Q1 2020 Earnings Call
Ladies and gentlemen, please continue to hold your conference call will begin momentarily.
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First quarter 2020 financial results conference call.
As a reminder, at this conference call is being recorded I.
I'd now like to turn the call over to host Mr., Paul Segun of T S that pharmaceuticals.
Investor Relations you May begin your conference call.
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Thank you operator.
Hello, everyone and welcome to Tee up that Pharmaceuticals, first quarter, 2020 financial and business results Conference call.
With me today as Glen met its president and CEO of Ti Vo Coleman, Chief Financial Officer, and Chris Kaino, Vice President of business development.
A press release announcing our Q1 results is available on the T. at that Pharmaceuticals website.
Let's take a moment to read the disclaimer about forward looking statements in the press release.
The earnings release and this teleconference. Both include forward looking statements. These forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially some statements made.
Factors that could cause actual results to differ I've described them the disclaimer and in our filings with the U.S. Securities Exchange Commission, including the risk factor section of our 2019 annual report on form 10-K filed with the FCC.
And that was my pleasure to turn the call over domestic one that us.
Thank you Paul Good afternoon, and thank you for joining us today to review the company's first quarter operations and recent highlights.
During this call I will provide an update on our clinical and corporate progress.
I will ask our Chief Financial Officer Coleman for you the company's financials.
I'm also happy to have Chris King are with US today on the call. Chris is our vice President of business development and responsible for our outreach to potential partners for our technology.
And Chris will update us on that key aspect of the company.
And then well open up the lines for your questions.
Hey, I'm very happy to say that this has been another quarter of major accomplishments for T.F. pharmaceuticals.
We've been able to maintain the clinical momentum or to lead programs.
Our comments all in isolation powder.
Tacrolimus inhalation powder.
Despite a challenging clinical trial environment due to the covert 19 pandemic.
I will talk more about these two internal development programs in a moment.
Perhaps most importantly, this quarter, we demonstrated invalidated the tremendous potential.
<unk> thin film freezing platform technology in ways, we could not have imagined even just a few months ago.
We are actively engaged with some of the world's leading research institutions as well as some of the largest biopharmaceutical companies develop products that will have more effective real world delivery capabilities.
And we have recently, we see strong scientific validation for our technology from two leading research institutions.
The University of Georgia Centre for vaccines in immunology, one of the nation's premier vaccine research centers and the United States Army Medical Research Institute of infectious diseases U.S.M. rid the world Freemyer Biodefense research facility, both have done extensive due diligence on our two.
Acknowledging and Chris will discuss these important partnerships later in the call.
And in a very exciting developments that were able to announce today, we have entered into a license agreement for the use of our TFS technology in the candidates market.
More on this in a few moments.
To sum up briefly this quarter, we demonstrated our company's unique ability to rapidly investigate prototype and develop a wide variety of compounds using our technology.
This allows us to be very nimble in responding to market conditions and to be able to take advantage of opportunities as they arise which is a great competitive advantage.
Now I'd like to take a closer look at our two clinical programs.
Our work on its all inhalation powder to treat the life threatening disease of invasive pulmonary aspergillosis successfully completed all four dosing cohorts in the single ascending dose phase of the trial.
And we're progressing rapidly in the multiple ascending dose portion of the study even in the midst of the covert 19 pandemic.
We expect the final phase one dosing to be completed by mid July and we will report topline results in September.
Do you have got second clinical program Tacrolimus inhalation powder, it's been held dry powder version or Tacrolimus. One of the most commonly administered immunosuppressive drugs used to prevent organ rejection and solid organ transplants.
We had intended to begin the single ascending dose phase one studies by the end of Q1 in Australia with multiple ascending dose studies beginning in the second quarter.
However, with the spread of covert 19 on the Australian continent, and because this drug is in immuno suppressant.
Our CR or partner foreigners to would be a slight delay and initiating the trial.
It's important to note. The trial has been approved by the Australian regulatory authorities and dosing will proceed once the risks to the subjects from the Corona virus has been sufficiently address.
