Q4 2020 Beyond Air Inc Earnings Call
Good afternoon, and welcome everyone to beyond Air financial results call for the fiscal year ended March 31st 2020.
This conference call is being recorded at this time I would like to turn the call over underscore gave us a lifestyle.
You may begin.
Thank you Devin and good afternoon, everyone. Thank you for participating in today's financial earnings Conference call for the company's fiscal year ended March 31st 2020, leading the call today will be seen lease you chairman.
And Chief Executive Officer up beyond there and joining him well be Douglas <unk>, Chief Financial Officer, and Amir out meal, President and Chief operating officer shopping and beyond Air issued a press release announcing its financial results for the fourth quarter and fiscal year 2020, a copy of the release can be found on the Investor Relations page of the company's website before.
Again, I want to remind everyone that comments on various remarks about future expectations plans and prospects constitute forward looking statements for purposes of the safe Harbor provisions under the private Securities Litigation Reform Act.
Beyond Air cautious. These forward looking statements are subject to risks and uncertainties that could cause actual results could differ materially from those into kid beyond encourages you to review the company's filings with the Securities Exchange Commission, including without limitation, the company's form 10-K, which identify specific factors that may cause actual results or events to differ materially.
No subscribed to the forward looking statements as a reminder, again this conference call is being recorded and will be available for audio rebroadcast somebody on their website at www dot beyond there.
Furthermore, the content. This conference call contains time sensitive information that is accurate only as of the date of the live broadcast June 22nd 2020 beyond their undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date at this conference call. So with that I'd now like to turn it over to Steve.
Actually the chairman of the board and Chief Executive Officer beyond there Steve.
Thanks, Corey good afternoon, everyone.
Thanks for joining us today.
Since our last quarterly call in February beyond Air along with the rest of the world.
That's faced a far reaching effects the ongoing called an 18 pandemic.
Team has been quick to adapt I appreciate all the hard work and dedication to the continued advancement of our programs.
I also want to thank the healthcare workers in the front lines of hospitals across the country.
They were not this work and the ongoing battle was cool 19th.
I'm very proud of the fact that in support of the scientific communities efforts to develop effective treatments for corporate 19.
Consistent with the known anti viral infection nitric oxide ore and though we.
We have initiated our own study of high concentration nitric oxide as a potential therapy.
As we will discuss in more detail in a minute we've enrolled our first patient and our U.S. coconut keeps getting.
First I will provide an update on our lead nitric oxide programs and upcoming milestones then I will discuss the new data for our proprietary system to administer nitric oxide and ultra high concentrations directly to solid tumors that was included in the poster during the HCR virtual annual meeting today.
After which I will hand, the call over to talk to provide review our financial results.
I want to begin by stating that we're more confident than ever and the potential opportunities we see for Olympic system.
As a reminder, the once it has the ability to generate nitric oxide from ambient air on demand and then deliberate to event Glitter circuit, what directly to patients lungs, right and he is kinda no word breeding mask.
This capability differentiates our products from any other offerings in the nitric oxide space to a point, where we believe the decades old cylinder based delivery systems will become obsolete overtime. Once our first device the teams FDA clearance.
Which we currently expect to occur in the first half of 2021.
[noise], eliminating cylinders allows for the use of nitric oxide anywhere in the hospital not just the I see you.
Eventually we envision the lung fit being used anywhere there is an electric outlet for conditions that do not require hospitalization.
The once it has the capability to deliver high concentrations are benno safely, meaning no cylinders, we're starting now.
And in a cost effective manner by utilizing ambient air.
[laughter] Ano concentrations of 150 parts per million and higher would quickly deplete cylinders are nitric oxide that are using current cannot delivery systems.
As we essentially have an unlimited supply of nitric oxide with a one consistent.
Our offerings include the lungs, it P.H. for use with ventilator patients requiring nitric oxide two to pulmonary hypertension.
The lung fit for high concentration delivery to non backed away to patients in the hospital setting.
And the lungs at home, which allows patients to self administer nitric oxide therapy.
As a reminder, currently approved an old delivery systems are designed to deliver a maximum 80 parts per million Ano and the current FDA approved no concentration.
Only 20 parts per million.
You know concentrations of 150 porch million higher.
Provided broad anti microbial effect, which we believe can play a key role in the fight against severe lung infections, regardless of the pathogen.
[noise] given the current environment I will begin with our corporate 19 program.
We believe our lung fits system cylinder redesign.
He said I don't delivery at the patients bedside simplicity for both the respiratory therapist and patient and the potential effectiveness of higher concentration nitric oxide for treating patients with viral and other infections.
Sets us apart from others trying to South Dakota 19 problem.
[noise] critical questions. In addition to safety and efficacy or being asked of any therapy being developed during this pandemic such as it logistics required to deploy treatment quickly or tens of thousands if not hundreds of thousands of patients.
We have the ability to scale up manufacturing quickly.
There are no special requirements for a long for distribution and the burden on medical staff is slow.
If I know, it's proven to be an effective therapies for corporate 19, we believe the lung fit is the only practical solution.
As I just mentioned, we see significant opportunity to use the one consistent hospitalized patients diagnosed with covert 19 caused by Sars koby too.
Considering the data compiled to deal with high concentration and though most notably the three completed pilot clinical studies in bronchitis, where infants were hospitalized to go viral infections.
We believe that this system could be significant tool in the battle against the score of ours.
I want to emphasize a point I mean earlier and I was effective against multiple pathogens and many times patients have co infections.
