Q1 2020 Earnings Call
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Well not like and accomplished arbitrary speaker today, Lisa Wilson Investor Relations for PLX. Thank you. Please go ahead.
Thank you Chris.
Welcome to feel its form is Q1 2020 earnings results call.
This is Lisa Wilson Investor Relations for PLX.
With me on today's call.
Our Natasha Giordano.
President and Chief Executive Officer.
I read O'connor, Chief financial Officer of Pls.
You can also accessing the webcast of this call.
Three investor section of the POS formal website appeal as pharma dotcom.
Before we get started I would like to remind everyone that any statements made on today's conference call that express a belief expectations projections forecasts anticipation or intent regarding future events and the company's future performance.
Maybe considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to PLX Pharmas management as of today and involve risks and uncertainties, including those noted in our press release issued this morning, and our filings with the FCC.
Such forward looking statements are not guarantees of future performance.
Actual results may differ materially from those projected in the forward looking statements.
Feel like specifically disclaims any intention or obligation to update these forward looking statements, except as required by law.
The archived webcast will be available for 30 days, our website feel like pharma dotcom.
For the benefit those who maybe listening to the replay archived webcast. This call was held and recorded on May 15 2020.
Since then.
You may have made announcements related to the topics discussed the please reference the company's most recent press releases and FCC filings.
And with that I'll turn the call over to Peel like the CEO Natasha Giordano.
Thank you Lisa good morning, everyone and thank you for joining our call today.
Well the has changed dramatically in the months since I last earnings call. We're facing a shared adversity that has affected all of us in our family lives as well as in our professional lines.
Our Hearts go out all affected by covert 19, and deep this depreciation and thanks to everyone working every day, serving our communities.
During these challenging times, we remain steadfast in our commitment to advancing Bangalore and ensuring that our novel aspirin product continues to progress through the regulatory and commercialization process. As you may recall from our discussions last quarter, we will be conducting a bio equivalents or a b study for that.
325 milligrams to support our supplemental new drug application or Sndk at the end of April we held the type C meeting with the FDIC to align on the study design for example, our 325 milligrams. We're currently awaiting the minutes of that meeting, which will confirm the required.
The study design.
Engaged to see our ROE to conduct the B study and are prepared to commence work once the requirements are confirmed with the FDA.
Assuming no cobiz 19 related delays, we are targeting filing the SNB submissions for both basketball or 325 milligrams and vascular 81 milligram doses to the F.D.A. by yearend 2020.
In addition, our previously announced $8 million series B convertible preferred stock financing with park West an MSP partners will be voted on by stockholders later today.
We're excited to continue our partnership with park West our largest stockholder and our new partner M.S.C. I will now turn the call over to our CFO read O'connor to discuss the first quarter results Rita.
Thank you Natasha we recognize revenues of $2500. The three months ended March 31st 2020 compared to revenues of 318000 for the prior year period.
Revenue in both periods is attributable to work performed under federal Grant from the National Institute of Health, which will be coming to an end in the second quarter 2020.
Research and development expenses totaled $514000 for the three months ended March 31st 2020 versus $1 million in the prior year period.
This decrease reflects $300000 lower reimbursable expenses related to the NIH grant, which will be completed in the second quarter.
Manufacture related spending also decreased in the quarter as we've completed the required registration batches for the SMB a submission and are working on continued required stability testing.
Spending in this area will continue to be less than prior quarters until we start validation and commercial production at some point after the San Diego are submitted an additional capitals obtained.
Though manufacturing spending will decline overall R&D spending is anticipated to increase in the second and third quarter's as we begin our plan B study later this month.
General and administrative expenses totaled $2.5 million in the three months ended March 31st 2020, compared to $2.2 million into 2019 first quarter.
The increase is primarily due to pre commercial related activities for vessel or an increase noncash stock based compensation.
<unk> expense is expected to remain at current levels for the next few quarters as we selectively spend on prelaunch sales and marketing activities, such as developing professional consumer messaging and planning for retail trade merchandising and support.
Other income expense net totaled $4.5 million net other income in the three months ended March 31st 2020, compared to $7.9 million net other expense in the prior year period.
The change is largely attributable to the noncash change in fair value of the warrant liability primarily due to the fluctuation of the price of the company's common stock. This change in the warrant liability is 4.6 million of other income and the three months ended March 31st 2020 compared to $7.7 million of other expense.
