Q1 2020 Earnings Call
[music].
And your house Trombley.
Good afternoon, and welcome to I know be as first quarter 2020 earnings conference call. An audio webcast with me today are Dr., Sean you onto live I know he is chief Executive Officer, and Chief Medical Officer, John and also I know be as Chief Financial Officer, and Michael Rowe I know be as vice president of commercial.
Earlier. This afternoon I know, we issued a press release announcing financial results for three months ended March 31st 2020, we encourage everyone to read today's press release as well as I know these quarterly report on form 10-Q for the first quarter 2020, which will be filed with the FCC The company's press release a quarterly.
We report will also be available on I know B.S. website at <unk> Dot Com. In addition, this conference call is being webcast at the company's website and will be archived there for future reference.
No that on today's call will be describing investigational products, which have yet received FDA approval.
Please also note that certain information discussed one call today is covered under the safe Harbor provisions of the private Securities Litigation Reform Act, we caution listeners that during this call I know the as management will be making forward looking statements actual results could differ materially from those stated or implied by these forward looking statements due to risks.
Certain teach associated with the company's business. These forward looking statements are subject to a number brisk, including risks related to impacts of an uncertainty related to cope with 18 fluctuations in our financial results and stock price, particularly given market conditions and the potential economic impact of cobot 19, our needs.
A raise additional money to fund our operations for at least the next 12 months as a going concern potential impacts a kobin Nike and on our supply chain risks of our clinical trials, including but not limited to limited to the cost design initiation enrollment, which could continue to be adversely impacted by cobot 19.
Resulting social distancing timing progress in results with such trial trials, the timing and our ability to submit applications for opinion and maintain regulatory approval for our product candidates potential success of our reprioritize pipeline any protected cost savings related to our reprioritized.
Pipeline estimates regarding the potential market opportunity for our product candidates the potential advantages of our product candidates the rate and degree of market acceptance and clinical utility apart I cant, but that's our ability to time, they developed and implemented anticipated manufacturing commercialization and marking capabilities and strategies.
Existing product candidates, our ability to identify new products, our ability to attract and retain key personnel intellectual property breast others detailed in qualified by the cautionary statements contained and I know be as press release and SEC filings, including its most recent annual report on form 10-K and subsequent filings.
This conference call contains time sensitive information that's accurate only as of the date. The election. This my broadcast May 13th 2020, I know the undertakes no obligation to revise or update any forward looking statements reflect events or circumstances. After the date at this conference call, except as may be required by.
A couple securities law with that I'd like now turn the call over to Dr., Sean you Watch live.
Thank you Tom Trump and now welcome everybody to I know via its first quarter 2020, <unk> earnings Conference call.
We hope that everyone is staying safe and healthy during this going and we appreciate your continued interest and I know via.
As we started the new year, we were able to successfully strengthen our balance sheet to help fund our operations into 2021, as we continue to monitor and assess the potential impact of the called it might be on them.
The challenge is timing from disciplined dynamic have accelerated things all of Cowen in the short span of a few weeks Colby 19 cousins Magna global economic landscape as the country slowly and cautiously tries to return to a new normal.
On the law School I mentioned that we work closely monitoring the situation and continually assessing the potential impact of called <unk> nine pm on our business.
Well today, we do know that Endemics effect is going to be we dose for some time.
And we do know that recent events.
We'll be more than a footnote.
We'll report of corporate America.
As a physician and public health professional.
I also know that our patients hospitals and clinics.
We'll have to cope with the off them off of copied 19 for sometime before they would be he preplanned dynamic level of operation and Reengage on non called it related clinical trial and investigations.
Notwithstanding this or not what is called in 19 in 2020, we continue to make progress towards multiple catalysts you know a best in class late stage therapeutic pipeline, we continue to advance some of our programs and a working diligently to ensure we can review all flood claims.
Nicole activities when possible.
D. C are we still anticipate submitting our new drug application for Mike, who stuck to the FDA and when the environment becomes safe to do so initiating a mix expeditions phase three trial for Microwatts.
We also look forward to read initiating enrollment of our micro pin phase three study when possible and in the meantime, I'm pleased to continue to work virtually with the subjects who are already enrolled in our shopper on study.
Let me first start with our most advanced problem Microsofts for pharmacologic dresses, which is our first pipeline program to complete phase three studies lost here as you remember Microsoft is our novel combination formulation of phenylephrine entropy combined for pharmacological to drive two products that are often used together.
During the approximately 80 million diagnostic eye exams, and 4 million cataract surgeries performed each year in the United States.
We don't want to positive phase three trials in 10, that's what was the 12 month stability testing of registration Walton progress, we're working diligently to prepare the necessary components of our new drug application.