Fortunately the per capita corona virus infection rates are relatively low in Australia and testing is being expanded to the general population.
As a result, we anticipate being able to start the trial by the end of June of this year.
No as I mentioned earlier, the covert 19 pandemic has dramatically challenge society and our industry.
But our technology is proving uniquely suited to help respond.
We've demonstrated that our thin film freezing technology has the potential to be able to re purpose and better to live or existing approved drugs you have therapeutic potential against the Sars koby to virus.
And we looked at a number of drugs that could benefit from the characteristics of our TFS technology as a dry powder products delivered directly to the long.
During the quarter one of the drugs, we focused on is the antiviral on the close of mine to enhance its effect as a potential covert 19th therapy.
Well if somebody is an oral drug first approved by the U.S.F.D.A. for use in humans in 1982.
We have strong potential to be re purpose to treat a variety of viral infections.
In film freezing technology is being evaluated to develop in health forms in the close of my they would enhance this promising drugs bioavailability for treating respiratory modes of infection and if successful we you potentially progressed the following an eye and deal with the FDA.
As we discussed in the past our teams have platform technology has a significant application in botanical.
And we've been actively engaged with potential partners discussing the terms of a license agreement.
Today I'm extremely happy to report the PFF has sub license its thin film freezing technology honor interim basis to an unaffiliated third party, who in turn worked with plus products Inc. one of the country's market leaders in CBD products to develop and commercialize non therapeutic candidates.
Cannabis derived products, including Canada bio.
Here for pharmaceuticals expects to find a long term license.
Pursuant to which T.F.F. would receive licensing fees, along with future products sell royalties.
We feel this is very significant because we believe our thin film freezing technology has the potential of being a new delivery modality for these products as a consumer friendly alternative to vaping and combustion delivery methods.
And now I'd like to turn the call over to Kirk for review of our financials.
Thank you very much Glenn for the quarter ended March 31st 2020 research and development expenses for the company were 2.2 million compared to 1.7 million in the first quarter of 2019.
The increase in research and development expenses. During 2020 was due to the ramp up of research and development activities. Following the completion of our IPO in October 29 team.
General and administrative expenses for the first quarter 20, 21.6 million compared to 532000 2019.
The company reported net loss for the first quarter of 3.8 million compared to net loss of 2.2 million in 29 team.
As of March 30, Onest 2020, we had total assets of approximately 26.6 million and working capital of approximately 25.4 million.
At the ended the quarter, our liquidity included approximately 25.7 million of cash cash equivalents.
We believe that our cash on hand as of the date of the sport is sufficient to fund our proposed operating plan for at least the next 12 months.
With that I'd like to turn the call back decline.
Thanks Kirk.
One of the unique features of our companies or do focus on internal development. For example for comments on Tacrolimus inhalation powder candidates that we discussed earlier.
And our efforts and partnering on disruptive thin film freezing technology with pharmaceutical and biopharmaceutical companies as well as with some of the world's leading research organizations for potentially groundbreaking therapeutics.
We've had some very exciting developments during the past quarter increase came to our vice president of business development has been involved in all of them.
This is not going to give you an update on the important progress we've made.
Chris.
Thanks, Glenn and good afternoon, everyone.
The business development group, a TFS has been focused on creating an awareness and educating potential partners or the beneficial characteristics.
Central uses of our thin film freezing technology, we had been planting the seeds with potential partners.
Well, we have been making tremendous strides with our delivery technology.
Business development efforts are bar are now starting to bear fruit.
Our business development initiatives and goals focus on three key areas.
First we are focused on our internal pipeline.
Growing or pipeline developing new and innovative products that benefit from the characteristics of our enabling technology and developing these products to find value inflection points with the goal of partnering these problems with large commercial organizations.
As we continue to successfully progress our pipeline products through development well level of interest by potential partners continues to grow.
We have engaged with multiple companies in partnering discussions and these discussions are fluid and ongoing.
The second area of focus is collaborations with pharma partners.
Both large and small picking their proprietary products.
