response has been associated with enhanced immunity against infectious disease, specifically in stars a close relatives. Other current source told me to virus that is because of the covert 19 pandemic.

First it means that building two when do you still neutralizing antibodies together with the virus attacking T cells may provide significantly enhanced immunity against the virus and its potential mutations.

This month, we initiated preclinical studies for our Kobin 19 vaccine candidates.

He's pretty cool preclinical studies will be used to provide initial confirmation oversee means ability to induce an anti sorry cozy to immune response.

These initial studies will evaluate and characterize the induction of both neutralizing antibodies as well as healthcare and killer T cells specific Sars koby too.

Further our proprietary Sars koby to protein being administered with first you mean.

Induces includes excuse me less variable regions of the virus.

This means that the immune system has the potential to be trained to recognize not only the outer shell of the virus, which is more likely to mutate.

But also the more stable sector part of the virus.

This should help provide improved protection against possible mutations Oh the virus.

We're currently in active discussions with both governmental agencies and Ngls on the most accelerated path to advance our cobot 19 vaccine into clinical trials.

We look forward to providing additional updates in the near future as we continue to rapidly advance this program.

Our second infectious disease program, it's part of a collaboration with Pharmacore Biotechnology further development of P.D.S. Oh to a one.

Novel therapeutic tuberculosis vaccine based on farmer course proprietary TB antigens combined with first I mean.

Tuberculosis isn't infectious disease caused by Michael bacterium tuberculosis, and manifest primarily as respiratory symptoms that also significantly affect other organs.

To date, there is no available therapeutic vaccine for tuberculosis.

And preliminary evaluation.

Our first I mean based product Tds, owing to a one demonstrated highly promising TB specific T cell induction in D., though.

Under this collaboration with pharma core we will continue the development of a product candidate and Pharmacore will conduct studies to evaluate safety and efficacy Oh the formulated product.

While this program it's still early in preclinical studies, we are hopeful that the data generated through this collaboration will continue to support our burst immune platform as a whole as well as validates our approach to infectious diseases.

With this very robust pipeline programs, we believe that our first union platform holds tremendous value and potential in both treating a variety of cancers, and providing protection as well as treatment of infectious diseases.

We look forward to providing additional updates on these programs as we continue to make progress through 2020.

I'll now hand back to our CEO Dr., Frank that it would do.

Right.

Thank you Laura.

Now before I review, our financial results for the first quarter of 2020, I would like to note our improved financial position, having successfully completed an underwritten public offering in February.

In which we raised approximately $11.9 million in net proceeds for the company.

After deducting underwriting discounts and commissions.

Not including other operating expenses.

This amount includes net proceeds from the underwriters full exercise of their over allotment option.

We believe with this additional cash infusion, we have the necessary working capital to support operations through 2021.

With that said I will now highlight our financial results for the three months ended March 31st 2020.

For the first quarter of 2020.

Net loss was approximately $4 million.

Or 59 cents per basic share impact of nine cents per diluted share.

Compared to a net income of approximately $6.8 million or $1.82 cents per basic share and $1.47 cents per diluted share for the first quarter Oftwenty 19, and this was related to the merger with edge therapeutics.

Research and development expenses totaled approximately $1.9 million for the first quarter up twentytwenty.

Compared to approximately $1 million for the same period in 2019, an increase of 91%.

For the first quarter of Twentytwenty General and administrative expenses were approximately $2.1 million compared with approximately $3.9 million for the first quarter of 29 team a decrease of 47%.

Total operating expenses for the first quarter 2020 were approximately $4 million compared to our total operating expenses.

Perhaps maybe $4.9 million for the same period in 29 team a decrease of 18%.

As of March 31st Twentytwenty.

The company's cash balance was approximately $21 billion [noise].

This amount includes the approximately $11.9 billion in net proceeds after deducting underwriting discounts and commissions.

Not including other operating expenses from Pds biotechs underwritten public offering.

Including the exercise of the Underwriters' overallotment option, which closed on February 14 Twentytwenty.

That concludes our financial statements.

Now before we open the call two questions I would like to reiterate but we believe that our novel versus new platform holds significant potential in both infectious diseases and immuno oncology.

And we are continuing to work with our partner sudden leading companies and academic institutions.

In the coming months, we look forward to advancing the preclinical development for our lead Corbett 19 vaccine candidates and look forward to providing further updates on the program as they become available.

In addition, we remain committed to our immuno oncology programs, including the two upcoming phase two studies for PDL, one to one with our partners up and National Cancer Institute and the leading cancer Research Institute, we hope to announce in the coming weeks.

