Q2 2020 Chimerix Inc Earnings Call

Within 20 earnings conference call.

Unknown Executive: I would like to introduce your host for today's call, Michelle LaSpaluto, Vice President of Strategic Planning and Investor Relations at Chimerix. Please proceed. Thank you.

I want to legacy introduce your host for today's call will show Laspaluto, Vice President of strategic planning and Investor Relations at Kamerick. Please proceed.

Thank you good morning, everyone and welcome to the claim Eric second quarter 2020 financial and operating results Conference call. This morning, we issued a press release, which outlines the topics. We plan to discuss today you can access the press release in our Investor section of the website.

Michelle LaSpaluto: Good morning, everyone, and welcome to the Chimerix Second Quarter 2020 Financial and Operating Results Conference Call. This morning, we issued a press release that outlines the topics we will plan to discuss today. You can access the press release in our Investors section of the website. With me on today's call are President and Chief Executive Officer Mike Sherman, Chief Financial and Business Officer Mike Andriole, Chief Medical Officer Allen Melemed, and Randall Lanier, our Chief Science Officer. Before we begin, I would like to remind you that the statements made on today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors that could cause actual results to differ materially from those referred to in the forward-looking statements. Please refer to our filings with the SEC for a more complete disclosure of these risks, and At this time, I would like to turn the call over to our President and Chief Executive Officer, Mike Sherman.

With me on today's call, our President and Chief Executive Officer, Mike Sherman, Chief Financial and business Officer, Mike and real Chief Medical Officer, Alan Melamed, and Randall linear our Chief Science Officer.

Again, I would like to remind you that the statements made on today's call include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors. These risks and uncertainties and other factors could cause actual results to differ materially for those that referred to for those referred to in the board.

Please refer to <unk> filings with the FCC for a more complete disclosure of these risks and uncertainty.

At this time I would like to turn the call over to our President and Chief Executive Officer, Mike Sherman.

Good morning, everyone. Thanks for joining us.

Michael A. Sherman: Good morning, everyone. Thanks for joining us. Well, this has been a challenging, a year that's been challenging for just about everyone. The team at Chimerix has maintained a high level of productivity, quickly adjusting to a virtual business world. I have to say the physicians we're working with at investigational sites and regulators at the FDA have also risen to that challenge. During the second quarter, we made progress on three important fronts. First, following the go-ahead from the FDA to proceed with the Phase 2-3 trial of D-Stat and COVID-19, we began treating patients.

While this has been a challenging.

A year that's been challenging a one for just about everyone. The team at Kymaerica has maintained a high level of productivity quickly adjusting to a virtual business world.

Say that physicians were working with at investigational sites and regulators at the FDA label, so risen to that challenge.

During the second quarter, we've made progress on three important fronts.

First following go ahead from the FDA to proceed with the phase two three trial of D Stat, and Cobot 19, we began treating patients.

Second we have resumed startup activities related to the D. Stat trial in acute myeloid leukemia with the expectation to have patients enrolling by early next year.

Michael A. Sherman: Second, we've resumed startup activities related to the DSTAT trial in acute myeloid leukemia with the expectation to have patients enrolling by early next year. This follows a brief pause on that program as we allowed sites to focus on their COVID readiness, and we focused on launching our COVID trial. And finally, we've been submitting packages to the FDA as part of our rolling submission of brincidofavir as a smallpox countermeasure, with plans to complete that this quarter.

This follows a brief pause on that program as we allowed sites to focus on their coded readiness and we focus on launching our Kobin trial.

And finally, we've been submitting packages to the FDA is part of our rolling submission of Brincidofovir as a smallpox countermeasure with plans to complete that this quarter.

In addition to the clinical progress we've made we've also strengthened our leadership team with the addition of Dr. all that does not a culture and Karen Barnett as vice president of clinical operations.

Michael A. Sherman: In addition to the clinical progress we've made, we've also strengthened our leadership team with the addition of Dr. Allen Melemed as Chief Medical Officer and Karen Barnett as Vice President of Clinical Operations. Allen has over 20 oncology approvals under his belt and a wide range of indications. He also brings a unique balance of medical practice and regulatory experience, along with his success in drug development. Karen has similar success in oncology operations. She most recently drove an endocyte phase three prostate cancer trial to full enrollment ahead of schedule, following a similar track record of leading multiple simultaneous clinical programs to successful conclusions. I am really thrilled to have both join our team as each is already making such a difference.

Alan adds over 20 oncology approvals under his belt in a wide range of indications.

He also brings a unique balance of medical practice and regulatory experience along with his success in drug development.

Karen has similar success in oncology operations. She most recently drove endo sites phase three prostate cancer trial to full enrollment ahead of schedule. Following a similar track record leading multiple simultaneous clinical programs to successful conclusions.