Formulating these products in our technology and making these products, new and improved either through a new route of administration.
Better absorption and door, removing the cost and expense of cold chain handling just to name a few.
As previously disclosed on prior updates we entered into a feasibility agreement with an undisclosed leading worldwide biopharmaceutical company to explore using our thin film freezing technology to formulate.
Perform testing and optimization work on two of their proprietary compounds, both of which are new chemical entities within sees.
For delivery of these compounds directly to the long for the treatment of respiratory elements.
This work is still ongoing.
Also as previously disclosed we're collaborating with a large multinational pharma company to explore using our technology platform to formulate the partner space to anti viral liquid vaccine into dry powder formulation for reconstitution.
We have performed internal testing in the partner has completed the animal testing, which has confirmed that the tfl dry powder formulation pizza same specifications as the liquid vaccine currently in development.
Ongoing formulation optimization and additional testing is ongoing.
We continue to work with numerous pharma partners on feasibility work formulating their proprietary am ordinary.
That's why aren't they plasmin DNA bacteria bacteria stage and vaccines into the T.F. dry powder for inflation.
Delivery directly to the lungs.
We're very hopeful, but this feasibility and formulation work with our partners will bear fruit in the near future.
Upon successful feasibility work our goal, we then D to enter into a full blown collaboration and development agreement with each of the respective partners.
These arrangements would include granting the partner a license for technology and in turn would include an upfront payment development milestones and royalties to T.F. a formal.
Our third area of focus its collaborating with government agencies and foundations.
Back on April 15th we publicly announced that we're working with you samaras on they're not novel antigens for treating helpful viruses and follow viruses.
We entered into a cooperative research and development agreement.
Or too as a credo with United States Army Medical Research Institute of infectious diseases referred to as you samurai.
This is the U.S. armies Premier institution and facility for defensive research into countermeasures against biological warfare.
Under the terms of the credo.
Yes, that's horrible and you Sam rate will collaborate over three year period to investigate using the thin film precision technology to formulate different countermeasures.
The first being a monoclonal antibody against Alpha viruses.
Such as Venezuelan.
Western and eastern acquired encephalitis viruses.
I can be dealer.
Stomatitis virus vaccine against fiber viruses, such as a bullet and lumber.
You summary, well evaluate immune responses induced by the T. S that dry powder formulations, given by pulmonary route you have loaded model as compared to the traditional routes of administration.
The Typtap team is very honored im proud to be working with Dr., John Die and his prestigious group of researchers at December.
Dr. Die as you May know, it's a member of the scientific team that develop the bullet vaccine.
Also on April nine we publicly announced that we're working on universal influenza vaccine with UGI age center for vaccines and immunology.
We entered into a research collaboration with the University of Georges Center for vaccines and immunology, We're CV hi.
To evaluate immunogenicity and advocacy of universal influenza vaccines following the thin film freezing process.
Under the terms of the collaboration.
Yes.
The University of Georgia, CB, I will collaborate to investigate PFF formulated recombinant universal influenza vaccine.
As part of this collaboration yes, that's far about will formulaic different proteins with and without agile.
Using our thin film praising technology.
The University of Georges CB, I will then evaluate utility but yes.
Compounds toolset broadly reactive immune responses.
The essentially provide longer lasting protection against a wider variety of influenza viruses in a preclinical rodent challenge model.
Dr. Ted Ross and the researchers University of Georgia C.
A world leaders in vaccine development and T.F. farmer once again, it's honored to be collaborating with such a prestigious group of researchers.
Also as we previously announced on our last earnings call on February 20 of the company along with its partner submitted a proposal to the defense Advanced research projects agency.
Harmful.
Through the broad agency announcement process for the personalize protective Biosystem program.
We expect to be notified of the award. It's an award is granted within 60 to 90 days after the date of such.
We're currently in this designated time period.
We are hopeful that we will be able to report a positive outcome of this award in the upcoming months.
In closing, we continue to actively pursue partnerships and collaborations in each of these three key areas, our internal development programs, our pharma partners and our government agencies. These are areas of focus for growing the company.
