Q1 2020 Earnings Call
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Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Novavax First Quarter 2020 Financial Results Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. It is now my pleasure to introduce the Associate Director of IRPR, Erika Trahan.
At this time, all participants on the listen only mode.
So to speak a presentation there will be a question and answer session.
Good question during the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded if your widen further assistance. Please press star zero.
Now my pleasure to introduce associate director of IR PR, Eric with Rod.
Thank you operator, good afternoon, and thank you to everyone who has joined today's call to discuss our first quarter 2020 operational highlights and financial results.
Erika Trahan: Thank you, Operator. Good afternoon, and thank you to everyone who has joined today's call to discuss our first quarter 2020 operational highlights and financial results. A press release announcing earnings is currently available on our website at Novavax.com, and an audio archive of this conference call will be available on our website later today. Joining me today are Stan Erck, President and CEO; John Trizzino, Chief Business Officer and Chief Financial Officer; Dr. Gregory Glenn, President of Research and Development, will be available for our Q&A portion of the call. Before we begin with prepared remarks, I need to remind you that we will be making forward-looking statements during this teleconference that could include financial, clinical, or commercial projections. Statements relating to future financial or business performance, conditions, or strategy, and other financial and business-related matters, including expectations regarding revenue, operating expenses, cash usage, clinical development, and anticipated milestones, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could change over time. I'll now hand it over to Stan to get the call started.
Press release announcing earnings is currently available on our website at Novavax Dot Com and an audio archive of this conference call will be available on our website later today.
Joining me today, our Stan Erck, President and CEO.
John Casino, Chief business Officer, and Chief Financial Officer.
Dr. Gregory Glenn President of research and development will be available for Q and a portion of the call.
Before we begin with prepared remark I need to remind you that we will be making forward looking statements. During this teleconference that could include financial clinical or commercial projections.
Statements relating to future financial or business performance condition worst strategy and other financial and business related matters, including expectations regarding revenue operating expenses cash usage in clinical development and anticipated milestones are forward looking.
Statements within the meeting of the private Securities Litigation Reform Act.
Novavax cautions that these forward looking statements are subject to numerous assumptions risks and uncertainties, which change over time.
I'll now hand over to stand to get the call started.
Thanks, Eric good thanks to all of you listening to this call first and foremost.
Stan Erck: Thanks, Erika, and thanks to all of you listening to this call, first and foremost. Given the ongoing COVID-19 pandemic, I sincerely hope everyone on the call and all of your respective families are well and safe. I'll start the call today by discussing the historic funding from CEPI for our coronavirus vaccine candidate that we just announced a few minutes ago and provide a brief status on our activities around COVID-2370. I'll then provide a recap of the positive Phase 3 results for nanoflu that we announced back in March, following a quick update on our ResVax program. John Trizzino will then provide a financial overview.
Given the ongoing cobot 19 pandemic I sincerely hope everyone of the call and all of your respective families are well safe.
Start to call today by discussing the historic fine funding from Stuffy, where Corona bars vaccine candidate that we just announced a few minutes ago and provide a brief status one or activities around.
Novavax Koby 23 73.
Then provide a recap of the positive phase three results for nano flu that we announced back in March following a quick update on our respect program.
Entre Xeno will then provide a financial overview after that Greg Glenn John and I will be available for questions.
Stan Erck: After that, Greg Lynn, John, and I will be available for questions. As a prelude to my remarks, I just want to say that our accomplishments so far in 2020, including our progress in our influenza and COVID-19 vaccine programs, are the most impressive in the company's history. So, let's get started.
As a prelude to my remarks I.
Just wanted to say that are accomplished so far accomplishment. So far in 2020 included or progression or influenza and co bid 19 vaccine programs are the most impressive in the company's history.
Let's get started.
Beginning with our Corona buyers program, we're thrilled that sheppey has chosen to invest up to 388 million funding in support of 23 73, Sheppey CEO indicated this arrangement represent shift the single biggest investment to date.
Stan Erck: Beginning with our coronavirus program, we are thrilled that CEPI has chosen to invest up to $388 million in support of 2375. As CEPI's CEO indicated, this arrangement represents CEPI's single biggest investment. The CEPI funding will allow us to advance our candidate through phase two. It will also support the rapid scale-up of the vaccine antigen and our proprietary matrix M antigen, critical components of 2370. In addition, this funding will allow us to dramatically increase our large-scale manufacturing capability. As we previously announced, we identified 2373, which will incorporate Matrix M to enhance our immune response and immediately begin testing in preclinical studies. Our studies have shown that 2373 is highly immunogenic in animal models, including mice and non-human primates. High levels of spike protein-specific antibodies with ACE2 human receptor binding domain blocking and SARS-CoV-2 wild-type virus neutralizing antibodies were observed after a single immunization.
Steffi funding will allow us to advance or candidate through phase two.
We will also support the rapid scale up of the vaccine antigen and are proprietary matrix, Jim edge, but.
The critical components of 23 73.
In addition, this funding will allow us to dramatically increase or large scale manufacturing capabilities.
As we previously announced we identified 23, 73, which will incorporate matrix him to enhance our immune response and immediately begin testing in preclinical studies. Our studies have shown that 23 73 is highly immunogenic in animal models, including mice.
Stan Erck: In addition, the already high micronutrient titers seen after one dose increased 8-fold with a second dose. It is generally accepted that high titer microneutralizing antibodies are evidence that a vaccine is likely to be protective in humans. We are now launching our Phase 1-2 trial, clinical trial of 2373. In a few days, we will initiate the placebo-controlled, observer-blinded Phase 1 portion of the clinical trial in approximately 130 healthy adults in Australia. The assessments include dosage amount and number of vaccines. The Phase 2 portion of the trial will likely begin in Australia and the U.S. Importantly, we are just a couple months away from human clinical data, as immunogenicity and safety results from Phase 1 are expected in July. As I mentioned earlier, the additional funding from CEPI will have a significant impact on our ability to quickly begin manufacturing. It will now be possible for us to begin manufacturing the vaccine with a target of manufacturing 100 million doses by the end of 2020 and with a goal of escalating production to 1 billion doses in 2020. However, I should point out that these production goals are based upon two key assumptions.
