Q2 2020 Navidea Biopharmaceuticals Inc Earnings Call
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All participants are not listen only mode. A question. That's just a short follow the formal presentation, if any which require operators just as during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I would now like turn the conference over to your host should get Lucky CEO. Thank you Sir you may begin.
Thank you Devin.
First off I just wanted to say that this call is being webcast live on our website I, our daughter video Dot Com and a replay will be made available following prepared remarks will be conducting a question and answer segment.
During the course of this conference call, we will be making forward looking statements regarding future events and future performance of the company. These events relate to our business plan should the opportunity as molecular diagnostics and Immunotherapeutics, which include clinical and regulatory developments and timing of clinical data readout, along with capital resources and strategic matters as well as the impact.
The Koeppen 19 pandemic on the video business operations. All these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions risks and uncertainties and could cause actual results to differ materially we assume no obligation to revise or update forward looking statements, whether as a result of new information.
Future events or otherwise investors should read carefully the risks and uncertainties described within the safe Harbor section of our web site as well as the risk factors included and most recently quarterly and annual filing with the FCC.
I want to thank everyone for calling in for today's second quarter Conference calls.
So my calls I've had relatively brief comments as one of the called to focus on the clinical developments and Weve, an all time at the end for Q1 day.
Today, my comments will be a little bit longer than normal due to the corporate activity that was announced on Monday.
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Oh legacy of this company that I inherited was triple the ever promised Golden partnership and the myriad existing contracts that didn't live up to their initial light.
Over the past almost five years I've spent countless hours extricating the video from the web agreements that either older products in profit limiting arrangements or prevented or future products are being partnered.
I also spent countless hours slowly, but surely trying to secure the white partnership for each of our future indications I truly feel that what we announced on Monday, It's the right agreement for already in North America, and I want to go through step by step why it's so strongly feel this way.
I want to take several minutes and discuss the binding and tell you that we saw in this week.
As I discussed is and where you I would stress for two reasons, while we pursue this route with jubilant and why you had the owners of this company should be more excited today for the future than you were on Sunday.
I will also briefly discuss the proposed transaction to sell up to 25 million and shares of our common stock.
I also want to stress now and later, but this was an opportunistic raise not a necessary race.
There was a massive difference.
For instance, you are forced to take money on someone else's terms.
Just a great you got to set the terms if you don't like them you walk away because you know that your main projects are fully funded.
I also want to apologize in advance if some of the language I use sounds too simplistic, but I would like to ensure that everyone listening to this call, it's replay and or reading a transcript clearly understand our thought process as we progress into this partnership.
If anyone has any questions at all we will stay aligned as long as it takes tonight to answer all of your questions.
Well first point that I want to make is that the binding and told you that we signed this week has been in negotiation for over 14 months.
Turning to our potential partnerships are finding extensive in exhausted due diligence has already been conducted over the next period of time, we will conduct a final like of due diligence and work towards the finalized license and distribution agreement, but make no mistake about it. This is a binding deal with very favorable economic terms from the video.
Before we get into the rationale behind a commercialization deal I want to briefly discuss our partner jubilant I have you did over the past year than we had one may partner in mind for this product and I am proud to announce that jubilant was always that partner.
Do you want as an integrated global pharmaceutical company with revenues of roughly $1 billion.
They have 50 to 100 employees engaged and Radiopharmaceuticals allergy therapy products contract manufacturing.
Products and generics June one is recognized as a partner of choice by leading pharmaceutical companies globally. Nowhere is this more evident then gilead choosing jubilant as one of its partners run disappear.
Oh, sorry for being a large global conglomerate with operation spine spanning five continents. They're also young at Hungary, and the U.S. just as we are in regards to what's what are your pharma assets jubilant operate the second largest centralized commercial radio pharmacy pharmacy network in the United States.
Jubilant operates over 53 Radiopharmacies in America, the company's rail radiopharmaceutical products business offers a broad portfolio products, which include diagnostic and therapeutic agents as well as stated the art devices for cardiology oncology Pulmonology and endocrinology backed by a global network of R&D facilities ends.
Yep jubilant is positioning itself to be the global leader in nuclear medicine by making significant investments in early and late stage product development. They have for Mt manufacturing facilities in North America and as part of this agreement we will they will handle the pack and fill a bar a product.
When we started our NAV threethirty one phase Twob trial, we were excited to commence working with triad jubilant radiopharmaceutical subsidiary because of an opportunity to introduce to Manocept. Two individuals that have never had their hands on the technology.
Why was this well we had an exclusive relationship with cardinal that prohibited lymphoseek from getting into the hands or other radiopharmaceutical players.
I reminded of a meeting several years ago, where I sat across from the GE Radiopharmacy executive that was pleading to use to manocept, but unfortunately was unable to access it.
This struck a chord with me and was the foundation for this deal.
I want to make sure that everyone has access to this product and that we achieved 100% market penetration in the U.S. and globally.
You are going well make that happen. It just is there a feverously working in India to help gilead with its recessive there.
So two here in the U.S., they will assure the widest distribution possible for our re diagnostic.
The terms of the planned partnership also ensures jubilant makes all reasonable efforts to commercialize the product, including building out a channel to call and rheumatologist. The ultimate prescriber of our product. What is also important is that every radiopharmacy will have access to the product so jubilant wholesale distribution network.
When we started discussions with multiple partners over a year and a half ago, we focused on four pillars, which would maximize the value of any partnership signed by the video I want to stress that maximizing the value to the video.
First bringing their partner that has the resources to see this product not just through the approval, but to make it a billion dollar product.
Life Science Division of jubilant as a market cap of over $1.7 billion and they have the resources to make this product that success. Its key that I'm ever our partner is they're committed to spending tens of millions of dollars upfront and developing the commercialization plans.