That's a therapy tart targeting starts coffee to most likely would not have any effect on the bugs and alone.
Where's nitric oxide, most likely had a positive impact.
[noise] recently started study in the U.S. and anticipate enrolling patients first study in Canada over the summer.
The U.S. trial is an open label study of 20 adult patients hospitalized coping 19.
Subjects were randomized one to one and treated intermittently with 80 parts per million Ano administered over 40 minutes four times per day. In addition to stand in support of therapy or treaty withstand its course of therapy alone.
This lower dose is designed to rigorously proof safety of this concentration in only 20 patients.
Before moving to a high concentration that we feel is going to have a more optimal efficacy profile.
The primary endpoint, it's time to clinical deterioration measured by the need for noninvasive ventilation or high flow nasal cannula or intubation or.
Other endpoints include reduction and viral load need for supplemental oxygen hospital length of stay mortality safety and various biomarkers.
In Canada, we plan on running a bifurcated study in which part one we'll assess safety 80 parts per million Ano and up to 10 adult patients and then upon the recommendation of a de safety monitoring board part two will begin.
Which is designed to assess safety and efficacy at 150 parts per million Ano and up to 40 adult patients.
Only part to be randomized one to one.
And all other aspects design of the Canadian study is very similar to the U.S. study.
We are still early in the enrollment period for the U.S. study and although we are optimistic for rapid enrollment it it's too soon for us to get back or projections for the troughs completion.
Look forward to up getting you I study proceeds and announcing the results as soon as they're available from there. Once we have established safety in its population the plan would be to move quickly two pivotal study upon appropriate consultations with regulatory authorities.
Let me now turn to our development program Brucie, let us which is leading cause of hospitalizations for infants worldwide.
For 130000 hospitalizations annually in the United States alone.
With no drugs approved for the treatment of bronchitis. This indication poses an important unmet medical need.
Just last month, we're excited to announce positive topline results from a third and final pilot study in Brooklyn, let us patients.
On an intent to treat basis 150 parts per million Ano statistically superior to both the 85 course remain at all and the control arms of the study for the primary endpoint of time to fit for discharge.
For the key secondary endpoint of hospital length of stay on an intent to treat basis. The data also showed statistical significance of 250 parts per million and arm compared to the other two arms.
Lastly data showed no difference between the 85 parts per million and alarm and control on either end point underscoring our belief that higher concentrations of energy are required for efficacy in patients with viral lung infections.
We look forward to publishing these data just as the previous to probably studies have now been published.
[noise] based on data from the three completed studies. We believe this program is ready for a pivotal trial the U.S. However.
During the impact of the covert 19 pandemic over recent months, we have no choice, but to postpone the initiation of this pivotal study until some later time when the impact from covert 19 dissipates.
As a reminder, because of the seasonal incidents of bronchitis and they need to begin enrollment in the fall. The commencement of this study will not happen until the fourth quarter of 2021 at the earliest.
Again, I'm very proud of the work our clinical team has done in executing the recent public study as well as the planning for the pivotal study.
This brings us to our long fit P.H. system, which is currently being developed to address persisted pulmonary hypertension of the newborn where PHN.
And also in certain cardiac surgery patients outside the U.S.
This continues to be our lead program and consumes the vast majority of engineering regulatory and quality team's focus.
As we announced on her last earnings call, we're preparing for a U.S. premarket approval or P. M. A submission for PHN.
I'm certain that everyone listening is generally aware of the impact over an 18 has had all of us.
We have beyond there have been working extremely hard to limit the impact where alone could be each program. However, the PMA submission timing has been delayed due to the cobot 19 pandemic impacting supply chains and logistics for testing.
We currently anticipate the P. made to be submitted to the FDA and the second half of 2020.
As this submission is a critical inflection point.
For beyond there aren't prepared to say that our target is to get this submission in by the end of September.
However, we're not a complete control at this time on given the overall macro environment in the U.S. today.
Update all of you if there's timeline changes on our first fiscal first quarter call or sooner if it is warranted.
This puts us on track to receive FDA clearance at some point in the first half 2021 is that the guideline state a 180 day review period for pay me.
We plan to follow immediately with a commercial launch in the U.S. with a partner or on our own.
Outside the U.S. partnering discussions are ongoing.
I would like to briefly highlight again, the operational safety and cost advantages of our lunch with peach system over so into based systems.
Eliminating cylinders provides the hospital instant savings on space inventory requirements training employee time patient time, yes, you and safety for both the patient and stuff.
We believe these advantages will position beyond air take a significant share this market, which is estimated to be more than 300 million in the U.S. and what the $600 million worldwide.
[noise] you know lung fit home program, we're planning to initiate a multicenter 12 week self administered at home pilot study in 20 patients with non to breaking loose mycobacteria lung infection by the end of 2020.
If we're not for the pandemic. This study would be underway as original goal was to start in June of this year.
In order to be enrolled and study a patient may be diagnosed with Ida or am I correct. Jim obsessed complex also called M. Abscessus, well my collecting them even complex, what's known as Mac.
Patients will be tightened it up to 2050 parts per million nitric oxide.
The study will evaluate safety quality of life physical function and bacteria look.
The FDA has emphasized the importance of quality of life improvement in physical function as well as improve safety profile as markers of success versus solely eradication of the bacteria.
Based on current expectations, we expect to report interim data from the at home study towards the end of the first half of 2021.
