Q1 2021 CASI Pharmaceuticals Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the Cassie Pharmaceuticals first quarter.
2021 financial results and business update conference call.
At this time, all participants have been placed on a listen only mode.
At the end of the prepared statements participants will be will have the opportunity to ask question and.
And when posing questions. Please pick up handsets to allow for optimal sound quality.
I'd now like to hand, the call over to Cynthia who from the company for a preliminary statement. Please go ahead.
Yeah.
Thank you operator, good morning, and welcome to Kathy's first quarter conference call.
Earlier today, Kathy issued a press release, providing the details of the company's financial results for the quarter ended March 31, 2020, and what the press.
Relief is available in the investors relations section of the company's website.
Today's call will be led by its off the way you will see our chairman and CEO.
Our president and Mr. Larry thing as well as our CMO Dr. Alex The key ski will also be available during the Q&A portion of this call.
As a reminder, our remarks today will include forward looking statements, including our business plans objectives and milestones.
These forward looking statements and not a guarantee of future performance and therefore, you should not put undue reliance upon them.
<unk> the subject to numerous risks and uncertainties that could cause actual results to differ materially from those projected or implied and all forward looking statements.
Of course for a description of important factors that could cause actual results to differ we refer you to all statements and our SEC filings.
It is now my pleasure to turn the call over child, Chairman and CEO.
Thank you Cynthia good morning, everyone and welcome to Cassis first quarter financial results and business update conference call.
The well began the call ways of general update focusing on our lead programs and near term milestones.
Followed by our first quarter financial highlights that.
That's paid we are happy to answer any questions during the Q&A session not covered in our remarks.
Our press release.
Contains details of our financial results for the first quarter of 2021.
Let me begin by saying that we are very pleased with the progress we have made and the first quarter.
And I'm extremely proud of all the team across all functions for the continued dedications and.
And focus there.
There's no doubt in my mind that we are well on our of course.
And building, leading and financially strong biopharmaceutical company.
And what address our financial highlights and the latest version of this call, but I would of pre pays it by sharing my optimism.
And our financial performance.
Revenues from Evo Melo, our first commercial drugs continued to increase with costs going down.
With that experience, our commercial and medical marketing team is poised to started preparation and pre marketing activities for the launch of our next commercial drug.
And C T 19.
Beyond that we will continue our traction of launching and delivery lifesaving drugs to patients.
And why we moved forward with our commercial and later stage assets.
We will continue to make progress with our product pipeline.
As well as continuing to pursue additional assets to grow our company.
We are interested in products and that fits our core competency and global drug development.
Allowing us to leverage China's clinical development and the large patient population in China, We look at business development opportunities with eight entrepreneur all I, specifically, we not only look at it and assets from the mental global development potential.
But we also look at our partners investment potential.
Our business development execution, and typically in crudes and the investment component in our partner.
We believe this additional layer of the investment deepens, our collaboration with our partners.
And the signals our confidence and trust.
This venture approach has proven effective and developing all of our cross cultural global partnerships.
It also provides our shareholders additional upside in the potential return on equity.
We used this dual approach and our in license all of our CD 19 car T V.
The <unk> 12 O six.
Yeah I do.
The <unk> III and <unk> 38 assets and most recently in our in license of C. D 5339 P. C. P. Slash she and 97 inhibitor. We believe our style of venture Madison that is investing and having conviction.
And our partners why jointly developed and ask that together one greatly enhances our collaboration and two gives our shareholders and additional opportunity to capture of body.
This approach also reflects the deep experience and core expertise of.
The our executive management in both drug development and biotech investment.
With this approach we will continue to build our pipeline one asset at that time.
We will now address more specifically, you've o'malley, our commercial products and our pipeline.
We recorded eve of Malouf revenue.
$5.7 million.
For the first quarter.
A 69% increase from a year ago quarter.
For the for year 2021 revenue, we are targeting much greater than 50% growth over 2020.
As you all recall you've of Mallet is approved in China for use as a high dose conditioning treatment try to team with Cove point of stem cell transplantation in patients with multiple myeloma and <unk>.
And it is the only form of the injectable malfoy commercially available in China.
<unk> is not just milk it is a proprietary formulation with patent protection until at least 2030 price.
Try to give of malice injury into Chinese market and.
