Q4 2020 Virios Therapeutics LLC Earnings Call

Okay.

Good morning, and and welcome to various Therapeutics, Inc. Fourth quarter and year end 2020 financial results Conference call.

At this time all participants are in a listen only mode.

A question and answer session will follow the formal presentation and.

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Please be advised on today's call is recorded at the company's request.

At this time I'd like to turn the call over to Angela Walsh Senior Vice President of Finance and treasurer like various therapeutic thing Chris.

Proceed Angelo.

Thank you good morning, everyone and thank you for joining us on today's conference call.

We executed our initial public offering and December F 'twenty 'twenty.

The team was pleased to generate demand for the full offering as well as the full over allotment, what's final gross proceeds of $34.5 million.

And net proceeds of the IPO were approximately $31.1 million after deducting underwriting discounts commissions and operating expenses paid by the company.

We are pleased to be with you today to discuss various therapeutics fourth quarter and year in 2020 financial results as well as to provide you with the progress we have already made and the past two months since the IPO.

Please note that our financial results and company update press release is now available on our website.

Given there are many attendees on today's call that are new to the various story.

And we thought we'd start the call with our C. E O correct Duncan providing you with a brief update at corporate overview.

Doctor and Mike Jendro Art, Chief Medical Officer will review, our recent research and development progress with a particular focus on on fibromyalgia phase two B program and then I will return to review our Q4 financial result.

In addition, Ralph Crosswalk VP of operations is with US for the question and answer portion of the call.

Before we begin I'd like to remind everyone that statements made during this conference call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially.

Any forward looking statements are made only as of today and we disclaim any obligation to update these forward looking statements other than as required by law.

Please see the forward looking statements disclaimer and our financial results release issued this morning, and the risk factors and the company's current and subsequent filings with the SEC.

It is now my pleasure to turn the call over to our CEO Greg Duncan.

Thank you Angela and good morning, everyone.

We appreciate you joining us on the call today, especially during these extraordinary and challenging times.

<unk> was founded by Dr. William prison predicated on the hypothesis that several chronic pain related disorders, including fibromyalgia and irritable bowel syndrome may be triggered by the activation of the herpes simplex cardboard and buyers.

As is well documented and the medical literature for herpes simplex hard one virus or HSV, one virus and.

We'll refer to on today's call is a tissue resident virus and affecting the vast majority of adults under the age of 50.

And most cases the HSV one virus resides in a dormant state.

However, dormant entrust rewards can be activated by certain triggers such as a major health challenge or anxiety related to job stress.

Once activated the HSV, one virus begins to replicate which in turn can trigger and abnormal immune response and susceptible individuals and.

Dr <unk> and theorize that this cascade of each SBU on activation followed by an abnormal immune response might be a potential root cause of the flare ups of symptoms and diseases like fibromyalgia.

Can wax and wane over time.

This thesis served as the Genesis for various therapeutics focus on developing new combination anti viral and inhibitor therapies with the and go to improve care standards for patients.

Suffering from chronic diseases, like fibromyalgia and durable bowel syndrome.

Our lead candidate oral arm C. One represents a novel potential treatment approach.

And Barnes to specific mechanisms of action purposely designed to inhibit HSV one reputation.

The ultimate goal of which being predicated on returning and activated or lytic H S. P. One virus back to a dormant state.

More specifically the firm sick leave every component of iron and she want inhibits viral DNA polymers and.

And thus inhibits replication of the HSV one virus itself.

The silviculture component of IMC, one inhibits the segment oxygenase too or Cox, two enzyme and to a lesser degree cups warm enzymes that are thought to be involved and the prostaglandin path were used by HSBC to accelerate its own replication.

We are unaware of any other anti virals and development for the treatment of fibromyalgia. This novel approach was a germane consideration and FDA designated IMC one for fast track review for the treatment of fibromyalgia.