Non human primates high levels of Spike protein specific antibodies with ace to human receptor binding domain, Lucky negativity and Sars koby too well type virus neutralizing antibodies were observed after a single immunization.
In addition, the already high Microneutralization titers seen after one dose increased eight gold with a second dose.
It is generally accepted that hi, Mike Hi, tighter micro neutralizing antibodies are evidence of the vaccine is likely to be protective in humans.
We're now launching our phase one two trial clinical trial of 23, 73, and a few days, we will initiate a placebo controlled observer blinded phase one portion of the clinical trial and approximately 130 healthy adults in Australia.
Assessments include dosage amount number of vaccinations.
Phase two portion of the trial will likely be getting in Australia, and the U.S. Importantly, Leer just a couple of months away from human clinical data as Immunogenicity and safety results for the phase one are expected in July.
As I mentioned earlier, the additional funding from Seppi, we'll have a significant impact on our ability to quickly begin manufacturing. It will now be possible for us to begin manufacturing the vaccine with a target of manufacturing 100 million doses by the end of 2020 and with the goal of escalating production too.
1 billion doses in 2021.
I should point out that these production goals are based upon two key assumptions those assumptions are regarding the actual dose of the approved product manufacturing yields that we actually achieve large scale.
Stan Erck: Those assumptions are regarding the actual dose of the approved product and the manufacturing yields that we actually achieve at large scale. We previously announced an agreement with Emergent Biosolutions to provide contract development and manufacturing services, including supplying Novavax with GMP vaccines for Phase I and Phase II clinical trials. We are also exploring larger-scale manufacturing capabilities globally.
We previously announced an agreement with emergent biosolutions to provide contract development of the manufacturing services, including supply Novavax with GMP vaccine product for phase one phase two clinical trials, we're also exploring larger scale manufacturing capabilities globally.
Details are those efforts will be forthcoming coming months.
Stan Erck: Details of those efforts will be forthcoming in the coming months. The significance of this funding cannot go understated, nor can our appreciation for CEPI's vote of confidence in our technology platform and progress. I'd also like to reiterate my thanks to everyone at Novavax. It has been an enormous undertaking to get this program up and running since January.
Significance of this funding cannot go understated, Norfolk, and our appreciation for sepsis vote of confidence in our technology platform and progress I'd also like to reiterate my thanks to everyone Novavax, there's been an enormous undertaking to get this program up and running since January we have made much progress at a very short period of time.
Stan Erck: We have made immense progress in a very short period of time to make this vaccine a reality. Now, let's move on to Novavax's most advanced program, NanoFlu, our recombinant quadrivalent seasonal influenza vaccine. While COVID-19 has grabbed the world's attention, we believe that nanoflu will also be a game changer for the prevention of influenza. The Phase 3 data we delivered validates its potential. Given our detailed March update for the program upon announcement of the Phase 3 results, I'll just provide a high-level recap for today. To put it simply, we achieved every single one of our goals in the Phase III trials. The trial included 2,650 clinically stable adults, 65 years of age and older, at 19 U.S. sites. It was randomized one-to-one between nanoflu and fluzone, and subjects were given a single vaccination. The data we have presented to date has been the 28-day result.
To make this vaccine to reality.
Now, let's move on to know the taxes, most advanced program nano flu, our recombinant quadrivalent seasonal influenza vaccine well covered 19 has grabbed the world's attention. We believe that Nanofluid will also be a game changer for the prevention of influence.
Stan Erck: The trial's primary objectives were to demonstrate non-inferior immunogenicity of nanoflu compared to flu zone quadrivalent using the day 28 ratio of geometric mean titers and differences in seroconversion rates. The primary objectives also included the overall safety of nanofluorescence. We measured immunogenicity by HAI assays using egg-derived reagents. We achieved the primary endpoints for all strains, including the vaccine. The anaflu is well tolerated and has a safety profile comparable to flu zone quadrants. Secondary endpoints were to evaluate the immunogenicity using both egg-propagated virus and wild-type reagents for all four vaccine homologous strains and select drifted strains at day 28. For these endpoints, nanofluid demonstrated significantly higher geometric mean titers and seroconversion rates than fluzone quadrivalent across all four strains included in the vaccine.
Stan Erck: Nanoflu also demonstrated significantly higher geometric mean titers and seroconversion rates in fluzone quadrivalent for four grifted H3N2 strains not included in the vaccine but circulating. We believe this is validation of Nanoflu's ability to overcome issues related to egg adaptation and antigenic drift, which are major issues with current vaccines. We look forward to providing additional detail from the study in the near future, including the cell-mediated immunity responses, the T-cell responses, and microneutralization data. We believe these data will differentiate nanoflu from bleeding lysinfexy.
Stan Erck: Nanofluid has fast-track status from the FDA, and we plan to use the agency's accelerated approval path. We will conduct our required CMC activities in parallel with compiling the immunogenicity and safety portion of our BLM. We will communicate additional timelines once we have finalized our. Before I turn the call over to John, a quick update on our RISVAX vaccine. We continue to believe in our RISVAX vaccine. We're the only company to have demonstrated potent efficacy in clinical trials in both the older adult population and by vaccinating pregnant women to protect their. While not meeting the pre-specified primary endpoints for the phase 3 trials, we observed that the vaccine had significant effects on hospitalization and pneumonia in both trials, which provides critical insights into the continued need for our RSV vaccine. We believe that we can design an affordable pathway to a licensed product over the coming years and are designing new clinical trials that we believe can take us to a licensed product. Now that we have a strengthened balance sheet, we will continue to invest in this. Now, let me turn the call over to John.