Average of only 800 stem cell transplant per year, well conducted in the multiple myeloma treatment setting.
Following Eva Malus launched in August 2019 chassis work closely with Kols to drive market awareness and.
Speed it adopt patient in the Chinese market.
In 2020 more than 2600 patients were treated with <unk>.
And the first quarter of 2021, we dosed in that one quarter alone we've dosed over a thousand patients and we are well on our way to meet our expectation of more than 50% growth over 2020.
The post marketing study for <unk> amount of in China has completed accrual and he is in the fall of the upper face. So far the data. We're seeing is consistent with published studies of each of our mallard.
Through each of our Mallard, we have built a commercial team of more than 80, hematology sales and medical marketing specialties.
Based in China they.
They have been thoroughly tested with the launch of our first commercial product.
And now stand ready to not just expand the eve of Mallow use but also ready to launch additional products such as our CD 19 car chief commercial assets.
With regard to our CD 19 car T. Our next asset for commercialization of partner.
Partner, Joe Ventas continues to make excellent progress with its current ongoing trials and b and nature of out and the.
P a L L.
The and and Ta granted C and C. T 19 breakthrough therapy designation last of year.
An initial phase one data the phase.
And when studies of B, a L L a and B and a child in China by day Ventas has been substantially completed with the phase II B N H L and be a out of our registration studies. Both currently enrolling in China, We continued to see very in.
And <unk> activities and we are starting to make preparations for the launch of C and C 219 day.
<unk> <unk> is on track to file an NDA with and then by the end of 2021.
As we have previously stated there are currently no approved CD 19 car T therapy products, and China, foreign or domestic C and C. T 19 will be locally developed and manufactured which grades of it distinguishes it from other Hudson 19 therapies.
Developed and manufactured outside of China.
Drug pricing is still an issue for patients in China.
And clearly for premier and innovative products.
Parable of CD 19 therapies that are developed manufactured outside of China.
Subject to certain ex China, CMC and cost of goods, making the price point significantly higher than where we believe <unk> and 19 can be priced.
Next I'll address our most recent pipeline.
And provide updates on our other key asset.
I'm pleased that we have made considerable progress across our current pipeline and have tactically added additional.
Okay.
Yeah.
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Please go ahead Sir.
Yes.
Sorry debt.
And I don't know if I'm and connected now so the phone just got dropped off of I apologize.
Our most recent addition in and license in the last quarter is CP five <unk> nine of first in class DCP $2 97 inhibitor from <unk> therapeutics for the great China market.
CD.
Right.
<unk> is an oral second generation small molecule DCP and 97 inhibitor, which is being evaluated by cleaved in the phase one clinical trial in patients with AML and Mds <unk> novel approach to inhibiting the.
$2 97, and chemo apology.
The Hematological malignancies is supported by extensive preclinical research and early clinical data.
C. D 5339 represents a promising new agent for selectively targeting BCP <unk> 97 in cancers and it is a complementary addition to our portfolio, obviously mythology oncology therapies.
We look forward to the joint development of CD <unk> with our focus on helping to accelerate the development program by initiating trials for current and new indications in China.
Now of what about <unk> 12 of six in October 2020 weighted.
Acquired the $12 six and novel and tie FC Gamma <unk> antibody.
For the greater China market.
The $12 six has a novel mode of action blocked in the single inhibitory antibody checkpoint receptor FC Gamma <unk>, the two unlock anti cancer immunity and both liquid and solid tumors.
FC Gamma receptors antibody checkpoints that modulate the efficacy of tumor cell.
Direct targeting antibodies and immune checkpoint targeting antibody used in cancer immunotherapy.
The $12 six can potentially be used of ways, all therapeutic monoclonal antibodies that rely on ADC.
CDC for efficacy it.
It is bio invents lead drug candidate and is being investigated by bow and embed in our phase one and two trial.
Income by nation with anti PD, one therapy Keytruda.
In solid tumors and <unk>.
In the phase one to a trial in combination with Rituximab for the treatment of non Hodgkin lymphoma.
Recently Biogen event for <unk>.
And then did early clinical data from their phase one to a trial of <unk> 12 of six <unk>.
Objective response rates, which contends to see us and for us.
What demonstrated in six out of nine patients evaluated.
