Q2 2020 Eloxx Pharmaceuticals Inc Earnings Call
Good afternoon, everyone.
And welcome to you Alex Pharmaceuticals, second quarter, 2020 earnings webcast and conference call.
Today's call is seeing recording.
At this time I wouldn't like the clinical over to Barbara line.
Next Investor Relations.
Again.
Thank you welcome and thank you all for joining US. This afternoon for you up you lock Pharmaceuticals second quarter 2020 financial results and business update joining me. This afternoon are Dr., Greg Williams, our Chief Executive Officer, Neil Bella Chief operating Officer in General Counsel Dr. Tom poverty.
Our Chief Medical Officer, Dr. Mascara, our vice President of research and even Mcdonald, our Vice President Finance and accounting.
Before we begin I would like to remind you that any statements made during this call that are not historical are considered to be forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual results may differ materially from those indicated by these statements as a result at the various important factors, including those.
Gossiping Dr. section in our most recent annual report on form 10-K filed with the Securities and Exchange Commission as well as our other reports filed with the FCC any forward looking statements represent our views as of today August six twentytwenty on a replay of this call will be available on the company.
Website Www Dot you lock pharma following the call. It is now my great pleasure to some call over for Dr., Greg Williams, Chief Executive Officer, He lost funds pitiful.
Thank you Barbara and welcome to lock in second quarter, Twentytwenty earnings webcast and conference call.
We're continuing to advance our clinical and trying to the programs forever he or she library.
Highest priority is to reach topline proof of concept cater for realex or two from our phase two cystic fibrosis clinical trial program, which we believe will be a substantial value inflection point for the company.
Earlier this week.
We used to now that the U.S.P.A. had granted an orphan drug designation the election to the treatment of cystic fibrosis.
<unk> orphan drug designation confers several important benefits to support the don't make for medicines and underserved patient population for rare disorders.
Perfect fewer than 200000 people anyway.
Orphan drug designation qualifies you logs for certain benefits.
Good morning eligibility for marketing exclusivity for seven years post closing.
Tax credits on qualified U.S. clinical trial expenses.
Potential grant funding opportunities that can be used for clinical trials and.
In a waiver of the prescription drug user fee required to submit an application for people with the idea.
Is currently set of just under $3 million.
We previously you know that our she of trials were temporarily pork in response to the covert 19 global pandemic.
Order to protect the health and safety at our employees.
Their families.
Our healthcare workers are investigators.
Most importantly, cystic fibrosis patients.
On June 17th we were pleased to announce that enrollment of our phase to see of clinical trials in Europe in Israel had been resumed why the trial me watch remained calls.
We've maintained a high level of engagement with our clinical sites investigators to ensure that we can complete our phase two program as soon as possible.
We will continue to update you as we can greater clarity on these activities.
We're extremely pleased.
Conducting these trials tops, yes, clinical trial sites and the expressed leveled interest and support from top indicators.
Oh, sorry, and patient advocacy group has been tremendous [noise].
We're also pleased to report that date there'd been no safety signal in these clinical trials.
Our CFO phase two program consists of two open label trial.
One for clinical investigators enrolling patients in sites in Europe in Israel.
The second phase two trial focuses on sites in the office.
Expansion of parts cystic fibrosis program to the U.S. has been made possible impart by funding provided by the cystic fibrosis Foundation.
Endorsement of our protocol.
By the therapeutic development network.
Europe, a protocol endorsed by Dcfs.
Tom at work.
We're also evaluating additional clinical sites in other countries, where patient enrollment may be feasible.
The company has sufficient capital to run through the end of 2021 and.
We believe we have the right resources and the strategic flexibility to accomplish our key priority, which again is to deliver top line phase two proof of concept theater for helix or two in cystic fibrosis.
We continue to be focused on delivering value to shareholders well fulfilling our mission to provide treatment options to patients with high unmet medical needs in the most even expeditious manner.
Beyond dealix him to in cystic fibrosis.
Our R&D team continues to advance other compounds from our E. R. S. T library for additional indications, which we previously spoken to you about such as autosomal dominant polycystic kidney disease, where 80 PK D.
And inherited retinal disorders.
We have a strong experienced team with expertise in clinical drug development.
Basic research and regulatory affairs.
I'm highly confident the we have the capabilities on the resources needed to deliver on our goals.
We expect that there'll be a steady cadence of additional data.
Scientific presentations and publications as we move through this year.
