Q1 2021 DURECT Corp Earnings Call
Greetings and welcome to Durect Corporation first quarter 2021 earnings call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Mike Alber, Chief Financial Officer. Thank you you may begin good afternoon welcome to our first quarter 2021 earnings Conference call. This is Mike Amburgey, Chief Financial Officer of direct Corporation.
I will provide a brief review of our financial results and then Jim Brown, our president and CEO will provide an update on our programs.
We will then open up the call for a question and answer session.
We're beginning I would like to remind you of our safe Harbor statement during.
During the course of this call we may make forward looking statements regarding direct products and development expected product benefits, our development plans future clinical trials or projected financial results.
These forward looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward looking statements.
Other information regarding these and other risks can be found in our SEC filings.
Our 10-K and 10 Qs under the heading risk factors.
Let me now turn to our financials.
Total revenue in Q1, 2021 was $2 2 million compared to $1 6 million in Q1 2020.
This year over year increase of approximately 600000.
It's driven by the combination of an increase in collaborative R&D revenue.
On the reversal of deferred revenue related to the now terminated Gilead agreement that occurred in Q1 2020.
Excluding deferred revenue year over year increase in collaborative R&D revenue for Q1 was about $140000.
Product revenue, which is primarily from the sale of all debt pumps was $1 $6 billion in both Q1, 2021 and Q1 2020.
Our gross margin from product revenue was 79% in Q1, 2021 as compared to 76 per cent from Q1 2020.
Product revenue continues to be strongly cash flow positive.
R&D expense was $8 million in Q1, 2021 compared to $7 6 million in Q1 2020.
The slight increase was primarily due to higher expenses for EUR 19 eight.
SG&A expenses were $3 5 million in Q1, 2021 as compared to $3 4 million for Q1 2020.
Our underlying burn rate during the quarter, excluding net proceeds from the equity financing was $7 4 million.
In Q1, 2021 we strengthened our financial position by raising net proceeds of $47 $8 million from an underwritten public offering and sales under our ATM program.
At March 31, 2021, we had cash and investments of $97 2 million.
Paired with $56 9 million at December 31, 2020.
With that thanks again for joining our call and I will now turn the call over to Jim for an update on certain of our programs.
Thank you, Mike and Hello, everyone.
Thank you for joining us today, we've made tremendous progress on their first quarter of 2021.
We initiated patient dosing and affirm our phase II B study or do you are 19 eight in patients with severe alcohol associated hepatitis.
We are pleased with the progress made in opening clinical sites in the U S and with early enrolment in the affirmed trial.
The mechanism of action for D. O on 19 weight was published in the journal of lipid research.
This publication connected the proposed mechanism of action for do you are 19 weight of D. N M. T inhibition with the elevated D N N T levels and hyper methylation of the epigenome reported in liver samples of a H patients.
This helps to explain the efficacy signals, including survival of patients in our phase Iia a H trial.
The FDA approved <unk> for post surgical pain reduction for up to 72 hours after arthroscopic Subacromial decompression.
We are now on discussions with multiple potential pause on we're partners with a goal of enabling the partner to launch the product this year.
In February we further strengthened our financial position by raising $47 8 million of equity and we ended the quarter with over $97 million in cash and investments.
We also appointed two highly successful and experienced pharmaceutical executives to our board.
Now, let's move to our programs.
I'll begin with the mechanism of action for do you weren't at Jewett and how it facilitates the remarkable results we saw on the treatment of alcohol associated hepatitis or H.
Because of the novel nature of how do you want on to weight works I thought it would be helpful to describe some of the science in more detail.
First I want to offer some perspective on the regulation of the epigenome.
Investors in biotechnology are familiar with CRISPR technology.
Christopher cash nine is the DNA editing tool used in gene therapy to insert a single new gene into the DNA of a cell or an organism.
By comparison, a direct we had the first naturally occurring epigenetic regulator in development.
You are now two eight which regulates the expression or the turning on and off more than a thousand genes.
Can you help me understand how exciting this is considered a DNA makes up only a small portion of the nucleus.
The vast majority of nuclear material on a protein that determined what the sell does and are known as the epigenome.
You are not actually not by changing the genetic makeup on the patient, but by repairing the epigenome, which controls the operation of ourselves, allowing them to operate in a manner as they did prior to the peak.
Another way to visualize the importance of day epigenome is to compare it to the software the computer.
You have the same DNA or hardware in every cell on your body.
The same hardware on every cell and think about all the different tissue types and cell types that make up your body.