Really thrilled to have both join our team as each is already making meaningful contributions.

Michael A. Sherman: Meaningful Contribution.

We spend a few minutes, making more detailed comments about our top three priorities.

Michael A. Sherman: Let me spend a few minutes making more detailed comments about our top three priorities. As it relates to the D-STAT trial in COVID, we've been very pleased by several peer-reviewed publications released in the last month, which independently reinforce the relevance of D-STAT's mechanisms in this disease. I'll let Allen expand on that a little bit more.

As it relates to the D stat trial and co bid we've been very pleased by several peer reviewed publications released in the last month, which independently reinforced the relevance of these stats mechanisms in this disease.

I'll, let alan expand on that a little bit more these mechanisms by the way likely apply to acute lung injury or acute respiratory distress syndrome from other causes as a result, the rationale for this investment goes well beyond the commercial potential in cobot.

Michael A. Sherman: These mechanisms, by the way, likely apply to acute lung injury or acute respiratory distress syndrome from other causes. As a result, the rationale for this investment goes well beyond the commercial potential of COVID. You may have seen a number of articles about the challenges of enrolling COVID trials. After a good start, we've experienced some of these challenges as standards of care have evolved quickly.

You may have seen a number of articles about the challenges of roll enrolling kobin trials. After a good start we've experienced some of these challenges that standards of care have evolved quickly that said, we've been able to respond quickly and effectively.

Michael A. Sherman: That said, we've been able to respond quickly and effectively. In our case, we have good flexibility as D-STAT will combine well with most of the treatments being used. Recall that our Phase II portion of the trial has three cohorts, two cohorts at different doses and then a third expansion cohort at the selected dose. We recently added some flexibility to our protocol to allow the potential unblinding of data after cohort two. This doesn't impact the statistical design material, and it potentially accelerates our insight into the data.

In our case, we have good flexibility as D stat will combine well with most of the treatments being used.

The color phase two portion of the trial has three cohorts two cohorts at different doses administered expansion cohort at the selected dose. We recently added some flexibility to our protocol to allow the potential unblinding of data after cohort to.

This doesn't impact the statistical design materially at it potentially accelerates our insight into the data.

We're particularly interested to evaluate the multiple biomarkers were tracking.

Michael A. Sherman: We're particularly interested in evaluating the multiple biomarkers we're tracking. With that, it gives us more certainty to have data to assess and report before year end. As we expect a complete enrollment of the third cohort in the fourth quarter, allowing that data to mature to the 28th day primary endpoint means final phase two data readout is more likely early next year. With regard to our program in AML, you can imagine that as we brought Dr. Melamed on board, his enthusiasm helped drive us to move ahead quickly with that phase three trial. By moving forward now, we can position ourselves well relative to some other trial initiations currently on pause. For Brent Sadafovir, we plan to deliver our last element of the rolling submission this quarter.

With that it gives us more certainty to have data to assess and report before year end.

As we expect to complete enrollment of the third cohort in the fourth quarter, allowing that data to mature to the 28 day primary endpoint means final phase two data readout is more likely early next year.

With regard to our programming and now you can imagine now see brought Dr. melamed onboard isn't doozy hasn't helped drive us to move ahead quickly without phase three trial.

By moving forward now, we can position ourselves well relative to some other trial initiations currently on pause.

For Brincidofovir, we plan to deliver our last element of the rolling submission. This quarter. So we expect to receive its 2021 PDUFA action date in the fourth fourth quarter up this year.

Michael A. Sherman: So we expect to receive the 2021 PDUFA action date in the fourth quarter of this year. We plan to communicate via press release as we receive that date from the FDA. The COVID-19 pandemic has highlighted the importance of preparedness to treat future viral outbreaks, especially those as deadly as smallpox, and we look forward to a potential brinsadophavir regulatory approval and a procurement contract for the U.S. Strategic National Stockpile, or S&S. Among the final analyses coming together for the submission, we've been particularly pleased to see the resistance data from our primary animal model. As expected, we're not seeing resistance materialize.

We plan to communicate via press release, as we see that they only have to yet.

Well the 19 pandemic has highlighted the importance of preparedness to treat future viral outbreaks, especially those is deadlier smallpox and we look forward to a potential brincidofovir regulatory approval and a procurement contract for the U.S. strategic national stockpile ore at the now.

Among the final analyses coming together for the submission we've been particularly pleased to see the resistance data from our primary animal model as expected were not seen resistance materialize. This is a key aspects of the nature of Brincidofovir treatment and the driving reason BARDA have supported this program throughout its still.