Well I had this opportunity I think it is critical to reinforce our strongest partnership and collaboration.
All of these business development efforts are supported by the tireless efforts of our collaboration partners at the University of Texas Austin.
This technology was created and developed by Dr. Bill Williams at the University of Texas at Austin.
And with Dr., William support and the support this research team we continue to expand the applications then some freezing technology, it's a new and innovative areas of delivery.
I often say.
Only scratched the surface of the many applications for the same film freezing technology.
With all that I will now now hand, it back over to the line.
Thank you very much for your time today.
Thanks, very much Chris.
It's been quite a quarter of activity in progress for T.F.F.. Our team has faced a challenging for lifetime with the global pandemic and they've responded well beyond my expectations.
Very proud of them all.
As always we appreciate the support of our investors and partners has looked a further the potential of our technology and our company and we look forward to updating you on the progress in the coming quarters.
With that I'd like to turn the call back to the operator and an open it up to your questions.
Operator.
Thank you Sir as a reminder to ask a question you would need to press star one on your telephone.
Which are your question press the pound key.
Please standby, while we compile documenting roster.
I show our first question comes from Jonathan Ashkali from Roth Capital Partners. Please go ahead.
Thank you Hi, guys I look started off with the big Congrats for exactly right executing on your problems to then that's a pretty much across the board clinical.
Yes, I missed the tenants when you just the squeaked in there at the $11 to that.
Look really good.
I'm not my first question it could be.
Chris.
Can you give a sense of the number of potential deals and disease is targeted by the park project to the mines are not yet the public you know whether youre net soliciting them all over the next season, then as a inbound interest.
Go ahead, Chris please.
Sure. Thanks, Jonathan for the question.
So it's really hard to quantify Jonathan.
How many because they're in various stages right. So it really focused on what kinda give you a little background. So with the partnership at the University of Texas at Austin and some of the.
Formulation work and proof of concept work, we've really focused on as we mentioned in and our called Marinade. That's irony in plasma DNA was really targeted companies.
To engage them in discussions based on our proof of concept work our goal center into Feasibilities received there.
Terry materials and do the formulation work.
From a quantity perspective, a were across the board, it's really hard to say.
And look like if you want to put a number of yeah. So.
Yeah, I can tell you Jonathan its its well north of a.
In terms of M.T. A's and active programs.
Keep a camberwell north of at least I would say it doesn't.
You have to the point, where we're actually building a second feasibility lab at the University keep track. The other phenomenon I think it's important for all of you to understand it that you know the you savard agreement as well as the interfere Georgia agreement were given thought to after extensive scientific.
Diligence I would say at least six months of back and forth with both institutions and after we announced those two agreements are inbound calls for business development and partnerships has really increased I think we're getting more inbound calls now than even the called for Chris is making to to companies are we've been chatting with.
So we're really inundated with people who are interested.
All across the board you know.
Chris mentioned is.
DARPA agreement, where even looking of acquiring.
The technology now for inter ocular preparations topical preparations so when I said in my narrative that we're in the area now that we never would have it even anticipated.
Being in six months ago. The D. It comes in we should we send it off to the to the University, we do the formulation as Chris described in and it's off to the races.
What's the assumption that the these potential partners are looking at other technologies as well you know what aspects and PFS would the two or three closest competitors point, she was being less competitive less advantageous again than their technology, you know how how did the most usefully counter detail.
Again, she's got to try out in that business. You know, it's really I don't want to make it sounds easy because it's not and.
But if you think about our technology and the secret sauce is if you will is that because you rapidly freeze the active component in the process. Our powder are put on matrix powder is highly concentrated in a pie.
So even if you can formulate with other modalities for dry powder creation environmental issues impacts likes your stress he water Denature Asian Air makes those preparation.
Not very concentrated now that's not to say that you can't do it in other compounds, but when you think about it I don't Wanna get too technical here.
Just the fact that we can get macrophages active active bacteria into a dry powder is remarkable.