I M. C. One has also been granted a synergy patent based on the fact that neither of the individual components of our M. C. One has proven effective and the management of fibromyalgia yet the combined use of these two therapies has demonstrated significant treatment benefits and early stage clinical research.

For reference this unique mechanistic approach secured IMC, one patent protection to 2033.

To corroborate his thesis our founder Dr. Purging conducted research and conjunction with the University of Alabama to further understand the role of HSV, one virus activation as a potential root causes of chronic pain related conditions.

This research collaborations centered on the tissue biopsy study designed to assess the presence of active Hs, we each SBU on infection in patients with fibromyalgia and or a comorbid chronic gi disorder, such as irritable bowel syndrome.

This study corroborate the company's thesis by demonstrating that patients with fibromyalgia and chronic gi disorder as well as patients with only a chronic gi disorder exhibited ongoing active H S. P. One replication.

In contrast, the control patients and this study those patients without fibromyalgia oral chronic gi disorder exhibited at almost no HSV, one and application.

This corroborative tissue biopsy, evidenced portends potential volume. So you want as a treatment for fibromyalgia patients as well as patients with a chronic gi disorder, more specifically irritable bowel syndrome.

Pardon me on my answer was chosen as the first target for IMC, one clock research based on three criteria.

The first reason being anchored to the pervasive dissatisfaction of fibromyalgia patients health care providers and payers with the three approved fibromyalgia medications, most notably related to poor tolerability.

For reference the three FDA approved medications to treat problem Alger on the record.

Cymbalta and Sabella all.

All of which are CNS media and therapies and argue have exhibited less than ideal tolerability and commercial usage.

The second reason for selecting fibromyalgia for first IMC, one proof of concept trial was predicated on less competition and.

And the Fibromyalgia research field.

The third and most important consideration for targeting fibromyalgia relates to the potential to improve care for between 10, and 20 million fibromyalgia patients from the U S.

And for more than 200 million fibromyalgia patients worldwide.

And the context of a large market opportunity and our clear medical need for new safe and effective fibromyalgia treatments.

AMC once clinical efficacy and safety was assessed and a double blind placebo controlled multicenter trial of 143 fibromyalgia patients.

The results from this phase Iia proof of concept trial, clearly demonstrated IMC once potential clinical benefits and treating fibromyalgia.

And this trial I M C. One treated patients demonstrated statistically significant reductions and pain as well as statistically significant reductions and petite and improvement and patients overall fibromyalgia symptoms.

IMC, one treated patients demonstrated improved functioning and improved overall global health status and this.

And this study also demonstrated that IMC, one treated patients required less quote unquote rescue therapy with low dose opioids to control their pain, when compared to placebo treated patients.

I think we'd all agree a new medication.

With the potential to improve fibromyalgia patients quality of life.

And to reduce overall opioid use would represent a significant step forward and fibromyalgia patient care.

I N C. One efficacy and treating fibromyalgia patients has generated significant excitement and the fibromyalgia research community. Additionally.

Additionally, the community's excitement is predicated on IMC want exhibiting tolerability that was better than placebo and a phase Iia trial.

More specifically patient from placebo treatment group were three times more likely to discontinued therapy due to adverse events when compared with IMC. One treated patients. This is a rare finding as the active treatment arm and virtually all other fibromyalgia studies.

Exhibits a higher dropout rate due to adverse events as compared with the placebo treated cohort.

This is and especially encouraging result, when viewed in the background of current patient and provider dissatisfaction with the tolerability of the three approved fibromyalgia treatments.

Moving forward the IMC one research programs will be managed by our seasoned executive team complemented by our highly experienced board of directors with extensive development and commercialization experience for many category leading medicines.

This experience includes previous management responsibility for Zoloft, Viagra, Celebrex Lipitor, Zyrtec Lyrica and Sabella. The latter two representing two of the three medicines approved by FDA to treat pebble mileages.

Furthermore, our chief Medical Officer, Dr. Mike General work with the FDA to help define the process by which the agency reviews, new drug applications for approval of fibromyalgia drugs. This.