The phase three data, we delivered validates its potential given our detailed March update for the program upon announcement of the phase three results ill just provide a high level recap today.
To put simply we achieved every single one of our goals in the phase three trial. The trial included 2650 clinically stable adults 65 years of age an older an 18 year stage.
Randomized one to one between Nanofluid fluzone.
Subjects were given the single vaccination. The data we presented to date has been the 28 day results.
Trials primary objectives were to demonstrate non inferior immunogenicity of nanofluid compared to Fluzone quadrivalent using the day 28 ratio of geometric mean titers and the differences in zero conversion rates are primary objectives. Also included the overall safety of nano flu, we measured immunogenicity by age.
Hey, I ask phase egg derive creators we achieved the primary endpoints were all strange include indexing.
And as little as well tolerated and head of safety profile comparable to Fluzone quadrivalent.
The secondary endpoints were to evaluate the immunogenicity using both egg propagated buyers and wild type reagents for all four vaccine homologous streams and select drifted strange at day 28.
Well these employees nanofluid demonstrated significantly higher geometric mean titers, Joe conversion rates than Fluzone quadrivalent across all four screens included in the vaccine.
Adam flu also demonstrated significantly higher geometric mean titers zero conversion rates and clues on quadrivalent for drifted h. three into strange not included in the vaccine, but circulated this year.
We believe this is validation of nanofluid ability to overcome issues related to ache adaptation antigenic drift, which are major issues with current vaccines.
We look forward to providing additional details from the study in near future.
Clearly the cell mediated immune responses.
You sell responses Microneutralization data, we believe these data will differentiate nanofluid for bleeding license vaccines.
Nanofluid has fast track status from the FDA and we plan to use the agencies accelerated approval pathway.
We'll conduct our required CMC activities in parallel with compiling the immunogenicity and safety portion of our belief.
We will communicate additional timelines once we have finalized our plan.
Before I turn the call over to John quick update on our respects vaccine. We continue to believe it or Rosebank sexy. We're the only company to have demonstrated potent efficacy in clinical trials. Both the older adult population and by vaccinate pregnant women to protect their infants well not meeting the pre specified primary endpoints for that.
Phase III trials, we observed that the vaccine had significant effects on hospitalization and ammonia in both trials, which provides critical insights on the continued need or RSV vaccine.
We believe that we can design and affordable pathway to a license product over the coming years and are designing new clinical trials that we believe could take us to a licensed product now that we have a strengthened balance sheet. We will continue to invest in this program.
Now, let me turn the call over to John.
Thanks, Dan today, we announced financial results for the first quarter of 2020.
John Joseph Trizzino: Thanks, Dan. Today we announce financial results for the first quarter of 2020. For the first quarter, we reported a net loss of $25.9 million, or $0.58 per share, compared to a net loss of $43.2 million, or $2.11 per share, in the first quarter of 2018. The reduction in net loss is mainly due to reduced R&D expenses.
For the first quarter, we reported a net loss of $25.9 million or 15 cents per share compared to a net loss of $43.2 million for 2011 cents per share in the first quarter of 2018.
The reduction in net loss was mainly due to reduced R&D expenses.
Revenue in the quarter decreased 15% $3.4 million from $4 million for the same period of 2018 and the decrease was primarily due to the completion of the prepare trial in 2019, partially offset revenue reported from southeast funding.
John Joseph Trizzino: Revenue in the quarter decreased 15% to $3.4 million from $4 million for the same period of 2019, and the decrease was primarily due to the completion of the PREPARE trial in 2019, partially offset by revenue recorded from CEPI's funding. R&D expenses decreased 52% to $16.9 million in the first quarter of 2020 compared to $35.5 million in the same period of 2018. This decrease was primarily due to decreased development activities of ResVax, lower employer-related costs, and other cost savings due to the Catalan transaction in 2019. However, G&A expenses increased.
R&D expenses decreased 52% to 16.9 million in the first quarter of 2020 compared to $35.5 million in the same period in 2018.
This decrease was primarily due to decrease development activities arrays, vacs lower employee related costs and other cost savings due to the cattle and transaction in 2018.
Gina expenses increased.
The increase coming in at $9.4 million in the first quarter of 2020 as compared to $8.7 million for the same period in 2019.
John Joseph Trizzino: Increase coming in at $9.4 million in the first quarter of 2020, as compared to $8.7 million for the same period in 2019. As of March 31, 2020, Novavax had $244.7 million in cash, cash equivalents, and restricted cash. Net cash used in operations for the first quarter of 2020 was $23.1 million, compared to $50.6 million for the same period in 2019. During this quarter, we further strengthened our balance sheet. In the first quarter of 2020, we raised $186 million in net proceeds. And from April 1st to May 8th, we raised an additional $74 million in net proceeds for a total of $260 million since the end of 2019 through our ATM offering. Novavax's cash position as of today is now in excess of $300 million. That concludes my financial review, and now I'll turn the call back to Stan.
As of March 31st 2020, Novavax had 244.7 million a cash cash equivalents unrestricted cash net cash used in operations for the first quarter of twice why was $23.1 million compared to $50.6 million for the same period 2018.
During this quarter, we further strengthened our balance sheet.
In the first quarter of 2020, we raised $186 million in net proceeds and from April 1st in a.
We raised an additional $74 million in net proceeds for a total of $260 million since the end of 2019 through our ATM offerings.
No that cash position as of today is now in excess of $300 million.
That concludes my financial review and now I'll turn the call back to stand.
Thanks, John we look forward to updating you on the phase one clinical trial of 23 73 in July.
Stan Erck: Thanks, John. We look forward to updating you on the phase one clinical trial of 2373 in July. And with that, I'll turn it back over to the operator for Q&A.
With that I'll turn it back over to the operator for acuity.
Thank you.
