Q1 2020 Earnings Call
Good morning, My name is cash he and I will be our operator today.
This time I would like to walk me all she Celsius, 2021st quarter financial results Conference call.
All lines have now been leased on mute to prevent any background noise.
The speakers remarks, there'll be a question and answer session.
I mean, they press star one on your phone to ask your question.
Keep in mind, if you're using a speaker phone you must you release your mute function to allow the signals to reach our equipment.
Again that star one to ask a question during the Kuni session.
I'd like to turn the call over to Kim Golodetz. Please go ahead ma'am.
Thank you and good morning, everyone welcome to sell see on Corporation's conference call to discuss its first quarter 2020 financial results.
As has been sounds practice and it's not as noted by the operator prepared remarks will be followed by a question and answer period [laughter] Today's conference call will be archived and the telephone replay will be available. Beginning later today through May 29 to 2020, the webcast will be available for the next 90 days on cell C. On its website.
During this call management will be making forward looking statements regarding sell sounds expectations and projections about future events.
Generally forward looking statements can be identified by terminologies, such as expects anticipates believes or other similar expressions.
These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission.
No forward looking statements can be guaranteed and actual results may differ materially from such statements.
Particular, there are significant uncertainty about the duration and contemplated impact of the calls at 19 pandemic. This means results could change at any time and the contemplated impact of scope at 19 on cell C. On top of operations financial results and outlook is the best estimate based on the information for today's discussion.
I also look on that question. That's the content of this conference call is accurate only as of the date of the live broadcast may 15th 2020.
So I'll see on undertakes no obligation to revise or update comments made during this call except as required by law.
With that said I'd like to turn the call lever to Michael chart Junior Selsey ons, Chairman CEO and President Michael.
Thank you Kim.
And good morning, everyone.
Joining me today is Jeffrey Church, our executive Vice President Chief Financial Officer.
We'll provide a review of Chelsea hands recent financial results in a few minutes.
Also on the call for the question and answer portion as Dr. Nicholas Borys.
Our Chief Medical Officer.
There's always it's a pleasure to speak with you.
Once again I'm speaking with many of you are kind of finds a home.
It's cobot epidemic epidemic.
Continues to impact our daily lives.
Okay.
All of you have remained safe and healthy and we'll continue to do so.
Okay, Great deal of exciting news during the first quarter in recent weeks for both of our lead programs first thing critically important.
The next phase three Optima study for the treatment of newly diagnosed and solar carcinoma.
Primary liver cancer rich the prescribed number of events in April for second Preplanned interim efficacy analysis.
Discuss this more in a minute.
Equally important however is the wave of ongoing positive knows that we've reported regarding the development of Gen. One right you know therapeutic currently being evaluated Didnt your vision to study.
Phase one two trial newly diagnosed advanced ovarian cancer patients.
In addition to our steady drumbeat of positive clinical research. There was just like all wind in my letter to shareholders last month.
After seeing the extraordinary volatility and signals of economic retrenchment, we have smartly taken steps in the most shareholder friendly ways.
Strengthen our financial position, Jeff will talk about this more.
Our goal is you know just a photo shows that our cash runway extends into the second quarter of 2021.
During which we expect to report several key milestone events.
I'd also like to report.
I have in the past and said many times Celsius fundamentals continue to be strong.
Our advanced clinical programs are directed to large patient populations were talking about medical needs with poor prognosis.
We have sufficient cash to see the company true several important value creating milestones.
And execution of our clinical development programs as I said before and then what do you like most care and with a strategic focus all supported with extraordinarily talented and oil staff. So it's appropriate to recognize our employees.
And include our partners.
The research physicians and their staffs in our consultants have professional members of the C.L. owners, who are engaged at our studies and other development projects.
Recognizing for their greater under pressure pressure during the current pandemic and collecting all that your dedication is very much appreciate it not only by this management team by the medical community on the patients who ultimately will benefit from our research programs.
[noise] I'd like to start by discussing our phase three optima study of Thermodox, our heat sensitive liposomal formulation of doxorubicin for the treatment of primary liver cancer.
Recently announced the study reached 158 events or deaths triggering our second Preplanned interim efficacy analysis by the studies independent data monitoring committee or do you have to shake.
At the time of data cut off we actually had 160 debts.
It will be reviewed but do you have shape.
The meeting of the committee members has been schedule data lock has been implemented QC data is being a date acute she is being conducted and now reports are being prepared we expect to report the interim results. Following the DMC meeting early in July.
No as I said before we believed that there was a very good potential for success in this analysis, but of course, it's not assured.
The company remains blinded.
I'd like to give it some.
Insight into the support for our belief.
At this study is on track for success supporting our belief is art comparison of the threshold for success to the data from the optimism for the data that the Optima study was based on.
The P value when the hazard ratio for optimistic sets at 158 offense ours 0.0 to two.
0.70, respectively.
P value for success is <unk> 0.0 to two the hazard ratio for success is 0.70, respectively.
This compares favorably to the P value and hazard ratio observed for the 285 patients in a prospective I'll repeat prospective subgroup from our earlier phase three each study upon which the Optima study protocol the space.
Prospective subgroup from the heat study demonstrated a two year overall survival advantage for patients treated with a single dose of Thermodox and compare to the studies controller.
And a remarkable median time to death of more than seven and a half years.
Why do I say remarkable at the time that each study was conducted median trying to death was expected to be only 36 months.
