Q2 2020 Aerpio Pharmaceuticals Inc Earnings Call

Hello.

Welcome to the appeal Pharmaceuticals second quarter 2020 earnings conference call. At this time, all participants are in listen only mode. It pretty watch require operator assistance. Please press star zero under telephone keypad.

Question answer session will follow the formal presentation.

As a reminder, this conference is being reported its all my pleasure soccer took hold over to June America, Vice President Finance. Please go ahead.

Good morning, and thank you for joining us for Lps second quarter 2020 earnings call.

Joining me on the call today May appeal is Joseph Gardner, President and founder.

This morning, RPL released financial results for the second quarter ended June Thirtyth 2020, if you have not see if the news release or she would like to be added to the company is just tradition last you can do so on the Investor Relations page on our website at <unk> Dot com.

I'd also like to remind you the remarks made on the call. Today includes forward looking statements about RPL such statements may include but are not limited to those related to LTL and its business and its product candidates, including that's just part of it also called they can't be 9778.

Oh, P. 15, 36, and the bi specific antibody asset.

Clinical development plan, there for it and therapeutic potential there.

Yes, and expectations with respect to read part Afib and the development, therefore, and therapeutic potential there up and addressing cobot 19, and they intended benefits from airfields collaboration with cost more biased inc. for Jeebies or is there for.

Each forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.

More complete description of these and other material. This can be found in Rpls reports filed from time to time, Yes, you see.

Yeah. It does not undertake any obligation to update publicly any forward looking statements, whether as a result of new information future events or otherwise.

We'll now turn the call the chair President founder Joseph Gardner So.

Good morning. This is Joseph Gardner President of Air Appeal Pharmaceuticals.

I'm very pleased to share an update on our 2020 progress with our investors.

As announced previously we started our phase two trial.

Cool argued or formulation RASM quota in glaucoma.

For which we expect topline results by the end of your 2020.

Of the earlier guidance we provided.

As announced on June 24th we have over 20 clinical sites actively screening patients for the trial with a target enrollment a couple hundred 95.

We now have 470 patients enrolled including those in the 28 day washout crude and those in the drug treatment period.

Based on these results, we are well underway to meet our target of 195 patients completing the 28 day drug treatment regimen.

We expect and we expect to trial to be fully enrolled by October.

Our investigators have been extremely enthusiastic to return to their practices. After the lifting of the covert corn Jean Marc regions of the country.

Yeah. There are very interested in working with an agent that has a novel mechanism of action.

It was the resistance to food outflow Dslams canal.

Thereby lowering intraocular pressure.

I will refer to as I hope you.

Notably this I hope you lowering signal was seen in two sequential phase two studies, because subcutaneous formulation rather proto true.

I can or normal intensive patients who have time to have diabetes.

As stated above we remain on track to report topline results from the phase two clinical trial in the fourth quarter 2020.

You may recall that we opted to progress into phase two after a highly encouraging results in a small phase one trial 43 glaucoma patients.

At baseline and director pressure ranging from 27 to 17 to 27 millimeters of Mercury.

Got a 1.58 millimeter.

Mercury incremental reduction and the diurnal I hope he on day seven when rapid prototyping was at its once daily on top of existing standard of care costs going up there.

Our product candidate was associated with a statistically significant reduction in my opinion on top of standard of care across Japan.

And these effects were not only clinically meaningful but deemed to be potentially best in class for adjuvant therapy by our clinical advisors.

Equally important data suggested a favorable tolerability profile for a topical drug candidate.

Putting low incidence of hyperemia for Red eye and no systemic safety concerns.

So the Tolerability profile of rapid prototyping is a clear differentiator in today's market.

At this point I want a switch gears to our covert problem.

We're also making progress with our subcutaneous formulation a resident Proto labs.

Let me I spy trial for the treatment of acute respiratory distress syndrome or Eric yes.

Covert 19 patients.

Hi, Spike over 19 trial is a platform trial run in collaboration with an outside network of investigators, which includes four active drug arms and a control them disappear.