We're pleased that a scientific manuscript detailing dealix twohg read through specificity towards premature stopped code on has been published in the August 2020 edition of the journal of Pharmacology and experimental therapeutics.
We plan to present additional data electro too in cystic fibrosis, the North American cystic fibrosis conference in late October.
[noise] as we previously shared we presented data during the second quarter for marriage Heritage retinal disorders program at the Virtual Association for research condition in ophthalmology.
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And if you moment Dr. Derisked, we'll update you on the continued progress you never inherited retinal disorders in 80 PKD programs.
We continue to advance our work in ophthalmology and our team achieved an important proof of concept milestone demonstrating that our he or she compounds can restore protein production in the I wouldnt injected intravitreal <unk> in an animal model.
We've built on this milestone with are ongoing formulation efforts, which are encouraging results across multiple strategies to sustain compound exposure.
We are evaluating Usher syndrome, and other disorders of the photo receptors, we're retinal pigment in a feeling recently demonstrating read through the most common nonsense a wheels for this up to 90.
Yes, seven eight NPD 60 genes.
Positive scientific data presented at last year's American Society of Nephrology kidney week from EQT completed renal impairment study.
For the expansion of our research in the kidney into other areas such as 80, PKD, but it's a high prevalence of nonsense mutation patients.
The data also provides modeling necessary for dose adjustment based on renal function.
Hi screening programs continue to evaluate opportunities to advance you look some too and other novel molecules from out Youre, a few library for new indications.
We are the most advanced company tackling degree challenge of developing potential new therapies for nonsense mutations, there's a high level of interest and enthusiasm in the scientific and clinical community for our programs as well as in the business community.
We continue to pursue partnerships, where appropriate to expand our therapeutic footprint and accelerate our progress.
We ended the second quarter of 20 to 23, 7.1 billion cash and cash equivalents and with the realignment of our resources or cash runway extends through the end of 2021.
We are well funded to deliver topline data for you look so two in cystic fibrosis and to advance the preclinical activities for electro two and our library molecules in additional indications.
Before I turn the call over to Dr. Mega Derisked, Our Vice President of research will update you on the progress in preclinical programs in Haiti, PKD end inherited retinal disorders.
I'd like to ask Neal Beloff.
Chief operating officer in General Counsel to provide you with an overview of how we are diligently and successfully navigating the challenges of the cobot 19 global pandemic.
Thank you Greg protecting the safety of our workforce healthcare workers in patients and their respective families are paramount importance. During this pandemic.
With that in mind, we have been working diligently to ensure that we can operate with minimal disruption and mitigate the impact of the current healthcare crisis.
Today, the cobot 19 pandemic has not had a material adverse impact on our financial condition, which Steve will speak to shortly and we have not had to lay off or for a low any employees.
Corporate operations continue even though our phase two clinical trials in Europe in Israel was temporarily pause for a period of time and those in the U.S. remain on hold.
We continuously evaluate our operations and risks and planned for possible alternative mitigation strategies in order to remain flexible well complying with applicable government regulations and guidelines.
Like most companies, we have made modifications to our normal operations.
Including prohibitions on business travel and meetings permitting employees to work remotely and implementing workplace safety guidelines.
We cannot predict the extent in severity of the future impact of the global health crisis on our business in clinical trials, which will be determined largely by the ability of patients to actually trial sites personnel from marci arose to perform in accordance with our trial protocols and our effective oversight and communication will see arose clinical sites that principle.
Investigators.
As Greg mentioned, we remain focused on completing our phase two clinical trial program as soon as feasible will provide additional relevant updates when available I.
I would now like to turn the call over to document Kundera, Vice President of research.
Thank you Neil.
We continue to advance our preclinical efforts across our Ers T. library of molecules working with our research partners to advance our programs.
As Greg mentioned, we are pleased there scientific manuscript title elect so to generates protein the premature staff code on read through without inducing native stop code on return protein.
Has been published in the August 2020 edition of the journal of Pharmacology and experimental therapeutics.
Manuscript demonstrates that while ill ekso to mediate read through a premature stop code on the fidelity Adapco Don's found at the end of healthy transcripts is maintained.
This indicates that translation integrity is preserved with targeted therapeutic exposure of PLX, so to consistent with the favorable tolerability profile across our pig preclinical and clinical dataset.
Our preclinical efforts in kidney Okcular disorders continue to progress.
