Q4 2020 Brickell Biotech Inc Earnings Call
[music].
Greetings and welcome to Brookfield Biotech Inc.
Fourth quarter, and full year, 2020 financial results call at.
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 press star zero on your telephone keypad.
And as a reminder, this conference is being recorded it is now my pleasure to introduce your host and Perry with lifestyle advisors. Thank you you may begin.
Thank you and good afternoon, everyone.
Joining me on today's call are Brickell, as Chief Executive Officer, Rob Brown.
Chief Financial Officer, Bert Marchio, Chief R&D Officer, Deepak, Chadha, and cheap and excuse my co founder and Chief operating Officer, Andy Squalor.
Before we begin I would like to remind everyone that this conference call and webcast will contain forward looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ.
Please note that these forward looking statements reflect our opinions only as of the date of this call.
We will not undertake obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events and <unk>.
Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward looking statements are discussed in greater detail and our most recent filings on form 10-K.
And our other periodic reports on forms 10-Q, and 8-K filed with the SEC.
I would now like to turn the call over to the company's Chief Executive Officer, Rob Brown.
Thank you Dan and thanks to everyone for joining us on this call. This afternoon.
First I will provide a business update and then ask Deepak to provide and update on our ongoing phase III clinical program. Bert will then review the financial results. We reported earlier today before we open up the call for questions.
With that as an outline for the call. Let's get started we entered 2021 with a positive momentum surrounding our lead program suffering and bromine, which we're developing for.
Is it potential best in class treatment option for the primary axillary hyperhidrosis or more commonly known as excessive underarm sweating.
Several recent achievements have put this program on a clear path and we anticipate that various near term milestones within the year will position the company for potential long term success, we initiated both the pivotal phase III clinical trials Cardigan, one and two and which we are evaluating the efficacy and safety.
And topically applied soft running and bromide gel and 15% and approximately 350 patients per study I am pleased to announce today that cardigan, though kartik and one study has already exceeded 50% enrollment and we remain on track to announce topline results from both pivotal studies and the fourth quarter.
There are 2021.
Secondly in the fourth quarter of last year, we raised approximately $13 $7 million. In addition, already this year, we received approximately $10 $5 million and aggregate net proceeds through the warrant exercises and the sale of shares under our existing ATM equity offering program.
This capital further strengthens our balance sheet and provides us with cash runway for at least the next 12 months and allows the company to continue executing on key activities that will enable us to submit a new drug application pending the successful outcome of the pivotal phase III program.
Now turning to our Japanese development partner, Kaki, and pharmaceutical Kaki and has proven to be a valuable partner as we've previously announced kaki and recently launched commercial sales and soft from you and gel, 5% and Japan under the brand name <unk> o'clock for the once daily treatment and primary axillary hyperhidrosis.
This is a significant milestone for both companies as Japan as the first country to approve soft peroni and bromine for any indication and software and and bromine is the first topical prescription product for the treatment of primary axillary hyperhidrosis in the country and.
As a reminder, brickell is entitled to receive sales based milestone payments as well as tiered royalties based on a percentage of net sales of <unk> o'clock and Japan.
Along those lines. We are pleased to announce that we have already started to recognize the first of these royalties since the launch of <unk> clock in the fourth quarter of last year, and we continue to believe that these future royalties royalties and potential milestones have the opportunity to provide significant value to brickell over the years to come.
Lastly, I'd like to briefly touch on our collaboration agreement with <unk>, which provides us with certain rights to develop their proprietary investigational adjuvant plasmid DNA vaccine intended to prevent COVID-19.
And he has completed a phase one and two study with its investigational COVID-19 vaccine candidate and recently initiated a phase two three study in Japan, and <unk> studies progresses, and the market evolves. We will continue to evaluate this opportunity and it is worth noting that if the development process if the development.
Process continues for this vaccine candidate a larger phase III registration study will be required for any approval.
Let's now turn the call over to <unk> for a discussion of our phase III Cardigan and one in Cardigan and two studies deepa.
Thanks, Rob.
This is truly a transformational phase and the company's history.
The progress we have made over the past year.
Particularly in the light of the pandemic speaks not only to the strength and resilience from a team.
