Q1 2021 Matinas BioPharma Holdings Inc Earnings Call
[music].
Hello, and welcome to the Matan. This Biopharma is Q1, 2021 results conference call and webcast.
At this time all participants are in a listen only mode.
Once you require operator assistance. Please press star zero on your telephone keypad, a question and answer session will follow the formal presentation. As a reminder, this conference is being reported.
It's not my pleasure to turn the call over to Peter Bozzo Investor Relations. Please go ahead.
Thank you Kevin Good morning, everyone and thank you for joining the <unk> Biopharma first quarter 2021 results Conference call. Early this morning, we issued a press release with our financial results along with business updates. This release is available on the Makena Biopharma website under the investors section.
Speaking on today's call will be Jerry Jabbour, Chief Executive Officer, and it keeps Kaczynski Chief Financial Officer. We also have Dart docs have Dr. Terry Ferguson, Chief Medical Officer, and Dr. Terry Mcevoy, Chief Development Officer, who will be available to answer questions. During our Q&A session. At this time I would like to remind our listeners that remarks made during this call may.
State management's intentions hopes beliefs expectations or projections from the future is a forward looking statements and involve risks and uncertainties forward looking statements on this call are made pursuant to the safe Harbor provisions of the Federal Securities laws. These forward looking statements are based on Makena as Biopharma <unk> current expectations and actual results could differ materially as a result, you should.
And not place undue reliance on any forward looking statements.
Some of the factors that could cause actual results to differ materially from those contemplated by such forward looking statements are discussed in the periodic reports <unk> Biopharma files with the Securities Exchange Commission. These documents are available in the investors section of the company's website.
Scc's website, an archive of this call will be posted to the company's website also in the Investor Relations section. Following the company's prepared remarks, we will open the call for a question and answer session I will now turn the call over to Jerry.
Thank you Peter.
Everyone and thank you for taking the time to join US today as we review our 2021 first quarter financial results and provide a brief business update.
At this point in the year, the reporting calendar becomes a bit compressed as we reviewed our 2020 financial results and provided an operational update for short while ago on March 29, and are now providing our first quarter report just 40 days later despite.
Despite the short reporting interval, we continue to be very pleased with our overall progress as we work towards several meaningful catalysts and milestones throughout 2021.
In March we outlined our plan and strategy to identify the right partner for our potential best in class prescription Omega three drug blip DSO. Following the announcement of data from the enhance it head to head trial versus Ameren Corporation's Vascepa, where we once again showed superiority and the ability to achieve.
He did levels by coach or pension or like acid or EPA in the blood, which has been demonstrated to correlate directly with the overall reduction of cardiovascular risk.
The partnership process is ongoing with interested parties coming across the globe, including the U S EU and China.
At the same time, we discussed finding the right partner to advance development of left DSO. We also announced that we were reallocating, our internal resources and expertise fully behind our lipid nano crystal or LNC platform delivery technology.
Following more than two years behind the scenes. It was now time for this proprietary and highly differentiated technology to take center stage.
Ultimately, while we continue to believe that there is great value associated with lip day, so the opportunity to focus on and advance the LNC platform its associated drug candidates and the multitude of possibilities for application across molecules and therapeutic areas is one that we believe will fundamentally.
We changed the perception and trajectory of mid teen this moving forward.
The response from analysts and investors alike has been very positive because people really dig in and evaluate the wealth of data generated to date and better understand the value to be generated moving forward with our LNC platform.
We believe 2021 is going to be a transformational year for our company and our technology and we are committed to realizing the full potential of what could be the most promising drug delivery platform technology to come forward to date.
We are genuinely excited by the opportunities ahead for our LNG platform and have made meaningful progress moving this platform forward since the beginning of 2021 with our own drug candidates as well as promising collaborations with some of the world's leading pharmaceutical companies.
For those of you who may be new to mid teen this into our LNC platform technology, what we're fundamentally talking about with our platform is interest cellular drug delivery.
For many therapeutic categories and related disease treatments, the ability to efficiently and safely deliver molecules across the cell membrane and inside a cell is imperative.
This has come more into focus with recent medical innovation and the advancement of treatments from being chemistry based to more biology based.
How do we effectively protect these complex molecules in the body from one another and then how can we facilitate delivery in such a way so as to avoid toxicities or unintended immune system responses each of which can have very significant and dangerous consequences.
Our LNC platform, which we believe can be applied to both small and large molecule such as gene therapy.
Also has flexibility for route of administration, meaning it can be used to deliver drugs orally intravenously, and even through inhalation or intra nasally.