Airfields resident Proto was one of the four product candidates selected to be in the trial.

And the only candidate from a biotech company.

That's the other three candidates are from major pharmaceutical companies.

The goal. This study is to identify agents that will result in substantial improvements to the clinical condition of participants with critical cobot 19.

Patients to be enrolled or classified is critical because they are already either on high flow oxygen were integrated on a ventilator.

Learn more about this study and its design please feel free to look up Resid Proto Phil.

Well I'm www dot clinical trials dot com.

Now in addition to the ice fire trial on August four 2020, we announced funding of up to 5.1 million from Amtech, The medical technology Enterprise consortium funded by the U.S. military.

To initiate a second clinical trial with resin Proto fab, which is designed to assess its potential to prevent.

The acute respiratory distress syndrome in patients with moderate to severe cobot Nike symptoms.

Yeah I'm Tech trial is a standalone study managed by Oh, sorry Air appeal.

We will evaluate earlier stage patients I'd moderate to severe covert 19 patients.

These patients are presenting prior to requiring high flow oxygen work intubation.

The endpoints will include proportion of subjects, a life him respiratory failure free at day 28.

Also the length of hospitalization from baseline to day seven.

And the length of hospitalization from baseline today 28 or death.

[noise] trial start up activities are progressing rapidly.

Two trials are complimentary as they will assess resid proto across a range of disease severity in cobot 19 patients.

Potentially demonstrating the ability to prevent the aired yes in moderate to severe patients.

And or treat ongoing respiratory distress and me critically ill patients.

The two trial approach will optimize our ability to determine how to best utilize resin proto fab to potentially save lives in patients with cobot 19.

As background the key cobot binding receptor is being used to receptor which has been widely published.

Which is expressed on both pulmonary appealing and endothelial cells.

Indicating that both tissues or disease targets for the virus.

Our son scientific hypothesis about resin Proto fab does that restoring tied to activation enhances endothelial cell function.

Ambassador stability to improve outcomes and cobot 19.

My preventing the vascular leak of both the fluid anti inflammatory cells into the long.

A basket of stabilization provided by RASM, Proto maybe potentially prevent or ameliorate the devastating respiratory distress that these patients often experience.

Oh, Hi, scientists have conducted significant preclinical work to demonstrate that tied to is expressed in the basket her in the long.

And we believe that active tied to is essential for maintaining and up to sell function ambassador stability in alone.

And throughout the rest of the body.

Now Fortunately RPL currently has the financial resources to support the completion of these clinical trials with the cash and cash equivalents of 44.9 million as of June Thirtyth 2020.

Do you will provide more details on the financials at the end of this call.

Now I will discuss the market opportunities for resin prototype.

We believe that glaucoma is an attractive commercial opportunity.

As many of you know glaucoma is a serious.

Condition affecting 3 million patients in the U.S.

We estimate that the dollar value of the total global market for address therapies is greater than $3 billion.

Simply capturing one third of that market could produce a 1 billion dollar product.

If our drug is truly disease modifying as we expect then the marketshare could go significantly higher.

More background on airport coma market is provided in our 10-Q filed.

Based on published science supporting the role of tied to the maintenance of Szumski now we believe that resin PROTOPAM has the potential to become the first disease modifying therapy for glaucoma and.

We are very enthusiastic about this opportunity for sure.

Now in addition to glaucoma the opportunity to address the ongoing cobot pandemic with a unique treatment that may render the D disease less legal.

Could be profoundly important to patients their families.

And simultaneously a significant source of value to our shareholders.

Oh outside thought leader support we have received has been remarkable.

With both the I find network and the U.S. military supporting our programs.

This third party validation is critical and helping us move forward as we're treating a new disease with a novel biological mechanism.

We expect to announce progress on both trials in the first half of 2021.

Positive results will have a beneficial impact on the company.

And our shareholders and hopefully will transform how these patients are treated.

As reported previously Air appeal has pioneered the field of tied to activation by developing both small molecule.

And antibody drug candidates that activate tied to.

