Q4 2020 F-Star Therapeutics Inc Earnings Call
Ladies and gentlemen, thank you for your patience and place if you have and standby, yes start Therapeutics, Inc. Fiscal year end 2000, and 'twenty earnings call and corporate update and will begin momentarily. Thank you for your patience and please continue to standby.
Yes.
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Good morning, ladies and gentlemen, thank you for standing by welcome to the F Star Therapeutics, Inc. Fiscal year, and 2020 earnings call and corporate update at this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, this conference will be recorded and available for replay.
I'd like to introduce to you today Lindsay Trickett, Vice President of Investor Relations and communications for S. Sorry. Please go ahead.
Okay.
Good morning, everyone and thank you for joining US with me today is Elliott for Star CEO, and Darlene Deptula Hicks CFO, we announced financial results pre market today for the year ending December 31, 2020 you can access the press release on the Investor Relations page of our website at <unk> Dot com.
Before we get started lets run through the forward looking statements.
No that is part of our discussion today management will be making forward looking statements. These statements are not guarantees for future performance and therefore, you should not place undue reliance on them and.
Investors are also cautioned that statements that are not strictly historical constitute forward looking statements.
Such forward looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated.
These risks include risks and uncertainties detailed enough stars filings with the SEC.
The company undertakes no obligation to update any forward looking statements and in order to reflect events and stances that may arise. After the date of this conference call with that I'll hand, the call over to Elliot.
Yeah.
Thanks, Lindsay, let let me repeat for the welcome to this our first earnings call. It's a pleasure to provide and update on what's been a transformational year for the company, we brought together and exciting portfolio of for clinical stage assets. We've listed on NASDAQ, We successfully adopted the company and response to the ongoing pandemic.
We've achieved robust financial performance and we continue to deliver for our partners. All of this was possible because everyone. At <unk> is dedicated to developing next generation of immuno oncology medicines, we're absolutely focused on transforming the lives of patients with cancer from our discovery group to clinical development.
Teams. That's the reason why we're all excited to get out of bed each day.
We have a unique opportunity to be instrumental and the immuno oncology field and a leader and bi specifics and we relish this responsibility.
Moving to slide four.
I'd like to run through our fourth quarter, 2020 achievements.
And they are a global pandemic, we focused on the things that matter the growth and the number of patients with cancer has not been halted by Covid and neither have we.
On the 23rd of November 'twenty, and 'twenty, we started trading publicly on NASDAQ Goss F. S. T X a huge milestone for our company and something we believe will unlock even greater potential and our unrivaled by specific spot for.
And first 118, our lead program completed its phase one study and the fourth quarter with encouraging results and I'll say more about that shortly.
I'm very proud of the fact that despite the COVID-19 challenges.
And we got two clinical stage programs off the ground navigated regulatory review and have patients enrolled and you can see our S 120 and S. S 222 here with the past first patients enrolled in the fourth quarter.
And as part of our business combination, we now have the opportunity to develop SB 11, 285 and <unk>.
Next generation Sting agonist.
On slide five let remind you of the <unk> platform technology.
We are the only company developing tetravalent bispecific antibodies with two plus two binding sites that have the ability to simultaneously cross-link immune cells, the tumor cells cluster immune receptors and conditionally activate the immune sign ups that is only went both targets.
Gauged.
As you can see we adopt the natural binding sites of the antibody and Blue and also two new binding sites and dark green.
With only a small number of changes.
This is a unique way to make bispecific antibodies unparalleled and immuno oncology drug discovery and protected by more than 230 patents.
Finally, the natural IGT want antibody format, and if all bi specifics makes them easy to manufacture with monoclonal like Titus great stability and few to no antibody drug antibodies and the clinic.
Moving to slide six I'll run you through our clinical stage programs.
The most advanced of the F Star Bispecific antibodies is S. S 118 targeting the key immune cell exhaustion pathways of PDL, one and lag three and.
We were excited to report that phase one data from forty-three advanced cancer patients, who showed F. S woman eight to be well tolerated with a disease control rate of 59%.
So a unique lots and through a unique like through sharing mechanism.
It gives durable disease control in patients with and acquired resistance to current checkpoint inhibitors.
F. S 118 is currently and our phase II proof of concept study focused on patients with advanced head and neck cancer and acquired a checkpoint inhibitor resistance.
Clinical data was expected and the first half of 2022.
We've been encouraged by the phase III data, we've seen recently from others with luxury it further validation of this important pathway and checkpoint inhibition to achieve immune activation.