Second.
Contribute upfront payments that exceed the cost of development and also make sure that nobody is chosen partner has skin in the game. So they are inherently bound to the success of the company as a whole new he insisted that any deal we constructed in such a way that would be 60, 40, or 50, 50 cash and equity investments together.
Antiques the partner was invested in the overall success of the company and not just the already product.
That is very important that we stressed that point.
Third building sales milestones that reflect the potential success of the product and provide long term future capital to allow for continued growth and reinvestment in the company's pipeline.
As this products becomes a greater and greater success, we have several hundred million dollars in sales milestones that can be it.
And finally fourth secure to above market royalty stream that provides long term cash flow that someone can invest in and support share price appreciation.
The royalty rates. So we are receiving our substantial and will allow for the company to continue to further its part pipeline, but more importantly will allow for long term visibility on the inherent value of this product and its earnings potential for current and future investors.
24, as possibly the most important one and it brings us back to where we started.
The videos long term value is rooted in the inherent success of each and every one of its future products.
It's crucial as we bring each product to partnership we don't just sell at all for Sugar Rush right now because that doesn't last and that doesn't from a long term share price appreciation.
Well, we're striving to become and what this deal does for US as we have now secured a very profitable long term cash flow stream for our first product post lymphoseek.
In doing this we are partially fulfilled the promise I may two years ago, when I took over as CEO. The goal then what's the focus solely on all right and bring it to fruition.
No more distractions no more de jars and no more other projects.
Once the idea is complete we will have done that and with that we chose to also raise additional growth capital to start in earnest on the other projects that will increase the videos long term share price I want to reiterate once again this is growth capital not day today capital.
This is very different than when many of you are used to.
The raise that we contemplated was for milk growth and not sure survival.
What this means is we won't be forced to do deals.
As we have in the past, we can negotiate from a position of strength.
This race, which does have a floor price too it is for both future growth now that the remainder of our planned already trials are fully funded through an FDA submission.
We will have more news on that very shortly the new capital will be used justice judiciously as pass capital under the current management team. It will not be wasted on pilots Guy pipe dreams or 30 different have done projects. It is going to be very focused and hopefully we to near term clinical success.
Okay, and long term commercial value.
With that I would like to turn the call over to Dr., Mike Rosell for the clinical update.
Thank you, Jeff Hello, everyone as always I'm happy to participate in today's call and provide you with updates from the clinical side.
So I'll begin with the progress on our currently running phase Twob trial and already we continue to make significant strides forward in the last quarter as you know from our announcements not only did we achieve our second interim analysis milestone, but we also completed full enrollment into this trial, meaning all 105 subjects have been entered into the study with arms one.
In two entirely complete and the latter half of subjects at our three continuing to have their longitudinal imaging and clinical assessments as outlined in the study protocol.
As a reminder, this space to be at the three arm trial in arms wanting to we're evaluating the repeatability reproducibility and stability of our till Manocept imaging readout in both healthy subjects added patients with active IRA and in the third arm were a mirroring the upcoming phase three study in order to enable us to obtain data to help valley.
Today at our sample size estimation and they have a first look at the ability of to Manocept imaging to serve as an early predictor of treatment efficacy and as a monitoring tool.
As we've discussed in presented in the past the interim results on the first two arms were very positive demonstrating low variability of imaging both within day and over time.
Those data demonstrated that to manocept can provide robust quantitative imaging and healthy controls and in patients with active IRA and that this imaging is reproducible and can define joints within without power a involved inflammation.
You may have seen we presented the results of that first interim analysis that Europe's largest rheumatology conference the European League against Rheumatism meeting this last quarter, we're planning to present the second interim analysis data later this year at an international meeting.
As we announced last quarter the results of the second interim analysis looking at the first half of patients enrolled in arm three of the trial. We're also very positive and supportive of our hypotheses together. These interim data provide evidence that to Manocept imaging can provide quantifiable imaging assessment of already involved joints that.
Enables early prediction of clinical response, as well as monitoring of clinical status.
These results were and are extremely encouraging and gave us the confidence to proceed forward with the study as well as to continue to prepare for the phase three.
In parallel with continuing to enroll into the current trial. We're presently in the midst of preparing a flushed out package of all of our interim analyses data from all three arms of the trial to take to the FDA to affirm our plans for the phase three.
We are targeting the next month or so for the submission of our meeting request to the FDA.
Following this meeting if all goes as expected since we've been in alignment with the recommendations all along the way we will begin to officially opened up sites for the phase three.
I've said in the past, we're well positioned for the phase three since most of the sites that are currently recruiting into the ongoing phase to be will be rolled right into that trial and so the logistics and strategies for recruitment are already established.
We will continue to fall over the remaining aren't three subjects in the current trial and they're also preparing for the start of the separate phase to be comparative study of our imaging read out to histopathology from the joints of patients with already.
This will be an adaptive study, where we aim to recruit patients with each of the three known sub types of already and obtain comparative imaging and pathology results from joint biopsies of there already and flame joints.
This study will primarily enrolled subjects in the UK, where our principal investigator who is the world's leading physician enjoyed biopsy of patients with our a is located and where there is a network of academic centers that also have specialists in this domain.
We will have at least one site in the us as well and we have been actively working to obtain all necessary approvals and putting the contracts in place to begin the study. Shortly just this week, we spoke with the main UK site and POI principal investigator and learned that with cobot 19 restrictions easing in the UK They hope.
To be up positioned to begin recruiting in the next month or so.
Recall that this trial is not required for FDA approval in the initial indications that already that we're going for but we believe it is critical in order to achieve qualification of CD tour six of the biomarker for our a as well as to engage with pharma for its use in trials of new Ari Therapeutics will also provide rheumatologist with a fundamental.