The reason for this is that the epigenome, which in this example would be the software controls, which genes are expressed on which are not it is effectively the brains of the operation.
Do you are 19, eight acts to repair malfunctioning software without changing the hardware.
Many diseases negatively impacting gmail.
Do you on HOA sued the first molecule in development that repairs, the omni channel restoring its functionality and it has done so to this date without significant side effects.
This is a novel seemingly safer approach to medicine.
Correct with deal on 19 weight is at the cutting edge on this new field.
The proposed mechanism of action for D. Var. In HOA was published in the journal of lipid research.
This article represent substantial work from Dr. <unk> laboratory defining the activity or do you want to wait and epigenomics regulation of stressed assets.
You weren't actuate is an endogenous sulfate <unk> oxy sterile that acts as an epigenetic regulator through the inhibition of DNA methyl transferase D N M piece.
19, eight regulates expression of genes that are associated with many important cell signaling pathways, including cell death, or survival stress or inflammatory responses as well as lipid biosynthesis or energy metabolism.
The publication showed that deal on lightweight down two and inhibits the activity of D. N N T 138, and three D.
D N M. Ts are epigenetic regulating enzymes that add muscle groups to the DNA in a process called DNA methylation.
I'm from escalation at the regulatory or promoter regions of genes depresses gene expression, while the decrease of DNA methylation up regulate gene expression.
Treatment with D O on actuate and stress deposits, that's led to decreased DNA methylation and up regulated expression of more than 1000 genes that are associated with multiple crucial cellular signaling pathways.
These modulations can lead to improved organ function and survival.
Reduced liberty accumulation and inflammation as we have observed at various in vivo animal models and in the promising results from our completed clinical trials and a H and Nash.
Lets focus for a moment on the connection between do you aren't actually its mechanism of action and a H.
In July of 2019, our journey at all published a study in nature Communications.
In this study liver samples from 82 patients with liver disease, including twenty-seven a H patients plus samples from 10 subjects with normal livers works on it.
For clarity the transcriptome is the full range of messenger RNA expressed by in Oregon.
In this study they found that the transcriptome that is the gene transcription patterns or the a H patients were distinctly different from the control subjects and patients with other liver diseases.
Importantly in a H patient the methanol or DNA analysis showed hyperventilation and mark inhibition of the activity of liver enriched transcription factors or less.
Our master regulators of the parasite gene regulation, including those that govern mature Pat cellular function.
The expression of DNA industrial transformations D. N M T. One N D N M T. Three eight well pad to be profoundly increased at a H patients, but not in the control subjects or patients with other liver diseases.
In conclusion deliberate transcript on of a H patients is characterized by decreased activity of less along with hyper methylation or regulatory reasons that their target genes.
The results of this study suggest that modulation of DNA methylation could be a novel therapeutic approach for a H.
In 2017 Hardy T at all published and got a study that evaluated 26 patients with biopsy proven non alcoholic fatty liver disease.
They found hyper methylation at the Pea par gamma promoter of hepatic failure, DNA, which can be detected in the pool of cell free DNA of human plasma.
Summarize why our understanding of Dr. Nitrates mechanism action fits so well with a H Nash and other diseases, we are investigating <unk>.
Genetic dysregulation, such as aberrant DNA methylation can lead to transcript Tobey REIT programming and subsequent cellular dysfunction and has been associated with many acute diseases, such as a H and chronic diseases such as Nash.
The literature I just described shows that both a H N Nash patients had significant hyperventilation.
At important DNA promoter regions on liver cells.
DNA methyl transferase or epigenetic regulator <unk> enzymes that add enough a good state DNA in a process called DNA methylation.
Elevated levels of these D N N Ts are associated with elevated levels of methylation and this was noticed hyper methylation.
For example, the our Jimmy paper shows that a H patients have elevated D N N cheese compared to normal livers and compared to patients with other liver diseases.
And this hyperventilation impacted expression of genes that are master regulators, that's a parasite genes, including those that government mature better cellular function.
The recently published manuscript on deal on Nitrates mechanism of action demonstrated debt as a D. N. M. T inhibitor do you are 98 reduced the level of methylation and stressed hepatocytes, which resulted an upregulation of gene expression and important pathways.
Had been down regulated in the hyper methylated state.
This is why we believe the mechanism of action of D. O. Our 90 day provide strong scientific rationale for evaluating ITI <unk> as a therapeutic agent for a H N for Nash.
It also helps to explain the patient survival and other efficacy signals demonstrated in our in our phase Iia H study as well as the encouraging results from our phase one B Nash trial.
