Q4 2020 DiaMedica Therapeutics Inc Earnings Call
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Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines will again be placed on hold for thank you for your patience.
Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines will again be placed on hold.
Thank you for your patience.
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Good morning, ladies and gentlemen, and welcome to the di America Therapeutics fourth quarter, 'twenty 'twenty Conference call.
A recording of new web cash will be available shortly after the call today on <unk> website at Www Dot Die America Dotcom Andy.
And the Investor Relations section.
He for the company proceeds with its remarks. Please note the company will be making forward looking statements on today's call.
These statements are subject to risks and uncertainties that could cause.
Actual results to differ materially from those projected in these statements.
More information, including factors that could cause actual results to differ for projected results.
Bierce, E&E income, including factors that could cause actual results.
Got you and Eric statement note regarding forward looking statements in the company's press release issued yesterday and under the heading risk factors in day America's Most recent annual report from form 10-K.
Hey, Guy Americas S. E. SEC filings are available at Www Dot S E C Dot com era.
And on its website.
Again, that's www Dot S E C dot golf.
Please also note that any comments made on today's call.
Only as of today March 11, 'twenty 'twenty, one and may no longer be accurate at the time of any replay.
Our trash creep per EV.
On Medicare disclaims any duty to update its forward looking statements.
Following their prepared remarks, we will open the phone line for questions.
I would now like to introduce your host for todays call Rick false Dion Medicos, President and Chief Executive Officer. Mr. Waltz, you may begin.
Thank you operator, and good morning, everyone, we hope you're all well.
And we'd like to welcome you to the year end 2020 earnings and business update call.
We issued a press release for the business update and summary of our financial results for 2020 yesterday. After the markets closed at that time. We also filed our annual reports on form 10-K, both documents can be found in the Investor Relations section of our website at <unk> Dot Com I am joined this morning by our Chief Financial Officer.
Kelly and our Chief Medical Officer, Dr. Harry Alcorn, Let me begin this morning with a few comments on our acute ischemic stroke program.
As you recall, we were very pleased with the FDA accepted our request for a pre IMD meeting for our stroke development program and are encouraged by their written responses to our questions. Their responses indicated acceptance of key elements of our planned phase II, especially trial for <unk> nine in acute ischemic stroke patients.
Specifically.
We proposed an adaptive trial design, which will allow us to conduct an interim check the interim check will evaluate the performance of day I'm wondering knowing specifically an independent data monitoring committee will evaluate whether day morning, nine is having a positive effect that is consistent with our statistical analysis plan assumptions.
And then allow for adjustments in the patient size if necessary in short we believe that the guidance received from the FDA provides a clear path forward for our stroke program. We are currently finalizing the investigational new drug application for our proposed phase II <unk> III study and expect to be submitting this application later this.
In parallel with this process, we are taking steps to organize the supporting vendors to run the study we still anticipate initiating the enrollment in the study later this summer.
The results of our remedy phase II study in acute ischemic stroke will be the subject of an oral presentation at the upcoming international stroke Conference 2021 being held virtually on March 17% to 19 2021.
As we announced we're also very pleased to be hosting a stroke key opinion leader webinar on the treatment of acute ischemic stroke on March 19th at noon Eastern time, the webinar will feature presentations from doctors, Scott <unk> of the University of Pennsylvania, and Dr. Paolo <unk> of the University of Bristol.
He will discuss the current treatment landscape and unmet medical need and the treating patients with acute ischemic stroke, along with their mechanism rationale and clinical data on stroke and recurrent stroke.
One final related note I'd like to point out that on the only line for our stroke program as it relates to reducing stroke. We occurrence in November 2020, Astrazeneca received an approval for an expansion of its label for Brilinta its latest generation blood Center product.
Were approved with an indication for reducing stroke, we occurrence in patients having had a mild stroke, we view astrazeneca as label expansion as potentially opening another door for approval for <unk> 49 in the treatment of stroke. We occurrence. If you recall from our remedy phase two data we reserve we observed a statistically significant.
<unk> and reoccurring severe strokes. This was an 86% reduction where there was one patient in the D. M on nine group compared with seven in the placebo.