We continue to believe that the unique capabilities of our LNG formulations to mimic envelope to viruses differentiate our technology from any other available intracellular delivery technology being applied today.
There are a few key areas I would like to highlight this morning that illustrate the progress we have made with our LNC platform.
First patient enrollment in cohort two of the second part of the enact study with <unk> 22, or three in Cryptococcal meningitis has reached approximately 70% with D. S. M. B review and cohort progression anticipated in the third quarter of 2021.
The SMB evaluation of full safety and efficacy data from cohort two provides a near term opportunity to further validate the LNC platform and highlight its ability to facilitate oral bioavailability and then carry molecules effectively across the blood brain barrier and combating deadly invasive fungal infections.
Unfortunately, we know that even with treatment there has historically been more than the 30% to 40% mortality rate for patients infected with Cryptococcal meningitis.
To date, however, the survival rate for patients on Matt 22 O. Three is exceeding expectations. We view. This is extremely encouraging and a good indication that Matt 22, or three is having the intended effect for patients.
Recall, the second part of an act, which is designed to assess both safety and efficacy of map 22, or three began enrolling patients in July of 2020 in October of 2020, the independent D. S. M. B completed a prespecified review of the first cohort and unanimously recommended progression into the second cohort of patients which.
Is where we are now.
We view cohort two is extremely important for several reasons first increasing the duration of oral mat 22 or three during the induction phase to 12 days should provide more detailed insight on the efficacy of map 22 or three in this vulnerable patient population.
We would expect to see continued improvement and reduction of CFS CSF bungled counts.
And the achievement of sterility without rebound during maintenance.
This would be additional validation that Matt 22, or three is effectively crossing the blood brain barrier and treating this deadly infection.
Second following day SMB evaluation of the data from cohort two and our own internal review, we anticipate meeting with FDA to allow them to review all data generated to date, and then act and to discuss opportunities to potentially accelerate development of map 22 O three through the limited population pathway for anti <unk>.
Bacterial and antifungal drugs more commonly referred to as the <unk> pathway.
This pathway was created to encourage and facilitate the development and approval of certain antibacterial and antifungal drugs to treat serious or life threatening infections in limited populations of patients with unmet needs.
We believe that Mad 'twenty, two or three is an ideal candidate for this pathway and we look forward to our discussions with the agency given the design of an act. We believe there are opportunities for a variety of indications here with a potential early approval step down therapy from IV Amphotericin B.
Recent M&A activity in the ENT and anti infective therapy space, such as Pfizer is a recent acquisition of amplexus illustrate the continued high unmet medical need for new and novel approaches to successfully treating life, threatening fungal or bacterial and viral infections.
And the COVID-19 pandemic has also emphasize the devastating impact of infectious diseases, highlighting the need for new therapies as well we are confident that as we advance our drug candidates they will receive more and more attention from patients kols and interested pharmaceutical partners.
Regarding our second LNC platform drug, Matt 20, 501, and with the support and validation from the cystic fibrosis Foundation, we have advanced this important drug into preclinical toxicology and efficacy studies with the goal of completing a phase one single ascending dose pharmacokinetic study in healthy volunteers by.
The end of 2021.
Thereafter, we expect to initiate a phase II program in CF patients with non tuberculosis mycobacteria lung infections.
Our goal is to develop the first oral aminoglycoside. This could essentially transformed the use of this important class of drugs. Our initial target is an indication for the treatment of non tuberculosis mycobacteria lung infections, followed by potential indication to treat gram negative bacterial infections.
We believe that mad twenty-five of one's ability to orally deliver high levels of amikacin directly to the lung and without use limiting toxicity distinguishes it from all available therapies and could provide an important solution for patients and physicians.
We are encouraged by this success it instead as seen with its inhaled amikacin Amikacin Erra case, despite its black box safety warning and very limited indication.
Our expectation is that our oral amikacin, given the benefits of our LNC technology could eliminate safety concerns and be positioned for a much broader label.
Regarding our collaborations we continue to make important progress in expanding the utilization of the LNC platform through our work with Genentech and with the National Institute of allergy and infectious diseases, and creating an oral formulation of gilead from death severe as.
As we discussed previously Genentech recently extended its collaboration with <unk> and then the first quarter of this year, we said Nia I D multiple potential oral formulations of room debt severe to begin evaluation and various COVID-19 in vitro models, we expect to be in a position to evaluate those data from the.
These early in vitro studies shortly although we are extremely limited through agreement and what we can say about this collaborative work we are confident in our technology and that ultimately we will be in position to comment more fully.