Will gold standard of information related to our imaging read out in sub type of already for example, if our imaging at baseline can be used to classify a patient sub type of rheumatoid arthritis. This has implications for what class of therapies might or might not work on that patient and would therefore have immediate impact.
In other indications I updated you previously that we have completed all imaging and biopsy of all subjects and our NIH funded study of cap Dizzy sarcoma and have all of the data in hand analysis of these results is ongoing.
On the cardiovascular disease front work is continuing on the clinical investigator initiated atherosclerotic plaque imaging study at MGH in Boston and the preclinical studies of gallium till Manocept imaging for NIH funded project with the University of Alabama, Birmingham have renewed after a closed down at you may be due to the Corona virus.
And we have a study underway as I speak we've been granted an extension on the funding for that project by NIH due to the Closedowns. The cardiovascular potential is large and we've been having internal and cable key opinion leader discussions about possible trial designs and specific indications to bring to the FDA to advance this part.
Of our pipeline.
We also continue to make significant strides towards producing the next generation of our molecule that we think will improve performance and diagnostic applications and in line with my statement from last quarters earnings call. During this last quarter, we have filed a provisional patent on this methodology in their ongoing preclinical studies related to this.
On the therapeutic side using funding from our NIH Therapeutics brand. We believe we have improved the method of synthesis for therapeutic constructs that can then be tested in human subjects. Those new drug delivery constructs are currently being evaluated in cell cultures and in animal models. It is our intention to file a.
New provisional patent applications covering the improve synthesis protocol.
Those are the some of the highlights of the last quarter that I wanted to touch on for this update we remain largely focused on the are a pipeline specifically preparation for the meeting with the FDA planning for the phase three and preparation to open enrollment in the imaging to Histopathological phase Twob comparison study.
While we continue to support and push for progress on these other diagnostic and therapeutic indications as well.
As always I want to thank the team here for their tireless efforts to keep things moving and our network of clinical trial sites and academic research collaborators for all of their hard work.
Wanted to keep these remarks relatively brief today since I know there's much to discuss in the queue in a period, so with that I'd like to thank you and turn the call back over to Jeff Jeff.
Thank you Dr. Russell I appreciate your comments and keep up the good work now I want to turn the call over to Erica just to go through some of the financial highlights for the quarter.
Thank you Chad.
Total revenues for the second quarter 2022 to 271000 compared to 260000 for the same period in 2019.
Revenues for the first half of 2020 were $427000 compared to 302000 for the same period in 2019.
The increases were primarily due to increased grant revenue related to small business innovation research grants from the National Institute Institutes of Health supporting Manocept development.
Research and development expenses for the second quarter of 2020 were $1.3 million compared to 1.1 million in the same period in 2019 R&D expenses for the first half of 2020 were 2.3 million compared to 1.8 million in the same period in 2019.
The increases were primarily due to net increases in drug project expenses, including increased Manocept diagnostic development costs offset by decreased Manocept therapeutic development costs, coupled with increased employee compensation.
Selling general and administrative expenses for the second quarter of 2020 were $1.3 million compared to 1.9 million in the same period in 2019 SGN a expenses for the first half of 2020 were 3.2 million compared to 3.6 million in the same period in 2019.
The decrease was due to decreased legal and professional services travel insurance depreciation and Investor relations costs.
And were offset by increased employee compensation and franchise taxes.
The videos net loss attributable to common stockholders for the second quarter of 2020 was $2.4 million or 11 cents per share compared to 2.7 million or 24 cents per share for the same period in 2019.
It is net loss attributable to common stockholders for the first half of 2020 was 5.1 million or 24 cents per share compared to 5.1 million were 48 cents per share for the same period in 2019.
Finally in a very ended the second quarter of 2020 with 1.6 million in cash and investments. However, since June Thirtyth. The company has received the final $3.9 million of cash related to the February 2020 funding transactions as well as $1 million related to execution of the jubilant <unk>.
I'll now turn the call back over to Jeff.
Thank you everyone I just want to once again sale excited we are about everything that we've been working on all but now lets turn it over to Q1 AG and.
Definitely that can you open up two.
Questions and answers.
At this time will be conducting a question and answer.
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And the starts is one moment, please we pull for questions.
Our first question comes from the line of Michael which with Maxim Group. Please proceed with your question.
Hey, Dan as the going congratulations on the progress.
Thank you so much I appreciate it.
Alright so.
I know logistics are generally.
Pretty important in radio pharma, you can't exactly we leave the stuff on the shell so I'd like to ask how how much of the market for our aim is covered by jubilant distribution and then also I wanted to clarify something you mentioned.
I'm not going to be exclusively distributed through jubilant nuclear pharmacy.
So they have as we said I think it's 52 radiopharmaceutical sites across the country by.
As we just had either they are the exclusive a wholesaler of the product, but the intention in the final agreement is that it will be available to everybody in the market. So they will resell as a wholesaler to whatever individuals wanted I think one of the issues that we have.
Lymphoseek is that it was 100% exclusive to cardinal and.
Kept it and they did not sharing with anybody else. They targeted agreement is that the wholesale distributor that jubilant as they will sell it to their radiopharmaceutical the triad group, but they will also sell it to Cardinal GE et cetera, Thats audacity intention that everybody will have access to the product so that instead of all.
Only covering 70% of the market are approximately as we did with.
With Lymphoseek will cover 100% of the market and that was very important to us to make sure that everybody has has access to it.
Right. Thank you I help their fair and then.
Both on the distribution deal.
It also covers you know, Canada, Latin America, which help proximately.
Double the population of the U.S. itself.
So how much how big is the market.
Hey for those additional areas.
Well, it's a good question, but it's really hard to.
It's hard to estimate that I mean, those are big population era areas.