Absolutely remarkable and the more companies we talked to in this macrophage space.
Little bit down first but now you're bills working on it.
Chris described we send that we send the compounds back.
We're in again into areas that no one whatever anticipate and you couldn't get there was other drypowder modalities and it's all around you know not going through all the process here the rapid freezing ability to use the different temperatures to get the right concentrations of different Simeon.
It really build got it down and it goes pretty smoothly and you know we're really here on the precipice of I think many important.
Development agreements with a number of different companies in a number of technology and therapeutic areas.
I'm glad my last question is correct.
HM drop a million dollars from quarter to the first quarter of 20 is that pretty much. The quarterly R&D is that what the quarterly R&D line is pretty much going to look like for the rest of the year.
That's a fair question it was.
There it's a good catch on the drop there was a drop its I would blend that it is just purely timing of when some things were paid not said.
Okay. Thank you very much good.
Thanks, Jonathan I appreciate the questions.
Thank you.
Our next.
A question comes from Douglas Russell from Brown Harris Stephens. Please go ahead.
Glad great quarter, we really appreciate it.
<unk>.
You are doing work in South Korea, what's your close.
Testing.
Was that live testing and when do you expect to get results from it.
Yeah. So I can Chris is kudos to Dr. Williams here, He's got a relationship.
With a lab that has an animal covert 19 model. It consists of the former student of bills.
We did ship our product there.
The last time I check it would just worth waiting on lab animals, it's been possible that they've already received them and testing.
Oral there's an oral crap as well as the powder products in a in their animal model there. So.
It's either happening as we speak or imminent.
Thank you Glenn I appreciate it thanks, well Doug Thank you.
Thank you I'm next question comes from Keith Girls.
Corner Terry Please go ahead.
Hi, Greg Congratulations great quarter.
Yes.
Hi.
Well go offer.
All right well.
February 20, it wouldn't this be roughly like.
In the process and the review.
Yeah. So.
Keith We did yeah, we are within the 90 day window there has been some activity.
Between DARPA and the partner company, we're working with process has multi sort of step to it where you get an initial feedback and then there's some negotiation, but we're still within that window, but we're getting pretty close to a knowing where we stand there that's about all I can say.
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No problem.
If I may do they tell you after 90 days, yes or no.
<unk>.
Communicated Q.
No.
You do get you didn't get communication as I said, there's a step two way where you can get Oh are you get feedback.
As a sort of give and take back and forth on what they're going to what they say they'll give you perhaps worsen versus what you requested our specific submission has a few levels to it so either you get at all or you can get nothing or do you get something in the middle but after this negotiation period, you have or you have a definitive.
Outcome and then once that happens Keith you have to submit to guard for any potential announcement you'd make about the outcome. So even if it if it gets passed a 90 day clock.
Don't assume no. It just means that a happened already and you have to wait for their approval on the on the relief similar process to the crater.
My comments about that process, where he samit, we got the created find golf and the release I got very quickly, which frankly surprised that since you samaras. So you know involved in a covert 19 work we were even surprised that we've got to not Covidien 19 crater at this time and I forgot.
Also a real supportive of how highly they thought of the technology. The diligence. They did so freight that come out in these covert 19 Daisy it takes a lot for surprises for that weren't surprised positively.
Okay. So then if I'm correct.
It is awarded.
You will prove a news release that you would put out is that correct. That's correct me out because we have to have their approval on a honorees.
And just one follow up.
Question from Doug regarding South Korea.
If it's successful.
Web animals, what's the next step.
So yeah, we have a couple of decisions to make Keith we you know we would obviously want to move forward to follow I envy, our assumption that would be hopefully would that would be funded through grants or government contracts, but you know we're opportunistic as you know and if we.
We'll see how it all plays that we won't walk away from an opportunity, let's put it that way, but I mean, I forget non dilutive funding to take us at least through probably R&D and then hopefully an accelerated.
Development program.
And with that.
That perhaps in the next.
Well you got the.
From South Korea.
Yeah, I mean, I would say between two to six weeks perhaps.