Im focuses on applying our understanding of read through to the unique genetics of each disease and evaluating efficacy with a focus on protein function using assays versatile enough to enable our personalized medicine approach. We continue our effort in establishing and evaluating functional models of 80 PKD in order to confirm that the read.
Sure, we observe has an impact on cyst formation and growth.
Our cystic fibrosis platform as highlighted utility of organization technology to step function in a translational model.
Similarly for 80, PKD organized derived from patient sells for induced pluripotent stem cells can be differentiated in a manner that recapitulate cellular diversity of the kidney and generate assist characteristics of the disease state.
Using a patient derived organized with the most common PKD to not until we have repeated encouraging result of reduced sister Genesis and also observe a reduction in society.
The results demonstrate that a read through approach and have a direct impact on meaningful metrics of 80 PKD progression. This number in size.
Furthermore, we continue to make progress in our efforts to CRISPR engineer induced pluripotent stem cells in order to model common PKD nonsensical Nielsen organized.
We intend to evaluate additional model of 80, PKD and with positive results to advance towards I Indy submission.
Turning to inherited retinal disorders, our library of compounds as demonstrated dose dependent read through using R&D churro assay platform acceptable Intravitreal tolerability and restored protein production in an animal model Ers Ci intravitreal injection.
Our intravitreal read through approach provides the opportunity to reach the totality of the retina.
To extend the duration of the delivery our team is actively working to achieve the desired sustained release formulation.
We continue our efforts.
Exploring several bio degradable controlled release technologies and are encouraged by the in vitro release rate achieved today, which are consistent with our target release profile of one to three months.
While we continue on our Okcular program efforts. It is gratifying to observe that others are also reporting on the exciting potential of HILA ex compounds in this disease space.
For example, the group up the cash Pattanaik at the University of Wisconsin, Madison recently demonstrate demonstrated that yield Xothree also known as Andy 84 was sufficient to rescue tier 7.1 channel function in a nonsense LDL cellular model derived from an individual with a form of pediatric blindness leverage.
Congenital amaurosis.
These results were published in the American Journal of Human genetics.
These promising results represent another example of how intravitreal delivery of an ers GE may have broad application across nonsense related inherited retinal disorders through restoring production of essential protein.
I would now like to ask Steve Mcdonald, our VP of finance and accounting to provide a review of our second quarter 2020 financial results.
Thanks, Matt.
As of June 32020, the company reported total cash, including cash equivalents in marketable securities of $37.1 million, which we believe will fund the company's operations through topline data in cystic fibrosis and through the end of 2021.
For the quarter ended June 30 2020.
Company incurred a net loss of $7.9 million or 20 cents per share as compared to a net loss of $14.4 million or 40 cents per share for the same period in 2019.
Noncash stock compensation expense totaled $2 million with 1.7 million allocated to DNA and 300000 to R&D.
Second quarter, 2020, R&D expense totaled $3.5 million compared to $7.3 million for the same period in 2019.
The quarter to quarter R&D expense decrease was driven by lower professional fees largely due to the recent pause in our phase two trials and reduced headcount and related salaries for the 2020 period.
DNA expense for the second quarter, 2020 was $4.1 million, which decreased from $7 million for the same period in 2019.
Due to lower headcount and professional services costs.
Given the realignment effective in March we expect our quarterly cash burn will decline sequentially as we move through the second half of 2020.
To reflect the company's reduced headcount elimination of non priority program spending and targeted efficiencies.
While the majority of cost savings will fall in January there will be some reduction in our R&D spending.
We expect that are cash burn rate will reach its low in the fourth quarter of 2020 and remain fairly stable throughout 2021 with some quarter to quarter variation.
In April 2020, we applied for and received alone of approximately 800000 dollar.
I have a U.S. sbcs paycheck protection program.
Which was a component of the cares and signed into law in late March.
PPP loans are eligible for partial forgiveness, which we will apply for.
Based on using the proceeds for payroll maintaining headcount and other specified costs.
The remaining balance of the loan bears interest at the rate of 1% and is to be repaid commencing at the end of 2020.
Also for your modeling purposes, our total shares of common stock outstanding as of June 32020 were 40.135 million.
This concludes the second quarter financial comments, and I'll turn the call back to Greg.
Thank you Steve.
As our highest priority to complete our phase two proof of concept clinical trials in cystic fibrosis and to report top line data, which we believe will be a major value inflection point for the company.