If approved this will be our first commercial products that would allow us to start introducing our off the drug dispensed to patients and physicians.
As we move ahead, we remain on track to fall or planned and be a with the U.S.M.D.A. by the end up 2020, and we do not currently see an indication that the called 19 from them. It will impact this timeline, although that could change.
We also remain excited about phase three my coin program for Presbyopia.
Which we plan to initiate wants conditions improve and clinical trial sites began to come back online for the opioid use the non preventable age related hardening of the ultimate less which causes the gradual.
Its ability to focus on nearby object currently presbyopia effect, an estimated 130 million people with a treatment paradigm dominated by really by devices, such as reading glasses, and non pharmacological drugs approved for the indication.
We anticipate initiating an expeditious phase two program for Michael and when it becomes safe to do so the reasons. We expect the phase three to be fairly quick is that similar to our Microsoft missed one in mid two trials our vision, one and vision two studies represent a fairly Robbie program both in.
In terms of the size and availability of the patient population and the shortsighted duration.
In the face of called 19, we see even more meaning to our fight against the global academic.
Few deals growth.
Progressive myopia, which threatens the vision of not only the elderly, but our children and adolescence.
Rates of Progressive myopia have double the last couple of decades with more than 9% of children in the U.S. and more than 80% of kids in Asia suffering from the disease.
On track. It is estimated that might help you will start nearly half of the world's population by 2050.
Today would stay at home orders and the remote learning programs in place around the country.
Time spend outside of People's homes has decreased by about 20% compared to January 2020. In addition, as children adjust to remote learning, they're using the electronic devices more than ever with fewer chances to go outside.
There was a well established link between the lack of outdoor activities and an increase of risk.
In a metro knowledge. This publishing the peer reviewed journal actor of them a logica researchers found that you've done a single hours a day and outdoors resulted in a 45% reduction in incidence of myopia compared to control group.
In another recent study published in Knoxville from a logic of children, who use their electronic devices more than six hours in a day.
Have all have less than three hours of outdoor activity a week roughly double their risk having my LP.
With this information, we believe bidding, but post called me the world Progressive myopia could accelerate and have a profound impact on division of our children were pleased to have robust level. One evidence of therapeutic approach. We took big we topical atrophied from large randomized collaborative studies, such as the up and more.
Hi, them too and lump studies, which provides significant momentum behind our shopper on phase three program of micro array print a trucking.
Last year, we initiated our phase three chaperone study, which is a randomized double masked trial, so to enroll more than 400 children between three and 12 years of age the study examining the safety and efficacy of our proprietary utrophin topical micro formulation deliberate can be up teacher dispenser.
For the reduction of progressive myopia.
Subjects are being randomized to receive treatment with either have to micro pin concentrations or a flexible and the primary efficacy endpoint is the change in the refractive ever from baseline to 36 months.
At this time due to the call with pandemic, our shopper off but he has been delayed even though we have to Paul's enrollment you subject. We have continued to supply cartridges of micro paying for the off the judge by mail and to work with our clinical partners to follow up virtually all previous enroll patients.
And study participants to help ensure that the trial continues to progress.
I would now like to turn the call our VP of commercial Michael low to discuss commercialization activities.
Thank you Sean.
I should mention earlier, we're getting ready to reignite, our clinical programs for both Microport and.
Safe to do so.
In support of those efforts.
Understanding of how parents that myopic children view, our shop study through quantitative research.
Results of this research will help our study sites fine tune, how they communicate with parents as well as help us with the eventual commercialization of the product.
Last week, we completed the National survey of parents of Myopic children were currently being treated only with glasses or contact lenses.
In the survey we presented these parents with information about Chaperone study and asked them to assign score from zero to 100 zero being very poor to 100 being very good indicating their reactions to the study description.
We found that 85% apparent set a positive reaction to the study.
On average these parents chaperone study of 83, well into the goods at very good range.
Additional analyses are underway to look at what specifically drives this response and how we might address anything that takes away from it.
We believe that actions such as the survey as well as other partnerships. We continue the build within the community of childhood myopia treating doctors will help us make up for the time loss due to the Covance crisis.
Well, that's it I would like to turn the call over to John to discuss our financial results.
Thank you Michael and once again, thank you all for joining us this afternoon.
I would like to review our financial results for the three months ended March 31st 2020.
For the first quarter 2020, we reported a net loss of approximately $5.5 billion with 31 cents per share. This compares to a net loss of approximately $5.9 billion booked two cents per share for the first quarter 2018.
Research and development expenses totaled approximately $3.6 million for the first quarter 2008, compared to approximately $4 million for the same period from Nike.