F. S 22222 is a T cell redirection that delivers PD L. One driven C D. One thirty-seven activation.
By specific by design is balanced the affinities for each target and will therefore differentiate from other clinical stage PD L. One and C. D. One and three seven targeted molecules. It's unique biology enables the treatment of patients whose advanced cancers have low PDL one expression.
These patients typically benefit little from checkpoint inhibitor therapy.
First two to two and a phase one study and patients with advanced solid tumors.
Early clinical data is expected in late 2021.
My first one 'twenty is a first in class dual agonist designed to stimulate the immune response and immunologically cold tumors.
By design F. S. One 'twenty causes triple immune activation and uniquely it brings together the combined properties of conditional pharmacology with cross linking unclos strength of the <unk>.
Stimulatory targets of Ox 40, and C D one and three seven.
The first one 'twenty is likely to have monotherapy benefits, it's designed to complement and enhance the outcomes of checkpoint inhibitors on to chemotherapy.
My first one 'twenty use and a two part phase one study and patients with advanced solid tumors as a monotherapy and in combination with a PD one inhibitor.
F stars for clinical asset S. P. 11, 285 is a second generation Sting agonist. It improves the first generation Sting agonist being given to patients and an intravenous infusion.
And rapidly is taken up into immune cells for tumor microenvironment stimulation.
S. P 11, 285 can be used as a monotherapy, but clinically and it will be best suited to enhance the benefits for patients for checkpoint inhibitors to this and SB 11 to a fibers and a two part phase one study and patients with advanced solid tumors as a monotherapy and in combination with a PD L. One inhibitor particulars and Bob.
This year, we're also delighted to see the clinical progress made by our partners and Ali and Hunter syndrome.
Here on slide seven.
You can see the multiple value inflection points and clinical data Readouts, we are anticipating in the near term.
Over the course of this year, we will share data with you on F. S 120 on S. P 11, 285 trials and we're optimistic about that potential.
We'll be attending and sharing data at multiple medical and scientific conferences, the first being a a CR in April.
With this schedule events, there's a lot and look forward to over the next couple of years.
I'm excited by the financial outlook for <unk> and in particular, the higher level of Investor interest and the company since going public. We believe we are and will be extremely well placed to deliver for patients and for our shareholders.
I would like to thank the <unk> team who've done a brilliant job and and unprecedented Joe I'd also like to thank our investors for their ongoing support and I Hope you share my excitement for the next 12 months ahead.
And now I'll turn things over to Darlene to give you an update on our financials as a newly listed NASDAQ Company Darling.
Thank you Elliot and good morning, everyone. As Elliott has highlighted it's been an incredibly busy and exciting fourth quarter for our stock and truly a proud moment for us to be here and I first earnings call with U S and NASDAQ listed company I'll now go through the financial results for the year ended December 31, 2020, which we believe provides a solid.
Platts and one for the strategy Elliot just outlined and we'll be happy to take any questions at the end.
And start now has for exciting programs in the clinic and the different stages of development are reflected in our research and development costs. Let me begin though with reviewing revenue. Our revenue consists of collaboration revenue under our 2017 license and collaboration agreement with Ares Slash Mark P G and H and our 2016.
License and collaboration agreement with Denali.
Revenue typically includes amounts that relate to upfront payments milestone payments option exercise payments and amounts due to us for research and development services.
Revenue for the year ended December 31, 'twenty, and 'twenty was $11.3 million as compared with $28 3 million and the prior year for a year over year decrease of approximately $17 million.
And this decrease <unk> represented 15.9 million and Denali 1.1 million and.
And 15.9 million Aries decrease was due primarily to a reduction and licensing revenue and R&D services revenue, resulting from the amended scope of our collaboration agreement in May 2019 is that star moved to a new wholly owned asset strategy and.
In addition, there was a 1.1 million dollar decrease year over year related to Denali revenue due to the achievement of a $1.5 million development milestone in 2019 offset for in 2020 by an increase of point 4 million and R&D services revenue relating to the start of the second molecule in the collaboration.
Now turning to research and turning to research and development total research and development expenses were $14 1 million for the year ended December 31, 2020 compared to 31.4 million for the 2019 prior year and resulting in 17.3 million decrease year over year and R&D expense.
Let me take this decrease program by program.
First our S. S. One money program costs decreased by $8 3 million from $11 5.002 million 19 to $3 2.002 million 20, primarily and the areas of clinical trials see arrow costs clinical sampling costs and R&D expenses due to the small number of patients remaining on study during 2020.
And that the phase <unk> study beginning to come to and and the in the phase two proof of concept study commencing late in 2020.
And that's 118 manufacturing costs also decreased due to a manufacturing batch run in 2019 that supply the remainder of the 2020 trial.