[laughter] the subgroup hypothesis and trial design were confirmed by the National Institutes of health.
Institutes request not ours, they asked us for the date or to review independently in their independent review of the heat studies 432 patients with single agent that's over 60% of the study population.
They concluded that a thesis supporting the Optima trial is valid.
Taking all this into account.
Sure I'll try to summarize by saying the bar for success at this second analysis is low and what was seen in the prospective heat study subgroup.
But again that was validated by the NIH using a different slice of the data.
[noise] soil afford to receiving the DMC his recommendation and the potential for positive outcome, regardless however.
I believe the Optima study as was ultimately well positioned for success, if a third and final analysis is necessary based on 197 patient access at that point the bar for successful be even a lower.
The P value and the hazard ratio required at the final analysis, if it's necessary.
Our 0.0 for three and 0.75, respectively, which is far lower than the value was observed in the prospective heat study shopper.
If it's necessary <unk>.
We anticipate this final analysis will occur in the first quarter of 2021.
Oh got remind you also.
At our confidence in the underlying hypothesis supporting the Optima study is not ours whole loan.
Thought leaders from the medical community and distinguish scientists have weighed in.
Conclusions from Chile viewed manuscripts, including published preclinical data supporting the Optima study published the public teach study manuscript validating the subgroup results and again the NHS published analysis in support of the heat studies hypothesis all point in the same direction.
[noise] more further encouraged when we look at the trends comparing the optimal studies current combined timeline for disease progression PFS and the patient death rates, both of which are tracking in line almost perfectly.
With the pro cut prospective heat study subgroup.
I've been asked the just the coal has the kogut virus or Apple pandemic affected our.
Our Optima study.
I'll point out that our plans for the CMC meeting in July includes a up the impact of covert 19.
Which accounted for a few extra weeks to ensure that all of the data input is clean and current before presenting the DMC. We discussed this during the last conference call. We took a few extra weeks just to make sure that all the monitoring the appropriate monitoring was complete a largely due to some of the restrictions from.
For our monitors are being able to visit the hospitals and some of the.
Areas of the world where restrictions were.
Got it to restrictions workplace, otherwise otherwise other than this very short the life for the do you have seen meeting the coupon a virus says virtually had no impact on to conduct the study or patient follow up despite many of the clinical trial sites being in China and other countries, where the virus has had a.
Okay.
[noise], so I want to want to John one.
Well, we prepare for the a T M. She review we continue advanced the development of our immunotherapy candidate Gen. One that will be evaluated as I said in the ovation to study a randomized.
Phase one two trial in newly diagnosed advanced stage ovarian cancer patients in this study Gen. One is being combined with a standard of care Neoadjuvant chemotherapy, you compare to a control arm of Neoadjuvant chemotherapy alone.
There is a phase one portion as we've talked about it you're running at 100 milligrams per meter square at 30% higher than the dose that concluded the first phase one study of chugging along.
This phase one study included 12 patients.
60 on the treatment arms six under control arm, a those six patients have been treated.
And the rolled off and have been evaluated.
Oh, we're now looking forward to phase two and enrolling up to 100 addition, I'm 118 additional patients in the phase two program for a total of 130 patients in this trial.
[laughter] that's for background for those of you need to sell see on Gen. One is engineered using our proprietary theraplas platform technology.
They're up class is the name implies is a non viral nano particle gene delivery system that provides a means to transact cells with plasmids coated for proteins of therapeutic value.
Just want incorporates the gene sequence for interleukin 12 or high Ehealth wall.
It is administered local regionally into a body care of any such as the parents any him for ovarian cancer treatment.
Following administration self transfection has accomplished among millions and millions of cells, resulting in persistent durable local search creation <unk>.
But to a week secretion of up to a week or the aisle 12 protein.
Hi, all 12 is well known to be one of the master switches of the body's immune system.
Recruits the immune system, the entirety of you've got a system.
And Chris it's proven to be an effective means to fight malignancies.
Beauty of this technology and I said it over and over again is that the durability of the response a week recruiting the immune system.
And the ability of John wants to be repeatedly administered.
In our phase two study will be administered up to 17 in 17, Weeklys cycles goal, which is to ensure that the immune system is sufficiently active to treat cancer cells that may have escaped either surgery or neoadjuvant chemotherapy.
The initial results suggest.
At this mechanism is having an effect I'll talk about that more.
As I mentioned at the beginning of the call. We've had a steady stream of encouraging news regarding gen. One during the quarter in February.
The de SMB declared the hundred milligram per metered dose to be safe and recommended continue follow up is required for protocol to ensure that the maximum 17 doses are safe, particularly following interval de bulking surgery, which is a part of part of the a treatment protocol for these patients.
A final and next evaluation of.
The 100 milligram per meter dose will be at approximately two weeks, we fully expect a recommendation from the D. S. M. B to continue phase two at 100 milligrams per meter squared.
Largely due to the a very positive safety profile of art.
On one therapy.
In March and another news release Gen. One in ovarian cancer was granted orphan drug status by the European Medicines Agency. You May know this is quite an accomplishment.
So it's not just granted it requires so they are the sponsor to supply.
Incidence data from a variety of sources as well as some demonstration of efficacy of our truck in early phase trials.
Oh the.
Value of this designation as manifold.
It provides for 10 years of market exclusivity following approval.
Oh It provides us with he amaze protocol assistance it gives us access to a centralized procedure. This is very important.