Allen S. Melemed: This is a key aspect to the nature of Brincid-Offavir treatment and a driving reason BARDA has supported this program throughout its development. Before passing the call over to Allen for a review of our DSTAT programs, and for those of you who have not met Allen yet, let me give a few more details on his background. Dr. Melemed joins Chimerix from Eli Lilly, where he spent more than 20 years dedicated to the clinical development and approval of oncology medicines across a broad range of tumor types, including Verzenio, Saramza, Lartruvo, Olympta, and Retevmo, among others. Most recently, he served as a Distinguished Medical Fellow and Senior Director of Regulatory Affairs, Oncology Allen is uniquely qualified to build and expand our clinical programs, and we're delighted to have him on our team. That will be turn the call over to Allen.

Hello.

Before passing the call over to Alan for view of our D stat programs and for those of you who have not met Alan Yes, Let me give a few more details on his background.

Documented adjoins time, Eric's from Eli Lilly, where he spent more than 20 years dedicated to the clinical development and approval of oncology medicines across a broad range of tumor types, including a perennial cyramza lartruvo ellipta and retail no among others.

Most recently served as a distinguished medical follow and senior director of regulatory Affairs Oncology North America.

Let's see Allen is uniquely qualified to build and expand our clinical programs and we're delighted to have them on our team.

That would be turn the call overkill.

I think you might for that's fine introduction I'm thrilled to be joining kymaerica, such a pivotal time in its evolution into a leading therapeutics company.

Allen S. Melemed: Thank you, Mike, for that fine introduction. I'm thrilled to be joining Chimerix at such a pivotal time in its evolution into a leading therapeutics company. In addition to its potential oncology, DFAT's mechanistic rationale was flagged for having the potential to treat COVID-19 patients. The mechanistic rationale supporting D-STAT's potential in acute lung injury patients with COVID-19 is twofold. First, DSTEDD offers the potential to decrease inflammation and immune cell infiltration in COVID-19. Studies have shown that the primary anti-inflammatory effect of D-STAT is mediated by inhibition of HMGV-1. This is important as HMGB1 induces downstream pro-inflammatory cytokines, including but not limited to, IL-6, TNF-alpha, monocyte chemotractive protein 1, or MCP-1, and macrophage inflammatory protein 1-alpha, all of which have been shown to be elevated in COVID-19. Infiltration of monocytes and other immune cells into inflamed lung tissue is a key pathologic driver of ALS.

In addition to with potential oncology defects mechanistic rationale was flag for having the potential to treat cold 19 patients.

The mechanistic rationale supporting piece, that's potentially an acute lung injury patients with Cowen 19 is twofold.

First he said offers the potential to decrease inflammation immune cell infiltration suncoke 19 patients.

Studies have shown the primary anti inflammatory effect of D. Stat is mediated by inhibition H.M. TV one activity.

This is important and h. and GP wine induces downstream pro inflammatory cytokine, including but not limited to iosix.

TNF Alpha Monocyte chemoattractant protein Warner N C P, one and macrophage inflammatory protein one alpha.

Oh, which had been shown to be elevated in covert 19 patients.

[noise] infiltration of monocytes and other immune cells into inflamed lung tissue is a key pathlogic driver appeal.

Yes, that's expected to reduce lung and cultures and filtration fight immune cells in airline likely by innovation that both H.M. GP, one finding to rage, and leukocyte long and portray shouldn't be a decreases in MCP, one expression and blocking the cell adhesion molecule.

Allen S. Melemed: D-STAT is expected to reduce lung infiltration by immune cells in ALI, likely by inhibition of both HMGB1 binding to RAGE and leukocyte lung infiltration via decreases in MCP1 expression and blocking of the cell adhesion molecule P-selectase. Moreover, D-STAT offers the potential to alleviate the underlying causal and coagulation disorder. Two recent studies have identified a high neutrophil-lymphocyte ratio and low platelet counts as clinically relevant indicators of disease severity and mortality in COVID-19. Neutrophils are early responders to infections capable of extruding granular and nuclear content to produce neutrophil extracellular traps or neutrophils. While NETs may be beneficial in trapping and eliminating pathogens, they also promote clotting and are related to intubation and death in COVID-19. HMGV-1 and PFF-4 are two key proteins involved in net formation and stability.

Keith selected.

Second piece that offers the potential to alleviate underlying causes them quite bullish disorders.

Two recent studies of identifying high neutral effect ratio and low platelet counts as clinically relevant indicators of disease severity and mortality in coated 19.

Neutrophils are really responded to infection capable extruding granular and nuclear content to produce neutrophils extra cellular traps ordinance.

Well next may be beneficial in traffic and eliminating pathogens.

Also promote claudia and I related to intubation and death and coordinating.

Hey, Tim JV, one and P.S. math for our two key proteins involved in net formation and stability.

Destock in fine uninhibited called H.M., GP, one and P.F. for which may reduce the formation of net and promote their clarence.