But also the opportunity in front of us as we dwell sulfur.
So, hoping you and worldwide and the potential best in class treatment option to improve the lives of millions of patients suffering from primary axillary hyperhidrosis and the United States and.
As Rob just mentioned and Goldman is on schedule for the two U S pivotal phase III studies evaluating software and even bromide gel, 15% for the treatment of primary axillary hyperhidrosis.
We initiated the first study cardiac and one last October and we are pleased to report that we have already enrolled more than half of the approximately 350 total subjects the <unk>.
Expect to enroll and that study.
The second study Carty going too.
Started dosing patients last December and all participating investigational sites are now on bolt.
We continue to be pleased with the recruitment and steady and Gordon and progress which is in line with expectations.
Looking at Cardica and won and Cardigan too.
We believe these studies are on track to complete enrollment by the end of third quarter of 2021 Mitch.
And which would allow us to report topline data from both of the pivotal studies and the fourth quarter of this year.
And just a quick refresher on the study design of these U S pivotal phase III studies, both cardio and won and Cardigan too.
Randomized double blinded vehicle control studies that are expected to enroll approximately 350 subjects eight nine years and older first study and the U S.
And the studies are designed to evaluate the safety and efficacy of topically applied sulfonium bromide gel 15 per cent for patient suffering from primary axillary hyperhidrosis.
Subjects participating and does studies there'll be treated.
Either suffered and bromide gel 15 person or placebo for six weeks with a two.
Two week follow up period.
The co primary efficacy endpoints and they agreed with F D. A.
The proportion of subjects achieving at least.
Two point improvement on the patient reported outcome assessment that is the hyperhidrosis disease severity and measure axillary or S. D. S. M. A X scale and the change and gravimetric sweat production each from baseline to the end of treatment.
It is important to note that if these two pivotal studies are successful they will form the basis of a prospective new drug application with the U S. F D a force.
Opinion bromide gel, 15% for the treatment of primary axillary hyperhidrosis.
With that I will now turn the call over to Bob for a financial overview.
Thanks, Deepak and good afternoon to everyone on the call.
Before I review financial results as the newest member of the Brickell executive team I'd like to share my enthusiasm and joining brickell as its chief financial Officer.
As Robin Deepak Cup discussed on this call great things are happening here at Brickell as our lead program progresses through phase III clinical trials and I'm really excited to be part of the team and bringing my years of experience as we look to scale the company up over the coming years.
And now onto a summary of the fourth quarter and year end financial results after which I also encourage you to read our full consolidated financial statements and M. DNA contained in our annual report.
And on form 10-K, which can be assessed through the investors section of our website once filed with the S. E C.
Starting with cash as of December 31, and 2020, we reported $30 1 million and cash and cash equivalents.
Have you used $4 8 million and cash during the fourth quarter of 2020.
In addition to our yearend cash balance as previously mentioned our balance sheet has been further strengthened this quarter by aggregate net proceeds of approximately $8 9 million, we received from warrant extra sizes and approximately $1.6 million from the sale of shares under.
For our ATM offering program.
We believe our current cash position will support our operations beyond the top line results of the U S pivotal phase III program and into 'twenty 'twenty. Two and addition, as the general housekeeping measure we filed a new S. Three today.
Yeah.
Net loss was seven 4 million for the fourth quarter of 2020 compared to 10.9 million for the fourth quarter of 2019.
The net loss was reduced despite a decline in revenue and is largely due to lower R&D expense incurred between finishing the long term safety study.
And the start of the phase III pivotal trials.
Revenue for the fourth quarter of 2020 was approximately 27000.
Which is attributable to the royalty revenue we recognized from the sales of E clock and Japan.
This is compared to <unk> 7 million and total revenue reported for the same period, and 2019, which was largely attributable to the recognition of a research and development payment received pursuant to a to the license agreement with our Japanese partner Tuck in.
Research and development expenses were $4 6 million for the fourth quarter of 2020 compared to $6 6 million for the fourth quarter of 2019 and.
This decrease was primarily due to the route to reduce clinical and other related regulatory and compliance costs of the phase III open label long term safety study of soft peroni and bromide gel and other ancillary clinical studies that were completed or.