And also to note that for those seven reoccurring in the placebo were fatal these.
These results were steady wide and we believe signal the potential of <unk> nine to both improve the physical recoveries and reduce stroke recurrence.
Stroke recurrence tends to be the more disabling fatal and costly.
We believe that do you mind line has the potential to further improve the health and quality of life for stroke victims.
Let us next update you on our redux trial studying <unk> as a treatment for three different causes of chronic kidney disease or CK D. Redox is a phase two study in 13 centers with a target enrollment of 90 participants in three cohorts of 30 patients cohorts include Iga nephropathy.
Diabetic kidney disease or decay D and hypertensive African Americans participants in the <unk> study will receive <unk> nine for approximately 13 weeks at two dose levels. The primary efficacy endpoint for the overall study our improvements in open urea and Egfr secondary end points include evaluating the <unk>.
Potential for do you have any line to positive impact each of the underlying causes of CK day.
Overall, our enrollment has reached 68 participants in the Redux study. This includes the full enrollment in the Dk day cohort enrollment in our Iga nephropathy cohort has reached 70% or 21 participants and enrollment in the African American cohort remains at 50% or 15 participants.
I would tell you we're very pleased to see the rapid enrollment in the Dk day cohort. This was largely due to the size of the <unk> population that matches the enrollment criteria for Dk D, making it far easier to recruit 30 participants despite concerns related to Covid also recall at the last participant was enrolled in this cohort in mid December.
And we are still very much on track to provide preliminary top line results from this cohort during the second quarter of 2021.
With respect to the Iga Nephropathy, and African Americans, where enrollment has continued at a much slower than expected pace. We are pleased to reported that we are seeing signs of increased activity with a significant declines in new Covid cases, and recently availability of vaccines. We now can announce that we anticipate complete.
<unk> for both of these cohorts in the second half of 2021.
I would now like to ask Scott Kellen to take us through the financial results for 2020.
Thank you Rick Good morning, everyone as Rick mentioned, we did release, our full year 2020 financial results and filed our 10-K yesterday afternoon. If you haven't had a chance to review. These documents. They are both available on either the <unk> or SEC website.
Our net loss for the full year of 2020 was $12 3 million or <unk> 78 per share. This compares to a net loss of $10 6 million or <unk> 89 per share for the prior year.
Our research and development expenses for $8 3 million for the year ended December 31, 2020, and this compares to $7 9 million for the year ended December 31 2019.
An increase of <unk> 4 million.
The increase was primarily due to a combination of cost incurred for our redux phase II <unk> study, which initiated in late 2019 and of course driven in particular by the addition of the third cohort targeting the decay D patients, which fully enrolled during the fourth quarter of 2020.
We also incurred increased noncash share based compensation costs and these costs were partially offset by decreases related to clinical study costs incurred for a remedy stroke study, which wound down in the first half of 2020 and the nonrecurring costs of the phase <unk> study.
Which was started and completed during 2019.
Additionally, there was a year over year net decrease in drug manufacturing and development costs.
Our general and administrative expenses were $4 4 million and $3 7 million for the years ended December 31, 2020, and 2019, respectively. This point $7 million increase was primarily due to increased noncash share based compensation costs increased outside professional.
Mrs and increased directors and officers liability insurance.
The increase in 2020 was partially offset by reduced travel and meeting costs driven by restrictions instituted as countermeasures to the COVID-19 pandemic.
Our total other income net was <unk> 4 million for the year ended December 31, 2020. This compares to $1 million for all of 2019. This decrease was driven primarily by the reduced RMC incentives receivable from the Australian government, which are paid for qualifying research work.
Performed by our Australian subsidiary during 2020, and this of course was related to the wind down of the remedy study during the first half of 2020.
This decrease was partially offset by increased foreign currency transaction gains recognized during 2020.
Turning to the balance sheet. We finished the fourth quarter of 2020 with cash cash equivalents and marketable securities of $27 5 million.
Current liabilities were $2 million and working capital was $25 9 million.
This compares to $7 9 million in cash cash equivalents in marketable securities $1 3 million and current liabilities and $7 5 million in working capital as of the end of 2019.