Based on the clinical and preclinical data generated to date, we're confident that this pilot study will succeed.
Specifically, we are encouraged by simplicity of our lung fit system, which allows patients to self administering the home setting.
For the patient it was a simple five step process.
Oh the system into any standard electric outlet.
Turning to power switch insert the smart filter into the system.
Placed the breeding mask on the face and press the star but.
This is a very straightforward system to use recall that our smart filters have an artifact the chip that communicate to the system and will dictate the dosing parameters.
[laughter] studies successful, we believe our lungs at home system opens the door to a very significant underserved market for chronic severe lung infections that could be treated in the home and with proper resources. We can potentially explore program in CBD patients with severe exacerbations that are frequently precipitated by an infectious agent.
There are over 1 million hospitalizations annually in the U.S. to exacerbations caused by lung infections and see how many patients quite a large unmet medical need.
[noise]. This brings me to the data announcement, we issued this morning regarding nvvault and in vitro data that we believe shows the potential effectiveness of ultra high concentration nitric oxide in treating various solid tumors.
These data are from four studies, including one in vitro and three in vivo studies were presented today at the HCR virtual annual meeting.
The in vitro study exposed mouse colon and breast cancer cell lines to gashes nitric oxide ore Gino versus air and control in order to test.
If gino can eradicate cancer cells in vitro.
[noise] cells were exposed to up to 50000 parts per million nitric oxide for up to 180 seconds. Let me repeat this 50000 parts per million.
This is obviously several orders of magnitude higher than we are using for our <unk> pulmonary applications. We also not delivering and out to the lungs in this setting and have flexibility to ensure safety for patients and medical professionals.
The viability of the cancer cells was then tested 24 hours after an exposure.
Built from the study show that exposure of the cells to 50000 parts per million and out damage, both colon and breast cancer cell viability, but more than 95%.
[noise] the in vivo studies treated tumors of cone tumor.
Treated tumors are calling tumor bearing mice by up to 200000 parts per million nitric oxide administered locally to test whether nitric oxide can a bleep mouse colon cancer tumors.
Stay reported a complete response in five out of 30 mice.
[noise] in a second in vivo study cone tumor bearing mice were treated using three different protocols for destruction of the primary tumor.
After receiving the nitric oxide treatment for the first tumor all of the mice then rejected a second cancer cell inoculation.
Other words data indicate that no treatment resulted in anti tumor immunity in the host.
Not all of the mice in this study had complete removal the primary tumor yet 100% of that mice rejected the second tumor challenge.
Hence we have shown in a small study.
That local treatment of a tumor with ultra high concentration of gas just nitric oxide conveys immunity to the host for that tumor type.
[noise], we will conduct further studies to confirm this finding but these data are quite encouraging that we're on a path to prevent tumor metastasis.
And another study spleen cells from a tumor bearing mouse, which was previously treated with gas just nitric oxide.
Were mixed with tumor cells and inoculated to naive mice.
These spleen cells inhibited tumor growth to nave mice to be clear, we wanted to see whether the anti tumor immunity conveyed to the host bio treatment could be transferred to another naive subject.
These positive data provide further confirmation that and no treatment may be working by anti tumor immune mechanism.
[noise]. These preclinical studies have provided positive data that high concentration cashless nitric oxide chose a substantial cytotoxics effect from cancer cells.
This innovative gotchas nitric oxide based therapy represents a novel treatments for cancer and may serve to treat solid tumors locally will be used as an adjunctive therapy for surgery and convey immunity to the host to prevent recurrence and metastasis.
We also believe gashes nitric oxide can be synergize with comedy anti cancer therapies, such as chemotherapy radiotherapy and immunotherapy to further enhance the effect.
With that I will now turn the call over to Doug for the financial review Doug.
Thank you Steve Here's a brief review of our financial results for fiscal year end March 31st.
2020.
Revenue for the fiscal year ended March 31st 2020 was $1.4 million compared to $7.7 million for fiscal 2019.
All revenue is related to the accounting for the payments needs to be aren't there, but the now terminated commercial agreement for lung fit.
Ph.
Research and development expense for the fiscal yearend Mark sorted first 2020 were $10.6 million compared to $3.9 million in fiscal 2019.
General and minute <unk> general administrative expenses for fiscal year end March 31st 2020 were 8.9 million compared to 6.9 million for fiscal 2019.
For the fiscal year in March 31st 2020, the company had a net wants to common shareholders at $20.9 million or dollar suddenly per share.
Petro one that was the common shareholders of $6.6 million worth 70 cents somebody seven cents per share in fiscal 2019.
As of March 31st the company had cash cash equivalents and restricted cash of $25.5 million. This cash is sufficient to fund operations beyond the next 12 months.
During the quarter, we entered into a 25 million dollar line of credit and then as available for two years.
There are a part of available consists of $5 million each and the first two can be drawn at the company's discretion.
The other three can only be drawn after FTC approval of lung fit P. H.
All trances carry a 10% annual interest rate and warrant coverage of 10% to 25%.
The pricing based on the pre determined formula.
The warrant term is five years and all good has a five year term regardless of when the charges drawn.
We have drawn the first <unk> 5 million dollar tranche.
Subsequent to the ended the quarter on May 15th we entered into a new common stock purchase agreement and rights <unk> registration rights agreement with Lincoln Park capital bumped at $40 million.
This new agreement extends until May 2023, and replaces the existing agreements that were set to expire in August 2021.
