Q3 2020 PLx Pharma Inc Earnings Call
Welcome to the PLX form of Q3 2020 earnings conference call at this time, all participants on the listen only mode. After the speaker presentations that will be a question and answer session. The ask a question. During the session you would need to press star one on your telephone. Please be advised that todays conference is being recorded if you require.
Any further assistance please press star zero.
I would now like the hand the conference over to your first speaker today to Lisa Wilson Investor Relations for PLX pharma. Thank you. Please go ahead.
Thank you Glenn.
Welcome to PLX Pharma is Q3 2020 earnings results call. This is Lisa Wilson of insight Communications Investor Relations for PLX.
With me on today's call on the Atocha, Giordano, President and Chief Executive Officer.
The read O'connor, Chief financial Officer of PLX.
You can also access the webcast of this call through the Investor section of the PLX website at PLX pharma Dot com.
Before we get started I would like to remind everyone that any statements made on today's conference call. The express the belief expectation.
The action forecast anticipation or intent.
Regarding future events and the company's future before me maybe considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to PLX pharma as management as of today and involve risks and uncertainties, including those noted in our press release issued this afternoon and our filings with the SEC.
Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements.
The next specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
The archived webcast will be available for 30 days on our website feel like the pharma dotcom for the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on November 16th 2020.
Since then PLX may have made announcements related to the topics discussed. So please reference the company's most recent press releases and SEC filings and with that I'll turn the call over to PLX, the CEO Natasha Giordano.
Thank you Lisa good evening, everyone and thank you for joining our call.
We watch thrilled to announce that in October we submitted to the supplemental new drug application or at San Diego One for the currently approved as the worth 325 milligram and one for the odds of <unk> 81 milligram dose to the Sta for regulatory approval ahead of the previously announced timeline.
The submissions are a significant milestone for our company and represent the culmination of a tremendous work effort on the part of the PLX team and our partners. These submissions are considered chemistry and manufacturing control or CMC filings and they include information on the change in formulation and.
The new manufacturing site provides a lot of 325 milligram and a new product strength of the 81 milligram dose the.
The submission for the 325 milligram dose also contains the results of the clinical study conducted demonstrating that the law is bioequivalent to immediate release aspirin further supporting the change in formulation the.
The submission for the 81 milligram dose builds off the information in the original approved anti <unk> and the recent at San Diego submitted for the outdoor 325 milligrams. We believe the results of the Ve study supporting the 325 milligram at San Diego and the information submitted reporting supper.
Regarding the 81 milligram at San Diego together with the additional requirements for CMC supplement form the basis for two strong submission to the agency.
We received the acknowledgment of letters from the F.B.I. officially confirming the receipt of our submissions and the estimated completion date of its review for both the odds of worth 325, and 81 milligram doses by the end of February allowing for a four to six month review and sufficient manufacturing time.
We are targeting of market launch of both doses of out of the lower in the third quarter of next year.
We're also happy to announce that we have secured $18 million in financing led by White rock capital and 11 level, one partner and we look forward to executing our strategic plan with these new partners I will now turn the call over to our CFO me the O'connor to discuss our third quarter.
The result, and provide further details on the financing readout. Thank.
Thank you Natasha our federal grant from the NIH was completed in the second quarter of 2020, that's no revenue recognized for the quarter ended September Thirtyth 2020, we.
Research and development expense totaled $1.2 million in both periods 2020 expenses include included clinical related spending for the Bioequivalent study combined with pre validation manufacturing costs.
The prior year period included manufacture and packaging costs per the Basel or registration batches things.
Things are going well on the manufacturing front with our partner Thermo Fisher scientific we're preparing for the validation batches working on manufacturing efficiencies and production planning for the launch rugs.
Regarding the cobot outbreak, we're fortunate the way not experience any significant impact to our supply chain Thermo Fisher is U.S. based and is currently fully operational as it relates to the reservoir.
General and administrative expenses totaled $2 million from the quarter ended September 32020, compared to $2.5 million in 2019.
The decrease primarily reflects lower compensation related expenses combined with reduced spending on conferences and related travel due to COVID-19 restrictions weeks.