The increases in the Companys combined cash and marketable securities and in our working capital are due to our February and August 2020 public offerings of common shares and if you recall in August we completed an underwritten public offering raising gross proceeds of $23 million or net proceeds of 21 point too.
And in February we completed an offering raising gross proceeds of $8 5 million or net proceeds of $7 7 million.
Our current capital position should allow us to complete a number of significant milestones for diabetics.
Including data Readouts for all three cohorts of our Redux phase II <unk>.
<unk> study along with initiating our phase two three study and the acute ischemic stroke.
And further fund our planned operations into the third quarter of 2020.
Now, let me turn the call back over to Rick.
Thank you Scott, we'd like to open the call for questions. Operator, if you could please introduce the first analyst.
Sure.
Your first question comes from Alex Nowak from Craig Hallum. Your line is open.
Great Good morning, everyone.
Maybe could you speak to on the on the label extent expansion to include stroke reoccurring just how would that work do you anticipate that the single pivotal phase III <unk> III study would support that label alone for stroke recurrence.
And frankly is there is there enough powering and net 350 patients did get an indication what have you been hearing from the FDA.
Yeah. Thanks, Alex So our plan is surely after filing our IND.
For the planned phase II as class III, we plan to reach out to the FDA and request a meeting to discuss the clinical path and the and the powering we do believe that.
Based upon the profile of our therapy for stroke of current there is truly a real potential and this is something that we wanted to get clarity with <unk> with the FDA first.
Okay got it that makes sense. So that decision will come later it sounds like okay.
Maybe for the feedback.
Maybe for the feedback you got from the FDA back in December you know what.
They say around fast track for breakthrough designation and when would you plan to submit it for those two those two levels.
Yes. So our plan is shortly after filing on R&D that we will be filing for fast track designation.
And then based upon our discussions with the FDA will look at other pathways for expedited approval.
Okay got it and then any update on the timing to run depends on stroke study, just how long would that take and what sort of costs. All in for 350 patients has there been any discussion about partnering on stroke to include parts has been outside the U S.
Yeah. So the based upon the powering on a on a 90% powering we're anticipating approximately 350 patients overall.
That study will start this summer.
And we're planning to have an interim analysis after about halfway through and right now we're planning for that to happen next year in 2022, and then ideally to finish the study in 2023.
The overall cost about that he will be close to $30 million for the 350.
Patients and then in terms of partnering out we're always.
Having discussions ongoing discussions right now our real focus though is getting this <unk> file getting the chronic kidney disease cohorts completed and I think after that point in time, I think we'll be in a much better position.
Both both looking for a partner in Asia and globally.
Understood that makes sense and then you mentioned in the press release that you do intend to take the drug forward in Iga nephropathy, and that's even before seeing the data just am I reading that correctly on perhaps speak to why you pick the syndication now before you can see on the three cohorts of data and I guess, how closely should the upcoming decay.
Results correlate to the Iga population.
So as we look at the clinical on the regulatory path for for these different cohorts, we see a very clear path for Iga nephropathy rare for them. There are a number of other recent compounds that are moving into pivotal studies for Iga nephropathy. So we think this is the clearest path for us moving forward in Soho.
We see the potential for day on Monday night for kidney diseases.
On the potential to start off when the rare and then longer term as for our partner moving into the overall CK D or diabetic kidney disease and part of that just comes to today the size on the cost of running a pivotal study for diabetic kidney disease is much larger so how we see it on the rationale.
For you know for this pathway here is.
Again, we can we can see a clear path for Iga and then longer term, we could see a partner having interest.
And taking this to the overall CK D or decay D patient population.
Okay got it and then just a correlation of <unk> results to Iga.
I mean, we believe that ultimately Demoing line will improve kidney function you know amongst different causes.
And really the purpose of this study is to get clarity clarity on that to see.
I think ultimately one day differences between.
Teekay D&C Iga is that we feel that for the Iga theres a potential immune modulating effect.
But again I think we're optimistic for all three cohorts and we plan to follow the data.
That makes sense I appreciate the update thank you.