Allen S. Melemed: DSTAC can bind and inhibit both HMGB1 and PF4, which may reduce the formation of NETs and promote their growth. In doing this, DSTAT may prevent and treat coagulation disorders observed in COVID-19. We are currently enrolling a randomized, double-blind, placebo-controlled Phase 2-3 study which is designed to determine the safety, as well as efficacy, of D-STAT in adults with severe COVID-19 who are at high risk of respiratory disease. Eligible subjects are those with confirmed COVID-19 who require hospitalization and supplement oxygen. The primary endpoint of the study is the proportion of patients who survive and do not require mechanical ventilation through day 20. Additional endpoints include improvements as assessed by the National Institute of Allergies and Infectious Diseases Ordinance Scale. Time to hospital discharge, Time to Resolution of Fever, Number of Ventilator-Free Days, and All-Cause Warranty. We're also evaluating changes in key biomarkers, including interleukin 6, tumor necrosis factor Alpha, HMGV-1, C-reactive protein, and D-dimer.

In doing this piece that may prevent and treat quite licensed stores observed in covered night.

We are currently enrolling a randomized double blind placebo controlled phase two or three study, which is designed to determine the safety as well as efficacy of D. Stat in adults with severe coordinate team who are at high risk and respiratory failure.

Eligible subject adults with confirmed coordinating who require hospitalization and supplemental oxygen.

The primary endpoint of a study it the proportion of patients for survive and do not require mechanical ventilation true day 28.

I just want endpoints include improving antecessor by the National Institute of allergy and infectious disease ordinance scale.

Time to hospitals and hospital discharge.

During the Bush left fever number of that's laid a free days and all cause mortality.

We're also evaluating changes in key biomarkers, including interleukin six.

Tumor and of course, the factor Alpha H. and JV on C reactive protein and D dimer.

[noise] the ongoing phase two portion. This study will enroll 24 subjects to confirm the maximum safe dose and then all expanded by an additional 50 patients as a selected dose.

Michael T. Andriole: The ongoing Phase 2 portion of the study will enroll 24 subjects to confirm the maximum safe dose, and then it will expand by an additional 50 patients at selection. As Mike mentioned, a formal analysis of all endpoints, including supportive biomarkers, is planned to be formed at the conclusion of the dose escalation portion of the trial and then again at the completion of phase 2. Contingent upon positive results, the Phase II portion of the study will enroll approximately 450 patients. In addition to this work we are doing with D-STAT and COVID-19, we have also resumed work in our D-STAT program for the treatment of acute myeloid leukemia, or AM, and now expect site activation for the Phase 3 study to begin early in 2021.

As Mike mentioned, a form analysis of all endpoints, including supportive Biomarkers is planned to be form at the conclusion of the dose escalation portion of the trial and then again at the completion of phase two.

Contingent upon positive results the phase two portion of this study will enroll approximately 450 patients.

In addition to that's where we're doing with these Stephen Colbert 19, Weve also resumed work in our de stock program for the treatment of acute myeloid leukemia or am though.

And now expect site activation for phase two studies to begin early 2021.

We're very encouraged by the potential for D stat in and now and this promising product candidate has shown compelling activity across multiple endpoints in first line and all patients.

Michael T. Andriole: We are very encouraged by the potential for DSTAT in AML, and this promising product candidate has shown compelling activity across multiple endpoints in first-line AML. Furthermore, the standard chemotherapy regimen of 7 plus 3 utilized in this study has recently been endorsed in the 2020 American Society of Hematology, or ASH, guideline for the diagnosis of elderly patients with AML, the newly diagnosed elderly patients with AML. We look forward to updating you on our continued clinical progress with DSTAT in both COVID-19 and AML. With that, I'll now turn the call over to Mike Andriole for an operational update and review of the financials. Mike.

Furthermore, standard chemotherapy regimen of seven plus three utilizing this study has been recently indoors and the 2020 American Society hematology or Ash guidelines.

The diagnosis of elderly patients with A.M.L., the newly diagnosed pega sounds like basis, an email.

We look forward to updating you on our continued clinical progress with D. Stat in both covert 19 and all indications.

With that I'll now turn the call over to Mike Andrew.

<unk> operational update Andrew do you have the financials.

Mike.

Thanks, Alan and good morning, everyone before I review the financials for the quarter I'd like to quickly comment on the commercial potential for each word development programs.

Michael T. Andriole: Thanks Allen, and good morning everyone. Before I review the financials for the quarter, I would like to quickly comment on the commercial potential for each of our development programs.

Michael T. Andriole: For DSTAT and COVID-19, we believe data generated from the current Phase 2 study has the potential to support advancing this program to a pivotal study in COVID-19. Furthermore, beyond COVID-19, data from this study has the potential to support a pivotal study in all-cause ARDS. A condition for which there are very few therapeutic options and approximately 125,000 patients diagnosed in the top 7 markets annually. This translates to well over a potential billion-dollar-a-year revenue opportunity. Additionally, in first-line de novo AML, there are over 40,000 patients diagnosed annually.