Now to our alcohol associated program for D on actuate.
There are 132000 hospitalizations per year in the United States for a H.
While the majority of age patients are between 40, and 50 years old and also have liver cirrhosis approximately 20 per cent of the age population are in their twenties thirties and may not have cirrhosis.
89% of hospitalized H patients have insurance.
Unfortunately, even prior to the COVID-19 pandemic the incidents of a H was increasing in younger patients.
During the pandemic alcohol consumption in the United States has increased.
There is no approved treatment for a H.
But physicians have available to them today, primarily involves absolutes and supportive care, which includes nutrition and hydration.
The overall mortality for a H is 26% day 28 day, 29% at 90 days and 44% at 180 days.
The high one month mortality rate from the time of diagnosis is similar to some ferocious cancers, such as AML and advanced breast or pancreatic cancers.
Hospitalization costs for a H are more than 50000 per patient in the first year.
Alcoholic liver disease is becoming a leading cause of liver transplant in the United States the cost of a liver transplant exceeds $875000.
We estimate the annual cost of 88 to the U S health care system to be as high at $6 billion.
The average hospital stay for in a H patients is approximately seven days with many staying significantly longer.
And our view on 98 phase two a a H call 14 of the 19 patients were discharged in less than four days after receiving only one IV infusion of <unk> 98.
If you consider my software analogy. This is now easier to understand.
All of the 19 patients in our phase Iia trial survived through the 28 day follow up period of the trial.
Above the 19 patients who are classified as severe based on meld scores.
And 15 of the 19 reclassified a severe based on a scoring system that is specific to a H called mud reach discriminant function score.
Prognostic scores, including Lille and meld as well as bilirubin and other biomarkers were improved compared to baseline in the phase Iia trial.
You are 19, eight was well tolerated by all of the patients and at all doses evaluated in a phase Iia trial, including and also B R. A H patients.
There were no serious drug related adverse events reported in this trial.
Yes.
Now to update on a firm.
Affirm is our ongoing phase <unk> efficacy and safety study. It is a placebo controlled double blind multinational study targeting 300 patients.
The primary endpoint is 90 day survival.
You have to be a granted fast track designation for deal on 98 in the treatment of a H.
We are making great strides with this study we have approximately 20 U S sites up and running and we are pleased with the early enrollment.
We remain on track to expand your free trial to the U K EU and Australia later this year.
Our team is executing at the highest level, especially considering they are working with hospitals that continue to deal with the pandemic.
Our plan is to have 30 to 40 U S sites and 15 to 20 sites across the U K Europe and Australia for a total of between 50 to 60 sites.
The results from the Phase Iia H trial. The fact that survival is the primary endpoint so to your first trial.
The correlation of our understanding of the mechanism of action of deal on an I joist and the epigenomics hyperventilation scene in a H patients all make us optimistic that we are able to demonstrate a robust survival benefit and affirmed this trial may support an NDA filing.
Approval based on a simple trials not uncommon in fact, 37% of new drug approvals between 2005, and 2012 were based on a single pivotal trial and 42 per cent of new drugs launched in the United States. In 2018 were approved based on a single trial.
To summarize the deal on actual H program.
The first trial is well underway for patients with severe a H.
The first trial is a double blind randomized placebo controlled multinational trial targeting 300 patients.
There are three treatment arms, 30 milligrams and 90 milligrams, a day or 19 weight on a placebo arm.
As with the Phase Iia trial patients on your phone trial receive an infusion of EUR 19, eight or placebo on day, one and.
And if they are still on the hospital on day four day receive a second infusion.
The primary endpoint for the trial is 90 day survival.
We have approximately 20 clinical sites actively recruiting patients and are pleased with early patient enrollment.
We expect to have approximately 30 to 40 clinical sites in the United States and 15 to 20 sites across the U K Europe and Australia.
We were granted fast track designation by the FDA for our a H program.
And we expect that if we achieve our robust survival benefit. This study may support an NDA filing.
Yeah.
Next I will update on the deal on activate Nash program.
In 2020, we reported positive results from our Phase one day trial of EUR 19 weighted Nash patients with stage one to three fibrosis.
This was a randomized open label Multicenter study or do you are 98 in Nash patients conducted in the United States.
Do you want to wait with dose orally for 28 consecutive days the patients were followed up for an additional 28 days.
Total of 65 patients completed the study and there were at least 20 patients per dose group.
You are 90 day treatment in this trial resulted in a reduction from baseline of liver enzymes liver fat liver stiffness as measured by imaging answer on lipids.