On August 2nd a prospectus supplement relating to a $15 million at the market or frame with Suntrust <unk> comment was filed with the FCC.
These three financing vehicles provides us flexibility to draw additional capital as needed to support our activities developments and anticipated milestones.
I'll now hand, it back to Steve.
Thanks.
In closing, we continue to see significant opportunities across our pipeline to address large and mostly unmet medical needs.
Our team continues to execute on our programs, including pulmonary hypertension, Pmeight, which is on track to be filed with the FDA later this year.
Let's go over 19 studies now enrolling patients with the Canadian study not far behind.
And Tim Palin study with patient self administering and I'll at home is expected to be initiated later this year.
Oh, we completed a third positive bronchitis study.
And we've shown promising preclinical data in solid tumors.
We look forward to the data announcements and clinical milestones expected to occur over the next 12 months. Despite the impact of to covert 19 pandemic on certain clinical programs.
The other teammates and instigators have worked tirelessly to make sure that we will be able to move quickly I presume these programs as clinical sites and regulators resumed normal activities.
I want to thank them for their dedication to the development of these programs and to the patient populations, which we are looking to serve.
Like to open up your call to questions at this time operator.
At this time, you would like to take any questions that you may have.
If you like does question. Please press star one on your telephone keypad a confirmation. So indicate your line is in the question Q. You May proceed starts with your lunch or move your question for the Q for participants using speaker women in maybe next year to pick up your here, which will person Starkey one more piece will be poll for questions.
Our first question comes on line ups Raj CLIA with Oppenheimer. Please proceed with your question.
Good afternoon, Steve. Thank you for all the color.
Can you give me a right.
Absolutely so Josh Thanks, So Steve three questions first is forgive me I must have missed at the number of patients treated under the U.S. covert study in the Canadian one stage one of the Canadian study.
So are the U.S. study will will look to enroll 20 total patience and they stayed one of the Canadian studies 10 patients.
And have heavy treated any so far.
In the U.S.U.S. one.
Yeah, and the U.S.U.S. kick in Canada, We just got a cool from how kinda recently, so it's going to take a little more time to get the sites up and running.
Did you into a timing for the U.S. study.
Did you talk forgive me I must have missed that remark.
Well, we just said that it's it it's kind of hard to.
Nail down an exact timing of completion of the study given the environment that we're in.
I mean I'm sure everybody as you see patients pop up in different places at all times, it's it's kind of guessing game, where they're going to be and there are lots of companies out there that are are competing for these patients. So.
We didn't give a timeline for for completion of the study.
Fair enough other people kitchen, P. amazed Steve by end of September the filing if I heard you correctly, what do you need it remains to be done between now to the actual submission.
So.
You know this has been a logistical nightmare for coordinating all of the.
Testing.
Shipping of of equipment and systems.
Moving people around because.
You need obviously highly skilled people who understand what we're trying to do here. So.
That's pretty much what's left to be done is getting all of these tests done and you know getting all of the final parts and pieces in for the final manufacture of the last few system. So you manufacture systems for testing they manufacture systems when testing was completed so.
These are the things that we're dealing with in terms of logistics on those on both of those basically.
We're just kind of in the home stretch here and.
Kinda like kind of <unk>, we just can't hear you can see the finish line just kinda running in place right now you can imagine.
So things are opening up and we've got timelines from a lot of our partners out there and it looks like we are on track to get this done before the end of September and the only thing I can say to that is we don't control.
What may happen, if Uh huh.
If things get shut down again war, if things get delayed because of Colgate or any other.
Potential reason I mean, there have been difficulties in getting certain things done not just due to covert but took a lot of the protest that's been going on it's also been difficult to manage around that sometimes so we're kind of at the mercy of of of the environment outside of our control, but if we can keep our timeline. So we have right now we will be fine for September.
So right now as long as nothing goes.
Goes wrong promote that perspective, we keep reopening covert covered a pandemic stops and we keep reopening on schedule as everybody is talking about we should be fine.
Just not not control.
Right.
Hey, Steve to others and I'll hop back in Q1 is a your updated expectations on a panel for P. etch and if that has been any change in the second thing and we can certainly take it offline. A you know if need be I was curious about the deep preclinical data presented today.
In solid tumors.
I mean, it's a fascinating concept and I think so one thing that I wasn't able to connect the dots is how do you intra tumoral injection of geisha is nitric oxide or you know when you try to a bleed how are you going to do that just mechanistically. If you could explain we can certainly take it offline. Thank you for taking my questions and congrats.
So again.
Thanks, Thanks Raj I was caught up in the cancer was your first question.
It just you asked about the thought going up yet shouldn't panel if any oh, yeah. The panel yeah. We we don't expect to have a panel and there's there's there's no human data.
I'm not sure what would it be discussing if we had panel.
There's nothing to discuss this is all about.
Having all of our.
Our paperwork and all of our ports and everything in order, having all of our testing done you know in the proper manner.
And getting our pre approval inspection over all of our contract manufacturers and that's really the what's happening here. There's there's no human data skus. So we don't think there's going to be a pound of all we we don't expect when we never expected one.
You know, we're working with FDA to make sure that we get a RPM may.
Submission to be pristine so it's not an expectation on our side.
So with respect to cancer I mean, we probably should take it offline and I can get you want to follow some of my team members to talk to walk you through but you know we mentioned we have a proprietary delivery system. We also mentioned that we had a three different methods for delivery.