Operator: Thank you. As a reminder, ladies and gentlemen, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A list. And I'm sure that the first question comes from the line of Michael Higgins with Landenburg-Bauman.
As a reminder, ladies and gentlemen to ask a question you will need to press star one on your telephone.
To withdraw your question press the penalty please standby, while we compile the Q1 day roster.
You know show up first question comes from a line of Michael Higgins with Ladenburg Thalmann.
Thanks, EFOR hi, guys how are you.
Michael Guba: Thanks Jeff for... Hi guys, how are you? Great. Great. Congratulations on the SPEPI funding. That's impressive, especially to have the biggest they've put out so far. I'm looking ahead a bit, trying to understand, with this ACT accelerator, what kinds of margins you can expect. And do we look at any...
That rate with great. Thank you.
Congrats with the funding that's impressive, especially the has a big within what else so far.
Looking ahead, a bit on interest and DCT accelerator seed margins you can expect.
And do they look at anything are you from guilty as we've invested here on the discussions you're having with investment community Bank.
Stan Erck: and the discussions they're having with each other.
Stan Erck: The investing community
Stan Erck: the investing community. Thanks.
Yes, it's it's a bit early to predict margins at this point.
Stan Erck: Yes, it's a bit early to predict margins at this point, but we do know that we're going to be producing on a very large scale. And we should be able to have efficient production. But we don't know the cost of that production yet. And nor do we know what the selling price is. So it's a new world out there in a pandemic setting. And my expectation is that we'll have a reasonable gross profit operating margin.
We do know that we're going to be we expect to be producing it very large scale and we should be able to have efficient production.
Cost of that production, yet and nor do we know the with the southern pressures. So it's it's a new world out there.
And then setting and my expectation is that we will have.
Reasonable gross profit operating margins.
[noise]. Thanks.
Greg Lynn: Thanks. The question would be looking ahead to this summer. Just a follow-up from two months ago on the last call, which is once you've got data in July, you talked a bit about the schematics of it. You can give us kind of an update as to how you roll into a larger study coming into the fall. Does the IMD stay open? Is it a separate study, separate sites? Obviously, you want to review the data before you can start moving forward, but it sounds like it's happening in a bit of a rolling fashion. Can you give us kind of an update on that?
The question would it be looking ahead to this summer and just a follow up from two months ago in the last call. It all of which is once you've got data in July you talked a bit about the schematic. So he can give this coming up how are you rolled into a larger study coming into the fall as the.
Hi, Andy stay open is is that it separate studies separate sites.
Obviously, you want to review the data before you can start moving forward, but sounds like it's happening a bit of a rolling fashion. It was kind of an update on that thanks.
Great I can jump is yes, so we'll be done in dry Andy.
Greg Lynn: Great, I can jump in. Yeah, so it will be done under IND. The, you know, the data will be filed with IND, and when we see the phase one data, we've written the protocol so that we can pivot rapidly into a later stage trial. Right now, we anticipate that that will be a phase two trial with on the order of 2,000 subjects. However, there's a lot of discussion about how one might accelerate that, so we're doing our best just to be prepared with sufficient animal data and human immunogenicity data to take the next step. And you'll see, you may have seen, we announced that on Wednesday, we're going to give a more detailed update on the COVID preclinical and next steps.
The you know the data we filed indeed, when we see the phase one data.
We've written the protocol so that we can pivot rapidly into later stage trial right now we anticipate that that would be a phase two trial. The order of 2000 subject wherever there's a lot of discussions about how one might accelerate that so we're doing our best just to be prepared with sufficient animal data in human Immunogenicity.
Today to take the next step.
And you'll see you may have seen we announced that on Wednesday, we're going to give a more detailed update on the on the covitz preclinical and steps next steps.
Yes, I noticed that.
Greg Lynn: Yeah, I noticed that. That's helpful. Okay.
Okay got it glad to some of it yet.
Greg Lynn: Okay, glad you saw that. Yeah.
And then last one I'm sure it's a busy Q.
Stan Erck: And the last one, I'm sure it's a busy queue, just trying to get a sense for global manufacturing. This is a heck of an update from up to $10 million per month by year-end to $100 million by year-end, and possibly billions next year.
Just trying to get a sense for the global manufacturing others. The heck of an update from the up to 10 million per month by year end to 100 million by year end 20, possibly billings next year I would think it depends not just on yields you mentioned on the call, but also the securing access to manufacturers.
Stan Erck: I would think it depends not just on yield, which you mentioned on the call, but also securing access to manufacturers. Obviously, CEPI can help with that, but, you know, a lot of the folks that are involved in this, say the top five globally, they've had a lot of press releases and comments out about securing other manufacturers. How confident can you be that you'll have enough ability to manufacture? Is that something that CEPI helps with, that WHO helps with? How do they kind of think about that?
Have you can help with that.
But yeah, a lot of the folks that are involved the stay the top five globally. It had a lot of press releases comments out about securing other manufacturers are confident can be that you'll have inox ability to manufacture.
That's something that the helps with that who helps with R&D cannot think about that.
So we didnt just start thinking about that and so we've been working for awhile.
Stan Erck: So we did just start thinking about that, and so we've been working for a while. We have been very optimistic about our data. We've seen this before.
We have been very.
[noise] optimistic about our data we've seen this before we've seen due to Corona buyers is we see.
Stan Erck: We've seen it with two coronaviruses. We've seen it with pandemic flu viruses. We've seen it with Ebola, where we get early clinical data, or I'm sorry, early preclinical data, and that in mice, that translates into non-human primates, that translates into humans, and then phase one and phase two trials with immunogenicity. We bet.
Flu viruses, we've seen order book, where we get early clinical data.
Sorry early preclinical data.
That in mice that lend that translates into non human primates that translates into humans and then phase one phase two trials with the new tradition, we bet.
And then of course as you know we don't have phase one results, yet we bet a while ago.