But in terms of the ability to pay even though the cost is going to be somewhere as we planted somewhere around.
What lymphoseek currently costs.
Hard to really estimate what those markets will be in terms of the actual revenue side. The main marketing the U.S. and when we get our assumptions of half a billion on the initial indication in a billion dollars. We're really looking at the U.S. market those markets will be nice.
And we do think that hasn't gains more and more acceptance in the U.S., especially what we believe it's going to become the de facto.
Diagnostic for our way, we do see significant revenues and other markets, but really the main focus is on the U.S. and Thats, it's really like that for a lot of the products in the market as you know.
Okay. Thank you and then.
That's we're on the on the topic of international let's see if you could just give a give a general update on Lymphoseek in Europe I know I know you guys are expected to get that back in.
November now so I have there been any ongoing discussions on on that front with partners or anything like that.
So we are in the process well first off we actually.
Just got back the M&A. So we do have the marketing authorization. So we actually reordering the product now fully.
It will continue until November in terms of.
In terms of the in terms of the negotiations and extricating ourselves from the agreement with Norgine.
And then the discussions will start in earnest once we've completed so we're working on a pretty extensive third party report on the overall value of the market. So this is something that.
We did sort of initially way back when but now as the product has gotten more and more.
Developed at least in the U.S., we had a third party do a valuation report and that will be available in the next week and then we're going to turn our attention to the discussion. So we've already had initial calls with several potential partners, but we expect that to get going in Ernesto probably I would say the September October timeframe just because.
Europe August is even with coated.
This is usually the time off so I don't expect much work to get done in Europe in August.
Yes, sure alright, Thank you gentlemen, congratulations on the progress.
Thank you Michael.
Our next question comes on line of Britain, Bernard you would see when Rick.
Yes.
Hi, guys.
Congrats also for me for the progress a lot of stuff has gone on and Oh and this environments you sound a lot of tremendous work so congratulations.
Thank you Brent plus question on the beautiful and just a little bit more because I guess what are their responsibility. So that if any between now and good time, when we see a prison assault from.
Bringing bringing them on board.
Oh, So do you mean in terms of when we sign the final license and distribution agreement or between now and approval the product.
Oh between now and approval product if anything.
Good Okay, so say than anything.
What there so what we're going to do as we have a couple of final steps in the due diligence that we're going to complete and it was important for us that as we got to the very last points that was the initial million dollar payment was sort of to get more fulsome access to.
Some of the people running the trial some of the data and so that was the that with the agreement that we announced this week, but really all the other terms have been have been ironed out I mean, the ammo you. A typical him are you is one or two pages. This was about 35. So we've gone through a lot of the extensive details jubilant understands and.
We're very excited about the product, but they understand that as with a diagnostic unlike.
The therapeutic where are you just have an immediate market once you have it.
I always talk about the Harvoni. Sovaldi example, that went from zero to 8 billion in one year jubilant understands that they're going to need to spend to really get out the marketing we've discussed.
The hiring of.
Talking about salespeople MSL. These are all things that they will start working on almost immediately so once we get.
The license and distribute distribution agreement signed begun start working on the manufacturing so we're going to start doing the pack infill.
They're going to start working on the marketing the commercialization plan and so we've already shared with them.
Quite an extensive budget and we do expect that.
There is going to be quite a bit of spend between now and launch and jubilant, we'll be taking all of that on I mean, they understand the value the product. They know how big the potential is and that's what we went with them because we I have the benefit of being able to look through the history of activity at we've had lots of people who run the company and.
I've really been able to learn a lot from them.
In terms of making sure that when we signed this deal they understand the costs one of the issues with Lymphoseek is that as a diagnostic it's a fantastic diagnostic, but there is cost and getting it up and running and I think the deal that we had lacked.
It was a little bit fuzzy on who is going to bear the cost we're not going to have that issue. Here. This is a very clear understanding that.
Jubilant is a very capable very powerful organization and they know that they're going to be able to spend the dollars that it takes to get wide distribution get in front of all the rheumatologist and make sure that we really hit the ground running.
When the when the when the product is approved that's the other thing I want to I want to focus on bringing in the additional capital that we're going to bring in from jubilant. The payments that will start receiving once we get the once we get the go ahead and we signed the license distribution agreement, we're going to go very wide with the trial, we're really going to open up as many centers as possible and.
Well that will give us a very nice distribution base to start there will be even more distribution and more marketing spend thats going to be needed and jubilant is going to take all of that on.
Well I appreciate your sharing the details because I think that adds to really.
What has been.
HM even by myself under appreciated as far as the year work.
That's you've done over the past, that's 14 month and the selection.
As I I know about others, but I don't know much about your comment at all and so the FICO the very helpful helping.
And hopefully others appreciate.
The importance of this agreement.
Yes, well, thank you for and I also want to really stressed to everybody listening and the investors that we did announce this on Monday, because we were hoping to hurry out an announcement before the quarterly call. We were very very methodical with working on these documents and in fact, we've had something sign a bowl for quite awhile now I mean.
Weve when I referred to the M&A in signing we've had documents that were very sizable for about a month, but we really wanted to make sure that this wasnt Justin ammo do we wanted to make sure that this was a document that once these final little bit of steps of due diligence and I really can't specify them, but they but they are some final.
Steps that we really are ready to sign a document. The annual you is very much the framework of the agreement. It is quite extensive it covers the royalty rate sales milestones and really it is the longest most detailed ammo you I've I've ever been a part of in my life I can say that.
That's terrific then [laughter] so congratulations sounds like.
Actually been learn more about jubilant their capabilities.
Switching gears a question on the phase to be Q4 enrollment.
Can you comment on the imaging events.
Patients.
Yes, so if I understood you. This is Mike rosell so the.
