Q1 2021 Salarius Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby and thank you for your patience again, ladies and gentlemen, todays conference is scheduled to begin shortly the skin.
The standby and thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to the quarter once when the 'twenty one for Larry It's Pharmaceuticals earnings webcast and conference call. 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, if you should need to.
I just thought ex the system the confluence of these press Star Zero I would now like to turn the conference how about you hosted the Mr. Jason Rando of the brand strategy of adviser Sir. Please go ahead.
Yes.
Good afternoon, everyone and thank you for joining Soliris Pharmaceuticals, 2021 first quarter.
The financial and corporate results call.
Earlier this afternoon, Soliris Pharmaceuticals issued a press release detailing its financial results for the three months.
Ended March 31, 2021, which we encourage listeners to read the.
The press release can be found in the news section of Soliris farmer dotcom.
Flourished also filed the 10-K this afternoon, which is available on Soliris for <unk> Dot Gov Dot com and SEC's Dot Gov.
Before beginning todays call I would like to make the following statements.
Today, we will be making certain forward looking statements about operating metrics future expectations plans events and circumstances income.
Moving statements about our strategy future operations, and the development and potential of effectiveness of our lead investigational drug candidate for Checkmate <unk> debt.
And our expectations regarding our capital allocation and cash resources.
These statements are based on current expectations and you should not place undue reliance on the statements.
Actual results may differ materially due to our risks and uncertainties, including those detailed in the risk factors section of Soliris Pharmaceuticals, 10-K filed with the SEC and other filings, we make with the SEC from time to time.
Soliris pharmaceuticals disclaims any obligation to update the information contained in these forward looking statements.
As a result of the new information future events or otherwise.
With us on today's call is David Arthur.
C E O of Soliris Pharmaceuticals, who will provide an update on soliris as corporate and clinical achievements during the first quarter.
And the decision for the future as well as Mark Rosenblum, CFO, who will review of Soliris since the first quarter financial results.
David Please go ahead.
Thank you, Jason and thank you to everyone joining our conference call, including those of you joining us for the first time.
This is an exciting time for Soliris. The first quarter of 2021 and recent weeks have been a period of substantial activity is hilarious accomplished several key milestones, including expanding our clinical programs for our lead drug candidates check with them staff and strengthening our balance sheet.
Before we review our financial results and business highlights I would like to take a moment to describe soliris to individuals joining us for the first time.
Soliris is a clinical stage biopharmaceutical company developing potential new medicines for patients with pediatric cancers.
Solid tumors and other cancers.
Hilarious was founded with technology from the University of Utah, Huntsman Cancer Institute, and our lead drug candidate cycle of them Stat is a reversible inhibitor of the LSD one enzyme which is believed to play a key role of numerous cancers caused by dis regulated gene expression.
Now for those of US who are not scientists dysregulation of gene expression can be described as misreading the recipe.
The right ingredients for all of Dana except the quantity of the ingredients is totally incorrect or E of ingredients are combined in the wall of water when that occurs in the context of cells misreading, the recipe or misreading of the genetic code can lead the cancer development and progression.
We believe sexual attempt that can address the dysregulation or said another way correct. The misreading of the recipe.
With that as background, let's discuss our recent accomplishments we.
We completed the dose escalation phase of the phase one two clinical trial in Ewing sarcoma.
Determined circle of dumped that safety profile confirmed that we can reach sector than the stat plasma concentration levels of both.
Love.
Efficacy was observed in the animal and cell models, and we established the recommended phase II dose.
We believe it was a good first quarter.
Dose escalation across the Ewing and advanced solid tumor trials.
We believe we saw that circle of them stat demonstrated early signs of drug activity in patients with ewing's sarcoma and.
In additional sarcomas the share a similar biology.
These additional sarcomas are also referred to as viewing related sarcomas or S. E T rearranged sarcomas.
As a result, and as yet another milestone we initiated the dose expansion stage of the clinical trial, which we expanded to include three distinct patient populations.