So yeah, it's still a question Mark how do you keep the nitric oxide from spreading beyond the tumor that's not what we're not going to tell you. How we do it we're not going to let everybody know how we do it at yet anyway.
But that's definitely something you have to be concerned with nitric oxide at those high concentrations will kill anything it's like just got to kill the cancer cells were not we don't have some kind of a biomarker work strong to inside the tumor so.
I mean, there are several ways to go directly to the tumor.
Yeah I mean.
We would start really going to go into detail on how we're doing it right now, but it is that we did mentioned its intra tumoral delivery.
So the nitric oxide is kinda.
Sit inside the.
The tumor mass itself and it kills from the inside.
So.
Obviously as time goes on will reveal more and more but I'm happy to get you on the fault my team if there's some of the questions.
Great. Thank you.
Our next question comes on line of Matt Kaplan with Ladenburg. Please proceed with your question.
Hey, Steve Thanks for taking the questions I hope you're doing well.
Thanks, Matt.
It's just does not want to dig in a little bit more to sizes question. Some of the P. P. M&A what needs to be done complete the filing I guess, specifically has that pre approval inspection of the contract manufacturers in schedule.
Yes, and what that doesn't happen met until you actually summit beyond me.
No.
Yes, the Pmeight FDIC before you get on their schedule. So we have to make sure that we can we have to complete all testing. So you can imagine.
Starting in the Middle of March everything was shut down.
And things get backed up and everybody wants to you know.
Get to the the starting line when things open back up. So you know that's what were you know where were in position to do and.
You know these these vendors are doing their best to open back up they're all over the country.
Sometimes you get lucky or unlucky, depending on where you which side of their as you were scheduled to be in.
You know if you are scheduled to be in a place where there's not a lot of covert then that's great. She had to being placed with a lot of corporate that's probably.
He is scheduled to be in a place where there's been a lot of protesting problem scheduled place with not a lot not a problem. So.
These are things that just you know you you couldn't have predicted you know.
Four months ago. When you were setting up all of this oh. He's logistics you you couldn't think of these things impacting your your business plans kind of.
You know global pandemic is a new one for us I'm sure. It has for everybody. You know you kind of kind of don't expect that you don't really know how to plan for it. So we've reacted well Oh, we're keeping these timelines you know pretty tight in terms of couple of months delay here its could be much worse and we've worked very hard with our with our suppliers and partners out there to make it.
Make it a very short delay so.
Again, I don't know what else you want me to say in terms of testing I mean, I I could we could rattle off 15 different tests, but you know.
It's just you know.
Electrical safety and.
You know.
Human factor is things like that this is a medical device server.
Right. So has any of the there hasn't been completed all you need to every every test that's necessary for submission of DNA still needs to be done.
No. Some testing has been done sure I mean, we were Madison, Wisconsin, or our engineers or do they have been rolled haven't missed the day I mean, there they're in the office there and then the lab doing everything they can do but you have to understand that they they don't have everything in house, we don't have even if we were.
10 times as companies still have to have some outside vendors doing some of these these tests you can't do them all on your own some of them you'd have to be validated you know.
Testing houses.
Some of these tests so.
Well I said no matter what.
<unk>.
Just just shifting gears in terms of Matt, Matt and I mentioned, one thing that you know all the testing for our long fit system that we're using for called it though we're gonna be using free for NTM.
That's passed all the tests all of them.
That one's been perfectly test all the test it's been done.
This is just the event, let it compatible system. So we have to repeat all the tests for the Atlanta compatible system. We've done the test for the others just already and we passed.
Great Great Yeah. So it's just really under the.
Getting done.
So help us understand what would the learnings from the third Rocky lightest pilot study versus the first two what what lessons you've learned that's new specifically from the third study.
Well you don't have the third study have had 85 parts per million and on it. So that's a we consider we would consider a low concentration of nitric oxide when you're looking to have an anti viral effect.
And what we saw here, we'll see that there was no effect on these on these infants. So that's something new that there seems to be a dose response.
And you know we can show that 80 85 parts per million had no effect versus control and 150 parts per million how to see what specifically significant on the primary and key secondary endpoint, which is hospital stay I.
I mean, there's a small study it was 89 patients and three arms, we weren't expecting to hit.
You know these robust P values, but the effect was so.
Strong that we hit it. So you know I would say that one we certainly learn that you have to get to higher concentrations to have this effect number one and number two I think that by the third study the team and the engineers on on our side have learned how to maximize the situation. I mean these these are in since there there they move around.
Quite a bit we learned a we went from five times a day to four times a day and treatments. So it's one less treatment. They got more rest on you'd have to you know a noisy them five times generally doing four times, a day and we used to a new mask. We adjusted the breeding circuits are we did a lot of tweaks here and there for the system.
And you see the results are are extremely strong. So this study taught us how to run a much better study and fine tune the equipment and it also taught us or it didn't teach us just it confirmed to us what we already knew and that would.
<unk>.
Hello.
Hello.
Yes.
He seems to be having some technical difficulties.
Hello.
[noise] not on my side.
We launched.
Yes.
Company.
[music].
[noise] Oh.
Oh.
[music].
Thank you everyone.
Steve you have the floor.
Matt you still there.
Thanks can you hear me.
Yeah. It this time it separately.
Oh, sorry, [laughter] ends up at all but thank you yeah. So I guess you what what do you think the Rocky light. It's a data provides with respect to read crews and potential we'd see the Coca Nike trial, obviously higher concentrations are better but what what.