I was wanting to as I mentioned, our complete today. So the water were healthy subjects and we image those it multiple times in in the same day in order to assess the stability in the stability over time after injection arm to we're subject with active severe to moderate to severe are a and we image those folks on two day separate.
Good by a week so that we could do in the first day, we had a number of imaging scans, Don just like with the healthy. So we could look at the repeatability in the stability and then we looked at the reproducibility over the course of a week and these patients were stable we treated to look how with no interventions happening or no new ones what is the buyer.
Logical variation.
Hi involved with the imaging variation what does that look like overall, so that we could then inform ourselves what is our minimum detectable significant change sorry, do you. Some jargon there, but they are those are the first two arms. The third arm that we're doing now where we have remaining subjects. That's the arm that is the mirrors the phase three right and so the way that are.
Works is these are subjects, who have already ready to be switch to an anti TNF alpha therapy, we image of them and do clinical assessments at baseline before they have started their new treatment. We then call them back five weeks later after they become their treatment and do an imaging event and clinical assessments and then do the same.
Thing it weeks 12, so three months after they start and we 24 six months after they've started their TNF therapy. The imaging in the clinical assessments. The idea is this.
That our change if any from the baseline scan to the five weeks scan will be predictive of the clinical outcome at 12 or 24 weeks.
If you know the literature it all in rheumatoid arthritis. The thinking is currently the paradigm is that if a physician puts a subject a patient with rheumatoid arthritis on one of these therapies they call him or her back three to six months later in say do a clinical assessment and say is the drug working.
About half the time, maybe more the drugs won't be working and right now, it's all trial and error and the patient is theres a good potential the patient is getting worse, even if they're not getting worse the co morbidities. The joint damage. It's all stacking up and accumulating if the therapy is not effective and there's no way of Detroit.
Willingness in that interval other than.
Yes, you called them back and you waited three to six month those measures those clinical assessments are so nebulous and noisy and subjective that you need a significant amount of time to pass before you can really believe there has been a significant change either way because how what the clinician does as they look at the patients fingers another joint.
Syncera swollen they squeeze them and ask for does this hurdles that hurt and that is subjective both on the side of the patients how he or she may feel that day.
Even just if they've had a good cup of coffee and the same for the physician they may squeeze more or less hard on any given day. So these are very noisy measurements.
And there is a great need for a quantifiable robust measurement and we hope to provide that so again. The design is baseline scan started a new drug bring them back a month later basically see if they if theres any change from the baseline.
That's what we'll be looking at call them back at three months and six months just business as is the clinical paradigm currently and then compare our early imaging read out with those later clinical assessments.
Good.
Oh, yes, I'm well, that's a very helpful information now what do you need to publish those results and perhaps.
Correlation.
Coefficient for acceptance, so well that method.
Sure I mean, yes, yes, yes, or no I mean in terms of need to we don't need to for the FDA. What we what we've started to do of course is we've we've presented these results as we've gone from the earlier phase one in phase two and now this phase to be the first interim analysis results, we presented be that national and international meetings, we're actually preparing.
[noise] publication based on the earlier phase one and two and of course. These data from this trial will also be published.
In the future as well.
Well, we'll bring to the FDA or the analyses of the data from the trial and we put those forward to the FDA and then they review them and by the way if part of your question.
Embedded in your question was where we are in terms of the patients enrolled in the arm three so we've got all of them enrolled in that arm three in more than half of them have had at least there 12 about half of bad there three month imaging visit and clinical assessment and we're following those up for six months and then there there are roughly half.
Through our earlier in the in the stream. So they've had maybe there are five weeks scan or they're just about too. So thats, where we are so maybe to fully address your question.
Helpful. Thank you very much yeah, that's very helpful and the addition of because very much appreciated.
The only to questions ahead, thank you very much.
Good morning, Thank you.
Our next question comes a little Jacob moments.
Good question.
Hi.
My question relates.
5 million shares.
Is that going to be all financing funded at ones are is going to be over time, what can you tell us about that.
Well, so we're going to be arrayed against 50 agreement have a floor of $5 will do the funding when we choose to do it and.
You know I think that we have some arrangements I mean, I think we could expect hopefully some announcements in the near future on that.
But we can take as little or as much as we want and then we will have a total of up to 45 days odd to complete that if we if we so choose.
Did you say the minimum floor price on the shares is $5.
It's $5 yes.
Okay.
And then let's see.
I think it's important that I stress to sorry, sorry, Jamie to cut you off but I think that I want to stress repeatedly that you know we have entered a new phase in this companies.
This is company history.
We are now thankfully once we get the deal signed completed with jubilant.
We are looking at growth capital, we're looking at being able to finally realize the potential of the other products, but you know I was never going to do that.
At the expense of getting our eight to completion.
With the L.D.A. in place with jubilant, we will be fully funded on that and it makes sense since investors have been clamoring for years to see progress and CV and more importantly see movement on therapeutics.
Now is really the time to do that provided that the terms are right. If the terms aren't right and if the price isn't.
Good for us, we're not going to do it I'm not going to be forced into doing a deal and if it means that we don't price. The deal well are already trials fully funded we will continue and and complete our ray get it get it to market and.
And then I'll start the projects done.
And incidents for me a little curious now so.
If the floor was $5 on the price.
Kind of comes opinion that should be something that should have been discussed when that news came out because obviously you saw the stock price drop on the news from.
For 75 to around 340.
And obviously it scared the mark and thinking of immediate dilution, but to me. This seems more like a like you said just a opportunistic raise but with a floor by floor price of $5 and seems much stronger.
Yes, it is and I.
I think that.
What we did it was we put the announcement in that it was at or higher than market are the initial shares that jubilant purchase we're at 478 and the assumption was that people would understand that we were not looking to do it at at $3. Obviously, we didn't expect that too.