Many of these reductions were statistically significant.
A statistically significant 24% reduction of plasma triglycerides, what's seen in the 16 patients who had baseline triglyceride levels above 200 milligrams per deciliter.
<unk> 43 per cent of the patients in this trial had at least a 10% reduction in liver fat as measured by MRI P. D F F.
In this group of patients with liver fat there were stiffness liver enzymes concern because were statistically significantly reduced from baseline.
You are 19, eight was well tolerated at all three doses evaluated there were no serious adverse events reported during the study additional data from this trial was presented in a poster at the Aaas All day.
These data demonstrated a reduction in numerous biomarkers from baseline.
These biomarkers moved in concert with the reduction of liver enzymes liver stiffness answer on lipids.
These results together with the continued safety profile for do you on actually supports further evaluation of 98 potential in Nash.
We will be presenting additional data from this trial at an upcoming medical conference and are planning on next steps for Nash.
Next to a pause per program.
This quarter also marked the FDA approval of positive.
<unk> is a novel non opioid sustained release local anesthetic that is approved to produce post surgical analgesia for up to 72 hours following arthroscopic Subacromial decompression.
This approval provides an important new option to orthopedic surgeons and their efforts to minimize opioid use while managing acute pain for up to 72 hours. After this painful surgery.
<unk> is the only approved sustained release bupivacaine product indicated for up to 72 hours of post surgical analgesia from a single administration.
Azimbek contains more bupivacaine than any other approved single dose sustained released bupivacaine product. We believe this may be an important differentiator in the market.
Another potential differentiator for polymer is the ease of application.
On the mers apply directly into the surgical wound the primary source of post surgical pain.
At the end of surgery polymers administered into the Subacromial space under direct arthroscopic visualization, where it continuously releases bupivacaine for 72 hours or more.
FDA approval is based on the pivotal trial arthroscopic Subacromial decompression surgery within attack rotator cuff.
The primary outcome measures will mean pain intensity and total opioid rescue analgesia administered both evaluated over the first 72 hours after surgery versus placebo.
Plasma demonstrated a statistically significant improvement in both primary outcome measures are.
1.3 point reduction in mean pain intensity on a zero to pinpoint pain scale. This represents a 20% reduction in pain and it's physically significant.
This trial also demonstrated at <unk> 67 per cent reduction than IV morphine equivalent rescue opioid use from a median of 12 milligrams in the placebo group two four milligrams in deposit per group.
This is also statistically significant.
The opioid epidemic and our country is responsible for approximately 200 deaths every day.
The objective of the pause on the program is to give healthcare providers and in turn their patients on non opioid alternative proportion operative pain control or at a minimum a way to reduce the amount of opioids required to reduce post surgical pain.
Subacromial decompression or shoulder surgery used to treat and pension syndrome common repetitive use injury that causes pain on the arms raised over the head.
Yes.
There are over 600000 surgeries involving arthroscopic subacromial decompression performed each year in the United States.
We view Subacromial decompression as a beachhead to get parse them out on the market and we believe the opportunity to expand the label to cover a broader group of surgical procedures represents significant upside.
To summarize we believe there are a number of product features that have a potential to differentiate plasma in the market.
Asthma is the only approved sustained release bupivacaine product indicated for up to 72 hours of post surgical analgesia from a single application.
And in the pivotal trial demonstrated a statistically significant reduction in both the level of pain and the use of opioids.
Awesome are contained more bupivacaine net any approved single dose administration controlled release bupivacaine product and according to the investigators on a clinical studies, possibly ease of application will be a welcome benefit.
In addition to these attractive features we believe there are a number of potential avenues available to extend the label to include more surgical indications.
We are in discussions with potential commercial partners for pause on there are plans to use the proceeds from a partnership to help fund our epigenetic program and our flagship product do you want to wait for the treatment of alcohol associated hepatitis.
We are working to put a deal in place in time for a partner to launch this year and expect that the deal would include an upfront license fees and royalties.
This quarter, we also appointed two new members to our board of directors.
Gail Mcdaris MBA.
And Mohammed Azad M D Master of science in M D. A.
These two senior industry veterans bring extensive drug development clinical research and medical affairs experience to our board.
Yes.
In summary, this was an impressive quarter.
With the initiation of dosing in our firm.
With robust clinical site startup and patient enrollment. Additionally, affirmed remains on track to initiate dosing in the UK Europe and Australia later this year.
With approval of <unk> and the commercial partnership process underway.
With the strengthening of our balance sheet and ended the quarter with over $97 million in cash and investments.
