Q2 2020 PLx Pharma Inc Earnings Call

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I'll, let you still see its comes columnist Lisa Wilson Investor Relations at PLX form you may begin.

Thank you Kevin welcome to Peel Whats Pharmas Q2, 2020 earnings results call. This is Lisa Wilson of insight Communications Investor Relations for Pls.

With me on today's call aren't Atossa, Giordano, President and Chief Executive Officer, I read O'connor, Chief Financial Officer Appeal.

You can also accessed the webcast of this call.

The Investor section of the POS website appeal at Harvard Dot Com.

Before we get started I would like to remind everyone that any statements made on today's conference call that exposed to belief expectation projection forecast anticipation or intent regarding future events in the company's future performance, maybe considered forward looking statements as defined by the private Securities Litigation Reform Act.

These forward looking statements are based on available information available to PLX Pharmas management as of today.

Involve risks and uncertainties.

Putting those noted in our press release issued this morning and falling to the FCC.

Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statement.

Good luck, specifically disclaims any intent for obligation to update these forward looking statements, except as required by law.

The archive webcast will be available for 30 days on our website Pos Farber Dot com.

Well the benefit of those who maybe listening to the replay or archive webcast.

This call was held and recorded on August 14, 2020. Since then Pls may have made announcements related to the topics discussed. So please reference the company's most recent press releases.

And with that I'll turn the call over two P. Alexia CEO Natasha Giordano.

Thank you Lisa good morning, everyone and thank you for joining our call today.

Our new World continues to evolve we've all had to learn how to live and work in these trying time appeal acts we continue our focus and commitment on the regulatory and commercialization process to advance sounds lore, I would novel aspirin product to market.

Since our last call I'm pleased to report that we made significant progress on several fronts to bring back to Florida market. We received the minutes of the type C meeting with the FDA confirming the design of the bio equivalents or be east study on the basketball or 325 milligram dose strengths and importantly.

The B.E. study is on track with topline data demonstrating bioequivalence to immediate release aspirin further supporting the change in the formulation. We believed that the results of this study together with the additional requirements for a C.M.C. supplemental filing will form the basis for a strong submission to the.

The agency, we're now finalizing B.S.M.D.A. filings for dogs were 325, and 81 milligram dose strengths, including incorporating the final de study report I'm also delighted to share that we've now shifted the timing of the submissions to mid November ahead of our previously committed time.

One of the ended the year, we're excited about the promise of bag war and the potential to transform the aspirin category, giving health care professionals and their patients with vascular disease, a unique alternative treatment option.

I'll now turn the call over to our CFO read O'connor to discuss our second quarter results Rita thinking Natasha we recognize revenues of $28000 for the quarter ended June 30, 2020 compared to revenues of 183000 for the quarter ended June 32019 Red.

You in both periods is attributable to work performed under federal Grant from the National Institutes itself, which came to an end in the second quarter 2020.

Research and development expenses totaled $1.4 million for the three months ended June 30, 2020 versus $1.6 million in the prior year period.

2020 quarter includes clinical related expenses, primarily for the B study and outdoor 325 milligram and continued manufacturing spending for stability and pre validation activities.

The second quarter 2019 consisted mainly of expenses related to the manufacture the registration batches.

Find with Reimbursable grant expenses.

For the remainder of the year R&D spending will decrease as the B study report is completed and incorporated into the S. India submission.

Validation and commercial production of Basil <unk> is expected to begin once the Sn Da's are submitted an additional capital is obtained.

General and administrative expenses totaled $2.2 million in the three months ended June 30, 2020, compared to our 2.4 million in the prior year period.

The decrease primarily reflects lower compensation expenses and reduce spending on conferences and related travel due to kobin restrictions offset by higher spending a pre launch activities for Basil or.

Genie expense is expected to remain at current levels for the remainder of the year.

After submission of the Escondida raised an additional financing is obtained spending is expected to increase as we prepare for the launch a bad for.

Pre launch activities will include developing professional consumer messages and planning for retail trade merchandising and support.