Decreased 9.3%.
For the first quarter of 2020 general and administrative expenses for approximately $1.8 million compared with approximately $1.9 billion. The first quarter 2019.
Decrease of 5.5%.
Yeah.
Total operating expenses for the first quarter 2020 were approximately $5.5 million compared to total operating expenses of approximately $6 million for the same period 2019, a decrease of 8.1%.
At March 31st 2020, the company's cash balance was approximately $13.7 million and this includes approximately $5.4 million that proceeds from our private placement, which closed in March 2020.
That concludes our prepared for natural Mark I would now like the hand, the call back over to Sean closing remarks.
Thank you Jim before we open the call to questions I would like to reiterate that our primary preorder do remain the health and safety our employees patients and partner.
As far as the communities. They served with our recent private placement that raised approximately $5.4 million in net proceeds we should remain calm that into 2021, we look forward to submitting the Microsoft and D.A. This year and the soon it is safe to do so initiating our faith in my calling studies for presbyopia.
That's why was really initiating enrollment of our phase three chaperone study for progressive myopia.
We believe that our fearless I know via spirit of ingenuity and resilience will ensure that we persevere through the spirit of uncertainty and look forward to providing additional updates over the coming months that conclude our prepared remarks, we would now like to open the call to questions operator.
Thank you and that's very minor ladies and gentlemen to ask the question you would need to press star one on your telephone to withdraw your question first the pound or hash key.
Again, if you have a question just press Star then one.
My first question is from Matt Kaplan with Ladenburg Thalmann. Please go ahead.
Hey, guys. Good afternoon hope you're all well.
Hi, Matt.
Oh, Matt.
Hey, guys.
Dig in to the micro line a phase three program for presbyopia little bit once you once you're able to initiate that study and conditions or when conditions are safe to do so what what's the potential timeline or for that study work for completion and read out of that.
Yeah, that's a good question.
Matt then if you remembered the missed one and mix just studies for me dry assays.
Those studies are similar to micro line in the way that we measure the primary outcome, which is a same day primary outcome.
And basically shows the pre and post.
Refractive response.
So again those are studies that as I mentioned.
There was no shortage of population.
Two top but these are pretty much 130 million people in the U.S.. It's a huge population there was tremendous interest in our program or even from from the investigators themselves who some of them upwards VLP. So we're copy them. So I think the biggest.
Factor to consider is when are the size of gonna be ready to begin investigative work and once that happens or my team and Ginger Cosby, who leads our operations.
And has tremendous experience in the space.
I'm assured that these will be fairly expeditious program and we're talking about a very low risk intervention. This is not a surgery.
This this is a topical well known established a compound.
And so we're very hopeful that we'll be able to enroll these hundred patients per study and a very very soon thereafter.
And it could be as soon as three and maybe six months be able to produce result.
Of course.
We're very impatient and very eager to get into the clinic.
Calls this pandemic literally undercut our efforts to start both programs.
Imminently.
Okay. That's very helpful. Thanks for the comparison to the just want to Miss two studies.
But then in context, and then just turning to the micro sat and D.A. you mentioned that right now you know you're not seeing an impact on the timeline.
What's what's currently the rate limiting step for for the NDA filing for Microsoft [laughter].
So today as as pretty much in the case and it hasn't been indicates for the past.
Six to nine month the rate limiting step is the fact that we are waiting for the stability studies I think now we are much closer than we were six or nine months ago.
And so we're on track from everything that we understand to to complete the stability and then the entire package for the NDA submission. My team has been working to prepare hold the other sections and to be ready. So that we can plug the stability data and then.
With that and we think there were very confident that we had very strong clinical data from our studies as you'll recall, we reported the results. So I think that we're holding our breath because again a lot of those stability.
Studies and and all the information is coming through our vendors.
And so far they haven't given if any indication that there was any disruption and as of today I think we're tracking this is probably where we feel the most coffee them.
That the timelines are no as much impacted by call. It has some other programs, where we need patients in the clinic and physical contact with the patients and all of that.
Seems to be not only impacted but also the return of activity is sold differential between different take different sites. So where you know the team is working really hard. These it's hard to predict how it's going to play out for each side, but we at least don't have too.
Due to patient interaction and we have our phase three data complete and wrapped up and being written up a to b.
Ah correlated with the stability studies.
And Registrational studies that are coming and so we hope that this would be forthcoming this year.
Okay, Okay, Great and then just with with with micro Pie Lycopene. The phase three study can you give us a sense in terms of how far in to that study in terms of enrollment and then a question is how you're managing those patients are currently enrolled to making making sure that.