Moving sarcoma, Myxoid LIFO sarcoma and other F T rearrange the Congress with each of these three patient groups, we have separate potential regulatory paths to approval.
Potential for accelerated regulatory approval and a distinct commercial opportunity depending of course on the outcome of clinical trials.
These patient groups represent speed the market for.
First prong in our development strategy, which I will discuss more later in the call.
Moreover, Moreover building upon the preliminary safety and efficacy data observed during the dose escalation stage of the trial, we have amended the trial to explore the use of secular dumps that in combination with chemotherapy agents Tobin T K.
Can the cyclophosphamide.
A common second or third line treatment for Ewing's sarcoma.
I want to pause here and I want to highlight this trial of amendment or change because we believe this is an important development and I would like to discuss this in more detail.
This change makes it easier for physicians to utilize circlet them staff earlier in the treatment continuum and potentially improve outcomes for you in sarcoma patients.
Because of Coca <unk> and cyclophosphamide are routinely administered as second or third line therapy. We believe the addition of several of them staff to that combination will integrate several of them step into the existing treatment regimen for human patients earlier.
And increase the number of <unk> patients, who can receive stuck with them of staff.
Treating ewing's sarcoma patients the sector them stat in combination to a with a common chemotherapy as a second or third line treatment is in Stark contrast to the Ewing trials dose escalation stage.
Where patients were treated with single agent cycle of them stat, meaning without any other anti cancer therapy.
Additionally, and also in Stark contrast.
Patients treated during dose escalation were treated later in the continuum of care as in patients received two to 12.
Prior lines of therapy before receiving several of them stack versus the.
The new amended protocol, where patients only received one or two prior lines of therapy before receiving cycle of them staff.
In summary, we are expanding the addressable U S population and now treating patients earlier in the continuum of care with the combination chemotherapy, which we believe will result in improved patient outcomes.
In addition to increasingly addressable human patient population. The trial expansion includes new patient populations of the S. E T rearranged sarcoma patients, including as I mentioned earlier, Myxoid LIFO sarcoma, and other <unk> rearrange sarcoma patients, which also significantly.
Increases several of them staff overall potential addressable market.
As you can see.
Compared to a year ago.
Our clinical activities have expanded dramatically.
What's more celerity substantially strengthened its capital position by completing a series of financial transactions. During the first quarter debt raised more than $30 million. We currently have the capital resources to fund our current clinical trials through completion and beyond.
While at the same time developing several of them stat in larger commercial markets, including Hematological cancers, and other potential therapy combinations.
At this moment I would like to hand, the call to our CFO, Mark Rosenblum, who will speak to our first quarter financial results and the recently completed transactions that have provided the soliris with over $36 million in cash and cash equivalents.
Mark. Please go ahead.
David.
For the three months period ended March 31, 2021, Solaris reported a net loss of one $9 million or six cents per basic and diluted share.
Compared to a net loss of $2 1 million or <unk> 22 cents per share in the first quarter of 2020.
The loss from operations before other income for the three months ended March 31, 2021 decreased by $6 million compared to the loss from operations of $2 $4 million for the same period for the same period last year, which was primarily due.
Due to lower general and administrative costs that more than offset an increase in research and development costs.
Higher research and development costs resulted from increases in personnel laboratory of expenses and drug manufacturing costs.
The decrease in general and administrative costs resulted from lower professional fees and lower travel expenses.
Professional fees in 2020, largely dealt with our onetime transformation into a public company during late 2019 and continuing into early 2020.
Lower travel expenses are a result of the COVID-19 measures.
During the first quarter.
Of this year share soliris completed of $23 million public offering.
And at the market offering for the maximum amount of $6 $3 million. Additionally, the company took in approximately.
$1 $5 million from warrant exercises during the period and received $900000 from the cancer Prevention and Research Institute of Texas also known as secret.
Collectively this amounts to over $31 $31 million and gross cash receipts in the first quarter.
As of March 31.