What do you think it does it provide anything in terms of potentially utility Oh, no higher doses of and out and the cover 19 side.
I Yeah. These are definitely different patience I mean bronchitis babies are different than most of the elderly patients with listen to viral ammonia. So is there definitely different setting here and it's kind of hard to draw direct comparisons what we can do with say that certainly higher concentration.
Nitric oxide is going to have an effect on on on the virus.
We can say certainly didn't have saw scobey two in these infants didnt exist and we did the study. So what we did have some grown of ours. There I mean, you know most of this is RSV about 65, 70%.
Brucie lattices RSV.
But the or the rest of it it's mixed viruses, we did have some corona virus and all other studies, so <unk> how much how much difference there isn't so I was koby two versus saws Colby one or any of the other human Cohen of ours is I I can't tell you I think we're still learning I know, there's some human cone of our surrogates that people are testing.
That are saying that there are surrogates for so I was koby too.
So I think that this is telling us they will be some kind of an impact on the viral load and how the virus is attacking.
These patients, but it is a different.
Setting so it really is hard for me to say with any no definitive nature here that that because we help these babies, it's going to work in corporate 19 patients. It's just that just completely different setting I'm. So what about some of that something about safety point of view as well just beyond.
So yeah, I mean look the FDA has asked us to do any parts per million sort. So so clearly there there they have concern on safety side, where we we as a company or aren't as concerned we've seen.
We've used this up to 250 parts per million in humans with no problems with dumped a foreign imports coming in in animals with no problems 30 days in those animals I foreigner parts per million, what we're really not worried about safety profile here, we have to make sure that were enrolling patients.
Before they have progressed to aired yes, that's where there could be some trouble, but as long as we get the patients before that and that's what our enrollment criteria dictating.
We really don't see much much concern on the safety side, but again, you know excuse me concern safety, that's what the therefore protect patients. So we'll take the small half step to satisfy their concerns I mean theoretically you can come up with lots of things, but there's nothing proving nothing to prove that not your DOCSIS gonna cause problems patients being when you're dosing an intimate.
Yeah.
So.
We're really not concerned again, there's been no essay use in any patients bronchitis NTM CF patients healthy volunteers all the animals, we treated we've seen nothing.
So this intermittent delivery is really lending itself to show that it can be done safely.
Oh, Okay last question to now what the Ace Yamagata notwithstanding the preclinical both the John be about HM.
Since the upside almost suspect to be anti tumor response, you observe and can you give us some more detail on that tumor response in terms of speculation in terms of the mechanism. There that's generating the the a prolonged anti tumor effect that you're missing in the animals when they reach.
<unk>.
Okay. So yeah the challenge.
Okay.
I mean this is this is probably nothing new people have been looking at solid tumors. I mean this is you know the immune system you know is.
Learning on the tumor antigen release by the ablation of the tumor so when its tumors ablated locally this tumor antigen release at least when nitric oxide is doing it I know there are other ablation techniques out there that don't necessarily.
Hey, what we're seeing here.
So the nitric oxide is doing it locally immune system is is not impacted and the tumor antigen releases there.
For the immune system to learn from essentially that's what's happening on our lehman's term level, if we want to get into.
More detailed.
Immunology discussion I think we probably take that one offline and I'm very happy to took to provide our immunologist to you for that discussion.
But suffice it to say the data speaks for themselves.
Yeah.
Wasn't just one mouse that was several.
And all of them have the immunity every one of them.
Great great. Thanks for taking the questions.
Yeah.
<unk>.
Our next question comes a lot of Scott Henry with Roth Capital. Please proceed with your question.
Thank you good afternoon, I guess, a a start on the financial side just to.
Go through that I.
You've been pretty consistent in terms of operating costs quarter to quarter certainly in a 2020 should we see any deviations to that in 2021, given covert 19, given some of the delays.
Meaning Meanwhile, expenses kind of dipped down a little bit or how should we think about 2021 fiscal.
You know I, I think you're going to see it.
It's hard to say it will be fairly consistent but I think that this this spend of you know Florida.
Four to 5 million a quarter is probably where we're gonna be excluding launch expenses.
If we were launch on our own so and it might be little choppy because you know we we you know we may pay for a lot of our systems may come in and in one quarter and we pay for all the systems or.
You know, we could have a run on covert patients where they come in a lot of them and we paying in that quarter. You know so things can get smoothed out or things could be trunk, it's kind of hard to tell because of the timing of when we are paying for our our systems that we're building and the timing of the covert trial in terms of when the costs hit us. So we have an idea of when they'll come.
But you know.
Could could be June and July it could be September October so, it's a little bit tough Scott's really tell you exactly what it will be quarter by quarter, but I think if you average four to 5 million a quarter for the next year for 2021, I think thats a good good place to be of course, if we are launching the lungs. It ph on our own that launch date.
Placing the first half a you would see some some costs some expenses or pre launch of course.
Fiscal year.
Okay. Thank you that's helpful and I.
Balance sheet I see you know almost 6 million in restricted cash.
Any color on you know will that be restricted long term or.
I wasn't sure.
How available that cash is going forward.
Yes, so no 5 million to that is used a line of credit cash to 5 million tranche. The first when we took down it's just we took it down before March 31st but.
It's kind of scale.
The reason we didn't get it by March 31st is because it goes so you know people aren't at work that out at the banks known wins around you know we had money. Some money came in some was an escrow. It just it was just a mess with <unk> I mean, I imagine you think back to this to the back half of the month of March.