To happen in terms of the share price, but I really want to stress and I've said this all along and I really I've spoken to many of you guys are many of the shareholders. As you know on on a pretty continual basis that we're not going to do raises at other prices banks are offering us bought deals all the time and I'm not looking to do a deal.
15, 20% and pay 7% to 10% fees and all that all of that other stuff. We're looking to do a raise out of strength.
And in this case, we felt that we were in a position of strength, having signed the ammo you brought in the partner of choice. The partner that we have wanted all along.
And something that has been a long term plan for us.
And and yet with that for price I think we are still going to get we're still going to get shares on it in my opinion, but will will discuss added at another time.
And then the just the second question. This isn't the fund of a question can you update the shareholders on the status of the current lawsuits that have been going on.
Oh, Okay. So we are currently on the synergy we are currently awaiting the.
Decision from the appellate court, which we assume will be sometime towards the end of the year beginning of next year and that was.
[noise] that that hope we are confident based on the decision that was ER.
That was that was reach by the judge in judge Surat in Ohio.
And then on the Gullberg case, we are moving forward. We continue to move forward on the document discovery as you know we have thankfully gotten quite a number of positive rulings from both Delaware and New York.
And we expect Delaware I believe in December I will have the trial and I think New York will be sometime before that but I'm not 100% sure on the timing because of the covance situation. So we're still trying to figure out.
The actual timing of depositions and everything and Cobot has just made it a little bit more difficult as you can imagine.
Alright, well that that's it for me on my questions I keep up the good work and I look forward to more good news coming in the future. Thank.
Thank you Jack up I really appreciate your support.
Once again, if you look this question please press star one.
Keep but once again if you look that's question. Please mr. weren't what are your telephone keypad. Our next question comes from one of my some permanent but he's who do question.
Yeah, Jeff This is Mike how are you.
Oh, it's Mike how are you doing today.
And Michael Michael Rose Rosell, how are you Hello, how are you.
Hey.
Like to thank you did for all your endeavors sticking in there through the thinking that then obviously this was an emotional warm, but thank you and to Mike and his team and Erica onto the board I'd like to thank the board for supporting.
<unk>, how big is helping the company around so now that my question. If it along it's been a long road and I understand the trepidation that a lot of our shareholders feel and I. Certainly you know this has been 20 years. This is a company that we feel has an amazing product and obviously, there's been lots of up and down up ups and downs, but.
Mike caught fire away.
Yeah, I have three questions that are more finance related.
A couple that are more scientific related.
The half the the half a billion dollars a year.
Potential revenue or is that per year or is that over the life.
Well the Ari.
We have no yet to be we actually expect that to be per year. I mean, we've done a joke health men who.
Is what are the key members the team on the on the business development side.
We've done extensive modeling on the IRA market as we've said the already Mark has a $50 billion plus revenue market.
And while I can't comment as much that rose 11, obviously spoken about a lot of the images, we've looked at and it's interesting to us to see how relatively ineffective.
Some of the products, our which are multi billion dollar products and that's why we feel that our diagnostics for me so important to the market.
No we really feel that it's that have a 50 billion revenue market. The half a billion is is achievable easily we feel and we do also now that we're going to be able to launched 323 32 with.
With the sent out with a biopsy on the Sonobi biopsy something that we think we're going to be able to glean. Some very good data that will enhance the product once its launched because if we could get the pheno typing and we can really tell right away as the database information gross whether or not you're going to respond to the anti TNF, we can move somebody to.
Different tiered product right away on that can be very important and thats why we think that once we show the efficacy of our product and the ability to spot these things.
We hope that this is going to be a test that everybody's going insist on and that the insurance companies going really demanded I'll give an example over and over again about you know I suffered from gross disease and the insurance company incessant I get Colonoscopies every year.
And as I've said repeatedly it's a real pain in the neck.
But you know with a test the insurance company doesn't want to pay 40000 hours a year. If they don't think the drug is going to work if our test gets approved which we hope it will be and it shows what we think it's going to show. There's no reason why the insurance companies not going insist on it because every six months when you get that renewal and insurance companies is why we paying for this drug.
Is this patient getting better.
We're going to able to say, yes, they are or no they're not and that's the key and Thats why we feel that this is a half a billion dollars product and in that half a billion. We took a relatively conservative approach to the pricing as well as the overall cost of the pricing the scan the Reid.
And everything.
I think that half a billion number keeps passing over base had because it's such a big number and I don't think it's been appreciated CIT and even if the discount it.
Yes, it's still very large numbers, so I think thats been passable, everybody said I smoke comprehensive it yet.
This next question you will have answered before type the 20 million you say will fund the our 83.
And the H. I see trials is that correct, yes, so that so the money that we have which is essentially the money that we have coming in which is essentially 50% cash.
50% equity, but not at set prices remember, it's always going to market. So as we hit milestones and the stock hopefully continues to appreciate those shares will come in to ever higher prices.
That will more than covered the trials that will allow us to do 32, and 33 and bring us to approval and that was really what was important we have a very very SREC budget. We've actually allowed for a lot of flexibility in that I mean, I've got a Jeff Smith, our business development Guy working class.
Mostly with our clinical team to make sure that we really monitor everything the cost so far have come in very.
Very much in line into a little bit lower than what we expected.
But the money that we're going to get from jubilant. The half cash have equity very importantly will cover the ability to expand do a lot of sites really try to go really wide with this trial.
And make this a big success and then we will have the growth capital that allow us to work on some other projects, but yes. The money that we have coming in and pledge will more than cover the trial I mean, I think it's important to stress that this deal was very very.
Very very closely negotiated we knew what we needed we knew what we want it and more importantly, we were very happy with the upfront payments between now and approval and were more than happy with what we have at the AD and that's what I said at the beginning that I'm going to say some simplistic terms I think I'd like to talk to people as the value of a company is your assets minus your liabilities.
