Q1 2020 Earnings Call
Bye and all come to the Q1 2020, Soleris pharmaceutical earnings webcast and conference call.
Time, all participants are any listen only mode. After the speakers presentation, there will be a question answer session.
Just a question during this session you will need a press star and the number one on your telephone keypad.
If you're a car any further assistance please press your.
Oh, no hand, the conference over to hear Speaker day Mr., Jason Rando. Thank you. Please go ahead Sir.
Good afternoon, everyone and thank you for joining swears pharmaceuticals, 2021st quarter financial Corp. results call.
Earlier this afternoon Solaris issued a press release detailing its financial results for three months ended March 31st 2020.
Would you encourage listeners to read.
The press release can be found in the news and events section of Solaris pharma dotcom.
So there is also file a 10-Q's afternoon, which is available on flourish farmer dotcom and SCC Dot Gov.
Before beginning today's call I would like to make the following statement.
They will be making certain forward looking statements about future expectations plans events and circumstances.
Great statements about our strategy future operations and the development of our lead investigational drug candidates stuck with them stuff.
And our expectations regarding our capital allocation in cash resources.
These statements are based on our current expectations you should not place undue reliance on these statements.
Actual results may differ materially due to our risks and uncertainties, including those detail in the risk factor section of Solaris Pharmaceuticals annual report on form 10-K for the 2019 year in a quarterly report on form 10-Q for the first quarter of 2020.
It's your filed with the FCC and other filings we make the S. You from time to time.
Slurries pharmaceutical disclaims any obligation to update information contained in these forward looking statements, whether as a result of new information future events or otherwise.
Joining me on todays call, David Arthur President and Chief Executive Officer Slayers Pharmaceuticals.
Provide an update on Solaris is corporate and clinical achievements during the first quarter and.
And Mark Rosenblum, Chief Financial Officer, who are used to wary since first quarter 2020 financial results.
After David market provided their updates they'll take questions.
Now I'll pass the call today.
David Please go ahead.
Thank you Jason.
And thank you to everyone for joining our 2021st quarter results Conference call.
Those of you who are familiar with hilarious welcome back and for those of you who are new to Solaris, Let me take a moment introduce the company.
Larry This is an emerging clinical stage biotechnology company developing potential treatments for cancer is caused by the Dysregulation of gene expression. We're stated another way cancers, but heart check the cells machinery to incorrectly turns unions on or off in a way that helped some cancer survivor.
And growth.
This theory of research is referred to as epigenetic.
Our lead drug candidate stuck with them that is a non cytotoxic agent, making a different from classic chemotherapy.
Let them stuff is an oral treatment that inhibits the LSD one enzyme which is believed to play a key role wouldn't regulating gene expression in many cancers, including Ewing and other sarcoma cancers of the prostate breast colon ovaries and melanoma.
Our lead indication Ewing's sarcoma is a rare, but devastating bone and soft tissue cancer, primarily affecting children and young adults.
Hilburn in young adults rely on me standard.
Okay fair treatment, including chemotherapy frequently intense multi aegion chemotherapy, and often radiation and or potentially just figuring surgery.
Unfortunately, many ewing's patients fail to respond to a relapse and paid five year mortality rates, reaching 70% to 80%.
In addition, many patients that did not respond the standard of care often experience long term complications resulting from their treatment.
All these patients need better treatment option.
And we believe the SEC with them that has the potential to be better auction.
No Solaris is coming off a transformative year in 29 pm.
Highlighted by our merger with flex pharma and our listing as a publicly traded company on the NASDAQ capital market.
We believe these events elevated our visibility among investors and helped us access to resources necessary.
To evaluate several of them that has the potential treatment for young sarcoma and other hard to treat cancers looking forward, we anticipate multiple clinical trial data disclosures and potential value building events throughout 2020 and beyond.
With this background lets now review the first quarter 2020.
Since January we've achieved a great deal, including a dose escalation advancement in our ongoing phase one phase two ewing's sarcoma clinical trial.
