Q3 2020 Sun Biopharma Inc Earnings Call

Greetings and welcome to the Sun Biopharma third quarter 2020 conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Anyone should require operator assistance during the conference. Please.

Please press Star zero on your telephone keypad as a reminder, this conference is being recorded I would now let's turn the conference over to your host James Carbonara with Investor Relations.

Thank you.

Once again welcome to Sun Biopharmas third quarter 2020 earnings call.

With me on the call are Jennifer sense.

Simpson, Chief Executive Officer, and two Horvath Chief Financial Officer.

Before I turn the call over to Dr. Simpson. Please note that statements made on this call that are not historical facts may be forward looking statements.

Significant risks and uncertainties that could cause actual results to differ from those expressed or implied.

In the forward looking statements are detailed in the Companys annual report on form 10-K, and supplemented by subsequently filed reports on form 10-Q as well as in other reports that the company has filed with the SEC.

Any forward looking statements made on this call are made only as of today's date and.

The company does not undertake.

Any obligation to update or supplement any such statements to reflect subsequent developments.

Now I would like to turn the call over to Jennifer Simpson CEO of Sun Bio pharma Jennifer. Please proceed.

Thank you Shane and thank you everyone for joining us this is our first quarterly call.

Now I would like to take the opportunity to introduce the company and then move into the quarterly highlights.

He will then follow with a review of the financial results and then we will open up for Q and a.

Sometimes pharma is focused on developing a small molecule in a new therapeutic class for solid tumors.

Our compound Apollo.

I mean analogue called SBP one on one is a novel Trojan horse with a poly metabolic inhibitor mechanism.

We believe that preferentially accumulates in the tumor cells, resulting in dual action of decreased production and decrease uptake of probably means which inhibits cancer cell proliferation.

It has been known for a long time declining metabolism is enhancing many tumors, resulting in greatly elevated levels, probably need which support the growth and proliferation of cancer cells.

All the human tissues. The pancreas has one of the highest levels of spring one of those probably means.

We also know that.

There was a relationship between poly means an oncogene driven cancers, such as K Ras and neck in.

In pancreatic cancer K, Rob is the most frequently mutated gene occurring in 95% of patients.

Mick is mutated in about 50%.

In addition to supporting the growth and proliferation of cancer cells.

Pardon Me also act as immune suppressant inhibiting T cells, monocytes and macrophages polarization.

With a solid preclinical foundation and a signal of efficacy in a phase one monotherapy trial, we continue development of our first area of focus metastatic pancreatic ductal adenocarcinoma.

The annual into them to pancreatic cancer continues to rise with dismal five year survival rate in.

In patients with metastatic pancreatic cancer, the five year survival rate is less than 3%.

In our current phase one trial in patients with previously untreated metastatic pancreatic adenocarcinoma we're studying.

The SPP 101 in combination with gem side to be then Abraxane one of two standard chemotherapy regimens.

The interim data from this trial was presented as a poster at ASCO Gi this year and demonstrated a shrinkage of tumor or objective response rate in 54% of the patient.

The first is genocide bean and Abraxane, which produced a 20 threepar sponsored rate.

From the registration trial.

Also at eight weeks, we had a 100% disease control rate conveying a very important benefit to this patient population.

This study demonstrated a favorable safety and Tolerability profile.

Most notably non aggravating the known toxicities associated with some siding and Abraxane.

Additionally, research has shown that there is a correlation between a decrease in the common tumor marker CA 19, nine and an improved prognosis.

In the registration trial for some siding and abroad.

Abraxane any decrease in the CA 19, nine level resulted in a median survival of 13.2 months compared to 8.3 months.

When it was unchanged or increased.

When the biomarker decrease with greater than or equal to 60%. There was an additional month of benefit or 14 too.

18.2 months.

Median survival benefit.

In our interim data for SBC 101, combined with CIMB side to be and Abraxane in approximately 90% of patients. There was some decrease in the C 99 level and about 70% of patients had a greater than 75.

Foreign decrease.

If our data remains consistent with the current research, we expect to see a survival benefit.

In addition to pancreatic cancer, we are looking to expand our clinical development program.

With the presence of poly means on the relationship with mutation driven cancers the possibilities across tumor.

Types, such as long prostate Colin breast bladder and ovarian are being explored.

Research confirms the relationship between the tumor microenvironment immune cell response and tiny levels now.

Not only does the SPP Wanna, one worked for growth inhibition inhibiting the cancer.

Tumor cells from growing it may also mitigate polyethylene mediated immune response suppression.

With this evidence it is theorized that our compound might actually act as a sensitizing agent for the immuno oncology or Io therapies.

That would be a game changer in pancreatic cancer, a so called cold tumor.

Sure and may carry over into other tumor type.