With the addition of two highly experienced board members.
But most importantly, with the publication of the mechanism of action for D. Var, 19 weight, which helps explain the efficacy signals, including survival of patients in our phase Iia trial as well as the encouraging results from our phase <unk> Nash trial and provides further scientific rationale for developing do you aren't antibody for the treatment of multiple other acute or.
Injury and chronic diseases.
Many diseases negatively impact the epigenome do you aren't accurate as the first molecule in development that repairs the epigenome restoring its functionality and it has done this debate without significant side effects.
This is a novel seemingly safer approach to medicine and directors at the cutting edge of this new field.
With that we'd now like to take any questions that you may have.
Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Our first question comes from the line of Francois Brisbois with Oppenheimer. Please proceed with your question.
Okay.
Hi, Thanks for taking the questions I just wanted to hit on the affirmed trial here.
I think it can you just remind us in terms of duration, maybe the comparison to gilead previous effort and how similar or different. It is so we can kind of gauge when when do you expect data here.
Yeah, I think we can.
First of all France was good to hear from you but.
No I think we'll have a I know well have a much better sense of all this as we.
Get into the summer months into the summer has been hopefully this is the last wave of the pandemic in the United States and and as we get into Europe, as well and and we get the hospitals. They have a couple of months of abnormal functioning to get a sense of what the enrollment rates will look like when.
When beds become free and that type of thing, but if one looks at the at the Gilead study day they.
They did a trial where they dosed.
100 patients. It was it was different from ours on that.
A couple of fronts first of all day, followed the patients for six months and we're following for three months. They also acquired biopsy, which limits the number of patients and we are not and they also required steroids of all of their patients and we are not we're leaving it to the individual physicians, who are treating and so all of those things.
Should make our enrollment go faster.
If you look at it.
Comparison of if they had a three month duration versus ours. They would have completed their 100 patients in about 13 months, but with all of those things I. Just described it should be much faster and also unfortunately were seeing a lot more of this during <unk>.
During the pandemic, we're seeing more age out there on the age is actually increasing even prior to that.
But I think we'll get we'll be able to give a better sense a sense of it all.
Probably in the summertime when we've got a little more.
Normal T under our belt.
No I understood.
Having said that though where we're really happy with what's going on right now we've got about 20 sites up and running the patient enrollment is going really well, so I'm really happy with where we are now quite quite happy.
Okay. Okay, great interest are switched deposits very quickly.
You talked about a partnership here in terms of the potential for label expansion that could be very important.
Is this something that you would like to figure out before the partnership and then potentially a launch this year or is this something that maybe the partner would actually deal with.
Working on the label expansion afterwards, because I assume it would be hard to get a label expansion is expansion before a partnership and then even launch an ear. What just what are your right. Yeah. Yeah. I think right now one should look at expected. The launch this year would be on the current label as it exists.
But the expansion efforts can take many fronts and there are there is an opportunity for gaming expansion.
And an easier path.
Which could be quicker, but still would occur.
I would think this year I think it would be longer and that and we're starting these processes now at the same time.
In parallel on working on the partnerships and so at some point as the partnership has established then we would handle to the partner.
The interactions with the agency.
Okay, Great and just sneak on one last one here congrats on getting the manuscript published I think that's a lot of people have been waiting for it.
Yeah, obviously, the epigenome is as complex the science behind it is still sure they'll probably an average ages can you just give us an idea of the the reception of the MAA when you've spoken to whether it's the medical community the scientific committee or the investment community.
I think it's been very positive on I'll, let.
Maybe weighted nominal so can can speak to this as well, but yeah. It's it's been we you have different.
Levels of of scientific background with investors do you have some investors who who.
Have a certain perspective, then you'll have others that have more and more depending on their backgrounds right and I think the ones that are debt.
Debt R M D ph D baked.
And their backgrounds are quite impressed with who and it also.
As I tried to allude to in the in our conversation today. It really helps to explain the remarkable results. We saw it can have.
Hum.
They have the results we see that the debt. There's a reason for it and so that I think that does help as well, but I don't know.
<unk>, you want to or Norman speak too.
The reactions you get when you talk to people.
Okay.
On other way she goes bad stomach no no go ahead and on them.
Okay sure.
Let me speak first so that you can correct me afterwards.
But you know.
I think what was really on it.
As an empirical observation the Iia study really students on it was.
Truly remarkable.
It's interesting how this epigenetic changes been percolating through the literature, there's scope for clinicians very new it's.
Less less so for for scientists they've been aware of this and there's a lot more work, but the.