And these decreases were partially offset by increased FTE utilization and a decrease and the amount of U K U K R&D tax incentives year over year.
Our S. S. One 'twenty program costs decreased by $4 6 million from 7.7 million and 2019 to $3 1 million in 2020 due to decreased toxicology costs from drug studies safety studies carried out in 2019 decreased manufacturing cost due to the manufacturing batch run and two.
19, and also supply twenty-twenty requirements and decrease R&D costs due to the timing of development activities. All of this was offset by increased clinical CRO costs, resulting from the startup costs incurred for the phase one clinical trial of S. F. S 120, and increased internal costs due mainly to increased head count utilization on the probe.
Graeme and also a decrease and the annual U K research and development tax incentive year over year.
Our S. S 222 program costs decreased by approximately $1 million from $6 3.002 million $19 million to $5.3 million and 2020.
This decrease was due to decreased toxicology costs and drug safety studies are also carried out and late in 2019 decreased manufacturing cost, resulting from the manufacturing batch also run late in 2019, that's applied 2020 needs and a day decrease and other R&D costs due to the timing of development activities. These decreases were offset.
And by an increase and clinical trials see aero costs of $1 million, resulting from the startup costs incurred for the S. S. Tucci, two phase one clinical trial and an increase of 1.1 million, mainly due to an increase and head count utilization from the prior year and a decrease and the U K research and development tax incentives year over year.
Other R&D project costs decreased by $3 $3 million from $5 8.002 million $19 million to $2.5 million in 2020. This was primarily primarily due to the discontinuance of and early stage program and 2019, a decrease and platform technology expenses, and a shift and a fulltime equivalent FTE.
Utilization at year over year as they move to other programs.
G&A expenses were $19 5 million for the year ended December 31st 2020, compared to $15 3 million for the full year of 2019.
This increase of $4 2 million and G&A expenses, primarily due to an increase of one 4 million and compensation related costs point 7 million noncash share based compensation expense 1.5 million increase and expenses associated with transaction costs for the November 2020 business combination some.
And increased facilities and I T cost of approximately <unk> 9 million and a miscellaneous and various other G&A costs equaling about point 5 million offset by a decrease of point 8 million relating to reduce travel and conference costs due to primarily to COVID-19 related travel restrictions.
The net loss attributable to common shareholders was $25 6 million or $9.69 per share for the year ended December 31, 2020 as compared with a net loss of 23 million or $14.89 per share for the year ended December 31st 2019.
The company's consolidated net loss for the year ended December 31, 2020 includes the loss of 1.7 million attributable for the spring Bank operation since the transaction day.
Turning for the balance sheet total cash and cash equivalents equaled 18.5 million for the year ended December 31, 'twenty 'twenty as compared to $4 9 million for the year ended December 31 2019.
The increase in cash and cash equivalents was driven primarily by proceeds from the pipe financing and cash resulting from the business combination and November 'twenty 'twenty and proceeds from our collaborations offset by the company's operational needs during 2020.
I know too that accounts payable and other current liabilities at December 31st 'twenty, and 'twenty, and 2019 or $17 million and $29 9 million respectively.
This reduction of $12 9 million, resulting primarily from the conversion of the convertible term notes at the time and the business combination and November 'twenty.
I can reiterate the encouraging interest we've had and our programs and our platform and look forward to continuing conversations with everyone. This year.
So I would say and summary solid performance some F stars and newly public company and one which we believe really sets us up for progress against our plans in 2020 and.
And with that we will open the call up for questions.
Ladies and gentlemen, if you'd like to ask a question. Please press Star then one.
Thanks for your question has and answered and you'd like to lose yourself and the Q press the pound key.
Our first question comes from Onesie, Li with Ladenburg. Your line is open.
Hi, Thanks for taking my question and congratulations on the progress first question is on the us.
Walmart a obviously a few days ago, a BMS reported positive data for the phase III trial and next three antibody.
Wondering and what's your thought on that and does that affect your plan anyway.
Especially I think their trial.
You wrote a patient without selection and alike.
Three party.
Patients.
And so.
Does that mean.
For the work without risk selection marker of course your strategy focus on flex reparative and.
PDL, one positive, but given that this data any impact on your strategy of claims.
Hey, Thanks very much for the question. So first and foremost we were delighted to see the luxury phase III data from BMS and melanoma patients. We are very encouraged that this moves like through towards being the third.
Checkpoint inhibitor and immuno oncology with.
With respect to Alfonso F. S for monarch term US you know we are in a phase II proof of concept study and head and neck cancer patients with acquired resistance and co positive PD L. One on luxury and our plans will be to continue to progress through that trial, clearly monitoring whats going on and next.