Stan Erck: And of course, as you know, we don't have phase one results yet. We've got a while to go before our technology would give us good data in phase one. So we didn't wait. You know, we didn't lose six months by waiting for phase one data. We started on it right away and are securing sufficient capacity to be able to make the statement that we made in this press release.
That are our technology would give us good day that pays one so we didn't wait.
We didn't lose six months by waiting for phase one data, we started about it right away and or securing sufficient capacity.
To be able to make the statement that we made in this press release.
I appreciate how congrats again, thanks guys.
Stan Erck: I appreciate it. Congratulations again. Thanks, guys. Thank you.
Thank you.
Thank you you know next question comes from the line of Mike Montani with B. Riley.
Mayank Mamtani: Thank you. And our next question comes from the line of Mayank Mamtani with B. Reilly. Pardon me, Mayank Mamtani, please check your mute button. And our next question comes from the line of Vernon Bernardino with H.C. Wainwright.
Pardon me, Mike Montani, please check your mute button.
And our next question comes from the line of Vernon Bernardino with H.C. Wainwright.
Hi, guys. Thanks for taking my question and congrats on the.
Vernon Tolentino Bernardino: Hi guys, thanks for taking my question and congrats on this amazing achievement. I'm very curious and... That's because I'm very excited about your very large amount of funding that you got from Stepi. I was wondering if you could tell me how... What exactly excited them the most as far as the vaccine programs out there made them choose your program in particular? And as far as the candidates were concerned, you chose COVID-2373. How many candidates did you screen and what led to the choice of that particular candidate for going forward into clinical trials?
Amazing achievement.
I'm very curious and.
Because I'm very excited or is there a very large.
Amount that funding that you've got some stuffy I was wondering if you could tell me.
How.
What exactly.
If that had been the most as far as the.
Our vaccine programs out there who choose to your program in particular and as far as the kind of that concerned.
You chose koby, two or 373, how many kind of bigger screen and what does that too.
The toys of that particular candidate for going forward into a clinical trial.
Thanks for it and all all answer the first question and let Greg you answered the second part of the question.
Stan Erck: Thanks, Vernon. I'll answer the first question and let Greg answer the second part of the question.
I think that they I think what got them.
Unnamed Speaker: [inaudible]
Most interested in or program was the fact that we have <unk>. You know we are an experienced emerging infectious disease vaccine computer platform Atlas has produced as I mentioned in my last comment.
Greg Lynn: I think what got them most interested in our program was the fact that we are an experienced emerging infectious disease vaccine company. Our platform has produced vaccines and shown not only good immune responses and safety but efficacy in models, in animal models and non-human primate models. We've done, in Ebola, we probably had the best immune responses ever gotten from a vaccine, you know, with our matrix-attributed vaccine. So I think it's the experience of that combined with the fact that our process has been scalable. You know, we've done it with the flu. We've done it with Ebola. RSV, and so we have a lot of confidence we can scale it. And I think, you know, when you ask them how they feel, when looking across the field, how do they compare it to others? I think there are a lot of other good technologies out there that just have not had the experience that we have, and so there are, both with immune responses and with scale. And so ours probably represents a fairly safe bet, and the others are exciting.
Has produced vaccines are shown.
Good to be responses in safety and efficacy in models.
Animal models non human primate models, we've done a boatload, we probably had the best immune responses ever gotten from a vaccine.
100 matrix management action. So so I think it's the experience of that.
Combined with the fact that are or process has been scalable.
On it with flu we've done it with.
RSV and so there's a we'd have a lot of confidence we can scale I think you know when you ask who are they looking across the field, how do they compared to others I think theyre awful lot of other good technologies out there, but just should not have you experience that we have and so there's there's a.
And in both with the immune responses and with and with skill and so it's a ours is probably represents a fairly shake, but and the others are exciting and time will tell.
Yes, Hi, Vernon Thanks for your support graduates to.
Stan Erck: Hi Vernon, thank you for your support.
Greg Lynn: I'll jump on this question. I think the hallmark of our vaccine is its immunogenicity. It's very immunogenic, and we were able to construct some good assays to demonstrate that, and so I think that was important. So, as you asked, we actually, I think, had about 30 constructs we made in a short period of time, and we did evaluate them based on several factors, so stability, productivity, because we knew a lot of doses would be required for immunogenicity, and I think, you know, when we We'll have a half hour talk on our COVID program.
Jeff on this question I think you have a hallmark of our of our vaccine is immunogenicity.
It's very immunogenic, and we were able to construct some good assay is to demonstrate that and so I think that's because that was important. So we as you asked you know we actually I think at about 30 constructs. We made in a short period of time and we did evaluate them based on several factors so stability.
Productivity, because we knew a lot of doses would be required in immunogenicity and I think you know when when we look at our Immunogenicity Ma'am you may notice on Wednesday, we're going to provide some detail or whatever of half an hour talk on our covert program, you'll see our preclinical data I think when they saw that.
Greg Lynn: You'll see our preclinical data. I think when they saw that, you know, that was, it was, you know, very compelling that the vaccine should work and be protective, so I think that combination immunogenicity, you know, productivity, stability of the construct, these are proteins that are inherently can be unstable, and their structure is really critical, and I think, you know, it's a mature technology. We just completed a phase three trial, you know, with the same kind of construct. It's a recombinant nanoparticle, matrix M. We had very good results there, so I think all those things, you know, have come together at this moment. We're very excited and, you know, grateful that CEPI stepped up to support us at this magnitude.
That is it is very compelling that the vaccine should work can be protected so I think at that combination immunogenicity.
You know productivity stability of the construct these are a proteins that are inherently can be unstable and their structure is really critical.
Thank you notes that mature technology, we just we just completed a phase three trial.
With the same kind of constructs of recombinant nanoparticle matrix M. At very good results. There. So I think all those things.
You know have have come together at this moment, we're very excited.
You know grateful itself he stepped up to support as of this magnitude.