The two papers that Jim mentioned, a really a very important one in Nash and the other one PD or give me Pete on.
Alcohol associated hepatitis and so this really felt it forms the foundation. So it doesn't seem to colleagues and saying are you aware of this paper and are you aware. This is the mechanism of action I'm getting a lot of very positive feedback because people like to understand not just that it works and why it worked.
Yeah.
I will just stop at the south on.
When we talk to the scientific come in they pay all of the medical community about our Magnus of mob action. Many people day once that now we know how to Kosovo rice compound. So for example, when you said many many times we saw people actually have done a.
Landscape of Nash not so much for that age as we know there's not much out on companies out there that are paying H product, but then mashes up that way.
Crowded field you want to come late.
It was competitive field.
Diagram to catalyze different compounds in development and based on their mechanism on boxing frequently no one knows how to place until a deal on nine till eight so now on where that publication manuscript out on proposed the mechanism on batching.
I hope that eventually not one day.
People took place on deal I'm not until eight that's a that's one and then something too after it.
Published adjusted in a shock mountains.
We were told that that this paypal as one of our three most right.
Uh-huh public patients.
Channel I'll start with that.
Pallets are lost about that interest about this.
Bathroom aside epigenetic regulator.
Okay. Thank you very much that's it for me.
Thanks Francois.
Our next question comes from the line of Kristen cluster with Cantor Fitzgerald. Please proceed with your question.
Hi, good afternoon, everybody. Thanks for taking the question.
Sure first one so the president of a S. All day recently discussed that his institution and others are citing 30 to 50 per cent increases in hospitalizations and deaths related to some form of alcohol related liver disease over the past year. So I wanted to ask if this is Ken.
With what you've been hearing from your colleagues across the space and also how are you thinking about this trend moving forward in light of bars, and restaurants, and social gatherings, starting to open and expand across the country.
Great question and I think normally is the best person since he was most recently in practice to address it and it's so involved in setting up this trial.
Thanks Christian.
Yeah, I'd say so.
So as I think you know I was practicing until November of last year, and we have seen a rising incidence of.
All alcohol associated liver disease, both the chronic form where you see cirrhosis in the acute form where you see this alcohol associated hepatitis acute inflammatory condition.
Secondly seemed to spike up from <unk>.
During the COVID-19.
During the pandemic and in a couple of papers have address debt there was keeping in jama.
And one very in a very similar time change in the landscape.
It affected different people differently, and so people with alcohol use disorder, some of them drink less in others drank a lot more.
And the ones, who drank less we don't see of course, but the.
I noticed and then in speaking to my colleagues as we're setting up. This trial. There is just a flood of people with acute alcohol every patient every hospital. We are speaking to are saying the same thing that a hospital is full of these people frequently much much younger groups. So as Jim mentioned.
There's an old so on an older group.
<unk> long standing drinkers, and then a group of young people that have started drink containing recently per drink very heavily.
And.
What you said is exactly true we are just seeing this.
This massive number of people with acute illness that as you know is frequently fatal.
Yeah.
Okay. Thanks, and then trends of that moving forward in light of the country opening up a little bit more.
So you know that that's.
Debt that's purely conjecture on that I think we didn't think we know I think people. We can expect that some people will say thank goodness I can see my friends and will soon become moderate drinkers on one of the dangers is people at home.
Get bored and have a lot of alcohol lying around the house so.
So sometimes social interaction increases the amount of drinking sometimes it decreases I think we will continue to just see something very similar but it's.
On a state it's purely conjecture I don't I don't think we know how it's going to ethical.
Okay.
Let me just add one thing and that is even before the pandemic.
We were just seeing.
Our hospital inpatient service.
More than 50% acute alcohol. It was just it was just unbelievable thing we have never seen anything like it.
Okay. Thank you for that and then has there been any work or will you consider evaluating the specific elevation of D. N N P. One and three a across the AAP age excuse me patients and whether theres any correlation with the disease severity meld score Rubin.
Any other of the key measures you look at.
That's a great question, probably way Chi you might be the best to speak to that one.
Sure.
As you know there's a fun trial, we are not requiring patients to well not required by biopsy. So in order to determine P. I N T one and three a zone.
People have reported in the H patient in 'twenty, one 'twenty two.
So without a liver biopsy.
On that and in order to call on ready to let that mouse gone on there.
Our sponsor is after the treatment is such that it's in the old School. That's one step further and then you'll have two odd.
Logical puff patients and then on.
The cash just published.