In the comparable 2019 period.
Interest in other expense for the first quarter 20 was $146000, which decreased 149000 from the prior year period. This was due to a combination of lower principal balance on our term loan and lower interest rates.
The principal balance of our 7.5 million dollar term loan was paid down to $3.4 million as of March 31st 2020.
This loan is expected to be paid off in the first quarter of 2021.
Net income attributable to common stockholders for the first quarter of 2020 was $1.2 million were eight cents per basic and diluted share compared to net loss of 23.7 million were 2.71 per share for the first quarter 2019.
The first quarter of 2020 includes a noncash gain of $4.6 million or 45 cents per share compared to a noncash loss of $7.7 million were 88 cents per share in the first quarter of 19.
All related to the change in the warrant liability.
The first quarter of 2020 included $320000 or three cents per share related to the series a preferred stock dividend.
Well the first quarter of 2019 included $12.8 million for dollar 47 per share for the beneficial conversion feature and preferred stock dividends related to the series eight transactions completed in February 2019.
As discussed last quarter, we entered into the purchase agreement with park West asset management, and MSP partners to purchase 8000 shares of series B convertible preferred stock for gross proceeds of $8 million.
The preferred stock will be issued a dog a thousand dollars per share and will be convertible into common shares at a conversion price $3 in 10 cents per share.
Holders of the preferred stock will be entitled to an end. This initial dividend rate of 8% per annum, which will stop accruing on the date of the FDA approval of the Essen Da's for example, or 325 and 81 milligram.
The dividends or compound a quarterly and payable in cash for preferred stock at PLX. This option.
Well, we issued warrants along with this financing the warrants or canceled upon stockholder approval, our stockholder meeting to approve the transaction is scheduled for later today and the related results will be included an 8-K to be filed next week.
As of March 31st 2020, cash and cash equivalents were $9.3 million with the cash burn for the quarter a $4.7 million.
The $8 million series B preferred stock financing should provide cash runway until the second quarter 2021.
The company will need additional financing upon submission of the San Diego.
The timing of submissions in the amount of capital raised will determine the level of pre launch marketing spend and commercial inventory build prior to the approval of outdoor.
We expect quarterly cash burn to be closer to $4 million as lower manufacturing spending is replaced with costs associated with the be east study.
Regarding Colgate 19 outbreak, we're fortunate the way if not experienced any significant impact to supply chain or other operational or administrative function.
Thermo Fisher scientific manufacturers, our product in Cincinnati, Ohio, and is currently fully operational as it relates to Basel or.
With that I'll turn the call back over to Natasha. So she can share additional updates about our recent activities Natasha.
Thank you Rita.
We are looking forward to completing the regulatory requirements to support vasyl or through the final steps of the regulatory process. Our goal is to submit strong SNB AIDS that address all of the FDA requirements and demonstrate that the new formulation of basketball performs like the approved formulation.
In minutes from our April type C meeting, we'll confirm the FDIC study design requirements. We discussed we have a good understanding of the ft A's preference on the design of the study and we've already engaged to see our ROE to conduct the study assuming there are no significant delays due to covert 19, we plan to begin.
Enrollment once all details have been confirmed with the FDA.
Let me briefly summarize the key reasons, we are confident about vassilis potential to transform the aspirin market vascular has demonstrated faster and more complete platelet inhibition, providing a more reliable anti platelet effect than enteric coated aspirin as the first liquid filled aspirin capsule. It is true.
We a novel addition to the Askmen category, our target market includes vascular patients those people who've had a heart attack stroke or a basket of procedure also known as patients who need secondary prevention. The guidelines for treatment of these patients require aspirin as a foundational and long term.
RFP our addressable market also includes diabetics at a higher risk of having an initial vascular event and whose doctors recommend aspirin therapy. Today. These two patient groups together represent more than 40 million people in the United States and a potential 10 billion dollar retail market.
We continue to engage with health care providers across cardiology, neurology and gastroenterology to ensure that vas was unique mechanism of action and robust clinical profile are well understood.
These specialists will have essential role in treating these patients and encouraging them to comply with recommendations.
Oh, Good 19 has impacted live attendance at many of the large global medical conferences that we typically attend to showcase as always clinical profile. We continue to execute upon our medical education and publication strategy as many of these conferences have been converted to virtual presentations.