Following immediate allowing for immediate marketing authorization and in all of the member States. So do you.
It would become eligible for a reduction of regulatory and marketing authorization fees.
I want to note also that the Gen. One previously received orphan designation from the FDA, providing among other things Oh seven years regulatory exclusivity from the time of approval.
All very possible, it's very positive.
Oh for John Walker.
In March.
Ported that pulling phase one data from our prior authorization one study with a 12 patients treated innovation too.
For the phase one portion of the patient to.
The company now it's highly encouraging dose dependent tumor response in surgical scores.
Surgical scores being a predictor I saw an improvement in overall survival.
In late March highly encouraging PFS progression free survival findings or reported comparing ovation one patients versus a statistically valid does it validated statistics a synthetic controller.
The synthetic control arm is provided to us by Medidata.
Many of you may know that name there a wall leader in clinical data management.
This is a cutting edge approach that's being developed by meditate.
Oh, two clinical trial strategy the goal of which is too.
Slide eight replacement for some or all of the control our patients in a clinical trial.
Well the hazard ratio that we saw when you compare our patients.
Well it to the a synthetic control arm in this phase one study and a 15 patients the hazard ratio was 0.53.
Almost doubling over a couple of I'm sorry.
The median trying to progression.
Well when we compare to our patients treated with gen wanting to synthetic control arm and as I said before this is quite remarkable what it does it standalone.
It's supported with impressive published.
Translational and clinical data from our prior for phase one experiences.
We weren't surprised you're surprised by the magnitude we weren't surprised that PFS improved largely due to the a mechanism of action that we are seeing and the translational data.
And the other clinical outcomes from our phase one experiences.
So we're very excited about these data as I hope you hear that in my voice and we believe that they want strong consideration for strategies to accelerate the clinical development program for a genuine newly diagnosed at varying cancer.
Fast ovarian cancer patients by the FDA, we've discussed various strategies with them in the past Oh, we're now submitting a brief off based on these data to we have submitted a great based on these data.
To the FDA all lining the results in our point of view I'm encouraged and I'm I'm expecting to post you want to age She's response, and then actually.
30 to 60 days.
All in all we're building the foundation for what we believed to be a lucrative asset worldwide should generate ones development work continue as planned and show the efficacy that is being held in early work.
But I do need to point out a is they suggested in earlier calls there is a modest that delay and I'd say modest during our year end call in March I pointed out that we didn't anticipate.
Anticipate any significant impact on our Gen. One program due to the coke that issue.
And as I pointed out that delays, if any would not amount to more than a few months.
Well after assessing the evolving situation over the past a six weeks or so we've decided to delay the phase two portion of the ambition to study by approximately three to five months. This delay is due to a decision made by the company largely made by me I don't have an abundance of caution.
That's because we assure the quality of our investigational product to ensure that aquatic product meets our finished.
I'll finish product meets our or specifications in our quality requirements, we have always mandated.
That's true for Thermodox is wallet as John one we've always mandated that our formulation side. This is Pete present in the manufacturing facility during the manufacturing runs of our product, but with this covert 19 related travel restrictions.
And with some strict limitations on visitors to their manufacturing facilities for our contract manufacturing organizations.
We were unable to have these technical resources onsite into factories at this time.
So I've decided to postpone manufacturing until we can be present.
Oh that delay maybe up to September.
Oh, it's incumbent upon us to make sure that we have investigational product available to treat our patients.
So we have decided.
Got it with an abundance of caution not to initiate phase two until manufacturing has resumed in the next few months.
As I said this is cautionary and frankly its just good practice.
Overall scheme this few months or not material success for a program.
In a bad production lot of John what would be.
Material to the success or caused an enormous go away.
Meanwhile, we're looking for ways to accelerate patient enrollment. So there's few months to like they would have only a minimal impact if any out of study completion.
[noise] shouldn't be precise our guidance, though is that the phase two portion ovation two will commence in.
The fourth quarter early in the fourth quarter.
Oh, where we had previously announced guidance that the a second.
Phase two portion would commence in its second half twentytwenty.
I also want to elaborate on what was included in our press release. The return of the 630000 dollar S.P.A. long made to us I Wonder if the payroll protection program of the cares Act.
We are we believe our loan application was more than justified and consistent with our understanding of the intent.
Congress any administration very clear to us.
But after some consideration in consultation with council.
I had become increasingly clear to me that the guidance for loan qualification.
Continues to evolve.
Its latest yesterday I think we've gotten some recent guidance not only from the S.P.J. salt, but also from the FCC.
So rather than a subject the company to decision uncertainty after the fact.
We have decided to return the funds.
And the deadline provided by the U.S. Treasury Department that occurred yesterday.
Not to compensate we've taken steps.
Set this up modest financial impact through some payroll adjustments and and the temporary reductions.
And we're taking other actions to improve cash flow.
My colleagues here Mr Church for example, as some renegotiated the Oh.
The full negotiate a deferral of principal payments under our horizon Gunter along that once the documents are assigned here, maybe more than offset more than offset the $630000 that we've.
Return to the government.
Our goal is always saw its like repeated many times is to ensure that we have a cash runway through the many major milestones that we expect to achieve off before the end of the corps second quarter 12 to 21.
And we will commit to you to everything in our power.
To make sure that that happens.
So I'll conclude with a few points here on what I've been saying for sometime now youre companies fundamentals are sound.