This is the same process used to approve and Lyrica sabella and.

Walter.

And there's still use today by FDA to guide development of new fiber miles and drug candidates, including IMC one.

During the first quarter of this year, we assembled a full team we need to manage both the fibromyalgia phase two b trial, and our concurrent chronic toxicology studies and have commenced or Ibs focused research collaborations.

From Michael Campbell, Larry of the Mayo clinic.

Let me turn the call over to Dr. General to update you on our research progress following our December Ikea.

Included in Mike's remarks will be and update on our top priority our phase two b fibromyalgia trial.

And the face to be and Remodels. The trial will henceforth be branded as the fortress study.

Fortress stands for fibromyalgia outcome research trial evaluating synergistic suppression of HSV one Mike.

Thank you Greg.

Our team has been focused on preparing to execute on the two key research programs. The fortress study itself and the concurrent chronic toxicology program to enable long term dosing of volume see one in the future.

Our operational activities started with refining the IMC, one manufacturing process and scaling up our drug supply to support the development program I M. C. One and matching placebo will be available to start our programs and the second quarter of this year.

The fortress study is planned to enroll approximately 460 patients aged 18 to 65, who will be randomized one to one either to I M C one or placebo.

All of whom had been diagnosed using the 2016 American college of Rheumatology diagnostic criteria for fibromyalgia.

The primary endpoint for this trial will focus on reduction in pain over time.

Pain reduction will be measured daily.

And the interest 24, our recall scale VI and electronic diary debt the patient will use at home and in addition to assessing the fiber module patients pain reduction. We will also assess IMC one's ability to improve symptoms of fatigue sleep disturbance improvements and overall global health status and improved pace.

On a function.

I am pleased to announce there is significant interest and the fiber miles you research community regarding participation in our forthcoming study.

This excitement as a result of the encouraging results I M. C. One demonstrated in our previous phase Iia trial as well as recognition of the need for a new safe and effective five from I was a treatment.

We expect to begin enrolling patients in may of this year as planned.

Based on industry standard patient recruitment rates, we project recruiting patient throughout the balance of 2021 followed by a database lock and top line results available and the second quarter of 2020 two.

While we cannot completely rule out recruitment delays related to COVID-19, we.

We have observed the recruitment rates and Fi Roger research trials have not been significantly impacted by the pandemic to date.

We're excited about this forthcoming trial for a number of reasons, including the fact that in this trial, we will be testing further optimized doses of biopsy, one, including an increase dosage of the anti viral component of the fixed dose combination.

Additionally, we will and measuring patient's pain on a daily basis, thereby reducing the potential for and increased placebo response, often seen in pain research during patients in office study visits.

We as a team believe I M C one's unique synergistic antiviral mechanism of action may have utility in treating other chronic functional somatic syndrome conditions as well.

And as announced in February we look forward to working with Dr. Michael Campbell area of the Mayo clinic to assess IMC one's effectiveness and treating symptoms of irritable bowel.

In parallel with the start up activity on our farm Roger clinical trial, we're also commencing our chronic toxicology studies and two species. These.

These studies will be required by regulatory authorities before we were permitted to dose study participants with IMC one for intervals of one year or more as we plan to do in our phase III program.

Chronic toxicology program is timed to complete by the time. The fortress study does so that we will be able to propose a final phase III program to the F. D. A at the conclusion of the current study.

With that update on our operational and research progress, let me turn it over to our senior Vice President Finance, Angela Walsh to discuss our Q4 financials Angela.

Thank you Mike.

Beginning with the balance sheet, we ended the fourth quarter with $29 $8 million and cash.

As previously noted we expect our current cash from the common stock offering and December 'twenty, 'twenty, including execution at the full 15% over allotment.

By the company with operational runway until the end of 2020 two.

With respect to our income statement as a development stage company, we did not generate revenue in 2020 or in 'twenty 19.

We reported research and development expenses.