Plus the present value a future cash flows when it's really important that we are able to show investors that yes, we have money coming in today, it's great to have 30 million on the balance sheet or whatever we will have on the balance sheet, but it's also more importantly that theres a long term stream of cash flows that you can attach a multiple to that would support is.
Leasing share price and that's what's really important and that's what I really want to stress to everybody listening to this call that we have set it up so not only do we have a nice amount of money coming in today something that more than covers our development, but also a very nice long term cash flow stream that will more than support future growth as well as something that investors can look at.
Hi, guys like Jason Mccarthy, and and Vernon and Michael on the phone the analysts they can model at when they come out with the research reports, that's really what's very important and that's what I want to stress to everybody.
I think one of the hidden values that obviously you can't publish yet is the value of license fees in the royalties that will be coming when the agreement is executed.
You know those those were mass right now and you and you continually stressed as very favorable to the shareholders and that's the thing that obviously, it's hard to value right now so.
Jack I hear you on that yet.
The other thing is that you were saying there was 10 sites right now on the P to be when you were thinking of expanding it can you give us a rough idea how many sites you think will be in the peak three years, that's too early.
Yes, no we've modeled it out we expect to have opened up up to 50, but our first pass estimate is about 25, or so and we're going to we're going to do this relatively rapidly are actually very rapidly. So those are the ones that we have currently open of course, those can transition really smoothly, we're working behind the scenes to you folks.
In the the frontline here, we're we're preparing other sites to be open up as part of that first maybe 25 or so and what are the rate limit or is there as Jeff alluded to was the amount of resources, we could bring to bear financially. So each opening up any one site costs some more than $10000 typically so there's a.
You can see that that adds up quite rapidly just didnt just in sight opening costs.
That's a conservative number so with this this nice partnership agreement with jubilant, we have the wherewithal and the means to hope to go more towards the larger number and what that benefits not just what has been talking about in terms of than in the past of getting these this is wider array of sites and widely distributed.
Array of sites familiarity with the product and being involved in the in the devaluation in the first test of the product in terms of the phase three.
It also of course would enable us to enroll more rapidly theoretically and then I'll get to the end zone.
More quickly so that might even expedite our timelines right and so that's the goal. So we're looking at mid Twentys.
And that can can grow and it might indeed grow.
Now one thing I will remind folks know as we actually we've been very good the sites that we have for the phase to be you might remember, Mike and one of the earlier calls.
Our rate of enrollment.
Even with the the coated prices has been greater than the median rate of enrollment across phase two in phase three trials in North America looking across all of those trials in the last about eight years. So we're.
We're up we're a little company, but the clinical team I'm not taking credit here. The clinical team here has been really good at identifying the right sites, who can recruit patients right patients and rapidly and we're going to maintain that and grow that so.
Okay. This question may be as for Eric are you jet in the form filings for the million dollar investment by Jubilant gave a cash balance of 1.5 million compared to the June and being a one point sixmillion does that include or exclude the 3 million use you receive.
He said deal closing.
No no exquisite I would I included I think we I bet.
We've received the 1.1 million from jubilant and another since the end of the quarters.
The point Ninemillion, yes for right into the February transactions, yes, right on the forms completed so the form 42.
Whatever it is 35 or whatever you filed for the jubilant.
Billion dollar investment showed 1.5 or 1.6 excuse me at the end of June and then 1.5 adjusted for current and that confused some people that but.
3.9 million, so that 3.9 million is added.
So if you add up you can take that money plus the money that receive the three and change but the million and then that can give you a more accurate now right.
That's very much appreciate that did cause some confusion about what's your cash position was.
A comment and then a question recently, we've seen several lymphoseek trials filed in the U.S. and overseas and to me that continues to speak well for the safety and utility of the molecule. You know you see what another one of the United States than you've seen some overseas.
Just recently, saying that one question, Jeff when we were well when you were doing the curious therapeutic trials, a few years ago or skill ongoing and then most recently on the conference call you mentioned and it's been mentioned by others that you're seeing other informations.
As youre at imaging for the are a in the K S and et cetera.
Are you finding other indications that you can't talk about things you're doing your our eight Ks trials.
Other information indication, yes, it's a tough question I'll, let dr. rose look at that but I mean, obviously when we review all the image is we're constantly trying to figure out and yes, I know what you're referring to that we we picked up the I believe is the pituitary tumor that you're talking about.
I believe we are we are constantly monitoring the different uses obviously, we've been very focused on our eight but I could I can let dr. rosebel elaborate but we are working on a lot of different projects and especially now as we've moved into the hopeful final phase of our Ray.
We have certain individuals on the team have really been focus on some of the the newer indications and some of the newer filings that we've been made for different uses of the product.
Yes. This is Mike so that that gave us I think a fair response there are we.
See you can pick up incidental findings right Mike So when there are.
Our agent targets with very high affinity.
Activated macrophages and those are involved in any number of in disease processes and therein lies unmet opportunity in terms of being able to bring benefit to the patient right. So.
I would say we've seen these things we.
In some of these may be in concert with where we're going in terms of our pipeline.
I'll leave it at that.
Okay. So that's positive I think that's being understated that you are seeing other things and that it's not just.
You may be can't talk about it but I think it's been an underappreciated understated that you are seeing other things that would help.
In general I mean, you're right again really again I can't emphasize enough macrophages. If you look at the letter to our involved and so.
So many disease process. He is right for good or bad and we have the agent that is the leading agent.
Kind of scientifically and chemistry wise as well as where we are it is in terms of approval that in clinical trials that targets macrophages that affords us the opportunity to either image it or to deliver a therapy to where those macrophages are and to do things to those macrophages, whether it be killam or do something else.
