Q3 2020 Synthetic Biologics Inc Earnings Call
Good afternoon, welcome to synthetic biologics 2023rd quarter Investor Conference call.
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Thanks, Brad and good afternoon, everyone.
[laughter] biologics 2023rd quarter Investor Conference call today, I'm joined remotely, but he didn't shop Crocs chief executive in financial Officer.
Dr., Michael Calico, Senior Vice President research and development and Dr. Bates wager product.
Synthetic biologics issued a press release this afternoon, which provided operational highlights and reported financial results for the quarter ending September Thirtyth 2020.
The release can be found on the Investor Relations section of our website.
During our call today will provide an operational update on our GI microbiome focused programs to summarize our financial results well take questions. After our prepared remarks.
In addition to the phone line. This call is being streamed live via webcast and the AR, which will be archived on our website www dot <unk>.
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During this call we will be making forward looking statements regarding that its biologics current expectations and projections about future events.
Generally what were looking statements can be identified by Terminologies, such as May should expects intends plans believes estimates and similar expressions.
These statements are based upon current beliefs expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth that biologics filings with the FCC many of which are difficult to predict no forward looking statements can be guaranteed and actual results may differ materially from such statements.
The information on this call is provided only as of the date of this call.
Biologics undertakes no obligation to update any forward looking statements contained on this conference call on account of new information future.
Events or otherwise, except as required by law with that I'd like to turn the all over to Steve.
The expenses.
Good afternoon, everyone and thank you for joining our 2023rd quarter Investor Conference call.
Hello, everyone is saying and in good health.
I'm excited to be with you. This afternoon to share a third quarter operational highlights and financial results.
It's been a busy quarter and a busy year for synthetic biologics.
Clearly this was a challenging quarter given the disappointing results Syn 10, as well as the ongoing impact of the COVID-19 pandemic, which continues to test the global community and our health care system.
Nevertheless, we've made substantial progress adult sales or as well as 10 20, and we're excited as ever about the outlook for the business leaders.
We believe our ability to successfully navigate these challenging times is a testament to the diversity of our platform as well as the strength and resilience of our team and our clinical development partners.
Earlier this year, we implemented a set of it in a set of initiatives focused and prudent cash management and financial stewardship.
This has allowed the company to aggressively conserve capital and extend our runway.
And as we anticipate clinical activities to return to normal we remain focused on executing our strategy to advance our portfolio, Oh, Gee I focused clinical development programs.
We believe the Singapore, and Sydney, 10 address very sizable and underserved markets.
Moreover, the mechanisms of action or unrelated that are unrelated to <unk> and as such we remain highly encouraged by the political outlook for these two programs.
With that backdrop I'd like to provide an update on developments during the third quarter beginning with the same 10 days to be investigator sponsored clinical trial and ideas he patients.
Last year, we began enrollment in a phase to be investigator sponsored clinical trials in 10 aberration, where their research partner Cedars Sinai Medical Center.
This trial was intended to further evaluate the efficacy and safety of two dose strain. So since then and breath methane positive I B S. He patients.
It was structured in a 12 week randomized placebo controlled trial and expect to do address specific queries about dose response in laser treatment that led to the design of the phase Twob three adaptive design clinical program previously agreed with the FDA.
During the third quarter, we completed a planned interim futility analysis of the phase Twob clinical trial.
After a thorough review of the results. It was concluded that although instead it was very well tolerated. It failed to meet the pre specified efficacy criteria meeting. The study is unlikely to meet its primary endpoint by the time enrollment is completed.
At September Thirtyth, we discuss these results with Cedars Sinai and agreed to discontinue the trial due to futility.
At this time Cedars Sinai has been unblinded and is conducting a thorough analysis of the data set which they intend to publish at the appropriate time.
As a result of this decision we have also mutually agreed to terminate the exclusive license in clinical trial agreements related to the city pen program.
We are grateful to the patients and the Cedars Sinai who supported this clinical program.
And while we're disappointed by these results as I mentioned earlier, we remain committed to working with our clinical development partners to advance our sales for and send 20 programs.