Winding down by the end of the first quarter of 2020.
This was offset slightly and the fourth quarter of 2020 as we started incurring greater research and development costs upon the initiation of our phase III program.
G&A expenses totaled 2.9 million for the fourth quarter of 2020.
Compared to $4 9 million for the fourth quarter of 2019.
This decrease was attributable to lower costs of one 4 million from professional related fees associated with the merger with <unk> incorporated that occurred and the third quarter of 2019, as well as reduced impairment cost of <unk> 8 million and other miscellaneous.
Expense and some point 4 million.
Partially offset by higher costs of <unk> 6 million for stock and other compensation expense with that I will now turn the call back over to Rob Rob.
Thank you Deepak and Bert and for your recap. This is really an exciting time for the company. We're all working together and continue to build momentum behind our ongoing pivotal phase III clinical program.
Before we open the call up for questions I would like to make everyone aware of and upcoming KOL event on hyperhidrosis that we'll be hosting later this month.
This event will provide our investors analysts and other interested stakeholders the opportunity to get into even deeper understanding.
Of what a primary axillary hyperhidrosis patient is dealing with in their daily lives. The current treatment options and why we believe this is a severely underserved and under treated market.
This virtual event will be led by two highly distinguished thought leaders and the field and hyperhidrosis, Dr. Adam Friedman of the George Washington University School of Medicine, and Health Sciences and.
And Dr. Joel Cohen of about skin dermatology.
This KOL event is scheduled to take place at 10, a M. Eastern time on Friday March 26.
We have already issued a press release with registration instructions, but if you have any additional questions. Please don't hesitate to contact our Investor Relations Representatives.
And we're excited about this event and look forward to having you all listening in.
That concludes the prepared remarks I'll now.
I'll now ask the operator to open the call for questions operator.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session session.
And you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is and the question to you May Press Star two if you would like from a move your question from the Q.
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Our first question comes from the line of Thomas Flaten with Lake Street Capital markets. Please proceed with your question.
Thanks, Hey, guys. Thanks for taking the questions just a couple on the timing of Cardigan and wanted to so with if enrollment is completed by the end of the third quarters I think you've guided given the time that the.
The last patient would be and the study what what how should we think about the risk of that flipping over into 2020 two from a data reporting perspective.
Yeah, Hey, Tom and Scott Thanks for jumping on the call and asking the question normally after if our study is completed obviously theres the whole data claims process and making sure you get everything right and you want to be very careful on that that process is usually let's say six weeks.
So it would have to and have to go pretty long for us to Oh slip.
Flip over into the next quarter.
But if you if you so.
Do you believe that the patients will be out of the study by the end of the third quarter or it'll be last patient in at the end of the third quarter I just want to make sure I understand.
No no we met and when we met last patient out by the Oh, I see okay, well that that changes everything.
Fair enough.
And then I was wondering if you guys could provide a little bit of our guidance on operating expense spending for the year, obviously, it ramped up pretty heavily in the fourth quarter and I know, there's some prepayments and there but I was wondering if you could give us some thoughts on how you expect that to look over the course of the year.
Sure Bert and would you like to handle that.
Yeah and in terms of the expenses and as we said on the call we expect the.
And the cash that we have.
Last is through.
Top line readout and into 2022 at this point, that's that's the guidance we're giving.
Okay Fair enough and then if you could just clarify on the and Gs. So I had understood. It from from the original agreement that you guys would take a look at the phase one data and then determine if you were going to participate and phase two but then they turned it into a phase two three could you just walk us through what happened there and how and what if and how you guys are involved and that data review.
Yeah, Yeah. Thanks, Thomas Yeah, So the way the and remember we have an option for them to make decisions are different.
Different points in their development process, but they've done is they've finished their phase one and they moved into this two three before all of the data was complete we have had a chance to look at the top line information.
All of the study, but not the finalized study report and you obviously controls the release of that information. So we really can't talk about their data, but we have and a chance to look at it at some of their initial feedback from that study obviously, they they looked at that information and chose to move forward with their study, which we viewed is encouraging and got it.
Thanks, so much.
Okay.