During the quarter, we continued to invest in our organization by recruiting and hiring six new employees predominantly focused on delivering on our mission of advancing our LNG platform. Most of these individuals have been focused on drug delivery and advanced science and we'll be working closely with Dr. Lu and Dr. Mannino.
As we look to expand the LNC platform into other innovative areas, such as messenger RNA and gene therapy.
Finally, we are also excited to announce that <unk> will be hosting its first virtual R&D day on June 17th 2021.
To provide an overview of our of our LNG platform, including a detailed discussions on the platform's clinical programs.
If you would like to virtually attend our presentation you will be able to register at the investors section of our website in the coming days.
Looking ahead, I see a more focused organization centering our attention and resources on our LNG platform. Unlike lipid nanoparticles and viral vectors, where multiple companies are working in a crowded competitive environments and with technology limitations no. Other company is working with phospholipid based lipid nano crystal if.
We continue to invest in extending the intellectual property surrounding this potentially disruptive technology and to further demonstrating how lnc's can and should be viewed as a potentially superior drug delivery solution to both lipid nanoparticles and viral vectors I would now like to turn the call over to Keith Kucinski our CFO.
Who will discuss our financial results.
Thanks, Gerry and good morning, everyone.
Turning now to our financial results.
Cash cash equivalents and marketable securities at March 31st 2021 were approximately $67 million.
Compared to $58 $7 million at December 31st 2020.
The company reported a net loss attributable to common shareholders of approximately $5 $2 million or three cents per basic and diluted share.
These results are identical to those of the first quarter of last year.
Research and development expenses were approximately $3 $2 million in the first quarter of 2021 compared to approximately $4 $1 million in the same quarter of 2020.
The decrease was due primarily to the completion of the enhancements study enhance it study of lip DSO in January 2021.
General and administrative expenses were approximately $3 $1 million in the first quarter of 2021 compared to $2.3 million in the same period of 2020.
The increase was primarily due to higher compensation expense related to the exercise of stock options. During the first corner of this year.
Finally pursuant to our at the market sales agreement with BT I G. The company sold approximately 3 million shares of its common stock during the first quarter of 2021 generating net proceeds of approximately $5.6 million.
Based on current projections management believes that cash on hand is sufficient to fund operations into 2024.
I will now turn the call back over to Gerry.
Thanks, Keith in summary, 2021 represents a transformational year from a teen is because we focus our attention and resources on our LNC platform and anticipate important and meaningful data from the enact trial in the near term.
That combined with progress on about 20, 501, and in our collaborations and focus on expanding the utilization of our potentially disruptive delivery technology. We believe we are positioned between us and our LNG platform for significant growth.
The maturation of our LNC technology has enabled us to move it into the spotlight and we look forward to continuing to share our progress with you during 2021 and beyond we move forward from a strong financial position and committed to creating significant value for our shareholders with that we have reached the conclusion of our prepared remarks.
And I will turn the call over to the operator for a question and answer session.
Thank you well now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is it. The question Hugh you made price start to if you'd like to move your question from the queue.
For participants using speaker equipment may be necessary to pick up per handset before pressing star one.
Our first question today is coming from Bert Hazlett.
From BTG Your line is now live.
Thank you congratulations on the continued progress Jerry just on 22 O. Three initially do you have any sense of how much data might be necessary for you to really enthused enthusiastically pursue.
<unk> kind of an L pad more rapid advance pathway and then I have a strategic question after that.
Yes, Bert thanks for the thanks for the question. It's a good one but it's one that comes with some uncertainty right because at the end of the day, you're you're talking about a pathway that's relatively new within F. D. A.
But at the same time, one that has received increased attention and emphasis from the agency in terms of <unk>.
<unk> companies to drive these drops forward. So in terms of magnitude of data I don't know.
That that's really well understood, but what we do know is that the enact trial really represents a great opportunity in a very vulnerable patient population to highlight the attributes of 'twenty two or three both from a safety and efficacy perspective and uniquely. It also gives the agency the opportunity to our value.
Matt 22, or three both from a step down therapy perspective, and an induction. So in those discussions with FDA. What we will be focused on is really highlighting the potential for Matt 22, or three and both of those areas and the first two cohorts of enact really.
We highlight the ability to effectively be used as a step down therapy and the next two cohorts really will focus on showing the ability of Matt 'twenty, two or three as induction. Although you certainly can draw.
Some conclusions from the first two cohorts about the overall efficacy profile, Matt 22 O. Three we're not going to be in position then to have to force. The agency to look at the whole and so we think that that is going to give us an opportunity for them to really evaluate and perhaps accelerate what a what.