For D Stat, and Cobot 19, we believe data generated from our current phase two study has the potential to support grants from this program to a pivotal study and Carbonite King.

The October 19 data from this study has the potential to support a pivotal study in all Colonsay Rds.

It condition for which burberry therapeutic options at approximately 125000 patients diagnosed.

Southern markets anyway.

Translates well potential billion dollar your room in Iraq.

Additionally, in first line de Novo no no 40000 patients diagnosed annually the top seven markets, which we also believe translates to a potential billion dollar per year Robin Roberts <unk>, when combining D stat seven plus three chemotherapy.

Michael T. Andriole: In the top seven.

Michael T. Andriole: Transcription by CastingWords As Allen noted, the recent ASH guidelines supporting the use of 7 plus 3 induction chemotherapy for FIT patients further support this strategy. And finally, we expect a potential procurement contract for brinzodopavir in the United States to generate meaningful cash flow over the next 5 to 7 years and, potentially, an additional 5 to 7 years should a second contract be subsequently awarded. International stockpiles of Bronsodafavir, while expected to be modest compared to the United States, are also expected to grow as the recognition of pandemic preparedness becomes a higher The opportunity for Chimerix to supply the U.S. and international markets with Bronsodafavir stockpiles further supports our innovation strategy with potentially substantial recurring non-dilutive capital for years to come.

As John noted.

The recent ash guideline supporting the use of seven plus three induction chemotherapy for fit patients further supports the strategy.

Finally, we expect.

From a contract for Brincidofovir and the United States to generate meaningful cash flow over the next five to seven years and potentially an additional five to seven years sort of second contract, we subsequently or what.

International Stockpiling of Brincidofovir, well expected to be modest compared to the United States is also expected to grow that's the recognition of pandemic preparedness becomes a higher priority globally and the your spectrum.

Opportunity for comments to supply the U.S. in international markets reports about your stockpiling further supports our operation strategy would potentially substantial recurring non dilutive capital for years to come.

As Michelle mentioned in her introductory remarks earlier today, we issued a press release comparing in our financial results for the second quarter.

Michael T. Andriole: As Michelle mentioned in her introductory remarks earlier today, we issued a press release containing our financial results for the second quarter of 2020. Starting with our balance sheet at the end of the second quarter of 2020, we remain well capitalized with approximately $96 million in capital to fund operations and no debt. We reaffirm our previous guidance to end the year 2020 with approximately $70 million in cash. Now turning to the Statement of Operations, the company reported a much narrower net loss of $10 million, or $0.16 per basic and diluted share, for the second quarter of 2020, compared with a net loss of $17.7 million, or $0.35 per basic and diluted share, in the second quarter of 2019. Revenues for the second quarter of 2020 were $1.4 million, equal to the same period in 2019.

Starting with our balance sheet at the end of the second quarter 2020, we remain well capitalized with approximately $96 million and capital to fund operations and no debt.

We reaffirm our previous guidance down to your 2020 with approximately $70 million in cash.

Turning to the statement of operations the company reported a much now or not loss of $10 million or 16 cents per basic and diluted share for the second quarter 2020 compare with a net loss of 17.7 million worth 35 cents per basic and diluted share I'm a second quarter.

Yeah.

Revenues for the second quarter 420 were one point fourmillion equal to the same period.

Research and development expenses decreased 8.6 million from second quarter 20, compared to 13.8 million for the same period and 20 monkey.

Michael T. Andriole: Research and development expenses decreased to $8.6 million for the second quarter of 2020 compared to $13.8 million for the same period in 2019. General and administrative expenses decreased over 50% to $3.1 million for the second quarter of 2020, compared to $6.3 million for the same period in 2019. And the loss from operations was $10.3 million for the second quarter of 2020 compared to a loss of operations of $18.7 million for the same period in 2019. With that overview, I'll now turn the call back to Mike for closing remarks.

General and administrative expenses expenses decreased over 50% to 3.1 million for the second quarter quite 20 compared to 6.3 million for the same juried important I can't.

Loss from operations ones come point Threemillion for the second quarter of 2020 compared to a loss of operations. They came for 7 million Hussein cured and 29.

That overview on I'll turn the call back to Mike for closing remarks, Mike.

Michael A. Sherman: Thanks, Mike. As we look to the balance of the year, Chimerix is well-positioned to achieve a number of value-creating milestones as we advance our Brincid-Ofavir program as a medical countermeasure for the treatment of smallpox, we complete enrollment and report preliminary results from the Phase II portion of our D-STAT clinical study in COVID-19 patients, and we ready our Phase III clinical program for D-ST I'd like to take this opportunity to thank the entire Chimerix team for their dedication and commitment throughout these past several months, and to our shareholders for your continued support and encouragement. With that, Operator, maybe we can open it up to questions.