Our next question comes from the line of Cleveland Garceau with Oppenheimer. Please proceed with your question.
Hey, good afternoon, and thanks for taking my my questions are kind of got a couple first just in terms of the enrollment seems.
Seems like it went up a bit faster pace than had been anticipated just wanted to ask if there are any factors you can identify that drove.
And that that faster right.
And and also just among the sites if there were any particular centers.
That represented kind of the drivers of the faster enrollment and then just a question in terms of E o'clock and Japan I know, it's still early days with that launch and there are obviously certain limitations on early drug launches in Japan.
And I just want any further color you can share with the trajectory of that low.
And just going as we've gotten into 2020, one and thanks very much.
Sure. Thanks, Thanks, Leland and Yeah, why don't I'll answer the last question and then Deepak when I turn it over to you to answer the question on the clinical trial on <unk> clock they've got approval.
And launched I think they launched November 26, so obviously, the third and fourth quarter of last year was pretty short quarter.
And of course, Youre, just getting started and stocking is more than anything else. So it's a little early based on those sales to make any any projections to what the product might look like I mean based on our conversations with the Cock Inn.
We're encouraged by.
Bye bye, how well its going but it is really early and it is the.
The first year and Japan is a little hard to.
Interpreted in terms of long term value from an asset for those on the call that don't know the and Japan there is a.
There's a limit on the length of a prescription to two weeks and what that means is that.
For a patient to get more than two weeks of product. They actually physically you have to go back and see the doctor and get a new prescription and it's not a refill and the Japanese government does that because historically they had problems with drugs getting approved and seeing unknown side effects. So therefore, they try to limit the utilization of new products and their first year. So.
Often what you do see kind of a muted first year and then.
And third month 13 tends to be more more substantial so with that said kaki and is out and doing their stuff everything. We hear is is positive. So we feel very good about the launch overall, but but the first the whole first year is a little hard to interpret and certainly the first the first six weeks.
Which is what were reported year is definitely difficult to make too much too much.
Determined too much how product is gonna do deep off would you like to answer the questions on the clinical trial.
Sure happy to do that.
Good afternoon, and they land. This is deepak thanks for your question so.
My question was around the enrollment for our phase III studies.
And again I think as mentioned on our call I think we are tracking against our projected enrollment timelines.
But again I think the D R.
I'm pleasantly surprised low but.
Not having any COVID-19 related delays, although we booked the checks.
Checks and balances and major.
Do any COVID-19 related delays whether to do any of the boat assessment, but that's maybe one of the factors that.
Enrollment is on target and also.
Because it's a multinational study across all the geographies and United States. So clearly I think looking at the extent of Covid.
They are some of our investigational centers for example, like in Florida, and Texas, I think clearly I think a.
They were low to be high and so so I think that maybe one of the reason we are still on track and up which is good news and we are.
And just hoping the stay on track with our second pivotal in coming months.
Yeah, Thanks, Deepak and it and just to add a little color to that.
You know, we're pleasantly surprised by enrollment we had you know had.
Obviously, some concerns about our ability to recruit them.
During during the peak of the pandemic and and we're really really happy with the work the team the CRO everybody's really done to bring us together and and and certainly the sites and and and the patients. So we're encouraged by where we are and think certainly we're still on track to report out top line data and the <unk>.
Quarter.
Yeah.
There are no other questions in the queue I'd like to hand, the call back to CEO, Robert Brown for closing remarks.
Great Hey, thanks, and thanks for taking the time this afternoon and listened to our update I wanted to close out the call by thanking our team for their hard work and dedication the investigators and the health care workers at the clinical trial sites for getting these two studies up and running smoothly and of course, the patients who are participating and studies that are pay.
And the way for others across the country that continue to suffer soundly with hyperhidrosis.
While every clinical program and daily has its own set of challenges. The COVID-19 pandemic has presented a unique set of hurdles that said I believe our team has done an excellent job and conducting these studies and we are encouraged with the enrollment rates, which continue to fall within our expectations. We look forward to keeping you all updated on the progress of these studies over the.
<unk> to come.
As always feel free to reach out to us if you have any additional questions and we hope you have a great rest of your day.
Ladies and gentlemen, and this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Yeah.