We are laser focused on assuring that we are investigators and clinical sites can complete this trial as soon as possible.
We're pleased to the enrollments resumed in Europe in Israel and that to date there've been no safety signals realex or two in these trials.
We're gratified that the FDA has granted orphan drug designation for you look so to the treatment of cystic fibrosis.
As I mentioned earlier, the orphan drug designation for several important benefits to the Elixa two program in cystic fibrosis.
And we look forward to presenting data annealing, so to the North American cystic fibrosis conference in late October.
The on cystic fibrosis, we continue to advance our portfolio of novel IAR as two molecules.
Several of these compounds demonstrated encouraging levels of retry activity and Tolerability supporting their further therapeutic development.
Dr. Good AEROSURF shared with you some of the latest scientific data from our preclinical programs in 80, PKD and inherited retinal disorders.
We're pleased that our recent scientific manuscript on the specificity elixir too.
Been published in the August 2020 edition of the journal of Pharmacology and experimental therapeutics.
We will be making presentations and hosting one on one meetings with investors next Thursday August 13th.
40, if annual Canaccord Genuity virtual growth conference.
On September 10th we will be hosting one on one meetings with investors that cities 15th annual Biopharma Virtual conference.
We thank you for joining us on our second quarter 2020 earnings call and we look forward to continuing to update you on our progress.
Thank you very much.
Operator, you May now open up the call for questions.
Thank you ladies and gentlemen, if you have a question at this time. Please press Star then one on your touched on telephone. If your question has been ancillary wish to remove yourself from the Q. Please press the pound cake.
Prevent any background noise, we ask that you. Please please your line on mute. What's your question has been stated.
Our first question comes from the line Michelle Gleason with Canaccord Genuity. Your line is open. Please go ahead.
Hi, guys. This is being I hear from so congrats on the quarter on resuming the study in Europe in Israel.
Can you maybe just remind us above the studies is fine and what would be a clinically meaningful results specifically on the expected change in SMB, one and then I have a follow up question.
Sure. Thank you so much for for asking and for joining the call today.
So this is Greg and the CF trial has for treatment groups, it's an inter patient dose escalation design, where the first dose is 0.3 milligrams per kilogram.
Second dose is 0.75, the third doses 1.5, and the top dose is three milligrams per kilogram. The first three doses are administered for the duration of one week each followed by a washout period, where pharmacokinetics and safety are evaluated by any.
The safety review Committee for the first two patients through and then the top doses as two weeks duration of administration.
Primary endpoint to safety as you know, we're also measuring pharmacokinetics and Pharmacodynamic endpoints.
The key Pharmacodynamic endpoint, which is a secondary endpoints in this trial is sweat chloride, which is highly correlated with improvements in NPV one.
And we are also following FCB one.
In a small trial like this.
Our primary focus is on sweat chloride.
And with a larger trial, we'll get more data related to FCB, one and a small trial where there's.
Essentially a fair amount of inter and intra patient variability with half VB one it may be more difficult to tease out a signal.
Chloride by comparison is much more consistent and again is highly correlated with FCB. One so were primarily looking for differences and sweat chloride.
And those differences and sweat chloride.
Could be as as much as.
A change of 50 or 60 millimoles per liter.
That would correspond to normalizing sweat chloride.
Smaller increments would also be potentially important therapeutically.
For patients.
We would be looking for FCB, one changes of course bond to those improvements in sweat chloride.
And.
So far.
We are.
Pretty confident that were on the right dosage range based on previous data from our Cystinosis trial, and we look forward to providing results with or more.
Okay, great. Thank you and then I guess.
You know from your interactions Wednesday this critical.
Hi, Dan.
Given how clinical activity seems to be kind of resuming gradually India. You have maybe you know anticipated timeline. Okay estimates when will you be able to resume and have you implemented any protocol changes both in the Israeli trial or in the U.S. trout kinda to try to mitigate potential cavatt impacts in case.
Second wave.
And then I guess, when we're thinking when you look toward the top line data.
Do you plan to include also the U.S. study as well I guess, just trying to kind of get a better SASSA timeline I should we expect they don't 2020 or are we thinking somewhere in 2021.
Sure. Thank you so.
So theres a number of questions there I will try to seize them out one at a time.
So.
First as you know Weve resumed our trial in Europe and Israel.
Across the World, we have kept in close touch with the investigators MCR rose.
We are.