2021, total cash cash equivalents and restricted cash totaled $36 6 million.
Compared to $11 1 million at December 31, 2020.
And $9 6 million on March 31, 2020.
Our original $18 $7 million secret grant dating back to 2016 contains remaining funds totaling $4 8 million of which $4 2 million is listed as the current receivable on our current balance sheet.
We believe that our current cash position, our strongest cash position to date will be sufficient to fund our operations for the completion of our current clinical trials in 2022 and beyond with that I'll return the call to David.
Thank you Mark.
As I mentioned, often our ultimate goal is to maximize the potential of cycle of them stat.
And by doing so make a difference from the lives of patients and their families fighting cancers with limited treatment options.
Expanding circle of them stat into new and larger markets is the second prong of our two pronged development strategy of.
Speed the market and expand the market to.
To that end, we hope by mid 2021 to have up to three total separate and active clinical trials underway evaluating several of them stat and up to five distinct patient populations and we are planning for these trials to explore several of them that not only of single age.
<unk> therapy, but also as a component in up to three different combination therapies.
As discussed earlier, completing the dose escalation stage of arguing trial was a major accomplishment and we believe that the trial achieved all key endpoints of established at its initiation.
Including demonstrating early evidence of circle of them staff anti tumor activity.
Full findings will be disclosed next month during a poster session.
And poster discussion at the 2021 annual meeting of the American Society of clinical oncology also known as <unk>.
Among the clinical evidence gathered so far is the refractory Ewing sarcoma patients, we demonstrated a 75% reduction.
75% reduction.
In the prospectively defined some of target lesions after.
After treatment with single agent circle of them staff.
Over a six cycle or 168 day span.
Unfortunately, despite this tumor shrinkage, a new TARP non target lesion appeared at the end of cycle two or after the 56 days.
The resulting in a classification of progressive disease as defined by the response evaluation criteria in solid tumors version one one.
Nevertheless, we believe this data demonstrates the preliminary single agent drug activity.
What makes this observation, especially encouraging is that relapsed or refractory Ewing sarcoma is exceedingly difficult to treat.
And the.
The fact that this patient received no other anticancer treatment, while taking single agent cycle of them staff.
When net clinical evidence is considered in the context of.
Of Soliris now treating new patients second and third line.
With circle of them stack in combination with total <unk> and cyclophosphamide, we believe there is potential for positive patient outcomes.
We believe this potential is also supported by our internal preclinical research demonstrating that in Ewing sarcoma cell lines cycle of them Stat has a synergistic effect when combined with total TTM and sacrifice from cyclophosphamide.
In addition to the Ewing clinical evidence, we also observed encouraging clinical data from a small subset of patients with relapsed or refractory F. E. T. We arranged sarcomas who were enrolled in the Soliris advanced solid tumor trial.
All patients in the small subset demonstrated indications of single agent drug activity.
Spite being treated of dose levels below the recommended phase two dose.
This data along with patient data from other cancer types will also be presented next month during an ESCO poster sessions.
When summarized Soliris is now actively enrolling up to 30 Ewing sarcoma patients to be treated with <unk> of them stats in combination with Coca tea kind of cyclophosphamide and up to 30 patients with Myxoid LIFO sarcoma and other ewing related for MPT rearrange sarcoma to be treated with <unk>.
All of them that single agent therapy.
We expect safety and efficacy data readouts in 2022.
Soliris has also completed much of the necessary work to begin clinical trials in additional cancer indications, such as gynecological cancers, and hematologic cancers, and we look forward to announcing additional trials in the near future. We believe there is substantial unexplored potential ahead for <unk> staff.
And other underserved cancers, including areas that we have previously discussed such as the use of sexual of them stat in combination with checkpoint inhibitors of <unk>.
I said earlier today. These are exciting times for Soliris and we're looking forward to what the future holds.
I'd now like to take questions joining me for the Q&A portion of this call is Mark Rosenblum CFO.