The completion up an $11 million public offering and strengthening of our intellectual property portfolio protecting separate them stuff.
Most recently.
Hilarious board of directors named Dr., Bill Mudd, Victor as the new Chairman of our board of Directors Bill is a seasoned pharmaceutical industry executive with more than 30 years of clinical development experience recently served as the Chief Executive Officer Flex Pharma I previously served as Chief Scientific officer and President of Enertec.
Pharmaceuticals.
In addition, our founding scientist Dr. signal Sharma and his team at the translational genomic Institute for teacher.
Phoenix, Arizona in February publish the scientific paper highlighting the potential of combining second with them that with cancer immunotherapy, such as checkpoint inhibitors I'll discuss this more in a few minutes.
Before I review Soliris first quarter accomplishments in more detail I would like to address the topic the forefront and everyone thought these past several months Corona virus outbreak.
Krona virus Workovers 19, global health crisis that has impacted all aspects of society in business hilarious like all businesses not immune but we have worked with that to the unexpected and challenging circumstances, resulting from the cobot 19 pandemic and hand at this time I am pleased to report.
And we have experienced minimal coated 19 related disruption for ongoing clinical trials for our manufacturing capability.
Due to the cobot 19 outbreak many clinical trials that are in place on home Fortunately.
The Solaris trials in Ewing's sarcoma, and advanced solid tumors have been prioritized within our clinical trial sites remain active and continue to enroll patients as such hilarious is continuing with plans to release clinical data from both trials as previously disclosed during 2020 and 2021.
I believe the prioritization and commitment to our clinical trial is indicative of the true unmet medical need facing the patient population, which we are investigating several times that treatment.
Relative to fill area in mid March we initiated a work from home policy for employees and our Houston headquarters and suspended non essential business travel.
Having said that.
The impact of Coven 19 changes daily and we will continue to monitor the situation and take corrective actions where possible to mitigate the impact on operations.
Before moving on I would like to say.
That the team work.
Billions and a commitment demonstrated by the personnel at our various clinical trial sites.
These are hospitals, so there's much going on our clinical trial sites personnel, our various clinical trial sites our contract research organizations and our manufacturing partners has been truly remarkable and has allowed us to continue advancing our ongoing clinical trials.
During the quarter 19 situation I want to publicly thank all of these individual.
Thank you.
Now I would like to move onto the first quarter 2020 operational update.
As I mentioned earlier hilarious is an emerging clinical stage biotechnology company developing potential treatments that address cancers call. It's hard to this regulation of gene expression.
Under normal circumstances, a series of enzymes called epigenetic Amazon are responsible for maintaining proper gene expression and human body.
However, when these epigenetic enzyme become dysregulated they can cause the body to incorrectly turned jeans on and off which can support the development for progression of cancer, rather than supporting normal cellular function.
Dysregulated epigenetic enzymes represent attractive points for therapeutic intervention in several cancers. This approach forms the basis of our proprietary lead drug candidate secular themselves.
Second attempt that.
However stands apart from this crowd as it is one of only two reversible LSB one inhibitor, we no longer.
To be in clinical development reversibility is an important distinction that may offer real therapeutic benefit benefits and we believe that are because our molecule does not permanently bind to the LSD one enzyme cycling against that may provide improve safety in a wider therapeutic.
Window, then you're reversible LSD, one inhibitors cycle that safety profile is currently being evaluated in our ongoing.
Phase one phase two trials.
First generation LSB, one inhibitors focused primarily on inhibiting the informatics function of LSB, one and a limited number of LSB one protein interaction.
Let them that is unique and its ability to not only inhibit anthematic function of LSV, one, but also inhibit a broader range of LSB protein interaction the ability to inhibit both of these functions of LSD, one may allow second with them that.
To impact a wide variety of tumor types.
I mentioned earlier Solaris is conducting two phase one two clinical trials for several times that.
First is in patients with relapsed or refractory ewing's sarcoma, a disease of high unmet need requiring central new treatment options such as several times that.