We expect <unk> expenses to be slightly higher for the fourth quarter as we begin pre launch marketing into.
Interest expense net was $73000 for the quarter versus the $118000 in the prior year. This decrease is due to the lower principal balance combined with lower interest rates on the term loan.
As of September 30, our debt balance is $1.6 million and will be paid off in the first quarter of 2021.
The income related to the change in fair value of warrant liability declined to $135000 from 5.5 million in the prior period.
The decrease is largely attributable to the fluctuation of the price of price of the Companys common stock as.
As a reminder, a decrease in the stock price at the end of the quarter compared to the end of the previous quarter causes the decrease so the liability and the income to the piano.
Net loss attributable to common stockholders for the third quarter of 2020 was $3.6 million or 40 cents per share compared to net income of $1.4 million or nine cents per share for the third quarter of 19, the change to a net loss of $5 million per 49 cents per share was primarily due to the significant.
The lower income from the warrant liability of 5.4 million or 53 cents per share.
As of September 32020, cash and cash equivalents were $9.1 million a sentence you mentioned today, we entered into with $18 million private placement led by White rock capital and level one partners.
The Securities purchase agreement for the sale of units comprised of shares of common stock and warrants to purchase shares of common stock in the private placement that will result in gross proceeds of the company of.
Approximately $18 million before deducting placement agent and other offering expenses for the issuance of 4.8 million shares of common stock and warrants to purchase up to an additional 5.2 million shares of common stock for per unit price of $3.79.
The private placement is expected to close on or prior to November 18th the warrants will become exercisable on the date of issuance and have an exercise price of $4.31 per share and will expire five years from the date of issuance.
We will continue to burn approximately $4.5 million for the fourth quarter, the $18 million financing plus the existing cash should provide a cash runway through at least approval of both doses expected next year.
This financing will fund prelaunch marketing spending and begin commercial inventory built prior to the approval of as the war to.
To finance the launch we intend to review non dilutive financing alternatives, such as debt and royalty based financing as well as the equity financing that may issue include issuing stock under our ATM with that I will turn the call back over to Natasha to discuss our next steps.
Thank you read of we're very pleased with the quality of our submissions and are highly confident in the date of that support and validate Basel one submission such as these take an enormous effort to complete and we are delighted to file them. A few weeks ahead of our mid November plan.
This is the really exciting time for us that the war as the first liquid filled aspirin capsule is a novel addition to the aspirin category, which has had no innovation in 80 years.
The war has demonstrated faster and more complete platelet inhibition, providing a more reliable anti platelet effect, then enteric coated aspirin and reduces the risk of stomach injury typically seen with immediate release that's from the.
As the laws has the potential to transform the way healthcare professionals and consumers think about daily aspirin therapy. We are excited to provide physicians and patients and alternative in this category.
Now that the submissions have been made we are transitioning from the strategic planning stage to the execution of our commercial launch we continue our commercial efforts focused on three key constituents the health care professional the consumer and retail trade at the same time, we are finalizing our professional and consulting.
Sumit messaging to build awareness provides the wars key differentiators and to generate enthusiasm in the aspirin category. We continue the active dialogue with our scientific advisory board, gaining new insights in the management of high risk vascular disease patients in clinical practice.
We remain closely engaged with all our retail partners and they are looking forward to implementing basel or into distribution.
As our focus shifts from product development of commercialization PLX management's deep experience with large commercially successful products is the especially valuable collectively we bring decades of commercialization experience on large Rx and OTC brand names such as New Center.
Lifted Tor and Zantac just to name a few.
And know the value of what has the potential to become a household name. We look forward to the agencies regulatory review planning for a successful launch and bringing a much needed aspirin therapy to patients at risk with that I will open the call for questions. Operator. Please go ahead with the instruction.
And.
Thank you.
A reminder to ask a question you would need superstar one on your telephone to withdraw your question. Please press the pound key please stand by while we compile the Qt roster.
I show. Our first question comes from the line of Elliot Wilbur from Raymond James. Please go ahead.
Thanks, Good afternoon.