Dr. Nadeem Mirza senior Vice President of clinical development and Dr. Daniela <unk> director of corporate development with that I'll now open the call to your questions.
Thank you ladies and gentlemen, if you have questions at this time. Please press. The Star then the number one key on your Touchtone telephone you for your question has been answered or you wish to remove yourself from the queue. Please spread the husky the standby, while we compile the Q&A losses.
The first question comes from the line of a day is now from benchmark. Your line is now open you may ask your question.
Hi, good afternoon. Thank you for taking my questions.
So I have a first question is on the <unk>. So we're going to see abstracts and about one week from now and just wanted to ask what to expect from the ESCO presentations I think the press release says initial efficacy signals from the relapses in sarcoma and preliminary efficacy for.
From solid tumor.
Tumor trials for our we're going to see the actual overall response numbers or this is going to be more of like a case study.
One is the this is this is David good to hear from you hope you're doing well thanks for the question.
So the abstract when it's released as you know as is the short summary of the findings.
What I will share with you is we have submitted three posters.
Along with two recorded presentations.
<unk>.
And the posters for the Ewing sarcoma, a dose escalation trial and the advanced solid tumor dose escalation trial contain.
Of all of the information that I think you are looking for it we'll have an update on safety.
And the.
The most common adverse events it will have a swimmer plot of both trials identifying length of.
The treatment and.
Any adjustments to dosage.
It will also have the.
The response data that you would expect to see based on resist criteria and also other assessments of drug activity that that we think we're relevant so I believe that the the data that you're looking for is going to be in the poster sessions.
And.
And you'll be.
Youll be able to pay.
Access that as as it becomes available and I apologize Aden.
I got my my name's confused so anyway. It's 80, it's good to hear from me. Thanks for the question.
<unk>.
I think the information you're looking for is coming up shortly here of ESCO.
Okay sure. Thank you.
Another question.
I have is about the potential of <unk> to clear them starting of the hematologic malignancies.
As you probably know horizon.
You bet I'm, Scott <unk>, the one inhibitor.
Sure.
86% of our RMP, 68% complete responses long duration of responses in AML, but given this result, so for in other areas. The one inhibitor what does it tell us about the potential success of <unk> in Mds and CMO based on the clinical trials. The Gulf. These are the indications that for you.
The.
Appears to be pursuing.
What would be the competitive advantage of the cleanup Scott.
In the hematologic malignancy and what it makes sense of course, the equivalence with the study.
The pursue AML as well given that both horizon of a model are going out of the AML.
So a great question and I'm going to give a short answer and then turn it over to Daniela. The short answer is yes, we have seen some of those results and we believe <unk>.
Has real potential in pursuing hematologic cancers, and we have plans to to enter the clinic.
In the Hematological cancer space, what I'd like to do is ask Daniela Dr. Daniel of Santee Esteban two to comment on a little more detail and the a little bit about the science and why we believe we're going to be successful.
Yeah. Thank you for the question.
So we're very excited to enter and for the heme space. As you said, it's been well validated by others that have let's see one inhibitor.
For instance, horizon.
As you know the cycle against that is differentiated from the other Alex do you want inhibitor currently in clinical trials.
That it is the reversible <unk> inhibitor and the interacts with all the different location of Dallas gigawatt protein.
So we think that both of those factors will contribute to us having an advantage in terms of.
The safety profile.
Where other Ellis B, one inhibitors, often run into Hematological toxicity.
When given in combination with Azacitidine youll have overlapping toxicity, we have not seen that with <unk> and our clinical trials to date, yet and we will be revealing more safety data of course during the <unk> conference.
We think that will give us an advantage.
And Mechanistically the reason why Alex do you want inhibition is.
The very attractive for any indication is because of the inhibitor of the ability to disrupt LSD one from associating with certain transcriptional rhopressa and we've seen that we're able to.
All of that disruption effect with tech what out of that so the.
For the rationale for efficacy is there and the advantage of Tecogen statin has in terms of not having significant hematological toxicity is also there.