Both of these programs are unrelated the Syn 10, and therefore, we remain encouraged by the outlook and potential for these programs to address large underserved markets and deliver long term value to our shareholders.
Turning first to our Singapore or write backs and based program.
As most of you are aware sinful or is there a first in class therapeutic intervention designed to protect the gut microbiomes from antibiotic mediated dysbiosis.
We believe protection of the gut microbiome may play a pivotal role in improving health outcomes for patients administered long courses of intravenous beta lactam antibiotics as part of their treatment plan for bone marrow in solid organ transplantations.
Last year, we announced our intention to move this program forward in collaboration with our clinical development partner, The Washington University School of Medicine in St. Louis in the form of a phase one b to a clinical trial of Singapore, and Elevenad committed attic cell transplant or HCT recipients.
Allogeneic HCT patients have a very high risk dysbiosis falling below courses of Ivy beta lactam antibiotics used to treat fever after conditioning therapy.
Damage to the gut microbiome caused by these antibiotics. It also strongly associated with a number of potentially fatal adverse outcomes in allogeneic HCT patients no.
Most notably the acute graft versus host disease. We are he called his Asian, bacteremia and C. difficile infection.
Results from our previously completed phase two clinical trial of sales for demonstrated protection of the gut microbiome in treated patients, which led to significant reduction in the incidence of CDIY and IAR he colonization.
Earlier this year, we held the type C meeting with the FDA to discuss the clinical program requirements needed to evaluate the safety tolerability and potential absorption into the systemic circulation if any sales for in this patient population.
During the third quarter, we were pleased to receive notification from the FDA that he pays won't be two way clinical program Mangers seen per our submitted clinical protocol protocol.
This is an important milestone for this program as it provides us with the framework necessary to establish the clinical infrastructure to support this trial.
Looking ahead, we'll continue to work very closely with walking through university, including conducting a planned virtual clinical site audit to ensure we are positioned commenced this trial as soon as pandemic conditions allow.
At this time, we believe we're on track to commence this trial during the first quarter of 2021 and look forward to providing additional updates as they become available.
Next I'd like to provide an update on our sales 20, intestinal alkaline phosphatase age or I, a P program, which we believe has the potential to be a significant long term value driver for our company.
Hey, good morning is there a recombinant form of bovine intestinal and test Oh Boy classic case, or IP, producing chose sales and formulated for oil delivery.
He is an endogenous enzyme expressed any other smaller testing that plays an important role in maintaining gut health through at least three important mechanisms first.
First it diminishes G.I. information by Detoxifying inflammatory molecules second it acts directly on the intestinal wall to tighten the gut barrier to diminish leaky gut and third it functions to support a healthy gut microbiomes.
Preclinical studies have demonstrated that worked in these mechanisms and recent studies in mice also suggests that these outcomes Navy, particularly beneficial in mitigating the effects of aging.
Based on these functional activities, we believe administration of oral IP has the potential to treat a number of clinical indication stemming from inflation of the Gi tract.
Equally important IP has the potential to diminish low grade systemic inflammation, which is believed to exacerbate metabolic syndrome and accelerate the progression of disease is associated with aging.
Despite its broad therapeutic potential industry developments Tobias. He is an oral drug has been hindered by manufacturing hurdles, which has led to currently commercially available I P clauses of up to $10000 a grant.
We have overcome these hurdles and now have the ability to produce more than three grams per liter of IP and scale. So roughly a few hundred dollars grant.
Equally important we are capable of incorporating thing 20 into an all dosage formulation and achievement that we believe makes in 20, a commercially attractive compound.
Earlier this year, we filed an investigational new drug application to the FDA for Sun 20.
During the third quarter, we were pleased to receive a study may proceed letter from the FDA to conduct the phase one single ascending dose study in healthy volunteers designed to evaluate same 20 for safety Tolerability and pharmacokinetic parameters.
This is an important milestone for the program as the phase one sad study is intended to support the clinical development of Syn 20 for multiple indications.
We're tentatively targeting the first quarter of 2021 to begin this study pandemic conditions permitting.