So I don't want to extend my congratulation the not only Don just pulling forward the application by a couple of weeks, but completing what essentially is been the two and a half of your journey to get to this point of the Odyssey really so congrats.
Threats to the the team I know, it's been a it's going along the line [laughter] from its been along the road.
So.
First question for you is can we.
With the.
Filing now submitted.
And.
Given the recent or the just announced financing can you just talk towards the little bit about sort of what the next steps for the company are going to be on the engagement from both on the clinician side and.
And on the retail trade drugs.
Absolutely so on the engagement front as you know weve been engaging with the the top key thought leaders in the anti thrombotic space for four years now and our our engagement with them continues we talk a lot with them about clinical.
Doctors, what is meaningful to the healthcare professional as they treat these high risk patients. We some of our scientific advisory board members of been with US for four years, and we will be meeting with them again were planning our next meeting for free January from there we will.
Through different mechanisms educate their peers. That's the one thing that they're very committed to is helping us to educate their peers cardiologists and neurologists in having a new alternative in the aspirin category to manage specifically secondary prevention patients people that debt.
Cat events, or some sort of invasive procedure and as well as diabetics, who may be candidates for aspirin therapy better high high risk. We are in the process of continuing to develop our commercialization plan and to really adopt some of the things we're learning in the marketplace, especially.
During and post coal the the coated era, how identifying how consumers and healthcare professionals receive information and it's the combination of of in person and virtual.
Ways to to get to those constituents and we're working through what is the best platform to do that as we speak of we'll talk more about that as we get closer.
To our launch on.
In terms of many of the.
In terms of I'm going to go to the trade part of this first and then go to manufacturing.
So in terms of the trade in the retail partners, we are continuing to meet with them as we speak we have meetings scheduled ongoing meetings to partner on how we're going to promote bouts of or within their own distribution systems, because as partners than everybody wins the the.
Retail segment wins, the company wins and certainly patients. When so those are ongoing discussions that are becoming very very detailed on how were going sport. Each other in this in this launch and then read the can talk little bit about what we have to do from a manufacturing standpoint sure. So our next step.
Now it seems are going very well actually we're going to start validation later this year and into early next year and then if all goes well with that we plan to go right into a building commercial inventory. That's why the financing would was key for us because we could build.
The inventory and then we're all ready to go when the retail trade places are orders and we already have a pretty good idea of where they are coming in the touch mentioned, so we're going to be ready to go.
Okay and are there any details you can share at this point in terms of just.
How much.
Of the financing you actually expect to invest in inventory levels and.
You know what sort of launch the debt would actually so.
Port.
I mean would you be targeting just initially from of the large the.
Retail chains or some of the the larger mass mass distributors of kind of fit within your day.
The show and.
The initial launch plans or would the pumping the something that you would follow on the later point in time.
Great question. So in terms of retail trade, we're assuming that it's going to be all of the top chain drug stores as well as the mass merchandisers and we've been speaking with them for years, including actually recently now that we've really submitted and everything's ready to go so we're targeting a nationwide launch so.
This inventory will level of build a lot of it because it's going to be on the retail shelves around the country. So we haven't put dollars to it per se.
Since we haven't gotten their final orders, but.
Good portion of that $18 million will help fund that inventory ahead of schedule or head to head of the approval I should say and then once we receive approval thus the will target.
Some additional financing to actually move forward with all of the commercial plans of Natasha talked about.
Okay and then the last question for the Natasha.
I mean, you've you've talked for quite some time about the importance of sort of the sort of owning thought the.
So on the owning the thought leadership here in terms of being able to successfully.
Launched the launch the product the kind of wondering how you're thinking about.
Sort of your original plans in terms of establishing the commercial infrastructure with the.
Feet on the street in terms of detailing the product how much flexibility you think you have kind of given some of the new tools that seemed to be out there the companies of used to successfully launch products without necessarily.
Having the onboard.
Rich you're still wondering if you're planning on this kind of be the sort of a rep driven launch from the outset. Thanks.
Yeah. Thank you Elliot.
Yes, so we've done a lot of of of thinking on with our partners and we've done a lot of research with that as well and yes in this in the cobot environment.