And maybe do something in between those two and I'm going to leave that at that but macrophages are involved in a great number of things. So you know there's no.
We sometimes get teased about saying, we're very excited and enthuse right, but but really there is a great opportunity here. There's a reason these that people myself included our here and stick around the scientific opportunity here in the opportunity to bring value to the health care field and people giant.
So.
Okay speaking of giant in the press release, you mentioned, you're continuing to enroll patients in CV.
No trial has been going on for a long time under Greenspan MGH can you give anymore color to what you're doing there, even though I know the funding isn't quite there yet, but it can you tell us a little more about that.
Yeah. So.
It is an investigator initiative initiated trial, so I I hesitate to give you give too much info without clearing it with Stephen but but I can tell you that they are continuing to recruit and they have a.
They've actually done really well recently in our ramping up again, there was a little bit of a lag in terms of recruitment with covance, but they have a number of patients lined up both HIV positive as well as controls.
And if you look on their clinical trials dot Gov, they're reaching those milestones that they had out there. We've also done a sub study or they have done a sub study where they looked at different routes of administration I've alluded to that in the past we've learned a good deal about how what's the best way to deliver this till manocept for these atherosclerosis imaging studies.
And they're doing our recently.
Asked us for some more drug with a with a fluorescent label so that they could do some in vitro studies to look at some of the mechanisms more so things are going there well we plan to have a discussion with them in the coming weeks.
Literally the coming weeks about what they've learned look over the data more closely.
And as I mentioned.
Some point, Yeah, I mentioned in my prepared remarks, we've been talking internally as well with the Codell wells about what our indications will look like our first indications to go to the FDA with South and I think there is another thing I want to build on on on this and I think that.
When when Michael said, it's an investigator.
Driven trial the thing that we've always done as a company either because we just haven't had the resources or because you know we were grant funded just a lot of different things we've always had these.
You know trials done at institutions universities, and those tend to take awhile I mean greenspan was funded with.
$350000 three years ago.
And we're slowly but surely getting there is a phenomenal dr., we're really happy with all his work, but I think that as the company pits and as we've signed what we consider the real pivotal deal.
For this phase of the company as we enter the next phase.
We are entering a new phase of Navideas life and one of that is going forward looking at doing trials be it on the therapeutic side.
Cardiovascular on the diagnostic side that aren't necessarily university.
There are maybe a little bit more expensive, but allow for greater control better speed more input.
Doing things, where you're giving grants to universities is great. But then you lose a little bit of control and what I think you're going to see over the next several quarters is a step change for this company, which is looking at trials that are more controlled internally.
Obviously, using external vendors, but more controlled internally using quicker to market processes that generate data that we can use turnaround and we own all of it. So they are no more licensing fees, having to be paid out in university, which isn't necessarily a bad thing, but I think that now when you get to that stage, where do you realize you have your.
One asset you're one new asset are a partnered off and then you have other new growth capital coming into the business that will be allocated wisely. So that the projects that we invest in will give us immediate returns and when I say immediate obviously that doesn't mean next week. It means in the upcoming years, but it means that we have greater control we can really.
Push those things and that will give us more data to talk about on a more regular basis, that's very important and that is something different that is something that that in the video as a company hasn't really done in the past and it's important to stress that is something that we are going to do in the future.
Excellent that sounds good.
Let me try to wrap up with this last question has to do with the K S. Therapeutics. Obviously this next round the funding that you're looking for will go into the therapeutics, but in your.
FCC reports and then another conference calls you've talked about putting together. The finally package for the case therapeutic presentation to the FDA is that deal and immediate.
On your immediate plans or is that pushed off further yet.
So there are two things here, maybe for the benefit of the audience that large and not so much you might but its important so we've got the Ks there cubic's ramped NIH grants and we've done work with you see us up on that and we've had the task diagnostic brand as well that we've also done work with that you CSF and so the.
The part that I was specifically referring to in this.
In this summary was more related to the diagnostic side in terms of the data that we've accumulated.
With where we have imaging from Ks subjects as well as biopsy specimens and we think we found something interesting.
That can bring benefit to the to those folks or something from Ks on the imaging side and that is.
Without revealing too much.
We think we can give an idea of the the lymphatic involvement in that is.
Essentially very important to the management of these four of these patients who have this disease across the world on that side, we've been discussing internally once those data are finalized and looked at going forward with an sndk right. So that is something will we do still at the forefront of our minds because we're looking through the data right now and speed.
And with our you see us that Beth you see SF investigators right. So there is that the cast therapeutic sprint has afforded us we've learned quite a bit about.
Constructs that that enable us to attack either the ks cells or tumor associated macrophages, and it's really helped us drive the ball forward in terms of the the therapeutics that my target these cells or or the tams right. So as you may have hurt us using the pad and that of course is at the forefront of our mind whether it.
We go for therapeutic in Ks, we need to think about that specifically, but there is the diagnostic opportunity and then there's the therapeutic as well and that grant has enabled us to drive the therapeutic as a class forward and that's certainly at the forefront so.
So on the past therapeutics that still up in the or whether it's at near term or long term or not in the term at all.
Yep.
Thats fair.
Okay. Okay. All right appreciate again as a long term shareholder I really appreciate what you guys are doing and I'm very encouraged I want to say thank you.
Thank you Mike I appreciate it yes.
I think back worded question.
Sorry about that doesn't mean, a cut you off by I think that ends the question and answer it's already out 612, obviously you all know that if you I want to reach out to US you can just send me any questions or give me a call I really appreciate everybody calling in.
And we hope hoped look forward to be speaking with you guys sitting in the near future.
This concludes todays teleconference. You may now disconnect your lines at the Sir Thank you for your participation and other one thing.
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