Yeah.
Your next question comes from etc <unk>.
And Guggenheim Your line is open.
Great. Thanks for taking our questions just the first one on stroke just wanted to know if you had any further color on which net goodness, oh, sorry, which medications.
It won't be allowed on beyond call took place and industrial growth phase two three study.
Sure.
The protocol is currently being developed and finalized and the inclusion exclusion criteria, which we do.
Delineated being they will not be allowed to be on tpa or received tpa or mechanical thrombectomy beyond that we will look at each patient individually, but thats. The only two exclusion at this point for this patient population.
Got it. Thank you and then just quickly on kidney so Iga nephropathy diabetic kidney disease seems to be pretty clearly.
Line population, just wonder do regulators view, the hypertensive African American with CK Dee cohort are the same way as other sort of TD CDK indications in terms of UAC, our on egfr against either decline or the improvements that would be needed by nuc therapy.
Particular indication.
Yes that is correct and especially with UAC or there was a meeting just last week on CK day, three where the agency weighed in on it in regards to the fact that theyre looking at UAC or directly as for kidney improvement along with Egfr respectively.
Got it. Thank you congrats on the progress.
Thank you.
Your next question comes from Alan <unk> from Roth Capital Partners. Your line is open.
Yes, good morning, gentlemen.
What I'd like to ask as a Ric as you outlined.
Outlined that you would pursue Iga nephropathy is an orphan indication.
If then subsequently.
There is a partner who would develop it for other kidney indications how would you tackle D.
For pricing differential.
And the different.
Therapeutic indications.
Yeah. So that's a great question. So how are we how we see this and we actually recently have engaged day.
It consulting company to help us to first answer. The question is that can we co position deamonte nine for both stroke and in kidney disease and the bottom line the feedback was that.
We feel those will be distinct products they'll have different N D. C numbers are there.
From our prescribers perspective, the stroke product will be will be prescribed in a hospital setting, whereas the kidney disease in particular, the rare will be done from a nephrologist.
So ultimately we feel that.
Ideally one partner for both indications and then that partner could manage right now our focus is getting as much data as we can and are positioning ourselves here to find the right partner, we don't have intentions to commercialize ourselves.
But we do can move this forward and.
Again find the right partner for both both indications.
And the next question would be what new data do you anticipate to release at next week's stroke conference.
There is some potential new data that that could be coming but we'll have to hold off until until that event.
So it'd be great day.
Joining me on on the call on March 19th.
Okay. Okay.
Thank you very much.
Thanks, Oliver Thank you on.
Your next question comes from Thomas Flaten Lake.
Lake Street capital Your line is open.
Hey, guys. Thanks for taking the questions just a couple of follow ups on stroke is our large vessel occlusions still part of the exclusion criteria.
Large vessel occlusions will be excluded which will automatically exclude mechanical thrombectomy.
Yeah, and then just going back to the sub study on stroke recurrence, so if you're going to submit the protocol.
For the IMD, obviously will how would you then re integrate a potential sub study would that require an amendment would that potentially lead to a slowdown in enrollment or a pause can you help me just think through the mechanics of how that would work.
Yes, so we will be filing the application with stroke the occurrence as a key secondary endpoint.
And then after we get clarity from the FDA and based upon those discussions we.
We will look at the potential for a subgroup study.
But we don't we do not anticipate this will slow down any aspects of the study or positive on a pause yet.
Got it okay, great and then one for Scott with it with the I guess.
Net of a slowdown on the <unk> enrollment and then there was a pick up as you start the stroke study how should we think about spending pacing over the course of the year.
Well, it's a little chunky obviously.
So as we wrap up the enrollment in the redox the spending will decline a little bit of course, that's offset by startup on on the stroke study.
No.
You'll probably see slow down mid year, and then a ramp back up towards the end of the year.
As the site Activations commence.
Excellent thanks, guys for taking the questions.
Okay. Thank you.
There is no further question at this time I'd like to turn the call over back to Mr balls.
Alright, again, we would like to thank everyone for joining us. This morning. We appreciate your interest and continued support and please stay safe in these challenging times and with this concludes our call today.
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