Published a paper on like that that a small number of Ah patient sub debt.
Paulo, like what that disease scores and you'll have to validate that animation after that net and tastes and know what that what that does is closet that wont be a pitch on the take on cell from Chile, It's not that goes on for doing that in order to run the trial week.
Basically it would not require a biopsy.
But we'll learn something from it there might be a few patients that a biopsy. As you said there were only 27 at that one study, but still it but it was interesting to learn and very important and I do think eventually someone will do a study in maybe a retrospective and a thousand plus patients and that's what you'll need to really start to draw correlations.
<unk>.
Yeah, just a thought on that that's actually a good point to that Oh, I hope with a public patient after mathnasium on batching and non weather endogenous celebrated the oxy fired on all I thought I saw.
I have a genetic regulator and what that inspire a lot of other labs around the country all around us.
Sure.
GAAP involved into that study outside.
On a a trough on.
Not just that NHI, even just the sales late in the office down on what the epigenetics and that without associated with the human disease on the legacy.
So that's all of that.
Basic clean way on January Kumar data from multiple labs, and many many people would be interested in.
Uh-huh outside that.
Yeah.
I think you're right and I think you made a point that just it's worth emphasizing again that this paper is then.
Screening, there's a lot of interest in this paper and its been highly red and.
Almost at record amounts.
And so to that debt.
We are at the cutting edge and so hopefully others will start to join in and you'll see on expansion of this field of understanding the epigenome so much better.
Okay. Thank you and then the last question that I have is well I know you're focused on your current pipeline and programs, but since you've done a lot of work here around the mechanism of action and you've seen some data to validate that in the clinic. How are you starting to think about future opportunities around do you are 90.
Really in light of these findings.
Yeah, that's a great question and the team is actually.
Spending a lot of time looking at next steps for not only do on edge weighted but we also have.
N S. A R. But the cost structure activity relationship program ongoing as well looking at analogs in the like so we've got a lot of research going on and my expectation is that in the future we will be able to to communicate.
Then on what.
Where we're going next with our epigenetic program, but 90 day. It is a great place to start but.
Not the only place and Theres certainly a multiple.
And then that can be played with this 98 instruments.
Thanks, everyone.
Two questions.
Our next question comes from the line on Arce with H C. Wainwright. Please proceed with your question.
Great. Thanks for taking my questions and good.
On the high.
Congrats on the important milestones reached in this first quarter.
Few questions for me.
First on your H study.
You mentioned you know very early days of course, but already.
Half or more than half of the sites in the U S that you plan to have opened or are now open.
So.
Wondering how your your early enrollment I know you mentioned there were some patients already enrolled as well how is that.
How does that fit with the.
The target at this time with your you know on your internal projections.
And.
Related to that is as you think about.
The challenges are.
And on the successes that you're seeing early on in enrolling patients in the U S hospitals.
What do you think he is going to translate as you expand into sites ex U S.
Well, we're certainly learning a lot on maybe I'll take the second one first and I'll, let let.
Let me just say first I guess I'll start with the first one as far as patient enrollment goes it's going very well.
Actually.
Faster than I had thought we would.
And so I'm really pleased with where we are with patient enrollment and as far as sites in the U S kind of comparing getting started here versus starting in Europe, I know theres a lot of planning going on enormous group. So maybe I'll, let you address that one moment.
Okay.
Yeah. So.
Where physical as Jim says were.
Hum.
I'm very pleased with the rate of enrollment.
Big mistakes people frequently make his thinking in June it will be easy and it's a it's always harder than you expected I think in our case, we're more or less on track.
As anticipated.
The the the centers in the U S are truly are the top centers nearly nearly all of the.
The best known investigators in the best centers are in trials. So I'm very I'm very pleased with a group of investigators.
The.
Europe will be very interesting because some areas are still facing some.
Is some COVID-19 problems, but I think we're hoping that by the time, we start to work there so that the.
A little later this year that will start to see that tailing off with debt with more vaccinate.
And then.
Where we're targeting potentially Australia, as well where debt should be its a little further but distance is no longer on issue with the NAV, we assume with everything and we have very good investigators.
So we're excited about the potential to expand into these different areas and I think the.
<unk> diverse data will make the study that's much better.
Alright, great.
Yes.
And then turning to pause them or I know you mentioned.
Our debt.
You were still comfortable with.
You know the timeline of reaching a collaboration agreement.
Sometime later this year.
I'm wondering what areas of label expansion are under consideration.
Either and <unk> by you and your.
Potential partners.
Well I think if you look at it.