You maintain the integrity of the study for the patients already mold.
Yeah. Matt. These are very good question and things that are really in front of my team all the time.
So we as you remember we said we're not going to be reporting. So you know every time, we enroll five or 10 patients are up for 50 patients.
And do status updates we were on track to enrolling our original plan was to enroll the study completely by the end of this year.
No and that was gonna come close towards the middle of December.
Now everything is being linear and the push and in fact, it maybe not so linear because as you as you know some of those cities goal through a.
Hey ramp in a hockey stick inflection in enrollment as you bring more sites and besides get more comfortable.
And right now we really don't know how the sites will come back to life and how they're going to do that enrollment some of them where most of them. We hope will come back Boston, they're very excited about the program. We don't lack enthusiasm by investigators in the patients, which I think is the fundamental thing there's just so.
Josh need out there and as we you and I know people compound and they look they take product. That's now that the proof to compiled it. So we have a tremendous medical need for these especially now as as Mike ripping and as the progressive myopia epidemic, we'll get exacerbated from call.
Yes.
To your other question when nobody was one of the first country that first companies that factored in coffee and partially because we're bays in New York and New York City and we early on the realize what was happening. So we really ensured we had adequate reserve.
Clinical product and we prepared for virtual visits and one of the good.
I think probably to double edge sword, you know way, we do have longer timeline for the primary endpoint, which is at 36 month, but also that place to our advantage because we don't have any patients.
Coming up anytime soon for a primary outcome measurement. So that's a good thing or half will be enroll patients and then were able to have plenty of cartridges and microbiome supply for them and maintain the currently enrolled patients because we don't want to lose anybody and so far we've been.
Doing great and from a clinical operations standpoint, we're focusing on two things, while maintaining everybody and not losing anybody and to being ready to call back into the saddle and support the size and facilitate their onboarding so to speak back to.
Enrollment as there are as they re enter so I think we're doing a great job on Bath and I'm Lucky that we don't have to deal with issues of clinical product supply interruptions.
Supplied for patients we have virtual monitoring and we've been implemented a lot of things that we can do virtually for those patients and a big advantage of the primary endpoint being way out with visits being about six months in between provides us I think some breathing room.
In that situation.
All right well.
Thanks for taking the questions and ER and a b pieces.
Thank you Matt Thanks, Matt, Thank you and I, sorry, mindshare, ladies and gentleman, who asked the question you need to press star one on your telephone keypad.
Our next question is can we can with H.C. Wainwright.
Oh, Thank you for taking my question.
Could you remind us how many clinical sites Oh, the Shepro study or the proposed vision study or located in the heavily affected areas such as New York State of California State. How many sites are no could even less affected areas.
Which those state governments may consider all have already started.
For a gradual recovery.
Sean do you want me to take that.
Yeah. Michael Please please do I think this is probably a highly specific question that I wish we had ginger, but Michael if you want to tackle that that's fine.
Right my pleasure so about.
A six of our site.
Our located either in California, or in New York and those are definitely the ones that are probably the furthest from opening up the rest of our sites. However are in the mix of states, where some are opening up as early as next week.
So we're going to start see seeing patients come online are very soon from you know places where where they are having the offices open and the investigators are really chomping at the bid.
To get back to work they've taken some very concrete steps.
Address safety and their offices, because that's the rate limiting step is they want to make sure that the pay per se they've been removing for example shares from the way the room to social existence people, they're making every one wear masks.
The people in the off it's our in mass and gallons and and clubs when appropriate so they they're working all of this out and I would expect that we will start to see some of our sites up as early as next week.
Got it so if let's say most besides a return to normal activities. During the third quarter. Then we are only expecting a delay of roughly a quarter for all the clinical trials right.
Well I could answer that.
Yeah.
Yeah, I think that's where we're today, we we expect that.
And that includes a dilutive optimism.
That the return to normal is fairly prompt.
And I can tell you as a physician somebody was also public health expert.
This is a situation that is very difficult to predict and and also it is not uniform. There was no homogeneous situation here, where the they tie countries. The same and we're seeing different clinics adopt slightly different.
Pathways in terms of their.
A return to normal quote unquote normal.
So I think that we're hoping that we will be exactly and from our standpoint, our team is ready to to get back into sat all we have product. We have the site. We have we haven't put the epic sites and everybody is ready to to get going.
But we'll see so I think next time when we have the call we're going to have a lot more visibility.
As we will as the country altogether I I don't think that this is just isolated to ophthalmology and have come all the G. Investigation site, we will know a lot more and I tend not to speculate until we see where we stand.
But my team is ready and really.
I'm looking forward to getting back because we.