0.0, $3 million and point $2 million for the fourth quarter and full year, 2020, respectively and.

Compared to <unk> $26 million and $8 million for the fourth quarter and full year, 'twenty and 19, respectively.

The decrease and research and development expenses for the fourth quarter and full year are primarily attributable to decreases and expenses for our human pharma co kinetics study conducted in 2019.

We reported general and administrative expenses of $6 $4 million and $9 $8 million for the fourth quarter and full year, 2020, respectively, as compared to point $3 million and $1.4 million for the fourth quarter and full year, 'twenty and 19, respectively.

The increase and general and administrative expenses for the fourth quarter and full year are primarily attributable to noncash expenses related to equity and share based compensation legal and accounting fees and costs associated with being a public company.

We reported a net loss of $6 $5 million for the fourth quarter, 2020 compared to a net loss of $6 million for the same period and 2019.

For the full year, 2020 net loss was $10.3 million compared to a net loss of $2 $5 million for 'twenty and 19.

Based on our projections, we expect these proceeds to fund a fortress trial are chronic toxicology studies to support chronic dosing and a I N C. One as well as operations through the end of 'twenty 'twenty two.

Which is approximately six months following our target for generating topline results from the fortress trial.

I'll now turn the call back over to Greg to moderate the question and answer portion of today's call Greg.

Thank you again, and Angela and summary of.

Fibromyalgia market opportunity is large and market research suggests that community is dissatisfied with the existing fibromyalgia treatment options.

The unique fixed dose synergistic anti viral mechanism of IMC, one represents a completely new approach to treating fibromyalgia and potentially other somatic syndrome disorders.

This novel approach and supported both by our Fibromyalgia Phase Iia data.

And the fast track review designation granted to IMC, one to treat fibromyalgia, which to the best of our knowledge represents the first time and new drug candidate has been granted this designation for fibromyalgia treatment.

I N C. One has already demonstrated clinical benefits and a phase Iia fibromyalgia trial using the pain reduction assessment FDA uses to evaluate new therapies for fibromyalgia indication.

And finally, the various executive team and our board of directors have extensive experience and developing many category leading medicines.

Including having had previous management responsibility for developing and commercializing lyrica and sabella, representing two of the free drugs approved to date by FDA to treat pebble mileages.

We know biotech investors invest based on both scientific merit and data as well as based on the experience of our company's management team and its board of directors and a particular disease area.

And various team and our board has unsurpassed experience and developing and commercializing new therapies and the fibromyalgia treatment arena.

We are committed to frequent and proactive outreach to the investment community and look forward to presenting at the Needham Virtual health care conference and mid <unk>.

April.

Operator, we are now ready for questions.

Thank you we will now be conducted conducting a question and answer session. He would like to ask a question. Please press star one on your telephone keypad.

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One moment, please while we poll for your questions.

Okay.

Our first questions come from the line of Ashok Kumar with <unk> equity. Please proceed with your questions.

And thank you, Greg Angela and Mike two questions. The first question is and then.

The development program costs, and Greg and Angela and you laid out that the cash on hand and $30 million.

It would be sufficient.

To support both the fortress study and the chronic toxicology studies and that's it.

To complete the development and the process the phase III from 'twenty three to Q2 on June 24.

Could you just go over and over.

And what it would take to complete the process. The additional costs on the second question is the expansion of our M C one value proposition and beyond.

And so the proof of concept study with the Mayo clinic could you. Please established on timelines for the Ibs Cooper.

And so the studies thank you very much.

Thank you Ashok for your question, we'll start with the second question first as you know fibromyalgia is the.

The top priority for our organization, but we as a team believe HSV one virus inhibition does hold promise and other potential disease areas I'm going to ask my general to just outline the other areas, we're looking to explore and.

And I'll come back on and answer the second question Mike.

Thanks, Greg.

In terms of the.

And the Ibs program the exact timing on that is not yet determined we're talking to Dr. Campbell, Larry about the scope and the magnitude of the study and whether we do that with Mayo clinic exclusively or if we bring other investigators and in debt.