Really happy with their level of enthusiasm and we are continuing to move things forward as fast as we can.
Since we have resumed in Europe in Israel.
We've made good progress in spite of the uncertainty associated with Covance, We Havent made any co vid related protocol changes sort of course, we are carefully.
Of course, we're carefully monitoring more patience as we normally would and.
Our highest priorities protecting patient safety.
As you know our highest priority is to complete these trials as soon as we possibly can Europe and Israel is ahead right now since we remain temporarily paused in the west.
And we will provide you with additional updates as as they become available.
Got it okay. Thank you and again congrats on the corridor.
Well talk to you as Mexico [laughter]. Thank you.
Thank you and our next question comes from the line of Joel Beatty with Citi. Your line is open. Please go ahead.
Hi, Tim Thanks, Thats helpful overview today.
The question is on.
Here there is no safety signals so far.
Are you able to provide context in terms of.
Dose level.
There's been no safety signals.
How many escalating doses as abandoned or how many patients that but no safety signals haven't seen him.
Joel there or so thank you for your question and for calling it.
We've got a number of patients proceeding through the protocol across dose level.
It's great to see that there are no you look so two related safety signals at this point and as we generate additional data will provide you a further update.
That's helpful.
Over the number of patients because that theyve been through three or four.
I guess, how far dose level is that what you meant.
So at this point.
That's a level of detail that were not sharing Joel.
Appreciate you're asking as we generate additional data and as we have a better handle on the total number of patients in each region and timelines will provide a more comprehensive update.
Okay got it.
Yes.
I guess.
Yes.
The sweat chloride.
Unclaimed that seems like it will be in accordance for her moving on to further development I guess how many.
I guess can you put all contracts into how variable that is from patient to patient or given the trial design. How confident can you can you be that's a real effects from the drug no.
How many patients would be enough that tickets evidence there will be able to show that.
So.
As we look at sweat chloride, the diagnostic value for patients, having CF would be 60 millimoles per liter.
Patients with nonsense mutations have reportedly ahead sweat chloride values of well over 100. So if we're looking at incremental differences that bring us down to 60 or even potentially below that theres a lot of room to really make.
An important difference for these patients.
Since this is an open label trial, we're going to continue to monitor the data as they come in and when we have.
Further information will be happy to share with you until we really quantify the inter and intra patient data.
Values its hard for me to give you a statistical mathematic response, but between the patients that are available both in Israel and Europe and the US we're highly confident that we'll have more than enough patients to have clinically meaningful and typically significant results.
Great. That's helpful. Thank you very much.
You're welcome.
Thank you and our next question comes from the line.
On top with Piper Sandler Your line is open. Please go ahead.
Great. Thank very much and thanks, Carl the detailing the update on the CF trial, one of the give a sense for some of the other preclinical efforts.
Specifically with some of stuff that you reported that are on the retinal disease.
Hello, covert sort of impacted preclinical work and appreciating that the focus right now is on CS just wanted to get an understanding of how those programs are advancing and whether maybe they offer partnering opportunities. Thanks. So much.
So Ted.
We are always talking to potential partners and we're certainly open to those conversations we routinely evaluate opportunities and we will continue to do so.
Covidien has slowed that slows down a number of businesses around around the world as you know, but our preclinical activities have proceeded.
Very well.
And I'd like to ask Matt Kundera to give us a little more color.
Yes, Thanks, Greg So appreciate the question Ted.
Early on we did see some delays in regards to covert and that says that difference euros and academic institutions. We work with came up with their own plans for how they're going to mitigate.
Risk, but we've seen.
Pretty much across the board labs reopening.
Definitely safety plans put in place in order to handle it and the only delays we observed.
That impacted any of our projects dealt with animal studies and that was in and around getting some of this study is up and running again with the iocs somewhat being on hiatus. So I would say the the initial pause did affect us for a few weeks and as people got to handle on it we were able to to get rate.
Back to it so.
So it would it's pretty much business as usual in terms of the preclinical efforts.
Great. Thank you very much of that update.
Thank you and I'm showing no further questions at this time and I would like to turn the conference back over to Mr. grade Williams for any further remarks.
Thank you. Thank you all for tuning in today. Thank you for your questions. We will look forward to talking with you again on August 13th at the Canaccord Conference and then again on September 10th at Citi.
Before it's continuing to update you and.
Look forward to talking again soon.
Okay.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect everyone have a good day.
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