Maintenance or consolidation or a step down approval will look like followed quickly by an approval for four induction therapy. So we think that's a little bit unique here and.
And given the fact that you're dealing with a deadly fungal infection in patients who are likely in the hospital as a result stepped down as a natural place to begin and one that we think Walt require.
A tremendous amount of patients to be able to get FDA comfortable that this is an important solution for patients.
Okay. Thank you just a quick follow on on the 'twenty, two or three comments as we get through cohort two.
Assuming progression there do you expect to provide a little more data in terms of the the results for the first two cohorts of will we get that or will we just potentially get a <unk>.
Regression to cohort three and beyond.
Yeah. That's a good question and an important one because when we announced cohort progression. The first time, that's really all we did was we relied sort of on the independence of the D. S. M B and because it was only 10 patients we rarely just announced cohort progression that plant for cohort two is going to be different so as of now.
We anticipate that we will be sharing data.
From both of the cohorts.
Should the day SMB recommend progression and we feel good about that and.
And we would release that data, we would likely have a call around that data we would involve the principal investigator and so we will be able to go into much more detail in terms of what we're actually seeing in these patients cohort two is four times the size of cohort one so you're really starting to get.
A meaningful amount of data and we think it's important that people have the opportunity to evaluate that.
In and of itself so that would be our plan for the third quarter timeframe.
Thanks, looking forward to that and then with regard to just a bigger picture strategy.
Or or programs like 20, 501, Jerry ones that you think that you will continue on to fruition just.
Given some of the successes that you've mentioned that in this space with various companies.
Or do you expect this to be largely a partnership strategy in the near term like but maybe some of the development deals you have with Gilead and others.
Thoughts on yes, it's a very fair. It's a very fair question, Yes. It's a fair question, because I think with our platform technology Youre seeing that.
Breadth of possible applications here leads you will lead you down a lot of different pathways. We continue to believe that the infectious disease area provides a great opportunity.
To demonstrate and validate the the LNC platform technology, So 22, or three and twenty-five of one of our very important products for us, but we do believe that they could be important products for larger companies that already have commercialization organizations intact and I think pfizer's recent acquisition of <unk>.
<unk> highlights that for for these products that are differentiated and have an impact in infectious diseases. There is large demand.
And so our goal is to advance 22 O three and twenty-five all one two points, where they then become attractive to third parties that doesn't mean, we have to decide today you know on May 10.
Whether we're gonna go it alone or we're going to have opportunities to partner, we think there will be opportunities there and that's going to do a couple of things for us. If there are the right opportunities with the right value proposition, both inside and outside the U S. We will partner and and sometimes you don't have to give away. The whole thing you can keep some reits.
For ourselves to co promote or do other things, but if we are able to find partners and generate value through those sort of licensing arrangements that does give us additional resources to then dive more fully into these more innovative areas like gene therapy like messenger RNA, where we.
Believe we can become very very impactful.
And so.
This is a multi pronged strategy.
Having these early clinical stage candidates give us the opportunity to generate meaningful data, which could translate into partnerships.
But it's it's kind of a good position to be in because realistically our work in gene therapy Messenger RNA things that we're doing with genentech the genentech, they're earlier stage.
By advancing our infectious disease candidates, we are allowing then our work in gene therapy for example to mature a little bit so the future exact future remains to be seen but we do think there will be demand for both an oral amikacin and an oral amphotericin.
By large pharma.
Great. Thanks, looking forward to the progress thank you.
Thank you. Our next question today is coming from Yasmin Rahimi from Piper Sandler Your line is now live.
Hi team. Thank you so much for sharing with us all the updates.
So you had only.
One question and the question is related to the deep, though I would love to hear your thoughts on sort of.
What type of key questions are coming up as Youre, having discussions with partners.
And whether whether how how mature those discussions are ongoing.
And as you noted in your press release thinking about.
More partners.
Is there a strategy why it makes more sense to hand that over to multiple people instead of one global partner that could actually.
Develop and commercialize it so I would just love to hear a little bit more granular detail on those discussions and when we should be expecting some insight and thank you for taking my question.
Great. Yes. Thank you for the question because we don't want lift do you sort of get lost in this and it's been an interesting beginning to this process. Because there has there have been expressions of interest across the globe and it's not surprising given the expansion of Vascepa is certainly an approval in EU and China and the growing problem of cardiovascular.
<unk> disease for example in China that there is interest there it's too early to tell whether this will be a situation whether for one global partner to take over development or it'll be more regionalized.
But the key questions.
Our our involving things like IP like supply chain and.