Discussion is ongoing plus there will need to be some interaction with FDA to get and IMT and place. So that's all going to be worked out over the next few months in terms of the.

Ibs program node Gregg wanted me to speak a bit about <unk>.

Why we would go that direction and it's it's a logical next candidate.

And for us to do a proof of concept study.

We have open label data from our founder that showed that we seem to have activity in ibs.

<unk> and Ibs pain.

And the tissue biopsy study that was conducted as Alabama at University of Alabama as part of our.

Phase Iia study in Fibromyalgia also showed active HSV, one replication occurring and ibs patients as well as fiber miles on patients.

And again, indicating that would be a logical target and I. The ibs Kennedy is seeking better treatment options to control pain related to Ibs, which is something that regulatory authorities are now requiring and.

And IV studies as well.

So because we know there's some opportunity there and we think theres a common underpinning of this HFC one virus.

Think that's a reasonable direction for us to go to.

Evaluate items he wanted to treat Ibs pain.

Sure.

I think that's that's probably all we can say about debt at the moment Greg.

Yes.

Thank you Mike.

And so to answer your second question as communicated the proceeds from our December IPO provide us with operational runway through 2020 two and it gives us a full six months beyond the phase two b fibromyalgia trial results of.

From a cash we would use that time wisely.

And you do two things one would be to engage the FDA to align on the IMC, one phase III program and financing requirements.

We believe.

And asset.

A new asset and the fibromyalgia arena has significant potential which will also portend interest from other life science companies and.

And so we could use that time to also assess external party interest and then basically once we have the clarity on the phase III program and have assessed interest we can choose the best value maximizing approach for our shareholders that may be alone or it could be and partnership as we advance IMC, one development and commercialization activities.

As for the Phase III program requirements, we will not know that until we have the data from the phase two b trial.

And we will certainly need fda's concordance with the phase III program requirements, we do believe that the size and the scope and the focus of this program could serve as part of our registration package.

So we will make the case that one further phase III study is required but thats, obviously subject to FDA review. So that's not something we can provide a firm recommendation on moving forward, but we do have cash to get through the phase two b.

We have time with that cash to scope out the phase III and then we can assess what's the best passbook path forward.

Is that going alone or in partnership with another potential life Science company.

And thank you, Greg and Mike.

Thank you.

Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

There are no further questions and in the queue. At this time I would like to hand, the call back over to CEO, Greg Duncan for any additional questions and closing comments.

Yes, we have just one additional question by email and I will ask Angela to come on munis and the question is can you from the second program.

E G. The Rds program with your existing cash Angela would you comment on that please.

And I'm sure glad I, Greg and wed be glad to we are in early stage discussions with Dr. Kim and Larry at the Mayo clinic to assess how best to explore the clinical benefits of HSV, one virus inhibition therapy for Ibs patients.

There are a range of options, we are assessing as a potential complement to the Fort study. What is clear is that if we pursue and I B S trial at the size and scope of our completed SAP on Asia phase to a.

Concept trial this will require additional cash on the cash we have on our balance sheet that said, we have not decided the best path forward for explorer and I N C. One and Ibs patients.

Thank you Angela.

And it looks like that concludes the questions on behalf of the <unk> team. We wanted to thank you all for your interest and videos and obviously for those of you that our investors and various therapeutics. Thank you very much for your support.

We don't need to tell you, but we do like to say it. We do think we have the chance to fundamentally change the quality of care for tens of millions of fibromyalgia patients here and the U S.

And hundreds of millions of fibromyalgia patients and the ex U S territories, and we remain committed to seeking that vision that Dr. <unk> and set up when you originally hypothesized about how anti viral therapy could improve the lives of many many patients and thank you for your time and attention and we look forward to continued communication.

Thank you so much for your participation. This does conclude today's teleconference. You may disconnect your lines at this time.

Have a great day.