Writing exciting evidence that <unk> 12 of six has the potential to restore the activity of Rituximab.
And non Hodgkin lymphoma patients who have relapsed after treatment with rituximab.
We believe by 12 O six has a broad clinical application with the potential to be used across multiple tumor types. In many first line indications and in refractory settings, which we plan to explore <unk>.
The gas always by inbound we plan to develop the <unk> 12 of six and both liquid and solid cancers with Cassie responsible for development and commercialization in greater China.
Our lead indication will BPI 12, six in combination with Rituximab in relapsed and refractory subjects for the treatment of <unk> and H out cash.
Chat the intends to Fi and R&D for <unk>, six with the N and M. P. Eight in 2021.
A word about our anti <unk> eight antibodies tid one of three ways.
Our now turned to CIB one of those three.
Our anti CD 38, monoclonal antibody tid one of the three is a fully human <unk>, one and <unk> 38, monoclonal antibody recognizing a unique epitope.
It is selected to have stronger.
A D C. The activity against <unk> 38 positive malignant cells and with a reduced CDC activity with a potential reduction of infusion reactions observed with existing anti CD 38 treatments.
Preclinical data demonstrate that <unk> one of those three has enhanced activity against a broad array of malignant.
Please express and CD 38, and the potentially a better safety profile when compared to other CD 38 monoclonal antibodies. In addition, the results of in vivo studies have shown promising data that outperforms what is currently available.
The data from in vivo efficacy models have shown higher CD 38, killing.
Hi, Adcs the activity recognize a unique epitope on the CD 38.
Improved safety profile.
No overt infusion related reactions less cytokine release decreased binding to human rbcs.
And the potential for shorter and administration time versus competitors.
As we reported the phase one study will be and open label dose escalation study ways and expansion phase to determine the safety and preliminary activities of <unk> one of those three in patients with relapsed refractory multiple myeloma.
The trial protocol design to test of priming dose as well as dose escalation with the subjective to reduce the infusion duration.
As of the commended by the data review Committee cash.
He has initiated the trial in France, and we expect it to dose our first pace and potentially this months.
This completes the update of our key pipeline assets.
As of note outside cheaper asset is also progressing well, we expect to submit our IND applications for two indications two of the NPA and 2021, we saw the Teapot registration study starting as quickly as possible after the NPA approval.
Now weighted that a few words on our financial highlights for our first quarter.
Our press release contains the details of our financial results.
Rather than read through all of these details my comments today will address the key highlights.
We recorded Evo mellowed revenues of <unk>.
Five 7 million U S dollars for the first quarter of 69% increase from a year ago quarter for.
For the for year 2021 revenue, we are targeting more than 50% growth over 2020.
And our cost of revenues this quarter were reduced to $2 4 million compared.
Compared to last quarter.
$3 $2 million for the first quarter of 2020 due to transition to a new lower cost of manufacturer.
And without being a decrease and the unit cost of inventories of <unk>.
As of March 31st 2021.
Cash and cash equivalents totaled approximately 68.
And $1 million.
And payer to 57.1 billion as of December 31st two solid and 'twenty one as.
As previously reported the company did an underwritten public offering in March 2021.
Generation gross proceeds of approximately $32 5 million.
Just financing brought in additional and follow on investments from long term, how scared dedicated financial institutions.
Taking into consideration.
The cash and cash equivalents balance of March 31, 2021 the.
The company has sufficient resources to fund its operations beyond 2022.
We continue to be extremely thoughtful on how we deploy our cash.
With a focus on building shareholder value.
We turn the call back to the operator, we hope to have conveyed to you our optimism.
And cash these positive outlook. The Bottomline is one we are committed to building and major integrated.
Biopharmaceutical company, using China, as our foundation and.
And ultimately delivering profitability.
Two we intend to launch products and increase our pace of acquiring assets and we will be tactical and entrepreneur all about it toppling clinical development partnerships with venture investments and our partners and of three we will continue to build and strength.
And our R&D capabilities further strengthen our sales and marketing team and.
The expand the reach of our business development activity.
It is an exciting time to be part of Cassie, we'd look forward to future updates as we hit our milestones and I will now turn it over to the operator for questions.
Operator.
We will now begin the question and answer session.
A question and please press star one on your telephone keypad again that is star went to ask a question to withdraw your question press the pound key.