Thanks, Mike as we look to the balance of the year Americas is well positioned to achieve a number of value, creating milestones as we advance our brincidofovir program as a medical countermeasure for the treatment of smallpox.

We complete enrollment and report preliminary results from the phase two portion of our D. Stat clinical study in coal that 19 patients and we ready our phase three clinical program for D stat to treat ml.

I'd like to take this opportunity and thank the entire time Eric's team for their dedication and commitment throughout these past several months and to our shareholders for your continued support and encouragement with that operator, maybe let's open it up for questions.

Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the Q. Please press the pound key.

Unknown Executive: Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question is from a line that was filled with dough with the cow and his company.

Your first question ASML, I know, Phil Nadeau with Cowen and company.

Good morning, Thanks for taking my question and congrats on the progress.

'cause first question is for their could face to whats your disclosure strategy, where you put out a topline press releases since you have the data early next year or would you wait for a medical meeting or publication in order to release for dinner.

Michael A. Sherman: Yeah, our strategy is...

Michael A. Sherman: I mentioned in our comments here that we had the opportunity to look at data both after the dose escalation portion, the cohort 2, and then again at the end of the phase 2 trial. So it sets us up for the likelihood that we would release top-line results this year on those first two portions, not wait for a medical conference. I think you've seen most of our peers are doing the same, and then they do the same update top line with the final analysis early next year. I do think, you know, that there's a trade-off here.

Yeah, our strategy is it and as I've mentioned in our comment here. We we have the the opportunity to look at data both after the dose escalation portion the cohort two and then again at the a at the end of the phase two trial. So it sets us up for the likelihood that we would really.

So the topline results this year on those first two portions not wait for a medical conference I think I think you see most of our peers are doing the same and then and then do the same update a top line with the the final analysis early next year I do think you know that there was a trade off your there.

The number of no. There's there's multiple Oh communications around data from a number of trials on and I think those coming out ahead of peer reviewed publication. This makes sense in this context I do think however that reporting random.

Michael A. Sherman: There are multiple communications around data from a number of trials, and I think those coming out ahead of peer-reviewed publications make sense in this context. I do think, however, that reporting randomized data is a discipline that we have adhered to, so you really can get a better understanding of what's going on with these patients and the effect of your drug, given that their patients are receiving multiple therapies. So we're balancing the discipline of reporting randomized data with the notion that we'll probably report it earlier than waiting for a conference.

Hi, This data is a discipline that we.

How that's your too so you really can get a better understanding of what's going on with the these patients will be affected your drug given that that the their patients are receiving multiple therapies. So we're balancing the discipline of reporting randomized data with the notion that will probably reported earlier than waiting for a conference.

Michael A. Sherman: That's very helpful. Thank you. And then second, on the entry criteria, clinicaltrials.gov says it's a score of three or four on the NIAID ordinal scale. And you mentioned the need for supplemental oxygen. Can you remind us, does the entry criteria include patients already on mechanical ventilation, or is it just those patients on supplemental oxygen who seem high risk of going to mechanical ventilation?

That's very helpful. Thank you and then second on the entry criteria clinical trials Dot Gov says, it's a square three or four and I'd word no scale and you mentioned.

The need for supplemental oxygen.

Can you remind is just the him entry criteria include patients already on mechanical ventilation or is it just those patients and supplemental oxygen who seem high risk.

Going to mechanical ventilation, it's it's the latter it excludes it specifically excludes patients who are already on the bench later the ideas to to treat those patients and potentially prevent them from progress into that that.

Michael A. Sherman: It's the latter. It specifically excludes patients who are already on the ventilator. The idea is to treat those patients and potentially prevent them from progressing to that stage.

That's helpful and then last question.

Michael A. Sherman: That's all. And then, the last question.

For me is it it seems like one challenge in running clinical trials for cobalt is that the pandemics moving around so in some places it's hard to know cools off and moves on to others. It looks like clinical controls that cover you have trial sites in Florida, Louisiana, Michigan in Virginia.

Michael A. Sherman: For me, it seems like one challenge in running clinical trials for COVID is that the pandemic's moving around, so in some places it's hot, and then it cools off and moves on to others. It looks like, according to clinicaltrials.gov, you have trial sites in Florida, Louisiana, Michigan, and Virginia. Do you think that's sufficient to fully enroll the trial, or would you look to add even more sites in other ge

I think that's sufficient to fully enroll the trial or would you look for looked at even more sites and other geographies.