The second phase one two clinical trial is evaluating secular them sat in patients with advanced solid tumors, which includes prostate breast or ovarian melanoma colorectal non ewing's sarcoma and others cancers, where several of them staff has demonstrated a single agent activity in preclinical studies.
Both trials are designed it's open label dose escalation trials to demonstrate the maximum tolerated dose for MTD.
The initial safety profile cycle dumps that.
One each trial establishes M D. A dose expansion phase begins at the NPV for recommended phase two dose a larger group of patients will be treated up the space to expand the safety profile for second step that.
Capture additional pharmacokinetic data potentially provide preliminary efficacy data as I mentioned earlier hilarious plans to begin the least in clinical data in 2020 and compete.
Clinical data releases from these two clinical trial throughout this year and into next year.
We're pleased to report.
That in the first quarter of this year. The safety Review Committee overseen Ewing's sarcoma clinical trial approved the advancement of the trial into the six seven dosing cohorts and patients are now enrolling at the 1200 milligram be I'd daily does.
We are also please.
But to date, we have not seen dose limiting toxicities that would prevent further dose escalation.
Thus far pharmacokinetic data from the trial suggests the plasma drug levels are increasing and that dose proportional manner with no evidence of plateau in drug exposure levels.
This is positive news as we're now seeing secular them staff levels in patients at or above the levels, where we noted pharmacological activity than our preclinical program.
[noise] dose escalation also continues in our advanced solid tumor trial, which is now in the fourth of seven dosing cohorts and its enrolling patients at the 600 milligram VIP daily dose.
Solaris believes both clinical trials are on track to reach maximum tolerated dose in 2020.
Triggering the dose escalation phase of each trial.
With Ewing's sarcoma, theres, a tremendous unmet therapeutic need and we believe that the potential to address this need offers several of them set the possibility of a more rapid FTC review process.
In fact, the FDA has previously granted second attempt that fast track designation as well as orphan drug designation and rare pediatric disease designation.
We feel very well positioned to take advantage of the FDA mediated programs for drug development or view.
Also if approved the FDA five years FDA second let them staff rare pediatric disease designation means malaria could qualify to receive a priority review voucher.
This is an extremely valuable and monetizable asset, which we can potentially sell for $80 million to $130 million.
The advanced solid tumor clinical trial is allowing us to better establish the secular them staff safety profile will more fully developing our future dance solid tumor clinical strategy.
Now third party research has demonstrated the cancers with new patients and other epigenetic enzymes for mutations in epigenetic complexes may have increased sensitivity to LSD, one insufficient anti proliferative and or Immunomodulatory effects.
These include mutations in Methyltransferase for a CDEL transferees enzyme and mutations in the sweet snip complex, which occur in roughly 20% of solid tumors.
Many of these tumors can be identified through already established and commercially available genetic screens by using these genetic screening. We believe we can identifying and rich our advanced solid tumor expansion cohort with patients the harbor desensitizing mutations and therefore increased the likelihood of patients.
Responding to separate then that treatment.
Since these genetic screens already exists and our common across standard testing platforms. It is possible to implement these enrichment strategies in the clinic and if approved in a commercial setting.
This type of tumor targeting is becoming more common as reflected in the recent FDA approval of Lilly drug sell for catnip for three different types of cancers, all driven by the same gene alteration.
We believe this approach could represent a significant opportunity for scenario.
Further.
We are exploring to use the SEC, let them staff in combination with a type of cancer immuno therapy, commonly known as checkpoint inhibitors checkpoint inhibitors, which have estimated global annual sales.
$15 billion were designed to expose cancer cells to attack by the patients own immune system.
However, these therapies only work in about 30% of cancer patients.
And in patients who do show an initial response many suffer a return of the disease.
As I mentioned earlier Soliris founder Dr., some Neal Sharma and his team at PJM published data from two in vitro studies investigating the ability of sex with that staff to promote anti tumor immunity.
He effector cell infiltration into types of ovarian cancer, both carrier specific mutation.