Your first response.
Is from.
Trevor I'll read please go ahead.
Hey, good morning, Oh, so as even though the hands of grip. The good pace a wanted to ask about what your focus is for the accelerated growth is it give me expansion into more hospital systems more word of mouth alone treating physicians or what aspects of that you're targeting for the optimal growth. Thanks.
Yes.
Thank you so much.
We are actually doing probably bose.
Because the last year is really just the only first the year of launching this product of we think the the debt.
Seek potential is still takes probably many years two rich.
We believe that the the whole market is and estimating the debt utility of this drug.
As you will see this year, we are targeting much more than 50% and revenue grows.
We are expanding.
More to the hospital and by the way are also you know basically if there is a huge educational job because.
Autologous transplant.
For many patients is the first line treatment, but historically because.
Transplant was not available in China for many pace and so the doctors has been convinced that using the traditional chemo agent is a good and not but so there is a a big education to educate the doctors as well that for many patients.
Using autologous transplant is a functional cure is the ads.
They are much more effective than.
Chemotherapy or other small molecule drugs. So so so answering your question about doing both sweat spending rich two more hospitals, but we're doing a.
Slowly converting more kols into this new treatment regimen.
Okay.
Yeah.
Thank you. Your next response is from thank you.
And I Yang. Please go ahead.
Hi, good morning, thanks for taking out of packaging.
A couple of the first question is at the Mailer.
Would you comment on the seasonality for and the typical Q1 seasonality in Chinese market. The reason, we're asking this is that and you ask mark.
Typically Q1 has the lowest.
And Neil assuming the product the is stabilizing and.
And so because of reimbursement.
About the commercial dynamics and in China and the SEC.
And that really.
C and C T 19 program.
Paul.
Think about the <unk>.
Shall I take.
To submit the IDE approval for any shortly and then beyond the.
How do you think about cell therapy.
And China.
That's great question.
In general the.
The first quarter in China is always low because of the Chinese new year and the.
The Chinese new year is the longest vacation in China. So the.
People powered and not doing a lot of transplant and doing that break. So you are correct. The first quarter, usually is a slow quarter.
For this type of operation.
Alright, so we expect the the.
The revenue increase over the next three quarters this year.
So.
In terms of.
The launch of.
Yes.
Does that answer your question.
Thank you.
The next question is yeah. So.
Yes.
Yeah.
Yeah. So I think we are very very unique you know because right now China has not approved a sim.
And golf car T 19 therapy yet.
We actually as of domestic Cochin and 19 program. We had the most we're at the forefront of.
The pivotal trial, we believe we believe that we will be the first.
Domestic of COVID-19, and complete the pivotal trial and submit the NDA.
The real advantage. We have is we think by the time, we are ready to launch Kaki and 19, we probably will already have one of the best.
Hematology oncology marketing and sales team in place thanks to each of them out.
Because our first drug what the telling the sand positions the.
The fitness and doing the physician that's doing autologous transplant and are also the physician.
We'll be using COVID-19 therapy. So in the sense, we already build a successful cash.
Marshall.
Franchise ready for COVID-19 therapy. So we're very gung Ho about it we think as the COVID-19 will probably be.
A lot bigger drug and China, then I'll, let you have of Mila.
So the the real advantage, we will have is.
The obviously, we believe our cost will be the lowest.
Or the you know the first batch of COVID-19 therapy will be on the market in China.
And we we we also see some unique property of our COVID-19.
And which which is very unique and China for instance, we see we have very low cytokine storms, which is we think it's actually a very beneficial.
And property of this therapy.
So in terms of cell therapy I personally you know we all believe in cell therapy is the ultimate the blue Ocean the Israeli.
The cell therapy as a modality to.
Treat human diseases. It's just the very very beginning so we Patti is looking at a lot of global of cell therapy assets that after we launched our first drug we believe that we will become a leader in cell therapy in China.
So does that and.
So your question.
Thank you.
Okay.
Thank you.
Thank you. Your next response is from Justin Zealand. Please go ahead.
Good morning, first congrats the way, we went and team and all of the progress this quarter. The aim of mail launch appears to be performing very well.
So can you comment on the size of your current sales force and would you expect to increase the sales force and preparation of for the launch of CMT 2019.