Type who is a receptor tyrosine kinase uniquely expressed ambassador endothelial cells in all baskets for and it's also expressed in funds can out in front of they are.

We have learned over the years I'd tied to activation stabilizes baskets are in a variety of settings as demonstrated in our publications.

Over the years Air Appeal has studied tied to activation in multiple models of air Diaz in sepsis positive results.

And when the covert pandemic arrived we already had significant preclinical data supporting our hypothesis on why it might be very effective.

In addition, ARPU is tied to activators has the potential to treat multiple diseases, where the underlying pathology is driven by unstable vessels.

These disease is also include diabetic nephropathy, where we have another pipeline candidate.

However, before discussing our preclinical programs I want to remind investors that we have a third drug candidate and clinical development, which is partnered.

With Gossamer bio drug candidate is GB zero zero for.

And it.

As a hypoxia inducible factor or [laughter] activator.

That is being developed for ulcerative colitis buyer pardon gosh.

I've got summer just recently indicated that it plans to initiate a 12 week phase two trial in patients with mild to Mount mild to moderate ulcerative colitis in the second half of 2020.

So they have moved up their timeline.

Investors may benefit from this program as well because our deal terms specify that are PEO has a 20% participation right.

In any transaction on this problem for example of Gossamer sells the program to a third party or bill will receive 20% of those proceeds.

Now I would like to switch back to tie to activation and describe our preclinical programs.

You know recently completed phase Twob study.

As a prototype demonstrated the ability to lower proteinuria as measured by decreasing.

Coronary albumin creatinine ratio by about 20%.

Replicating a finding in a previous phase two study.

The decrease in proteinuria suggests that resident products and our other tied to activating drug the antibody ERP 15, 36 may have the potential to improve kidney function in diabetics potentially delaying progression to kidney downs.

The companys.

You know second Asad Air P. 15, 36 is the humanized monoclonal antibody observed to activate tied to receptors in a dose dependent manner in preclinical models.

Airfield leaves eight A. Archi 15, 36 holds potential as a monthly or biweekly systemic therapy to treat diabetic complications.

Including diabetic neuropathy.

The company's third asset is a bi specific antibody that binds both bed Jeff.

And the PTP the faster pace enzyme.

And by doing so it inhibits bed, Jeff activation and activates tied to.

This by specific antibody has the potential to be on an improved product for treating wet age related macular degeneration and diabetic macular edema.

These antibodies would be goes into ritually into the eye.

In the same fashion as the current anti VEGF drugs like highly centers.

That completes the description of our pipeline. This morning, So I would like to thank you for your attention. During this call. We are excited about the prospects for air appeal and believe that both her glaucoma program and cobot 19 programs could be transformative for the company.

Over my career as a drug developer I have never been more pleased we're excited to be part of the European team.

I will now turn the call back over to Gina to review the financials for the second quarter.

Thank you just says.

The earnings release details our financial results for the second quarter 2020.

Those interested you can find additional details on our operations results and financial condition beyond what is in our press release in our 10-Q, which will be filed today.

I would now like to walk you through a few key items.

Let me start with the income statement.

For the three months ended June Thirtyth 2020 earnings attributable to common stockholders was 9.3 million benefiting from a onetime payment of 15 million. Some golfsmith bio for an amendment to our license agreement touchy be zero sales floor.

In the second quarter 2019, we reported a net loss of 5.7 million.

Operating expenses for the second quarter, 20, 25.7 million compared to 6 million said the same period in 2019.

Research and development expenses for the quarter ended June Thirtyth 2020 increased by approximately 1.3 million or 56.7%.

The three three point Sixmillion, some 2.3 million for the same period in 2019.

This was the result of increased spending on our lead candidate present predecessor, primarily for the glaucoma and Erik Yes, the cobot 19 development programs.

General and administrative expenses for the quarter ended June Thirtyth 2020 decreased by approximately 600000 or 21.6% to 2.2 million some 2.8 million in 2019.