We continue to view, saying 20 is a versatile multi indication program that has the potential for development as a platform program for our company.
As an additional indication we are pursuing the enterocolitis associated with radiation therapy for rectal and anal cancers, a largely underserved market with a significant unmet need.
Initially will focus on the acute toxicities associated with radiation or apathy. However, we believe there is also a significant opportunity for change one to address the long term complications as well.
Importantly that preceded this indication they also provide an accelerated path to registration.
Why we're enthusiastic about sending 20, its potential to mitigate and treat radiation or apathy we.
We are also very excited about our collaboration with Massachusetts General Hospital superseded develop then assume 20 and several additional indications.
As you May recall earlier this year, we announced agreement with Massachusetts General Hospital granting the company an option for an exclusive worldwide license to intellectual property and technology related to the use of <unk> to maintain G.I. in microbiome help diminish systemic inflammation.
And treat age related diseases.
If executed the license is expected to support the advancement of it and expanded clinical development program for same 20, Angola War indications tea.
He treat and prevent metabolic and inflammatory disorders associated with aging.
Our pursuit of these indications would expand the pound foundational research conducted by Dr. Dr., Richard Holdings Laboratory at Massachusetts General Hospital, and Harvard Medical School.
I'd encourage you to visit the scientific publications page of our web site, where you can access Dr. Holden publish research.
Lastly, we're also exploring the potential utility EPS in 20 per Silly Act disease.
Really at it, particularly intriguing because when the disease is active its associated with low levels of IP and gut barrier leakage.
Therefore, supplemental seeing 20, maybe ideally suited to play a role in alleviating the symptoms associated with this disease.
I hope I have conveyed my excitement for this versatile program and for the wall and make it may play and delivering long term value to our shareholders.
Looking ahead, our phase one studies will support an initial indication of radiation or apathy, but more broadly should enable the pursuit of other clinical indications as well.
Before reviewing our financial results for the third quarter I'd like to take a moment to share our vision beyond thing for announcing 20, which as I laid out earlier represent a very sizable and other served markets.
Importantly, we build a first class team with extensive operational scientific and clinical experience.
For this reason we plan to actively explore and evaluate a range of strategic options, which could include in licensing or acquiring assets that may complement our g. I focus or give us the ability to expand our interest into related areas of clinical development.
We are committed to building a first in class pharmaceutical company rooted in our scientific and operational know how.
And we believe we have the tools and resources and make this vision a reality, while driving value for our shareholders.
With that backdrop I'll review, our financial results for the quarter ended September 32020.
During the third quarter of 2020, we continue to operate very efficiently.
We remain focused on improving cash management and continue to identify additional areas to further abuse, none essential operating expenses.
We ended the quarter with approximately $6 million in cash and cash equivalents and looking ahead, we anticipate our burn to remain in line with the previous quarter.
This is due primarily to the postponement of the phase one b to a clinical trial assent for an l. to make HCT recipients and the discontinuation of the phase Twob clinical trials intent.
At this time, we do not anticipate additional expenses related to both programs for the remainder of the year.
As a result, we anticipate that our current cash position will allow us to continue our operations through at least the first quarter of 2021.
As we have in the past we believe we can identify additional areas and the cost savings to further extend our cash runway, which at this time may not be reflected fully in our guidance.
Now I'll turn to the third quarter financial results.
General administrative expenses increased by 9% to $1.2 million for the three months ended September Thirtyth 2020 from $1.1 million for the three months ended September 32019.
This increase is primarily due to increased insurance costs in stock registration fees offset by a decrease in legal costs.
The charge related to stock based compensation expense was $67000 for the three months ended September 32020, compared to $68000 for the three month period ended September 30 and 29.
19.
Research and development expenses decreased by 78% to $900000 for the three months ended September 32020 from $4.1 million for the three months ended September 32019.
This decrease is primarily the result of the response to the global Coke, making pandemic by our clinical development partners, which led to the postponement of the phase when we do a clinical trial of Singapore and allogeneic HCT recipients.
Additional reductions in R&D expenses during the third quarter are the result of the discontinuation of the phase two be investigator sponsored clinical trial setting Ted.