In this study secular them that modulators, the tumor microenvironment to increase.
Immune cell infiltration into tumor organizations, Oregon weights are clumps of tumor cells growing and culture.
This is significant because checkpoint inhibitors are often in effective do a lack of effector immune cells within the tumor.
In other words sechler dumps that may turn cold tumors hidden from a person's immune system into hop tumors that can be identified by the immune system and which could then respond to checkpoint inhibitor treatment.
We believe this is a significant potential opportunity.
And we are currently researching the best ways to advance into clinical trials.
There's a lot to be excited about the SEC with them set and excited a lot to be excited about in our development programs.
We look forward to providing updates on our progress throughout the year.
With that.
I'd like to pass the call to Mark Rosenblum, Slurries, Chief Financial Officer, who will provide a brief review of our first quarter Financial report Mark. Please go ahead. Thank you David for the quarter ended March 31st 2020, Solaris reported a net loss of $2.08 million or 22 cents per basic and.
Diluted share compared to a net loss of $1.52 million were 64 cents per basic and diluted share for the same period in 2019.
The last before other income for the three months ended March 31, 2020 increased $5.84 billion compared to the same period, a year ago, which was primarily due to an increase of $8.94 million in research and development expenses, resulting from.
The increased clinical trial expenses and drug manufacturing costs.
We also reported a net increase of 0.3 $7 million in general and administrative costs, resulting from our transformation into a public company and increased personnel expenses during the current quarter somewhat offset by lower professional fees or legal costs compared to the same period since 2009.
Jane.
As of March 31.
The answer to 20.
Total cash and cash equivalents were $9.65 million compared to $5.77 million on March 31, 2019, and $3.74 million at yearend 2019.
The increase in our cash position stems from an underwritten public offering completed in February of this year.
Gross proceeds totaled approximately $11 million prior to the ducting underwriting commissions and offering expenses.
We intend to use the net proceeds from this offering for general corporate purposes, including working capital.
But this is not Solaris is only source of capital one of the genuinely interesting aspects of this Larry to story is the amount of non dilutive capital we have at our disposal.
2016, we received an 18.7 million dollar grant from the cancer Prevention and Research Institute of Texas also notice secret.
Which we still have 9.1 of that $9.1 million available for drawdown.
On top of that non dilutive support from the National pediatric cancer Foundation.
Covers roughly half of the cost of our ewing's sarcoma trials by sending funds directly to our clinical trial sites.
As a result of these various funding sources, we believe celerity assess the financial capital to advance our ewing's sarcoma and advanced solid tumor clinical trial programs into the second half of 2021.
With that I'd like to return the call to David.
Thank you Mark.
As we've discussed today Solaris is on strong putting operationally developmentally and financially.
And we are maintaining our momentum in 2020, despite the corona virus outbreak.
None of this would be possible without the diligent efforts of our Soliris team.
I would like to close by thanking our shareholders for their continued support as we work to bring hope to patients and hope to their families battling ewing's sarcoma and other cancers with that I will now open the call to your questions.
Ladies and gentlemen, as a reminder, say question you want me to press Star then the number one on your telephone keypad.
So the trial. Your question you May press the pound key please stand by only compiler culinary roster.
And we have our first question for me Mr. Hunter.
Go ahead Mr. Hunter.
Hi, just you touched on in a little bit can you guys provided an update on developments related to immunotherapy.
Synergies with chemotherapy or anything investors should be watching for those next 12 months.
Yes, I will provide a brief overview and then ask Daniela Santee Esteban.
Director of business development, a research provide a little more color.
As mentioned were actively.
Reviewing not only external third party.
Publications and scientific research in the area of immunotherapy and possible combination therapies.
With secular dumps that another drugs.
But we're also performing internal work to help us best understand how to bring SEC, let them step forward into the clinic in these various scenarios.
Now we have not announced any.
Timelines relative to that work because it is preclinical research and as we learn we advance and we sometimes seem to do more work.
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But.