Great to follow through on that.
Vernon Tolentino Bernardino: Great. Two follow-ups on that that are related. So one part of the deal is to increase production of the matrix adjuvant. What exactly is that for? And then, Stan, you mentioned that you saw high neutralizing antibodies just after a single dose. Is part of the thinking behind all this such that if you need only a single dose, but you're testing, let's say, V222 doses, but because of matrix M, the availability of it allows you to get away with a single dose, does that play into the whole thinking about the one billion doses in 2021?
Got a related.
So what part of the deal is to increase production of matrix M estimate what exactly is that for and then as Daniel mentioned that Oh, Hi, neutralizing antibodies just after a single dose.
As part of the thinking and all the such that if you don't need I'll only a single dose, but you're testing lets say.
The two to two doses, but because of a me took them the availability of it allows you to get away with a single does that play into the whole thinking about though though 1 billion doses by the by and 2021.
Well I think I'll, let Greg respond.
Stan Erck: Well, I think I'll let Greg respond.
Greg Lynn: Yeah, I think, first of all, I think we're not seeing, you know, real limitations with the adjuvant supply. So our, you know, our staff has worked very hard to make sure when you look at those dose numbers that it's not going to be limited by either. So it's a relatively simple process to make Matrix M. It's a very good adjuvant.
Yes, I think you know we first of all I think we're not seeing.
You know real limitation with the agile supply. So our arc staff has worked very hard to make sure. When you look at those dose numbers. It is not going to be limited by by either.
So it's relatively simple process to make matrix M. It's very good answer, but we're going to look at this in the trial setting you know the as you know the after one dose we get a very good response, we get neutralizing antibodies.
Greg Lynn: You know, we're going to look at this in the trial setting. You know, as you note, after one dose, we get a very good response. We get neutralizing antibodies, and you know, we, we, we see dose varying, you know, this is, this is a virus, however, it's highly infectious. It has a very tight binding to the human cell, so disrupting that is, you know, going to be very important. And there could be a lot of merits in having really high neutralizing antibody levels, and, you know, we're going to weigh all those factors as we move into our late stage trials. We'll have the data to look at that, and I think we have assays that are really meaningful, they're conservative in terms of neutralization, they're functional in terms of blocking receptor binding, and we think it gets to the heart of the critical nature of So we're going to take into account all those factors, I think, when making the dosing decisions going forward.
And you know we see dose very.
You know this is this is a virus however, as highly infectious.
It has a very tight binding to the human cell.
So disrupting that is you know going to be very important.
There could be a lot of merits and having really high neutralizing antibody and we're going to we're going away all those factors as we move into our late stage trials will have the data.
To look at that and I think we have essays that are really meaningful their conservative.
Terms neutralization their functional in terms of blocking receptor binding and we think it's you know gets to the heart of the critical nature of how this infection spreads. So we're going to take if in fact, all those all those factors I think for making the dosing decisions going forward.
Great. Thanks for the question a follow ups I'll go back and I feel or.
Greg Lynn: Great. Thanks for the question and the follow-up. I'll get back to you with other questions or follow-up offline. Thank you.
With other question or follow up offline. Thank you.
Do you.
Thank you it as a reminder, ladies and gentlemen, if you have a question. Please press star one on your telephone once again that star one.
Vernon Tolentino Bernardino: Thank you. And as a reminder, ladies and gentlemen, if you have a question, please press star 1 on your telephone. Once again, that's star 1. Our next question comes from the line of Mayank Mamtani with B. Reilly.
Our next question comes from the line of Mike Montani with B. Riley.
Hello can you have you guys, though.
Mayank Mamtani: Can you hear me guys now? Okay, finally. I got disconnected first, and then you couldn't hear me. Congratulations on the update and thanks again for taking my questions. Very quickly, on the Phase 1 study design, I noticed that you are testing those without matrix M at you. And so I'm just curious sort of what's the rationale for that, doing with and without matrix M. And also, as you think about the IgG antibody assessment, I'm just curious how you think about what you learned from there about the other endpoints, the more core endpoints of... Geometric Mean, ELISA units, Could you maybe talk to him about that?
Yes, yes, yes, okay. So haley I got disconnected from US and then you are right. So you can damage congrats on the update and thanks again for taking my questions.
They quickly on the under Phase one study design I noticed that.
Testing a doors without matrix in that you've been so I'm just curious.
What's the rationale for the I'd.
Doing that in the Dallas, Egypt Salmon and also as you think about the I.D. antibody assessment I just curious how do you think about what you learn from the I bought the other endpoints to more coal endpoint. So.
Oh, you make no. These units in a in others makes your conversion could you maybe talk to that.
Yes, that's great question so.
Greg Lynn: Yep, that's a great question. So, look, you know, whenever you do a trial with an adjuvant with a new compound like this, you need to clearly demonstrate the adjuvant effect. So, you know, that really is important, and it allows you to compare and contrast safety and immunogenicity. With our Ebola vaccine, which I think is a very good blueprint for the immune response we'll see here, we could see the adjuvant was critical, and that was, you know, important for going forward for regulators and, of course, public health and ourselves. So, that's its role, you know, is to demonstrate the need for the adjuvant. You know, the different measures, all, you know, they are kind of, if you will, orthogonal views of the immune response.
Look you know whenever you do a trial with it adds but with the new compound like this you need to clearly demonstrate the ads that effect. So you know that really is important and it allows you to compare and contrast, the safety immunogenicity with our Ebola vaccine, which I think is a very good blueprint for the immune response.
We'll see here or we could see the agile was critical and that was important for going forward for regular regulators and of course, you know public health. It ourselves. So so that's his role you know it's tough to demonstrate the need for the as Vince.
You know the different measures all.
You know they are they're kind of if you will orthogonal looks at the at the immune response.