Michael A. Sherman: Yeah, we're continuing to add sites, and to your point, you need to have broad coverage because this is going to pop up and be intense in areas, and then wane. And I think one of the things we're seeing is areas that were intense initially, New Orleans being a good example of the, I think the hospitals. Hospitalizations went down pretty significantly after the initial spike, but those have been coming back up again. So it will continue to ebb and flow. We've got perhaps another six sites or so that would add to our coverage, and we think that'll be helpful.

Yeah, we're continuing to add site, a and then to your point you need to have broad coverage. Because this is going up pop up and then be intensive it's an area and then and then Wayne and I think one of the things. We're seeing that there is that were intense initially in new Orleans being a good example, the the.

Like the hospital and hospitalizations went down pretty significantly after the initial like but those have been coming back up again. So it will continue to ebb and flow. We've we've got no perhaps another another six sites for so that would add to our coverage and we think that'll be helpful.

Unknown Executive: Perfect. Thanks for taking my questions and congrats again on the progress. Thank you.

Perfect. Thanks for taking my questions and congrats again on progress. Thank you.

Your final question comes from the line of Sumit Roy Jones trading.

Unknown Executive: Thank you.

Unknown Executive: Your final question comes from the line of Soumit Roy with Jones Trading. Good morning, everyone. I see Matt. Good morning. I was thinking like if you could provide a little bit of color on the biomarker approach; are you looking into the predictive biomarker side, if there is like a retrospective look into the patients who progress into ALI, if you can address those patients ahead of time in a prophylactic setup rather than treatment, might, that would help faster enrollment in the future, or just any color on the biomarker approach.

Good morning, everyone I'd say that question.

Good morning.

I was thinking that get you can provide a little bit calling on the biomarker approach are you looking into a.

Predictive biomarker side.

There's like a retrospective look into the patients who are progressing to.

Hi, if you can.

Address those patients ahead of time now.

Kind of a prophylactic set up rather than treatment might or might that would help faster enrollment in future.

Or just any color on a biomarker approach.

Michael A. Sherman: Yeah, let me start with that and then maybe let Randall and then Allen chip in if they want to add to it. I think it's a great comment because one of the challenges in this disease is that it shows up so differently from patient to patient. And so far, we've seen no silver bullet in terms of therapeutic options. However, you know, these drugs are seeming to be effective in some individuals versus others. So identifying in advance which may benefit the most is important, and we will get that kind of helpful information from these biomarkers from the data that we gather so that we can identify up front if there's a population based on their initial biomarkers that seem to benefit better than others. And of course, we could incorporate that and adapt our phase three trial accordingly. But it's, yeah, that'll play out as we see the data. I don't know, Randall and Allen, anything you'd like to add to that?

Yeah, Let me I'll I'll start with that and then they'd be but well that Randall and then and then Alan ship and if they want to add to it I think it's a it's a great comment because one of the challenges.

This diseases that shows up so differently and from patient to patient and and so.

So far we've seen no silver bullet in terms of the therapeutic options. However, you know it's drugs are seeming to be effective in some in one individual person. Another so identifying in advance which may or may benefit. The most of this is important and we will get that kind of helpful information.

Some of these biomarkers so from the data that we gather such that we can identify upfront if there's a population based on their initial biomarkers that seem to benefit and better than others and then of course, we could incorporate that and adapt our phase three trial accordingly, but a it's a young that that that'll play out as we see the.

I don't know Randall and an l. anything you'd like to add to that.

Oh I can add just a little bit of color here. This is Randall we're looking at over 30 different biomarkers at and inflammatory biomarkers and quite relation biomarkers.

Randall Lanier: I can add just a little bit of color here. This is Randall.

Randall Lanier: We're looking at over 30 different biomarkers, inflammatory biomarkers, and coagulation biomarkers.

And sell migration related biomarkers. So so we're going to look at a wide array of.

Randall Lanier: and Cell Migration Related Biomarkers. So we're going to look at

Allen S. Melemed: , and Mark Bollinger. We will look at the factors that we know have been reportedly involved in COVID-19. We will look at those early on, so in the first two cohorts that Mike mentioned, and then we will focus down on those for the later trial part, especially in Phase 3. [inaudible] Yeah, the only thing I've got, I agree with what both have said, is this is really going to be a treasure trove of data that we have, that people did not have this kind of data, that we're going to look at both to see Can our drug modify these biomarkers? And if so, what are the benefits for patients?

Factors that we know [laughter], we're deeply involved in cobot 19.

And well look at those early on so in the first two cohorts.

That Mike mentioned, and then we'll focus down on those for the later trial park and for especially for phase three.

Got it.

The other thing Okay, I got I agree with what fourth of side. Yeah. This is really going to be a treasure trove of data that we have that people did not have this kinda data that we're going to look at both to see.

And our drug modify these biomarkers and if so.