Non led environment at the same time. This eventually will lead us to a basket trial and which we can begin to think about inclusion of other patient types with other profiles, but our main focus continues to be on these acquired resistance PD L. One luxury co expressing head and neck patients.
Got it great and then of course ethics to walk through zero.
Could you remind me what's the schedule for the extra day dose titration as you expected to reported initial data in this for the quarter on the.
<unk> exited a dose titration portion.
Many doses and patient per dose and Annie and a reminder to those details of what it should do we expect sports there's day at data reported in the third quarter.
Yeah. So actually thanks very much for that question and I'd be delighted to give you an update and I, but unfortunately haven't disclosed and the details of that accelerated dose titration.
Profile at the moment and we can look forward. However to give an update later this year as we progressed through that and the clinic sorry about that.
And our last question for Darling.
So for the license revenue for this years, who do we expect similar.
Ballpark with 2020, how do we think about it more or less for.
Yeah, and also answer that question.
And there's two ongoing partnerships and there are certain milestones along the way and some R&D services and things we have not provided guidance on that yet.
And so as you know these things can vary depending on timing and and what milestones may be what I can say the team.
Collaborations have been going on for multiple years and theyre on them and they're very very positive so, but we haven't given guidance on on that exactly yet.
Okay got it alright, thanks for taking my questions again.
Thank you.
Our next question comes from Patrick <unk> with H C. Wainwright Your line is open.
Hi, good morning, and afternoon and congrats on the progress I have a follow up a few follow ups on <unk>, so with that for US one one and <unk> targeting.
Targeting lag three and PD L. One, whereas we have other bi specific approaches instead targeting lag three and PD, one and we.
We also had the positive data from relativity, Oh for some and trial reported by Bristol last week, and evaluating monoclonal antibody targeting lag three and combination with Nemo has discussed.
So I'm wondering if you can further discuss differences between F. S 118, and these other approaches and secondly, why other cross linking between TD for positive and CDA positive T cells are up regulated lag free and tumor cells with upregulation of PD L. One could demonstrate differentiated efficacy compared to those approaches and if the cleavage of lag three is tied in.
Some way to this cross linking or is that and independent mechanism.
Yeah, Hey, Patrick nice to speak to you and thanks very much for your question and good morning to you too. So as you know we are uniquely focus on AR and the clinic lag three and PD L. One and and we particularly like PD L. One because I'm exhausted chew mistakes and we have and Upregulation of PD L. One on those tumor.
Sales and and as you know we are both cross link.
Between the C D for CD eight cells I'm, sorry between the tumor cells and and C. D for Cta itself to.
Two those are over expressing exhausted and.
And sales that have like three on the surface, the clustering that oh molecules and juice and F. S. One more day to very good example of that drives our unique biology, and and the case of F. S. Walmart H that cluster and causes and enzymatic shedding of luxury from the surface of those exhausted cells.
And as you know there is now a growing literature suggests that that shedding is critical for our long term pharmacology and and we believe durable effect and we certainly and the phase one study seen dose dependent increases and soluble luxury so showing that we're getting a pharmacological benefit but also long jewelry.
And treatments, our longest treated patient to over two years and on study now so we believe that our mechanism will and through that differentiate and pharmacology and jus, a durable effect and patients benefits and patients.
Got it and then just a follow up question on SB 11 to eight five so can you tell us about the patient characteristics of those enrolled in the phase one a day trial and that the study has been enriched and any way for patients, perhaps there's more likely to respond to a sting agonist and then secondly, what differentiates SB 11 25 from the prior attempts with thing Agonism and then.
And finally, what is it that we should expect and the update mid 2021 on the program.
Sure so like most phase one studies Pat.
Patrick we have taken just all comers into the phase one study for SB 11 to eight five and that includes a mono therapy ascending dose on day combination and a sending dose with roche's PD L. One inhibitor at Taser lose them up.
We expect to provide data in the middle of the share on both of those parts of that study I guess the real big differentiation is the chemistry of the second generation Sting agonists and has been refined to enable these drugs to be giving a systemically and and and indeed.
SB 11 to eight five.
And second generation does that and it's given intravenously and as opposed to the first Gen, which generally were given a intra tumor really.
And <unk>.
And that really is the main difference between those two studies and we'll report out on this ongoing phase one study midyear.
Got it that's helpful. Thank you very much.
Thanks, Patrick.
Our next question comes from Yale Jen with Laidlaw with Laidlaw and company. Your line is open.
Oh, good morning, and thanks for taking the questions and congrats on a great quarter.
My first question is that.
For 222 for the trials in Europe.