And as each day turns we grow stronger our medias meetings with various regulatory agencies, which has been a regular.
I'll have resulted in no significant issues and in fact have been quite encouraging.
As shown in our recent orphan drug designation for Gen. One from me.
Our manufacturing strategy can be characterized as solid.
Our focus on redundancy. During this pandemic has served us well and as I pointed out in our last a year end discussion.
Our product costs cost of goods is enviable what the promise of high gross margin as a matter the market or the region.
No for example.
Thermodox addresses H.C.C.
Malady, that's highly concentrated in China and southeast Asia.
What countries.
Frankly, where they call it low cost of goods assures us.
Gross margins, but more importantly, the ability to provide this life saving potentially lifesaving truck.
Two HCC patients worldwide.
So Jeff will point out our spending and cash management have been tight and focused.
And each of our two investigational products I'll conclude with this point I've said it over again.
Each of our two investigational products have block botched.
Blockbuster market potential fight anyone's standard for measure.
Oh, the Optima study is on the cost now generating important and potentially transformational results.
We have every confidence in our trials our investigators in our collaborators our product technologies and most importantly, our employees.
Despite the cope with 19 turmoil.
So it still looks for with laser focus to the balance of 2020, a year that we have every reasonably well be transform rational for patients the medical community and our investors.
Well, if these comments I'd like to turn the call over to Jeff Jeff.
Thank you might detailed themselves against first quarter 2020 financial results were included in the press release, we issued this morning and in our form 10-Q, which we filed today before the market open.
Michael standard in recent weeks at clinical progress has accelerated as we near the important milestone for the second prepaid interim data review, which is expected to occur in less than two months in the meantime, we've been smart about raising capital and keeping tight control on all of our corporate expenses.
We've also kept a careful eye on cost of goods, while making sure we're able to topic the adequate supply of their lead compound both in the U.S. going abroad.
March 31st 2020, something on the cash short term investments.
Interest receivable were $15.7 million.
In addition, we had a receivable at $1.8 million from the sale of our New Jersey State net operating losses, which we were able to monetize in April bringing our cash balance is $17.5 million our quarter on cash position includes $6 million net proceeds from the sale of equity during the first.
Corridor, which includes.
4.3 million from the registered direct offering of stop and warrants quite at the end of February.
We have opportunistic we strengthened our balance sheet the buffer against the potential for continued erosion, if our share price in the face of heart public market uncertainty, while we complete the Optima study our current cash plus future plant sales of our New Jersey stayed out will extend their operating runway.
Through the second quarter of 2021 importantly, this is well beyond the final data read out of the Optima study, which is needed would occur.
During the first quarter 2021.
Our cap table includes approximately 29.3 million common shares outstanding at approximately 3.6 million warrants.
Which is 3 million. If these warrants are exercisable at $1.24 cents a share beginning in early September 2020.
These are the warrants associated with the February equity raise.
The share price now is above this exercise price cities warrants may provide additional capital in the coming quarters.
To further expand our cash one way.
With respect to future funding flexibility, we have a $75 million shelf registration on file with the at the same.
We have $60 million left on that show.
We also have a traditional aftermarket facility with Jim trading that allows us to raise money opportunistically with no warrants and they're very low a commission they used to the ATM facility is entirely under our control.
Turning out to our first quarter financial results operating expenses were $1.9 million near current quarter.
Hi, which represented a 2% decrease from the $5 million in the first quarter point writing.
During the current quarter, we incurred half a million dollars and non cash stock option expense compared to 700000 in the prior year.
Research and development expenses.
$3.1 billion compared to $2.8 million in the first quarter up 20 like team up with clinical development expenses for the Optima study.
Were 700000 in the first quarter, but this year compared to 900000 last year. These costs have decreased as expected.
The trial has moved into the follow up they after full patient enrollment with announced in August 2018.
Expenses associated with the optimum two study increased to $300000 into first quarter 2020, compared to 100000, the same period last year.
A copy announced initiation of the follow on phase one two obligation to study in September 2018, with full enrollment of the phase one portion of this trial completed during the first half of 2020.
<unk> expenses associated with research and development activities for Gen, one and Theraplas increased to $900000 in the first quarter of this year compared to $600000 last year as the company continues to expand its manufacturing a capability and implement programs to reduce manufacturing cost forgotten one.
General and administrative expenses were $1.8 million in the first quarter 2020, compared to $2.2 million for the first quarter playing like team.
This 17% decrease was primarily attributable to lower personnel costs and other expenses related to non Paul stock compensation, which was partially offset by increases in premiums. What are you know when charts in 20 Twond and.
Other expenses included a non cash charge of $41000 for the change in valuation of the earn out milestone liability for the Gen. One ovarian cancer clonal that this compares to a much color gain of $2.7 billion net of a charge for $4000 for warranty issues related to an amendment.
For the earn out milestone payments for Gen. One during the first quarter of last year.
The company realized $100000 in interest income from in short term investment in both first quarters of 2020 and 2019.
And in connection with our venture debt facility with horizon, we incurred interest expense of $300000 going both first quarters and 2020 to 20, helping in summary, Celsion is in excellent financial shape with sufficient capital to fund operations through the second quarter 2021.
We anticipate that our net cash usage for the second quarter of 2020 will be approximately $4.3 million, which is in line with their full year budget, which calls for keeping operating expenses in test utilization at approximately $4 million per quarter. We anticipate that are that pad during the second quarter.