And commercial differentiation, specifically when you're talking about the U S and we feel like we have good answers to each of those three questions you know to take them in reverse order.
For commercialization in the U S.
As a differentiated product and so whether you're talking about a party that wants to push this into S. H T G or take on cardiovascular risk reduction we've shown not once but twice how this drug is differentiated from vascepa and any generic copy.
And as more and more comes out from the reduce it trial about the importance of EPA levels you know we we.
We saw recently for example.
Doctor part due in non their analysis, where you start to see real levels of impact on cardiovascular risk. When you achieve an EPA blood level of 104, well you know we saw and enhance it the ability to get all the way to $1 43, and if you break down our enhance it trial.
Even further there's a market difference between.
Lip dsos ability to generate levels above 104, and vascepa is ability to generate levels above 104. So from the commercial perspective, we think that there across the globe. If you think about IP, just a very different situation from vascepa.
Our our patents relate and directly kind of comment on deep.
Compositions, comprising DPA and we will have the benefit of exclusivity in the U S and potentially the EU that amarin was never really fully.
It was never fully couldn't avail themselves of those and then from a supply chain again, and we feel good about where this is relative to development.
It's a complex supply chain, but one that we have good expertise in and we think that a partner can step in and take it over pretty pretty easily. So it's going to be a few months, though he asked me and I think people are also looking forward to some additional data announcements at ACC and a weak here, let's see some more data from both reduce it in <unk>.
Strength in and how that sort of fits and provides additional pieces to the puzzle. So I would expect as we get into the third and fourth quarter that we would have more meaningful updates here, but to date sort of very pleased with the interest.
Certainly given some of the uncertainty that amarin spaced in the beginning of this year. It does not seem to have impacted people's desire to get in.
And really look at and evaluate everything about Lyft DSO.
Thank you Jerry.
Okay.
Thank you as a reminder, that star one to be placed in the question. Hugh Our next question is coming from Greg Fraser from true Securities. Your line is now live.
Good morning, it's Greg Fraser on for Gregg Gilbert.
On that 25 O. One should we think about the sequence of development is getting into proof of concept data and can't first and then you consider other indications like gram negative bacterial infections or can you move forward with the Gram negative program before you add efficacy data in N T M.
Hi, Greg Thanks, that's a very important question.
'cause, it's not something that that needs to be done one after the other but there is a certain foundation that needs to be built so part of the work that we're doing and that is being supported by the cystic fibrosis Foundation is establishing that short and long term tox.
That would be supportive of going into.
Programs targeting Gram negative bacterial infections. So you don't have to we're not going to necessarily go through the process.
Going into phase II and phase III, MTM, and then coming back to Gram negative, but we do need to get through that foundation that shows.
That we continue to have a safe product one that can have an effect certainly on an LTM, but it's really those 28 day and 90 day Tox studies that will provide support.
For any number of programs.
That that we want to undertake and so as we get through those as we get through a phase one in healthy volunteers. Then we will began and we have an interaction with FDA around those data then we will be able to better forecast, how we may be able to do some of these things concurrently and remember there is still as an opportunity.
That has been expressed by the cystic fibrosis foundation to continue to be a key supporter.
Of that 25 or one in MTM. So just because we would be doing things in parallel concurrently doesn't necessarily mean that we will be doubling our need for internal resources. So building. The foundation in 2021, and then it can go off and a number of different directions at the same time.
Got it Thats helpful.
And then how should we think about R&D spend this year and next year, assuming that continues and twenty-five I wanted dances into phase two next year.
Yeah. It remains relatively consistent Greg when you look at it year over year basis, especially with enact since that trial is financially supported by the National Institutes of health. Our cost you know obligations. There really are from certainly from a supply perspective, and then from an oversight perspective in meeting our obligations as a sponsor.
So they don't change meaningfully where they could change is dependent on what we would discuss with the FDA. For example on al Pat approval are there adjustments that can be made or or will we need some patients in the U S. For example.
For 'twenty, two or three the tradeoff there would be a much earlier approval. So that's something that I think we would trade every day and on 25 one.
That will change, but again it remains sort of contingent on on what support we get from the cystic fibrosis Foundation, so year over year right now the way, we forecast things it looks pretty similar.
But that could change depending on regulatory interactions and a trade off for an earlier commercial opportunity.
Got it thanks very much.
Thank you we've reached out of our question and answer session I would like to turn the floor back over to management for any further or closing comments.
Thanks, Kevin and thanks to everyone for joining US today. We appreciate your continued interest in <unk> and the entire team here looks forward to providing you with updates on our future progress have a great day.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.