Interest income declined significantly due to the lower cash balance and lower interest rates versus the prior year.

Interest expense also declined due to the lower principal balance combined with lower interest rates on our term loan.

Our remaining term loan balance is $2.5 million as at the end of June. This loan is expected to be paid off in the first quarter 2021.

The expense related to the change in fair value the warrant liability declined to $1.9 million in the second quarter 2020 from $5.4 million in the prior year period.

The decrease is largely attributable to fluctuation of the price of the company's common stock.

As a reminder, an increase in the stock price at the ended the quarter compared to the ended the previous quarter causes an increase to the liability that's an increase in the expense.

[noise] preferred stock dividends increased to $407000 in the second quarter 2020 versus 302000 2019 due to the addition of the series B preferred stock dividends.

After receiving stockholder approval on May 15th we completed the $8 million series B convertible preferred stock financing with park West an MSP partners.

Series, eight and be preferred stockholders are entitled to a different end up 8% per year, which will stop accruing on the date of FTC approval, a both dose strengths of thousand war.

Net loss attributable to common stockholders for the second quarter 2020 was $6 million were 66 cents per basic and diluted share compared to a net loss of $9.6 million or dollar 10 per share for the second quarter 2019.

The decrease in the net loss of $3.6 million for 44 cents per share was due to the lower expense related to the change in the warrant liability of $3.4 million were 40 cents per share and lower operating expenses of $430000 were four cents per share.

As of June 30, 2020, cash and cash equivalents were $13.3 million, reflecting the addition of the net proceeds of $7.7 million from the series B financing in May.

We expect the quarterly cash burn to be around four and a half million dollars for the remainder of the year.

The company plans to obtain additional financing upon submission to the San Diego to fund prelaunch marketing spending and commercial inventory build prior to approval about the war.

Regarding the cobot outbreak, we're fortunate do if not experienced any significant impact to our supply chain Thermo Fisher scientific or manufacturing partner is U.S. based and is currently fully operational as it relates to bassler with that I'll turn the call back to Natasha to elaborate on our progress.

Thank you read.

Once we aligned with the FDA on the B study design, we were able to commence the study immediately as we had already engaged a CR, we quickly obtained I or be approval and successfully recruited qualified healthy subjects required for the study. Fortunately we were able to recruit patients conduct the study.

And keep to the timeline without any delays related to coated.

The topline results demonstrate the new formulation of Vas War is bioequivalent to immediate release aspirin further supporting the change in the formulation. The next step is to prepare the B E. Clinical study report with all the required data and analyses to be included in the guide for 325 million.

Graham submission, while preparing the 81 milligram submission in parallel we're eager to bring this innovative therapy to market I'm pleased to be able to shift the timing of submissions to mid November ahead of the previously announced yearend timeline.

Once the admitted the typical if the a review period for these types of CMC submission is about four to six months. We're now targeting the launch of both fastened weren't dosages for the third quarter of 2021, assuming FDA approval adequate capital funding and no call good related delays.

We're executing our commercial realization activities focused on health care professionals retailers and consumers.

Central to our commercial strategies, including the appropriate communication platforms with health care professionals and consumers and this evolving virtual world.

We are maintaining our presence acquisti just conferences to engage with the experts in the field and to highlight basketball's unique attributes. Additionally, weve maintains an active dialogue with our scientific advisory board to strategically partner on how to continue to raise awareness with the medical community about basketball.

Innovative mechanism of delivery and its potential to help millions of vascular patients who can benefit from a new aspirin therapy.

Furthermore, we're developing our pre launch marketing activities for the consumer and our retail partners, including messaging and planning for trade merchandising and support.

In closing our highest priorities appeal lacks a complete the remaining regulatory steps submit the SMB a filings mid November and target launching Basil <unk> in the third quarter of next year with that I'll open the call for questions. Operator. Please go ahead with the instructions.

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First question comes from Elliot Wilbur with Raymond James.

Thanks. Good morning, My first question will be a comment it's nice to see timelines moving in the the.