Well usage during the second half of 2020 will be approximately $7 million or three and a half normal dollars per quarter in closing, we believe that a successful clinical outcome for thermodox opens up a billion dollar market opportunity and will result in significant value inflection point for the crop him as well if you are shareholders.
I'd now like to turn the call back to Mike.
Thanks, Jeff well done.
Before we open the call the questions I want to remind you all the a memorandum of understanding that we signed last year with officials from the hung Joel you on an economic development area to establish a subsidiary in the you on district of Hong Joel.
Yeah, well you I'll remind you provides the company with.
Significant financial incentives.
Oh the area.
For the subsidiary is located in one of China's biotech comps for the Chinese government has made development of advanced medical technologies that address unmet patient needs high priority.
On the spot.
The primary purpose of this this subsidiary is to commercialize innovative cancer therapy, starting with Thermodox.
This is China the subsidiary will focus on all nearby developing markets, including the Philippines, Malaysia, Thailand and Vietnam.
Hi, so.
Our local manufacturing partner for Thermodox is expected to provide an economically viable cost structure by establishing a low cost it has established a little costs.
Production for these geographies.
Registration of the subsidiary has been completed.
Yeah subsidiaries name in English if you see it is self John Hone Joel pharmaceutical limited.
That's point Oh, we have begun drafting as I said the D N D. Andy I M. A for Europe for Thermodox in HCC.
Our goal is to have both sufficiently prepared to complete a filing within six months or the unwinding of the Optima study for example.
If we announced positive data from the second interim analysis in July.
I would hope to have a filing made around the beginning a very beginning 2021.
[noise], we remain active with investors, albeit by telephone during this time, we will continue to create remain so as we have so many exciting milestones ahead of us this year.
With that we'll open the call to your questions operator.
Thank you at this time, we'll open the floor for question if he would like to ask your question. Please press Star Q filed by the one key that star one tasking audio question.
First question airline inside.
Well at the second question or offer.
Hello.
Hey, sorry, I did not start Thompson with Oppenheimer I apologize I get about them, though so that was supposed to be me. Thanks, Mike. Thanks, Yeah I'm just a quick question a couple of questions on talk on Thermodox.
Then on on Gen. One.
By the way.
Solutions for all the good work that you're doing falling through an all he expectations that you had said.
And we do understand the other day, probably 90 I think that's almost every company that we know who is having some kind of impact. So on Thermodox can you talk a little bit you know you've been updating investors with the optimal blinded PFS or over the last couple of years can you talk a little bit about how that is.
Change since the last interim when you did the first interim.
Well, the blinded PFS or that that you've been monitoring for the Optima study and then also you specifically talk about you know while you'd be a working dropping the idea again I mean, let me see me owe them off the most successful what are the specific leading the meeting stops you know what are the things.
That Pete those six months to get you to that really 2021 filing assuming this interim and successful not just got a couple of quick follow on Gen <unk>.
Sure and great questions. Thank you very much so with regards to the a blinded PFS data the.
Well most recent information comes from.
The <unk> the first interim analysis, so we don't.
We don't do the comparison it except.
For <unk> otherwise it it may not be accurate I, except for presentation to the DMC.
And then analysis, we saw that when we pull that two arms.
From the high heat study subgroup that 285 patient prospective subgroup median time to progression.
The two arms together is 16.8 months.
When we pull the two arms of the 556 patients.
In the current Optima study median time to progression is 17.2 months.
So they're virtually on top of each other so the basis for the study was the Kaplan Meier that we generated from this 285 patients showing a me.
To your improvement in overall survival.
Oh, we.
As a marker now are falling PFS from that.
Group is compared to the Optima study and we see as they're falling almost exactly your rig recall that the threshold for success for the Optima study is lower than the hazard ratio in that and or the high has a higher P value, but a lower threshold or doesn't.
What we saw in they.
Each study subgroup.
So we're encouraged we're really encouraged by that.
The second ER and ER.
And Ah ticket I believe it was one of the rate limiting steps.
For filing the NDA, so I'm not much of it right limit the activity has to do with engaging with the FDA our cash.
So if it tomorrow, we were to heavy up a positive result.
From a the DMC or we would immediately types to call to the FDA, we would let the FDA I know that.
We have a up a positive outcome and would like to have a pre NDA meeting with them.
Oh, we give them some idea of the topline then we'd have to submit a formal letter to the FDA requesting this meeting.
Oh and weren't drafting that letters, we speak it takes you know.
A little bit of time to make sure we're asking the right question. So this meeting this pre NDA meeting.
Usually a companies I.
Just a series of questions along with a topline data from the trial.
Scheduling that meeting takes about 60 days.
And in some cases 90 day almost half of the time to prepare the M.D.A. Once we have yesterday's understanding of what they're looking for them. We can finalize the yen San Diego, which is probably another.
Two to three months.
[laughter].
Greed, Mike and then just will not specifically in terms of just the I know you know in India or in M&A or would have three sections right. The preclinical CMC and clinical site assume you're preclinical and CMC section should be good to go I mean, the altima trials and going for a while it's really the clinical section and the result.
It's from the Optima second interim that you'll need to discuss with the regulators correct.
Correct, Yeah, I Should've mentioned that so for the most part the a preclinical and and the CMC sections are complete.
Right so it.
And then there in the narrative for the clinical section or we haven't drafted cement just a matter of populating it [noise].