What I will do is just pause for a moment and half Danielle to provide a brief overview of the type of work, we're doing to help us better understand how several of them start can be used with immunotherapy and possibly with combinations.
Yes. Thank you David Hi, This is Daniel Hofkin test learn and now I'll speak towards what we're doing ancillaries and that's really interesting area that first.
Lets published last year 20, 2018 in a sell article.
And then that article they showed that let's see what's inhibition can you really teams the tumor microenvironment and increase these effector T cells.
Increased or infiltration into the tumor so that these tumors can become sensitized to anti PD one.
Anti PDL, one a variety of checkpoint inhibitors as serious we're expanding upon that research both in the preclinical section.
So we're looking at different in vitro as long as in vivo models to explore that go down that's potential.
Across a variety of indication define that best match for us as we move forward into clinic Oh. We're also looking at not only it several times that consensus highs, but the potential of secondary batteries sensitize tumor.
Right now as David mentioned, only 30% of tumors respond to checkpoint inhibitors and some of those will lose their response overtime. So there was a huge market for secretary SEC, what I'm thats potential in sensitizing as well as reef sensitizing to these types of therapy.
Right and that makes it makes perfect sense.
And obviously if you can capture any of these markets as you stated in the call.
Yeah, they're all enormous target markets in addition to Ewing.
I guess my next question just one more would I guess you from Mark just in terms of I guess for investors. The the capitalization. Obviously the company has access to non dilutive capital, which is great I guess and there are lot of data inflection points coming out in the second half of the year I'm, just confirm or do you Mark I guess sort of.
The understanding based on the cash in the latest Q and the non dilutive funding is sort of this capital and relatively low burn rate takes the company to the key inflection points right, though it potentially reset it.
Thanks, Roger Yes, you are pretty much right right on point B. The capital we have available to us in our financial model going forward allows us to as I mentioned is into the second half of 2021.
By that point, we should have scientific results data read outs or the like and just like every biotech company what you're looking for is the hot is to have positive scientific news advocates have the cash to get you to the scientific news and if the company would have to everybody I have every biotech raises capital.
You don't somewhat frequently and if you do you always wanted to have always want to have it at a higher valuation and that's it so the combination of our scientific new schedule and the cash available we have should be just fine.
Absolutely absolutely and if it's positive is such a discrepancy between the shares and Epizyme and these other companies.
But obviously it would be much more attractive than than current levels.
Okay, yet another that's all I have the I guess for Mr. Hunter and just stay safe everyone and appreciate the update.
And again, ladies and gentlemen, if he would like to ask the question. Please press star and the number one on your telephone keypad.
And we do half our next question.
Mislead. Please go ahead.
Hi, Thanks for taking my question can you hear me okay.
Yes, we can hear you just fine.
Okay. Good if it doesn't mean done if this guy spend sure.
But.
The current to trying to you is so colm you couldn't do six cohorts.
Yeah designed mix among seven cohorts, but.
He also mentioned to this so funny that those are preparing for no.
And so I just wondering if let's say you still see emit TD, San Francisco or do you plan to continue or you're just stop it there.
I know psychologically without really immaturity, but just the maximum dose you tested.
So thanks for the question we.
We are at dosing cohorts six in the Ewing's sarcoma study, we have not observed to date.
Dose limiting toxicities that would prevent continued dose escalation so the possibility of advancing to the seventh and final cohort, which is 1500 milligrams be I'd is a possibility.
All we won't know if we're going to advance until we complete enrollment and dosing cohorts six and patients have completed at least one cycle therapy, allowing the safety review committee to make a determination.
Once we do advance to 1500 milligrams and we complete.
Patients treatment at 1500 milligrams.
We will then have the opportunity to look at the information that is available that information would include the safety that we've observed it will allow us to to look at the PK data that we've collected in all of the dosing cohorts, including 1500 milligrams and also look at the PK levels, where.
We saw activity in our preclinical models and with that information in hand, that's when I think we would be able to answer the question, you're asking which is what we what we would not advance.