Other direction, meaning being pulled forward switch back show so duly noted.

Okay.

[laughter] just a couple of quick one here HM with respect to additional gating factors prior to submission of the S. In D.A. It sounds like basically you have everything you need essentially entirely in the company's control at this point, it's just a matter of.

Assembly and everything and so many of the FDA, but wanted to see if there weren't any other items outstanding that maybe a or somewhat outside the companys control that need to be checked off before the package gets submitted and then.

What will we see or hear from you with respect to the finally or data in advance of the expected submission in mid November.

If anything.

Okay. Thanks Elliot Yeah, we're pretty excited about about this call is well you know shifting a timeline is always terrific and always something that we try to achieve so we're really happy about about today's call and what we can share with you I.

I think you haven't right in terms of additional gating factors as the B study comes to the topline results. We feel very confident in those results that that's what shows bio equivalence to immediate release aspirin and so now we're in the process and.

We continue to be in the process of administrative Lee preparing these these filings riding the documentation and all the required elements that that has to be submitted for both submission so where we've been working on that all along and so we feel pretty confident that we're going to be able to sit.

These filings by mid November.

In terms of of what you may see I think certainly we'll we'll we'll let you know and confirmed that we submitted those those filings as far as the data well, we'll think about it but the most important thing I think freight for everyone to understand is that.

For the approval Vas war, we need to demonstrate bio equivalence to immediate release like we did a years ago and that's why the Bioequivalent study was such a critical milestone for us to to achieve.

Okay.

And I did I guess based on the results of the be each study any change or.

We're talking B study and then also conversations with the agency in the receipt of the actual ft minutes any changes to the originally approved proposed labeling.

Oh, Yeah. That's a great question, Yeah, I know a there there are no discussion a with the FDA that would suggest that there would be changes in the labeling remember we did receive approval for the labeling and in the O T C space as you know the package.

Turning in the labeling it packaging is the labeling and we we've invested a lot of time market research, we incorporated feedback from the retail sector from the F.D.A. itself. So we're pretty excited about our labeling and our packaging, it's it's quite differentiated and will.

Of course submit that as part of the CMC supplement, but we don't anticipate any changes there.

Okay and just one last question for hop back in the.

Q show wash, yes in dish admitted expected again.

Production validation of commercial batches read a how how do we think about the investment necessary to generate launch quantities, obviously, the the incremental costs of active in the like or a relatively small but not sure you know what type of.

Capitals required in order to a.

Command share of manufacturing to short lead time, and like but just maybe your preliminary thoughts around that subject matter, obviously dependent upon future financing and then just as a follow up to that I mean, PPI not mutually either their approach on the CMO side, but any unique aspects of the manufacturing process that you think.

Might require.

After you sign off in advance of approval.

Do you need a pre approval inspection.

At the facility or is there any other additional FDIC related requirements, maybe related to the a supplier of the Vicki inactive.

Might need to be checked off before you can get final approval. Thanks.

Okay.

A lot in that [laughter]. So we are working with pacing on as you said they they are pro is there, they're really fabulous partner to work with and speak to them almost daily and well there. So they've been true partner to us and we've been working with them in terms of our forecasting and pro.

Production and we're also working with the retail trade. So our team is doing a great job selling it in so you know in the next couple of months, we're going to go back out now that we have a date and really try to firm up the purchase commitments and so we think this is gonna be so big so unpaid.

Pairing the team to really gear up for manufacturing and that could take a couple of months and quite a lot of money considering a you know how much. We we think this product is really going to get uptake in every store in the country. So I don't have really numbers for you in terms of what it will cost but.

I will next couple of months once we submit CSN da's and it's had those prelim preliminary meetings with the retail trade will get a better feel for the inventory needs and prepare accordingly, and try to do as little as rent at risk as possible. As you said you know the we can manufacture the capsules, but do.

We hold off on packaging and make sure the FDA.

Has approved the package they have approved 325.