What we've done with the drug right. We did work in both soft tissue and hard tissue soft tissue trial being hernia.
On the hard tissue being Subacromial decompression, and we got approval for <unk> a decompression.
And.
So one would hope then to look to expand into other surgical sites, the Holy Grail would be to have general surgical.
And and.
I stepped back from that would be.
On some areas of soft tissue gone on a surge of those kind of things. So we'll have to see how it all unfolds.
Okay great.
Final question.
Just on <unk>.
Your recent raise now with the cash level that you have.
What are your project is your runway.
Sure I'll, let Mike speak to that.
Sure.
We don't provide cash burn forecast going forward, but.
This most recent quarter the burn was about $7 4 million in last year of about 35 for the year. So certainly have well over two years of cash going forward comfortable to say that.
But like I said, we don't provide specific cash burn forecast.
Alright fair enough. Thanks, Mike appreciate it.
And that would be without a positive deal or out any revenue coming from plasma either so.
Our next question comes from the line of Michael Morabito with short on capital markets. Please proceed with your question.
Okay.
Thanks for taking the questions sure on that.
A little bit deeper into.
The afirma and the potential for a survival benefit I just wanted to know what can you remind us what specifically is communicated to you about the potential ability to file for an NDA if a survival benefit is reached.
Does that change with VITAS drug designation that you've had and does that impact the timing of the one you can see that and just generally.
How how often are you.
All you weighted survival as adjusted DSO day meetings are more frequently.
But if you could just give us a little bit more color there about how how often youre looking at debt.
Sure I'll, let Norman.
And and.
And this is also potentially very cheap the comment I would just say that we do have a D. S. M. B evaluating this and survival is the benefit on that.
On the approach that we're taking right now is that if we see a robust enough survival benefit given the unfortunate circumstance, where you know we're talking 26% mortality at 28 days and 29% at 90 days. So we're talking of a very high rate.
Of.
Danger for these patients.
And many of them are younger and so to be able to to make a difference. There. It's one could then I think that there's a there's a potential.
There would be.
If the data on.
I hope they will be that we would be able to submit an NDA based on on this trial it would be more I and I think the best analogy that I that one can consider for this is more like an oncology product or are you looking at survival benefit.
But on women.
To speak to how often the day SMB needs or how is it how does that work.
On right too.
Michael It's very unlikely you know FDA well not say go ahead and do the try on that will get you approval.
Depend on the results.
But speaking to a very sophisticated advisor.
Looking at the statistical package.
He made the point that if it is as good as the two way data and if you were saving patients lives fda's into lot of a.
Depression, not to give you approval if you have a life saving technology. So we can't promise to that so that we could file after a single trial.
But we are based.
Based on its if it looks like the Iia study then I think it will be a very reasonable.
Very reasonable.
A decision on our part to do that.
Okay.
Great just one follow up you.
You had mentioned.
You know that.
Going back and looking at the Nash program is it possible that we could see initiation of a new Nash trials sometime in the next 12 months and for the data from from the earlier trial that you mentioned that you'll be presenting do you have any idea of when and where you might be presenting that data.
Yes, I believe it was in the press release or is it not Mike.
I always said as a future medical conference.
Because as you know they don't want them too.
Discuss what's going to be in a in a poster or presentation prior to the abstracts getting published so for.
This thing future Medical conference.
Okay. So that's where we sit today.
And.
As far as the next steps and working on the next steps right now in Nash. It's really helpful to have this mechanism. These mechanism of action data on the information out there on the Bakken interaction side because it fits.
Not only very well for H, but also it fits well for Nash and so now we kind of can put <unk> into a circumstance for how it might help.
When we see the data coming up at the new.
When some of these.
Formations release, you'll see that we've got some working more severely ill.
Patients with a net pharmacokinetics and alike and we've learned a lot of interesting information from that so right now we're working with thought leaders in this space on Nash.
Understanding how we want to approach Nash there've been so many trials out there and somebody Unfortunately, so many failed circumstances out there.
I think we need to.
The Carpenter measure twice, we're definitely measuring multiple times in evaluating where would be the best place knowing the mechanism of action for 90 day and knowing the variability that are out there to pick the right patient population on the right study to conduct to get the most information and that's what we're doing now so once we have a good sense of that then we'll we'll talk about it more.
Yeah.
Yeah.
Okay. Thank you very much for taking my questions sure.
Thank you.
There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.
Okay, well I want to thank you all for your for your time today and as always if you have any further questions. Please feel free to give us a call and thank you all and take care.
Goodbye.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.