We have the whole momentum going we know what we're doing we'd have a great protocol. We have great time, we have very very interested to patients and we really.
Feel bad that we can milk execute a with respect to how we are ready and how how well design that program. It.
Got it.
On the operation side do you expect the total operating expenses to be at a much lower level before the resumption of enrollment for the Shepherd study and the initiation of the admissions.
Yes, so unless we looked out through the balance of 2020 to 2021.
We expect the cash burn could be reduced probably somewhere in the three and a half million $4 million per quarter area.
Because of the release as we've mentioned associated with Coke 90, and then they'll ramp back up to pretty much. What this corner level was once we get back into.
Full scale operation.
Got it got it. Thank you yeah definitely one of the silver lining theories that jumps pursues a little bigger [laughter].
Thank you for the time be.
Yeah.
Thank you.
And that's very minor ladies and gentlemen, if he has a question just press Star then one.
Next question, it's on Jonathan Aschoff with Roth Capital Partners.
Thank you hi, guys wondering compel us to Novartis phase two trial was going on or before it is also delayed and I guess, how do you believe.
Second question, just the non life threatening nature of the conditions, you're pursuing make you guys, particularly vulnerable to a cobot 19 delays.
[noise], Okay, Jonathan I missed the very first part of your question about the Novartis trial can you repeat that.
If that is also similarly will deliver the mean yours can't start but Ah I was curious you know the extent to which that has the Liz.
Yeah, I mean, I, Oh, I don't I don't know more than you do about them bargains trial.
Obviously, it's a different trial design and it includes a new molecular entities and this is the phase two study.
Versus our phase three.
I can definitely appreciate the fact that.
We were not caught in the middle of our phase three when we have to decelerate.
Or disrupt some of the activities because this is a very fast based study.
That were.
Planning to execute on so I would rather take this situation that we have that where they don't be laid in terms of carting, but when we start.
We can initiate the proper steps and finished the trial and wrap it up quickly.
And and this is probably related to the fact that we have the type of trial design.
We anticipate will go fairly.
Rapidly and so it's good to delay that and then exit could quickly versus too to get going and then you have to interrupt and then you have to redo everything, particularly for a trial, which unlike chaperone, where we're talking three years from now and you don't have to worry about a specific primary endpoint for sometime here you'll have your primary endpoint.
Right on the heels of the already enrollment.
So I think that really is he is potentially a good news for us when it comes through that program.
In terms of execution.
Okay, and when you were talking earlier before about extra time outdoors, what was the per cent decrease in my own yeah that was associated with how many hours or our outside per day.
I'm I'm glad you guys are paying attention because these are really interesting studies.
And and in fact.
Did the studies that have been done for quite some time from independent groups.
And and the data is really growing and there is a preponderance of data to the point that as you recall the American Academy of Ophthalmology did a matter knowledge is for actual team.
Drops and basically said there was level one evidence from the collaborative study groups that African work now that wasn't study a Mecca analysis published in the peer reviewed journal of October them, a logic or wherever researchers found that even a single hours a day and outdoors resulted additional hour a.
So seven hours a week additional resulting in 45% reduction in incidence of myopia compared to control groups now that isn't one hour more now we really don't have the flip side of that calling one hour.
The reduction of time span and that will be interesting to know, but I think it's gonna be somewhere in the same ballpark because that's an incremental.
Our and we're seeing now incremental or decremental hours law.
Outdoors activities in our children everyday. So this is not a trivial 4.5% we're talking 45% those studies.
And on top of that help that you have children, who use their electronic devices more than six hours in a day.
Or have less than three hours of the outdoor activity a week roughly doubled their risk of having myopia.
So those two factors one of the biggest risk factors for progressive myopia.
Our time all doors.
Or lock their.
Or spending time near devices looking at a computer screen looking at ipod and tablets and guess small both of these things are exasperated from call. Good 19, and I know it because they have two teenage boys ages.
10 in 14, and and they're spending their whole time for schoolwork is in front of the computer.
So I see it first hand at home and competing for bandwidth with Mike Kids. When we do the zone calls and so I really don't like the they spend home all the time and that will then is even more than an hour.
That way, so but data are very strong very compelling and even if we don't break that or is that becomes than your normal.
I think that will be very very impactful in terms of what's happening to the prevalence in the incidence of progressive myopia, which in some countries and in some academic journals is declared as an epidemic a proportion.
Thank you for that I would you. Please request could you. Please send me to link.
To those primary lit.
So were softer looking after the call. Thank you very much yes, thanks for answering the question.
Thank you and with bad news from Gentlemen's of Lee and our Q and program for today. Thank you for participating.
And you may now disconnect.
[music].