This decrease was primarily attributable to decreased employee related expenses and stock compensation.

One quick note on the balance sheet, our cash position at June Thirtyth was 44.9 million and we have no debt.

Yes sufficient cash to get to topline data so current clinical trials and through at least the fourth quarter 2021.

This concludes our presentation on the financial statements at this time I will turn it back over to Joe's sets for final comments so.

Yes, Thank you Gina and thanks, everyone for participating in this morning's call. We look forward to updating our investors as we move forward, particularly over the next six to nine months.

This time, we will now take some questions.

Thank you and I'll be conducting a question answer session, if you'd like to be placing the question Q. Please press star one on your telephone keypad.

A couple from me she told would indicate your line is in the question Q you made press star to if he'd like to that question, probably Q for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one one moment, please what we pull for questions.

Our first question today can be pretty Chen from H.C. Wainwright. Your line is that a lot.

Hi, Thank you for taking my question.

Oh, My first question as well so the impact trial start enrolling.

<unk> lighting patience and when do you expect to report entering and or topline data from begin Tectrol also could rise a product that used to treat mild to moderate patients as well.

[noise] Ah yes. Thank you you.

For the questions the.

The trial will start enrolling patients eminently within the next few weeks.

We've been very busy are working to get that trial up and going but when we're making very good progress there.

Oh, we expect to have topline results toward the end of the first quarter.

2021.

So you know that trial is.

Hopefully will enroll quickly and we're very optimistic about that outcome.

And your second question was.

Oh.

Good the truck you used to treat mild to moderate patients as well.

Yes, the drug definitely could you be used to treat mild to moderate patients, particularly if we start to show that it may prevent patients from going into the acute respiratory distress syndrome, but is so severe.

We've also thought given our mechanism, but a maybe people to be use.

You know in the recovery mode, where we've noticed that many many patients have really troubled recovering their lung function and divested or components ambassador remodeling and stabilization, we might provide may be useful in that setting as well.

Okay. So oh.

Will there be a separate trial for mild to moderate patients.

Well, we want to certainly focused on the two trials were running right now we would certainly contemplate additional trials on the backend of these trials so both for going expanding into phase three as well as for expanding into either early.

Sure or recovery stage of disease.

Got it.

My next question as could you share your expectation for the quote call much sharper results and what degree of Oh, P. lowering for resident product at RECIST Latanoprost, what warrant a pivotal trial in 2021.

Oh, yes, as as stated in the.

Presentation and also our earlier presentations on our phase one data we did observe a 1.58 millimeter reduction on top of standard of care.

I prostate gland them in that phase one trial.

We have heard from many thought leaders and other commercial experts at a 1.5 millimeter better result is clinically meaningful and that's particularly meaningful because of our exceptional tolerability profile.

We're actually hoping to do maybe better than that particularly because of our mechanism. If we are actually repairing slims canal with increased duration of dosing so going from seven days in that phase one trial to 28 days of dosing in a phase two we might actually get me actually got an improved result, so were.

Definitely thinking that 1.5 is is okay very good result.

And obviously, we're hoping to do better.

Got it.

Is it possible to formulate runs a profit and latanoprost into a single I draw.

We have done some preliminary [noise] excuse me experiments on them.

Yeah excuse me.

And it does look to be feasible.

To do that we have some more work to do to fully expand that to make good viable to take into the clinic.

Got it thank you.

No. Thank you for your questions.

Thank you as a reminder, that star one to be placed in the question Q1 moment. Please what we pull for further questions.

We appreciate about question answer session.

Hi back over to management for any further or closing comments.

Oh no. Thank you thanks to all our investors.

Again, as I said earlier as a drug developer. This is really the most exciting moment in my career to be able to potentially deal with two very severe diseases, one very sight threatening in glaucoma.

As well as one very life threatening in the covert pandemic.

Is very very exciting and we at the European team are very dedicated to moving these programs forward.

And we look forward to providing updates in it you know over the next six nine months. Thank you for your attention.

Thank you. It does conclude todays teleconference. You may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.