Greg Lynn: You know, the overarching response is a spike response, so we measure IgG. You know, because people are immune naive, we expect to have very high levels of seroconversion, on the order of 99%. So, you know, that would be the norm here and I think we're going to see that in our adjuvanted, you know, especially our adjuvanted two-dose formulation. The other assays, you know, measure different things. So, you know, as I mentioned earlier, receptor binding is the first event. It's an important event if you can block that. It's a very high affinity event, so it takes a really good antibody, in our opinion, to block that binding. Neutralization is a different look. It's probably, you know, a combination of what you get from receptor binding blocking and some other epitopes, some other immune responses to the rest of the spike protein. So, you know, when we look at all of them, as you'll see on Wednesday when we talk about this, there's a really nice relationship between all those immune measures, which makes sense, and I think, you know, those different looks at the immune response really give us a lot of confidence that the vaccine should work.
Over the overarching responses a spike response, so we measure the idea G.
You know because people are immune naive we expect to have very high levels of zero conversion on the order of 99% so.
That would be that would be the norm here and I think what we're going to see that in our AD unit, you know, especially gradually to dose formulation. The other assays you know measure different things. So that you know as I mentioned earlier receptor binding is a first events. It's an important event if you can walk that.
It's a very high affinity event. So it takes a really good antibody in our opinion to block that that a binding neutralization is a there's a different look it's probably you know a combination of what you get from receptor binding blocking and some other epitope some other immune responses to the.
The rest of the spike proteins. So when we look we look at all of them. They you as you'll see on Wednesday, when they talk about this there's a really nice relationship between all those immune measures, which makes sense and I think you know those different looks at the immune response really give us a lot of confidence the vaccine should work.
Great. That's super helpful and then on dividends day presentation and as human this.
Mayank Mamtani: Great, that's super helpful. And then on Wednesday, I'm assuming this is a combination of the non-human primate and the mice study that you talked about. Any incremental color you could give on, I think you said 30 constructs you tested in mice, but in the non-human primate, was it just one candidate you tested? Yeah, yeah, yeah, yeah, we do.
Combination up and non human primate and ER and the mouse study that you talked about entering.
And any incremental color you could deadline I think you said take on specs you tested in mice, but in the non human primate was it just one candidate we tested them, yes, yeah. We down selected by time, you got to nine non human primate, we generated a lot of confidence in the in the construct we made so.
The non human primate is just the.
Greg Lynn: That's just the 2373 construct.
2373 construct.
Okay, Great and just final question on now and also I did any like in native regulatory Todd that become available obviously, given the current environment beyond the ones you, obviously have legs as far as traffic and the accelerated approval that.
Mayank Mamtani: Okay, great. And this final question on NanoFlu, are there any alternative regulatory paths that could become available, obviously given the current environment beyond the ones you obviously have, like the fast track and the accelerated approval, that are potential options for NanoFlu?
Hi, Prudentially options bananas.
Oh, you know that's a good that's an interesting question. So right now no I think we expect to go through accelerated approval, we have an obligation.
Greg Lynn: You know, that's a good question. That's an interesting question. So right now, no, I think we expect to go through accelerated approval. We have an obligation, you know, to do a post-licensure efficacy study.
You know to do a post licensure efficacy study I think we're on track for them I think you know it is very very good data.
Greg Lynn: I think we're on track for that. I think, you know, it is very, very good data.
I think you know it's you know intriguing there was a lot of flow.
Greg Lynn: I think, you know, it's intriguing. There was a lot of flu. When COVID came around, it was really dominating, and it's going to be interesting. I think, you know, what COVID will do for the flu is, we hope, generate interest in preventing this seasonal disease because every year there are a large number of people that die from seasonal influenza, and we need a better vaccine. So I think we have very good evidence we have a better vaccine going forward, and so I think that's going to emphasize this COVID, this pandemic, will emphasize the problem we see every year with an annual seasonal influenza vaccine. And, you know, the issues we are addressing are the key issues, the drift, the fact that vaccines are not able to induce immune responses that recognize these drift strains, and especially around H3N2.
Covert came round it was really dominated and it's going to be interesting I think you know, what's cobot will do for flow as.
We hope generate interest in preventing a seasonal disease because every year. There's a large number of people die from that from a from seasonal influenza, we need a better vaccines. So I think we have very good evidence we have a better vaccine going forward and so I think thats going to emphasize this covances pandemic with size the.
The problem, we see every year with an annual seasonal influenza vaccine and deal with the issues. We are addressing all the key issues that the drift effect vaccines are not able to induced immune responses to recognize these drift strains.
Greg Lynn: So our data looks very strong in that arena, and I think, you know, shortly we're going to be able to show that the CMI data and, frankly, the phase 2 data will be published shortly as well, so you'll see that. We think that's the missing arm of a good immune response to flu in older adults, and I think you'll see our vaccine, I think we've mentioned it before, really gives a very good antigen-specific effector cell response, and we think that's an important piece of the puzzle here going forward.
Especially around these three into so our data looks very strong in that in that arena.
Thank you know shortly we're going to be able to show that the see a my data.
And frankly the of the phase two data will be published shortly as well so you'll see that we think that's the missing arm of a good immune response to flew in older adults and I think you'll see our vaccine. If we've mentioned it before really gives a very good antigen specific.
Effector cell responses, we think that's an important piece of the puzzle here going forward.
Great. Appreciate you taking my question and look forward to brought the non us to update and then the July update under Phase one study.
Mayank Mamtani: Great, I appreciate you taking my question and look forward to both the nano flu update and then the July update on the phase one study for COVID-19.
Thank you.
Mayank Mamtani: Thank you.
Thank you.
Your next question comes from the line of burning Bernardino with H.C. Wainwright.
Vernon Tolentino Bernardino: And our next question comes from the line of Vernon Bernardino with HC Waybright.
Hi, guys. Thanks for taking my follow up one thing as far as vaccines concern.