Again, I'm not sure of the status of the web animals. There once they start you won't take very long.
Are those primates or what animals I think it's the I believe Chris correct me, if I'm wrong I think it is it rodents to start.
Yeah, we're starting with roads.
That's right.
HM.
Okay. Thank you I'll get back in queue. Thank you very much.
Thank you.
Thank you.
And I'll ask question comes from Bill Morrison. Please go ahead from National Securities.
Hi, guys, great progress on the quarter Hi, Bill.
Good how are you doing.
[noise] journey is there any possible government funding from other.
Organizations and the government likes appear BARDA or anything like that for any of the.
Of your.
You know formulations for a plane that the existing drugs <unk>.
<unk>.
Hi, Chris do you want to take that one.
Certainly thanks, Glenn Thanks, Bill for the question we are.
Definitely actively engaging with different government agencies, so whether it's certainly a the deal D and so there there are multiple opportunities there and so we are constantly engaged with them in our own internal development pipeline products, that's well as from a technology platform.
In play as well so those discussions are always ongoing.
And they're constantly putting up <unk> new opportunities on their website. So I think.
Based on funding.
We are definitely.
Looking at all those opportunities.
Yes, I just want to comment to look our company philosophy is like we only when we talk about things that are really are real and now we have a lot of different discussions going on with a number of different companies, who are very very interested in direct to long application of anti viral therapeutics.
A couple of them are maturing quite nicely.
So I'm not going to talk about things that that potentially could happen.
We have a lot of irons in the five year or excuse me aspect about some of them.
Some more than others and those relationships could take a lot of different forms it could either.
By way of what Chris is describing in formal development relationships, where the partner might go through for government funding or we would but just think about where we're at you've got a potential to reformulate or even 12, new therapeutic Smith director long application.
And in the vaccine area I wouldn't say, we're gonna be present in the acute development phase of vaccines, but into the second generation, where you can you know avoid the cold chain necessity. If these vaccines are formulated with aluminum Andrea.
We've got tremendous potential there you know about 80% of all the vaccine costs, where there is a cold chain necessity come from the need to ship in store in refrigerated conditions.
So there's a lot of potential you know that's why I'd say that the runway for Tia fab is really.
Almost limitless and the technology is ubiquitous so.
Where we've got a lot of different things were looking at and as soon as they become real we'll let you know, but we're very enthusiastic about where this is habit.
Yeah understood that sounds great.
And then on the plus products agreement.
The undisclosed partner can you walk me through how that would play out overtime.
Yeah.
Right.
Yes, so bill we we've been looking how to do this for a while plus emerged to be are really outstanding potential partner based upon their market position. So look we're going to you know we were going to license technology to the intermediary sublicensing to plot.
And then it's there it's there were not in the cannabis business when I've touched in Canada as you know, they're going to they're going to use the technology to develop products are we think we can be and they think that could be in that market, whether they think they could be in that market quickly.
They're going to do some market testing some product development and.
That point once they are in the market.
We've got.
An option in the in the initial interim.
License that calls for meaningful upfront and very meaningful royalties.
Great. Thanks, So my question.
Yeah, So that's where we're handing it off here we're not.
We know what our core business is no distractions, but yes, we think that you know in light of all the problem with with Vaping. This is where plus is coming from this technology could could really be.
Have a really interesting place.
In their markets and it's just the technology play.
Interesting. Thank you appreciate it.
Thanks Bill.
Thank you.
I show no further questions in the queue at this time I like to turn the call over to Mr. Glenn Matt.
For closing remarks.
Well. Thank you operator, thank you offer for your interest in the company your support I can speak for everyone that that's working here at Ts out if we.
Getting up in the morning, it's a pleasure everyday is so great opportunities, we're very pleased with where we're at and.
We can't wait to tell you about what's what the second quarter looks like I want to report back in in a few months. So everyone. Please be well they say and again appreciate your time and your interest.
Good evening.
Ladies and gentlemen.
This concludes today's conference call. Thank you for participate and you may now disconnect.
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