It's going to require a different approach, we still believe that its really critically important to get to the cardiologist and the neurologists, we will absolutely utilized.
Our scientific advisory board as the vehicle through different mechanisms. So for instance, our publication strategy. Our medical conference appearances are presenting abstracts that evolve into manuscripts.
Sorry are all are all very key and important to get into the community cardiologists and those things are in progress as we speak.
As far as reps and feet on the ground, we have been talking in assessing with our partners and potential partners. How we want to address that and most likely I think there will be in the market every manufacturer of big and small are pondering, how they're going to get to the health.
Professional with with reps and Theres, some innovative ways to do that when you combine face to face with a of virtual approach those platforms that are new and evolving and we are evaluating those on what's the best mix is what the best mixes to provide that information to the healthcare.
The fashion, but we absolutely are adopting our thinking to get ahead of this this wave of of change. The good news is that we can plan for that in front of our launch that scheduled for Q3 of of next year.
Okay. There is of the questions. Thank you. Thank you Elliot.
Thank you.
Your next question comes from the line of Jason Butler from JMP Securities. Please go ahead.
Hi, Thanks for taking the questions and congrats on all the progress for the.
Thank you.
Just any.
Any color if you can on the the dialog with that.
The petitions were submitted obviously they've responded to you but just.
Just to 70 cents of all the progress of making.
And your expectations do you expect the pre approval inspection manufacturing inspection.
With our our interactions with the FDA as you know have been pretty regular and ongoing one thing I'll say is I always like to say is that we have aligned with them on what they require in the CMC supplemental and deejays on both.
Doses and so that gives us very high confidence and that we have submitted everything that they will need and so we have heard from them very recently that they will.
They have an estimated completion review date of the end of February now of course, they may have questions. All along the way of that that's why we always say the the approval is expected within four to six months, but again I'll say that we have of very high degree of confidence that we've provided.
Everything that they will need to get to approval and we're ready for any questions that that they might have.
And the other day, okay for us to give to read out yet do you expect the prior approval inspection.
The one nice thing with them with the FDA as we're using paid beyond the division of Thermo Fisher scientific a very well known manufacturer and the have a great track record of compliance with GMP. So we're hopeful that they will wave and inspection, but day they are entitled to do that.
But we're confident that they may wave it because it's not a new chemical entity. Its aspirin. So we're hopeful that they will waive the at this time so but.
And it's a way of us inspection of the U.S. inspection, which I understand there would be a letter a little better timing than they are with foreign inspection. So it would just be the Cincinnati plant.
Got it and then obviously, there's a lot of work you'll be doing between now and approval, but can you talk about the the key dating.
Items post approval for the launch so from a manufacturing and supply chain perspective as well.
What needs to be done.
From from the approval the.
The the Threeq you launch.
Yes, so the big thing is as you hit on the head is manufacturing so.
Unlike in Rx product and the package the actual package and carton.
Of our product is the label.
So as you can imagine a true.
Trying to print all of that at risk I mean, we're pretty confident that the FDA has already approved our 325 label of.
Other than a few changes we've made here that were pretty insignificant.
They still have to prove the 81 milligram carton as well, but theres very similar language on there and it's also class labeling for all aspirin. So we don't think its a big risk, but we want to make sure that we manufacture of enough.
And not too far in advance that you have a dating issue. So we're anticipating going out with 24 months is typical for no Tc product. So you don't want to start that dating clock too early and by making it. So we want to make sure that we're timing it sufficiently so it's certainly a balance of between when.
We receive approval and launch so mainly a lot of that is related to manufacturing and not building its too early but making enough time to build enough.
Okay, great. Thanks.
Thanks for taking the questions and.
Once again, congrats from all the progress.
Thank you thank you Jason.
Thank you.
I show no further questions in the queue at this time I would like to turn the call back over to that's actually the Giordano President and CEO for closing remarks.
Thank you the line. Thank you for joining us. This evening. This is an exciting time for PLX I'd like to thank the PLX team, our partners and shareholders for their support and confidence throughout this process.
We look forward to sharing future updates, please stay healthy and safe and have a great evening.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect good day.
[music].