Vernon Tolentino Bernardino: Hi guys. Thanks for taking my follow-up. One thing as far as the vaccines are concerned, You'll probably go into this at the World Vaccine presentation, but what is the actual amount of protein for the COVID-2373 candidate that is actually being administered?
You are probably going to this at the award vaccine presentation. What is the actual amount of protein or the could be a two or 373 candidate that is actually being administered.
Greg Lynn: Yeah, so we're, you know, I think we mentioned this before, we're using two dose levels in our Phase 1 trial, 25 micrograms and 5 micrograms. It was our experience with Ebola using similar levels that we were really at the top of the dose response S-curve, so 5 and 60, in that case, micrograms were really no different in terms of immune responses, and so, you know, it's our expectation that's likely to be the case here. So, you know, obviously, 5 micrograms is very nice, dose varying, 25 micrograms is relatively low, but, you know, so we're just doing those two arms with Matrix, and then, as you mentioned earlier on, you know, without an adjuvant as a control, so, you know, that's our antigen dose level, 50 micrograms of Matrix, 25 and 5 of the antigen, and we'll be giving that with two doses, or we also have one arm with a one dose, immunization with 25 and 50 of matrix.
Yes. So were you know I think we Miss is before we're in we're using two dose levels in our phase one trial 25 micrograms of five micrograms. It was our experience with Ebola using similar levels that we were really at the top of the dose response S curve. So five in 16 their case micrograms were really.
No different in terms of immune responses and so that's our expectation that's likely to be the case here.
So you're obviously five micrograms very nice.
No sparing 25 micrograms is relatively low but so we're just doing those two arms with matrix.
And then as you mentioned earlier on you know without without an edge that as a control so.
You know that's our that's our energy dose level 50 micrograms of matrix 25 in five of the antigen.
And we'll be giving that with two doses or we also have one arm with the one dose.
Immunization with 2500 50 of matrix.
And as a follow up given sometimes the confusion of the.
Vernon Tolentino Bernardino: And as a follow-up, given sometimes the confusion of the symptoms as far as when you initially look at somebody who's infected with SARS-CoV-2 and people who are also infected with the flu, is there the potential to have a combination vaccine?
Sometimes as far as when you initially you look at somebody has impacted with.
It's probably too and people who are also a impact but the CLO is there potential to have actually a combination vaccine.
Well, Yeah, I think you know, we think about that because where our specialties and restaurant vaccines. Okay. It's Scott it has that potential I think what we need to see where this will go. Many experts think this will become a common annual seasonal issue and you know would make sense.
Greg Lynn: Well, yeah, I think, you know, we think about that because our specialty is the respiratory vaccine. So it's got that potential. I think, you know, we need to see where this will go.
Greg Lynn: Many experts think this will become a common, you know, annual seasonal issue. And, you know, it makes sense to have an accommodation vaccine. It's certainly theoretically possible we could formulate the vaccine. It's the same platform. It's a nanoparticle. How are we using Matrix M in both those settings?
To have a combination vaccine.
It certainly theoretically possible, we can formulate the vaccine. It's the same platforms and then particle a reason matrix M. In both those said he said it's a good thought.
Greg Lynn: That's a good thought.
Because that's probably doesn't go away conceivably if you added it to a seasonal flu vaccine thing you're kind of taking care about even and not really relying on the fact of Oh, the a host of weight is ever going away.
Vernon Tolentino Bernardino: because if it totally doesn't go away, conceivably, if you added it to a seasonal flu vaccine, then you're kind of taking care of both even and not really relying on the fact that the source is completely ever going away.
Yeah, that's a good thought it's good spot.
Vernon Tolentino Bernardino: Thank you.
Well, congrats I look forward to via additional data and.
Vernon Tolentino Bernardino: Well, congrats. I look forward to the additional data and, you know, I'm really rooting for you guys. So, good luck.
Now I'm really really putting guide.
Good luck and bank support Yep. Thanks, Ron.
Thank you and I'm showing no further questions at this time I'll now turn the call back over to see no staying.
Stan Erck: Thank you, and I'm showing no further questions at this time. I will now turn the call back over to CEO Stan Earp for any further remarks.
For any further remarks.
Yeah. Thanks, I <unk> as you can imagine we are.
Stan Erck: Yeah, thanks. As you can imagine, we are We're euphoric in the company. It takes a long time. We've been working to be at this point for at least a decade since I started at the company. In the last six weeks, we've worked on a project that virtually everybody in respiratory vaccines has been trying to do, which is to get a better flu vaccine. Our goal was to get a differentiated flu vaccine, not be as good as the best flu vaccine, but differentiated from that. And we accomplished that, and that alone was a big deal.
Where were you florek and the company. It takes a long time, we've been working to be at this point for at least the decade that I've been at the company.
Stan Erck: And then the coronavirus comes along, and we do what we've been doing for the last half dozen emerging infectious diseases. And we have a lot of confidence, and we're being supported by large groups of academic and non-governmental organizations, and I think corporations, that will help us get to the point where we can help solve this problem. So we're proud of the work we've done, and we're happy we're finally getting recognized for it. And we look forward to reporting on the data in a fairly short period of time. And thanks very much for listening in. And with that, I'll sign off.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.
Unnamed Speaker: [inaudible]
We've had in the last six weeks, we've worked on the project that that.
Actually everybody in respiratory vaccines have been trying to do with just to get a better flu vaccine. The goal is to get a differentiated flu vaccine now not be as good as the best flu vaccine, but differentiated from that we accomplish that and that doesn't alone was a big deal then corona buyers comes along.
We do what we've been doing for well over the last half dozen emerging infectious diseases.
And we have a lot of confidence and will be supported by.
Large groups.
Academic and non governmental organizations corporations that will help us get to a point, where we can help solve this problem. We're we're we're proud to work we've done happy we're finally getting recognize for it and we look forward to reporting.
On data and appeared a short period of time.
Thanks, very much for listening in and the that no sign up.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
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