The trial was designed I think very thoughtfully to put seven cohorts into the study and if we are able to achieve treatment.
Finally in the seven cohort all we will complete with what we initially set off to accomplish.
Now you did touch on one.
Component.
Okay data that I do want to.
Follow up on and that is the fact that so far.
We have seen an increase in dose levels to be.
Providing dose proportional response in PK levels, which means.
Drug levels increase we're not seeing a plateau effect.
And we're very pleased with this fact, we're also very pleased and I'll draw distinction to a statement I made in my my update.
Is that we are now at a level.
Dosing, where the levels of Sechler, Devon stat observed in patients.
Our at or above.
The drug levels.
That we saw in animals.
Where we observed activity.
So we're very pleased with where we are from a dose escalation perspective, and we're very pleased from where we are.
And not seeing dose limiting toxicities, preventing further escalation and we're very pleased with the level of second with them sat so we're observing in our current patients.
Got it.
Maybe one more question is.
You look at the other company the data I mean, so question good.
Early kind of see a dog eats into into indications like AOL and myelofibrosis, whose liquid.
Indication.
And those who looks most cell lung cancer I'm or did I report it so what Uh huh.
I mean, it internally how do you think about really indication.
Do you want to continue for sure I mean course either.
On the other companies into the upper and trials theaters, but potentially.
One of the May also differentiated so just one to see any thoughts on those indications.
So let me, let me try and cover some of the questions. You brought up I thought that was Oh no is a very good strategic question that you teed up so first.
We look at the fact that.
There are multiple.
Companies researching.
Alex do you want inhibitors actively in the clinic and as I mentioned during during my update.
Several of them that differentiates itself from that group.
Of five that are in the clinic by being one of only two LSD one inhibitors that we know to be in the clinic and reversibility. The fact that we do not permanently bind to the L.C. one inhibitor gives us the belief that we will have all.
The potential to demonstrate and improve safety profile and a wider therapeutic window.
Discussion.
Our differential binding site.
The fact that we addressed both the enzymatic and the protein interaction aspects more broadly than irreversible inhibitors get we believe give us the opportunity to show efficacy in a wider range broader range of tumors.
So to your question when we look at the.
Data the clinical data being released from other companies first I view this as validation.
That the LSD one enzyme is a viable target for drug development.
And for Paul.
Providing benefits to patients fighting a number of illnesses and specifically cancers. So there's there's validation of up to target and as validation of clinical activity.
Third part of your question is how do we respond well.
Right now we believe we have a very well thought out development strategy and we're implementing against that strategy and it's a two part strategy part one is speed to market as I mentioned, we believe that if we can show benefit to patients suffering from ewing's sarcoma that we are.
Well positioned to take advantage of Expedia aided ft, a development and review processes.
Concurrently.
We're also working on indications that would expand the market.
And so these are other these are some of the indications that other companies are.
Working in and there's some areas, where they're not working and we touched upon we touched upon our advanced solid tumors study that has the ability to enroll prostate breast.
Ovarian cancers melanoma, all melanoma colorectal cancers.
And as I mentioned.
We are developing a strategy in advanced solid tumors, where we want to target patients with tumors with specific mutation that we believe will be more sensitive to LSC one treatment.
And if that's the case then we believe we have a very good path forward to developing additional indications and much broader market expanding the market.
And as an example, our U.S Eli Lilly's recent approval for a drug that was approved for treatment in.
Three different tumor types, all sharing the same gene alteration or mutation.
So.
To summarize because you asked a very very thoughtful question.
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We believe we're going to have the potential for broad.
Activity across tumors I look at the data being presented and release from other companies is validation of our approach and our development strategy continues to be speed to market. While currently developing expand the market approaches and indications.
Okay got it will have a six a lot.
And we have no further questions at this time.
I'd like to thank everybody for attending and please have a safe we.
And ladies and gentlemen. This concludes today's conference call. Thank you very much for participating you may now disconnect lenders. Please hold one moment.
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