We're also excited to initiate our third phase two program evaluating the combination of PDL one to one in merck's Keytruda in HPV 16 associated recurrent or metastatic head and neck cancer.

First line treatment when it's safe to do so.

We would like to funko shareholders for their continued support and look forward to providing additional updates as they become available.

That concludes our prepared remarks, we'd now like to open the call two questions.

Operator.

Thank you.

I'd like to ask a question today. Please press star one on your telephone keypad and a confirmation telephone indicate your line is the question Q.

Let me first start to feel that your move your question from the Q.

Just one shooting speaker equipment, maybe necessary to pick up your handset before personally starkey.

One moment, please while we pull for questions.

Thank you. Our first question is from the line of Joseph Spak units with H.C. Wainwright. Please state your question.

[noise] Hi, guys. This is supposed to close some fallout from the line of Joe. Thank you. So much for taking my questions for other couple of quick one.

Yes, one deal truly.

So can you give us more color on the program, especially like the competitive landscape and advantages of using best <unk> platform and also what rationale is behind these indications.

The PBS Oh, one of re ask Dr. would mentioned this would be addressing.

Land ovarian.

Breast and colon cancers.

We could potentially address significant unmet medical need.

So the the rationale behind the design obese novel proteins from the Mark one protein.

Because the fact that Mach one have been studied for several years.

It's very well known to be highly immunogenic, meaning that the T cells of our immune system can recognize and respond to those.

Specific proteins, we are strongly associated with poor and poor medical or therapeutic outcomes.

So based upon diverse means the ability to effectively more effectively deliver the specific proteins to the immune system and to crane. The T cells to specifically recognized both sell from the body, but highly contain whats breadth of those particular proteins. The goal of National Cancer Institute.

PDF, it's now to combine those novel Mach one proteins that have been designed by the by the national accounts that you to be much more readily or highly recognizable buyer immune system with the person you with intentional would the hopes of developing an immunotherapy with that will be a lot more effective and powerful applying.

Okay and training our immune system to much more effectively come back and kill those cancer cells.

So that's really the thinking behind this and.

Not really based upon the experience a PDF and the National Cancer Institute and combining these together to really aggressive I'd rather be specific cancers.

That's really I'll focus so much and we won't know like P. P. S. One deal one you said that basically the blue coat system. The sequence you look like purple exactly.

Can you elaborate a little bit or would you brightness color.

So this so we're looking at the HPV 16, Esix and Eseven proteins. These are the Easter and <unk> seven protein a well established can be highly and oncogenic and well highly expressed in these HPV cancers.

We've picked HPV 16 asked the lead program, what the lead target because of the fact that HPV 16 isn't by far the most prevalent HPV type MBS advanced cancer. So for example over 90% of HPV positive head and neck, Kansas, Our HPV 16.

Positive. It's also been reported that 70% to 80% of anal cancers, and 50% to 60% obstetrical cancers are HPV 16 positive and so that's really the reason for the focus on HPV 16, and specifically, but he six and he seven components out proteins. So it's maybe 16.

So if I understood correctly, each formulation is gonna coating ball <unk> six and seven frankly is that correct.

Yes, it's one formulation that's being up applied broadly across the various indications and that formulation contains proteins from both the east six and E. Seven.

Okay I see okay. That's.

My last question, we'll go called me like like Food program, So I am saying a walk her multiple candidly.

Each back food formulation include diesel vial peptide Franklin and how would be bucks to address potential multiple swing so called me like <unk>.

Thanks.

Yes, so I'm just a follow up on what Dr. <unk> Dr. would mentioned earlier, we're looking at protein. So we're looking at the recombinant protein rather than peptides.

And we are looking after a number of various constructs the rationale behind looking at Verisk construct is the fact that we need we would like to understand which of those constructs can be manufactured much more effectively.

And in <unk> with high yield go that's going to be very important and in the commercial setting and we also want to understand combine that with all the induction of both the T cells and antibody responses. So we're looking at the big picture to re identify which construct will give the best combination all effective production.

In high yield and strong immunogenicity.

And I stuck to would make and we're looking at the variable region of the virus, which almost every vaccine us looking out today, but what's also unique about P.D.S. This approach is the fact that due to various immune stability to prime the immune system to generate T cells.

We can also look at less variable regions of the virus, which would allow us to generate these powerful T cells against more conserved regions within the virus. We therefore provides much broader protection and continued protection hopefully asked the virus continues to mutate asked the most the more variable regions I will.