[noise], Okay and then on June one you know I was noticing that you have those good Oh hazard ratios again, he synthetic controlled study, which is which is really interesting I think the future clinical trial.
See more of those.
I had was why did you see such a big dispersion. When you look at the hazard ratios and it's reflected in the P values are being point won in about a point on.
The hazard <unk> you know.
Just purchased from like as little as 0.151 takes all the way up to 1.7 why would that happening is it's just small numbers or what was the reason for that.
Yeah, So I'm not sure I understand the question completely the hazard ratio that we just discussed was <unk> 0.530 0.53.
Oh, the payback the comedy candles right upon confident that any drugs that are pretty wide.
So that's I don't think where's that coming.
I think it's a largely due to small numbers I.
I mean, the Doctor Borthwick do you have a insight.
Yeah, that's correct, Mike when when I discuss that with the statisticians.
[noise] statisticians from crop.
[laughter].
Yes, the group I'm sorry.
It's really due to this.
And then this type of analysis. They told me that is that the P value really shouldn't be the focus the hazard grades so thing.
<unk> <unk>.
Okay.
Unfortunately, Nick your you're breaking up a little bit.
Oh, I'm, sorry, I'm, sorry, we talk quotes will be our in house statisticians and the statistician somebody data and they agreed that.
Key value was due to a small number.
Great Great and then just supposed teacher purposes, I know that well you know leasing to design with a hazard ratio <unk> 0.75 is there any kind of a phone from this a synthetic control arm study will you be able to show why some of the patients that were showing up.
Core hazard ratio why they were performing in such because again you know my only concern is that you've got a really good hazard ratio, but at the dispersion is pretty wide I know you'd be kind of interesting to see why the patients that had a you know sub optimal hazard ratio why they had it oh if possible.
[noise] like do you want to feel that.
Yeah, I think that's why it's important to work closely with the FDA and no. Currently our next Phase study is 130 patient study, which will address you know all the very abilities that we see in a biological system. So just a cancer and and that's where.
I think you'll start seeing tighter P values I know stronger HR.
Great all right. Thank you I understand that my last question is that appreciate all the caution you just a delay a which is completely understandable I can see it with lot of other copies in fact, most smart companies, but one question I wonder how it is.
You know your manufacturing loss can you just talk about how many loss you need for the fees to where are you would that manufacturing campaign and then why specifically do you want to have the formulation scientists on site I mean, it will just be ongoing issue meeting you know if we should to success.
Whole, maybe you get therapy any well you all we don't want me from scientists. So there are many countries like nor to be able to produce he's lost and thanks all the question.
Yes, sure. So we manufacture the the clinical supplies a in relatively small batches.
And so sufficient size to be able to scale within the F.D. age for a limitation. So we're able to scale 10 times the clinical.
Batch size, assuming that that clinical batch size has been properly engineer that a niche kids fell updatable and it as the uptick.
Established its quality through a for a registrational studies.
The.
The in frequency of manufacturing clinical supplies is the issue.
That's if we were a regular regularly produced product by a CMO I would have no hesitation.
Oh, Wow, producing a commercial product without having a person in the facility.
But clinical supplies are produced infrequently and in many cases, there are minor adjustments made to the batch records or when during the course of manufacturing, particularly at phase one in phase two.
Hi, So we think it's important that all companies do this this is a maybe an obsession on my part, but we think it's important.
To have an individual in the plan. During these infrequently men manufactured products because manufacturing people are you know there they're exposed to multiple many many many kinds of manufacturing and they they you know they lose some of their knowledge as a function of time for the time is six months or nine months or 12 months.
So having our experts on site make sure that assures us that we are not losing product due to this in frequency of manufacturing that's simply yet and for Gen. One this is a particularly.
Important issue.
It takes about a year.
Ah historically, it's taken about a year not for us, but for every manufacturer or sponsor whose.
Our product includes a plasmin or or some gene therapy.
[laughter] takes almost a year to schedule a batch.
So if we were to consume some of our plasmid.
In a finished product manufacturing that did not meet our requirements and we had two.
Dispose of it we have turned away.
We wouldn't be waiting a long time at a very high cost for subsequent batch to fill out the requirements for the clinical trial and we just so we think that's a risk it so even though it's a small risk it's a risk that we can't take.
Yeah No Mike.
Makes a lot of sense and I actually want do for it I think that's a very smart only apart and everything green. Thanks for all the questions not looking forward to to out to you a lot.
Huh.
Thank you so much artists.
Our next question I'm sure a messy cross Amgen's training.
Yes.
Good morning, Happy Friday, whatever that means anymore [laughter]. Thanks for taking the couple of questions from me.
First off I guess I'll start with with Optima given that it sounds like the next time, we maybe talking about this program you may have a positive results here hopefully and so just wanted to get kind of a reiteration of your plans regarding commercialization I know you've previously spoken to you know wanting to handle things in the U.S. internally.
And partner out in places like Europe, and China, I'm, just wanted to get kind of the latest on that positioning given you know taking into account cobot in this kind of ever changing landscape and then the second was one on Jan one was hoping you could kind of remind us of what or any plans that you might have to.
To look at longer term follow up from from the phase one portion of relation to maybe to come to confirm some of the benefits of maintenance dosing and potential read through to the phase two portion I guess, particularly because you know maintenance dosing.