So we'll make sure that we're assuming that was going to be the same with 81, but well try to hold off it much as risk as possible and as you said it will depend on the financing as well how much do we want to do at risk and how much do we obtain prior to approval. So a lot of that will shake it.

Self out over the next couple of months, while we focus on the Sndk submission.

Asked about on the FDA inspections, yes, typically they require pre approval inspection as you said Pcsknines greatest this they've been inspected a lot with a lot of their clients. So we don't foresee any issues there.

So now my understanding is that the FDA has really put a hold on foreign inspection, but the good news is it seems like the U.S. based ones are continuing as planned and as you know we are manufacturing that was lower in their Cincinnati, Ohio plant and.

Our Excipients, we don't expect Excipients as well as the pie.

We don't anticipate that they would need to be inspected but.

No that's well, we'll see but we're not expecting that as a requirement we're doing our audit inspections as required.

All of our raw material sources, as well as doing our own audit and inspections of pay for themselves.

So I Miss any your questions.

Okay.

Thank you. Your next question comes from Jason Butler JMP Securities.

Hi, Thanks for taking the questions. So let me ask my congrats on all the progress.

Just wondering if you could give us any more color on your.

Some plans.

And them thinking for post approval what are the steps that need.

We were in terms of getting approval.

For getting the products on the shelf. So once you get approval what are the steps that need to go together on the the pharmacy shells I know you know inventory build out to some degree but anything else.

In terms of the commercial agreements it can't happen until after approval.

Okay.

Good morning, Jason.

Yeah like like I mentioned before we're pretty excited about the progress that we've made you know all things are coming together our two most important milestones are.

Filing these submissions and then approval and in parallel developing our commercialization plans.

Our commercial strategy is really based on on three areas. The the health care professionals, the retail partners and the consumer and so we continue to develop.

Messaging for those sectors, but also how we're going to communicate through which platforms, where we communicate and utilize to best reach engage all three of those very important stakeholders for for us and in this evolving kind of coated in virtual world.

We're looking at different platforms on how to best do that so that we can differentiate that war and showcase the uniqueness of its mechanism delivery because that truly is what what makes basil are different and makes it a more effective and with less.

Stomach a injury risk a those plans really do center on those three areas. We continue though now to to work with the health care professionals and I talk with the scientific Advisory Board every week, the very engaged they remain excited about helping us to raise.

Awareness through their peers and in the medical.

Communities, we continue to execute on our publication strategy and from a sales and marketing point of view, we aren't developing the materials that we think are necessary to reach and engage the cardiology community both in the <unk>.

Acute and chronic areas and why do we think that's important it's really about the patient and when they're initiated on aspirin therapy.

Secondary prevention patient in particular that that person will remain on aspirin therapy throughout their their lives. So our commercial strategy is really focused on.

On on that journey.

In terms of post approval I think reader can talk through what we need to get done from from the supply chain area right. So we are have been working on the manufacturing process. So that the next step three communicated or.

To start the validation validate the commercial lines at Patheon, and we were actually engaging already in pre validation activities in advance of that so we're all ready to go and once we submit the Essen da's and they've been accepted by the FDA, we're going to work with pacing on to schedule.

All that validation runs into we'd have to do a couple of validation runs on both dose strengths to make sure that we can.

Manufacture this in in the large quantities and then shortly thereafter, we would move into the commercial production runs of the capsules and based on the forecast that we get from the retailers. So we'll be pretty busy on the manufacturing front post submission.

Okay, great. Thanks for taking the questions and congrats again on a little progress.

Great. Thanks, Dan Good [noise].

I'm not showing any further questions at this time, let's turn the call back over to Natasha.

Thank you Kevin. Thank you for your time. This morning, we look forward to keeping you posted on our progress with Bas War in the meantime, I'd like to thank our investors partners and employees for their continued commitment to our share admission during these challenging times and wish that you and your family's remains safe Haven.

Good day, I know we [laughter].

Ladies and gentlemen concludes todays presentation. You may now disconnect have a wonderful day.