The charge related to stock based compensation expense was $15000 for the three months ended March 30, 2020 compared to $23000 for the three months ended September 32019.
Other income was $134 for the three months ended September 32020, compared to other income of $92000 for the three month end September 32019 are.
Other income for the three months ended September 32020, and 19 is primarily comprised of interest income.
In closing despite continued uncertainty around go to 19.
We had synthetic biologics remains focused on the execution of our strategy of advancing our portfolio of CGI in microbiome focused clinical programs.
We see a tremendous potential horrible thing for Anthony 20, as I mentioned, and we look forward to leveraging our clinical and scientific expertise to potentially license or acquire other synergistic assets.
We have operated with responsible financial discipline and have proven nimble and our ability to adjust and adapt our strategy, including our clinical strategy as well as our response to the CRO to buy this pandemic.
We look forward to continue to update you on our progress in the weeks and months ahead, and now I'll turn the call back to Vincent two questions.
Thank you Steve.
We'd like to open the phone line to questions can you. Please describe the procedure to ask questions for our listeners.
We will now begin the question and answer session Todd.
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At this time, we'll pause momentarily to assemble our roster.
Our first question comes from Jason Mccarthy with Maxim Group. Please go ahead.
Hey, guys and my books, you know John for Jason.
Yeah.
As we go.
So on.
He.
One other thing that you've repeatedly highlighted is dramatic cost reduction, which is made possible through your production process down to I think you say hundreds per gram and thousands.
So my first question is how many grand with someone general use or therapeutic application.
So let me let me bring my Calico in and let him answer that question. Mike go ahead.
Well the <unk>.
Susan dosing is usually made in stage two.
Well Nicole trial. So we don't know the exact number yet, but we believe it will be in the range of.
I see so the.
Milligrams per day for the patient.
All right. Thank you that's good news.
Pretty significant on a yearly basis.
I also have another question on San Antonio I actually like to see if you could be kind to lay out a bit of the roadmap for development because I know you discussed that radiation and throughout the <unk> is probably the quickest way to registration and then you're potentially moving into other indications deal yet.
We've been and Julie metabolic.
So let's see if he did layout, how you're planning to close this would you be going straight irradiation drop and then after that's done in the crude moving into other indications would you look at doing things in parallel or potentially bringing partners on board to explore some of each other.
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So so I'll take a shot at that first so obviously, we got to get through the safety studies.
Which we don't anticipate there being any difficulties given how clean the Tox studies were any of the animal animal models that we conducted.
You raise an interesting strategy and we're evaluating all the above we have the ability assuming sufficient funding to run one or more of these programs the phase twos.
Together or two to do one of them or at least you know one leg of of one of the two.
Phase two studies and then layering in parallel all the remainder assuming that we may have to do more than one we also could possibly partner at that point in time.
And share some of that clinical burden.
With with a partner, we we have fielded a some inbound calls with the folks that have interest in this program. So that that is totally within the realm of possibilities.
All right. Thank you very much a healthy one more if you don't mind I'm it might be really just salaries yet started anything but you said you also need shame on how long is that he is the one blast.
He did not.
Oh lets go ahead Mike.
So the phase one the very first study is a single ascending dose.
Study.
Should last.
A couple months I would imagine.
And he actually does that include data analysis that would be followed by a multiple ascending dose study. We don't have the details worked out with the F.T.A., yet so I can't really comment on it but Uh huh.
Just a page.
Well, let me not let me not comment on on that it would be relatively short term.
Cohorts, maybe six months for that but.
And then we would at that point move on to two patients.
Does that help in mind of course, I'm, sorry, I don't have more details.
Oh no problem, so that definitely very helpful. Thanks appreciate it.
Again, if youd like to ask a question. It is star then one star then one last for.
There being no further questions. This will conclude our question and answer session.
I would like to turn the conference back over to Steve Shallcross for any closing remarks.
Well, thanks again, everyone for joining us this afternoon.
And we thank you for your continued support.
And we look forward to further updating you on our progress have a great evening and we'll talk to you next time. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.