Do you feel any sort of impact at this point in terms of the Covid and Europe and that you'd anticipate visa and.
Did this impact to be dissipating over the years or later in the years.
Yeah, Thanks, very much and we in fact it.
Plant to split the trials between our different programs for between the U S. A and Europe are in order to manage around some of the COVID-19 risk and we'd put F. S. 222, as you say into Spain. We've got you really world, leading collect clinical sites are in Spain and.
And in fact, I'm very pleased to report that the study is going very well, we can't give details now, but it's going very well and.
And indeed, Spain is I guess fortunate and unfortunate enough to have to pay more in other countries that quarter and early third wave and so that operating a fully right now and we're delighted with the progress there.
Okay, Great and then maybe two quick questions for one for you and it will have both Ari.
And I know your hands full.
Collaboration right now, but do you guys do and test the pail all.
Be willing to take wall collaboration goes and slower.
Maybe this year or in the future.
Sure as you know we moved to a wholly owned asset strategy a couple of years ago and now of course for clinical stage assets, which is really exciting. We will continue to look to see if partnerships and may emerge, but will not be going back to the discovery led a partnership.
[noise] type that we've had and the past and although I would expect to see and asset type.
Partnerships and particular non clinical asset type partnerships over the coming couple of years and we have a fantastic pipeline of targeted S cops already.
Sort of on the shelf as it were and we continue to look to see what we could do without and and further enhance the benefits of all of our validated our platform.
Okay, Great that's great and the last question for dialing in.
Lived and housekeeping in terms of operating expenses for 2021.
Should we take the fourth quarter 'twenty.
Figures.
Base case for.
The remaining of the year for the full 2021 or there is a substantially.
Substantially increase how should we.
Do you think about that.
Yeah, I'm happy to kind of take this offline a little bit too yeah, but I think.
Q4, we had almost a full quarter and for programs and the clinically obviously just took on this the the sting assets. So it's not quite a full quarter of that so we need to kind of keep that in mind as well, although that program will wil.
It will be completed around mid mid year or so.
So you've got to kind of look a little bit of that as well. So but yes Q4 is more indicative of going forward and then history and prior to that.
Okay, great. Thanks, a lot again, congrats all other provinces.
Thank you Akshay.
Yeah.
As a reminder to ask a question. Please press Star then one on a net.
Question comes from Matt Phipps with William Blair. Your line is open.
Hi, Thanks for taking my question and one one day you mentioned data early next year from the head and neck trial, but there's obviously the futility analysis as part of the savings. There's two design is that.
And so as a futility analysis, which we expect the research and the.
Page two of that by early 2022, and just wondering how you.
And the schools close it and past that utility analysis and stage one.
Yeah, Thanks, Hey, Marc and good morning, and thanks for the question.
Yeah. That's the futility analysis is what we'll be reporting early in 2020 two for.
The ongoing head and neck study and acquired resistance consultations and so.
And so that's the.
Where we expected to read out for F. S. One minute.
Got it okay. Thanks for clarifying that and then on one 'twenty I think this slide specifically mentioned that it's likely to have monotherapy benefits.
Quickly moving on to a PD one combination studies just wondering if you've given thoughts of looking at expanding some of the monotherapy.
And indications or anything for that drug.
And the benefit and.
And this dose escalation.
Yeah, no. Thanks again motto.
Bank strategy is to push it to the PD one combination and what we are have showed a previously but come back come back to US also we've got some very intriguing data and combination with chemotherapy and we want to explore the full opportunity with with checkpoint and chemo and but you know we saw some really.
Interesting and encouraging monotherapy signs in the.
Pre clinical setting in particular in the primates are that we were studying and and I think that if that translates into a benefits biological benefits in particular that we observed during phase one with a F. S. One 'twenty and we use sun would not rule out the possibility of going.
And with a monotherapy approach, but just to reiterate you know all all of our.
Guidance is that we'll be combining with PD, one and ultimately chemo.
Yeah. Thanks Elliot.
Thanks, Matt and I stood here.
And no further questions I turn the call back over to Elliott Foster for any closing remarks.
<unk>.
Great well first and foremost I'd like to reinforce a thanks here at F staff for everyone Who's taken the time to join the call and ask questions. This morning.
And then further to that are really to think and the whole F star team from the board of directors and all the way through to the rest of the organization who've done an absolutely brilliant job and and unprecedented you for everyone of course I'd also like to thank our investors for their ongoing.
Ongoing support for the company and I Hope with this update you to share my excitement for the 12 months ahead and thank you very much.
Ladies and gentlemen, this does conclude the call you may now disconnect everyone have a great day.
And the growth.
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