What are the benefit of the pacing and if we see new ones that are very pre prognostic and help them look and see if they can be predictive. So it's kind of to fall, but a lot will depend on how much biomarkers, we can actually get and how much effect, we see from that but I do think that we have the potential to do both.

Allen S. Melemed: And if we see ones that are very prognostic and help, then we look to see if they can be predicted. So it's kind of a twofold process, but a lot will depend on how many biomarkers we can actually get and how much effect we see from that. But I do think that we have the potential to do both from this kind of study. Thank you for the question. Great, thank you. On the enrollment pace of the phase 2 COVID trial, if, you know, 35 plus something patients take some time and you are in the hot spots, In order to be able to enroll the entire Phase 3 portion in a timely fashion, I don't know how you're thinking through it, what's the timeline on that? or would you expand it into a sepsis patient or a flu patient, a separate cohort just because you know 30% of the ICU patients are undergoing sepsis and they have a high chance of COVID. So if there is any indication of expanding beyond just COVID for, you know, we are looking into the relevance of the drug in 2022-2023.

Oh from this kind of a study thanks for the question.

Great. Thank you.

My last question is.

On the on the enrollment piece off some of these two trial will be trial is no toward de sites, that's something patients taking some time and you are in the hot spots offs.

Current players in the U.S. huh.

Two.

In a tough to to be able to enroll thing times peachy portion and timely fashion.

I'll.

I don't know, how you're thinking through it to whats the timeline on that.

Or would you expand.

[music].

In two sepsis patients on who patient.

Separate cohorts just goes toward you pushed until twice you patient or under Blake.

Hutchinson.

'cause it so securities any indication of expanding beyond just a couple weeks for looking into the elements of the drug into any drugs to treat drinking suite.

Thank you.

Unknown Executive: Mikey, you might be on mute.

Mike as you might then you.

I am I'm reminded everybody to make sure you're off mute when you're speaking there you go.

Unknown Executive: I am. I reminded everybody to make sure they're off the mute when they're speaking.

That's a it's it's also good question on a on on enrollment I, though the experience. We've had initially we had really good engagement and enthusiasm around oh, the enrollment so off to a a good start where we where are we.

Michael A. Sherman: There you go. It's also a good question on enrollment. The experience we've had initially. We had really good engagement and enthusiasm around enrollment, so off to a good start, where we had challenges like others related to the standard of care evolving, and we needed to quickly assess those changes so that we could adapt our, you know, our study to confirm that we were okay with those other standards in combination with DSTAT. And we were able to do that quickly. And as we have feedback from sites, they're very supportive, and they remain confident in their ability to enroll quickly. So I think it was just as those challenges came up early on and we dealt with them quickly. So that having been said, I think your point about this therapy going forward, if in fact, we are seeing activity in COVID, it causes us to look pretty aggressively at other opportunities that we might explore even in parallel, as Mike Andriole mentioned in his comments.

Had challenges like others related to the standard of care evolving and we needed a quickly assess those changes so that we could adapt our oh you know our study to confirmed that we were okay with those those other standards and in <unk> co.

Combination with a would D stat, and we were able to do that quickly and as we have feedback from side, they're very supportive and and they remain confident in their ability to enroll quickly. So I think it was just as those challenges had come up early on.

Dealing with them quickly so that having been said I think your points about.

This this therapy going forward. If in fact, we are seeing a activity in in coated it causes us to look pretty aggressively at other opportunities that we might explore even in parallel is because like handrail mentioned in his.

Commented it sets us up not only for a a potential phase three trial encoded patients, but but in other clauses.

Michael A. Sherman: It sets us up not only for a potential phase three trial in COVID patients but also in other causes of acute respiratory distress syndrome where you could expand or create parallel cohorts and or separate trials to pursue those. So I think all of those are options on the table, and we'll make those decisions as we see what both the data and the enrollment pace looks like. Thank you so much for taking the questions and congratulations on the victory. Thank you.

Respiratory distress syndrome, where you could you could expand or.

Created parallel cohorts and or separate trials to pursue those so I think it's all of those are options on the table and we'll make those decisions. That's we see with the both data and the enrollment pace looks like.

Thank you so much putting the question [laughter].

Thank you.

I'm showing no further questions at this time I wouldn't like to time across the spectrum, Mike Sherman.

Unknown Executive: I am showing no further questions at this time. I would now like to turn the conference back to Mike Sherman.

Michael A. Sherman: Great, thank you everyone for your time this morning, and I look forward to providing updates in the coming months. Thank you.

Great. Thank you everyone for your time this morning, and look forward to providing updates in the coming month. Thank you.

Okay. Thank you for joining today's conference call you may now disconnect.

Unknown Executive: Okay, thank you for joining today's conference call. You may now disconnect.