Change it change as the virus new dates.

So that's that's really the planned but it seems it's yet to be come from.

That we would be able to provide that protection against <unk> and favorites mutations, but theoretically that is the approach to target not only the favorable region, but also to targets more concept regions of the virus to provide a much broader and robust protection.

Long term.

I'm in the other thing don't always something what's the what the long term memory.

Due to the fact that we kind of view. These T cell again some of those variable regions within provide long term my memory. That's also very important in being able to generate that robust and long term protection against these that these agents.

Understood. Thank you congrats on the progress.

You're welcome back you benchmark.

Oh.

Our next question comes from the line of Jim a light with Alliance Global Partners. Please proceed with your worst.

Hi, Thanks, taking my question I was wondering if you could walk through the breakdown of the year, we're spending will be between the oncology verse or.

[laughter] Kobe, the or the vaccine programs for the rest of 2020.

And as I look at the vaccine what's sort of the next.

Timeline, you might expect originally guide to for an update on that program and what do you anticipate that would there might be.

So in terms of the spend between the immuno oncology and vaccines. The focus really is to focus our.

Our finances on the immune oncology what Pds currently doing is talking to some of these the government agency agencies as well at the end Geos to hopefully obtained funding to progress the cobot 19 program.

And so our hope is that we would be able to obtain external external funding to progress. The program forward, while we conserve cash to apply to the immuno oncology programs and so that's the current stuff the current to go.

If there are any changes we will update our shareholders regarding these these damn potential changes.

In terms of the timeline.

A lot of the timeline and progression poet, it's also going to be somewhat dependent on our ability to raise the capital through the some of these agencies, we talking to currently to progress the program forward [noise].

However, we have initiated basic preclinical studies.

And so those preclinical studies will probably it will probably take us another month in the how the two months to start generating the initial data, which will then inform exactly how we progress with the constructs that are currently being developed so we have we have won some partnerships with companies who would be working with us as we.

You talked to these agencies to evaluate the full program. So one of the key things that we've had to do with essentially doubled the program from eight to see how are we going to perform our preclinical work and manufacture the product all the way through phase one.

Clinical trials to the larger clinical trials and eventually and commercial production.

So we doing a whole evaluation about program as we talk to be some agencies with the hope of being able to get the funding in two progress. These independent of the cash that we currently operates.

[laughter], knowing that the world has changed a little.

The spend wasn't first quarter.

20 pretty dramatically here, what's the thinking on spend.

So going forward is 4 million a quarter or the right level or when does it.

Or is that number that number you're likely change or and win or when do you really to spread I know, it's hard to our deal with with everything going on when you originally anticipate being able to start up the phase two trials.

In three indications.

Well when we start the phase three trials this a little bit difficult to project just because of the current situation I see no with with oncology trials, especially.

Most oncology new oncology trials have been put on hold just because of the complications, especially associated with oncology patients.

So with the largest trial, which was the Merck trial with <unk> in which we are looking out at least 20 sites that becomes a little bit more difficult to predict exactly when that will go up and running.

The other two programs are probably so they're being run a single sites are more likely to be able to get up and running in the near term. However, both p. eyes book principal investigator for each of those two programs have informed us that.

They are hoping to be able to get started at least sometime early in the third quarter, but they cannot come from and so they will keep us update at not price as to when they will be ready and when do you think they can get those trials up and running.

And so the short answer to that question is it's difficult for us to say exactly when those trials will get up and running.

Now certainly understood.

Can you comment a little on on expected sort of expected burn quarter going forward is it you know, there's a 4 million level, where you guys need to be given sort of the delays was that come down pretty dramatically.

Oh, no so before.

Our our burn will be the $3 million to $4 million range per quarter, and so with that we we are comfortable that we have the funding to take us who twentytwenty one [noise].

[noise] Gary Thank you very much taking the questions.

You're welcome Thanks, a lot.

Thank you and Weve reached end of the question answer session and I'll turn the call back over to Frank for do I know for closing remarks.

Well, thank you very much and again I'd like to reiterate our thanks to all shareholders and also to also to reiterate our belief in our verse mean platform. We look forward to getting these clinical trials, especially with Pds I want to one up.

Running and we will certainly that our shareholders know it once we understand exactly when these trials will be running and if there any changes to our programs whether its covert 19 or oncology programs. We will also let our shareholders know us and thus we have that information are once again. Thank you very much for your support.

And we will continue to keep you updated thanks a lot.

Thank you. This will conclude today's conference you may disconnect. Your lines at this time, we thank you for your participation.