We believe that if we can validate this theory.

It would open up potential paradigm shift in the Io approach, especially to the cold tumors.

We look forward to working with our scientific collaborators.

Finally, with a compound that has orphan drug doesn't.

Nation and after <unk> fast track status, coupled with a strong management team collectively with more than 10 ft approvals under our belt. The company is well poised for growth.

I would like to finish with our milestone.

The first and most important one was to complete a public financing and I'll close Tonight.

Act, which was accomplished on September onest of this year.

We are looking to complete enrollment of the expansion cohort in the phase one trial by year end.

Topline data from the full phase one trial is expected in the first half of next year and we plan to initiate the randomized phase two trial late in the first half of 2020.

Then as well.

A neoadjuvant study in pancreatic cancer and preclinical work looking at additional tumor types represent other potential milestones.

And finally, assuming we validate what we've seen in the research literature, a combination of SPP one of one and an Io is an opportunity that will also be.

Pursued vigorously.

In summary, we are excited because we have efficacy data that is superior to the standard of care and with a positive impact on the field 99 levels. We believe will translate into improved survival for pancreatic cancer patients.

With all these possibilities in other cancers or as an iOS.

He wants placement agent the pipeline is truly robust.

We look forward to prioritizing and putting out our clinical development plans in the near future.

Turning to the quarterly highlights we announced receipt of fast track designation from the FDA for our lead product SPP 101 being developed.

For the first line treatment of patients with metastatic pancreatic ductal adenocarcinoma, which we refer to as P.D.A.

When administered in combination, which I'm fighting and Abraxane.

One of the Ft AIDS expedited programs for serious conditions fast track is a profit is designed to facilitate the development and potential.

Actually expedite the review of drugs intended to treat serious conditions and address unmet medical needs.

[noise] programs with fast track designation may benefit from more frequent meetings with unwritten communication from the FDA. In addition to being eligible for accelerated approval and priority review if certain.

Criteria are met.

Fast track designation also provides eligibility for rolling review of a new drug application or Anda, which allows for completed sections of the N.D.A. to be submitted to FDA for review.

Usually the NT a review does not begin until the company has submitted the entire application to the FDA.

[noise] fast track designation is important for somebody with pharma biotech it enhances our ability to develop SPP 101 as efficiently as possible.

There is an urgent need for new therapeutic options for patients with pancreatic cancer and we look forward to working closely with the FDA as we continue to advance.

It's our development program of 51 to one for patients with metastatic PVA.

Also during the quarter about six weeks after serving as CEO, we completed a $10.5 million public offerings, providing cash runway that enables us to execute against multiple milestones and take us into 2022.

Family.

Multifamily, we uplisted to NASDAQ expanding our access to a broader investment community.

I will stop here and turn it over to Sue to review the financials.

Thank you Jennifer.

General and administrative expenses increased to 1.2 million in the third quarter of 2020 up from point.

$6 million in the third quarter of 29 chains. The change in the third quarter is due primarily to higher employee compensation, including non cash stock compensation expense right.

Research and development expenses increased 2.8 million in the third quarter of 2020 up from 2.7 million.

In the third quarter of 2019, the change in the third quarter is due to just slightly higher spending on our clinical trial.

Operating expenses in the third quarter were partially offset by a foreign currency exchange gain on our intercompany receivable balance in the third quarter 29 chains just other.

Thats was primarily a foreign currency loss.

Net loss in the third quarter of 2020 was 1.7 million or 21 cents per diluted share compared to a net loss of 1.4 million or 23 cents per diluted share in the third quarter of 2019.

Total cash was 10.9 million as of September Thirtyth 2022.

Total current assets were $11.4 million and current liabilities were 1.9 million as of the same date.

Looking to the cap table, we have 9.6 million of common shares out.

Sandy and on a fully diluted basis, we're at 18.4 million.

The fully diluted number includes all outstanding stock options, which are held primarily by insiders and all warrants to purchase common stock.

We have for several quarters been using cash in operations.

Ins of approximately 1 million per quarter.

The funding Jennifer mentioned earlier will allow us to complete the current clinical trial as well as initiate a randomized trial in the first half of 2021 and spend preclinical dollars and the other cancer areas we expect.

Back the cash we raised to take us into 2022.

That concludes my financial remarks, operator can you. Please open the phone lines for acuity and poll for questions.

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I'd like to turn the floor back over to Mr. carbonara for any closing remarks.

Thank you everyone for joining today, we look forward to updating you with press releases speak with investors next week at the Craig Hallum.

And benchmark conferences, and providing a quarterly update in March for our Q4 report.

Thank you again, you may now disconnect your lines.

Thank you. This concludes todays conference you may disconnect. Your lines at this time again. Thank you for your participation have a good evening.