Is the more novel exploratory parts, so to speak obligation to relative to Oh vision one.
Yes. Good question. Thank you. So let me just start with the commercialization Thermodox <unk> I don't see you under any circumstance the to the covance situation affecting our commercial plants.
In and as you is this you consider the timelines from positive. So I've read all of the study to Oh, launching a product or it could be I know to 12 to 14 months from the time you have a kind of fast track even for the biggest of competition 12, 14 months before you're prepared to watch [noise].
And that's assuming that the FDA or other regulatory agency.
Gives you a after you know a fast track priority review.
So you know I hopefully this covert situation will be a better understood by a medical community and better managed.
And not a if its persisting another can all year and a half out here we've got.
More problems just go then just thermodox.
Ah This oh you know.
Thermodox addresses the largest unmet medical need remaining in oncology.
By the time this drug is approved.
There will be close to a million incidents worldwide.
A highly concentrated in the most or strategic market focus right now from for Big Pharma and that's a China.
So you can imagine China being that the potential for the largest pharmaceutical market on the planet.
With 50% of the global incidents of the largest unmet medical need with I mean literally no therapeutic options for newly diagnosed patients they've treatment options, but no no no drug options for newly diagnosed patients.
So there was a great deal of interest for this truck.
Two after hitting that particular population and when you look at it globally, maybe you know our business models.
Okay, very conservatively as Jeff pointed out blockbuster a billion dollars plus market.
I don't think we're gonna have any difficulties with [noise].
Oh, finding suitable partners I mean, we'll have our choice really I'm sure of that <unk> partner. So we believe had the best capability to watch this product at the optimum prices given them. They all of the market diversity that we're saying.
With the fastest penetration and the strongest sales and marketing.
Organizations as you mentioned, a we are preparing however ought to bring thermodox to market ourselves in the United United States.
That's a oh and ambition that we have we think we can handle all we'd be the best stewards for Thermodox a in the United States. However, it's going to sound trite, but I think it's.
Important mentioned, we will do what's best for shareholders.
But if there's a licensing opportunity that we believe both reduces the.
Just a financial risk.
For launching the product or in proofs.
What this company could provide in terms of penetrating the market.
Then a and gives a better returns to investors then we will Oh, we will certainly thought she that as an important consideration.
[noise] I'm glad we have thought we have made no expenditure itself some market little so market research.
Oh and pricing research.
At this point.
We are conservative with our cash certainly a positive outcome, however will be quite a bit more aggressive in developing our marketing plans for the U.S.
As a oh, a lead approach, but I've made may turn out to be the Oh yeah.
[noise] white, the dark horse in the rates really.
And.
Finding the best strategy to bring thermodox to to market in the U.S.
Oh.
[laughter] all with regards to your question on Jan one.
We have talked about maintenance therapy.
Oh.
And what your I assume what you're talking about is Oh.
While continuing to treat patients following the full cycle of treatments.
In the current protocol.
At some schedule at some frequency to.
Continue to recruit the immune system over a longer period of time I think that's a very interesting strategy off but we haven't we haven't explored and with Ah you know any.
Sufficient.
Consideration at this point to present anything I.
I mean I'd to Nick Nick Your on line do you have any thoughts on how well maintenance program beyond the 17 doses might look like cannot for all.
For patients in our in our study.
Yeah, I agree might get so it's a very interesting opportunity for gen. One Oh, we're ready proving that the drug has a very nice safety profile. Both he since that have bulky disease pre surgery and now we're proving post surgery that the drug has a nice safety profile.
So it is very well positioned we're looking you as a maintenance therapy. So if the data that we we were were establishing to seeing or synthetic control arm and the first phase one if all that keeps on lining up the way we're seeing it right. Now are there are further opportunities as you suggest.
And I'd just add to just to add to next point or Nick has been instrumental in developing a I'm kind of a home health care approach, we've been working with the yet a third party.
Uhhuh <unk> pre prepares a I'd type thought a lot it demonstrations for for home administration.
So on the I'm just thinking about it more broadly that this strategy really fits nicely into a oh.
Commercial or a potential work patients would be.
Required to administer this so the gen. One out of some some frequency throughout the course of the rest are life perhaps.
[noise]. Our next question comes from Russia, My Maclean capital markets.
Hi, Thanks, well I'm not big migrations, so for us to regarding.
Well I mean, the ones, who do you envision Dan.
Mark how are you seeing Dom south.
And then a follow up on are you seeing even expected.
And if you need to stop and try and funny because the how long would these be lucky to be long enough fine on that any changes expected because of the <unk> nine do situation.
Oh.
Yeah I.
I think are you asking if if.
The trial a successful.
Oh, well, we we will we stop the study and stopped falling patients that are set the question.
[noise] odd, but yeah I end up then something on where they just complements the beacon money Dupont know how long does it have been formally and whether there'll be any changes because some schools main street.
Yeah, I don't see Colvin impacting this or.
Our Oh.
Ovation studies at all.
Exactly.
But I I. That's a question that will ask the F.D.A. I think our point of view is that.
We will continue to follow patients for survival.
And I think at only strengthens our hand.
But Nic do you want to weigh in on that.
Certainly no.
Yeah. This is Nick or is and I agree that you know we're going to take a the council from FDA and also remember as Mike mentioned earlier in the presentation. We are also looking to submit in China, and Europe and the Chinese authorities may want to see continuation of some of their.