So those are the reasons, we're excited too to enter that space.
Okay. Thank you very much I appreciate your answers.
For the last question of half.
Guarding cichlid them Scott.
<unk> show opportunity.
CNS.
As you know probably that horizon published first in human data.
Albert I was the one inhibitor and other inhibitor.
The them stop in the personnel of the disorders CNS indications of the briefing.
<unk> has any potential in CNS in EPS.
Yes would you plan to out license the specific CNS indication of course, the credit stats.
<unk> that's of great.
<unk>.
We have currently to this point not proceed.
Extensive exploration in the central nervous system of CNS area.
So I'm not I don't think I can give you any additional information from my perspective.
Daniela on the deemed do you have any perspective Daniella would you like to go first.
Sure Yes.
So yes, it's been very interesting area.
And there's been good validation of LSD, one inhibition for that day.
Aidan, but as you know every molecule is a little bit different with some crossing the blood brain barrier of more effectively than other.
We stuck with that doesn't cross the blood brain barrier and even in cases the CNS.
Yes, tumors, where it might be somewhat disrupted.
Get as effective penetration.
That can be a good thing and some indications but.
And that will likely target other indications outside of the CNS space.
Understood. Thank you very much for your answers.
Thank you and next question comes from the line of Rang the Lee from Ladenburg.
Your line is now open you may ask a question.
Hi, Thanks for taking my question just for Rob on the <unk> since the abstract will be out next week.
Just wanted to see do we expect significant difference or new data on the present at the the actual presentation versus the abstracts next week or there will be quite similar.
Up.
<unk>. This is David Thanks for the question hope you're doing well.
The poster.
We have submitted for the posters that we have submitted for ESCO debt.
Support for the two abstracts, I think youre, referring to contain extensive information in detail.
About the two studies the.
The abstract.
As you know is our short and really only provide summary comments on the findings the posters.
And I've mentioned than maybe previously.
Include significant detailed information on safety findings.
<unk>.
And the response criteria that include the swimmers plots and day.
Include assessment of not only the resist criteria, but also other assessments that we feel.
Women's straight the drug activity debt.
That we see and we really believe is supporting the continued drug the development of this drug in the clinic. So I think the information Youre looking for is really going to be it's really going to come out in the poster sessions.
Got it helpful. And then maybe for the question is where are the poster you include the some of the historic of benchmark information or the context to interpret the especially the efficacy of single no. If not could you provide us some color.
How should we.
Use of the Readouts on day.
Net of contacts or benchmark.
So when does the and I'm going to do a little bit of it's from memory, and then ask nadeem and Daniela to comment.
I believe in.
A few cases, we have provided the reference.
For some historical or accepted benchmarks.
And.
In some of the data that we present.
We've put it in the format of what some other companies.
<unk> chosen to use as a way of presenting their data. So I think you may have to read our poster and then go pull up a couple of references to get the comparative numbers, but I believe.
We provided what youll need in both posters and all of them.
Looking at Nadeem and letting him see if I got that correct, yes, so David you're correct. So absolutely. We have provided references so you can look of the reference.
For the competitor and as David mentioned, we.
We have shared some of the data of presenting some of the data.
You can.
Evaluate based on how other.
Others have been presenting and certainly after this data as presented we are happy to have a conversation with you and walk you through the competitor.
Unfortunately, you cannot.
On the non competitor trial for the competitor data in the in the poster.
But we are happy to have the discussion.
Got it that's great just think of that.
My question is thank you very much.
Thank you alright, thanks, Karen.
Thank you. Your next question comes from the line of Hunter Diamond from Diamond.
With the research. Your line is now open you may ask the question.
Hi, everyone. Congratulations on the continued progress.
I think we had a lot of questions on the scientific advancements of the company.
I wanted to just go a different angle and this maybe more for mark.
Just wanted to see if the recent take on spending expanding the head count I saw the burn was recently around $2 7 million and just how I guess youre thinking about at the same time advancing a lot of different trials, but also managing the budget and I know you may not be giving formal guidance, but just any color around how youre looking for.