Over the last couple of years, we've seen a universal growing interest in aspirin amongst clinicians to that end, we continue to analyze our data to better understand and highlight the benefits of improved bioavailability and absorption of Vas war, including various sub analyses and sub populations.
In February and original poster entitled Bioavailability of aspirin in fast it in fed states of a novel formulation of a pharmaceutical lippitt aspirin complex was accepted and presented at the 2020 internal International stroke conference the Premier meeting that occur.
Catered to the science and treatment cerebral vascular disease.
The study with simultaneously published in the journal of thrombosis and Thrombo license.
At the end of March to original abstracts that showcase important advantages of Basil or were presented at the American College of Cardiology virtual annual scientific session.
First entitled improved Pharmacologic profile of a novel liquid Aspen formulation compared with enteric coated aspirin a pool patient level analysis of two randomized crossover study describes the improved pharmacological profile over enteric coated aspirin and was presented as a model.
Rated poster by Dr., Deepak bought of Brigham and Women's Hospital and Harvard Medical School.
The second abstract and title impact of weight on the anecdotal effects of aspirin results of a pooled analysis of two randomized crossover studies, comparing a liquid aspen formulation with entire coated aspirin assessed patient weight in response to aspirin and discussed basketball visibility.
To mitigate the negative impact of increasing weight on in Paris coated aspirin efficacy.
These prestigious conferences offer an important opportunity for us to engage with the experts in the field and to highlight Vas Lloyds unique qualities. We are pleased that we have two more abstracts accepted for presentation at two leading global conferences Euro PCR and the European Society Cardiology.
Gee, which is the largest cardiology conference in the world.
Let me conclude by stating that our highest priority is delivering value to help millions of vascular patients who can benefit from a novel Aspen formulation and to the health care professionals treating them. We're excited to complete the remaining regulatory requirements and submit our SNG A's to the FDA by here.
Then in order to bring this innovative therapy to market.
With that I'll open the call for questions. Operator. Please go ahead with the instructions.
Thank you.
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Our first question comes from the London Elliot Wilbur with Raymond James Your line is now open.
Hey, Thanks, good morning.
I guess I'm old enough for a bit around long enough to realize that companies aren't going to give us quite a bit of detail about their interactions with the the agency, particularly in ahead of a receipt of the actual minutes of the meeting, but I guess the basic question ventures always want to know is is you know or were there.
Any surprises or significant deviations from your prior expectations with respect to the a path forward for those are lower and then I want to make sure that I have this down Pat So they did 325 in the 81 will be submitted simultaneously in.
The same package is that the plan or or is that in fact, perhaps.
I'm not correct.
Okay. So let me take your first question, we have had many interactions with the FDA and our meeting in late April specifically addressed the Bioequivalent study design and so we have a good understanding of what.
Of what they prefer and what they require for the Sn Diego filing however.
I do want to wait until the the meeting minutes come across and since it was late April we expect those meeting minutes to come to come shortly they typically come within 30 days of the meeting.
In terms of the SNG a filing for 325 milligrams and 81 milligrams, we will be submitting to filings.
But in parallel so.
325, and then 81 milligram will be submitted shortly thereafter.
Okay and then.
Perhaps just a.
As a quick follow up to that in thinking about so obviously, you're not going to disclose submitted themselves or the details of them but.
Data point.
Or announcements might we get in advance of the actual.
Yes in the submission so I'm thinking about maybe announcements around at least the the commencement of the be studies or perhaps a more detailed announcement with data post the actual completion that just wondering what your current line of thinking is around.
Those milestones.
Okay, well continue to disclose and update the market with with every quarterly release for certain but what I would say to you Elliot is that we do have a good understanding of what the FDA will require and weve factored that into our target.
Getting this admissions for the end of this year.
Okay and just last question.
Obviously, there's been quite a bit of disruption on the commercial side just wondering NOPAT.
Your ability to kind of stay engage with potential retail partners down the road just any update on conversations you've had with them and sort of what activities still able to maintain are currently ongoing in order to put you the best possible position for launch post the actual.
The submission thanks.
Thank you Elliot.
Well, our vice President of trade sales to be Valentino has been managing those relationships and those partnerships and those meetings and yes, certainly meetings are not being held lives, but conversations continue virtual meetings continue they continue to be engaged and they're eager.