I mean it was it was ridiculous so we have that as restricted cash just because it <unk>. It technically wasn't in our bank account that was in escrow. So okay, Oh, it should free up but that money. It's already free it's already for he was for example, so part of a couple hundred thousand that's left over has to do with without contract manufacturer that.
That's kind of normal when you're ordering yeah, yeah, when you're ordering parts for her for systems. That's normal to have some extra cash that are hard at Kroger upfront high and then a one word and sort of finance or related but.
When should we expect some resolution on this or CACI a deal.
Anytime soon or just any color. If you have any at this point in time.
I I don't have any color because.
There's really.
No nothing to report.
There's nothing.
Okay, Alright fair fair enough.
Just switching gears to the cobot 19, a clinical program.
Let's say you get the U.S. data, Yeah, you get some data from Canada and the higher doses.
Lets say its pointing in the right direction, what's the next step we would it be a pivotal trial post the Canadian trial, how should we think about that development plan.
Assuming that there is what you want to be well based on what we've seen from others in terms of what they've done and then moving onto larger more pivotal type studies I think we have the data from U.S. in Canada I think the next that it would be pivotal for sure.
So I I can't imagine 70 patients not being enough to move forward and coping 19, but again, that's still a discussion we have to have with regulatory agencies.
But my expectation would be that yeah, given its given what's going on with the pandemic and.
We have something some data are trending into right direction that's safe.
I would think yeah, we'd be pivotal but again.
You know I can't predict regulatory agencies, and what they're going to say. That's this is my okay. Yeah that seems to be the program for others to go pretty quick to pivotal.
I guess final question and I don't know if you can.
Add anything to this or not but whenever I look at Invivo data I I never know really how quite to interpret it. He can you put it into context at all it and how nitric oxide performed in vivo relative to other treatment or just any kind of comparison any sense of Uh huh.
How we should view this data given that it's early stage, sometimes you can compare to the way other products worked at the same stage I don't know if you have any but I'm just curious.
Yeah, I don't have any specific.
Examples for you I you know.
You and I ask I've been doing it's a long time, I mean, I I haven't seen too many.
Too many companies with a even if you just take our ablation I mean five out of 30 complete responses is it is pretty good in mice to begin with let alone the immunity that being conveyed to the host.
When you're.
I can't recall too many studies, where your conveying immunity to the hosting prevention of Oh.
New tumors or prevention of attack the season. So I. This is rare I I just don't have the knowledge tell you.
How rare, but I can tell you that our team our cancer team internally the very excited by this our advisors that we've shown as to when we brought on board are very excited by this.
And you know, where we're going to be running more studies to confirm this with larger numbers and I think that's important since.
This is you know dozens of mice and now we want to go to hundreds I think thats Whats next the next step is to just do it again and confirm in large number of mice, which is normal kinda like in humans. We do 10 15 patients then we go to 100 patients. So here what do the same thing.
And will be showing more of that hopefully a.
Before the end of this year, we hope to have some more more data out on cancer and confirming what we've already seen in maybe trying to do some new things.
In terms of trying to show mechanism and trying to show predict the effect that it would have in humans. So it's it's it's very exciting but.
You know we still a you know you have to start somewhere I mean.
This is this is where you start in mice and the data looks really strong very strong oh, well see what happens.
Now that was great, though that was great additional color on it a I appreciate that and thank you for taking the questions.
All right. Thanks, Scott.
Our final question comes on line of your Gen <unk> lead long company pretty stupid question.
Oh, good afternoon, <unk>, and then well taking the question.
Uh huh.
And I think trials that.
First of all is that a 10 day three men or that's them longer.
It's up to seven days a closing.
We can be less but it.
Can't be more but it can be less.
And the rent.
Potentially could be independent care all of that being excluded.
No standard of care standard of care, if someone wants to use rooms as severe go right ahead.
Okay, and though would you be able to.
Would you be able to do respectively <unk> that.
Segregated the patient with or without it wasn't up as Ebola just the truth one number two.
Patient due to do that.
I think it's too small a number of patients and I also just remember that this first you know 20 patients U.S. is really a geared more towards safety I mean, we don't think the antiviral activity is very strong at 80, if there's any benefit to the patient it's gonna be.
On auction saturation, which were there should be benefit there and potentially on the anti inflammatory properties of nitric oxide, but I don't think wouldn't see an antiviral activity at 80. So this is really you know safety. So we can move to be more efficacious concentrations.
Okay, that's very helpful.
Asian, well in terms of Oh, Oh engine.
You mentioned about that.
It happen outside of <unk>.
<unk> <unk> <unk> M- or do you also [laughter] any hot they let the off at the Amy delaying thing, although there will be a finite kind they need to make decisions Oh is there any possible concerned there as well.
Yeah.
I I really don't know there's always concerned because you know FDA days, you never know what's going on at Sta in terms of their resources and right now obviously the stretched with misquoted. So.
But there could be something I don't know, but what I will say is that.
Again. This you know our ventilator compatible system is you know it.
It is something that can help I think if you'll remember everybody is using lots of ventilators early on the corporate 19.
That's for sure if everybody realizes that they were using nitric oxide on these on these ventilator patients as well and there was a lot of demand for nitric oxide that time. This still is so I don't know if it's going to be something that was slow us down giving the opportunity for hospitals to have a.
Another source of supply for nitric oxide to help with this this pandemic if they want to use it on ventilator patients who are they would want to use it.