Patience or other regions as well so we're going to leave that option open to or whatever the best sciences and whatever the regulatory authorities are indicating to us.
[noise] and with regard to Gen. One one to start mining exactly I'd want I'm fine do you think it'd be comfortable doing all the initiating the phase two.
[laughter] off well as soon as we said as we start manufacturing I don't see any real potential of up manufacturing failure. It's just a matter of having a person in the facility to provide the guidance the institutional knowledge to assure that is set up that is correct that the times I mean, you know there's some time depending.
Tees and temperature dependencies that we don't want.
To be overlooked so as soon as we are ready to manufacture silicon put a person that facility and it could be as early as September Oh, we'll initiate the the phase two program.
And you also talked about on getting the screening the basin.
So why do you expecting DHMSM bulletin won't be [laughter] bond wanzhou on the comp.
<unk>.
Yeah. So we have a a model that where your thumb develop now we have a little bit of experience with recruiting patients.
<unk> the model.
Suggest that a weekend.
Expect to recruit a approximately one patient per month per site.
We currently have a activated 19 I believe the numbers 19 don't hold me to it.
19 sites are very close to 19, our expectation is to a enroll up to 25 sites in the U.S. into more in Canada.
Oh, we were.
Oh, I just to kind of on a slow walk here given this coal that situation and initiating those the balance of those sites.
But that could happen very quickly once we've got a you know what's that the phase two is initiated again. So we would expect all of the study sites that have been.
Initiated.
To begin recruiting patients immediately it as I said, our model shows about one patient per month per site.
In the meantime, however.
I don't want to lose any momentum.
And enthusiasm among our investigators and that's it. Thank you know that can be a big problem for us.
So this company has taken a position that you know this is a modest delay but.
It could have an effect, so I Nick and his.
Pinnacle operations people are all have organized and investigator meeting.
Hi, good there will be on the cost Bob.
<unk> initiating phase to the goal of what's just to remind everybody. What the requirements are quickly go through the protocol one more time, so we haven't lost any.
No knowledge of how they program should be one at each of these these physicians.
She patients who have a limited life span I mean, when they when they very very few patients every day.
[noise] any expectation of living more than three years from diagnostics.
And so in minutes grip, it's really it's grim and when they get together we've seen this.
When we they get together in our investigator meetings, the enthusiasm that they generate among each other for our product and they similar kinds of trial is extraordinary.
And so our goal here is to continue to motivate our investigators are we have a good number of sites that are ready to go we'll be adding a few more sites a wants to manufacturing has been initiated and will kick. This thing off as quickly as we can't I think there is one.
One outlier that Ah, we don't know hooked up part of our discussion with Sta is if they agree with us all we'd like to substitute some of the.
Control arm patients organically recruited control arm patients with synthetic control arm patients not all of them.
But if we could replace 25% of the control arm patients it would.
Maybe we would it would ER immediately.
Or reduce the number of patients that we have to recruit into the study and then what you know accelerate its completion.
If we could get a 20 or 25 full control arm patients from the synthetic crude.
That would not do you have to boost to getting the trial or little more quickly.
So that's part of part of the Fox.
[noise] [noise] [noise] [laughter]. Our next question comes from Neil Lane.
Private investor.
Good morning, gentlemen.
Thanks for taking.
Thanks for taking calls from individual investors I'll try to be brief one question Mike in regard to the few extra weeks.
That.
We're wisely taking them when you are getting you know, making sure that all information was correct for the submission for the Optima trial. Just curious was deed already locked or is there a chance that those few extra weeks actually provided a little bit more time of separation of the two arms, which I think would be good in our case.
Yeah.
Well.
Yes. It says that it's yes, if you extra weeks allows the more maturity in a few more patients into the Oh, yeah into the valuation the patients few more patients have died.
So the at the number that the DMC won't be reviewing is I think in my prepared remarks, <unk> remarks, I said it was willing to 60 patients.
Yeah, that's actually bode well for even slightly increased likelihood of success of this interim coming intermediate which be awesome Oh. It finally, it not a complaint just some feedback I'm not sure. If there was a technical issue on the web site I can just sheer from my own direct experience and also that other individual private retail investors there seems to be a difficulty with.
Getting any kind of response to nonmaterial, just you know a everyday.
Individual investor retail retail investor questions that are being submitted through the web portal or phone calls to Mr. church and again, that's not meant to be a personal guarantees that its feedback to the company that somehow that communication channel isn't working I do appreciate that you take individual investor questions. On these calls in the past the investor friendly thing you used to do is to limit questions even for.
Financial advisors them out to two to afford a the opportunity for Wanna get in that also would be appreciated. So you know if you want to address that are just as a quick feedback to the company that something in somewhere in that communication changes the breakdown.
Well with anyway.
Well, it's not where of a a any particular problem, we'll look into it that yet thanks for pointing it out.
Thank you smell best to all.
Ill take thank you.
[noise] and that's how many of them for that question you can't I'd like to turn it back over to today's speakers.
[noise], Okay, well. Thank you all very much for your time and your interest in the company the sporting a week, we could not be more excited.
What our prospects and the work that we're doing.
To make such a huge difference in the lives of cancer patients and I hope before long or with positive results that are we seeing some of you face to face.
But at a weekend a wish you a health.
During this.
Covert virus.
Pandemic.
They say.
[noise]. Thank you ladies and gentlemen, if you can see teleconference. You may now disconnect.
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Oh.
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