Yeah, Justin Yeah. Thank you so much of.
Our current sales force is the Lithia and the 100 people marketing and sales people, but this year one of our major push is to potentially double our sales force and preparation for the COVID-19 launch so by the time you know if every single.
Well you know we should have close to 200.
Field people in the field to launch COVID-19. So this is why we have great hopes for car T and 19.
Launch because this will be the potentially.
Potentially the first Chinese domestic cell therapy launch in China, and it's a it's a.
Pretty significant milestone for the country and it's obviously for Cassie.
Great that makes us that Anthony price index.
Yeah, Yeah, yeah other than.
We are.
Yeah go ahead.
I just had another question on Iot.
You mentioned for two indications for for your R&D and I was just curious if you could comment on those two indications and and and just how you see the.
The drug fitting into the overall market.
Yes, one day as we're treating the maybe actually Alex is on the call. Our CMO, Alex you want the timing on that.
So just and this is Alex excuse me the CMO, we haven't publicly stated which indications we're going to the pursuing but they are and the allogeneic stem cell transplant one is of more.
Uncommon.
The genetic disease, and we believe that that will get us to the market with this form of style type of very quickly and the other is and the pursuit of.
The usual unexpected AML indication.
Okay.
Great, Thanks, Alex and waiting for it.
And I appreciate the comments and credit congrats once again the solid quarter.
Thank you Justin.
Thank you to ask a question. Please press star one on your telephone keypad again to ask a question. Please press star one.
Responses from Sean Lee. Please go ahead.
Good morning, guys congrats.
Congratulations on the strong revenues and thanks for taking my questions.
My first question is on the evil MELA. So it's great to hear that you guys have been continuously to increase the market for the drug based on educating and Kols. So I was wondering what's your thoughts on the whats the overall market demand for it and how long do you think you'll be able to reach.
The the actual market level.
Yeah, we so far have not given a definitive guidance we are learning.
Ourselves are we right now actually in China. The bottleneck is there's a lot of hospital has the shortage of transplant units.
So in my in our opinion, we probably will reach the peak of revenue maybe in three to four years.
But then you know kind of always.
Never kind of stopped the surprise you in terms of its market potential so we actually stopped to be.
More optimistic that we think this drug has you know pretty large you know.
Opportunities.
And so but we so far have not given out peak revenue guidance.
So I'm sorry, if that the trying.
And trying to.
Kind of answer your question this way.
No problem that's understandable.
And my second question is in terms of the CD 19 car T. So I was wondering what do you what do you expect to be the timeline for the clinical studies will we see any clinical results published before the NDA applications.
Yeah.
But yeah, we probably will leave that to Joe Ventas, because right now there.
Primary objective is to submit the NDA and they will be opportunistically.
The published that data.
Actually on in the in the international.
Conferences.
My gut feeling is probably will be around the same time the NDA is filed.
Great.
And the second question is also on the car Ts. So I was wondering what's the manufacturing and distribution site like for them is true, but just and link that and what's the capacity.
Yeah.
Yeah.
So vantage is actually building or has just build it a GMP facility.
And the that plant can manufacturer of leased 2000 patient. So it's a centralized of GMP plant in Tianjin in Tianjin.
And that will be our first GMP plant for for the initial launch of the drug.
Oh, Thanks, So just a little bit on bad debt.
That plant being completed and has it been through all of the inspection of approvals.
Yeah, I believe so its the absolutely.
And it's already built and it's already manufacturing and some of the debt.
The phase two trial, a GMP plant the.
The phase II trial is in the new GMP plant.
Great. Thank you. Thank you for that that's all I have.
Yeah. Thank you shop.
Yeah.
We have reached the end of our question and answer session.
Like to hand, the conference back to Kathy Chairman and CEO, Dr. <unk> for closing remarks.
Well. Thank you again for joining today's call. We're incredibly proud of the progress. We have made this quarter and continue to be encouraged by what we expect will be a pivotal year ahead of forecast and we look forward to leveraging our existing commercial infrastructure.
As we move forward on key business development initiatives.
Pursuing pre commercial launch activities for our car T program drive expanded pipeline progress.
Yes.
And continue to observe steady Evo mallow grows it is an exciting time to be part of Cassie and we thank you again for your continued support.
Operator.
Yes. Please.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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