And in other capacities I mean, you can see that they've been using nitric oxide for it made sense.
A ways to help with covert 19 again.
Where we're not trying to say anything gets used off label here. We're just trying to say that you know it's another option for physicians to having their arsenal when they're looking to use nitric oxide, whether it be a cylinder based or the Blair fun system or someone else. The system. So forth because I think that nitric oxide is is being tried in many many different areas right now.
Over 19 different systems different concentrations, so I'm not so sure that nitric oxide product would be would would be impacted nervous or I could be rongyao I don't know, but seems like and always something that ft has moved pretty quickly on not just for us, but for others as well and the nitric oxide space.
So I think it's an important tool right now for cold. It so it's cold, but still a problem I I I don't feel like we'd be slow down in its covance not a problem then we wouldn't be slow down so.
Feel pretty good about the fact that yesterday would be the open to reviewing RPH system on a regular timeline.
Okay. That's very helpful. I mean <unk>.
Two off label in terms of Ah, we knew that people as well across.
Suggesting some study older cardiovascular site or do you have any update on that and the don't believe that could be something or other leeway will you you guys still also expanded into cardiovascular.
She meant though without much <unk>.
Hey lead the way you know any of you have any update on that.
I have no updates on that that's Mallinckrodt program I, you know, it's up to them to update people in that but I would say that oh outside the U.S.. It's it's on label for cardiac surgery. So.
I'm not so sure that.
In the U.S. there I don't I don't know I would think STS not averse if he presented them at the right data and the right package to two putting it on label, but you know you need to justify and I think that.
I I don't think its overly difficult to do that if you take your time and do with the right way So I think mallinckrodt.
Can probably do it we can do it I don't think its I don't think it's far off that everybody in the space would have a past cardiac surgery on their label I don't think thats.
Something that's going to take five to 10 years to do I think it's going to be a lot quicker than that and it's good for everybody. It's good for all the players. It's good for patients good for everybody to have it on label. So no hopefully if mallinckrodt doesn't who will do.
But one of us look at a time.
And maybe a lot one or two question on oncology or do you anticipate a net studies or is that the beacon could take a look into whether you have any increase I'll oh, the p. sale or other immune.
As bonding itself, which is a suggestion was it will be consistent with.
Hi, humor back on wrong or for example, the leasing up the neo antigen allowed to kind of your meal activity.
So yeah, that's that's probably a little bit too much for me. So I I do have a or immunologist I think she still on the line. So he'll are you on the line.
Can you answer that question, where do you want to repeat it.
[noise], Yeah, Hi, I'm on the line yeah.
Yes.
Hi, Yeah. So yeah, we actually had started to a manager and to analyze that immune response now that actually taken at.
All right in that in this immune response and gas cancer.
And.
Well I'm not sure if at this moment, we would like to share Oh, Oh. The data we have but did you see different then that actually explain the immune response that we that we see.
But just to say that in general into my ablation, so usually.
Sorry.
No I'm not though it has season.
Yeah, Okay. So just to say that that's a according to you that you might ablation concept. So in general antigen presenting cells, usually I recruited two data related sites and de Sac detailed belong to the digging into immune response.
So in the banking, yes, tumor antigens and they present them to the adaptive immune response out.
So so basically we are focusing on on B cell bite T cells.
We sell sell but actually belong to the adaptive immune response, the Pete because this is the most important respond if we would like to have a specific.
Immunity that can actually.
Attack you [laughter].
Okay, Great that's very helpful maybe that I.
Steve is that you do have a that humor inside the store.
In early stage and making up all the steel P.D. So you do have a lot of.
And just overall.
<unk>.
<unk> and program at this point, besides that sort of making progress on or you want to pursuit.
Yeah. So CLP CRPD is is not prioritized at all it's it's just a now we we don't have the bandwidth.
On many aspects to to tackle CRPD. So.
Yeah, we'll do our NTM study first because I think the most important thing is to make sure that patients can self administered at home safely and that we see you know a positive response Oh in these NTM lung infected patients.
Before we would embark upon a CRP programs. So we have some time before we get going on scope of the.
We.
If we had the resources, we certainly could do it sooner, but I think that's our plans for CLP de Soto kind of take it back seat for now what's the oncology side. This is in in animals still we're not going to be looking at you know a human study for at least a year. So sometime 12 to 18 months to the back half of next year, we were.
Targeting so we have some time before that that expense hits and it would be a small first in man studies you can imagine it's not overly expensive, it's not it's not CRPD where.
Where that that takes a lot of patients. So we have time and we it's not very expensive for us. So so in in Israel, we have our own animal facility. So you know it's.
Something we control we control the expense we control.
What kind of experience, we're doing and how frequently we're doing them. So this is not a big expense centre for us at this moment in time.
The real Big expense centers, obviously is manufacturing and doing all the testing for they ph program.
And obviously you know the studies that we run the clinical studies, you're running expenses with respect to covert and the NTM home study so.
Those are the three priorities right now is coated NTM home and long said Pmeight, what's cancer still moving along and Bronkema lettuces on hold because we have no choice and see if it is not going to started because you have resources, it's kind of how we look at it.
Okay, great Thanks, and congrats on the progress though.
Great. Thanks, so much you.
We have reached the end of our question answer session I know, what let's turn the call back over to Mr., Steve easy for any closing remarks.
Well, thanks, everybody for joining us today.
Look forward to speak into all of you and the next couple of weeks picking up.
This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation in a wonderful day.
[music].