Either expand the team pay more salaries versus also watching the cash balance.
Yeah.
Thanks Hunter.
The.
The number you see on the.
Cash used in operating activities of about $2 7 million.
Remember, we probably not probably we did spend additional cash.
Related to the capital raise which just to give you an additional degree in accounting would be charged to additional paid in capital and non.
Ill hit the P&L, so we'd go to the balance sheet debt that's <unk>.
One thing.
We did receive the $900000 from sheep for it which is an operating activity also advanced accounting as opposed to.
Financing activity. So if you were to have added back the 900000 and you would have put in of.
A number an amount related to professional fees related to the capital reserve you would've seen our number of probably be in line with the with the guidance. We've mentioned in the past, which is we spend about 1 million to $1 million two per month, and we've provided that inferred.
The information publicly as to the head count or personnel.
The additions.
Very normal it's in our R&D section of the business.
And also we will replace.
Consulting fees so.
As of as a younger company, we use because we used outside consultants for a number of scientific and add the.
Administrative activities as we grow we're bringing those.
Activities in house, where we can get 100% dedication of People's time as opposed to of Consultant's time. So we're really just can be swapping out the numbers a little bit our overall forecast.
Has really not changed dramatically.
From what we've had and we probably would stick with that let's say of numbers. So we will update this from time to time, we're growing company on the admin side as.
As I mentioned, we had we basically were down based on professional fees.
Being lower in the first quarter than they were at the end of 2019 and in the first quarter of 2020 really related to again the <unk>.
Transformation to a public company.
<unk>.
We haven't commented on.
General and administrative head count if you will of personnel, but where we're comfortably staffed we don't see the spike.
And everything in that direction of our efforts around the on the scientific side of the house.
I hope that answered your question.
No absolutely Mark and appreciate the additional color. So my last question and I'm not sure if anyone's thought about this the company appears to be trading almost near its cash balance right and I've seen other small cap companies.
Have a buyback of available so the company now has a good amount of financing.
To have and I've seen other microcap say, okay, we're going to allocate a few million dollars. If the share is dipped below a level, where it's undervalued. It's a reasonable use of our cash to purchase our own equity and reduce the outstanding shares is that something the company has thought about are.
As ive come on the radar.
It's a good comment this is mark again, it's a good comment certainly it's a board decision frankly, we have not considered it we think the best use of our everyday capital is to place to place our bet on the science.
<unk>.
The marketplace.
For early stage biotechs as always can always be choppy waters. If you will in our best bet is to put put our dollars into the R&D cost of the company.
Understood. Okay. Perfect I was just something I figured I would bring up because I've seen other companies do that.
Just because as you know biotech can be very volatile on the day to day weekly movements.
Yes.
Yes.
So okay perfect. Thank you for taking my questions and again, congratulations with the progress.
Thank you Hunter.
Thank you I am showing no further question at this time I would now like to turn the conference back to Mr. David Arthur share.
Thank you.
So as you have heard from today's discussion Soliris has never been in the stronger position. We entered this year firing on all cylinders and with positive momentum and we are now actively enrolling multiple patient populations for treatment with <unk> in combination with a common chemotherapy treatment.
And for treatment as the single agent we.
We are planning to announce additional clinical trials in the near future and we closed the first quarter with $36 $6 million in cash and cash equivalents of enough to fund our ongoing clinical trials through completion and beyond.
We look forward to maintaining and building upon this momentum as we continue to advance and expand the clinical development of ex of <unk> debt.
I would like to thank our employees for their dedication and loyalty the loyalty and always thank our stakeholders for their continued support I. Appreciate your time and attention today and would like to extend my sincere swishes of good health for all.
And thank you for your time today.
Hey.
Yes.
Thank you ladies and gentlemen that concludes today's conference call. Thank you all for participating you may now disconnect.
Okay.
Sure.
Okay.
Sure.
Sure.
Other.
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The revenue.
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