As much as we are to bring back or to to market. So we're feeling pretty good about the conversations we're having with them and updating them as we do some market.
Thank you.
Our next question comes from the line of Aster Hall with James Your line is now open.
Hi, good morning, Thanks for taking my questions. So what steps remain prior to Sndk filing other than the Bioequivalent study and the completion Dod stability studies.
And then can you remind us of the potential timeline from filing submission filing to an approval decision and then with a pad with a potential approval in 2021 next year, what could we expect in terms of prelaunch activities when a U.S. launch could take place any.
Additional details on that thanks.
Thanks, Good morning.
Okay. So the first question was what other steps do we need to take prior to the filings. We do indeed me to execute conduct the Bioequivalent study and we have already engaged to see our ROE. We are ready to commence that works just as soon as we get the.
Confirmatory meeting minutes from the FDA that alongside the manufacturing data that we will fill into the CMC portion of the filing those two elements together is what makes this.
What we think is a very strong filing for four Vas award. So those are really the two things that we need to accomplish as far as the CMC portion of the filing we've been working on that for a while now so I anticipate that everything will come together very nicely and we're confident that we will submit a very strong.
SMB package.
In terms of the timeline to approval. We continue to believe that this is a CMC supplement where we will provide not only the CMC portion of the filing but now also the bio equivalents.
As well so we do continue to believe that this will be a four to six month.
Review period for the FDA, but of course, you know we will always wait for the FDA to respond and give us their target could do for.
Approval timeline.
What to expect on pre launch we were going to continue to focus on our on three major constituents strike the healthcare professional with which we are very much committed to medical education and our publication strategy.
The retail partnerships that we're building and continue to to build.
And to plan for this launch and of course the consumer.
We will continue and we have been working on on the consumer and healthcare professional messaging commercial plan, but of course, we also will need to secure additional financing typically around the submissions and that will dictate the level of spend.
We'll we'll put across those three areas, but those three areas our main pillars for our commercial strategy.
Thank you.
Thank you.
Thank you.
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Our next question comes from a lot of Jason Butler with JMP Securities. Your line is though.
Hi, Thanks for taking my question I have to.
Just first one is as you think about no longer term in pet.
Okay, but can pandemic and.
How are to what extent that you already.
Been considering healthcare provider education virtual tools like.
Yeah, Jason et cetera.
Is that changing now as you think about that the impacts of depend on it.
And then second question just from supply chain can you talk about how you think about longer term diversification for Mike.
At a single site or would you diversified multiple sites or multiple suppliers. Thanks.
Good morning, Jason.
So in terms of Covidien and longer term intacta I'll start by saying, we have not skipped a beat in terms of our medical education plans because many of these conferences and meetings that were having our all being held virtually even with our scientific advisor.
The board, which really comprises the key thought leaders in this and this therapeutic space in terms of E. Education that has always been part of our commercial planning and strategy. So we will continue to explore new venues and how to to get to these.
Cardiologists and neurologist specifically the education of clinicians is a key fundamental aspect of our our strategy, but it links with the retail partnerships and and the consumer education as well. So we're exploring all of those those factor.
In terms of the supply chain I'll I'll, let Rita answer that sure in terms of supply chain diversity. It's a great question. It's one that the team and I are always talking about and right now we have a single site for our manufacturing of our capsules, but it is U.S. base it since since.
Natty, Ohio, and they have been fully operational during this time and as well as we have enough supply of our key ingredients right. Now. However is always some of these issues with always good to take a look at backup suppliers. So you know once it's a little difficult because you can.
Managing to validate a lot different suppliers and manufacturing sites it costs of money. So but that is one of our strategies long term to diversify both our sites as well as our supply with raw materials.
Okay, great. Thanks for taking questions.
Thank you.
Thank you. This does conclude today's question and answer session or we're now let's turn the call back to Natasha Giordano for closing remarks.
Thank you Chris. Thank you for your time. This morning, we look forward to keeping you updated as we continue to advance vast along through the regulatory process and prepare to bring this transformational aspirin product to market. During these challenging times, we hope that you and your family's remained seats and have a great day.
Ladies and gentlemen, this does conclude today's conference call. Thank you for participating you may now disconnect.
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